OK, here’s where we are right now, and it isn’t good:

1. Europe is in recession, and its financial crisis is growing worse. The bailout of Spain was a bust. Yields on Spanish bonds are now at their highest point of the crisis. Here’s looking at you Italy.

2. The sputtering U.S. economy may well be heading into another recession, and the approaching fiscal cliff is hardly helping confidence. It sure looks like nothing will be done on that front before the election.

3.  Three-fourths of the BRICs—China, India, and Brazil—are all slowing. There go the emerging-market growth engines.

How to avoid a worsening of this already dire scenario? AEI economist John Makin thinks four steps are urgently needed:

1.  Europe’s banking system must be stabilized to end runs from depositors withdrawing funds;

2. Europe must articulate clearly a framework for rapid evolution toward fiscal union;

3.  The policy mix that includes additional fiscal stringency in return for rich loans to Europe’s periphery must be softened.

4. The ECB can help calm markets and reduce uncertainty by signaling its support of more accommodation, including a system of deposit insurance for European banks and could cut interest rates by fifty basis points and undertake another round of extra lending to ensure ample liquidity to banks.

I would add that Europe should be cutting taxes, not raising them.

But here’s the problem: As Makin notes, the odds of all that stuff happening are low, maybe a 50% chance depending on “Greece electing a coalition government willing to cooperate with Europe’s core countries to move toward a true monetary and fiscal union.”

So we have a) a 50%  probability of a cooperative outcome from the Greek election on June 17, and b) conditional on that, a 50% probability that Europe will be able to quickly move forward to enact a more credible monetary and fiscal union.

Do the math. The joint probability of these events is 25% at best, “meaning there is only a one in four chance that the euro system will survive through the summer. Should the more likely outcome—an acute European financial crisis—emerge, the United States will be forced to act to prevent serious damage to its financial system and economy.”

So we have a 75% chance of a nightmare summer and autumn heading smack into the U.S. elections in November. The only question is how bad it will be. We don’t know what’s beyond the veil formed by the EU financial crisis, so any predictions about Obama vs. Romney are pretty much worthless.

But it’s hard to see how a financial shock would help the Obama campaign. He is the incumbent, after all. While the president cannot be blamed for the financial crisis, the Romney campaign could charge him with not doing everything possible to doomsday prep the U.S. economy for another global economic shock. It’s not like the EU debt crisis popped up in the past few weeks.

Why do we still have the highest corporate tax rate in the world?

Why did Obama nix the Keystone pipeline?

Why is the president still talking about raising taxes?

Why has the White House offered no long-term debt plan to reassure global markets?

Already, Romney has been hitting Obama for becoming obsessed with passing healthcare reform in 2009 and 2010 rather than boosting economic growth and job creation. Expect more of that.

And if the economy slows further—and if Obamacare is tossed by the Supreme Court—it’s a message that may powerfully resonate with voters.