Greece is sinking deeper and deeper into its financial quagmire. Its debt was downgraded to junk status by rating agency Standard & Poor's today, and Portugal's debt was also downgraded on fears the troubles could spread. The news sent stock markets plummeting.

Greece's worsening situation forced it to go cap in hand to the eurozone and the International Monetary Fund on Friday, despite insisting for weeks that it wasn't looking for a bail-out.

Riots erupted in Athens again over drastic public spending cuts, not long after Greek prime minister George Papandreou sought an emergency £40 billion loan package from eurozone countries and the IMF.

Tempting as it is to dismiss the Greek woes as those of a little faraway country in the Med, Greece's fate is a stark reminder of what can happen to other countries like Portugal, Spain – and Britain – if they don't get a grip on their own spiralling debts.

The Greek meltdown is also a threat to the wider European and global economy, which is just recovering from the worst downturn in decades. At the weekend, Alistair Darling urged the European Union and the IMF to hammer out a financial rescue package for Greece as quickly as possible.