Will Greece's Troubles Spread?

Here's what's at the core of all the chaos today in Greece: The country is on track to run out of money next month.

European leaders will probably come through in the end and lend Greece more money.

But for now, at least, Europe can't agree on whether to admit defeat – to finally accept that Greece can't repay its massive debt on time – or to keep looking for ways for Greece to muddle along a while longer.

That may be because admitting defeat could cause widespread trouble in Europe's financial markets.

Just today, Moody's put three big French banks on review for downgrades because of all the money they've loaned to the Greek government and Greek banks. France, as it happens, is pushing for a solution that would avoid a Greek default.

The European Central Bank also staunchly opposes a default. The ECB has said it won't be able to accept Greek debt as collateral for loans if the country defaults. That in turn could trigger a meltdown in the Greek banking system, according to the FT.

A default doesn't necessarily mean renouncing all debt. In the case of Greece, it might mean extending the payments on existing debt, which would effectively mean a loss for Greek bondholders.

That's what German leaders, driven by voters who are fed up with Greek bailouts, have been pushing for.

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