The big story in Britain last week was the fact that Gordon Brown finally relinquished power to a new management team. And for the British people, it was very good news indeed.
The bad news is that, for the rest of the world and investors in general, Britain's election is something of a sideshow. The plight of Europe remains the story hogging all the financial headlines, and has been a key factor in last week's widespread sell-offs.
To be more exact, investors are fretting over exactly how long it will take before Greece is forced to admit defeat in repaying its debts, and what that will mean for the euro and the rest of Europe.
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The short answer is nothing good...
The Greek rescue package is not enough
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When Europe's leaders finally shook hands on a Greek bail-out deal last Monday morning, they must have thought they'd hit those evil 'speculators' right where it hurt.
The rescue package, agreed hurriedly over the weekend, was described as €750bn-worth of "shock and awe", in the ridiculously gung-ho language of the financial world. And the markets rebounded sharply for, oh, at least a day.
But anyone watching the reaction of the euro would have realised that it wasn't enough. After a short-lived rally, it ended the day no higher than it had begun. And it spent the rest of the week plumbing fresh depths, hitting a 14-month low against the dollar on Friday.
The markets followed rapidly as they twigged that the bailout package wasn't a solution. The problem in Europe is that there isn't enough "shock" or indeed, "awe" in the world to deal with its debt crisis.
For one thing, plenty of important eurozone figures still don't seem to 'get it'. As The Sunday Times reports, Olli Rehn, Europe's economic and monetary affairs commissioner, said that the €750bn loan mechanism should "be made so unattractive that no EU leader will resort to it."
I applaud Rehn's concerns about 'moral hazard' the danger that if other profligate states see Greece being bailed out painlessly, then they'll be less inclined to put their house in order.
Greece can't repay its debts
But there's a problem here. Greece simply can't repay its debts. As German paper Die Tageszeitung puts it (translation courtesy of Spiegel Online): "Some euro states are already caught in the debt trap. Greece has already been hit by the 'interest' effect. The country can only pay the interest on its loans by taking out more loans at some point the only thing left will be insolvency."
So it's all very well talking about moral hazard now, but it's too late for that. Greece got away with macro-economic murder for years, and it's too late to try to turn it into a model eurozone citizen now.
If Greece wants to at least keep rolling over its debt in the short-term, it will be forced to resort to this €750bn 'crisis mechanism', whether it wants to or not. But as John Mauldin puts it, "at the end of the day, Greece will just have more debt." And at some point, some of the people who have loaned that money to Greece, be it the European taxpayer or the European banking system, are going to end up losing it.
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So if Europe's leaders had really wanted to get ahead of this crisis, they should have been talking about realistic propositions for Greece restructuring its debt (i.e. paying back less than it owes, probably over a longer period of time.) That way the market could have started to price in the worst-case scenario with a bit more clarity.
But as it stands, investors don't know what to think. They're pretty sure that anyone holding parcels of Greek debt when the music stops will get stung. Beyond that, their imaginations can run riot. Will Spanish debtors be next? Will a country try to break away? Or will the whole of Europe move closer to political union, learning to live with a currency that's closer to the drachma than to the deutschemark?
Under the circumstances, you can see why the euro has tanked.
A weak euro is bad news for Britain's recovery
That leads to another big problem. A weak euro may seem like good news for German exporters. It makes their goods cheaper on the world market. Trouble is, the weak euro is just a symptom of a weak eurozone. As countries across the eurozone try to force through austerity packages, their consumers will buy less. Given that Germany exports 60% of its goods to Europe, that can't be good for their economy. As Die Tageszeitung puts it: "The EU could, therefore, be facing a double-dip recession."
In turn, that just means a weaker euro. And in case you're wondering, a weak eurozone economy combined with a plunging euro would also put paid to all those hopes of a manufacturing-led British recovery too.
Mauldin reckons that "the euro is on its way to parity with the dollar." He's far from alone in that prediction, especially after last week. But I see no reason to disagree. We suggested shorting the euro against the dollar at the start of this year, and it's been a winning move so far. It seems likely to continue, though as usual, if you're spread betting, be careful and watch out for volatile moves and unexpected government intervention. If you don't have a spread betting account and fancy trying your hand, you can find a provider here.
The easiest way to bet on a falling euro
But if you're looking for a less risky way to bet on the euro falling, you could do worse than simply buy gold. There are still many sceptics on the yellow metal around which is a good sign but I think it's fair to say that this latest bout of fear over paper money has given gold a new spring in its step.
The gold price hit new records in euros and dollars last week. And if you need any more convincing that its 'safe haven' properties are starting to tempt investors, try this: "The Austrian Mint sold more gold in the two weeks from April 26th than in the entire first quarter of the year because of soaring demand in Europe," reported Reuters last week.
Apparently, demand came "exclusively from Europe" said the mint's marketing director Kerry Tattersall. "That's a clear sign that there is panic buying because of concerns about Greece and the euro Currently we don't have anything in stock. We sell our entire daily production immediately."
It's enough to make you want to run to your nearest bullion dealer.
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