The European debt crisis, often also referred to as the eurozone crisis or the European sovereign debt crisis, is a multi-year debt crisis that took place in the European Union (EU) from 2009 until the mid to late 2010s. Several eurozone member states (Greece, Portugal, Ireland, Spain, and Cyprus) were unable to repay or refinance their government debt or to bail out over-indebted banks under their national supervision without the assistance of third parties like other eurozone countries, the European Central Bank (ECB), or the International Monetary Fund (IMF).

The eurozone crisis was caused by a balance-of-payments crisis, which is a sudden stop of foreign capital into countries that had substantial deficits and were dependent on foreign lending. The crisis was worsened by the inability of states to resort to devaluation (reductions in the value of the national currency).^[3][4] Debt accumulation in some eurozone members was in part due to macroeconomic differences among eurozone member states prior to the adoption of the euro. The European Central Bank adopted an interest rate that incentivized investors in Northern eurozone members to lend to the South, whereas the South was incentivized to borrow because interest rates were very low. Over time, this led to the accumulation of deficits in the South, primarily by private economic actors.^[3][4] A lack of fiscal policy coordination among eurozone member states contributed to imbalanced capital flows in the eurozone,^[3][4] while a lack of financial regulatory centralization or harmonization among eurozone states, coupled with a lack of credible commitments to provide bailouts to banks, incentivized risky financial transactions by banks.^[3][4] The detailed causes of the crisis varied from country to country. In several countries, private debts arising from a property bubble were transferred to sovereign debt as a result of banking system bailouts and government responses to slowing economies post-bubble. European banks own a significant amount of sovereign debt, such that concerns regarding the solvency of banking systems or sovereigns are negatively reinforcing.^[5]

The onset of crisis was in late 2009 when the Greek government disclosed that its budget deficits were far higher than previously thought.^[3] Greece called for external help in early 2010, receiving an EU–IMF bailout package in May 2010.^[3] European nations implemented a series of financial support measures such as the European Financial Stability Facility (EFSF) in early 2010 and the European Stability Mechanism (ESM) in late 2010. The ECB also contributed to solve the crisis by lowering interest rates and providing cheap loans of more than one trillion euro in order to maintain money flows between European banks. On 6 September 2012, the ECB calmed financial markets by announcing free unlimited support for all eurozone countries involved in a sovereign state bailout/precautionary programme from EFSF/ESM, through some yield lowering Outright Monetary Transactions (OMT).^[6] Ireland and Portugal received EU-IMF bailouts In November 2010 and May 2011, respectively.^[3] In March 2012, Greece received its second bailout. Both Spain and Cyprus received rescue packages in June 2012.^[3]