THREE years ago this week, the US Government was battling to save the financial system from collapsing, following the downfall of Lehman Brothers.

This year – this week – European governments will be fighting to save the Euro.

I have never seen such uncertainty in the global economy. With few exceptions we have politicians in Europe and in the US burying their heads in the sand and dithering about what action they should take to avert an impending train crash. A number of worried banks have stopped lending to other banks again – so we have credit crunch déjà vu.

Greece is a total economic disaster, and completely bankrupt. If Greece defaults on its debt payments, then it would undoubtedly have to leave the Euro zone.

In this scenario, the Greeks would probably find that the real value of their cash and savings drops by half overnight, as they are converted from euros to drachmas. Then the nightmare starts, as panicky populations in the other countries with weak economies – Portugal, Ireland, Spain, Italy and even France – try to move their own euro savings out of their own country to safer havens such as German or Swiss banks. Result? A run on banks everywhere.

Europe is looking to Germany to save the Euro, which, of course, is a huge burden politically for Chancellor Merkel, so you can understand some of the dithering.

Fundamentally perhaps, is the Euro really worth saving, from a German perspective? One commentator has even suggested that Germany could exit the Euro zone and let the rest sort it out. Unlikely, but we have got used to the unthinkable happening in the last few years.

The Euro will never work unless there is fiscal union – in other words tax policy set centrally by Eurocrats. What are the realistic chances of that being agreed by 27 countries?

Whichever way you look at it, there is colossal short to long term uncertainty for Europe's economies.

Thankfully the UK, outside of the Euro, seems set to retain its AAA rating and we can therefore continue with a low interest rate environment for some time yet.

Our inflation is likely to hit five per cent but then subside, and there is no real sign of pressure for wage increases. The biggest problem, of course, is where growth is going to come from. We are still some six per cent lower in GDP terms now than we were before the 2008 crunch.

The UK government was hoping that an increase in company investment and exports would drive growth and this has yet to happen. Hence Nick Clegg's announcement of a boost in public spending on large infrastructure projects such as roads.

The global economy as we have known it is changing massively, with a huge structural movement of wealth from developed to emerging economies. Over 80 per cent of the world's growth in the next year will be accounted for by the latter.

Western countries will suffer increasingly from such challenges as unsustainable pension and health care commitments, lack of the right skills in the labour market and a defective banking sector.

Further pressure will come as the export of cheap goods from China to the West declines. A useful source of deflation for the western world for the last decade, China is facing its own problems such as high inflation and a population that is increasingly aspirational.

So from the viewpoint of a company based in the South West, what action should you take?

The fundamental requirement is to ensure that costs are kept well managed so that the company gets the best value out of every bit of expenditure; efficiency and effectiveness are the keys. The winners will be those businesses that can survive and grow faster than their competition.

We still have a lot of hard work ahead, but the opportunities are out there for those companies that are lean, nimble, flexible and entrepreneurial.

Keep your focus on your market but at the same time watch the global picture so that you can move quickly to divert resources or streamline costs in the event that the economy goes downhill again.

I do believe that we are in for a very rocky ride over the next 12 months – and I am a natural optimist.