Greece, a small country within the European Union, is currently the focus of media and political attention due to its ballooning debt, its suspect creative accounting, and likely default unless the EU bails it out. Greece is not the only country with unsustainable debt. Pundits have named Greece as a member of “Club Med” (Portugal, Ireland, Italy, Greece, and Spain) or somewhat less charitably, a member of PIIGS (Portugal, Ireland, Italy, Greece, Spain).

However, as Tom Lauricella of the Wall Street Journal wrote, “Should the woes of a country with fewer people than metropolitan Los Angeles really roil the massive U.S. financial markets?” People are speculating that the Greek bond problems could spread to other countries. However, wouldn’t our politicians be better advised to look at California’s problems rather than Greece? Greece has only 2% of the Euro zone economy while California makes up roughly 13 percent of the U.S. GNP. When Greece goes to the EU, it gets a hearing. However, with California facing a fiscal disaster of a $6.6 billion deficit, it appears we’re on our own.

The problem for the EU with Greece is that there are no mechanisms for the EU to bailout Greece or even for Greece to leave the euro zone. The founders of the EU did not map out a contingency plan for dealing with a credit crisis of a member. Greece can not devalue its currency because it uses Euros, not drachmas. Currently, the only option open to Greece are draconian cuts in spending and salaries on an already struggling country which would exacerbate social unrest in Greece.