Greece, Ireland and now Portugal. Debt-ridden, deficit-laden and bankrupt were it not for bailouts from abroad. Spain is the fourth and final letter in the hackneyed PIGS acronym for Europe’s struggling economies. It is also the biggest, and its economic future will decide the fate of the euro zone.
Portuguese officials continue to insist they can keep the threat of a bailout at bay with their current austerity push. However, that does not mean the markets will be convinced.
Once again, the Spanish economy is under pressure from the markets. But while comparing the country to Ireland may be unjustified, the government’s reluctance to send a clear message can only encourage speculators.
Spain may not be on the verge of seeking a Greek-style bailout, but the government’s slow progress on cutting a burgeoning budget deficit is doing little to calm jittery investors.
Portugal, Italy, Greece and Spain have all been grouped together by some market watchers as potentially unstable economies due, supposedly, to their deficit and debt levels. But a closer look at the figures tells a different story.
Austerity after stimulus. The government reigns in spending to calm jittery debt markets, but is an economy mired by recession and unemployment ready?