| Publication |
2011.
|
| Summary/Abstract |
All major developed economies vary in the causes of their debt problems, but the nature is the same: income falling short of expenditure and spending on deficits. The root cause of European debt crisis lies mainly in the "high salary, high welfare" policy universally pursued in the European countries after WWII. The outbreak of global financial crisis became the fuse to the European debt crisis. The economic scales of Greek, Ireland and Portugal troubled by debt problems are not very large. Their debt problems constitute not much risk to the EU. But the European debt crisis has been turned into a hubbub. This is not only because the defects of the EU policy-decision mechanism have provided the public with an opportunity to play up the problem, but also because the US attempts, by speaking ill of the Euro, to resist the pressure from the European side demanding reform of the world financial system dominated by the US dollar. As a matter of fact, the US economic situation is no better than Europe's. Its debt burdens are also heavier than Europe's. Therefore, although European economic recovery will take a considerably long period, the Euro will not "collapse" and the Euro zone will continue to exist. The EU will remain the largest economy in the world.
|