All eyes are on Athens as the Greeks face a choice on euro
Tomorrow's election is now effectively a referendum on whether the country stays in the single currency
WORLD financial markets, policymakers and 300 million people who use the euro every day will have a rare day of calm today before Greeks head to the polls tomorrow.
The uncertain Greek elections are set to bring to a head the months of crisis that have beset the eurozone and dragged down global economic output.
Sunday's result also presents the greatest danger to the euro since the single currency was created more than a decade ago.
Analysts said the election was now effectively a referendum on the country's euro membership.
Germany's Angela Merkel and other leaders have ruled out any renegotiation of the second Greek bailout deal, even if voters return an anti-bailout majority to parliament. Such a result would set the scene for a showdown that could see Greece forced to withdraw from the currency union.
Heading into the weekend, the left-wing party Syriza, which promises to renege on Greece's bailout deal but wants to keep the euro, and New Democracy, which backs the current deal, are neck and neck -- but neither is set to secure a majority.
The fallout from an anti-bailout victory in Greece threatens to overwhelm the EU's ability to contain the danger of a deeper and more dramatic financial crash.
With no structures in place to facilitate any country leaving the single currency and with the huge Spanish and Italian economies already on the brink, the risk of an even deeper crisis has become desperately real.
Yesterday, stock markets were boosted after central banks around the world hinted that they were prepared to flood the world with easy money if the crisis intensified.
Spain's 10-year borrowing costs surged past the danger level of 7pc on Friday -- more than the country can sustain.
Rumours in the market that Italy, the third-largest euro economy could suffer a rating cut saw that country's debt costs also rise.
The euro itself remained under pressure. Since May 6, the single currency has lost 3.6pc against the dollar.
Leaders outside the single currency are railing against Europe's seeming inability to tackle the crisis.
US President Barack Obama has blamed the euro crisis for a slowdown in US employment growth.
"It's in everybody's interest for Greece to remain in the euro zone, while respecting its commitments to reform," Mr Obama said last week.
"European leaders understand the need to provide support if the Greek people choose to remain in the eurozone.
"But the Greek people also need to recognise that their hardships will likely be worse if they choose to exit."
In the Far East, Taiwan's Premier Sean Chen plans a cabinet meeting, tentatively scheduled for Tuesday, to discuss strategy after the Greek election.
European finance ministers plan to issue a statement at a summit of world leaders in Mexico scheduled for June 18-19.
"Greece was the first default, now it would be the first exit from the euro," said Riccardo Barbieri, chief European economist at Mizuho.
He added: "The ECB and other European institutions must be ready to intervene if necessary to support Spain and Italy but this inevitably entails a further accumulation of sovereign risk. Until the markets see that there is a line of defence, uncertainty will remain very high."
Standard & Poor's said earlier this month that the chance of Greece leaving the euro area in the coming months was one in three.
"The dilemma is whether Greece has a European future," said Dimitris Papadoukis (53), an employee at the state-owned Hellenic Post. "We may have delayed or made mistakes, but that doesn't mean we should go back decades."
Mr Papadoukis spoke outside New Democracy's election pavilion in Syntagma Square, the site of anti-government rallies exactly a year ago that drew as many as 50,000 protesters.
He said he would vote for Samaras, even though he knows he may lose his job as part of the spending cuts demanded by the troika of creditors from the European Union, the European Central Bank and the International Monetary Fund. (Bloomberg)