Greece has the highest budget deficit in the European Union, nearing 13 percent of it's GDP which has been making everyone nervous. Greece has a plan for fixing things, but it's not pretty. Yesterday the EU endorsed it:
On the revenue side it includes the elimination of tax exemptions, the rise of excise duties on tobacco and alcohol and measures to fight tax evasion. Regarding expenditure, the government will cut public servant allowances, freeze recruitment in 2010 and will only recruit 1 for every 5 civil servants retiring thereafter.
For comparison the U.S. deficit is expected to peak slightly lower than where Greece is now, at 10.6 percent of GDP.
If you add up total debt, Greece is expected to pass 120 percent of GDP next year. After borrowing to fight World War II, the U.S. peaked at 122 percent.
Here's the primer from our friends at Baseline Scenario about how much debt is too much.