So I am reading this rather horrific article about the dire financial straits that Greece is in. I had been reading similar articles in the past few weeks at Americablog.
Warning: extremely dry and impermeable discussion of financial instruments to follow. Coffee should be nearby.
Greece is causing the financial markets great consternation of late as the country is on the precipice of a financial meltdown similar to the one the United States just had but perhaps much worse. The NYT article that Americablog links to gives a little more detail, but not much.
Governments raise money in several ways. The simplest is to get it from taxes. However if a government is spending more than it is earning it can either print more money or borrow it. If the country uses the former, it devalues the currency and even though the country just printed more of it, because there is more of it, as a whole it is all worth less. So countries prefer to borrow it. But they have to pay it back...with interest. Apparently, Greece cannot borrow money any more, and credit default swaps are the problem.