piigsty

Heres a really useful (and informative) graphic from Der Spiegel.

It compares the 3 key economic indicators for the PIIGS, France and Germany. Note how the EZ crisis is now boiled down to just the pivotal 7 of the 17 members; the Franco-German leadership duo and the PIIGS crisis countries. For reference: the Maastricht Criteria for entry to the euro started that…

• ‘Sovereign Debt: GDP ‘ be 60%
• ‘Budget Deficit‘ does not exceed -3%.

Over the past week, there have been a few really valuable insights from the Economist on the euro crisis and the European debt crisis. Of course, we at PIIGSty are very proud of our summaries so, with you in mind, we’re giving you a run down of our favourite three articles. Heres a PIIGSty pictoral summary of all 3.

Full summaries of the articles are below…

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There is plenty of negativity associated with the present day European project – some of it merited, some not. A key question which is not often asked is ‘what next?’ With the EU’s economic wings pretty firmly clipped for next few years, we are living through an on-going battle. While we look within ourselves and talk about future economic and political governance, what about our external position? Where is Europe’s relevance in the 21st century?

One article which PIIGSty feels represents an interesting tip of the iceberg insight to this question is in today’s Wall Street Journal entitled ‘Emerging Giants Look at Europe Aid’

An alternative headline could be, as one clever commentator puts it ‘BRICS rescue PIIGS.’ The BRICS – Brazil, Russia, India, China and South Africa – are basically an acronym for growth especially considering the various restrictive factors on the traditionally strong US, EU and Japanese economies. The BRICS, in sum, are growing fast in economic importance. But even the BRICS are not immune to a downturn.  Chinese growth forecasts for one have been pared back thanks in part to the EZ crises. Without Europe buying BRIC exports, BRIC economies can overheat. China needs to carve out new markets and as China produces more technologically advanced exports, the best option is to sell them to Europe and North America rather than Africa where it is also trying to get a foothold.

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A sobering visual from the Economist Daily Chart 18 Aug 2011

Also featured? Every member of the PIIGS has suffered GDP decline since late 2007. Ireland has fared worst with Greece  and Italy close behind.

Key stat: Ireland’s income per head is now a painful 25% below its previous trend. Its GDP is 12% lower

With all the hullabaloo about the sovereign/national debt piles across Europe, the US and beyond – it might be handy to know vulnerable the PIIGS to their debts (based on a wider measure than just the old favourite GDP:Debt ratio).

A daily graphic from The Economist, found here: Economist Daily Chart July 12 2011 gives you a clear indication based on 2011 forecasts (which could still be optimistic).

Heres the list:

In terms of the countries vulnerability to its national/sovereign debt pile, the top 10 includes the PIIGS (Portugal 5th, Italy 10th, Ireland 2nd, Greece 4th, Spain 6th).