The European Union being awarded the Nobel peace prize coincides with the realization that the euro, despite facing financial turmoil, is likely to remain intact. However, there are concerns that the euro zone may become a strained relationship with ongoing disagreements and potential separation. Recent developments have indicated that the euro is likely to persist with all 17 members and possibly more in the future, but the region still struggles with economic stagnation, unemployment, and social issues that are deepening the divide between northern and southern Europe. The European Central Bank's decision to purchase bonds from troubled member states has provided some stability to the euro zone. ECB President Mario Draghi emphasized that the bank will utilize all available tools to prevent anyone from speculating on the dissolution of the monetary union. The euro zone's permanent rescue fund became operational recently after facing obstacles and legal disputes, offering a 500 billion euro safety net for countries at risk of losing access to financial markets. German Chancellor Angela Merkel's visit to Athens indicated that the EU's leading economy is keen on Greece remaining in the eurozone, putting an end to debates in Berlin about expelling the Greeks. Interestingly, the numerous predictions about the collapse of the euro, which had been circulating from financial institutions in London and New York, have suddenly ceased. Additionally, the amount of short positions against the euro in currency markets has decreased. 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. The likelihood of Greece leaving the euro, known as "Grexit," has decreased according to economists at Citigroup. They now believe that key euro zone players think a Greek exit would be more harmful than beneficial. Citigroup has lowered the probability of a Grexit from 90 percent to 60 percent, but still predicts that Greece will likely leave the euro within the next 12-18 months. They argue that European governments are unlikely to agree to forgive part of Greece's large debt to make it sustainable. However, there is still a possibility of debt forgiveness, especially if it is postponed until after the German general election next year. The idea of a disorderly Greek default and exit, with its disastrous economic and social consequences for Greece and Europe, may appear more rational than popular. The International Monetary Fund recently criticized the EU's incomplete policy response, warning of potential capital flight, breakup fears, and economic decline in the euro area. The IMF is urging faster progress on banking union and fiscal integration, as well as a change in the policy mix between austerity and growth. The IMF also acknowledged underestimating the negative impact of budget cuts on growth and called for Europe to ease up on austerity, prompting a strong reaction from Germany's finance minister. The effects of the sovereign debt crisis will continue to wreak havoc for years to come. Public spending cuts and recession are causing harm to societies in cities like Athens and Madrid, pushing many middle class families and retirees into poverty and increasing unemployment and instability for young people. This crisis has shifted power dynamics in Europe, giving Germany and its allies more influence in euro zone decision-making due to their strong credit ratings, while weakening southern states. Europe may be moving towards a two-tier system, with a tighter inner core of euro zone countries and a looser outer circle including Britain and Sweden. Germany is reluctant to take on financial responsibility for other euro zone nations, opposing common bonds or joint bank deposit guarantees. Finance ministers from Germany, the Netherlands, and Finland are working to prevent retroactive use of euro zone rescue funds. Berlin is in favor of creating a separate euro zone budget to address economic shocks and supporting a single banking supervisor, which could lead to a sharing of risks in the future. As the euro area becomes more integrated, countries outside the single currency like Poland, Hungary, and Latvia face difficult decisions. They are trying to align themselves closely with the euro zone in hopes of joining eventually, but are facing challenges in gaining representation in decision-making bodies. Poland recently attempted to join the Eurogroup but was informed that only euro members could participate. Britain is not planning on joining the euro or banking union but wants a veto right to protect its financial sector. It also sees the closer integration of the euro zone as a chance to negotiate looser ties with Europe. Sweden, with a pro-euro political establishment, feels uneasy about the euro zone progressing without it. These developments are creating tension in Europe as it undergoes a period of reshaping that will test its ability to maintain peace and prosperity on a divided continent, as recognized by the Nobel Prize.