Europe’s banks are in huge trouble—sitting on the brink of triggering not just a European crisis, but a global one.

Leading the way is Germany’s Deutsche Bank. Germany’s most prestigious and influential financial institution is on the brink of disaster. Its share price has gone from nearly €120 (us$133) a share before the 2008 financial crisis to nearly €12 a share today—a 90 percent drop.

The bank has been fined $2.5 billion for manipulating the libor rate. It was forced to spend $8 billion on litigation. It owns $46.5 trillion of derivatives.

The bank lost $7.4 billion last year. Its chief financial officer has said he expects bank losses to continue until 2018 at the earliest. This year, it seems set to lose even more than in 2015.

It’s no wonder, then, that the International Monetary Fund (imf) recently declared Deutsche Bank the most dangerous bank in the world. Among globally systemically important banks, “Deutsche Bank appears to be the most important net contributor to systemic risks,” the imf wrote in a report published on June 30. The United States Federal Reserve recently found that the American branch of Deutsche Bank and the U.S. arm of Spanish bank Santander were the only banks to fail its stress tests.

The bank is teetering on the brink of bankruptcy. It has $1.82 trillion in assets and $1.75 trillion in liabilities. With just a slight shift of a few percentage points, the bank is literally less than worthless.

To make matters worse, Deutsche Bank is at the foundation of Germany’s entire economic system. Jacob Shapiro and Lili Bayer wrote on Geopolitical Futures that “Deutsche Bank’s importance to Germany is many times greater than that of an investment bank like Lehman Brothers to the U.S. in 2008.”

“Its fate will be shared by all of Germany,” they wrote. The bank is a year older than the country itself. For well over a hundred years, it, along with Commerzbank and Dresdner Bank (now owned by Commerzbank), funded German industry. “By the mid-1980s, according to a German government study, the Big Three were estimated to control the voting authority of over three quarters of the shares of most major German companies,” wrote Shapiro and Bayer. “A 1995 report by the U.S. Congress’s Federal Research Division estimated that the Big Three by themselves, not counting the shares they held for their clients, held 30 percent of the seats on the advisory boards of all German companies. Disaggregating Deutsche Bank from the German government’s political goals or the structure of German corporations is impossible. They are all inextricably linked.”

A crisis in Deutsche Bank would also spread far beyond Germany. The bank has deep links to banks around the world, including many in the United States.

The bank made risky investments in the 2000s and it got burned spectacularly in the fallout. Since then, the ultra-low interests rates in the eurozone have made it all but impossible for it to make any money. The only way for it to generate cash was to get involved in southern European government debt. Any problem in Spain or Italy could quickly spread to Deutsche Bank.

Problems here are very likely. Italy’s banks also present a major risk to the world. Seventeen percent of their loans are nonperforming, meaning they’re not being paid back—that’s $398.9 billion. Even during the height of the financial crisis in America, this figure reached only 5 percent. Shares in some Italian banks have halved since April alone.

Germany’s economy faces grave potential threats, but right now it is fundamentally sound. The government is even taking in more money in tax revenues than it spends. But Italy has one of the most flawed economies in Europe. Government debt is 135 percent of its annual economic output. Unemployment stands at 11.5 percent. In 2015, youth unemployment was over 40 percent.

On June 30, the Wall Street Journal revealed that in the wake of Brexit, on June 26, the European Commission “authorized Italy to use government guarantees to provide liquidity support to its banks.” The commission spokeswoman said the support was approved “under extraordinary crisis rules for state aid to banks.”

The general consensus is that Brexit doesn’t have much to do with Italy’s problems—but it provided an opportunity to get permission to bail out the banks.

To make matters worse, Italy could be heading for a political crisis with a referendum of its own. In October, the nation will vote on reforms to the nation’s electoral system. Prime Minister Matteo Renzi has said he will step down if he does not get the approval he wants. Citi warned that the vote was “probably the single biggest risk on the European political landscape this year” outside the UK. Confindustria, an Italian business lobby, said there would be “political chaos” if Renzi lost.

Will Martin wrote on the risks posed by the referendum in an article for Business Insider, “Forget Brexit—Italy Is Poised to Tear Europe Apart”:

Italy is on the cusp of tearing Europe apart, but the economic and political crisis brewing in the nation is largely going unnoticed. … [I]f you look at the country’s economic data, bank issues, and the impending constitutional referendum coming up, Italy is like a bomb waiting to explode. …The Italian financial system is teetering on a precipice without much hope of a solution. Brexit may be the biggest problem facing Europe right now, but Italy isn’t far behind.

The crisis has prompted a showdown between Italy and Germany. Under new European Union rules, the Italian government is not allowed to bail out its banks without bank investors taking hits first. In Italy, many of these investors include pensioners. Last December, a pensioner committed suicide after the “bail-in” of a smaller bank cost him his life savings.

Under these new rules, anyone with over €100,000 ($110,000) in the bank would lose out. That may sound like a lot of money, but someone’s entire life savings or pension fund could easily come to €100,000. Even small businesses could easily have that much in a bank—let alone large businesses.

A bail-in for one of Italy’s bigger banks would provoke not only an economic crisis, but Italy’s greatest political crisis since World War ii.

But Germany is refusing to let Italy bend the rules. “We wrote the rules for the credit system,” said German Chancellor Angela Merkel. “We cannot change them every two years.”

Ultimately, Italy will probably be allowed to break the rules and get away with it. That would deal with the immediate problem, and it means that the wrath of the German taxpayer is not directed at Ms. Merkel.

But even then, the trouble could continue. Italy’s debt “is too big to really be covered by Italy because Italy is up to its neck in debt anyway,” said Andreas Becker from Deutsche Welle’s Business Desk. He explained that if Italy gives loan guarantees to its banks, it will affect its credit rating. It will become more expensive for the government to borrow money, pushing the Italian government into the same sort of debt crisis that has trapped Greece.

“The banking experts I’ve talked to, they all expect that sooner or later it will be the eurozone countries, meaning the eurozone taxpayers who have to come up with the solution,” Becker said.

But with German taxpayers unwilling to let the Italian government bail out Italian banks, they’re not going to be keen on the German government doing so. Meanwhile euroskepticism is growing within Italy. The euroskeptic Five Star Movement is currently one of its most popular parties. Its politicians just won mayoral elections in Rome, Turin and 17 other cities. Neither Germans nor Italians are in any mood to give ground.

An Italian banking crisis would be the Greek crisis on steroids. A crisis with Deutsche Bank could be even worse, destroying Germany’s entire banking system.

And these are just the threats within Europe. A crisis from oversees, in the U.S. shadow banking sector, for example, could set off either or both of these potential crises.

It’s hard to see how Europe could avoid an economic crisis worse than Lehman at some point within the next few years. Already fringe and extremist parties are rising across the Continent. What effect could a much more serious crisis have?

After the Greek crisis, Trumpet editor in chief Gerald Flurry wrote, “The crisis in Greece is a forerunner of a whole rash of similar crises set to soon break out across Europe. They will provide the catalyst for the EU’s leading nation, Germany, to rise to the fore with solutions of its own making.”

Europe has been very successful at kicking the can down the road. It has avoided making the painful decisions that are necessary to come up with proper solutions. Both of these crises are so big that it seems hard to see how Europe could avoid making radical changes should these crises hit.

For more on what this change could look like, read Mr. Flurry’s article “Did the Holy Roman Empire Plan the Greek Crisis?”