The Research Of European Debt Crisis Contagion Under The Visual Angle Of Monetary Integration

Debt crisis contagion is defined as the phenomena that a background of openeconomic system, debt crisis happened in one country and spread to other countries.And there occurs shocks transnational transmit. Debt crisis contagion not only doesharm to the initial country, but also make more countries and the whole world to leadto economy depression more likely.The outbreak of European debt crisis in2009swept the major countries ofEuro-zone. Greece became the first country of occurring debt crisis. Since then, therisk spreads to a number of countries rapidly, including Ireland, Portugal, Spain andItaly. The euro area is the only successful practice area of monetary integration. Thetrade and economics of Euro countries greatly promote because of monetaryintegration. The euro has also become the best reserve currency after the dollar. Manycountries take the liabilities of the mode of economics development in order toreaping the benefits of monetary integration. So these countries resulted into the debtproblems inevitably. The debt crisis completed the contagion in a short time. Thecontagion of the debt crisis hasn’t been resolved even though kinds of measures wereused. What’s more worse, the crisis has are showing persistent and expand. It enablesscholars to re-examine the monetary integration.It has great practical significance to study the contagion of the Europeansovereign debt crisis in the euro-zone as well as how to eliminate and prevent the debtcrisis contagion. The article analyzed the contagion of the debt crisis between thecountries in the euro-zone through trade channel, financial channel and expectationchannel as the perspective of the monetary integration, we found there are reversecontagion and cross contagion in countries obviously. Then we test empirically thecontagion of debt crisis at the use of VAR model. We prove monetary integration isthe main raise of not resolving the contagion of Euro-zone debt crisis effectively.Based on the above analysis, we propose some policy recommendations to solve theEuropean sovereign debt crisis. In addition to Europe should combine the externalassistance and the internal assistance, but solve the drawbacks of monetary integrationagainst the reformation of the monetary integration.