Greece has lavish social welfare programs, everything you can think of (think Obamacare, Social Security, Foodstamps etc. on steroids), they also have a large portion of the working population employed in the public sector with just as lavish benefits and handouts.
For a long time Greece has been having to borrow to keep the gravy train rolling, this worked out ok as long as they could make their debt payments, unfortunately during the worldwide recession of 2008, the gravy train went off the rails, and they could no longer make their debt payments.
Since they are part of the EU, the other members came in with a bailout plan, which boiled down to, "We'll give you the money to make your debt payments but in return you need to trim all the generous welfare handouts."
Well Greece did take steps to cut some of their welfare programs, in response the Greek people through a hissy fit and kicked the government out and elected a bunch of socialists who basically ran on keeping the welfare state as is and screw the other members of the EU.
Well the EU responds, "Screw us? Ok, we'll just stop paying your bills unless you implement the cuts to welfare state you already promised as part of the bailout."
That fast forwards us to today, "The Greek people have essentially just told the EU to take their bailout terms and piss off." Unfortunately they don't seem to realize that keeping the generous welfare state is not an option, and Greece is bankrupt. The only option at this point is for Greece to start printing their own currency (they are currently on the Euro, but banks are essentially out of money because the EU is no longer handing out Euros to them). Basic economics, when a bankrupt country starts printing money, bad things happen (think a wheel barrow of money to buy a loaf of bread). So they might "keep" their generous welfare handouts, but now it won't be so generous as it will only be worth pennies on the dollar.
Weimar Republic all over again.
It seems incredible to me but some people do not seem to understand that paper money (or numbers in a computer) does not equal to real wealth. I have actually had someone say to me that it does not matter that taxes paid by Americans don’t come even close to covering all the bills because, “Don’t let them kid you, the government has plenty of money, all they have to do is print it.” Apparently Greece has some idiots of the same sort.
Very well stated.