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Question of the Week RESULTS: Painful Slog for the Euro

A majority of peHUB readers believe that this week’s announcement by central banks to support European lenders during the crisis in the euro zone will be just another step in a long painful slog for the unified currency.

That puts our wise readers on the same page as Angela Merkel, who says the crisis will take years to resolve. The German chancellor, nonetheless, did urge fast action to give leaders the tools to tackle the causes of the problem.

In fact, with 56% of the votes in our Question of the Week, “painful slog” scored exactly twice the 28% response of our second alternative, and my personal choice, “possible turning point.” To elaborate on that, I believe the turning point will in fact occur only if the European Central Bank steps up to its responsibilities as a lender of last resort, a move it has resisted but one that the presence of the U.S. Federal Reserve makes to appear more likely. But still, the nations of the euro zone will have to step up with responsible fiscal policy if the Continent is really going to turn the corner on the crisis.

On a side note, I should say we had an unusually low response rate on this question. I’ve been contributing to this feature since August, and I believe this one attracted less reader interest than any I have done.

I shouldn’t be surprised. Since early November, I have put the question to a series of conference panels that I have moderated, both at our own Buyouts Texas event and at one put on by the Yale School of Management, totaling a dozen investing pros or more, and none of them, not a single one, believed that what was going on in Europe would affect the mid-market buyout business in the U.S. middle market, they said.

All right. Fine. Maybe y’all are right. But the smart money also said that the impact of the housing bubble would be confined to the subprime mortgage market and the dot-com bubble wouldn’t spread to the broader stock market. Some observers say a euro collapse could destroy the U.S. economy.

You’ve been warned.

Steve Bills is a senior editor at Buyouts Magazine. Any opinions expressed here are entirely his own. Follow him on Twitter @Steve_Bills. Follow Buyouts tweets @Buyouts. For information on how to subscribe, contact Greg Winterton at greg.winterton@thomsonreuters.com.