German Chancellor Angela Merkel and French President Nicolas Sarkozy have now lost all credibility when it comes to the Euro zone crisis.

For those who were operating under the mistaken belief that Sarko was going to be the Messiah (the Antichrist) aided and abetted by Merkel, who were going to lift the Euro zone out of the doldrums, with Italy now seemingly needing a bailout package with money that is simply not there, that myth seems to have been dispelled once and for all time.

Throughout the euro zone's ongoing debt crisis, German Chancellor Angela Merkel and French President Nicolas Sarkozy have said they will do whatever it takes to save the euro.

As it turns out, according to The Wall Street Journal, their assurances have not been worth the paper they were written on.

First, they said there would be no defaults by eurozone countries. Yet they approved a haircut on Greek debt, calling it "a unique situation."

Then another Greek haircut followed 12 weeks later.

In addition, in September the European leaders said they had six weeks save the euro, the article reports. That timeframe passed without a coherent plan.

Euro zone leaders produced nothing of substance at their summit in Cannes last week.

Nonetheless, the Journal article notes, Merkel and Sarkozy did issue a most remarkable statement: that Greece was free to leave the euro. They decided that the euro zone membership would be voluntary because they do not want countries in the currency bloc to be liable for other countries' debts, not out of any principle of national self-determination.

The importance of the statement is huge. "At a stroke, they have introduced foreign-exchange risk into a sovereign-debt market still grappling with the realization that euro-zone government bonds contain unexpected credit risk," the Journal reports.

"No wonder the markets won't lend and China won't invest in Europe's bailout funds," the Journal reports. "Nothing these leaders say any longer carries any credibility."

The European economy seems to be disappearing down a sinkhole, the Journal reports. The weakest economies forced to try to decrease their debts through austerity measures that prompt a downward cycle.

The weakest countries suffer higher borrowing costs that in turn decrease their competitiveness while being stuck in an uncompetitive exchange rate at the same time.

Other observers say that publically raising the possibility of Greece leaving the euro zone may have been necessary to convince Greece to drop plans for a referendum on the euro zone's bailout and accompanying austerity plan for the country.

Seen as a vote to keep the euro, Greek Prime Minister George Papandreou proposed a referendum on the austerity plan but later dropped the idea.

Merkel and Sarkozy may have pursued Greece to drop the referendum plan, but they reintroduced currency risk by raising the possibility that a country might drop the common currency, according to The Financial Times.

A German euro is suddenly not the same as a Greek euro even if they are now interchangeable.