Who has had the worst month? BP? The Israeli navy? Or German bankers?

Global financial markets collapsed in May, the worst month for U.S. Stocks since 1940, as investors began to absorb the idea that the Greek financial crisis is not a very Greek crisis at all.

Actually, Greece is going to be just fine! True, the Greek state owes a lot of money. But given a little time, Greece should be able to dig itself out of debt. As a Greek resident last week noted on, the website I edit:

The government does not go after Greeks who evade paying their income taxes, which is a surprisingly large number of Greeks. If the Greek government actually collected what was due, they would triple their tax revenues.

How can that be? Here’s the New York Times’ explanation from May 1:

In the wealthy, northern suburbs of [Athens], where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools. So tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools.

By some estimates, the Greek underground economy is worth 40 percent of the legal economy, costing the state some $30 billion annually in uncollected tax revenues. That missing money would go far to service Greece’s national debt of 262 billion euros.

Cutting expenditures should not be too difficult for Greece, either. The nice thing about operating a ludicrously overstaffed, ridiculously overpaid, preposterously over-benefited government is that there is a lot of fat to cut.

Over the coming months and years, Greeks will pay more in taxes, receive less in benefits and balance their books. From the perspective of a country with 3,000 years of history, half a dozen years of austerity is not an impossible difficulty to overcome.

Even in the worst case – default – Greece will recover. But not Greece’s creditors. They can be wrecked just by a few late payments.

Der Spiegel estimates German banks’ exposure to Greece at 30 billion euros. Add the German banks’ other wobbly European borrowers – Portugal, Ireland, Italy, and Spain – and the total bulges to more than 500 billion euros, or about one-fifth of German GDP.

If those loans go even temporarily into default, German banks lose their ability to pay their own creditors: depositors, bondholders, others. Thus if Greece sneezes, it is Germany that catches pneumonia.

And that is why Wall Street – and your own 401(k) – crashed in sympathy last month. If German banks go illiquid or insolvent, German credit markets freeze. If German credit markets freeze, German purchases of American goods and services shrink - or collapse. And the portfolios of banks in other locales become suspect.

Taxpayers and citizens understandably resent bailouts. They especially resent them when the people responsible for the crisis escape consequences—or worse, when they resume collecting multimillion-dollar bonuses not even 12 months later.

For that reason, Germany has disguised its bailout of its big banks as a bailout of their Greek borrowers. Don't call it a bank rescue—call it saving the euro!

But a financial crisis is like a fire or earthquake: There is no way to rescue only the innocent. We are all at risk together. Maybe we can figure out a way to do justice later. For now, let’s first do rescue.