I'm calling it. When government bonds are selling at 25%, particularly in a very low investment yield environment, it's Zero Hour for Greece. 25% goes beyond junk bonds into loan shark territory. If you say, "I'm paying 18% on my credit cards and I'm doing fine," I'm going to doubt that your credit card debt exceeds your annual income, unless you are a student and the banks know they have you once you get a job. Greek government debt is well above its GDP, and vastly exceeds tax collections.
Greece has long been on schedule to be the first westernized country, and one of the first on the planet, to hit Zero Hour. With excessive government subsidies and payouts to Unions, and extremely poor tax collections, it now depends on bailouts from the Eurozone for basic sustenance. Greece is the first of Europes "PIIGS" nations (Portugal, Ireland, Italy, Greece, and Spain) to fall. German and French bailouts are keeping it afloat, but these are likely to dry up soon. Any way you look at it, Greece's unsustainability of government spending is upon the terminal endpoint.
I've been meaning to comment on the gradually worsening situation of the PIIGS nations, but anytime a meaningful event has occurred regarding their credit situation, the Eurozone has stepped in with austerity packages and bailout measures, reducing the situation to almost a non-event, and simply delaying the need for major spending adjustments and spreading the pain of uncontrolled spending to healthier economies.
We see a similar phenomenon in the U.S. with state mispending and the Federal Government accumulating massive levels of public debt to compensate.
UPDATE [5/9/11]: Looks like S&P agrees.