by Laurence Norman
Wall Street Journal
June 16, 2012
In coming days, European policy makers could face the very situation they have worked so long to avoid.
With Spain’s government-bond yields at record highs and Italy’s borrowing costs not far behind, Greeks will go to the polls to decide effectively whether they want to remain part of the single currency. Even for Brussels, used to many supposedly make-or-break moments over the last two years, the events of this weekend seeem unusually momentous.
By next Friday, the euro zone may have split for the first time and fresh waves of volatility could be spreading through the region’s banking systems and bond markets. Alternatively, the euro could come through the Greek vote intact and by year’s end, Brussels could be the politically-reinforced center of a currency zone which more closely resembles the fiscal, banking and political union the original designers of the euro hoped it would become.