Many countries have a higher external debt than Greece. Why is the problem only with Greece?

All countries around the world would have their debts (both short-term and long-term debts), which these debts will raise the capital to invest for their country's infrastructures or the government expenditures to run the nation's governance. Usually, we will see a country will issue new Treasury bonds when the old debts will mature shortly, which is to pay off the upcoming debts. Or, a government will issue T-bonds to build enhance the national traffic system or establish the special economic zones.

Each government will need to review its budget to determine the need for money for the upcoming year. The expected growth of the economy, inflation rate, unemployment rate, and other microeconomic and macroeconomic figures will be combined in their decision. The percentage of external debt to GDP would be an important factor to decide how much loan a nation will be able to take to substitute for its needs. That explains why some countries will extend this targeted percentage to approach more debts.

In the case of Greece, the debt over GDP is 180% in 2017, which is extremely high. The main source of money to pay off debt will be called from the new issue of debt. This fact indicates a lack of liquidity. The increase in the interest rate of debt instruments would not be helpful if the economy is not expected to grow stably. Thus, it explains why other countries would not provide loans to this country.