European officials predicted weak growth for their continental economy at 0.7% which, from last year’s 4% contraction, is a marked increase. These expectations come from improved export rates, but investment remains weak and there are other problems within the E.U.

Greece is the largest one. The Mediterranean country finds itself in a position similar to American International Group (A.I.G.) when credit-default swaps caused by banks and hedge funders bet on defaulting. If Greece defaults on its debts, the owners of these swaps stand to profit hugely. This seems to be, unfortunately, a vicious circle. As the banks and investors invest in Greek debt, the cost of insuring this debt rises. Then bond investors who see these signs  refuse Greek debt, making it more difficult for the country to borrow monies.

Others argue that the Greeks are to blame for hiding their debt in the first place, using “creative accounting” to do so. In any event, a Greek default could spread ruin to other shaky economies, like those of Portugal and Spain.  While the potential for a Greek bailout by a wealthier country like Germany is slim, Ireland, recently in a similar position, was able to build international trust back by cutting its national spending and reforming its institutions.