What’s your opinion on European sovereign debt crisis?

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问题 What’s your opinion on European sovereign debt crisis?

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答案The European sovereign debt crisis(often referred to as the Eurozone crisis)is an ongoing financial crisis that has made it difficult or impossible for some countries in the euro area to repay or re—finance their government debt without the assistance of third parties.The European sovereign debt crisis resulted from a combination of complex factors,including the globalization of finance;easy credit conditions during the 2002—2008 period that encouraged high.risk lending and borrowing practices;the 2007—2012 global financial crisis:international trade imbalances;real—estate bubbles that have since bumt;the 2008—2012 global recession;fiscal policy choices related to government revenues and expenses;and approaches used by nations to bail 0ut troubled banking industries and private bondholders,assuming private debt burdens or socializing 10sses. The crisis erupted in Greece firstly.In the early mid-2000s,Greece’s economy WaS one of the fastest growing in the eurozone and was associated with a large structural deficit.As the world economy was hlt by the global financial crisis,Greece was hit especially hard because its main industries’shipping and tourism.were especiaUy sensitive to changes in the business cycle.The government spent heavily to keep the economy functioning and the country’s debt increased accordingly. European soverel‘gn debt crisis, which displayed both internal and external causes brought about serious problems,triggering a global deficit surge,impeding the efficiency of international trade and financial markets and slowing global economic recovery. For China.the debt crisis has accelerated the internationalization process of RMB,causing large evaporation of foreign exchange assets, along with the influx of hot money.Therefore, China should propose dlfective measures to curb the negative influence of European debt crisis on China’s economy?For example,first]y,China should buy more bonds from multilateral institutions,including euro bonds and the bonds issued bv the European Financial Stability Facility,because they are less risky.Secondly,China should encourage domestic enterprises to expand in Europe, carry out business cooperation with European companies or purchase those companies’preference shares that do not carry voting rights tc avoid political obstacles.Thirdly,China should increase the weight of the euro in the RMB’s curreney baSket.That’s my opinion on this topic.Thank you!

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