2010 marked the unthinkable outlook of a euro-zone breakup. 2011 will determine whether the present euro has the momentum to overcome its flaws or completely collapse. If the euro does indeed breakup, Europe will be posed with two options: keep the euro, or ditch it completely.
Many politicians have argued for a two-tiered euro -- one for stronger European nations and one for weaker. Germany, the Netherlands, Austria, and Finland would most likely be lumped into a stronger euro while Spain, Portugal, Ireland and Greece would be the lucky winners of a weaker euro. This "two-tiered" theory was primarily devised by European politicians and has gained little to no traction with European economists, who cite that it would be too difficult and costly to implement.
Life could also get choppy for Germany and other countries that use the stronger euro. These countries would likely be lumped into the world's strongest currency which would be unwelcome for those nations' leading export sector.
Ultimately the euro decision rests with Germany, which is likely the country that will decide the euro's fate.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).