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Should Greece Remain in the Spotlight?

Much of the near-term risks in Greece have diminished, but the country will remain an important preview of what could happen in other heavily indebted countries.

The sovereign debt-driven volatility of the last week doesn't begin to approach the roller-coaster ride of the summer of 2011, let alone late 2008. But the market remains skittish and laser-focused on what is happening in Greece. Recently, it seems that as the picture in Greece darkens or lightens, so does the market.

But does that make any sense? Greece is a small economy, dwarfed by other members of the European Union. At this point, is anyone really shocked that Greece can't pay back its creditors 100 cents on the euro or that the European community is deeply conflicted about dolling out unlimited aid? No. The market isn't focusing on the fact that Greece is in trouble. Instead, the spotlight is on the precedent that Greece is setting and its impact on larger economies.