| Since the2008debt crisis, the economy of euro zone remains in the doldrums. Therecovery of the global economy is struggling. The range of transmission of the debtcrisis and the impact of the extent and the scale of aid are far beyond the previouscrisis. In the past in2012, the evolution of the debt crisis in Europe makes the Europeaneconomy into a second recession. Recovering the world economy is more difficult. Inthe coming year, Europe still will be in the context of sustained deflation to economicrecovery. Meanwhile the United States, Japan and other developed countries in theworld will face a test of the debt crisis. Damage and impact of the debt crisis are morethan expected to the world economy. The global economy has been troubled in deepdebt crisis. According to IMF data, in2012, the total size of the public debt of developedcountries is about$50trillion, and the public debt to GDP ratio has risen to110.7percent. This is the highest level since World War II. In the face of the rapid increasingsize of the debt and a downturn in the domestic economic situation, no country can usethe large-scale fiscal policy to stimulate the economy. The debt crisis has become oneproblem that plagued the world. Therefore, studying the modest size of the debt of thesovereign state, controlling and preventing the debt risk and warning the debt crisisbecome necessary and meaningful.In this paper, we take five countries of the Eurozone for example, Greece, Ireland,Italy, Spain and Portugal. We analyze the debt sustainability by the methods of thequalitative and quantitative. Then we take it as a reference variable added to themeasure of the risk of its debt. At last we warn its future debt risk. In the sustainablequalitative analysis of the size of the debt, we can find that after the2008debt crisis,the country’s financial situation is deteriorating rapidly. The budget deficit and the sizeof the debt in the proportion of GDP rapid rise. All this values are far exceeding the prescriptive value in the Maastricht Treaty. In our study, Greece has the worst financialsituation. Then we have the Quantitative analysis by the empirical analysis. We have aconclusion that the debt in Greece, Portugal and Ireland is unsustainable, while Italyand Spain’s debt is relatively good. We think they are sustainable.The next part of the article is a risk early warning analysis. First, we determine theeffects of the various early warning indicators of the risk of the national debt. Thentaking the debt sustainability into the analysis indicators. By factor analysis we find thatthe macroeconomic indicators and the debt burden indicators are the most importantfactor influencing the risk of debt. The sustainability of government debt has becomean important factor. Through the Composite score factor curve we can see that after2007, the debt risk of the five countries is rising faster. This is meaning they have largerrisk. But from2010, the performance of each country is different. In addition, in thecomposite score factor of five countries in2013which is predicted by the ARIMAmodel, we can find that Greek and Irish have a tend to increase the risk, Spain stillhaving a high risk, Italy and Portugal’s debt risk having gradually stable trend.Finally, we can have the revelation of the European debt crisis on China’s debtmanagement. In recent years, debt policy is frequently used to control the macro-economy. The size of the debt is rapidly expanding. The risk of debt is rapidlyincreasing. Debt management is gradually more difficulty. In some countries in the eurozone, we analyze the debt situation and gain the revelation to control our size of thedebt and complete the early-warning system. In addition, it is also proposed relevantpolicy recommendations in managing our local government debt. |
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