20 May 2012
Last updated at 13:23 GMT
Ken Clarke said the US should contribute more to the International Monetary Fund
He added that electing "cranky extremists" would worsen the situation.
The comments come after Prime Minister David Cameron used the G8 summit to urge action to end the eurozone crisis.
Voters in Greece return to the polls next month after the recent general election left no party in control and efforts to form a coalition government failed.
There is uncertainty over whether the country, beset by problems arising from its debt levels, will remain in the European single currency.
'Hardships' Mr Clarke, a strong supporter of the European Union, told Sky News' Murnaghan programme: "The Greek voters have really got to face up to reality - it is very, very difficult for them. They are having a terrible time."
But he said the consequences would be "serious" if the Greek people elected "cranky extremists" and defaulted on their debts as a result, adding: "Everyone says they will leave the euro. Actually that is quite likely but doesn't necessarily follow...
"No-one knows exactly what will happen in the rest of Europe. But the banking system is in tatters. It is weak in very many places.
"We don't know what the knock-on effects would be, they could be very serious and of course people will start barking at the door of Portugal, Ireland, Italy and here in Britain."
Mr Clarke, who served as chancellor under Conservative prime minister John Major in the 1990s, defended the coalition's decision to increase the UK's contribution to the International Monetary Fund, despite the US refusing to do so.
He added: "It is a pity that the Americans are so paralysed by their pre-election arguments that they are not able to contribute, but all the more reason for the British, the Brazilians, the Chinese and others to be persuaded to put in because it is quite essential."
Ken Clarke said the US should contribute more to the International Monetary Fund
Former
chancellor Ken Clarke has said Europe's banking system is "in tatters",
warning the UK is "heavily exposed" to potential problems.
The justice secretary also told Sky News that Greek voters
had to "face up to reality" by voting for parties willing to cut the
country's deficit.He added that electing "cranky extremists" would worsen the situation.
The comments come after Prime Minister David Cameron used the G8 summit to urge action to end the eurozone crisis.
Voters in Greece return to the polls next month after the recent general election left no party in control and efforts to form a coalition government failed.
There is uncertainty over whether the country, beset by problems arising from its debt levels, will remain in the European single currency.
'Hardships' Mr Clarke, a strong supporter of the European Union, told Sky News' Murnaghan programme: "The Greek voters have really got to face up to reality - it is very, very difficult for them. They are having a terrible time."
But he said the consequences would be "serious" if the Greek people elected "cranky extremists" and defaulted on their debts as a result, adding: "Everyone says they will leave the euro. Actually that is quite likely but doesn't necessarily follow...
"No-one knows exactly what will happen in the rest of Europe. But the banking system is in tatters. It is weak in very many places.
"We don't know what the knock-on effects would be, they could be very serious and of course people will start barking at the door of Portugal, Ireland, Italy and here in Britain."
Mr Clarke, who served as chancellor under Conservative prime minister John Major in the 1990s, defended the coalition's decision to increase the UK's contribution to the International Monetary Fund, despite the US refusing to do so.
He added: "It is a pity that the Americans are so paralysed by their pre-election arguments that they are not able to contribute, but all the more reason for the British, the Brazilians, the Chinese and others to be persuaded to put in because it is quite essential."
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