The European Stability Mechanism (ESM) that was created to fund the bank bailouts is grossly underfunded at this point, and hasn’t even yet been ratified by all of the members whose ”YES” votes are needed for the program to proceed. We all know about the hesitation of Merkel and the Germans to move forward with the plan, but other countries like Norway, and even the Netherlands are threatening to vote “NO.” When it comes to currency movements, much of the tide can be shifted based on confidence, and confidence is waning for the Eurozone. Unless more positive developments are released out of Europe, markets could be heading down regardless of anything else happening around the world.
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