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As the British election was overwhelmed by BigotGate -- and I don't doubt for a second it will go down in history as a seminal moment in the Campaign of 2010 -- let me give you the international backdrop to tonight's final leaders' debate on the economy.

While we we've been watching Gordon Brown grin and gaffe and then grovel to Mrs Duffy, , Portuguese debt has been downgraded and, more ominously, so has Spain's. If you don't think this matters to Britain then heed the words of the head of the prestigious OECD who says:

I have studied the reports and spoken to a number of international financial specialists: I am now in little doubt that , that its lenders will take a serious haircut and that the virus will spread. Whether it reaches us depends on how next Thursday's winner -- if there is one -- tackles our own debt mountain.

The and the EU have promised -- though not yet delivered -- E45bn to help Greece meet its debt repayments. In fact, Greece will need three times that if it's to meet its obligations over the next three years (something the heads of the IMF and the ECB have now acknowledged). With over 80% of Germans opposed to any bail out in the first place, I just don't see that sort of cash being forthcoming.

The clamour for restructuring is growing: the Irish Foreign Minster has called for it (though he was disowned by the Finance Minister) and so are an increasing number of German politicians. The German ruling coalition's Bavarian partners are even calling for Greece to leave the Euro. The IMF and the ECB are already looking for international figures who could broker the restructuring.

Greek debt will have to be rescheduled over a longer period and the banks and institutions who loaned it billions will see their loans written down by 20% or even 30%. It will be a painful process -- but probably the only realistic way forward.

Portugal, Spain and possibly Ireland will then find themselves in the same firing line as Greece is now. And Britain? Greece got into serious trouble because it and the markets doubted its ability to re-pay it. Britain is borrowing shed loads of money and the IFS says the political elite on the Left and Right have yet to explain how they would cut the deficit by the massive amount it has to be cut.

I don't envisage Britain ever defaulting on its debt (like Greece) or even a restructuring (our debt is pretty long term anyway). But if a sovereign debt contagion crisis spreads from Greece across Europe then the size of our debt means we could easily end up paying a huge premium to service it because the markets had lost confidence in the political system's ability to deal with it. As a result interest rates would rise and the recovery would be in jeopardy.

Exactly how they would avoid that is the most important thing the

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