Governments earn money with taxes, fees etc and spend money on infrastructure, health, pensions, education, public servants etc.
Now the problem with Greece is not unlike what is also happening in the US today.
The money the Greek government spent was always more than the money they earned.
To cover the difference they just printed Greek Bonds and sold these to European banks to cover the shortfall.
Where things went wrong for Greece is not long ago they printed another round of Greek Bonds only to find none of the banks would buy them.
So overnight the Greek government runs out of money and is broke.
Now they need German/French EU handouts to cover this shortfall but the Germans/Frenchs won't give them money uless they agree to big spending cuts.
Hence the current impass.
Governments earn money with taxes, fees etc and spend money on infrastructure, health, pensions, education, public servants etc.
Now the problem with Greece is not unlike what is also happening in the US today.
The money the Greek government spent was always more than the money they earned.
To cover the difference they just printed Greek Bonds and sold these to European banks to cover the shortfall.
Where things went wrong for Greece is not long ago they printed another round of Greek Bonds only to find none of the banks would buy them.
So overnight the Greek government runs out of money and is broke.
Now they need German/French EU handouts to cover this shortfall but the Germans/Frenchs won't give them money uless they agree to big spending cuts.
Hence the current impass.