This paper presents the causes of the global financial crisis and critically discusses the Greek debt crisis. We argue that the crisis is the result of deterioration of Greek macroeconomic characteristics to levels inconsistent with long- term EMU participation. We also argue that without extensive structural reforms the sustainability of the European Monetary Union is in question. We suggest that the European leaders should take initiatives to create mechanisms to address the debt crisis, to improve surveillance for the implementation of fiscal rules and to strengthen economic cooperation between countries in order to raise funds that may cover the short-termneeds of countries facing sovereign debt crisis.