Ireland is in peril, and it's not because Dublin is running low on umbrellas or Guinness. Rather, the country's housing market is in shambles, unemployment, at 13.9%, is at a 15-year high, the government's budget deficit this year will check in at nearly 12% of GDP, and Irish banks risk collapse because of $90 billion of bad debt -- a number that's roughly one-third the size of the entire Irish economy. Not only does the Irish government lack the resources to stabilize the banks and get its economy moving again, but it doesn't look like it will be able to borrow them either.

Because of this crisis, Irish yields are skyrocketing, with 10-year Irish bond yields climbing to near 9% before a recent drop. The country, like Greece before it, looks now like it can only be saved by international intervention.

And yet ...
Irish politicians, however, are resisting a rescue, fearful of the consequences that an EU- or International Monetary Fund-led bailout might bring with it. Not only would Ireland cede sovereignty to new financial overseers in that event, but austerity measures like those imposed on Greece such as higher taxes and lower spending would almost certainly cost Ireland's ruling party its power.

While it might seem like Ireland has no chips to bargain with, the country actually has some leverage when it comes to negotiating with the rest of Europe and its central bankers. The reason for that is that the continent has already collectively committed $146 billion to prevent Greece's default in an attempt to stop the crisis from spreading to Portugal, Spain, and others and preserve the euro and European economic union. Should the EU now fail in Ireland, that money would be wasted because doubts about the stability of the euro and EU would be back. Ireland, in other words, is aware that Europe is already in for a penny and ready to go in for a pound. This means that by dragging their feet this week, they might succeed at negotiating better terms when it comes to the inevitable bailout -- a fitting development given that Ireland has long sucked money out of the EU for its own benefit without giving much in return and routinely voting against a stronger EU.

So is this the end of the euro?
Before I traveled to Germany and Greece with our Motley Fool Global Gains research team back in April to assess the situation for myself on the ground there, I wrote a column proclaiming that the euro would be dead by 2014. That was the only endgame I could foresee for a flawed idea implemented with flawed execution by flawed actors.

Yet when I got to Europe, I discovered just how wedded the current political generation there -- embodied by current European Central Bank President Jean-Claude Trichet -- was to the idea of an integrated Europe that they had spent more than a decade creating. They saw the EU as an incredible political achievement, still liked the power it gave the continent relative to the United States, and were committed to preserving it. As evidence of that fact, they'd never written into the laws governing the EU any way to dissolve it!

The euro will survive, but be worth less
That's why I changed course and now believe that European politicians today will do whatever it takes to preserve the euro and the EU. This means that larger economies such as France and Germany will ultimately end up rescuing all of the financial basket cases with whom they have chosen to ally, long-term consequences be darned! They will, however, exact some concessions from countries such as Ireland, and I suspect that the European Union of 2014 will be much more centrally governed as a result. The euro will also be worth far less, given the massive obligations that will overhang the continent and the slow-to-no growth resulting from necessary near-continentwide austerity measures.

This is why we are so fearful of European exposure at Global Gains and have recommended selling shares of companies with significant euro exposure such as Spanish retailer Inditex, cement maker Cemex (NYSE: CX), and Portugal Telecom (NYSE: PT).

The global view
It's also important, however, to be aware that every crisis also creates opportunity. For example, during the euro swoon last April when Greece was in the headlines, we took advantage and recommended buying shares of companies such as Philip Morris International (NYSE: PM) and Adidas that although they are headquartered in Europe, are becoming less and less European every quarter. At Philip Morris, for example, the EU region declined from 36.4% of net revenues (before excise taxes) in the third quarter of 2009 to 32.3% of net revenues in the third quarter of 2010 -- a trend that should continue given the company's growth in emerging markets.

That's why it's short-sighted to sell off Philip Morris, Adidas, and the likes of global liquor giant Diageo (NYSE: DEO), the maker of Ireland's famous Guinness beer, with the rest of Europe. The good news is that markets get short-sighted often in times of crisis, and I'm hoping fears of the real financial crisis that Europe has on its hands with Ireland will cause these stocks to sell off again as they did when the world was worried about Greece. So add these stocks to your watchlist, and should the euro really start to drop, think about booking a lavish European vacation.

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Tim Hanson is co-advisor of Motley Fool Global Gains. He owns shares of Philip Morris International. Philip Morris and Adidas are Motley Fool Global Gains selection. Diageo is a Motley Fool Income Investor selection. Cemex is a Stock Advisor pick. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.