Interpretation Of The Eurozone Debt Crisis

At the end of2009, Greek sovereign debt crisis happened, thus triggered the beginning of the eurozone debt crisis. From that time on, the eurozone debt crisis has been developing worse and worse. As a result, it does a grave disservice to the eurozone-a place where so far in the world political integration degree is the highest. In economy, along with the development of the eurozone debt crisis, several eurozone countries are facing debt default risks, thus have to receive the united aids from the European Union and the International Monetary Fund. At the same time, the eurozone debt crisis has seriously dampened the European integration process. Whether the eurozone can survive this crisis or not is still a question to be discussed. The purpose of this paper is to interpret the eurozone debt crisis, to analyze the causes and evolution mechanism of the crisis, then to seek solutions.In this paper the eurozone debt crisis is analyzed in the perspectives of political economy and the new institutionalism theory. Since the Second World War, Productive forces have been becoming more and more developed, along with the development of the third technological revolution. Economic exchanges become more closer, splitting the political pattern which is made by individual sovereign states. Their relationship is so close, almost any major political events can be found behind the economic motivation and the analysis of the economic impact of events; and so are economic events. In this sense, the analysis of political factors which are behind economic events and economic factors which are behind the political events can lead us to a clearer understanding of the facts. In addition, new institutionalism which is rooted from the new classical economics focus on the systems\the effects of institutional changes\factors that influence the development of institutions. From1980s, the theory has been used to explain the European integration. Choosing such a theory analysis is conducive to the analysis of eurozone and its debt crisis.This article has the idea that the although unfavorable world economic environment contributed to the outbreak of the debt crisis, the most fundamental reason is that the drawbacks and contradictions hidden in the eurozone systems. The lack of coordination between fiscal policies and monetary policies within the eurozone has been playing the most important part. Therefore, in order to solve the euro zone debt crisis, attention must be paid to the institutional level in the eurozone.