Mention Greece, and I used to think of idyllic island holidays, azure seas and sky, classical ruins and the cradle of democracy. Remember Mamma Mia"?

Now Greece is the profligate spender and shaky debtor of Europe, threatening to drag the financial system into another global crisis. Do investors need to worry that Greece will be the next Lehman Brothers?

So far events have been eerily reminiscent of 2008. Some of the same hedge funds that cashed in on the subprime mortgage crisis are said to have piled into credit default swaps on Greek bonds, betting Greece will default on the debt driving up the cost of insurance against default. Reports that European banks, especially those in Germany and France, have big exposures to Greek debt have been driving down their stock prices and feeding speculation about who will turn out to be the next American International Group.

We know how interconnected the global banking system has become. Just as European banks Societe Generale and Deutsche Bank turned out to be two of the biggest AIG counterparties, American banks and financial institutions could well be on the hook for guaranteeing Greek debt against default. And where that chain of swaps ends is anybody s guess. We know from the AIG crisis that insurance is only as good as the insurer s ability to pay.

But we also know from the financial crisis that entities too big to fail, which presumably include debt-issuing sovereign nations, won t be allowed to default. The consequences are too dire. Leaders of the European Union have already said that Greece s credit will somehow be salvaged, even though they ve been conspicuously silent about how a Greek rescue will work.

Last week Greece had to postpone a planned offering of bonds, which rattled markets. Greece has 20 billion euros of bonds coming due this spring which it needs to refinance. The cost of insuring against a Greek default soared, and the value of the euro fell against the dollar. But having said it will act to resolve the crisis, the European Union has to follow through or risk financial chaos and the collapse of the euro. I think it s safe to assume there will be a rescue eventually.

Everyone assumes the brunt of a bailout will fall on the Germans and the French. No wonder German voters are mad: The Germans have to wait until they re 67 to be eligible for retirement benefits. (Greece plans to raise its average retirement age to 63 from 61.) Greek workers have gone on strike repeatedly to protest any cuts in benefits. As one Greek woman told the New York Times, We gave world democracy, and we expect the European Union to support us.

We ll see. In the meantime, European stocks have dropped more than U.S. markets this year, creating something of an opportunity, in my view. Europe s problems aren t confined to Greece by any means, but high quality European stocks look attractive relative to their counterparts in the rest of the world. I own an exchange-traded fund, the BLDRS Europe 100 ADR Index, which yields 3.78%. But there are many mutual funds and ETFs that focus on Europe. Financial and European stocks may continue to gyrate on the latest developments, but in the end I expect the crisis to be resolved. Greece shouldn t turn into another Lehman Brothers.