After a six consecutive week long run of posting losses against its American counterpart, the Euro finally closed last week slightly up against the U.S. Dollar.

The EUR/USD closed above the day’s open, for the third consecutive day last Friday (in the forex market), fueled by speculations that European leaders were in the midst of forming a potential bailout plan for Greece. For the past few months the tiny nation of Greece has been a central focal point for the Euro’s troubles, as the floundering Mediterranean country continued to struggle to find a solution for its debt crisis – the fiscal deficit is estimated to account for more than 120% of its GDP. Since news broke that Greece’s budget deficit jumped to 12.7% of GDP, well above the EU’s legal limitation of 3%, the Euro has spiraling down against its major currency counterparts, depreciating as much as 15% against the greenback.

With a supposed rescue plan, led by Germany and France to bailout Greece for as much as €30billion, in the works, Greek officials are expecting to seal a deal by Friday, when Greek Prime Minister George Papandreou is to meet with the German Chancellor Angela Merkel in Berlin. Greece, which needs to refinance more than €40 billion in debt within the next few months, is eager to lock down a rescue plan as soon as possible; however, senior German officials are denying the existence of any such plan.

The conflicting accounts reflect Germany’s hesitation to give up any leverage it has over Greece before Athens has shown any tangible progress in reining in its deficit, expected to reach nearly 13% of gross domestic product this year. While it would be the EU as a whole who be helping Greece, the fact is that Germany is the economic engine and force driving the 16-nation Euro Zone – and as a result would need to bear the burden of providing the majority of the bailout means. With current polls showing that the majority of Germans, nearly 70%, are opposed to such a bailout plan, the chances of a rescue plan being sorted by this Friday are becoming dimmer and dimmer for the tiny nation of Greece.

However can the EU and particularly Germany really risk not playing the part of knight-in-shining armor in Greece’s current tragedy? While the EU treaty official contains no “bailout” clause, can the Euro zone nations really afford for one of their very own members to default? Already the Euro has depreciated nearly 15% against the U.S dollar, and if the “Greek situation” isn’t fixed, the single European currency will most like keep sliding down. While there is no written provisions pertaining to a bailout of any one member of the Euro Zone, letting Greece just default may have disastrous consequences for the other 15 nations. According to estimates for the Bank of International Settlements, Greece owes its neighboring countries a total of $303 billion, including $75.5 billion to French banks, $64 billion to Swiss banks, $43.2 billion to German banks.

Since its creation the EU has always aspired to become a world superpower – from a certain point of view it could even be considered as France and Germany’s only way to relive their glory days of ruling the world. However, with the EU being hit hard by the current economic recession, and the PIIGS rolling around in massive amounts of debt, the EU’s dream, namely that of France and Germany, has been pushed back. Saving Greece from bankruptcy, keeping the euro and the monetary union afloat have become the immediate priority of the EU leaders. However, without backing from Germany, the formation of a bailout plan will be near to impossible. With the fate of the EU in its hands, it is time to decide if it really wants to remain “king” of Europe, and if so is it ready to accept the lead part of the protagonist in the current Greek Tragicomedy.