PIGS: Portugal, Ireland, Greece & Spain

A This is Money article explains:

PIGS is an acronym for a group of four countries. Portugal, Ireland, Greece and Spain - all in deep economic trouble in the eurozone.

These are the four countries reckoned to be suffering from having to stick with the euro - and with the European Central Bank's interest rate policy.

Standard & Poor's, the ratings agency, thinks these four countries may have to ask the International Monetary Fund for help. To give you flavour, it seems that Ireland's economy could contract 4% this year.

Economists think we should be talking PIIGS here, not PIGS - they bundle Italy in with the four PIGS countries.

Since this article first appeared, S&P did indeed downgrade Spain's credit rating, and there is talk that the UK could also lose its coveted AAA rating.

Francisco, a reader from Madrid took exception to the original article and its slur against Spain. He (quite rightly) pointed out that people in glass houses shouldn't throw stones:

"Spain produced a star performance: Average growth of more than 3% for the last ten years, budget surplus, low public debt, massive immigration (five million, second only to the US)."

"Even at these tough times, no Spanish bank has been nationalised or bailed out as has been the case in the UK, Germany, the US, the Netherlands or Belgium."

"Furthermore, Spanish public debt stands below 36% whilst the UK's is 50%, Germany is 60 and the rest is higher than 70%. So think twice before using this kind of derogatory term against these countries, because countries like the UK are in a bigger mess."

As more recent articles from This is Money deal with the continued devaluation of Sterling, and the likely nationalisation of more UK banks, it seems that Francisco might well have a point.

In reality, the whole of Europe is in trouble, and comparing the degree of economic suffering in each country - especially those linked through a common currency - is an exercise in futility.

Martin Dell, Kyero.com

Like this? Then share with your friends and colleagues!