It feels as though the "old industrial nations" are fully occupied with managing their internal problems while developing nations such as China and India, etc. are working constructively toward the future.

Various European scenarios are being assessed by the experts, from making it possible to leave the Euro, the issue of Eurobonds, huge debt write-offs, different exchange rates for north and south, allowing Greece to default and leave the Euro, to financing a European stabilization fund.

There are many ideas, but who has the strength, resources and courage to carry them through? Germany has domestic problems regarding big undertakings to save the Euro and Greece promises a lot, but there is little grass roots support at home for major savings measures. Greece is already in a serious negative spiral where even the savings measures previously decided on are difficult to achieve. Politicians want banks to participate in major write-downs, but if banks that are already weakened suffer losses it could mean the beginning of a banking crisis in the west. Any measures taken now are likely to set precedents, which will be momentous if Spain and Italy need help.
The major budget deficits currently afflicting so many countries make it extremely difficult for states to invest in the infrastructure expansion and energy conversion that would otherwise be investments for the future which would keep the wheels turning during the recession.

I personally feel that we will see continued crises and impromptu measures, while at the same time gradually strengthening the European Financial Stability Facility (EFSF). Today the fund has "just" € 250 billion of lending capacity, which is sufficient only for Portugal, Ireland and Greece. It is not enough if Spain and Italy experience difficulties, which seems likely. These countries are already having trouble selling national bonds, and the ECB has had to buy up bonds in support. A strengthened EFSF would be able to take over this role while acting as an emergency fund for regular banks to prevent a banking crisis. Now it's time for all Euro countries to approve the reinforcement of the ESFS. Although a few countries still need to approve expanded undertakings, Germany sets the tone and during the past week the German parliament gave its OK. We can expect continued difficult times on the financial markets with crisis warnings and stock market reactions. It's time to see if the notion of a United Europe can stand up to turbulent times.