Negotiations between the EU and Greece have occupied the headlines since February, and the chance of a breakdown appears to be increasing. Yet while it is in many people’s interests to rattle the chains about the dangers of a Greek exit (Grexit) from the euro, the reality is that Greece is a small economy and its exit or debt default by itself could not do too much damage. And in the rest of Europe, things are looking up and growth is returning to a respectable pace.

The European Commission recently upped the 2015 growth forecasts for the 28-nation bloc from 1.5% predicted in November to 1.7%. That’s better than it looks: the EU’s population is increasing at only 0.3% annually compared to the U.S. 1.0%, so the EU’s 1.7% growth rate is equivalent to a U.S. growth rate of 2.4%. Growth in Germany, the EU powerhouse, is expected to reach 1.5% this year compared with an earlier estimate of 1.1%. In 2016, growth is expected to accelerate further to a rate of 2.1%. All 28 economies of the EU are expected to grow for the first time in eight years – even Greece!

The Greek drama is enlivened by the extraordinary negotiating style of the Greek finance minister. He must have slept through his Diplomacy 101 class, because if you’re trying to get money from someone it’s probably not wise to accuse them of being Nazis and demand hundreds of billions in reparations for a war that ended 70 years ago.

That has stretched the patience of the EU negotiators, and made it likely that the talks will collapse. There are two issues here. One is a default on Greek debt, which apart from Greek banks would affect mostly the EU countries’ budgets and the European Central Bank, where most of the debt now rests.

The other question is whether Greece will leave the euro and re-adopt an independent currency the “new drachma.” Economically, it should probably do so. Greek labor is still overpaid compared to its productivity, although much of the excess has been squeezed out by half a decade of austerity.

However Greece’s current left-wing Syriza government is likely to spend more than it should, so it makes more sense for the necessary reality to be imposed by the markets through a devaluation of the “new drachma” rather than by the European Commission as conditions for new loans. The Syriza leaders can then denounce the markets and accuse them of Nazism, but nobody will care.

Whatever happens to Greece, it is unlikely to affect Europe much – the country represents only 1.4% of EU GDP. Conversely, the “QE” bond purchases of the European Central Bank, which began in March at the rate of $66 billion a month, should continue to boost EU growth and asset prices. After all, the bond purchases represent one third of Greece’s GDP each month. So the outlook for European shares is good, especially as the continent’s average P/E ratio, at 18.3 is lower than the 20.7 on the S&P 500.

For our Global Income Edge portfolios, advice on British holdings should await the settlement of the inevitable post-election maneuvering. However the Swiss drug company Novartis AG (NYSE:NVS) should benefit from growth in the Eurozone. Banco Santander (NYSE:SAN) should benefit still more from the continued recovery in its home economy, Spain, as well as from ECB bond purchases, which will boost the value of Spanish real estate, still a problem for Spanish banks.

In general, European holdings represent an attractive alternative source of income for U.S. investors, which nicely balance a portfolio of U.S. blue chips.