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The EU crisis has been the proverbial flat tire stalling the global recovery for some time now. Any bad news out of the region causes a precipitous drop in the Dow and other indexes, and suddenly the sky is falling.

The crisis began with Greece, a country with the 32nd largest economy in the world, during the Great Recession of ’08.  The nation’s relatively small size masked a problem so large that it could cause the entire global economy to go down in flames. Like any good financial crisis, the contagion spread to the weaker economies of the EU, which were already reeling from the global downturn sparked by the US housing bust.

Portugal, Ireland, Italy, Greece and Spain became known as the PIGGS, a fitting acronym for countries that gorged themselves on government spending at the trough of the bond markets. Countries in the EU are known for lavish government spending on healthcare, transportation and the salaries of pointless bureaucrats; for years they suckled on the government teat, but now it’s time to be weaned off.

The problems in Greece are due to its heavy spending and lack of revenues—sound familiar? The EU mandated that countries in the Union could not have government deficits larger than 3 percent of their GDP and that total debt could not exceed 60 percent, but thanks to some creative accounting Greece was able to leave out large expenditures on defense and health care. Greece also used complex financial instruments known as currency swaps to borrow large sums of money without them appearing on its balance sheets. A “currency swap” is an exchange of principle and interest in one currency for principle and interest in another.

This financial gimmickry was orchestrated by the infamous Goldman Sachs through a project codenamed “Aeolus” in which investors would receive cash flows from Greek assets in exchange for loans, in this case its airport. Project Icarus would have been a more fitting name.

Greece, unfortunately, isn’t the only player in this tragedy. Countries like Portugal, Ireland, Italy and Spain are also caught in this mess.  Although Ireland’s problems stem not from lavish overspending but from a government guarantee of its major banks, which helped finance a property bubble. The bursting of that bubble left those banks with many loan defaults it could not roll over, thus leaving the nation saddled with the debt. Spain, Portugal, and Italy, however, are on the same page as Greece—too much spending and little economic growth.

These countries all have one thing in common: bloated public sectors controlled by unions that demand high pay and generous benefits for their members for work that adds no net benefit to the economy. And all of this is funded by borrowing, which is why bond yields play an important component in this mess. Bond yields are usually measured by a ratio of their interest payment over the bond’s price on the world market, and whenever those yields reach a level greater than 7 percent the countries cannot afford to pay the investors back the interest due on the bond. This in turn roils markets around the world, causing indexes like the Dow, Nikkei and FTSE to plummet and investors to run toward water and T-bills.

Rescue packages above $1 trillion, haircuts on bonds and stringent austerity measures have all been used to assuage the crisis, but time after time this monster rears its ugly head yet again. The two saviors of this crisis have taken the form of Germany and France, but the heaviest burden falls upon the broad shoulders of Germany. It is the largest economy in Europe and unfortunately must accept the burden of being the adult in a room filled with children.

France, while an important player in this issue, will probably end up adding to the problem—that is if Francois Hollande ends up as the president. The elections in France are immensely important for this issue and the global recovery. Hollande is a staunch socialist who wants to increase government spending in France and raise taxes on the wealthy; he is also opposed to the necessary austerity measures imposed on the PIIGS.

And so it comes down to politics to determine how a solution will be reached in this European debacle, and the wrong vote could sentence the entire global recovery to an untimely death. Whenever governments try to coddle the weak and chain the strong, the inevitable end is ruin.  It is fitting that Greece has them in abundance.