The Greek Debt Crisis Of The Causes, Effects And Its Implications For China

In December2009, the Greek government announced the budget deficit of2009will reach12.7percent of GDP, while public debt will account for113percent of GDP, far more than the3percent and60percent upper limit required by the EU "Stability and Growth Pact". After that, three international rating agencies successively lowered Greece’s sovereign credit rating, the Greek faces sharply increasing finance costs and financing difficulties, the Greek sovereign debt problems surfaced. The sovereign debt crisis is not unique in Greece, the history, some developing countries in Latin America and developed countries such as the United States have occurred, it has a negative impact to the host country and the neighboring countries, even to the world economy. Conduction mechanism, the Greek debt problems quickly evolved into the European debt crisis, cast a shadow over the recovery of the world economy.Although the debt crisis is not as fast as the U.S. sub-prime debt crisis, it also experienced the beginning, development, climax, shock and other sectors. The reasons are:In the process of the Greek debt crisis, the Greek economy has exposed the inherent problems, and the euro zone monetary system drawbacks also showed. Before the global financial crisis, the countries only focus on their own financial viability and economic development, as they are generally lack of the financial regulatory and financial constraints, the international speculation are prevalent. After the outbreak of the international financial crisis, the world economic slump, international capital surplus, speculation intensified and the severity of the debt crisis in Greece deepened. Greek debt has widespread effect:Greek debt crisis is a continuation of the global financial crisis, the recovery process of the Greek economy will be serious hysteresis, which will have an impact on the instability of the political situation, a negative impact on the EU economic recovery, and even a negative impact on China’s exports and foreign exchange reserves which increase Chinese economic operation uncertainty. The Greek debt crisis is derived by the global financial crisis, is a public financial crisis which is triggered by the financial crisis, is a country’s sovereignty crisis which is due to the private sector risk transfer to the public sector. In the short term, the crisis can not be completely eliminated, it continues to spread. The problems such as a big amount of local government debt, low fiscal transparency and outdated mode of economic development also exist in China, they require the improve of financial regulation, diversify into other currencies, the RMB internationalization and the building of the international credit rating agencies which meet the reality of our country’s. Greek debt crisis has important reference significance for China’s future economic development.