The Greek Sovereign Debt Crisis:Causes, Solutions And Inspiration

The Greek Sovereign Debt Crisis:Causes,Solutions and InspirationStandard & Poor's, Fitch, Moody's three major international rating agencies have lowered the Greek sovereign credit rating in December 2009,It found that the Greek government's 300 billion euros of public debt is difficult to repay. Greek sovereign debt crisis broke out.By 2010, the Greek sovereign debt crisis could spread to Ireland, Portugal and Spain. From 2009 to now,the problem of Greek sovereign debt has been the focus of European Union, the International Monetary Fund and the other countries. The causes and solutions of Greek sovereign debt crisis also become a research of domestic and international economic and financial scholars. This paper studies the following main three questions:First, the debt theory.This paper reviews the theory of debt. Classical economists believe that the state should not borrow, the burden of debt left for future generations. Even believe that debt and the state can not coexist. Or debt destroy national, Or national eliminate debt. This "debt phobia"theory still has some influence now. Marx believed that the debt is credit, the process of borrowing and debt is the process of money into capital.As long as the debt can help increase production, to help expand trade, well, a debtor country can not only repay the debt, but also increase their wealth. Contemporary economist Paul Samuelson considered that as long as the domestic potential production capacity is not to be used,as long as the debt can also promote GDP growth,well, not a crisis, but also can promote the production and trade, improve social welfare. This paper agrees Marx and Paul Samuelson's point of view.Second, the reason of Greek sovereign debt crisis. This according to Marx, and Samuelson debt theory, analysis of the Greek sovereign debt crisis for three reasons:1,Greece did not used effectively borrowed foreign debt in the development of production and expanding trade, borrowed money can not be produced more goods and services, into more money.This means that the debt crisis to the outbreak.2,Greece borrowed money directly to civil servants and workers, improve social welfare, expand consumption. Greek economy and the other countries of EU economy is the integration. Greeks to expand consumption, the purchase is not their own production of goods and services, but other countries, stimulated the production and trade of other countries, did not expanding domestic demand,Greece's GDP growth lagged behind the growth in debt, it also means a crisis.3,Greece is a euro-zone countries, from 2000 to abandon their national currencies and start using the euro. Euro distribution rights in the European Central Bank,therefore, the loss of the monetary sovereignty of the Greek government,fiscal policy and monetary policy does not match, unable to expand demand and promote the production, development of trade and increase GDP.Greek government lost the power to manage their national economies, this means that the debt crisis of the Greek government could do nothing on their own, only helped by the other EU countries.Third, the enlightenment of the Greek debt crisis.Greece's sovereign debt crisis occurs from the negative side show that in the case of shortage of capital, external borrowing, foreign capital,and make use of foreign debt and capital on production and trade. 80 years from the 20th century to the present,the introduction of the foreign debt and foreign investment in China continue to increase, however, China's GDP and export growth rate is much higher than the growth rate of debt.So, not only to repay the foreign country, but also a creditor. But the Greek sovereign debt crisis has reminded us to attach importance to sovereign debt risk and local government debt risk,to develop effective measures to prevent the debt risk.