Analysis On The Cause Of European Sovereign Debt Crisis From The Perspective Of Trade

In December2009the Greek sovereign debt crisis broke up, affected manyeuro-zone countries and finally evolved into the Euro sovereign debt crisis, that is,European debt crisis. The economy within the euro zone violated heavily andEuropean debt crisis became an important economic problem in the EU as well as thewhole world. The root of the crisis becomes an important problem which academicdiscussed. The direct reason of The European debt crisis is excessive debt ofgovernment departments and private behavior, which lead to the government budgetdeficits. While the fundamental reason is that economic growth is below theexpectation and there is sluggish adjustment of economic structural. Because of thelower economic growth and the unreasonable economic structure, the country’seconomic slow development could not support the government’s borrowing capacity.Faced with the huge debt, the government’s revenue is not capable to repay, whichleads to the country’s sovereign credit crisis. The euro zone is an economic unionbased on the customs union and the unified currency. Given its convenient free tradeconditions and stable fluctuation of foreign exchange, the unique economic and tradesituation in euro-zone countries become important factors of national economicoperation. Therefore, researching from the perspective of trade is full of theoreticaland practical significance to analyze the crisis cause, explain the sovereign debt crisisand promote the stable development of economy.The paper analyzed the function of trade in the crisis’ forming from the view ofthe Euro-zone countries. At first this paper analyzed how trade affected the businesscircle and Euro debt crisis in theory. Secondly, this paper introduced the developmentof euro-zone countries’ trade and economy by the collection and analysis of the latestdata, and reviewed the European debt crisis. By further analysis, it’s found that thetrade scale and structure of euro-zone countries have connections with the crisis.Based on the analysis, econometric analysis was carried out in this paper by using thepanel data of10euro-zone countries. The paper studied the risk factors causing thecrisis, and focus on explaining the cause of crisis from the perspective of trade. On theone hand, the expansion of export scale has a negative effect on the formation of the crisis. It could be concluded that the slowly growth of export in euro-zone countries isan important reason of the crisis. On the other hand, the level of manufactured goods’intra-industry trade has a negative effect on the crisis degree. That shows theformation of the crisis is affected by the countries’ unreasonable trade structure. At thesame time, the study support that the sluggish adjustment of industrial and economicstructure is an important cause of the crisis. Finally, this paper put forward thecorresponding countermeasure and suggestion according to the empirical analysis.