Debt crisis is a situation in which a government loses the ability of paying back its governmental debt. When the expenditures of a government are more than its tax revenues for a prolonged period, the government may enter into a debt crisis. Various forms of governments finance their expenditures primarily by raising money through taxation. When tax revenues are insufficient, the government can make up the difference by issuing debt.
100,000 people protest against the austerity measures in front of parliament building in Athens (29 May 2011).
Depositors protest the freezing of their accounts, mostly in dollars. They were converted to pesos at less than half their new value.
President Néstor Kirchner and Economy Minister Roberto Lavagna, who presented the first debt restructuring offer in 2005
A country's gross government debt is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit occurs when a government's expenditures exceed revenues. Government debt may be owed to domestic residents, as well as to foreign residents. If owed to foreign residents, that quantity is included in the country's external debt.
Total (gross) government debt as a percent of GDP by IMF
