Just over a year after eurozone governments and the International Monetary Fund agreed to lend Greece 110bn euros ($156bn; £97bn), the scale of the crisis means that European leaders are trying to work out the details of a second bail-out.
This second major package of loans, expected to be worth around the same as the first, will be the subject of an emergency summit in Brussels this week.
Why is Greece in trouble?
Greece has been living beyond its means in recent years, and its rising level of debt has placed a huge strain on the country's economy.
The Greek government borrowed heavily and went on something of a spending spree after it adopted the euro.
Public spending soared and public sector wages practically doubled in the past decade.
However, as the money flowed out of the government's coffers, tax income was hit because of widespread tax evasion.
When the global financial downturn hit, Greece was ill-prepared to cope.
It was given 110bn euros of bail-out loans to help it get through the crisis.
Why did Greece need another bail out so soon?
Greece received that original bail-out in May 2010.
The reason it had to be bailed out was that it had become too expensive for it to borrow money commercially.
It had debts that needed to be paid and as it couldn't afford to borrow money from financial markets to pay them, it turned to the European Union and the International Monetary Fund.
The idea was to give Greece time to sort out its economy so that the cost for it to borrow money commercially would come down.
That has not yet happened. Indeed, the ratings agency S&P recently decided that Greece was the least credit-worthy country it monitors.
As a result, Greece has lots of debts that need to be paid, but it cannot afford to borrow commercially and does not have enough money from the first bail-out to pay them.
Why can't Greece just default on its debts?
If Greece were not a member of the eurozone, it might be tempted just to default on its debts, which would mean either declining to make interest payments or insisting that creditors agree to accept lower payments and write off some of the debt.
In the case of Greece, that would present enormous difficulties.
The rates of interest that eurozone governments have to pay have been kept low by the assumption that the European Union and the European Central Bank would provide assistance to eurozone countries to stop them defaulting.
If that turned out not to be the case, the cost of borrowing for many of the smaller EU states, some of which are already struggling to service their debts, would rise significantly.
It means that if Greece were to default, the Irish Republic and Portugal might have to default as well.
A default would also be bad news for the banks that have loaned large amounts of money to the governments of Portugal, the Irish Republic and Greece.
If all of those banks got into trouble, it would seriously test the resources of the European Central Bank, which has loaned large amounts of money to the banks involved and to the countries themselves.
As long as Europe can afford to help countries avoid a default, it is likely to do so.
If Greece defaults, then the problems could well spread to Portugal and the Irish Republic.
Without a default, there could still be problems, because the bail-outs for Portugal and the Irish Republic were designed to tide both countries over until they could borrow commercially again, just as was hoped for Greece.
If that hasn't been possible in Greece, investors may question whether the same solution will work for the other two bail-out recipients.
There are also concerns about the situations in Spain and Italy, both of which have seen their borrowing costs rise recently.
The Spanish and Italian economies are far bigger than those of Greece, Portugal and the Irish Republic and the European Union would struggle to bail them out if that became necessary.
According to figures from the Bank for International Settlements, UK banks hold a relatively small $3.4bn (£2.1bn) worth of Greek sovereign debt, compared with banks in Germany, which hold $22.6bn, and France, which hold $15bn. When you add in other forms of Greek debt, such as lending to private banks, those figures rise to $14.6bn for the UK, $34bn for Germany and $56.7bn for France.
However, since a Greek default would have such a big knock-on effect for other troubled European economies, it would exacerbate the UK's exposure to Irish debt, which is rather larger.
The UK's direct contribution to any Greek bail-out is limited to its participation as an IMF member. But the indirect effect of a Greek default on the UK would be incalculable.
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