German Chancellor Angela Merkel gained support from lawmakers to expand the European Financial Stability Facility's firepower, as the lower house of parliament passed the measure with 523 votes in favor and 85 against. Concern Greece will default is dragging global equities and commodities toward their biggest quarterly losses since 2008. About three-quarters of investors surveyed by Bloomberg say the euro-area economy will fall into recession in the next year and more than half predict China's growth will slow to less than 5 percent a year by 2016.

"Crucially, Merkel won the vote without relying on the opposition," Geoffrey Yu, a currency strategist at UBS AG in London, wrote in a note to clients. "Fears had initially been voiced that dissent within the party would be high."

David Fuller's view There has been no shortage of emotional talk in recent months forecasting variously, the "collapse of the euro", the "break-up of the euro region" and more recently, "Germany leaving the euro." Most of this emanated from outside the euro region, and to the extent that it helped to concentrate minds within the seventeen euro member states regarding the seriousness of their sovereign debt crisis, that hyperbole may have been helpful.

I have long maintained that the euro would survive so long as Germany remained committed to the single currency. Polls will show that the German public has reservations about the euro. However, overwhelming support for the single currency from Germany's powerful export industries and all of the country's viable political parties has seldom wavered.

German Chancellor Angela Merkel needed 311 votes today. She received 523 and only 85 voted against expanding the European Financial Stability Facility's financial firepower. That is a resounding victory in favour of European solidarity, which has never been seriously in doubt.

No one should underestimate the seriousness of Euroland's sovereign debt crisis. It will remain a drag on the region's economic growth for many years. This will continue to be outright deflationary for member countries on Euroland's periphery. Others will experience stagflation due to some monetising of Europe's debt, a generally soft euro and commodity price inflation when global GDP growth picks up once again.

Debate on policies among seventeen member states will often appear chaotic and ineffectual as do so many forms of democracy in progress. However, the overwhelming consensus among the political and business leaders involved is that they have far more to gain by remaining within the euro zone. They now also accept that a move towards fiscal union is necessary to ensure its survival.

Of considerable interest to the rest of us, euro zone leaders are determined to avoid a 'Lehman moment', in terms of Greece and also Europe's regional banks. I would not bet against them succeeding, at least for the next few years.

In terms of emotional contagion affecting other markets, this crisis may have passed its nadir.