The European Union's Nobel peace prize is being awarded at a time when it is becoming clear that the euro, the EU's most ambitious project, has survived three years of financial turmoil and is unlikely to break up. However, while the euro zone has avoided a bitter separation and the loss of some members, there is now a risk of it becoming an unequal and troubled relationship with frequent disagreements. Recent events have shown that the euro is likely to remain and may even expand in the future, but the euro zone still faces challenges such as economic stagnation, unemployment, and social unrest that are deepening the divide between northern and southern Europe and fueling anti-EU movements in various countries. The European Central Bank's decision to buy bonds of troubled member states has provided some stability to the euro zone, but the region has yet to find a way out of its economic problems. Mario Draghi, President of the ECB, emphasized the bank's commitment to utilizing all available tools to thwart any speculation on the dissolution of the monetary union. The euro zone's permanent rescue fund, established after lengthy negotiations and legal battles, now provides a 500 billion euro safety net for countries at risk of losing access to capital markets. Angela Merkel, the German Chancellor, demonstrated her support for Greece remaining in the euro area by visiting Athens, effectively ending months of debate within her own coalition about potentially expelling the Greeks. Interestingly, the numerous predictions of the euro's demise 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 the money markets. The possibility of Greece leaving the euro, known as "Grexit," has diminished according to economists at Citigroup, who now believe that key euro zone players see more harm than good in Greece exiting. Citigroup has reduced the likelihood of a "Grexit" from 90 percent to 60 percent, but still predicts that Greece will likely leave the euro in the next 12-18 months, as European governments are unlikely to agree to forgive a portion of Greece's significant debt. However, there is still a chance that debt forgiveness could occur after the German general election next year. It might appear to be a more logical, although unpopular, choice compared to a chaotic Greek default and exit, which would have devastating economic and social repercussions for Greece and Europe. The International Monetary Fund recently criticized the EU's response to the crisis, warning of potential negative consequences such as capital flight, breakup fears, and economic decline. The IMF is urging the euro zone, particularly Germany, to speed up progress on a banking union and closer fiscal integration, and to adjust the balance between austerity and growth. The IMF acknowledged underestimating the negative impact of budget cuts on growth and called for Europe to relax austerity measures, sparking a disagreement with Germany's finance minister. The effects of the sovereign debt crisis will have a lasting impact on the streets, despite a noticeable shift in perceptions in financial markets. Austerity measures and economic downturn are causing societal unrest in countries such as Athens and Madrid, pushing many middle class families and retirees into poverty and increasing unemployment and insecurity for young people. This crisis has shifted power dynamics in Europe, giving Germany and its allies in the north more influence in euro zone decision-making based on their strong credit ratings, while weakening and further dependent southern states. The idea of a unified Europe moving at different speeds may be evolving into a divided Europe, with a tighter inner core in the euro zone implementing stricter rules and budget controls, and a looser outer circle including countries like Britain and Sweden. Germany is determined to protect its taxpayers from bearing the burden of other euro zone states, refusing to issue common euro bonds or provide joint bank deposit guarantees. Finance ministers from Germany, the Netherlands, and Finland are working to prevent any retroactive use of euro zone rescue funds. However, Berlin is in favor of the idea of establishing a separate budget for the euro zone to deal with economic shocks, and its support for a single banking supervisor may lead to more shared risk in the future. As the euro area becomes more unified, non-euro EU members like Poland, Hungary, and Latvia are faced with difficult decisions. Those aiming to join the monetary union are seeking closer ties with the euro zone, pushing for representation in banking supervisory bodies that make decisions regarding banks in their countries. Poland recently attempted to gain a seat at the Eurogroup table by offering to participate in a financial transaction tax initiative, but was informed that only euro zone members were allowed to attend. Britain is not planning to join the euro or the banking union, but they want a veto right to protect their financial sector. They also hope to negotiate looser ties with Europe as the euro zone integrates further. Sweden, which has a pro-euro political establishment, is uncertain about the euro zone progressing without them. This situation will challenge Europe's ability to maintain peace and prosperity on a divided continent.