The Greek crisis has been on going now for over a year. In that time period, the economic crisis has morphed into a Sovereign risk.  The stability and future of Europe is in the hands of these government’s below.  The lack of stability and or strength is amazing.  In a world looking for character and stability, Europe has these nation states…

Belgium:  No government in the last year, caretaker mandate was never expected to last this long. S&P is looking to downgrade their debt. As a highly leveraged economy, with a bifurcated population base, when Europe starts to crumble, it will be a location like Belgium that causes the cracks to be visible.

England: The first government to change after the major economic crisis, England is focused internally, as the economic austerity necessary to adjust to the global economy weights on the national economy.

Finland: has just seen an extreme anti Euro centric party gain significant in parliament elections. The anti Euro party went from around 4% to 19% of the people. The small nation has stated it does not like where the political body is going, vis a vi the Greek Bail outs.

France:  Sarkozy has extremely low approval ratings in the low double digits, has an unknown re-electable future.  DSK was expected to be his primary opponent before being arrested in NYC.  France has so far been lucky, however the current draught in rain is going to impact their economy in the near future, just as politics gear up for their next election.

Germany:  Merkel is toast, it’s just a matter of when.  She is losing each of her major state elections. The power base is crumbling.  The German High Court has agreed to look into aspects of the national bail outs for constitutionality.  This leaves Germany trying to prop up the current status quo, while the ECB has drawn a line in the sand and says it is done with providing liquidity to states that are not meeting their portion of the bail outs.

Greece:  There is a real chance that Greece will have its current government fall. The most likely route would be possible snap elections that would not surprise anyone. Greece may need to bail out of the Euro, if Europe quits bailing out Greece, if so, expect the current government to fall first.

Italy: The end of the Big Berlusconi era is coming; elections are already unwinding his impact, even while he is still in office.  The populous has just voted to shut down their national nuclear reactors, like Germany is planning now.  The era of stability in Italian politics is winding to a close.  Currently Berlusconi faces 4 separate trials that are ongoing. He has lost his immunity, and has pledged to attend court, when not busy running the government.

Ireland: has just sworn in its new government. However, it was and is already tainted by the national bailout package that caused the last government to fall.  Ireland is closely watching the outcome of the Greek bailout of their bailout. If Ireland sees a way to lower the upfront costs of their own bailout, you can expect that they will make the same kind of demands.

Europe $FXE, is a fractured nation made up of unstable state governments struggling with a mutual bail out approach that is going to shatter the system, if they don’t figure out a solution this summer. The best pair to watch the European adventures this summer is the Euro – Swiss exchange, as a gauge for fear inside of Europe itself.

US Currency ETF Symbols to watch this summer, as the market rushes back and forth between risk on and risk off trades.

  • $FXE
  • $FXB
  • $FXF
  • $FXS
  • $UUP