The debt crisis that has affected countries in Europe has been largely caused by their inability to pay debts that they have accrued over the years. Countries that have been unable to raise the amount of money needed to offset their debts have seen their economic growth affected to the point of asking for bail outs from friendly countries. The countries that have been worst hit by this crisis are Portugal, Spain, Ireland, Greece as well as Italy and are at a place whereby they can default on their payments which will affect their economies negatively.
Greece is one of the hardest hit by the debt crisis which has produced a lot of economic problems for the government and its citizens. Before the financial crisis in the United States which exposed fiscal policies that were unsustainable, the Greek government had not been spending money wisely and even ignored fiscal reforms and thus their economic growth was affected the most during the debt crisis. When the growth of the economy began to weaken as well as tax revenues, the budget deficits which are high became unsustainable.
The debt that has been accrued by Greece was larger than the economy of the country which posed a lot of problems for the country. Some of the problems facing Greece as its debt burden grows is the demand of higher yields by investors on the bonds made available by the country. The demands of higher yields result in raised costs which increase the debt burden, and can only be solved by the provision of poor credit loans by other European countries. Greece has been assisted twice by countries in the European Union so that they are able to pay their debts and finally solve their economic problems that has slowed down its progress.