Hard to tell. Germany, the biggest part of Europe is reported to be doing well. A few small fry like Iceland and Ireland have already suffered financial collapse and bailout. They are poorer now, but doing OK. Greece is getting a bailout, but they are bitching about the conditions the bailer outers (Germans mostly) have demanded. If the Greeks manage to irritate the bailer outers enough, the bailout will stop. Then the Greeks will run out of money and have to print their own to keep going. It will be tough on them, but heh, you want to speak politely to those who are giving you money. Either way, Greece is a sideshow.
Italy and Spain, both much bigger than Greece, are having the same problems. To many government "workers" and pensioners demanding monthly checks and not enough tax revenue coming in. Private investors have indicated that they won't lend either country much (if any) more dough. They have to cut spending (lay off government "workers" and cut pensions) and get their economy growing again. That means scrapping no-layoff regulations, and dropping license requirements that keep the unemployed from taking jobs. Spain and Italy are too big for anyone to bail out. Nobody has that big a bucket. If this doesn't work, they will have to print money or IOU's (which probably amounts to dropping out of the Euro) to make ends meet.
The financial press and blogs are beginning to cry terror about Europe. Undoubtedly some banks have been stupid and will get hosed when the defaults begin. Too bad. The world would be better off with fewer stupid banks. But the majority of European countries are doing OK (not great but reasonably OK), and having a few losers get flushed won't be the end of the world.
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