The Greek government is bankrupt, having for decades spent far more money than it takes in. The richer nations of the European Union and the IMF have already bailed out Greece once and are getting reading to do it again. Why?
Because of the banks. Most of the Greek government's debt is held by big European banks. Some of them hold so much debt from Greece and other troubled EU countries (Ireland, Portugal) that they might fail if those countries default on their debts. This could well cost the Germans and the French much more money and trouble than it does to prop up the Greek government. The Germans had been pushing for a deal under which the bankers would have to take some loss in return for the second bailout, but the bankers argued that imposing any loss on them would be a default by Greece and lead to financial chaos. Essentially, they are blackmailing the EU and forcing the governments to rescue them from their mistakes.
For the same reason, the most obvious way for Greece to get out of its long-term problems -- leaving the Euro -- probably won't happen either. If they did, converting their debts to their own currency, the banks would take a huge loss.
This is a real mess. Defending the Euro, which European politicians seem determined to do, will cost hundreds of billions over the next decade, and that will be a huge drag on the European economy. The debts run up in the US, Europe and Japan over the past decade are a gigantic burden for the world, and this seems to be the reason this recession has been so bad and is lingering so long. I had expected that the American economy would be roaring back by now, but it obviously is not. We are all paying a grim price for the economic foolishness of the recent past -- the Bush tax cuts and America's wars, the Euro, rampant real estate speculation, bad investments, and so on. There are no really good options now for governments that were running big deficits even in good times, and I now think we can look forward to at least two more years of economic malaise.