Public debt crisis in Europe and the lessons for Vietnam

Abstract

This paper looks at the European Sovereign debt crisis. The results show that firstly crisis can happen in eitherlow, middle or high pubic debt countries. Secondly, crisis can take place in a country with high economic growth. Thirdly, macroeconomic problems can accumulate for a long time before causing a crisis. Fourthly, banking cisis increases public debt quickly afterwards. Fifthly, public debt crisis has significantly negative effects oneconomic growth. The lessons drawn for Vietnam are following: firstly, Vietnam needs to reduce her current budget deficit level. Vietnam must be careful in increasing further the level of public debt because public debt crisis can happen at a relatively low level. Secondly, because macroeconomic problems can accumulate for a long time before causing a crisis, Vietnam needs to solve these macroeconomic problems. Thirdly, Vietnam has to solve the non-performing loan problem in the banking system and take measures to prevent ballooning of real estate and financial markets in the future. Fourthly, external debt of Vietnam has reached 41,1% GDP, not so high but not low. Vietnam has to be cautious in accumulating more external debt.

Keywords

• nợ công
• khủng hoảng nợ công
• châu âu
• việt nam