Eurozone Debt Crisis: Debt/Budget Comparisions Across the PIIGS, France and Germany

November 3, 2011

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%.


The Economist on the European Crises (10-17 September)

September 15, 2011

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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The BRICS Bail-out the PIIGS?

September 15, 2011

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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Ireland #1 (GDP Collapse is World’s Worst)

August 18, 2011

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

Michael Lewis on Germany

August 10, 2011

Michael Lewis of Vanity Fair is no stranger to Europe.

  • In April 2009, Lewis published ‘Wall Street on the Tundra an article tracing the logic behind the economic meltdown in Iceland.
  • In October 2010, Lewis followed this up with a study into Greece in an article entitled ‘Beware of Greeks Bearing Bonds.’
  • In March 2011 Lewis made waves in Irish political circles (an article published in the March edition of VF but available during the final calamitous days of the Cowen government) with his devastating insight into the banking and political upheavals in Ireland with his ‘When Irish Eyes are Crying.’

In the September 2011 issue of VF, Lewis has focused on Germany – EU lender of last resort and lynchpin of the euro – in an article entitledIt’s the Economy, Dummkopf!’

Heres your summary…

Lewis begins with a valuable insight into the German character – something with has an historical affiliation with…well….’faecal matter.’ From bizarre childhood folklore tales and Gutenberg’s strange choice for his 2nd printing to Martin Luther’s ‘scatological’ original idioms and Hitler sexual desires–a key German character trait is an obsession with waste or at least, taking dirt and cleanliness in equal measure – an affliction deeply ingrained but hidden within.

The article pivots into more analytical territory with a reference to sobering and contrasting statistics. Greece unemployment at 16.2% versus a 20-year low German rate of 6.9%. A job in Germany which pays €55,000 pa, pays €70,000 in Greece – effectively two extra monthly payments. Greece is plaqued by debt and deficits – with the euro like a inverse gastric band meaning the binge cannot stop. Greece, according to Germans, have two choices. Slim down government (and sacrifice growth) and fiscally integrate into Europe or reform how Greeks work and make the Greek people…Germans…with all the efficiency and productivity that goes along with that stereotype. Economically, the only solution is for German to stop bitching, arguing and hoping and just write the cheque. Politically, this isn’t a runner for Merkel. So, Europe trundles on, with regular crises (as in Spain and Italy recently and soon in Cyprus and France) meaning stop gap sticking plaster solutions that solve nothing.

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PIIGS in the Top 10! (For Debt)

August 4, 2011

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).