Research On The European Sovereign Debt Crisis And The Revelations To China

Since the American sub-prime mortgage crisis triggered a global downturn in capital lending market, the financial indicators of the world’s major developed economic entities continue to deteriorate. In 2009, Greece became the first country bearing the brunt of capital chain rupture because of accumulated budgetary deficit and huge government debt and then the three major credit rating agencies subsequently cut Hellenic debt rating, making the European Sovereign debt crisis break out. Research of this crisis could contribute to find the correct developing road of the APEC and the eastern Asia monetary cooperation.Analysis in fiscal operation state of Greece, Italy, Ireland, Spain and Portugal (PHGS) from the long-term perspective revealed the reasons for the outbreak of European sovereign debt crisis as followings. Firstly, the financial tsunami in 2008 induced rising of fiscal deficit and debt in Europe as the fuse. Secondly, the average government debt level of advanced economies in the world’s was engaged in decades of growth cycle as the macro factor. Thirdly, the binary contradiction between European fiscal policy and monetary policy was the inner cause. Fourthly, international credit rating agencies contributed to the European debt crisis. Fifthly, political system of high welfare and the appreciation of Euro indirectly led to this crisis.Fiscal rules once had been the primary method to keep watch the sovereign debt crisis in history but there is no real constraint finally. As the new approach of academic exploring, independent finance committee seemed to be able to control the operation of macro economy. Holland CPB was a successful example.China’s GDP maintained a rapid growth speed since reform and opening while the RMB internationalization trend was increasingly obvious, which also may cause our country export trade tightening and dilute the government paying ability. Besides, the expansionary fiscal policy over yeas increased considerable financial risks. This European Sovereign debt crisis brought us several revelations. First, keep moderate debt scale and at the same time establish perfect supervision and early-warning mechanism. Second, solve fundamentally the problem of the inconformity of property right and authority in local governments. Third, optimize and promote the fiscal expenditure structure. Fourth, ensure effectively the coordination between fiscal policy and monetary policy. Five, change the model of our export-led growth way, expand domestic demand and accelerate the optimization of industrial structure. Six, change the concept of seeking pure digital as for government management.