Seems like the running gag for the last 12 months.  Greek debt worries shock the markets and send the DOW and S&P to losses, but when the EU conglomerate manages to kick the can down the road, the markets breath a sigh of relief. It keeps happening over, and over again.  No one is addressing real long term answers to the issues facing the European Union, that could actually lead to it’s dissolution. The critical questions going forward include how an economic union supporting a single currency, can survive between sovereign principalities given the inherit conflicts in the oversight of debt repayment, restructuring, and the management of actual defaults.

It seems no one in the EU, or Greece in particular is thinking outside the box when it comes to salvaging what remains of the nation.  The extreme level’s of austerity, and increased taxes will only serve to push their population to other EU member states, or to better opportunities in the Americas or Asia.  There seems to be a complete void in leadership across the board.  Germany is no put in the unfortunate situation of supporting the entire continent.  The sole focus is on raising taxes, and cutting government spending when it’s clear that this is not a sustainable path on its own.  Greece will have to grow their way out of the crisis.  Their socialist tendencies, and those of their neighbors are perhaps the greatest obstacles.  Look to promote new business development and investment in the country to help increase the income base that can eventually generate new tax revenues.

For example, open up offshore sites to Oil and Gas exploration.  Setting more reasonable royalty sharing mechanisms, such as those in effect by the United States, will give them a significant competitive advantage.  The major’s would all look to Greece for potential increases in their margins, which already range between 7-10%.  Greece can collect a nice premium in royalties, and allow a new booming industry to start up.  Certainly there will be more details to work out, but thinking outside the box, and focusing on growth within a 2-3 year horizon would actually make good use of the continued bailout funds that are keeping the country afloat.  Afloat to continue rioting for now, given the absence of direction and vision from the current leadership.

The United States faces a similar challenge with a lack of leadership and vision from the Obama administration, leading the nation out of the fiscal crisis.  Greece is just much further down the path of insolvency, especially considering the significant entitlement system run by the socialist government.

Should Greece no longer be supported by the European Union (better known as Germany these days), what would happen should a default come forward?  Is the EU assembly prepared to begin repossession, or sales of Greek assets in order to settle bond debts? Would this be permitted by Greek leaders, or even the people?  Imagine the rioting that would take form should this become an eventuality.

Here lies the danger of a single currency system for an aggregation of countries that are tied together economically, but not politically. Although the mutual socialist roots of most European nations helped form the union, using the baseline of cooperatively controlled production mechanisms (also known as government controlled), the socialistic tendencies have now found their fatal end where government dictation of production does not yield sustainability.  Further, without a true political bond, would the repossession of Greek assets constitute an act of War?  How would this otherwise be received?  Imagine the French and Germans flying in to decide how to most efficiently, and effectively recoup their losses.It may have been seen to be the ultimate socialist move at the time, but it’s now become clear that a single currency system for non-politically aligned states is a dangerous proposition.

The Obama administration has advocated for more European-like policies over the course of his term.  This includes policies on environmental regulation (cap and trade), health-care (universal single payer system), and government based stimulus for the economy. What’s next, a move by Obama for a single Americas based currency called the Ameri?

Keep in mind, by definition, a socialist regime deems it most appropriate to drive all decisions of a countries production or outputs from the government.  The government, in this case, is considered to be the cooperative behind the socialist policies.