The EU is primarily a state union with the monetary integration inadequately implemented. I would reverse the question to how it can be corrected. It works for theUS; it would work for the EU.

Second, the root problem with Greece is political. The Socialist party won last October deceptively declaring that “money exists!” and promising more benefits . From their first week in power, they started talking about the road to the IMF – when the spreads were still very low; half year of inaction and mishandling of the debt drove the spreads through the roof and made the IMF an inevitability, while too many economists thought the IMF was avoidable if the government did the sensible things early on.

The economic problem is a curtain to the bigger political problem: Mr George Papandreou – a foreign born national with little ties with Greece who owes his election to the family name of his father Andreas who founded the Socialist party in the late 70’s – is now seen even from members of its own Socialist party as aiming to damage the European Union and using the fiscal problems as a means to bring Greece to its knees. He has a very open agenda against the idea of traditional nation-states such as Greece. The Greek people are now watching in astonishment – the perils of democracy, when voters don’t pay attention to the “small print” during the candidate campaigns.

A 14% budget deficit is much more easily corrected in a country where the official estimate for tax evasion is 30%, the state spending on major sectors like health care is 2 or 3 times (multiples!) above cost – the difference being consumed by people who abuse the system and effectively steal state money, and a public sector who grew from 3% in the 70’s to an astounding 12% after it was expanded by socialist vote mongering policies.

I don't think the Greeks will get any where going back to their old currency. How would you like to get paid in drachma? A debased currency will not get them far.

Hi Jeff from NZ.
1. The euro is unstable. I'm sure you are aware that the last currency union (which was gold backed) was called the lira, and that did not last, for the same reasons.

2. Sheepfarming in NZ is in the doldrums. The main income generator is the wool (high quality merino wool is a nice product). Most lowland farms are being converted to dairy — over the sqawks of the greens — or into niche markets such as wine (Otago Reds are much, much better than the ones in Ontario, and half the price. Yes, I've drunk both). We make money by being ultra efficient and minimizing fuel inputs (for instance we don't use barns — the stock stay out in the snow, under a shelter or a hedge).

Oh, and there is a rolling 5% cut system running through education and health in NZ. It makes our managers drink more coffee — which does NOT come from starbucks, since all good citizens of NZ have taste.