II. Greece public debt 1. Current situation
Greece has been in the public debt crisis since 2009. The Greek public debt crisis is one of a number of current European sovereign-debt crises and is believed to have been caused by a combination of structural weaknesses of the Greek economy coupled with the incomplete economic, tax and banking unification of the European Monetary Union. Those days, Greece has confronted with three main related problems: government trust crisis, declining liquidity capacity and high risk of bankruptcy. a) Government trust crisis
The prestige of Greek government was impaired seriously during crisis time. Greece borrowed uncontrollable amounts from the financial market to ensure the liquidity for the budget deficit. The budget deficit limit allowed in Eurozone was only 3% of the GDP, while this level of Greece in 2009 was 13.6% and might even increase to over 14%. To cover the overspending in the past years, the Greek government had reported data inconsistently and bias, containing various unusual sections in budget. This action drew to the negative consequences on the reputation of the Greek government on the domestic as well as international market. The credit ascertaining organization successively downgraded Greece recently. Within the first four months of 2010 S&P had lowered continuously the credibility coefficient of Greece, from A- to BBB+ and BB+.

b) Declining liquidity capacity
Unpaid debt of Greece was nearly 400 billion U.S dollars, in which the due debt in 2010 amounted to 73 billion U.S dollars. The interest rate that Greece must pay until April 2010 reached the record level: over 9% for 10-year loan. With the debt in 2012 was estimated to 175% of GDP and expected to increase to nearly 190% of GDP next year, it is difficult for Greece to achieve the target debt ratio down to 120% of GDP in 2020, at which