‘PIGS’s comeback: Spain and the southern countries are driving the Eurozone’s economic growth against a stagnant Germany and France (in Spanish)

by guillerub2001

25 comments

  1. Translated article:

    Southern European countries still remember how, during the worst moments of the great recession of 2008, the word PIGS became popular to refer to them (PIGS, which means “pigs” in English, stands for Portugal, Italy, Greece and Spain in that language). The PIGS, a clearly pejorative term, were the worst-performing economies during the crisis and the ones that weighed down the Eurozone’s growth. Fifteen years later, the collective is experiencing a kind of revenge: they are managing to weather the pandemic crisis and the war in Ukraine better than their northern neighbors. But the gap opened by the Great Recession still remains.Eurozone GDP data for 2023, released on Tuesday by Eurostat, once again paint a picture of a flat encephalogram. The euro countries have now gone 15 consecutive months without seeing anything resembling economic growth. After a third quarter in which the economy contracted by 0.1%, the eurozone has miraculously and unexpectedly avoided technical recession: its GDP did not move in the final three months of the year.

    This is particularly striking when Germany and France, which account for 50% of the eurozone in economic terms, suffered contraction and stagnation respectively. How is it possible that the eurozone avoided going into negative territory with half of its GDP practically in the red? The answer lies in the south. “The economies of southern Europe led growth and were the main reasons why a technical recession was avoided,” says Bert Colijn, chief economist at ING. A diagnosis in which Bloomberg news agency agrees. “The eurozone] kept its output stable, helped by the expansion of Spain and Italy,” they point out.

    In the case of Spain, GDP increased by 0.6% in the last quarter of the year, while Italy grew by 0.2% and Portugal by 0.8%. These figures contrast with those of Germany (-0.3%), France (0%), Sweden (0.1%) and Austria (0.2%). What was observed in the final quarter of the year is part of a trend that has been observed since Russia invaded Ukraine in February 2022. While the German economy has remained frozen at its pre-war size, the southern countries have managed to maintain dynamism.

    Proof of this is that, compared to pre-Pandemic records, the GDP level of Spain, Portugal, Italy or Greece exceeds that of northern economies such as Germany, the Netherlands or Austria and also that of France. The Spanish economy is now 9.8% larger than in the fourth quarter of 2019 (the last one before the pandemic); Portugal’s GDP is 10.8% higher, Italy’s is 7.7% above and Greece’s (no data yet for the fourth quarter) is 8.6% higher than then.

    By contrast, the German economy is only 2% larger than before the pandemic, Austrian GDP has grown by 4.6% since then, while Sweden’s has grown by 6.7% and France’s by 7.6%. Among the large northern economies, Belgium is one of the best performing, with GDP 8.1% higher than at the end of 2019.

    The current situation contrasts sharply with the situation during the great recession of 2008. If we analyze how these same countries were four years after that date – the same years that have elapsed since the pandemic until today – the picture is the opposite. In the first quarter of 2012, Germany, Sweden, Belgium, Belgium, Austria and France had already recovered their pre-crisis GDP level and the Netherlands was only 1.4% below. In contrast, the economies of Spain, Italy, Portugal, Spain and, above all, Greece, were still sinking…

    Why is this time being different? Why are more productive countries with healthier public accounts faring worse? The war in Ukraine and the different nature of the current crisis are the keys. The German case sheds some light. Germany has been hit by a severe industrial crisis, aggravated by the sharp rise in energy prices following the closure of the Russian gas tap. In addition, the country is facing increasing competition from China, a regular customer of Germany’s powerful industry, which is changing its role to that of a producer. As a result, the German nation’s main muscle has weakened.

    By contrast, the south – more dependent on the service sector and less on industry – has benefited from the full recovery of tourism and other high-touch services. In addition, countries such as Spain and Portugal are much less dependent on Russian gas, so the impact of the war has been much more modest.

    **The scars remain**

    Although this time it seems that it is the countries of the South that are weathering the crisis better, the deep gap that opened up between the South and the North during the great recession is still far from being closed. If we take an arithmetic average of the GDP of the countries of the South and the most representative economies of the North (Germany, Austria, Belgium, the Netherlands and Sweden), the differences are obvious.

    While the northern bloc currently has a GDP level 18% higher than in the first quarter of 2008, in the south it is only 4.3% higher. However, the differences are likely to be reduced if the importance of each bloc is weighted (in the case of the south, the very serious collapse of Greece greatly affects the results).

    Translated with Deepl

  2. Not really a shocker if people would know how basic economics works.

    Economies always have up and down phases, driven by many factors.

    In Germany, the deficit brake in the constitution denies any government from supporting the economy or fight recession. It was a product of the 2010s were everyone believed Germany wil do well for a infinite time, which was of course BS. Not the state nor the industry invested in those plus years and now, oh wonder, we have a recession

  3. wait I thought “PIGS” was only a r/2westerneurope4u joke

  5. Some Portuguese people still will tell you that our economy is a disaster, when last year it grew above the EU average.

    Why they deny it? Because…. Socialism.

  6. I am a bit more worried at the impending interest rise. Current NL coalition talks are already troubled with the prospect of a increasing amount of budget to cover the increasing interest to be paid on the national debt.

    And NL, having a sizable debt, will suffer consequences, there are many other countries that will have a tougher time.

    Plus with the current change towards a more rightwing government; there is already reluctance to sell cuts to the Dutch population. I doubt there will be even less motivation this time to finance solidarity with other countries.

  8. so now its time for them to give hundreds of billions to the struggling economies like Germany.

    Solidarity is a two way street, right?

    Right?

  9. And it means jackshit when the standard of living for the common person keeps declining. It’s almost like the GDP of a country doesn’t directly correlate with living conditions…

  12. Maybe it’s time to consider the France Austria Germany group as the laggards of Europe.

  13. It is time for Germany to sell some of their ports or maybe one island ( I don’t know if Germany has any). Those lazy Germans, they spend too much time in Spain on vacation. They must work more and gain less like they teach us, PIGS, during the 2008 crisis.

  14. What a success story considering Greeces economy has barely recovered to its 2003 level. Wow.

  15. Ah yes, the miracle growth of my beloved country’s economy (Portugal). Conveniently supported by excessive taxation (every year we break records for the highest tax volume by GDP %), a chronic brain drain of the highly educated youth, the worst housing crisis to date, lack of investment in public infrastructure and services (portuguese national health care is in its deathbed) and wide open immigration policies. Overturism sure is a good thing. /s

  16. This shows how the EU is a ticking time bomb. A bunch of countries uncoordinated culturally and economically and politically only on a superficial level.

    A federation were some members exploit every difficulty of a neighbor in order to gather a larger share of the capitalist market, like Hungary did for its industry with Russian resources when Germany began choking on lower gas imports.

    A federation were Bulgarians and Romanians are treated like 2nd class citizens even though their collective cheap labor has saved hundreds of thousands of capitalists from starvation.

    A federation without a common language, whose biggest countries are populated by people with no knowledge of the neighbouring cultures (few Germans speak French, few French speak German).

    A federation which cannot regulate its sea borders, that lets some members treat refugees with impunity.

  19. Piggies are BACK! 😀 But no joke, I’m happy that things are going good way for south!

  20. Those comments …

    Can’t people simply feel happy for them? Economies that were struggling are doing good. What is there not to like? It almost looks like if anyone does a Tiny bit better than the usual top dogs, people need to being them down. Countries improving is a good thing, even if they are not the top ones.

  23. The photography seems Pablo Iglesias serving drinks in a chiringuito.

  24. It’s time for Germany and France to get into a memorandum. /s

  25. Anyone with some historical knowledge knows there are economic cycles that locally look crazy relevant at a given time – but don’t mean much in the big picture

    * Germany was called *the sick man of Europe* in the late 1990s
    * early 90s Italy had, at one moment a higher GDP per capita than France and almost as high as West Germany – *il sorpasso*. At one point it was the 4th world economic power
    * Japan had such a high development in the 70 and 80s that a lot of people expected it to overtake the US in a matter of a few decades.

    None of those mattered.

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