Here's the basic level. Each year Greece's government was borrowing money to pay it's bills. Each year lenders asked for higher interest rates due to more debt, more risk. One day lenders decided Greece was never going to be able to pay back all that money. Greece needed money from other European countries to pay it's bills. The other countries demanded the Greek government to stop spending to much before they would help them.
To stop overspending each year the Greek government decided to raise taxes, cut money it gave out to everyone. Each person in the country suddenly had less money. They raised their prices for what they sold to pay higher taxes. They also spent less money on restaurants and entertainment. Everyone suddenly had less money.
The Greek government has very little foreign reserves as of now.