The four year pattern of repeated eurozone crises, punctuated with half-baked attempts at resolution and fudges when compromise is not attainable, is moving to decision time again.
The focus now is two-fold; whether Greece will vote to leave or keep the euro on June 17th and/or whether the eurozone leaders will start to move towards a strong European banking union. The former will be decided by a traumatized, polarized and naïve electorate, many of whom believe that Greece can end austerity and stay in the euro at the same time. The results of the election will not be known until June 18th and possibly not even then if a government cannot be formed.
A full banking union would require a eurozone-wide bank supervisory and regulatory authority, ending flawed national bank regulation. It would require massive funds to recapitalize banks and insure deposits, probably only possible with a euro bond. That option, however, is very complicated as it would, among other things, have to be guaranteed?but by whom? Bank runs will not stop until these things are done and countries either make a full commitment to the euro and political union or to leave the euro. That’s a tall order but not impossible as the crisis moves ever closer to the panic stage.