It would be grand if it plays out this way: Greece given a bon voyage and possibly Portugal too, in an orderly fashion. Then reassurance could be made that the Euro will weather the storm...

From The Economic Times:

30 Jan, 2012, 04.53AM IST, Sudeshna Sen, ET Bureau

World Economic Forum Davos 2012: Consensus reached on euro zone solution, say sources

DAVOS: The big question at the annual World Economic Forum meeting in Davos in 2012 was the Euro zone. As the week winds down on snowy ski slopes, the inside track is that some kind of solution - or consensus - has been reached.

According to high level sources, the current thinking among Euro zone leaders is to work out a plan for Greece - and maybe for Portugal - to make a structured exit from the Euro, provided European leaders can ensure that firewalls are big enough not to spread contagion to Ireland and Italy, among others.

Measures like joint Eurobonds, where the entire region guarantees sovereign bonds of everyone, or more firepower to the Euro zone bailout fund - both measures that markets have been calling for - seem "more likely" than they did a week ago.

It is likely that markets may heave a sigh of relief as the message seeps through informal channels coming out of Davos, but none of these measures will become evident until a few months down the line.

The urgency of the need to restore confidence in Europe as a region has been communicated to German chancellor Angela Merkel. While Germany is committed to keeping the Euro zone together, it has consistently insisted that structural reforms and improving competitiveness is the way forward, and has been reluctant to put more money on the table to underwrite weaker countries.

"The world cannot wait ten years until Europe restructures itself, and that message has been clearly communicated to Germany," said one source privy to the inside track.

Nouriel Roubini, known as Dr Doom for his gloomy predictions, said he expects Greece to be out of the Euro within a year, but in case the European leaders cannot deliver on a credible package, the chances of the Euro zone breaking up is 50% "in 3-5 years," he said.

http://economictimes.indiatimes.com/news/international-business/world-economic-forum-davos-2012-consensus-reached-on-euro-zone-solution-say-sources/articleshow/11680614.cms