What are the causes of debt crisis in European countries ?

In simple words, some European countries have spent more than they earn. Countries like Greece have taken huge loans to fund their spending and they are unable to pay back. Their own banks and neighboring countries like Germany lend money to them. When the governments defaults on loans, banks get into trouble and there are a lot of cascading implications due to this.|||During 2010 the government debt of Greece, Spain, Portugal, Ireland and Italy have


undergone speculative attacks, which have caused intensified financial distress, a sharp


decrease in the rate of growth, higher unemployment, economic and social instability,


changes in economic and social policies that are undesired by the majority of the


population, dramatic social conflicts.





In July and August the interest rate on the 10-year government bonds of Greece, the


most affected country, moved around 10.3%, a level considered unsustainable.





Absence of an independent super-national Development Agency able to identify the structural needs of the economies and to establish priorities among them.





Absence of a “Monetary Stabilization Fund” that could be used to defend the Euro-area from


speculative attacks. The Fund should be managed by the monetary authorities, guarantee timely reactions and be endowed with an amount of resources sufficiently large to discourage speculative attacks.|||It was the Bush era crazy lending - it got everybody hooked on credit. Then when the bill came due, the Billionaires buggered off to their private islands.



It's "capitalism" - millions stave to make a two or three people filthy rich.|||Greece's overspending, and bubble in Ireland,Italy and Spain.