I was at a lunch recently with about 10 people. One of the participants was an analyst from Portugal — smart guy, delightful accent.

The table was discussing the BRIC countries — what a tiresome acronym THAT has become — and our Portuguese pal mentioned the PIGS countries.

PIGS? What the heck is a PIGS?

It turns out that PIGS stands for Portugal, Italy, Greece & Spain — P.I.G.S.

Why so crude an acronym? They are all in, or on the verge of tumbling into, a recession. Their significance is that they are the soft white underbelly of Europe. While not as economically important as Germany or England or even France, they are still a substantial chunk of nations, consumption and output for Europe. Our dashing Portuguese analyst expects their slowdown to spread to the rest of Europe.

PIGS: Now you know. 


UPDATE: July 9, 2008 11:09AM

I am aware of the dispute between whether Italy or Ireland is part of the PIGS. I am going to defer to the Economist magazine, which notes:

One danger is that fractures within the euro area will distract the ECB from staying on top of inflation. A particular worry is
what could be called the PIGS—Portugal, Italy, Greece
and Spain
, Europe’s negative version of the fast-growing BRICs. The fear is that these countries may be in a hole they
cannot easily climb out of and that the ECB will be
pressed into running a looser monetary policy to save them.



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Discussions found on the web:
  1. scorpio commented on Jul 9

    mmmmmm, bacon!

  2. Peter commented on Jul 9

    Pedant mode on (apologies in advance).

    There is a difference between England and the UK and it annoys the Scots, Welsh and Northern Irish immensely when people refer to England when they mean the UK.

    Economically, Scotland, Wales and Northern Ireland contribute the square root of bugger all to the UK economy so in reality the UK economy == the English economy, but just to make them feel included it’s often nice to refer to the UK rather than just England.

    PIGS! Kudos to whoever came up with than acronym!

  3. PP commented on Jul 9

    Pardon me, sirs

    but do you think that UK, with a bloating financial sector, an housing market tumbling, without a significant industrial base, with North Sea Oil peaked, is in a better shape? (not to mention the U.S. troubles).

    I suspect that the PIGS are more than four (and the number is growing….)

  4. Ed commented on Jul 9

    I had a boss once who referred to these countries as “The Garlic Belt” but I suppose acronyms are the current in thing.

  5. Organic George commented on Jul 9

    The PIGS were against the rate hike by the EU. However they grew faster than the industrial countries due to the real estate boom for second homes in sunny climates.

    Once that bubble burst the PIGS wanted to be bailed out but no such luck.

    I would prefer an interest rate policy that protects the industrialized countries of the EU rather than a weak monetary policy to correct a bubble.

  6. Guilherme Diaz-Bérrio commented on Jul 9

    Technically, PIGS stands for Portugal, Ireland, Greece and Spain – it was the “nickname” given to the 4 countries that received the biggest chunk of EU funding for development purposes.

    As for the spreading of PIGS crisis to the rest of the EU, I disagree with my fellow countryman: we are talking about countries that suffered from housing market bubbles and structural problems, but only accounts for 15% of EU 2007 GDP.

  7. Paul Parkinson commented on Jul 9

    Lucky the PIGS countries didn’t include Malta. Might have ended up with GIMPS…

  8. rexl commented on Jul 9

    or Poland, it could have been PIMPS.

  9. JL commented on Jul 9

    And I always it was Palau, Indonesia, Gabon and Suriname…

  10. Sentimental commented on Jul 9

    These comments are getting silly. Which probably explains why I keep reading them!

  11. Charlie commented on Jul 9

    The EU rate hike will hurt (my mortgage payment will go up), but it’ll keep the Euro strong, and inflation contained. In Spain, the recession has already started, but there will be no banking crisis–regulations prevent banks from selling mortgage-based securities.

  12. Bud commented on Jul 9

    Man crush, maybe?

  13. joe commented on Jul 9

    BR, how bout iPigs? Ireland, Portugal, Italy, Greece, Spain.

    Solves the problem, plus gives a web 2.0 touch…

  14. drew commented on Jul 9


  15. STS commented on Jul 9

    Now we just need acronyms for WOLF, STRAW and STICKS and we’ll have a complete Little Red Riding Hood.

  16. STS commented on Jul 9

    er … the Three Little PIGS? Some fairy tale or other. Need to borrow a copy of Grimm’s.

  17. Sinomania! commented on Jul 9

    I take it the intent is to create an acronym as irritating (and pointless) as BRIC? Italy is a stretch. According to the numbers it is always a banana republic but under the surface it is anything but a “pig”. New bullet trains, amazing technological innovation, an underground economy far exceeding the impressively large reported economy, very high standard of living, etc. It’s a stretch methinks.

  18. L’Emmerdeur commented on Jul 9

    Greece doesn’t have the massive mortgage credit problem other countries (like Spain) do, but they do have ridiculous consumer credit bubbles that are bursting right now (credit cards, auto loans, etc.).

  19. michael schumacher commented on Jul 9

    sounds about as logical as putting up a rocket defense shield in the Czech republic…..or signing an agreement to put 6 nuclear reactors in saudia arabia where it is sunny for well over 300 days a year….

    Sorry wrong thread…..


  20. John F. commented on Jul 9

    iPIGS is nice, but the formulation PIIGS is already in wide circulation (in honor of Ireland’s problem with sub-prime). Lacks a certain je ne sais quoi…It’s not to early to start planning for further entries. FIGPIGS anyone?

  21. Joe commented on Jul 9

    For the unwashed, such as myself, BRIC stands for “Brazil, Russia, India, and China”.

  22. rj commented on Jul 9

    “The PIGS were against the rate hike by the EU. However they grew faster than the industrial countries due to the real estate boom for second homes in sunny climates.

    Once that bubble burst the PIGS wanted to be bailed out but no such luck.”

    So they’re the European equivalent of Florida, Arizona, Nevada, and California, or FANC?

    We need more state group nicknames.

  23. Brendan commented on Jul 9

    Hey, rj, I represent that! But it’s better here in Arizona than back when I lived in PIMONY (Pennsylvania, Indiana, Michigan, Ohio, New York), formerly known as the rust belt.

  24. Aurora Borealis commented on Jul 9

    Please don’t forget the BIG PIGS: Britain, Italy, Germany + the little PIGS.

  25. Jim D commented on Jul 9

    To the person who thinks there will be no “mortgage crisis” in Spain. Dream on. The Spanish housing market is going to crash harder than anywhere else in Europe, and it will take the banks with it. That they didn’t sell the mortgages will make it worse for them, not better.

    Not to mention that many mortgages were loaned out by non-Spanish banks, which *did* securitize them.

  26. S A commented on Jul 9

    Perhaps Iceland, that should be a bigger contender than Italy or Ireland… Any comments?

  27. tyoung commented on Jul 9

    Ireland are definitely in. Enormous amount of mortgage debt, mostly floating. Bank of Ireland just increased their variable rate by .35% on the basis of the recent ECB action.
    Irish stockmarket down over 50% from it’s high in Jan. 07

  28. Diarmuid commented on Jul 9


    Firstly John F., in relation to your comment “in honor of Ireland’s problem with sub-prime” – Bank of Ireland confirmed only yesterday last year it completed ZERO re-possessions and so far this year they have completed one. As the states second largest bank (and Allied Irish have similar figures), I believe your statement to be untrue.

    However, continuing the Bank of Ireland link, their share price is down over 70% year to date – this is largely driven by fears of it’s exposure to UK mortgages where it generates a double digit percentage of their earnings

    Ireland was in the original PIGS acronym, as it was, a correctly stated, a term to represent nations who experienced excessive property booms.

    Why is the Irish stock exchange down over 50%. Firstly the country is officially in recession as of 2 weeks ago. But it’s biggest companies are financial (Allied Irish, Bank of Ireland, Anglo Irish, Irish Permanent) all who are in decline in line with a global fall out. Also in the mix is Aer Lingus and Ryanair – in decline along with all global air lines and high oil prices. Building firms such as CRH and Kingspan who are struggling globally with a housing slowdown and US dollar exposure. Last but not least C&C who make Magners / Bulmers cider, who’s sales have been weak as a result of poor weather in the UK and Ireland. The point here is that Irish companies have a large global presence and a lot of the declines are based on global issues. Perhaps this is one market that is reflecting near fair value or has been over-sold. The Dow still stands at 11,100+.

    The last recession from peak in ’99 to trough in ’02 saw the Dow tumble 33%. That was a soft landing. If this is a hard landing, we should have a bit to go – we are only down about 20% so far. We are only at Q1, 2006 levels – does anyone think this is fair value. I remember a few people were shouting then that values were too high.

    Time will tell the complete story I guess. But for now the trend is your friend but ISEQ stick should post significant gains when the trends reverses. After all a 13% yield on BOI, 8% yield on AIB and C&C signal value even if dividends are cut in the short term…

  29. 42 commented on Jul 10

    I’ve only been to Spain and Italy, but it seems to me that all four of these “PIGS” have a serious “mañana” mindset, of which I’m totally in favor.

    Growth, shmowth. enjoy life. let the Germs and Brits work themselves to death.

  30. Luis Montes commented on Jul 23

    The name PIGS was coined by racist euro/nordic economic journalists, mainly German and Dutch, in the running up to the Euro. The purpose was to denigrate those countries so that they would be seen as unfit to join the aryan nations of the North in their quest for a “pure” new coin. Then the anglosaxon media picked up the term in their aim at dividing the euro zone.

    The acronym backfired from the moment countries like Spain in the late 90,s proved to be far more fiscally virtous and economically dynamic than for instance Germany at the time. Since the Spanish entry into the euro, Spain more than doubled the rate of growth of the average EU performance, becaming the 8th largest world economy, the sixth largest world investor and richer than Italy. Ireland also boomed,Greece has done well while Italy and Portugal stagnated.

    So far as the alleged homogeneity of the “PIGS”. As to the revival of the term nowadays due to the global crisis hitting particularly hard countries like Ireland or Spain, the rational behind is still the same.

  31. One Man Standing commented on Aug 12

    UK external debt position:
    Total external debt as per The World Bank: $12,298,598 million (08Q1)
    Total UK population: 60.5m (as per 2006)
    Total external debt per capita: $203,282

    France external debt position:
    Total external debt as per The World Bank: $5,396,005 million (08Q1)
    Total French population: 64.1m (as per 2008)
    Total external debt per capita: $84,181

    Portugal external debt position:
    Total external debt as per The World Bank: $529,696 million (08Q1)
    Total Portuguese population: 10.6m (as per 2008)
    Total external debt per capita: $49,971

    Recent developements in Portugal:
    Aeronautical company Embraer to invest in two centers of excellence in Portugal worth 148million Euros.
    Intel to open a new factory and produce child friendly laptops in Portugal. The Portuguese goverment has also agreed to distribute 500,000 laptops to school children as part of the e-Escolas program in Portugal.

    Wonder which countries are really in trouble? Especially considering Portugal, Italy and Greece have large informal economies that are not captured in GDP (which means GDP figures are understated).
    Portugal – Investing in Innovation.

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