Research On Default Risk Of Eurozone Sovereign Debt

Eurozone in human history, the nation-state to achieve the highest form of peaceful political and economic autonomy high degree of integration is a historical and logical perfect unity, representing the direction of the development of human civilization and progress. In this magnificent background and process, appear to any political, economic failures are worthy of our serious thinking and discussion. Began in earnest in2009in the euro zone sovereign debt crisis continues, many Member States, especially in peripheral countries remain high debts, deficits soaring bond yields spreads widened significantly, sovereign default risk is very serious, and even the European Union Eurozone major challenges facing disintegration.Sovereign debt crisis as a form of financial crisis, frequently occur in the history of human civilization. Unique in the euro zone sovereign debt crisis is that it is a member of a sovereign debt default the first time in human history occurred in the monetary union, its causes, processes and countermeasures were significantly different from the traditional nation-state. Accumulation and the outbreak of the euro zone sovereign debt default risk, not individual member states debt too large, the solvency deficiency as simple, in fact, the euro area and the democratic political framework based on the rules and conventions economic system, fiscal and monetary policy arrangements, economically competitive differentiation and even result in financial markets react, and many other common effects.From the background and evolution of the euro zone sovereign debt crisis starting summarized the general characteristics of a sovereign default in history from centuries of sovereign debt default in. The risk of sovereign default in the euro zone were analyzed in this article to start the political foundation and framework of sovereign defaults begin, followed by the euro area’s fiscal and monetary regime coordination of macroeconomic imbalances, financial sustainability, financial markets, such as sovereign risk contagion default risk factors have a significant impact on in-depth analysis on the basis proposed the establishment of a fiscal union and banking union, to eliminate the risk of default monetary Union member countries fundamentally. Finally, also from the history of the development of monetary union as a starting point, out of the euro member countries analyzed the political, economic, legal and technical barriers, noting whether it is powerful or weak countries are drowned out of the euro on its own members States have no incentive to exit the monetary union, the euro zone will move toward a higher level of political, economic and social integration.This paper is composed of nine chapters. The first chapter, the paper describes the background and significance of research methods and logical structure, and the lack of major innovations. Evolution and general characteristics of the second chapter of the eurozone sovereign debt crisis, explained the development process, the evolution of the sovereign debt crisis, as well as the general characteristics of many events in the history of sovereign default in the euro area, which focuses on the frequency of sovereign default, and expected loss characteristics of self-realization. The third chapter review of the literature. The fourth chapter analyzes the political foundation and structure of sovereign default, the euro zone from the general political struggle to a unique political structure, focusing show the non-normal risk of default to the political changes brought by the Member States and the lack of democratic deficit in the digestion of default risk. The fifth chapter analyzes the fiscal discipline and policy coordination conflict fragmented single monetary policy and the euro area fiscal policies, as well as before and after the outbreak of the debt crisis, the European Central Bank to ease the risk of default and the implementation of a series of monetary policy. The sixth chapter analyzes the impact of macroeconomic imbalances brought to the risk of default, the main concern of the current account imbalances, convergence tool failures and sector balance sheet risk conduction. Chapter VII discusses the relationship between welfare policies, fiscal sustainability and default risk, the paper considers the southern European countries beyond its economic base level of benefits, and the deterioration of fiscal sustainability are to some extent increased the risk of default. Chapter VIII of the assessment and analysis of financial market contagion effect on default risk, learn the system of rating agencies and sovereign bond spreads observed from the perspective of economic basic face quantify the impact of default risk, the risk of default of Italy and other southern European countries were a degree of assessment. In order to investigate the risk of contagion in the euro area, the reference Bekaert et al.(2011) arbitrage model, reveal the risk of default in the euro zone overflow and infection. Chapter IX proposed measures and the default risk of the euro zone’s future, the establishment of a fiscal union and banking union is the key monetary union to eliminate the risk of default from the root. On the basis of analysis of the history of the collapse of the monetary union, we pointed out the obstacles facing the exit from the euro, as well as strong and weak exit costs to arrive at the conclusions of the disintegration of the euro area will not, and the future of the reform and the euro area to make some superficial judgments and recommendations.