Many think that Greece and possibly Spain will end up having to default on their debts and if that happens then the affect will be catastrophic. It will seem that Berlin is trying to show the rest of Europe that it will get tough with the Greeks to ensure that the others, Portugal, Ireland and Italy, fall in line. I fear this is really what's going on. So the battle for supremecy is being fought on the streets of Athens and other major cities of Greece whilst Lisbon and Madrid are sitting back watching how it all unfolds.
There is an excellent entry on the Unison Active blog (always well written) which compares the situation in Greece with that of Argentina. They of course ended up defaulting on their huge debts but are now out of the worst and doing better http://unisonactive.blogspot.co.uk/2012/06/greece-and-eurozone-lessons-from.html Unison Active think that Greece could do the same and whilst most of what they say is valid there are some major differences and other factos that can not be ignored.
Greece holds one of the most strategic positions in the South of Europe controlling the Agean sea. This is where the Russian fleet will first get to after it leaves the Black sea, Russias ambitions and aspirations are well known. The area is extremly volitile with some newly formed Balkan states waiting for an opportunity to settle old scores. The military alliance between Greece, Israel and Cyprus also means that tensions will rise if the region got further destabilised. In other words the picture looks quite similar to the one Europe had before the start of WW1
It follows that if Greece was allowed to disintegrade into chaos forces on the extreme could lead the country into civil war or they could get a government that will be looking for hostilities as a way to divert attention from internal economic problems. I don't think this will happen as there are enough democrats in the coountry to ensrue that this doesn't take place. But the EU leaders ( not a collective of intelligent people unfortunately) will be wrong to let the situation get out of control. If they do then we will be facing another 20 years of instability and recession or even war. We are so unfortunate to be governed by career politicians who are as intelligent as a bag of chips!