BY VANESSA FUHRMANS AND MATTHEW KARNITSCHNIG

BERLIN—As Europe careens deeper into political and economic crisis, the immediate survival of the euro turns more than ever on a single question: Will Germany act?

For nearly three years, Chancellor Angela Merkel has resisted pressure from European neighbors to provide a stronger financial backstop for the euro zone. Germany, the only euro-zone nation with the economic heft to do so, has done the minimum necessary to keep vulnerable countries afloat—and demanded crushing public-spending cuts in return.

Now, with Greece's euro membership hanging by a thread, Spain's banking system in deep trouble and concerns about Italy mounting, the German government ...