Financial markets remain jittery and the euro has continued to decline despite a $1 trillion aid package, put together by the European Union and the International Monetary Fund, to stabilize the currency. It was a crisis that began in Greece, but now threatens other countries that use the euro and beyond. And, many wonder whether Europe can dig out and at what cost.
The euro had been a success story since it first came into use about 10 years ago. It defied the critics who said it would never work as the single currency of even part of the European Union. Used by part of the European Union - known as the Euro-zone - it was stable, rose in value, and became the de-facto second currency of choice behind the U.S. dollar.
But in recent months things began to unravel, and it all started in Greece. The immediate reason was simple and some two decades in the making, says economist Spyros Economides of the London School of Economics.
"The Greek government, the state and inevitably the Greek people have been spending more money than they have been earning. So, at some point the debts got to a stage that the Greek government could no longer afford to repay interest and capital on loans that were made on international money markets to fund the phenomenal growth in credit, which had been the hallmark of the Greek economy for the last few decades," he said.
Economides says the global economic crisis also played a role. "It is a combination of an accumulated debt over an extremely long period of time, combined with the global financial crisis which has made the market place extremely jittery about having loans, which may be bad, towards states that are heavily in debt," he said.
And with Greece at a point of not being able to repay debts coming due, it turned to other European countries for help. The European Union and the International Monetary Fund provided a $140-billion bail-out package for Greece to draw on. Billions more have been put in place to try to stabilize the euro.
Greece is not the only Euro-zone country with a massive debt, says political analyst Christian Schweiger of Durham University in northeastern England. "If you look at Italy, where the annual borrowing is not as excessive as in Greece, but the total level of public debt it is almost 100 percent sometimes above 100 percent [of annual GDP]. It simply shows that there is no budget discipline," he said.
Other countries singled out for fiscal excesses and massive debts are Spain and Portugal.
Greece has announced severe austerity measures and Spain and Portugal have followed suit.
"The key is to pre-empt a swift decline by taking necessary measures which will be easier to do now than to do at the very last minute as happened with Greece when they have to be far, far more severe and could lead to the kind of social unrest which we have seen in Greece," said Economist Spyros Economides.
Economides says he believes that Spain and Portugal are better placed than Greece to begin paying back their debt.
But austerity measures are needed and that means cutting back on social programs says Christian Schweiger.
"If we have a budget crisis in individual countries then obviously they will be asked to cut back. If you look at the European Union as a whole and not just the Euro-zone - there is certainly a tendency to ask countries to limit public spending," he said.
That will not be popular and Schweiger says it could lead to an erosion of public support for the European Union, especially in countries with high welfare spending.
European countries pride themselves in their generous social safety net - from unemployment benefits and pensions to health and education. Will that have to be scaled back to the point of being lost? Spyros Economides, thinks not.
"The European Union member states have a lot of things in common one of them being that their economic and social model does provide for those less well off in society, for whatever reason, there is a safety net in place," he said.
But, many economists, including Economides, say there is a fundamental flaw in the Euro-zone that hampers long-term sustainability of the currency.
"That is the fact that there is no European government, there is no interventionary authority that can provide the fiscal background to this particular monetary organization. This crisis has made patently clear is that the interventionary powers of Brussels are limited," he said.
And, that is not likely to change, says Christian Schweiger.
"It is something the European Commission tries to do. They for a number of years have been trying to advocate the coordination of economic policy making. Although the aspiration is there, I do not think it will happen to a large extent," he said.
In or out of the Euro-zone, E.U. countries are loathe to give up any more power to headquarters in Brussels. But, Schweiger does not think this spells the death knell for the euro - because he says there are political as well as economic aspirations behind the monetary union.
Spyros Economides believes the immediate crisis may have been remedied, but there is a warning. "I think this is such a big crisis that it is going to be coming back to haunt us for the foreseeable future," he said.
He says that is because of the structural flaws in the Euro-zone. And another warning from many economists - damage to the euro also hurts countries outside the Euro-zone that trade heavily with it, and in today's globalized economy, many stand to lose.