Europe is a train wreck and on the brink of a major financial collapse. A debt problem that began with Greece now endangers the entire Euro zone. It's so bad that it could drag down the global economy. It might also mean the beginning of the end for the Euro, the common currency of 17 countries and 330 m people. The debt crisis began in one corner of the continent Greece and has spread like an epidemic, threatening banks and investors and undermining the creditworthiness of other European countries.
Greece isn't the only country with a debt crisis and a foundering economy. Spain, Ireland, Portugal, and Italy all have similar debt problems. In order to avoid a default by any of the above mentioned countries, the European Central Bank (ECB) has to act quickly. But the ECB is a reluctant savior at best, with Germany unwilling to drop its opposition to a strategy of full-fledged quantitative easing that would allow the central bank to more effectively ramp up purchases of government bonds and drive down borrowing costs for Italy and other threatened sovereigns. Unless the ECB acts fast, it could be months, weeks or days before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe, dragging the European banking system and the world economy down with it.
The debt crisis has not even spared the two largest European economies, France and Germany. France has a large banking sector. The size of their banking sector balance sheet is 300% of GDP. Their banks are under fire and so their sovereigns are under fire. Germany's economy has slowed down significantly. Their economy depends on exports. The austerity packages adopted by various European countries are killing their exports, resulting in slowdown.
The ripple impact of several European countries collapsing or requiring such money might force the IMF to collapse, as all the countries are having the same deficits, countries that collapse will wreck financial markets, investments around the world, impacting banks which will impact the common man on the street, whether directly or indirectly.