European leaders have done it again. When 27 of them gathered in Brussels this week to discuss the steps needed to contain the European debt crisis as a whole and Greece’s financial woes in particular, it’s no surprise that no plan emerged.

Instead, Greece’s prime minister revealed that the country’s exit from the euro could cost $640 billion to $1.28 trillion — and European leaders are preparing for this possibility. If the PM’s goal was to strike fear in the hearts of investors, he succeeded.

Stocks around the world have been slaughtered — and Europe’s financial problems are far from over.

It’s times like these when investors are likely to sit on the sidelines. But it’s exactly times like these when the smartest investors pick up great names at huge discounts.

In fact, one of the world’s most famous and well-respected investors, Warren Buffett, has started to look for opportunities across the pond.

Back in December, Buffett poured around a billion dollars into the European market. Recently, he’s upped that stake to $3 billion to $4 billion.

No one knows what he’s buying. But I have a few pretty good guesses.

The Oracle of Omaha’s Top European Picks?

All you need to do is look at Buffett’s buying behavior in the past to figure out where his money is likely being funneled now. During the mortgage meltdown, when global markets were hammered, he upped his stakes in Coca-Cola (NYSE:KO), now his largest holding, and Wells Fargo (NYSE:WFC).

So what is he buying today?

Since several world-class businesses have been unfairly punished of late, I think Buffett is finding outstanding opportunities in global powerhouses that are in multinational markets, pay fat dividends, have blue-chip balance sheets and will offer tremendous upside when Europe’s smoke clears.

The first sector he’s likely to be targeting is consumer staples.

Nestlé (PINK:NSRGY) is a logical first choice. Based in Geneva, Switzerland, Nestlé touches practically every market in the world, whether it’s candy or coffee or prepared foods or bottled water. It’s a powerhouse.

It also doesn’t hurt that the company is on track to deliver 5% to 6% organic growth in 2012 despite a challenging environment with low consumer confidence. In the first quarter, Nestlé reported 7.2% organic growth.

Another name I like that I’m sure Buffett also likes is Unilever (NYSE:UN). Based in the Netherlands, Unilever is one of the largest consumer-staples companies in the world. It produces packaged goods that include pasta, canned goods, fresh foods, laundry detergents, soaps and shampoos.

The fastest-growing part of Unilever’s business is in emerging markets. In fact, in the first quarter, UN’s sales in emerging markets were up nearly 12%, while sales in developed markets were up just 4.2%.

That’s something you want to be a part of. You want to own big multinational companies that have enormous upside potential in emerging markets. So Unilever is a great buy.

What else might Buffett be buying in the consumer-staples sector?

I think he’s probably taking a look at GlaxoSmithKline (NYSE:GSK). After the big merger of GlaxoWellcome and SmithKline Beecham, GlaxoSmithKline became the largest pharmaceutical company in England. It’s a powerful name in the pharmaceutical sector, and it offers a dividend yield of better than 5%.

Recently the company made a bid to buy Human Genome Sciences in Rockville, Md., for its very promising lupus drug. If GlaxoSmithKline wins that hostile takeover, I believe the company is set for a blockbuster 2013 and many more years to come. GSK is a strong buy on any kind of pullback.

I think Buffett may also be buying a European bank or two, similar to his move during the mortgage meltdown. Barclays (NYSE:BCS) makes sense as a likely purchase.

Based in London, Barclays has seen its stock be unfairly punished, along with a lot of Italian, Spanish and Portuguese banks. BCS is down roughly 60% from its high last year. But London is the financial capital of Europe, and Barclays is a major player.

Add its 6% dividend yield and Barclays is a phenomenal way for you to buy a distressed British bank — a bank that isn’t in a country that’s having trouble just keeping a coalition government together.

The Bottom Line

Warren Buffett has made billions of dollars as an investor, and he’s done it by taking advantage of distressed prices in great stocks.

Right now, I believe he’s buying worldwide franchises with quality management, the highest-quality balance sheets, transparent financials and good dividends — stocks that have been unfairly hurt because of the woes around them.

The four stocks mentioned here are the best income opportunities in Europe today. If you have the stomach for it, I suggest you follow Buffett’s lead and leg into these positions at today’s ultra-low prices.

You don’t have to buy all at one time. Rather, commit a third of the capital you would consider investing in this market, just like Buffett is doing. And when he takes a full position, I will alert my Cash Machine subscribers to do the same.

Bryan Perry is the editor of Cash Machine, a weekly financial advisory that focuses on high-yield investments that provide cash payments month after month — no matter what happens in the stock market and the global economy. His brand-new report, 9 High-Yield Dividend Superstars Every Investor Must Own Now, details the biggest threats to your wealth today and reveals four bulletproof sectors that will continue to outperform. To access your FREE copy, go here.