At this stage of the crisis’ history finding in the media, print or via Internet, the word PIIGS to refer European Southern economies, and also bailed-out Ireland can be sort of a shock. However , it sometimes occurs when experts want, for instance, suggest that recovery in these countries is little more than pure image.
Using initials of Portugal, Italy, Greece and Spain, Anglo saxon media coined a pejorative acronym that was a carbon copy of the term meaning “porcine animal” or “dirty person”. It was the nineties and journalists, analysts, market watchers and so on needed a word for those troubled countries on the eve of their entry into euro zone. In current crisis, the term has been used again to point public finance problems of mentioned economies, substituting Italy for Ireland or including both as PIIGS.
If magic words to see a true recovery at the south of Europe is making real economy move again, beyond shining light of macroeconomic figures, one can say that PIIGS are still stagnated. These countries’ citizens living conditions are worse, much worse than ten years ago. At the end, they are the real architects of such early signs of recovery thanks to their huge adjustment efforts.
The question is which European country has increased their population’s purchasing power or their households’ wealth? Those not included in the select group of PIIGs Germany, the UK, France…? And a second question. Which European country has avoided to clean, let’s say, their banking sector dirtiness? The UK where Northern Rock was one of first Europe nationalised entities? That France and Germany have not resolved this point yet, means exactly that: they have not resolved the problem, but the problem exists. France’s banking system clearly needs a reorganisation to fix the country’ s ailing economy, according to experts general consensus, while German Landesbanken’ profitability is lower than their international peers. Besides, these last will not take ECB’s stress tests. Maybe they are not as efficient and clean as foreseen.
It is easy to say that Spain is timidly growing thanks to the European Union’s help, which did not demanded the country’s government to meet the agreed budget deficit targets. It is a big truth, but from time to time it is good to remind that Germany and France exceeded Maastricht Treaties’ target deficits fourteen times in buoyant economic ages between 2000 and 2010, and the rest of member states supported the idea of including some flexibility factors for both countries to assume European committments.
It is not a question of doing old dirty washing, but please don’t call European Southern economies PIIGS anymore. No international institution has adopted the term ever. Banks such as Barclays even told their experts to avoid it.