Greek Election Poses the Next Major Threat

Wall Street Journal
June 11, 2012

Spain's agreement to recapitalize its troubled banks marked a critical step to calm global financial fears, but another giant threat still looms: Greece's elections on Sunday. Both events could prove more influential than anything President Barack Obama can do at home in determining whether the U.S. economy perks up ahead of the fall elections.

If Greece stays in the euro zone and the European debt crisis abates, the U.S. economy could conceivably stabilize enough in the coming months to allow Mr. Obama to sustain his argument that the U.S. economy is slowly improving.

If Greece exits, risking a breakup of the currency union, then the applause for the Spanish bailout could quickly give way to widespread fears about another global crisis—just as he is heading into the final stretch of the election.

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