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You might find a way to paint a rosy picture of China's well acknowledged economic slowdown. You might be able to convince yourself national GDP can rise along with prices at the pump. You might even be able, given the slightest ray of hope, to view the proclaimed improving housing market as more than just a hopeful fallacy.

Still, even the most daring, most hopeful of dreams can not paint the latest Greek debacle, or short term victory as many will declare, as the cure all for a nation still left in such utter hopelessness. Now another last second aversion of a messy default may seem like a positive, but in the end all it does is set up for another ugly and possibly more hectic failure further down the road. Problems, especially those as major as the ones suffocating Greece, don't peacefully end by themselves. They don't take a backseat as soon as some more euros jump in the fold. They don't automatically reverse course in the face of a looming election in May that is sure to present more riots than alternatives.

All this reality is the main reason why European banks, including the National Bank of Greece (NBG), have not been on a tear recently or at least showing some signs of hope. For they have witnessed firsthand the script and they have already memorized the ending.

When the National Bank of Greece implemented a reverse 1:5 stock split in November, the move wasn't done to simply reassure investors. The opportunity to do as much had already passed. The move was more of a last-ditch effort to portray Greece in a favorable light. A nation that had its problems, but was on its way to working through them.

Still, that strategy hasn't won over a number of shareholders. Shares in the beleaguered bank remain down 65% in the past year, maintained only by a final assumption the EU doesn't have the guts or foresight to admit their past mistakes and move on, while leaving their biggest headache to suffer alone.

In fairness to the remaining European nations, abandoning Greece now would be a difficult decision and not solely because of the financial interest involved. However, when it comes to economics emotion can never override common sense. For the damage Greece has done to the rest of the EU at this point is almost beyond measure. The carnage many other European banks have suffered in regards to both share price and earnings since the fiasco first garnered national attention is undeniable.

Below is a look at the performance of some European banks since the Greek crisis came to the forefront in 2010.

Royal Bank of Scotland (RBS)-53%
Lloyds Banking Group (LYG)-52%
UBS (UBS)-22%

The EU can still face and accept the path towards a true recovery. They can drop Greece from the union and face the protests that will undoubtedly accompany such a move while also appropriately rearranging their focus on cost cutting. They can, but for now they won't. In response, investors won't buy their shares.

Source: Investors Play Keep-Away With Euro Bank Shares