Prioritizing Solutions of Sovereign Debt Default in PIIGS

Chien-Jung Ting

International Business Research, 2018, vol. 11, issue 2, 161-169

Abstract: The global economic recession in 2008 triggered an eruption of Europe sovereign debt defaults in Portugal, Italy, Ireland, Greece, and Spain (PIIGS), and these defaults originated from a social welfare expense burden and sovereign debt rollover. In this paper, we detect methods for eliminating the European sovereign debt crisis via the Delphi technique and the Analytic Hierarchy Process. Suggestions from experts include, respectively, “actively lessening government fiscal deficit,” ”lowering the sovereign debt of PIIGS,” and “strengthening the fiscal structure of Eurozone countries.” The empirical results correspond with the actual actions of the EMU, especially the reimbursement constraints on PIIGS by the European Central Bank. It is concluded that improving the nation’s fiscal structure is important, and the feasible ways to do so include reducing social welfare expense, levying more taxes on the middle class, and improving the quality of labor. Especially, enhancing a nation’s debt-credit ratio could increase solvency.

Keywords: sovereign debt default; PIIGS; debt burden (search for similar items in EconPapers)
JEL-codes: E50 E60 F33 F34 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ibrjnl:v:11:y:2018:i:2:p:161-169

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