(MoneyWatch) The Greek election on Sunday has a good chance of finally pushing the EU financial crisis past its breaking point. If the Syriza party - which has pledged to reject the bailout - wins, there could be a bloodbath in the markets Monday as investors scramble to get out. A victory by the pro-euro New Democracy isn't guaranteed to provide a different outcome as it is now calling for the terms of the bailout to be renegotiated.
Voters are in a situation where they must choose between anger over the intolerable terms of the bailout and fear of economic life outside of the euro. Because Greece bans all political polling for two weeks before an election there is no way of knowing which party is ahead. The last polls had Syriza up slightly.
What is known is that life for most Greeks is grim with no relief anywhere in sight. The skyrocketing unemployment rate - 22.6 percent for the first three months of the year - left many people homeless because they can no longer pay rent or mortgages. Government budget cuts and the difficulty of getting international financing have crippled the health care system and critical medicines are in increasingly short supply. The most optimistic predictions show Greece's GDP shrinking by 6 percent this year alone.
Widespread despair has caused the nation's suicide rate to skyrocket. From 2009 to 2011 it rose 22 percent, according to a report by Attikon Hospital. Before the financial crisis first began, it had the lowest suicide rate in Europe -- 2.8 per 100,000 people.
Outside events will also influence the outcome of the election. Even though the Spanish bank bailout failed to reassure investors, its lenient terms will have a huge impact on the vote. Greece's bailout came with severe requirements which have sent the nation's economy into what some are calling a "death spiral."
Last weekend Spain requested a $125 billion "line of credit" to draw on to recapitalize its banks. Although the official terms of the agreement won't be revealed until after a bank audit is completed at the end of the month, some details have begun to leak out. It is clear that unlike the bailout packages presented to Greece, Ireland and Portugal, the terms are very generous.
The Spanish newspaper El Mundo reports that Madrid has received a five year grace period, pushing back the repayment start date to 2017, and will then have until 2027 to return the funds with a 3 percent interest rate. Because the money won't be coming from the IMF, it is almost certain Spain will not face the budget targets that other bailout countries are forced to adhere to.
While Irish and Portuguese leaders are already complaining about not getting similar deals, their countries have not been devastated like Greece has.
Greeks are particularly angry because almost none of the $162 billion in the second bailout package is going to the Greek government to pay for vital public services. Instead, it is being used to pay back lenders.