Like many family rules, they are usually broken first by the parents, in this case, EU founding members Germany and France. Both broke the 3% deficit and Italy was allowed to join despite its government debt being over 60%. The troubled child of today, Spain, actually stuck to the rules right up to the outbreak of the subprime crisis in 2008.

The other family problem child, Greece, apparently took no notice of the rules to begin with and undertook creative accounting to make its borrowing position look better than it was. Re-evaluation of the Greek financial situation occurred in December 2009 when the government announced it owed 300 billion Euros (US$442 billion), then the highest in its history at 113% of GDP (over 160% now), moving its budget deficit from 3.6% to over 13% in a day, four times the Maastricht limit.

And so a crisis was triggered. Why? Economies and financial systems depend greatly on confidence. The Greek debt situation created uncertainty, specifically about debt repayment. Sovereign debt subsequently moved from risk free to high risk for some countries, and a new banking crisis emerged.

Today it shows in the wide discrepancy between bond yields across Europe. German 10-year bonds are under 2%, France 2.5%, Spain and Italy at 6% and Greece at 27%, all under the same currency intended to harmonize economies. The UK, outside the Euro, is benefiting from safe-haven status. Bond yields of below 2% are at historic lows. Put simply, yields show the degree of trust that investors have in their money being repaid.

For Greece, this has been a tragedy. Its contracting economy cannot cover existing interest repayments even without the problems of getting new debt. No one will lend to Greece, so it relies on bailouts by the European Union, European Central Bank and International Monetary Fund--the troika.

Europe’s response has been summit meetings leading to support funds and bailout packages. Family therapy for the Euro has involved Germany and France pushing a fiscal agreement to oversee future government spending, signed in January 2012. Germany is playing the role of the strident parent, lecturing the errant children about the dangers of credit card spending, the price of its financial support. Europe’s rebellious teenager, the UK, opted out of the fiscal compact, too.

While these moves are helpful, Europe’s political leaders always seem to hint that measures are not comprehensive or quick enough. The doubt is sufficient for financial markets to suppose that Europeans are not all for one and one for all; national, rational self-interest is the real motivation. Financial markets continue to pressure weaker European nations.

Direct economic effects are largely confined to the Eurozone. And even within Europe, the struggle of some Greeks seems very remote to people in Germany, France and the U.K. Nevertheless, if there is one lesson from this crisis for U.S. investors, it is that being related matters, through linkages in the financial system especially.

Real estate investors prefer markets where they understand the fundamentals and consider these factors: legal structure, transparency, liquidity and risk. This normally means staying local or specializing in certain markets. Very few investors feel comfortable buying an asset they have not visited. “Kicking the tires” is part of due diligence.

The underlying supply constraints in European cities can be attractive, so European investors wanting to stay local can find plenty of value. But the Euro crisis’ impact on risk profiles may make the US look more attractive. Similarly, US investors with New York City; Washington, DC; and San Francisco (all among the top five global cities for real estate) to choose from have little desire to take on exposure from currency risk, so they can stay at home.

Private equity funds are looking at opportunistic investments in the US and Europe as bank deleveraging continues. Investment strategies may be looking for a balance of riskier European assets and safer US assets. Currency risk can be hedged against at a price. The strong US dollar is making American assets look pricey, but this position could unwind quickly since underlying fundamentals do not support a strong dollar; the dollar’s position is driven by Eurozone uncertainty. Those already invested in the US may be looking to repatriate before the dollar weakens but will only do so only if they have another safe haven to place their money.

The Euro crisis will continue to impact credit availability, and not just in the Eurozone. The April US senior loan officer opinion survey on bank lending practices reported tightening standards on loans to European banks and non-financial firms with substantial business in Europe. This means that credit will be harder to come by and more expensive, too.

The IMF suggested that the Euro crisis will lead to a sharp drop in risk appetite and in asset and commodity prices as well as lower global demand. In effect, the IMF said the more terrible it gets in Europe, the worse it will be in the US, with rising yields and risk premium. The spillover from the Euro area to the US is relatively strong since the US is a prominent financial center and safe haven. The recent flight of capital to the States has been positive on US government bond yields, offset by higher volatility. The IMF thinks there will be negatives on bank funding costs, corporate bonds and equities. Occupational requirements from international businesses are likely to be lower.

Uncertainty in the Eurozone will make holding assets there less attractive. The weak Euro makes assets price attractive, but the risk perception is heightened. Eurozone investors will look outward, initially to non-Euro EU countries like Sweden and the UK because they are seen as safe havens.

The final outlook for US real estate will depend on how the real economy fares and how the money and credit markets behave. It has been estimated that a Eurozone meltdown would lower growth by 1.5% relative to what it would have been without the crisis. The close relationship between the real economy and real estate returns means that US investors need to keep a watchful eye on Europe.

Will family happiness be restored? To answer that, we end up back with the EU’s problem child, Greece. In “The Royal Tenenbaums,” family problems are partly resolved by the lead character’s death. No politician in the European Union publicly espouses Greece do something similar by leaving the Eurozone. With its national election concluded, Greece decided to stay in the family, but it faces a generational challenge to rebuild its economy. Staying in the Euro requires Greece to keep wage growth subdued to stay competitive with Germany; many think it may take Greece up to 50 years to regain the standard of living it had before 2008.

It is this type of strain over jobs and living standards that present the greatest difficulty for EU leaders today. The solution to the Eurozone crisis is seen increasingly as creating a complete monetary union with a common debt issuance and banking union. Whether Europe’s individualistic family members agree to their lives being so closely parented remains to be seen.