Wall Street Journal
November 25, 2011
The biggest question in Europe isn't what it was a few weeks ago. It is no longer just whether any of the 17 governments in the euro zone will default on its debts; increasingly it is whether the euro zone will survive in its current form at all.
On Thursday, it emerged that the European Central Bank is considering a dramatic extension of its longest loans to commercial banks, to stave off a potential collapse of the bloc's banking system.
Meanwhile, leaders of the Continent's three largest economies met and pledged to work toward the closer political and economic integration most analysts say is needed—but with no specifics, meaning the pace for such efforts still lags behind the market's demand.
Germany's failure to sell almost 40% of a €6 billion ($8 billion) bond issue at an auction Wednesday is, many analysts say, symptomatic of this new phase of the crisis, with investors beginning to question even the bloc's safest harbors.
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