Leading article: The future of the euro is hanging in the balance

Even if a political meltdown is avoided in Greece, it is only a single hurdle cleared

Of all the make-or-break events of the eurozone's slow-motion crisis, the general election in Greece tomorrow is the most momentous yet. Neither the Greeks themselves, nor indeed the rest of us, should be under any illusion as to the significance of their choice. But whatever the result, it will answer only the most pressing of the questions that will determine Europe's future.

There are three likely outcomes tomorrow. One is that a coalition can be formed behind Antonis Samaras's centre-right New Democracy party, in which case the unpopular austerity programme that unlocks financial support from the EU and the IMF continues. Alternatively, the votes may fall in such a way that there is no workable solution, as with last month's ballot, with the result that the waiting game resumes until yet another poll. The last is that Alexis Tsipras and his leftist Syriza party form a government, perhaps with help from the Communists, and Greece's exit from the euro becomes not just possible but probable.

A so-called "Grexit" would be catastrophic, but Mr Tsipras has wooed voters ground down by years of recession with promises of instant relief. There are any number of factors in the case against him. Not only is his emotive talk of the Greek flag "pulled down and handed to Angela Merkel" misleading: Athens's finances are such that there would need to be cuts even if all its debts were wiped out, and Berlin is not wholly unreasonable in its demand for guarantees. More egregious still is the suggestion that a Tsipras government would use German fears of a Grexit to force a renegotiation of the terms of Greece's bailout. Leaving aside the gross bad faith of such an approach, a wholesale rewrite of the hated "memorandum" could not go ahead even if the German Chancellor wanted it to, because of the implications for similar funding provided to Portugal and Ireland. Mr Tsipras is either naive or opportunistic, both undesirable qualities in a leader.

Neither should Greek voters focus solely on his economic programme. Mr Tsipras's other pledges – which include proposals to nationalise coastal ferries and to disband the riot police – only confirm him as a fringe player not equipped to govern, least of all at a time of crisis. It can only be hoped, then, that the votes which catapulted Syriza to prominence last month are a protest, duly registered, but which will be distributed elsewhere tomorrow.

Even if a political meltdown in Greece is avoided, however, it is still only a single hurdle cleared. European officials may have hinted that, in the event of a Samaras victory, there could be tweaks to ease Greece's pain. But the central deficit-reduction targets will not be altered, raising the possibility of further public outcry as austerity grinds on.

Nor is Greece the only problem. The $100bn lifeline to Spain's banks, unveiled with much fanfare last weekend, rallied the sceptical markets for a bare few hours. Madrid's borrowing costs were soon back on the rise, even broaching the fateful 7 per cent mark at times on Thursday, and the country's credit rating was downgraded to only just above "junk". Part of the problem is the specifics of the Spanish scheme: by channelling money through the government, rather than directly into the financial institutions themselves, the bailout adds to the mountain of national debt. It also strengthens the toxic marriage of shaky sovereigns to tottering banks that is central to investors' anxiety. And confusion over which of the two European funds the money will come from, and therefore what rules apply, has hardly helped.

But there is, as ever, a wider picture, too. Few dispute what is needed to resolve the crisis, such as euro-wide banking union and some kind of mutualised debt. Ms Merkel's priority is to ensure the necessary shared fiscal structures are in place first. Otherwise German taxpayers, liable to be left to pay for the profligacy of others, simply will not agree. The difficulty is that even if closer political union is possible, the issues raised are of such magnitude that the journey to get there will take years. But Germany is not the only cause of delay. France is just as strongly resisting the loss of sovereignty that closer union implies. Meanwhile, with the life bleeding out of Europe's economy, and only last-minute stop-gaps from its policymakers, the markets are losing faith, as this week's alarming rise in Italian borrowing costs only emphasises.

There may yet be a way through. There are signs, for example, that Germany may tolerate the higher inflation needed to rebalance the eurozone economy, and there are hints of interest in pooling at least some debt. Banking union also has widespread support. Once again, hopes are pinned on an EU summit, this one at the end of this month. And if there is tangible progress, it might contain investors' panic, in the short term at least. But there is no way to dodge the trickiest issue of all. Until tomorrow, the question is whether the Greeks will pay the price for the euro. Ultimately, however, the question is whether the Germans will.