A little spot of Greece

Okay, I have to first admit something. I've always wanted to use this title for something. Anything really, but I didn't have a good opportunity until Greece got itself into a bit of economic trouble. That line comes from Mel Brook's movie To Be or Not To Be (about 1:03 into this clip):

Well, anyway- Greece has gotten itself into a little spot of bother. You see they ran up a large national debt relative to GDP without the means to pay it back. One sunny day just recently, the world woke up and decided it didn't think Greece could pay it all back. Upon further digging, the world discovered Greece's politicians even went so far as to, with the help of the infamous (or is it ignoble?) Goldman Sachs, hide some debt from public view too.  How terribly embarrassing for the EU!

Bad jokes, puns and the obvious aside, why is Greece's problem so important? After all, Greece represents less than 3% of the EU's economy. That is about the same size as the state of Washington relative to the whole United States economy. Washington, except for Microsoft, isn't really all that significant (sorry, Seattle). We have much bigger state problems like California, New York, New Jersey and Florida running into their own debt troubles- so why is Greece making the headlines?

There is no chance- no matter how much Texas would like it to happen- that California could exit the US and issue its own currency. Greece however, is part of a currency union and so poses a threat to the very nature of the EU's currency and economic stability. "Washington (or CA) poses a threat to the US economy and thus the US dollar in the same way, doesn't it?", you ask. Aside from the secession possibility (however remote), there is another difference which may not be immediately obvious.

California has the same economic structure, give or take a little, as does Texas. The two have almost the same language, culture, food, sports, entertainment, and popular culture. When jobs are scarce in California, people can and do relocate fairly easily to Texas or Colorado etc. Greeks on the other hand, very rarely move to Germany or Denmark. Rigid employment laws cement the difficulties. Similarly, companies and industries might relocate- just as Boeing moved to Illinois from Washington- but Greek industries generally don't relocate to France. In other words, the labor market has little flexibility to adjust to the new economic reality and labor markets are one major key to economic adjustment.

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To be fair, I'm having trouble discerning other major differences between Greece:EU as is CA:US, which is scary. Anyone else know of some?