Citigroup (NYSE:C), Goldman (NYSE:GS) on Possible Greek Default Risk

While a lot of the financial media don't report the extraordinary dangers still inherent in the ongoing sovereign debt crisis in Europe, that doesn't take away from the reality of the fact.

Mostly how the crisis is reported is when an event happens they report on it, and then the EU and its spokesman will say they're ready to intervene to prop up the countries, and then that's basically considered the end of the story. Mix and repeat.

Citigroup (NYSE:C) and Goldman Sachs (NYSE:GS) representatives note that the crisis isn't going away, and even Greece is still in danger of defaulting.

German chairman of Goldman Sachs, Alexander Dibelius, said today concerning the potential for Greece to still default, “It cannot be allowed to be led to a Greek default. For this reason a restructuring of the Greek debt is necessary,” Dibelius said in the newspaper 'Bild,' saying there was a need for “a mixture of support, discipline and pressure for Greece in order (for it to) return to the road of virtue.”

Chief analyst for Citigroup, Professor Willem Buiter, added that there is a need for Greece to cut 50 percent of its debt. Buiter added Greek political leaders continue to put off the tough decision needed to get the country back to fiscal health.

The reason Greece is so important isn't because of the size of the debt in relationship to the overall European economy, but it's important because of its symbolism as to the problem the EU and the euro faces, and continues to be a poster child as to why socialism doesn't work, as it makes promises that cannot be kept or met.

The domino effect that would probably result from a Greek default is what is at issue, and we have seen how quickly other countries in the euro-zone had to be propped up after Greece had to be.

If there is a Greek default, the same would happen, and the EU would, as it is, effectively cease to exist, and the euro would struggle to survive.