Will Greece's Crisis Mean Tragedy For The Euro?

If, as now looks quite possible, far-left party Syriza wins next month's snap elections, plunging Greece back into chaos, there will be more than a smidgeon of irony about the whole affair.

For one thing, the elections mark almost exactly five years since the Greek economic crisis first exploded onto the world stage.

In late January 2010 the then-prime minister George Papandreou stood up on the main plenary stage at the World Economic Forum in Davos and declared that his country was under attack by speculators. The country sought a bailout three months later.

But, more significantly, 2015 was supposed to be the year of the Greek recovery.

Yes, the country is still regrouping following the deepest post-war recession of any developed country. More than a quarter of the eligible working age population are still out of work - and around half of all those under the age of 25.

The number of years a Greek citizen can hope to live in a healthy state has fallen from 67.4 in 2007 to 64.9 in 2012.

And yet Greece seemed to have turned the corner. Unemployment was starting, very gradually, to fall. The Government's austerity plans were coming to an end. The country had attained a primary surplus, meaning that when debt interest was ignored it was finally earning enough tax revenues to finance its spending.

And, to cap it off, the International Monetary Fund expected it to be the fastest-growing economy in the eurozone next year (after Ireland).

So the return of the jitters around Greece could hardly have come at a less opportune moment. But does this episode mean a full-blown euro crisis is in prospect? Well, yes and no.

On the one hand, remember that the euro crisis was as much a political one as an economic one. All it takes is for a country to elect a government which is steadfastly against either the euro or the terms of its bailout and it could cause major disruption in the single currency area.

That's what could happen if Syriza wins the election. It could well happen in Spain if Podemos, the fast-growing new anti-bailout party wins the country's elections at the end of the year.

Moreover, the real problem in the single currency - that there is a massive gulf in performance between its member states and few, if any, mechanisms to adjust for that - still hasn't been addressed.

Although there is now the skeleton of a banking union taking shape, there are no plans for a proper fiscal union (so that taxes from, for instance, Germany, could help support the Greek economy). Until one is created, the likelihood is that Europe will continue to limp from crisis to crisis.

However, even if Greece were to start threatening to renege on its bailout commitments or leave the currency, a widespread crisis beyond Greece's borders may not be a foregone conclusion.

Stock markets across Europe have been relatively sanguine about what's happening in Athens. Bond yields on other leading European economies remain low.

In other words, markets are betting that a Greek crisis could be contained. That won't prevent some nervous moments in the coming months as the country prepares for the polls again.