The Greek Sovereignty Debt Crisis’ Causes,Impacts And Counter-measures

In the first half of2010, a sovereign debt crisis derived from the Greek triggered unrest across the euro area, threatening the stability of global financial system, which has had a profound influence on the European Union economic management. In the domino effect, the Greek sovereign debt crisis spread quickly, and soon evolved the whole Europe’s sovereign debt crisis, added more uncertainty to the European economic recovery.This paper briefly analyzes the Greek sovereign debt crisis and evolution process, and discusses the root of Greek debt crisis on the basis of this analysis. With deepening of the global financial crisis, the Greek sovereign debt crisis has its own reason, but the primary cause is the developed economies’system of welfare. Greek debt crisis not only exposed some important defects of the Greek government system and the financial and economic system, but also exposed the internal institutional defects of euro zone as a new type of single currency system. Unified monetary policy and distract the fiscal policy make the European Union commonly faced with financial deficit and debt pressure, and an aging population and labor market rigidity will further deterioration of the Greek sovereign debt. In the beginning, the process of European Union and International Monetary Fund to rescue Greece was filled with all kinds of complicated international contradiction, and the scale and strength of relief fund were unprecedented. So far, the Greece sovereign debt crisis has lasted two years, the Greek government authorities and game of European rescuer continues, interests of every respective and political contest will make the process of rescue difficult and full of variation.It is the focus of scholars to study the prospect of Greek sovereign debt crisis as well as measures. This paper analyzes the measures of European Union to deal with crises. First, strengthening the relief mechanism is the necessary means to stabilize the financial market, but it doesn’t solve the problem fundamentally; Second, there is no doubt that strengthening financial coordination and financial supervision is the basic countermeasures to solve debt crisis, however, in the short term, it is difficult to obtain immediate effect, in the long run, the fundamental way out of the crisis is to strengthen the competitiveness of the economy and promote the economic growth; Finally, it is another factor that the contradiction of asymmetry between euro zone member states unified monetary policy and requirements of economic convergence that caused Greek sovereign debt crisis, the prerequisite to fundamentally eliminate sovereign debt crisis is to further promote the euro-zone integration, especially financial integration. In view of its many interests and the complexity of the political system and legal framework restriction, it remains to be seen whether the measures of European Lnian and the International Monetary Fund to rescue Greek dem cnsis of the rescue measures has worked.At last. the article expounds the influence and impact on Europe and China’s economy caused by Greek sovereign debt crisis. From the perspective of economics, the core countries and peripheral countries of EU are benefit from the unity of the euro zone, the exit cost is huge. As the largest euro-zone beneficiaries, Germany exports checklessly under the circumstances of the unified currency, and rely on the weak currency increases the export ability; For peripheral countries such as Greek, exit the euro zone doesn’t mean the disappearance of debt, but bring flight of capital, banking crisis and inflation; From the perspective of political, the euro zone is the largest achievements of integrated construction, and the crash of euro zone means huge regression of the European integration, weakening ability of Europe to participate in the competition the world pattern. Therefore, the collapse of euro inevitably won’t be the choice of euro zone countries such as France and Germany; they will take measures to go through the crisis. It will accelerate the process of European integration, and the degree of financial unity. The direct influence of Greek sovereign debt crisis on China is limited, but the potential impact is inevitable, this influence can reflect through the following three channels:First is Chinese foreign trade; second are China’s exchange rate and its reform; third are Chinese foreign exchange reserves. Studying the Greek sovereign debt crisis has positively practical significance for our Chinese to in our country to adjust fiscal policy and financial revenue and expenditure structure, avoid sovereign debt risk actively and reserve the foreign exchange assets value, at the same time, it provides the basis for us to establish trade policy to Europe.Greek sovereign debt crisis says again that the sovereign debt risk has become an important risk for mature system of market economy, it is therefore, in order to solve the sovereign debt risk and reshape the confidence of investors, strong and reliable medium-term financial reorganization is needed for highly indebted economy, strengthen the welfare and tax system reform supplemented by the financial departments and the reform of the economic structure as well as the macro prudential supervision, make sure the growth of financial debts and development of the economy are sustainable. For the system of euro zone has its institutional defects, Greek sovereign debt crisis should be an important opportunity to reform European mechanism.