NEW YORK (TheStreet) -- Europe is making the Greece crisis all about Europe -- which is how it should be.
Greece now has until Sunday to submit a proposal for resolving its debt situation. The alternative is for Greece to leave the eurozone.
The goal of the European Union is to create an economic community that has the productive capability and the scale to compete in the new economic order with the United States and with China and with anyone else who reaches that level.
In order to achieve this, the union must not only have a common currency, a common banking and financial system, but also a common political union. National sovereignty is not anywhere near the top of the list.
Greece has some major economic problems of a structural nature that must be overcome in order to be an effective member of the EU during the coming economic era. The very fact that the economy has around 25% unemployment is just one sign that there are major problems in its structure.
This amount of unemployment is not just a problem in aggregate demand. It is a problem in education and training. It is a problem in the labor markets. It is a problem in how Greek businesses do business. It is a problem of how the government operates.
The economy, for one, has a very weak export sector. This means, that if Greece leaves the eurozone and re-establishes its own currency, even a depreciating currency will not help it much economically, because exports represent such a small part of Greece's output that a devalued currency will not increase the demand for its goods that much.
Of course, one of the major problems faced by the government is the amount of debt it has outstanding. Almost any kind of solution to the Greek problem is going to include writing down some of the debt.
That will provide it with short-run relief but what will the government do if it cannot borrow additional monies for an extended period of time? The government will have to balance its budget or print more money to exceed its taxing ability.
But, the ability of the Greek government to collect taxes is another problem. It seems as if Greek citizens don't pay the taxes they should, or, the government let's people get away with not paying taxes.
Members of the EU had hoped that membership in the economic union would help Greece modernize and restructure its economy. These members hoped that Greece would learn by seeing how other countries were progressing and would copy these others members and move into the twenty-first century.
But, alas, the Greeks did not watch others, did not emulate them, and, in fact attempted to avoid having to deal with the issues no matter what they promised the EU.
This is, of course, one reason why members of the EU have so little trust in what the Greek leaders say or promise.
Whereas the yield on the ten-year Greek bond has risen this past week by 300 basis points or so, most other yields of government bonds within the community on have remained relatively steady. The only exceptions have come in some of the "weaker" countries such as Spain and Portugal where yields have risen modestly.