Economic Research On The Rescue Mechanism Of Greek Sovereign Debt Crisis

At the end of2009, the Sovereign Debt Crisis occurred in Greece, which becamethe first developed country entrapped in debt problems. The reasons for GreekSovereign Debt Crisis included many aspects. On the one hand, the Greekgovernment adopted the expansionary fiscal policies in order to cope with the globalfinancial crisis. On the other hand, there were some inherent institutional problems ofEuro Zone in the course of European economic integrity. The above reasons jointlyled to the increasing Greek government’s financial deficits and sovereign debts. Withthe credit risk of Greek government increasing, the Sovereign Debt Crisis happened.As well as the negative influence on domestic economy, the Greek Sovereign DebtCrisis impacted on other member countries of Euro Zone, resulting to theuncertainties of European Union’s economy recovery. Through a series of rescuemeasures, the European Commission and IMF tried to stimulate the Greek economyand resolve the debt crisis, consequently insuring the stability of the EU economy.Greece wasn’t the first country where debt crisis occurred. However, the severalrescue measures to Greece didn’t have significant effect on debt problems. And it stillinvolved in the increasing risk of debt restructuring, the lack of economic growthpoints, the social contradiction and the like. Even more, the Greek Sovereign DebtCrisis brought about the expansionary debt scale of other member countries, thesystematic risk of European banking system and internal political conflicts in EuroZone. As the member of Euro Zone, the outbreak of Greek Sovereign Debt Crisis had closely connection with European economic integrity. We discussed the rescuemechanism of Greek Sovereign Debt Crisis, that is, analyzed the institutionalproblems of European economic integrity.Given the continual global financial crises, governments began to play a moreimportant role in crisis management out of the needs of political interests and socialwell-beings. The expansionary fiscal expenditure, which was targeted to economicgrowth, placed great burden on government fiscal revenue and caused the globaldeficit problems, adverse to the global economy recovery. The research of debt crisisrescue mechanism not only benefited the resolve of the spreading Greek SovereignDebt Crisis, but also laid the theoretical and practical foundation for othergovernments’ fiscal management and supervision. Thereby, governments were able tomake the reasonable macro-economy policies in order to guide the economy out ofcrisis.On the basic of integrity theories, the formation mechanism of Greek SovereignDebt Crisis was clearly stated. In this paper, through the classification of rescuemeasures related and comparison with historic debt crisis rescue mechanisms, wecould realize the real effect and lesson of Greek rescue measures, providing effectiverecommendations for governments to address the debt problems and establish thecrisis rescue mechanism.