Based On The Background Of European Debt Crisis Of Sovereign Debt Influencing Factors Research

Since the2008financial crisis, the European economies continued turmoil, and some countries sovereign credit verge of collapse. At that time, Iceland’s banking sector had collapsed the total liabilities of about110billion euros, seven times Iceland’s GDP that year. Until the end of2011, the government remained liable for a debt of1.6trillion Euros. In late2009, the Greek government announced that the level of their current year’s budget deficit will account for12.7%of GDP. Outside speculated that the Greek government couldn’t continue to be approximately$20billion of its total debt refinancing. Subsequently, a number of countries in the euro zone’s financial problems had surfaced. The euro zone crisis entered a spread stage, especially in countries such as Italy, Spain. Portugal and Ireland. In addition, the economic powerhouse of Germany, France and other euro-zone were also influenced by the crisis, such as the euro fell sharply, capital flight, rising interest rates, stock market phenomenon of serious diving. Therefore, the EU as a whole was troubled by the crisis facing the most severe test in its tenth year since.The euro-zone economy was deteriorating under the shadow of the sovereign debt crisis. Junk bonds on the balance sheet of the central bank are also increasing. The European Union, the European Central Bank and the IMF emergency issued a series of bailouts and the crisis entered a remedial stage. April9,2010, the Federal Reserve announced a currency swap mechanism to restart with the United Kingdom, Switzerland and the European Central Bank. May10, the same year, Euro zone central banks and the IMF announced the biggest ever rescue operations in Europe---€750billion rescue plan. After a lapse of nearly three years, the euro area economy is not so bad like past, but it is still not optimistic. In March this year, Cyprus’sovereign debt crisis broke out. The European Central Bank issued an ultimatum to the Cyprus that before March25the country should reach relief agreement with the EU and IMF (IMF), otherwise it would be cut off emergency loans to assist the Cyprus banking sector. According to the Bloomberg report, the entire Euro zone services and manufacturing output atrophy than economists expected. This is the euro-zone economy shrinking for five consecutive quarters, and economists expect further shrink0.1%in the first quarter of2013. So, sovereign debt crisis still has its practical significance, and China’s sovereign debt problems of certain reference.The first part of this paper is to study the background and significance. After review relevant literature, I arranged for the writing of the article content, and pointed out that the innovation possible.The second part of this paper is the genesis and evolution of the euro zone sovereign debt. Firstly, in this paper, the sequence of time-based line described the outbreak of the debt crisis in Europe and the conduction process. Secondly, this paper analyzes the external causes of the euro zone debt crisis. Thirdly, this paper analyzes the internal causes of the euro zone debt crisis. The establishment of the euro zone there is a congenital defect. The level of economic development of countries is not balanced, economically underdeveloped countries disadvantage continue to accumulate over time.The third part is a deeper discussion of the main factors to affect the level of sovereign debt. The first is to study the impact of government fiscal revenue and expenditure of the sovereign debt. Maintain the size of the debt, the government requires a certain amount of cost and the interest rate reflects the size of the cost. Secondly, we believe that a country’s government held assets is one of the factors affect the possibility of a sovereign default. The Morton model based to explore the relationship between the assets changes the default rate. Thirdly, the use of the IS-LM model to explore the shackles of the member economies of the euro zone’s own system.The fourth part is an empirical analysis of time-series data in Greece. The dependent variable is the total government debt, and the independent variable is GDP growth rate, fiscal revenue and expenditure, capital investment income. The results support this in the third part of the study.The fifth part discusses the main conclusions of this paper and the limitations of the study. First of all, the paper concludes needed the test of time. Secondly, the main research fiscal revenue and expenditure, capital and within the euro area system. But the impact of the sovereign debt problem is certainly not limited to this. Third, the paper used in the empirical analysis section Greek nominal gross domestic product. Deviations may exist in the true expression of the Greek GDP growth.This article strives to achieve a breakthrough in research methods and content possible innovation:1. This paper focuses on government fiscal revenue and expenditure, capital gains and the euro zone internal system, and hope that the analysis proposed unity framework can focus on these three aspects of the analysis.2. Sovereign balance sheet and company balance appearances combined, a clearer means of sovereign balance analysis.3. The empirical analysis, the level of sovereign debt is related to a country’s GDP growth rate and GDP is not obvious.