As Europe wrestles with its own version of ‘too big to fail,’ speculation is rising that the Euro might not survive the sovereign debt crisis. Greece may not be able to repay its debt in full, but the problems of fiscal irresponsibility are broader and may take more than the almost $1 trillion already pledged.

Fears of a debt contagion in Europe got the attention of US investors this week. As of Friday morning the NASDAQ is off 7.2% the S&P 500 is down 6.2% and the FTSE All US Index is down 6.5%. The S&P Europe 350 is down 11.6% for the week and 16% over the past 30 days. Worried Bond investors flocked to the relative safety of US Treasuries driving intermediate and long-term bond indices up 2.2% and 5.6%, respectively, for the week. Concerns that severe fiscal problems in Greece, and growing pressures in Portugal, Spain, Ireland, and Italy might cripple the European recovery along with reports a few forecasts that China is months away from a burnout started a selling wave that grew throughout the week.

Recovery remains firmly on track as revealed by the government’s first of three estimates on the growth of US Gross Domestic Product for the first quarter of this year. While a little below expectations, the 3.2% gain is solid and continues on the heels of a 5.6% pace set in the fourth quarter. The six months together comprise the strongest advance since 2003.

The biggest news this week on the US economy comes today as the Commerce Department announces that orders for durable goods excluding transportation jumped by 2.8%, the most since the recession began in December 2007. Other reports this week including Leading Indicators and Home sales reported this week further bolstered the view that the economy is healing.