European Debt Crisis: A period of time in which several countries in Europe faced the collapse of financial institutions, high government debt and rising bond yield spreads in government securities. It first began with the collapse of Iceland’s banking system in 2008 and ultimately spread to Greece, Ireland and Portugal, among other countries. The crisis made it difficult for many countries to repay their government debt without the assistance of a third party organization such as the European Central Bank. The crisis eventually led European nations to create and implement several financial support measures such as the European Financial Stability Facility and the European Stability Mechanism.
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