question: How does Greece have so much debt?
comment: It is a combination of things and timing. Greece was doing really well in the early 2000’s and money was flowing into the country from tourism and foreign investors (mainly investing in shipping). Leading up to 2008, the Greek government forecasted continued high growth rates and went on a spending spree, mainly in the form of social programs. When the 2008 financial crisis hit, Greece was hit really hard. Their two main sources of income, tourism and shipping, took a big hit as people around the world reduced expenses (less stuff to ship) and stopped taking expensive vacations. In response, the Greek government attempted to enact austerity measure to cut back on spending. This did not sit well with the Greek people who had grown dependent on social programs. Due to this political pressure, the government decided to raise taxes instead to make up for the short falls. This huge taxation created an unintended consequence of many Greeks starting to evade taxes. Wealthy Greeks started moving money out of the country, mainly to Switzerland. Many business owners started to require cash payments and started under reporting their income so that they could avoid taxation. This created a grey market where it is estimated that around 25% of Greece’s GDP was going unreported and untaxed. The Greek government’s tax collection agency was also very poorly managed and was not able to enforce their laws effectively, meaning most people got away with tax evasion. Many of these business owners realized that the penalties and fines for tax evasion where less risky than the chances of going bankrupt by paying extremely high taxes. So, this combination of a dwindling economy, high cost social programs, and low tax recovery forced the Greek government to take on large amounts of debt to run their country and continue to fund social programs.
passages: The ability to pay its debts depends greatly on the amount of tax the government is able to collect. In Greece, tax receipts were consistently below the expected level. In 2010, estimated tax evasion losses for the Greek government amounted to over . Estimates indicated that the government collected less than half of the revenues due in 2012.
   Between 1981 and 1993 it steadily rose, surpassing the average of what is today the Eurozone in the mid-1980s (see chart below). For the next 15 years, from 1993 to 2007 (i.e. before the Financial crisis of 2007–2008), Greece's government debt-to-GDP ratio remained roughly unchanged (the value was not affected by the 2004 Athens Olympics), averaging 102%
  
  – a value lower than that for Italy (107%) and Belgium (110%) during the same 15-year period, and comparable to that for the U.S. or the OECD average in 2017.
   Initially, European banks had the largest holdings of Greek debt. However, this shifted as the "troika" (ECB, IMF and a European government-sponsored fund) purchased Greek bonds. As of early 2015, the largest individual contributors to the fund were Germany, France and Italy with roughly €130bn total of the €323bn debt. The IMF was owed €32bn and the ECB €20bn. As of 2015, various European countries still had a substantial amount of loans extended to Greece.
  
  Section::::Creditors.:European banks.
   Section::::Currency.
   There were key differences in the effects of the Greek programme compared to these for other Eurozone bailed-out countries. According to the applied programme, Greece had to accomplish by far the largest fiscal adjustment (by more than 9 points of GDP between 2010 and 2012), "a record fiscal consolidation by OECD standards ". Between 2009 and 2014 the change (improvement) in structural primary balance was 16.1 points of GDP for Greece, compared to 8.5 for Portugal, 7.3 for Spain, 7.2 for Ireland, and 5.6 for Cyprus.
   Section::::History.:2010–2018 government debt crisis.:Evolution of the debt crisis.
   During the latter period, the country's annual budget deficit usually exceeded 3% of GDP, but its effect on the Debt-to GDP ratio was counterbalanced by high GDP growth rates. The Debt-to GDP values for 2006 and 2007 (about 105%) were established after audits resulted in corrections according to Eurostat methodology, of up to 10 percentage points for the particular years (as well as similar corrections for the years 2008 and 2009).These corrections, although altering the debt level by a maximum of about 10%, resulted in a popular notion that "Greece was previously hiding its debt".
   Section::::History.
   For the next 15 years, from 1993 to 2007 (i.e., before the Financial crisis of 2007–2008), Greece's government Debt-to-GDP ratio remained roughly unchanged (the value was not affected by the 2004 Athens Olympics), averaging 102% 
  
  - a value lower than that for Italy (107%) and Belgium (110%) during the same 15-year period, and comparable to that for the U.S. or the OECD average in 2017.
   Pre-Euro, currency devaluation helped to finance Greek government borrowing. Thereafter this tool disappeared. Greece was able to continue borrowing because of the lower interest rates for Euro bonds, in combination with strong GDP growth.
  
  Section::::Causes.:Internal factors.:Current account balance.
   The Greek economy had fared well for much of the 20th century, with high growth rates and low public debt. By 2007 (i.e., before the Global Financial Crisis of 2007-2008), it was still one of the fastest growing in the eurozone, with a public debt-to-GDP that did not exceed 104% , but it was associated with a large structural deficit. As the world economy was hit by the financial crisis of 2007–08, Greece was hit especially hard because its main industries—shipping and tourism—were especially sensitive to changes in the business cycle. The government spent heavily to keep the economy functioning and the country's debt increased accordingly.
   Greece joined the European Communities (subsequently subsumed by the European Union) on 1 January 1981, ushering in a period of sustained growth. Widespread investments in industrial enterprises and heavy infrastructure, as well as funds from the European Union and growing revenues from tourism, shipping and a fast-growing service sector raised the country's standard of living to unprecedented levels. The country adopted the Euro in 2001 and over the next 7 years the country's GDP per capita more than doubled, from $13,070 in 2001 to $28,660 in 2008. The Greek government, encouraged by the European Commission, European Central Bank, private banking institutions, and the Greek business community also took out loans to pay Greek and foreign infrastructure companies for a wide variety of infrastructure projects such as those related to the 2004 Summer Olympic Games in Athens. Government deficits were also consistently underreported. As the Financial crisis of 2007–08 began to affect Greece's economy, the country's GDP stagnated between 2008 and 2010 and the government's capacity to repay its creditors was drastically reduced.
   According to "Der Spiegel", credits given to European governments were disguised as "swaps" and consequently did not get registered as debt because Eurostat at the time ignored statistics involving financial derivatives. A German derivatives dealer had commented to "Der Spiegel" that "The Maastricht rules can be circumvented quite legally through swaps," and "In previous years, Italy used a similar trick to mask its true debt with the help of a different US bank." These conditions had enabled Greek as well as many other European governments to spend beyond their means, while meeting the deficit targets of the European Union and the monetary union guidelines. In May 2010, the Greek government deficit was again revised and estimated to be 13.6% which was among the highest relative to GDP, with Iceland in first place at 15.7% and the United Kingdom third with 12.6%. Public debt was forecast, according to some estimates, to hit 120% of GDP during 2010.
   Section::::Modern Greece.
  
  Modern Greece began its history as a nation state in 1829 and was largely an undeveloped economic area mostly based around agriculture. It has since developed into a modernised, developed nation.
  
  Section::::Modern Greece.:19th century.
   An editorial published by "Kathimerini" claimed that after the removal of the right-wing military junta in 1974, Greek governments wanted to bring left-leaning Greeks into the economic mainstream and so ran large deficits to finance military expenditures, public sector jobs, pensions and other social benefits.
  
  In 2008, Greece was the largest importer of conventional weapons in Europe and its military spending was the highest in the European Union relative to the country’s GDP, reaching twice the European average. Even in 2013, Greece had the second-biggest defense spending in NATO as a percentage of GDP, after the US.
   A study of the period 1999–2009 by forensic accountants has found that data submitted to Eurostat by Greece, among other countries, had a statistical distribution indicative of manipulation; "Greece with a mean value of 17.74, shows the largest deviation from Benford's law among the members of the eurozone, followed by Belgium with a value of 17.21 and Austria with a value of 15.25".
  
  Section::::History.:2010–2018 government debt crisis.
  
  Section::::History.:2010–2018 government debt crisis.:Previous situation.
   To keep within the monetary union guidelines, the government of Greece for many years simply misreported economic statistics. The areas in which Greece's deficit and debt statistics did not follow common European Union rules spanned about a dozen different areas outlined and explained in two European Commission/Eurostat reports, from January 2010 (including its very detailed and candid annex) and from November 2010.
   Section::::Causes.:Internal factors.:Government spending.
  
  The Greek economy was one of the Eurozone's fastest growing from 2000 to 2007, averaging 4.2% annually, as foreign capital flooded in. This capital inflow coincided with a higher budget deficit.
  
  Greece had budget surpluses from 1960 to 1973, but thereafter it had budget deficits. From 1974 to 1980 the government had budget deficits below 3% of GDP, while 1981–2013 deficits were above 3%.
   Portuguese national debt
  
  The Portuguese national debt, the public debt of Portugal, or the debt of the public administrations of Portugal, as any other government debt, is the financial amount the Portuguese State owes, externally and internally, due to its various financial commitments.
  
  By the first semester of 2013, the Portuguese national debt was 130% of the GDP, around 214.5 billion Euros or 293 billion US dollars.
   The 2001 introduction of the euro reduced trade costs between Eurozone countries, increasing overall trade volume. Labour costs increased more (from a lower base) in peripheral countries such as Greece relative to core countries such as Germany without compensating rise in productivity, eroding Greece's competitive edge. As a result, Greece's current account (trade) deficit rose significantly.
   Finally, there was an effect of controversies about Greek statistics (due the aforementioned drastic budget deficit revisions which lead to an increase in the calculated value of the Greek public debt by about 10%, i.e., a public debt to GDP of about 100% until 2007), while there have been arguments about a possible effect of media reports. Consequently, Greece was "punished" by the markets which increased borrowing rates, making impossible for the country to finance its debt since early 2010.
   There were two main periods since the early 90s when the debt of Portugal had a strong growth. The first was at the beginning of the third millennium, i.e., from the year 2000 the Portuguese public debt began to have growth that many economists considered worrisome, and that in their opinion would contribute to create a structural crisis in the country. However, the big increase in the public debt, in parallel with the rest of Europe, was post-2008, after the international crisis of the Great Recession which began in 2008, that caused the sovereign debt crisis in the majority of European countries.
   Economist Paul Krugman wrote, "What we’re basically looking at ... is a balance of payments problem, in which capital flooded south after the creation of the euro, leading to overvaluation in southern Europe" and "In truth, this has never been a fiscal crisis at its root; it has always been a balance of payments crisis that manifests itself in part in budget problems, which have then been pushed onto the center of the stage by ideology."
   Up until 1994, Greece recorded very high deficits, for some years above 10% of GDP. During the late nineties, according to the figures submitted by the Greek government to the European Union, Greece's high budget deficits were significantly lowered. In 2000, given a deficit below 3% of GDP in 1999, Greece was accepted as the 12th member of the European monetary union.
  
  Section::::Background.:Eurostat refusal to validate Greek figures.
   had not actually met all five accession criteria, and the common perception that Greece entered the Eurozone through "falsified" deficit numbers.
  