The Greek crisis caused many a sleepless night for European policy makers, who were actually forced to move at something faster than their usual glacial pace to prevent what one official called the Greek Ebola virus from infecting the entire euro zone.
By the time they realized that sitting on their hands was not a viable option, investors had stampeded for the exits, the euro had fallen sharply and bond yields for some of the currency union's weakest members had soared.
But once an unprecedented €110-billion bailout began taking concrete form and the spectre of an imminent default faded, investors proved they could be a forgiving lot when the prospect of tidy profits and juicy yields beckoned. By the end of last week, Greek bonds were climbing again, the benchmark stock index in Athens jumped 2.2 per cent and the euro slowly regained some of its lost ground. And once the ink is dry on the rescue package, the euro can be expected to surge in value.
"You could certainly see a relief rally. It's very unusual to see a major currency like that take a huge hit and have it be just a straight line," says David Riedel, president of New York-based Riedel Research Group, which specializes in foreign markets.
But whether the euro can hold on to any gains is an entirely different matter. "I wouldn't encourage people to run out and buy it," Mr. Riedel said the other day from London.
Indeed, based on an analysis of the region's gloomy economic prospects, continuing fiscal and banking woes and heightened political and social unrest, he recommends investors stay out of southern Europe entirely. And he's not exactly enamoured of the northern part of the euro bloc either.
The emergency aid for Greece - with €80-billion coming from other euro zone countries and the rest from the IMF - is being peddled to skeptical voters in the more well-heeled parts of euroland as essential to stabilize the currency. And, it is being pointed out, the Greek government has agreed to much tougher austerity measures over the next three years. These include freezing all public-sector wages, boosting the value-added tax by two percentage points to 23 per cent and collecting taxes on illegal construction (good luck on that one).
But we're talking about a population that brought down the previous government in Athens partly over its mishandling of forest fires. Already, Greek labour leaders are calling a planned general strike this Wednesday "the beginning of a long battle."
As Mr. Riedel observes: "You don't know when another shoe is going to drop, another round of strikes or idiotic comments from a politician that could undermine confidence coming back into the currency."
And needless to say, it's not just a dangerous Greek disease. Deficit-challenged Spain, Italy and Portugal all face the politically perilous task of imposing Draconian cuts in social spending. France is in no great fiscal shape either.
"I'm surprised at people's willingness to believe this [crisis]is over at some point," Mr. Riedel says.
"This is an ongoing problem. Don't buy Europe until you have been shown decisively that Spain, Italy, Greece and Portugal have all taken the steps to dramatically reduce their budget deficits. My advice is: Don't hold your breath. I don't even think it's possible."
Rather, investors should be focusing on other parts of the world "where the countries are much more structurally sound."
Mr. Riedel also happens to be a card-carrying member of the growing inflation-is-nigh camp, which steers him toward the major commodity producers and away from the big resource importers like China and India. Galloping inflation would hinder their efforts to significantly boost the consumer side of their economies.
His favourites among the resource exporters include - insert your favourite cheer here - the likes of Canada, as well as Brazil, Russia and Australia. So forget about BRICs and think BRACs instead.
In Canada and the rest of the BRAC bloc, that means loading up on exporters of energy, coal, gold, iron ore, potash, grain and related equipment. Among his Canadian choices: Suncor Energy, Talisman Energy, Potash Corp., Western Coal and Ag Growth International. All of which sound like reasonable places for investors to take shelter from the storms still buffeting Europe, not to mention others that loom on the horizon.