Investors brace for dramatic new stage in Europe

By Barbara Kollmeyer, MarketWatch, June 15 2012

MADRID (MarketWatch) — Investors have begun preparing for a dramatic new stage in the European debt crisis ahead of a weekend Greek vote that could help determine the future of the euro zone.

In a sign of the heightened tension, global markets were boosted late in the week on reports that central bankers stand ready to act in the case of a credit crunch following the Greek elections.

Edward Hugh, an independent economist and well-known blogger based in Barcelona, said investors are beginning to make calls as to whether the euro will disintegrate or ultimately be saved. “I think investors are trying to cover themselves both ways,” said Hugh. “If you buy German [credit-default swaps], it’s win-win.”

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