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You're reading: Eurozone faces tough hurdles early in 2012
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With government finances under pressure as growth wanes, the eurozone will find it even more difficult to shore up shaky banks and reduce the high borrowing costs that threaten Italy and Spain with financial ruin.

As early as the second full week of January, bond auctions in which Italy and Spain need to borrow big chunks of cash will start showing whether the eurozone is finally getting a grip on the 2-year-old crisis that has seen Greece, Ireland and Portugal bailed out.

If the auctions go well and borrowing costs ease, the crisis will ease, lending support for the EU strategy of getting governments to embark on often-savage austerity measures to reduce deficits, along with massive support for the banking system from the European Central Bank.

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