“It’s done!” one eager Irish official shouted. “The baby is born.” The “baby” was an agreement that had eluded European leaders for years and held up their grand plan for a common currency. That deal, reached after months of bitter acrimony, would pave the way for the euro’s launch in 1999. But its flaws would help spark the financial crisis that is now sweeping the continent. The problem at the time was simple. How could euro zone countries ensure that their currency would not be undermined by one or two members who overspent and ran large budget deficits?

The administrator of insolvent German chipmaker Qimonda has almost doubled his demands for payment from former parent company Infineon Technologies to 3.35 billion euros ($4.22 billion), Reuters reported. "The insolvency administrator continues to base a substantial part of his alleged payment claims on so-called liability for impairment of capital," Infineon said in a statement on Friday. Infineon had said in February the administrator was demanding 1.7 billion euros, claiming Qimonda paid Infineon for a business in 2006 that was negative in value.

The results of the Greek elections are in: New Democracy, the conservative “pro-bailout” party, has come in first and appears to have enough support to form a new government, The Washington Post Wonkblog reported. So what does this mean? In the very short term, it likely means Greece won’t be leaving the euro zone. New Democracy’s leader, Antonis Samaras, basically wants to abide by the terms of the country’s bailout agreement with the rest of Europe. Greece will continue to stick with its austerity program — spending cuts, tax hikes, paring back public-sector jobs.

The U.K. on Thursday unveiled an extraordinary series of measures designed to insulate the British financial system and economy from the euro zone's deepening crisis, The Wall Street Journal reported. Chancellor of the Exchequer George Osborne and Bank of England Gov. Mervyn King announced plans to flood banks with cheap funds in a dual attempt to jump-start lending to British households and businesses and to fend off potential financial problems at big U.K. lenders. The programs resemble some of the emergency measures enacted by central banks in Europe and the U.S.

Spain's borrowing costs jumped to a record Thursday, fanning concerns that the €100 billion ($125 billion) aid package planned for its banks won't suffice to stave off a much larger bailout for the entire country, The Wall Street Journal reported. Spain agreed last weekend to a bank-recapitalization plan it hoped would restore investor confidence in the country's credit-worthiness. Instead, investors have continued to jettison Spanish debt amid concerns that the deal for as much as €100 billion in aid will saddle the government with more debt at a time of deepening economic malaise.

Two holding companies of the embattled Ligresti family, which controls Italy's second-biggest insurer Fondiaria-SAI, were declared bankrupt on Thursday, muddying the waters of a plan by insurer Unipol to save its troubled peer, Reuters reported. A Milan court declared bankruptcy on the Sinergia and Imco holdings of the Ligrestis, rejecting a request from the firms' lawyers for more time to draw up a proper debt restructuring.

Central banks from major economies stand ready to take steps to stabilize financial markets by providing liquidity and preventing a credit squeeze if the outcome of Greek elections on Sunday causes tumultuous trading, G20 officials told Reuters. A senior U.S. official cautioned that the Greek election will not provide "the definitive signal on what happens next" in the euro zone debt crisis.

France is pressing the EU to adopt a financial stability package to stem the eurozone crisis, believing negative market reaction to the €100bn bailout of Spain’s banks shows the need for more comprehensive action, the Financial Times reported. Ahead of the EU summit due on June 28, Paris is set to propose a package of measures to put the European Central Bank in charge of bank supervision and to use the European Stability Mechanism, the new €500bn eurozone rescue fund due to come into force next month, to recapitalise banks directly.

Crédit Agricole SA is making contingency plans to abandon its Greek bank or merge it with a conglomerate of domestic banks in the event of Greece leaving the euro zone, according to a person with direct knowledge of the plans, The Wall Street Journal reported. The admission offers the starkest evidence yet of international companies preparing for the worst in Greece, just days ahead of elections that could set it on a path to leave the currency union.

The biggest threat to the survival of the euro may not be a Greek exit. It may be the Balkanization of Europe's banking system, The Wall Street Journal reported. Financial markets are braced for the growing likelihood that Greece will abandon the euro sooner or later. That raises the prospect that another euro member will leave, but it's ever easier to cast Greece—with its crippling government debt and political chaos—as sui generis. A bigger deal is the unraveling of the decadelong cross-border integration of European banks.