The Causes And Enlightenment Of The Debt Crisis In Greece

First happened in the US in2008, soon spread to all over the world, the financialcrisis had a hash blow on the world economy. When the cloud has not dispersed, becauseof some deep rooted economic problems and some inappropriate measures ofgovernment after the economic crisis, the debt crisis exploded in the Europe especially inGreece. World economy is volatile, and the deteriorating situation in Europe lead totremendous negative impact on the world economy，more lead to a panic feeling of thepublic to some certain extent, which cast a shadow to the good vision of the globaleconomy recovery.The paper defines debt crisis systematically, compares different ways of definition,and introduces the occurrence of debt crisis and the evolution process of it, the causesand the consequences of the Greece debt crisis as well as the conduction and thediffusion process in the region. And by the trend of gold as well as fluctuationsin commodity prices in the world, the euro-dollar exchange rate, the impact on financialstability within the euro area indicators the paper measures the impact of the crisis. In thenext, this paper introduces an important means of studying debt problems, which is debtsustainability model, by discussing the relative relationship between primary surplus andpublic debt, it finds out that the Greek debt crisis is mainly the result of the long pursuedinappropriate economic strategies, and doomed.The world economic crisis is like a fuse detonation of this series of questions.Then the paper continues to develop some problems of the economic policies, fromthe domestic and foreign economic situation to the mode of economic development fromthe perspective of internal and external balance. The failure of fiscal policy, the bloatedcivil service, the lack of competitiveness of products, excessive wage growth while thelack of openness are all the worries of the economic development Greece. Inaddition, not mature enough, the system design of the European integration, the Greekdebt crisis can not get away from. The separation of monetary and fiscal policy in theeuro-zone countries led to the shortage of means of monetary policy to influence theeconomy, further led to excessive use of fiscal policy. The lack of pan-Euro financialsupervision system and crisis relief mechanism led to little attention at the early stage of the crisis and lacking consideration of appropriate relief, failing to strangle the crisis inthe cradle.