All you need to know about the crisis in the eurozone
Why is a high deficit in just one country, Greece, causing such widespread problems in markets?
Greece is only one of several eurozone members with a huge fiscal deficit. The markets are worried these countries -- Greece, Portugal, Spain and Ireland -- will not be able to service their debts in the long term without some kind of outside assistance. Markets are also worried that debt levels will act as a brake on economic growth, making it harder for countries to improve their budgetary positions. Ratings agencies are also making markets nervous by questioning the credit worthiness of some countries, like Spain yesterday for instance.
But haven't several eurozone countries had debt problems for a long time?
Yes, countries like Italy and Greece have had high debt levels for years, but the bond market, which allows countries to borrow, has become more concerned about the debt levels since the financial crisis began. The level of borrowing being done by major western economies, including the UK and the US, is also at unprecedented highs, making markets nervous about whether there will be enough buyers for all the debt.
Where does Ireland fit into all of this and how vulnerable is the Irish Exchequer?
Very vulnerable. Ireland has the highest fiscal deficit in the eurozone at over 14pc and is being charged the third-highest interest rate after Greece and Portugal.
While the government has improved the budgetary position, more expenditure cuts and tax raises are still needed. Markets do not believe Greece can service its debts alone. They don't believe that Ireland is in the same category, but that view could change.
Borrowing costs are rising for Ireland and if that remains the position, it will hurt the exchequer in terms of higher debt-servicing costs.
Is the euro under pressure and could the eurozone itself be threatened by this crisis?
Yes, the euro hit a one-year low against the dollar this week as investors worried about the problems in Greece spreading elsewhere.
The single currency slipped to $1.3143 against the dollar as traders looked for safe harbours, one of them being the US dollar.
The dangers to the eurozone are real as many observers question whether Germany, the largest member, is prepared to be a lender of last resort to smaller, indebted countries.
Already the Washington-based IMF is helping to bail out Greece.
However, nobody knows what will happen if other countries are shunned by the bond markets and have to find other ways to borrow money.
However, the break up of the eurozone remains a very remote possibility at this point.
So what is the immediate danger arising from problems in Greece and other countries like Spain?
The key danger is whether Greece defaults and simply tells the market it cannot honour its commitments.
This would send fear all over the European bond markets, as it would be the first time a eurozone country had defaulted. It would make some observers fear that other eurozone members could do the same.
Even the danger of this will raise borrowing costs for countries like Ireland and Portugal. The other danger is that Germany won't even approve the current €45bn rescue plan for Greece.
What can the government here do and how are they handling the crisis?
The government has little power to influence the bond market; all it can do is stick to its plan which is to get the deficit down to 3pc of GDP by 2014. However, the government has not given enough information on what steps it intends to take, according to the EC. In terms of the immediate crisis, the NTMA, the government's treasury department, claims it has sufficient funds to get through any storm.