PIIGS is a term used historically to describe Portugal, Italy, Ireland, Greece, and Spain, the weakest economies in the Eurozone during the European debt crisis. This group of nations garnered attention due to their economic struggles and financial instability, which sparked concerns about their ability to repay bondholders and risks of default.
Key Takeaways
- PIIGS Highlighting Economic Vulnerabilities: PIIGS was widely used to point out the significant impact of Portugal, Italy, Ireland, Greece, and Spain on the EU’s economic health.
- Evolution of Economic Jargon: Over time, the use of this term has been discontinued due to its derogatory nature.
- Economic Challenges Post-2008: These nations were often blamed for slowing the eurozone’s recovery after the 2008 financial crisis, with issues like slow GDP growth, high unemployment, and mounting debt levels.
Deep Dive into PIIGS
During the 2008 U.S. financial crisis, the Eurozone, consisting of 16 member nations, used a single currency - the euro. Access to low-interest capital led some of the weaker economies to accrue unsustainable debts. The global financial upheaval in 2008 made it hard for these nations to manage their financial obligations, exacerbating their economic frailty and limiting access to additional capital sources.
Using the euro had its downsides; these nations couldn’t deploy independent monetary policies to counteract the global downturn effectively. In response, European leaders approved a 750 billion euro stabilization package in 2010 to support the struggling PIIGS economies.
Critique of the PIIGS Acronym
The acronym
Related Terms: European debt crisis, euro, monetary policies, economic integration, Brexit.
References
- Küsters, Anselm & Garrido, Elisa. “Mining PIGS. A structural Topic Model Analysis Of Southern Europe Based on the German Newspaper DieZeit (1946-2009)”, Journal of Contemporary European Studies, Vol. 28, Iss. 4, 2020, pp. 477-493,
- Vossole, Jonas Van. “Framing PIGS: Patterns of Racism and Neocolonialism in the Euro Crisis”, Patterns of Prejudice, Vol. 50, Iss. 1, 2016, pp. 1-20.
- Picard, Robert G. “The Euro Crisis in the Media Journalistic Coverage of Economic Crisis and European Institutions”, I.B.Tauris & Co. Ltd, 2015, pp. 1-15.
- European Parliament. “A Decade on From the Crisis Main Responses and Remaining Challenges”.
- West African Monetary Institute. “The Greek Debt Crisis – Lessons for the ECOWAS Single Currency Project”, Page 21.
- European Commission. “Spending Reviews: Some Insights From Practitioners”, Pages 6-7, 55-61.
- Government of the Netherlands. “What Is Brexit?”
- The Organization for Economic Cooperation and Development. “The Economic Consequences of Brexit: A Taxing Decision”.
- European Parliament. “Greece’s Financial Assistance Programme - June 2018”, Pages 1-5.
- Britannica. “Eurozone Debt Crisis”.
