Europe can’t just kick Greece out of the EU. It will have to find another way.

At first glance, the solution to Greece’s financial mess seems clear. The country repeatedly failed to adhere to the deficit limit of 3 per cent set by the European community, racking up a deficit that is now 12.7 per cent. It cheated big time. And what do you do with a delinquent? You throw them out of the house.

But upon closer inspection, things don’t seem so simple after all.

First of all, the cheating was obvious. But as long as the system as a whole remained stable, everyone looked the other way. Some even helped.

Second – and this is the more important legal issue – there is no way to actually kick a country out of the Eurozone or the European Union. It is simply not in the treaties. If you are in, you are in for good. The only way anyone is leaving is if they decide to go themselves, and no sane nation would make that decision.

Doing so would mean no less than utter chaos. A country would have to establish a new currency (at a high cost), presumably at a worse exchange rate to the euro than the one fixed when joining the Eurozone, leading to the devaluation of assets and wages, higher import costs, the flight of capital, and inflation – all of which an already financially unstable nation cannot cope with.

And even if there was a way for the other members to exclude one from their midst, there would be no chance whatsoever of reaching a consensus on actually doing it. There are other states in a comparable situation, including Italy, Spain, and Ireland. If Greece is forced out, why not them too? A domino effect would be started, leading to disaster for everyone involved.

The solutions so far proffered to the Greeks by their peers, asked or unasked, have ranged from the sensible to the insane (among the latter, that they should sell some of their islands). With tensions rising (fuelled by the press and investors looking to profit from a falling euro) and accusations starting to fly, another idea surfaced – that Germany should pay reparations for the occupation and the atrocities committed during the Second World War (German banks being one of the largest debtors).

Fortunately, politicians have resisted such shallow populism and are staying remarkably sensible.

A look at the facts shows that the whole crisis is a lot less worrisome than some would have us believe. Certainly, Greece has problems, mainly that it has a bloated public administration and – even worse – massive tax evasion is not just common, it is the norm. On the other hand, Greece's share of the EU’s GDP is only 2.6 per cent (2006). For comparison, the troubled state of California's share of the U.S. GDP is 13.5 per cent (2008).

Greece's problem, therefore, is mainly Greece's problem. Of course, other European states will help by buying government bonds, which would go unnoticed if not for the spotlight being shone on the situation. There is just no way the EU will let the IMF or any other outside entity step in to help Greece. The situation has to be solved by the EU itself to demonstrate its strength and compassion.

There is a lesson to be learned though. What the EU needs is a unified tax system for all its members, enforced by a European agency. Europeans should become "proud taxpayers," as Greek Prime Minister George Papandreou asked of his citizens. This would help European unification more than anything. Unfortunately, it is rather unlikely that this will happen anytime soon, certainly not while Europe’s citizens continue to understand that it is they, not the bailed out banks, who must bear the brunt of the global financial crisis.