The fall of the PI(I)GS

A new era comes with new acronyms for new phenomena. We have already commented on the rise of the BRICs, which is an apt shorthand for Brasil, Russia, India and China, the economic powers to be (or that be). Yet there are also less flattering acronyms around. What to think of the PI(I)GS, for example. It is the acronym for Portugal, Italy, (Ireland) and Greece, whose sovereign debts led, and are still leading, to differing extents, to the 2010 Euro-crisis. A brick is robust and strong; a pig is… well, nevermind. The connotations are so offensive, in fact, that the Financial Times has banned the acronym from its pages. But what is going on?

“Greece, followed closely by at least four other EU nations, is”, Michael Moran explains, “so comprehensively over its head in debt that international markets have pounced, driving up the cost of Greece’s government borrowing to the point where default — the international financial term for going flat bust — is a very real possibility. And if Greece goes, others may follow. Those others — derisively grouped together as Europe’s “PIIGS” by waggish traders — … share a dubious distinction of having debt levels that exceed (or are on target very soon to exceed) their GDP. In simple, Main Street terms, these economies are underwater.”

And the end is not near. Not near at all. Despite the European bail-out fund.  When it comes to Ireland, for example, the (brackets) needed to be dropped recently, as ‘the island of saints and scholars’ lived though its Lehmans moment. It has become, in other words, an official and full member of the PIIGS. And Portugal, Italy and Spain can expect some heavy weather soon. The Euro-crisis marks the end of the postmodern years of speculation and boom, restructuration and development of lagging economies at the periphery of the European Union.  For that matter, the fall of the PIIGS is just another sign of the times. Metamodern times, that is.

Table: Wikimedia commons.

There are 2 comments

  1. Will Richardson

    Robin, I think you’d find the posts on this link interesting…

    http://bilbo.economicoutlook.net/blog/?cat=18

    …they basically disembowel and excoriate the idiocies of the Euro and the EU/ECB High Priest/Class.

    You’d also do well to familiarise yourself with the posts further afield on Modern Monetary Theory and the Job Guarantee Employer/Spender of Last Resort ideas that correctly describe floating fiat currency state money mass unemployment disequilibirum modern economics as opposed to the flat earth of la la land of neo/classical equilibrium fixed/gold standard currency economics practiced by the ‘lame’ stream ‘orthodoxy’.

    Joan Muyskens at Universitet Maastricht is a practitioner.

    All the best,

    Will

  2. Robin van den Akker

    Hi Will,

    I will have a look, thanks. I am wondering how governments will response to the euro-crisis. at times it seems they take a flight forward and further liberalize economies; at other times they seem to be more prudent and perhaps even keynesian in their policies – and generally their approach seems to be neither of them.

    If you feel like writing a more economically-orientated (or specialized) post on the topic, we would be more than happy. We ourselves, as you probably would have noticed, are no experts in the field. If so, contact us at: mtmdrn@gmail.com

    best wishes, robin

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