Greece’s epic odyssey: in or out of the euro?

Mr Tsipras, 37, is leader of the anti-bailout leftist party Syriza, one of a handful of candidates campaigning to get rid of drastic EU cutbacks in exchange for IMF bailout funds. While a Syriza victory is not a foregone conclusion in the battle for Greece, the threat itself creates fear and uncertainty about whether Athens will default into bankruptcy bringing Europe down with it.

European Central Bank head Mario Draghi said on Friday that the ECB is ready to provide further liquidity to eurozone banks. “The ECB has the crucial role of providing liquidity to sound bank counterparties in return for adequate collateral.”

The Bank of England pledged a £100bn offer of loans to banks on Thursday. Japan’s top financial diplomat Takehiko Nakao warned that Tokyo would intervene in unwelcome currency moves if investors push the yen too high in search of a safe haven.

Central banks in Britain, Canada, Japan, China and India are working on plans to counter the financial market turbulence that could result from the vote. The Bank of Canada warned North Americans that European debt could severely crimp financial conditions worldwide including a “major shock” to Canadians.

Capital outflows from Greece are more than 500m euros a day, with 10bn euros pulled out in the last month. Brussels is concerned the scenario will worsen with a Syriza victory.

G20 summit

Public opinion polls cannot be published in Greece within two weeks of a vote, but recent surveys show Syriza neck-and-neck with the conservative New Democracy party, which favours the euro bailout package and austerity measures.

The election is widely seen as a vote on whether Greeks should remain in the eurozone. World leaders travel to Mexico on Sunday for a G20 summit to consider their next move as Greece counts the ballots.

Even if Greece agrees on a pro-bailout leadership, it will not be over yet. The worst may still be to come for Europe. Spain and Italy are shaky, unemployment is high in Poland and Slovakia, and Cyprus has already said it may have to ask for an IMF bailout.

Greece only makes up 2 per cent of the eurozone economic output, but investors worry about the contagion affecting the larger economic powers of Spain and Italy.

“The European banking system is paralysed,” Nicolas Veron, a senior fellow at Brussels Bruegel think tank, said. “So many banks hold massive amounts of Spanish and Italian government bonds that are losing value. We no longer have a functioning interbank (lending) market in the eurozone.”

German strength

German leader Angela Merkel warned this week that Berlin could not solve the debt problems alone. “Germany is strong,” Merkel said, but its strength is “not unlimited”.

She is under pressure from other leaders to consider eurobonds and deposit guarantees as a backstop.

If Greece does leave the euro, it would have to start printing its own currency, the drachma, to pay its way. The new drachma is expected to lose half or more of its value relative to the euro.

Greece’s future

“We guarantee the Europe of the future,” Mr Tsipras told about 8,000 Syriza supporters in central Athens at a final campaign on Thursday. “On Monday we will form a government for all Greeks,” Mr Tsipras said, with the 37-year-old adding that Angela Merkel’s Europe “belongs to the past”.