The 2008 global economic recession impacted Greece, as well as the rest of the countries in the eurozone. From late 2009, fears developed in investment markets of a sovereign debt crisis concerning Greece's ability to pay its debts, in view of the large increase in the country's government debt. This crisis of confidence was indicated by a widening of bond yield spreads and risk insurance on credit default swaps compared to other countries, most importantly Germany. Downgrading of Greek government debt to junk bond status created alarm in financial markets. On 2 May 2010, the Eurozone countries and the International Monetary Fund agreed on a €110 billion loan for Greece, conditional on the implementation of harsh austerity measures.

In October 2011, Eurozone leaders also agreed on a proposal to write off 50% of Greek debt owed to private creditors, increasing the European Financial Stability Facility amount to about €1 trillion, and requiring European banks to achieve 9% capitalization to reduce the risk of contagion to other countries. These austerity measures were extremely unpopular with the Greek public, precipitating demonstrations and civil unrest.

In all, the Greek economy suffered the longest recession of any advanced mixed economy to date. As a result, the Greek political system has been upended, social exclusion increased, and hundreds of thousands of well-educated Greeks have left the country.