Plenty of Problems Remain for Greece's Crisis, Including Its Citizens

Greece has yet to present the other 15 nations in the eurozone with an adequate debt-reduction plan. Auditors for the group and International Monetary Fund officials have said that the Southern European nation will need to do more than it has planned to get its deficit as a portion of GDP within the eurozone's mandates for member countries.

Greece's current deficit is 12.7% of GDP. In the U.S. that figure is 10%, but America can readily raise money by selling Treasury notes and bonds in the global capital markets. Greece cannot.

Economists and bankers are deeply concerned that if Greece defaults on its sovereign debt obligations, the euro will lose a large part of its value, and many large banks that hold Greek paper will suffer horrible losses.

Germany and France, the nations with the strongest financial positions in the eurozone, may come to the rescue of Greece with as much as 30 billion euros, according toThe Wall Street Journal. The two countries could make the investment though their state-owned banks.

An Internal Foe

But the two nations propose to buy only about half the debt directly. The balance would need to be purchased by public bond buyers. The Journal says Greece will have to borrow 54 billion euros this year, so the proposed plan will solve only a portion of the problem, and it won't guarantee large cost cuts and tax increases in Greece needed to shrink its deficit.

Greece's greatest financial enemy remains it own citizens. The Federation of Greek Customs Workers decided to call a three-day strike. According to Bloomberg, "Exports have fallen 18% since the beginning of the strike because the shipping of goods via maritime, rail and air links is paralyzed," Christina Sakellaridi, president of the Panhellenic Union of Exporters says.

The Greek government can raise taxes and propose cost cuts. But as long as powerful unions oppose them, the country's sovereign debt crisis will linger.