Numbers in Europe are getting worse, unemployment is growing due to the austerity measures, GDPs are falling and borrowing costs are rising.
The EuroCrisis continues and several possible outcomes have emerged according to Economist Shayne Heffernan.
1. Europe finds the money for a real bail out of Greece, Spain, Italy, Portugal, for now this seems unlikely.
2. Greece leads the mass exit of the Euro and will be followed by Spain, Italy, Portugal and possibly others, this is now a real possibility and would allow for these countries to devalue their own currency and manage an exit from recession.
3. The Euro gets devalued, either by the Banks or by the ECB, a real value on the Euro post Greek default is around 80c according to estimates from LTN www.livetradingnews.com Asia's leading economic research house.
Regardless of which outcome results from the muddled mess the Euro Politicians created the only real interest the rest of the world has is the deleveraging of Euro Banks.
Based on estimations from Shayne Heffernan the maximum result of Europeans selling off their assets is an 8% fall in the US markets that would be short lived.
The immediate risk for Europe's banks, and for the euro region, is the developing deposit flight from indebted nations such as Portugal, Ireland, Spain and Italy on speculation those countries also might quit the currency. Lenders in Germany, France and the U.K. had $1.19 trillion of claims on those four nations at the end of 2011, Bank for International Settlements data show.
Should Greece leave the Euro, its new currency probably would suffer an immediate devaluation of as much as 75 percent against the euro, forcing individuals and companies to default on foreign loans.
European Union leaders have been advised by senior officials to prepare contingency plans in case Greece decides to quit the single currency. Now the politicians that were in charge and are responsible for the EuroCrisis have urged the country to stay the course on austerity and complete the reforms demanded under its bailout program that will lead the nation to collapse.
After nearly six hours of talks held during an informal dinner, leaders said they were committed to Greece remaining in the euro zone, but it had to stick to its side of the bargain too, a commitment that will mean a heavy cost for Greeks and will be rejected.
For now the most likely result is the disintegration of the European Union or a Euro collapse to 80c.
Merkel is expected to resist any pressure from Monti, French President Francois Hollande and Spanish Prime Minister Mariano Rajoy for less stringent euro zone fiscal policies or the issuance of common euro zone bonds.
After a meeting of euro zone finance ministers late on Thursday, IMF chief Christine Lagarde demanded rapid progress on a number of other fronts, raising the heat on Merkel.
Lagarde said a banking union was a top priority, alongside fiscal union and the principle of mutualising debt. Germany refuses to countenance common bond issuance and will not soften until economic union is complete. It is also opposed to the early introduction of a bloc-wide bank deposit guarantee scheme.
While Spain's needs are most pressing - its medium term borrowing costs hit a euro era high at auction on Thursday - the political stakes may be higher for Italy's unelected technocrat prime minister, Mario Monti.
With his popularity sinking, the parties that back Monti in parliament are increasingly reluctant to support his reform proposals at home, but demand he get results in the European arena to ease the pressure on Italy's recession-bound economy.
Monti, who presents himself as a mediator between France and Germany, has insisted for months that the euro zone must temper the German-led austerity drive with measures to foster growth.
That position is shared by Hollande and Rajoy, but when the Italian leader has tried to transform his pro-growth rhetoric into policy prescriptions for the euro zone his ideas have generally met a cool response from Merkel.
He proposed on the sidelines of this week's G20 summit using the euro zone's rescue funds to buy the bonds of Spain and Italy in the secondary market to bring down their borrowing costs.
Monti will raise it again in Rome.
Spain's Foreign Minister José Manuel Garcia-Margallo called the idea intelligent, but Merkel played down the plan, which investors said might be counter-productive unless the European Central Bank stepped in decisively in support.
Other proposals from Monti, such as stripping some forms of public investment from budget deficit calculations, or commonly issued euro zone bonds, are also broadly supported by France and Spain but opposed by Germany, at least for now.
But what they have now are a series of ideas, and no answers.
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service