How to Profit from German Minister's New Year's Prediction

2011 has been a tough year for the Euro Zone countries. The sovereign debt crisis has shaken investors' confidence in the Euro currency and bond yields of a number of Sothern European countries have been at record highs. These red flags have been big enough to catch credit agencies attention too, which led to actions to cut the credit ratings of Greece, Italy, Portugal, and Spain. The downgrade of these countries' sovereign debt rating also landed a big hit on the European Banks, as they hold a significant amount of sovereign bonds that have seen an extreme decline in value. As the horrific year is coming to an end, German finance minister, Wolfgang Schauble, may have thought up the best New Year's resolution for traders. Minister Schauble stated this morning that the Euro Zone crisis will be stabilized in 2012 and that the common currency will not be in danger. He did not entirely rule out a departure of a Euro Zone member country, but told that “no such development can [be] seen at the moment," the Telegraph reports.These positive comments sent EUR/USD currency pair higher to $1.298. Earlier this week EUR/USD broke below a critical support level at $1.30. The U.S. equity futures were also trading slightly higher pre-market.Despite the optimism, Schauble is not expecting any quick fixes to the crisis and, according to the Telegraph, argues that "the talk of bazookas and the like only leads to us not tackling sustainably the causes of the crisis." Overall, the future actions to fix the crisis are unclear, as different sides prefer opposing methods to fix the distressed balance sheets. The European Central Bank has recently increased the money supply and bought sovereign debt of countries that have had problems finding buyers for their bonds. The critics argue that the bond buying program is violating the ECB sole mandate of price stability. On the other hand, Ireland that has undergone severe austerity measures is one of the few European countries, whose stock index is positive on the year. The Irish people have had to pay a high price for this, as the unemployment rate in the country is hovering near 15 percent.No matter which methods are applied in 2012, trades should pay attention to the European banks and companies with a heavy exposure to the region as they will be affected. If the German finance minister's New Year's resolution holds, we might see a nice boost in these stocks. You can follow me on Twitter @TuomoKallio.