This is not to say that those countries are PIGS. It is simply an acronym for the four economically problematique countries in Europe now. And this short post is about excess pork -- represented by high budget deficit, spending beyond their means -- in those countries.
Some macroeconomic data here on the four and other countries. Data is from The Economist, November 25, 2010 issue.
A. Budget deficit, 2010 (percent of GDP)
Ireland, -37.0% (!!!)
Spain, -9.7%
Greece, -8.5%
Portugal, -7.4%
Compared to other rich countries that are not in crisis situation yet, the figures above (except that of Ireland) do not differ much:
Britain, -10.1%
US, -9.0%
France, -7.8%
Japan, -7.5%
Italy, -5.0%
Germany, -3.7%
Canada, -3.7%
B. Unemployment rate, 2010, in percent
Spain, 20.8, September
Ireland, 13.6, October
Greece, 12.2, August
Portugal, 10.9, Q3
They are indeed high, compared to other rich economies' levels:
France, 10.0, Sept.
US, 9.6, Oct.
Italy, 8.3, Sept.
Canada, 7.9, Oct.
Britain, 7.7, Sept.
Germany, 7.5, Oct.
Netherlands, 5.2, Oct.
Japan, 5.0, Sept.
We will be watching these four countries as they continue to make (negative) headlines) these days.
Signs of panic here in Europe abound. A lot of Eurocrats are saying "Everything's fine, the Euro is not in danger" - when they start saying things like that, you know it's getting serious. I expect a breakup of the Euro zone into a Hard Northern Euro and a Soft Southern Euro. This will happen very suddenly and within the next 6 months.
ReplyDeleteHi DirkH, I didnt know that the situation is that bad over there. And I find your scenario rather severe since you think it will happen within the next 6 months. Do you have a blog so I can also follow your analysis of these things? Thanks a lot.
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