The European Union and the Eurozone member countries - the bloc of countries that have adopted Euro as their common currency - are having sleepless nights. The problems with the financial situation of Greece, a member country, have now come to head and threaten a catastrophic collapse of the European financial and monetary union if dramatic and bold steps are not taken.

This European crisis, in turn, threatens the global financial system, which is heavily tied to the European and North American economic blocs. A financial crisis such as the present one in Europe can fast turn into a full-fledged global economic crisis, engulfing the whole world. In such a scenario, Afghanistan, already mired in crises, certainly, would not be immune from the adverse impacts of such a crisis.

As evident, the safeguard mechanisms against such fiscal and monetary problems that were originally put in place by the architects of the European monetary and financial integration, were inadequate. Moreover, regulation and supervision by pan-European financial and economic watchdogs were lax and failed to prevent the process of unsustainable debt buildup over the past many years by the Eurozone member countries.

For example, the European Economic and Monetary Union rules stipulate that no member country is allowed to run a national debt that is greater than 60% of its Gross Domestic Product. In other words, Eurozone member governments are not allowed to borrow a total amount that would be greater than 60% of its annual GDP.

However, in case of many countries such as Greece, Portugal, Italy and Ireland, this ratio went way beyond the prescribed 60%. At the end of 2010, the average national debt to GDP ratio for the whole of the Eurozone stood at about 80%.

This single figure is enough to show that the current crisis that has engulfed Europe was for a long time in the making. Another rule in the Eurozone required the member countries not to have budget deficits in a single year at more than 3% of their respective national GDPs. At the end of 2010, this budget deficit to GDP ratio stood at 6% for the whole of Eurozone, meaning that set rules of the game were broken time and again.

The same Eurozone rules stipulate that if any member country violates these statutory requirements, then other member countries would go even to the extent of imposing sanctions on the erring member country to get it to mend its behavior and finances. Nonetheless, nothing happened; no country was placed under sanctions; it was business as usual for all until the very last hour.

For now, the leaders of the Eurozone member countries have agreed on a grand plan of rescue for Greece that includes forgiving 50% of the national debt of that country. This means that Greece, unable to pay back the money it had borrowed from European banks over years, is forgiven on half of the money it owes.

French banks and other European banks that are the creditors, would in turn receive part of this forgiven money from a Euro Rescue Fund - the European Financial Stability Facility - that currently holds more than 400 billion Euros in rescue funds kept for rainy days such as now.

This is a plan of rescue for Greece drawn up by the European leaders, who were egged on by the North American and Asian governments to do something concrete about the crisis. This plan should be endorsed by individual countries' parliaments to be implemented.

The process of national ratification of this rescue plan would take around 45 days. People in many countries such as Germany, which have healthy economies and strong finances, are just not happy with paying for other countries' mistakes.

Germany has to pay the larger part of the bill for the rescue of Greece. Economic nationalism in Germany has surged to new heights and the popular mood is against spending hard-earned German money for rescuing other governments such as Greece that were financially irresponsible over years. German Chancellor, Angela Merkel, has a tough time selling the idea to the German parliament. The important German parliament's vote is scheduled for today.

But then again, if Germany and other European heavyweights shirk from extending financial assistance to their troubled peers in the Eurozone, they too will be affected negatively if, for example, Greece defaults on its debt. The situation of Germany, Greece, France and the entirety of the Eurozone is much like the proverbial co-passengers in a sinking ship.

All of them are in it together; being indifferent would mean financial and economic catastrophe for all. Experts warn that in the wake of a Euro collapse, Germany, for example, would lose up to one fourth of its Gross Domestic Product.

This would be a nightmare scenario. A collapse of Euro as the single currency of the Eurozone is a very real possibility if Greece and other bankrupt countries are left alone to fend for themselves. The consequences of inaction are much worse than painful action. Therefore, I personally deem it extremely likely that the German parliament, the Bundestag, will vote in favor of expanding the Euro rescue fund and extending assistance to Greece.

In my previous articles on the Euro debt crisis I had maintained that a default - inability to pay back debt and its interest - was a matter of certainty with Greece. Now that the European leaders have agreed to forgive 50% of the Greek debt, I have been proved right.

This is a controlled and orderly default. A messy default by Greece would have, no doubt, led to the collapse of the Euro as the common currency. Knowing that the default by Greece has been inescapable, the European leaders have decided to make this inevitable default into a managed, controlled and orderly one in order to minimize the negative effects from its fallout.

Ok folks, suppose the Greece rescue plan, as hatched by European leaders, goes ahead with no major problem and bankrupt Greece is finally bailed out for good. This long and difficult process would be only one fourth of what is required to rescue the Eurozone and prevent a collapse of Euro as the common currency.

Even if Greece is rescued, other countries are in the pipeline. Portugal, Spain and Italy are the most likely candidates. Will Europe have the will, money and guts to rescue all of them one after another? This theater is going to get more interesting - and also more bloody!