There has never been a time in recorded history when virtually all of the governments of the world were drowning in debt all at the same time. This sovereign debt crisis is never going to end until there is a major global financial collapse. There simply is no way to unwind the colossal web of debt that we have constructed in an orderly fashion. Right now the EU and the IMF have been making "emergency loans" to nations such as Greece, Ireland and Portugal, but that is only going to buy those countries a few additional months. Giving more loans to nations that are already drowning in red ink may "kick the can down the road" for a little while but it isn't going to solve anything. Meanwhile, dozens more nations all over the globe are rapidly approaching a day of reckoning.
All of the bailouts that you are hearing about right now are simply delaying the pain. The reality is that when the "emergency loans" for Greece stop, Greece is going to default. Greece is toast. The game is over for them. You can stick a fork in Greece because it is done.
Since the entire world is playing an extreme game of balance sheet fraud (banks, governments, everyone) it is actually pretty simple to pinpoint what will cause it all to blow up. Greece is insolvent just as everyone else, but is saved by redirection of cash flows from other governments to Greece. The same thing is going to happen to other governments (and banks) one by one until finally someone realizes that there isn't enough cash flow/income in the system as a whole, and then the whole shabang comes unglued in one extremely violent explosion.
The sad thing is that what will happen is exactly the reason why we are supposed to have balance sheets - namely to be able to make a correct assessment of the financial position of an entity long before it has to be liquidated due to a lack of cash flow.
It's the age of Enron.