The European Union's Nobel peace prize coincides with the realization that despite three years of financial turmoil, the euro, Europe's single currency and most ambitious project, has survived and is unlikely to disband. However, while the euro zone has avoided a potentially bitter breakup and the loss of some member countries, it now faces the risk of becoming an unequal and strained partnership with frequent disagreements and the possibility of separation. Recent developments have indicated that the euro is likely to remain and may even expand to include more members in the future. Despite this, the euro zone still struggles with economic stagnation, high unemployment, and social unrest, causing a growing divide between northern and southern Europe and fueling anti-EU sentiment in various countries. The European Central Bank's decision to purchase bonds from troubled member states has provided some stability to the euro zone, but challenges remain in addressing its economic woes. ECB President Mario Draghi emphasized the bank's commitment to using all available tools to prevent any speculation on the dissolution of the eurozone. The euro zone's permanent rescue fund, which provides a 500 billion euro backstop for countries at risk of losing access to capital markets, became operational after a long period of negotiation and legal challenges. German Chancellor Angela Merkel's visit to Athens indicated that Germany, the EU's strongest economy, wants Greece to remain in the euro area, effectively ending debates in Berlin about Greece's potential expulsion. Furthermore, the numerous predictions about the euro's collapse coming from financial institutions in London and New York have suddenly ceased, leading to a decrease in short bets against the euro in currency markets. Bond yields have decreased and bank stocks have rebounded. Spanish banks are borrowing less from the ECB as some are regaining access to money markets. There is a decreased likelihood of a Greek exit from the euro, as Citigroup economists believe key euro zone players are now opposed to the idea. The probability of a "Grexit" has been reduced from 90 percent to 60 percent, but it is still believed that Greece will likely leave the euro within the next year and a half. European governments may not be willing to forgive part of Greece's debt to make it sustainable, but there is still a possibility of a write-off, especially after the German general election next year. It might appear to be a more logical, though unpopular, choice compared to a disorderly Greek default and exit, which would have severe economic and social implications for Greece and Europe. The International Monetary Fund recently criticized the EU's policy response, warning of potential capital flight, breakup fears, and economic decline in the euro area. The IMF is urging the euro zone, particularly Germany, to accelerate progress on a banking union and closer fiscal integration, and to adjust the balance between austerity and growth. The IMF also admitted underestimating the negative impact of budget cuts on growth and called on Europe to relax austerity measures, which was met with opposition from Germany's finance minister. The effects of the sovereign debt crisis will continue to devastate the streets for years to come, despite changes in perceptions in financial markets. The impact of public spending cuts and recession is causing social upheaval in countries such as Athens and Madrid, pushing middle class families and retirees into poverty and increasing unemployment and precariousness among young people. This crisis has shifted the balance of power in Europe, giving Germany and its northern allies more influence in euro zone decision-making based on their credit rating, while weakening and furthering the dependency of southern states. There is now a possibility of a two-tier Europe emerging, with a tighter inner core in the euro zone with its own budget and rules, and a looser outer circle including countries like Britain and Sweden. Germany is adamant about not taking on additional financial responsibilities for other euro states, rejecting common euro zone bonds and joint bank deposit guarantees. Finance ministers from Germany, the Netherlands, and Finland are working to prevent any retroactive use of euro zone rescue funds. Berlin supports the idea of creating a separate budget for the euro zone to deal with economic shocks, and its endorsement of a single banking supervisor could lead to more risk sharing in the future. As the euro area becomes more unified, non-euro EU members like Poland, Hungary, and Latvia face difficult decisions. These countries are eager to join the monetary union and are pushing to have a say in decision-making bodies that oversee banks in their countries. Poland recently attempted to gain access to the Eurogroup by offering to participate in a financial transaction tax, but was told that only eurozone members could attend. Britain is not planning to join the euro or the banking union, but is requesting a veto right to safeguard its financial sector from decisions made by others. It also hopes to negotiate a reduction of its European ties as the euro zone integrates more closely. Sweden, with a pro-euro political establishment, is uncertain about the euro zone progressing without its involvement. These developments will challenge Europe's ability to maintain peace and prosperity on a divided continent, as recognized by the Nobel Prize.