Myth 2: Greece and the other PIIGS countries are going to bring down Europe.

March 11, 2010 | Economic Opportunity Institute

ShareFACT: Greece, along with the other so-called PIIGS countries of Portugal, Italy, Ireland and Spain, have large budget deficits, but that is to be expected after a global economic collapse in which “prime the pump” government spending is playing a key role in stimulating the economy.

While alarming,  Greece’s deficit at 12.7% is not that much higher than the U.S. or Japan at 10.5%.  True, Greece has a sizable accumulated debt over many years, estimated at about 110 percent of its GDP, but even the US has a debt estimated at 94% and projected to break 100% by 2012. The euro zone, on the other hand, has a fairly low deficit by today’s post-collapse standards, only 6%.

California actually is more worrisome than Greece in certain ways. Greece’s economy comprises only 2% of the European economy (about the same as Indiana’s to the US economy). But California, which has had to issue IOUs to pay its mounting debts, makes up 14% of the US economy (about the same magnitude as Germany’s economy in Europe).

Having a state that is one-seventh of the national economy in dire straits is a threat to the nation’s economic recovery. California is “too big to fail,” yet the Obama administration has refused to bail out The Golden State, despite requests from Gov. Arnold Schwarzenegger for assistance. Meanwhile, Germany and France have pledged to stand by Greece during this difficult time in return for Greece’s efforts to cut its deficit.

– Steven Hill, guest blogger



Ed. comments:

You can see all the posts in this series here.

Steven Hill is the author of “Europe’s Promise: Why the European Way is the Best Hope in an Insecure Age” (www.europespromise.org). He’ll be visiting Seattle and Bellingham next week:

  • Monday March 15 at 11 a.m., interview on the Dave Ross Show, KIRO 97.3 FM
  • Monday March 15 at 7 p.m., presenting at the University of Washington Communications Building
  • Tuesday March 16 at 7:30 pm: presenting at Town Hall Seattle (tickets here)
  • Wednesday March 17, 7:00 p.m.: presenting at Village Books, Bellingham


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Comments

  1. Cody Crouse says:

    Thank you for taking the time to take apart the the Eurosceptic argument of the “P.I.I.G.S” The Eurosceptics say that the reason as to why the “P.I.I.G.S” are so bankrupt & have such high unemployment is @ least partially thanks to the European Union, the Euro & their institutions along w/the Austerity policies that the E.U has implemented just a few short years ago. They completely gloss over the fact that when Greece & the other “P.I.I.G.S” wanted to enter the Euro/was required to enter the Euro, they went to Goldman Sachs to ask for money b/c they had so much debt that they needed to pay it off to join the Eurozone. Goldman Sachs ripped them the FUCK off, & then here comes the economic crisis in the “P.I.I.G.S” Even then, not all of the “P.I.I.G.S” are doing bad right now. Italy seems to be doing the best out of all the “P.I.I.G.S” followed by Ireland & Portugal. Just Spain & Greece are completely FUCKED up right now. However, the Austerity Policy by the E.U wasn’t a good thing @ all for the “P.I.I.G.S” especially Spain & Greece. Since then, the E.U has created stronger bank regulations to prevent this shit from happening again. It’s also true that U.S & Japan nowadays have more debt than Greece now. Some of these Dumbasses think that the E.U is run by big multinational corporations & big banks while in reality they have (among) the strictest regulations on them in the world. These dumbass morons blatantly ignore the fact that the European Union & the nations & the same area enforce strict campaign finance limits which would prevent big companies & banksters from buying out politicians & the gov’ts of Europe. So this idea that the E.U, the Euro & their institutions are for the rich & ruling elite only doesn’t make any sense @ all. Another thing is that some of these fucking morons gloss over the fact that most European nations pay for their citizens to go to college & it’s more common to go to college than ever before, I’d say then “What’s the point of getting a job to pay for your college?” They also have little/no free time b/c they go to college & they have a lot of school work. I’m sick & tired of people blaming the European Union, the Euro, & their institutions for the “P.I.I.G.S” economic crash. They also gloss over the fact that the “P.I.I.G.S” were run by conservatives before & during the economic crash. Most European Conservatives tend to be against the European Union, the Euro & their institutions. This means that the gov’ts of the “P.I.I.G.S” were (most likely) run by Eurosceptic gov’ts. However, they didn’t have regulations to prevent shit like that from happening or they just didn’t enforce them, but now the lesson is learned. Thankfully the European Economy is recovering & all that economic recovery is going to every1 in Europe (nearly) equally, & not just to the top 1% like here in the Corporate Shits of America. The Euro is also deflating now, while the U.S.$ is still inflating which means that no1 will want to use the U.S.$ & more & more people will want to use the Euro instead. This will drive the European Economy back on track, while sinking the U.S.A economy. Thank you for reading & please share this comment!!!!

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