Portugal, Italy, Greece and Spain through the eyes of the economists

PIGS is a term coined by the business and financial press as a way to refer to Portugal, Italy, Greece and Spain during their current financial plight. Some would also include Ireland in this group, but since it never possessed an empire, it hasn’t had to face the loss in historical prominence that the PIGS have.

What started as a pejorative label used by neoconservatives, mainly from English speaking countries, was eventually taken up for some time without any qualms by the media.

Excessively high levels of public and private debt, government deficits, a property bubble and, generally speaking, very disappointing political and economic policies, have put the PIGS in the crosshairs. It is alleged that the PIGS won’t be able to bear the pressure of sharing a common currency with their stronger European brethren. In this analysis, the forced exit of at least some of the PIGS from the Euro would lead soon to the demise of the European currency.

Yet, how much truth is there to this? To what extent are the wealthy member countries of the Eurozone really fed up with paying for the Southern countries? Is the UK secretly celebrating the stumbling blocks the Euro experiment is facing? Has Europe’s historical decline reached a point of no return from which it won’t be able to recover? Or is this just an attack by speculators to get rid of the EU as a competitor in the international financial markets? Have the PIGS really been deluding themselves into enjoying a level of prosperity that doesn’t match their social and financial reality?

I have often asked myself how, after so many centuries of splendor, could these countries have come to their current destitute state. What happened to Greece, the cradle of Western Civilization? What became of Italy, heir to the Roman Empire and endowed with one of the richest artistic heritages in the world? What went wrong with Portugal, the first global naval power in history? At what point did Spain and its empire, on which the sun never set, see the onset of their decline? I believe the root-cause of our countries’ current sorry state of affairs is to be found in the distant past. Issues that for many centuries piled up on our doorsteps are now rearing their heads and plain to see.

Classical Greece and its world disappeared with the eclipse of the ancient schools of philosophy. Greek culture waned during the Byzantine Empire, becoming almost buried during the time of Ottoman rule. The difficult process of rebuilding its national identity in the 19th Century was overseen from the start by other European powers.

Italy fragmented at the fall of the Roman Empire. The presence of the Pope in Rome, the only bond among the numerous states that comprised the Italian peninsula, made the establishment of a central secular power impossible. In spite of which Garibaldi was able to unify the country, albeit in a somewhat artificial manner, in the 19th Century.

Portugal, after controlling the main African sailing routes, saw its position falter with the discovery of America, and the consequent obsolescence of its trade with the East. The Great Lisbon Earthquake of 1755 leveled the country in many ways. The Colonial Wars of Independence at the end of the 20th Century impoverished even further an already poor country.

In as much as the discovery of America served to enrich Spain greatly, it also engendered an empire of courtesans and administrators with no entrepreneurial spirit. The Catholic Church prevented the Enlightenment from flourishing. The gradual loss of its colonies, and 40 years of dictatorship under Franco deepened its economic and social backwardness.

And so it is that, over time, a significant discord developed between the perception the PIGS have of themselves, fed by an idealized view of their own past, and the weakness of the foundations on which they actually stand. The PIGS view themselves, rightly, as the architects, and as the stem cells from which the idea of Europe developed. Southern Europe resists admitting its loss of political stature in the global political arena, seeing itself as the wellspring of Western Civilization. Both in the institutional sphere, and at a personal and individual level, the PIGS embody a paradox. An overblown perception of their own relevance that clashes with an inferiority complex standing between their own desire of greatness and the reality of their situation.

The PIGS are all old, cynical and individualistic countries. The sense of community, so deeply rooted in Northern European countries, is very weak in the PIGS, carrying as they do upon their backs the weight of centuries of a highly hierarchical social structure, and being accustomed to both authoritarian and corrupt governments. People have turned their backs on the political class, from which they don’t expect much, if at all, and seek to improve their wellbeing exclusively from a personal standpoint; an attitude that constitutes both an evolutionary advantage for survival, and a factor hindering social progress. Meanwhile, the family as a social institution has maintained its authority, serving both as a refuge and as a prison.

I have attempted to illustrate the stereotypes brought up by the term PIGS. In other words, what we would see if we were to translate into images the articles we read in the financial press. This is how I imagine economists see us. The result is a collection of clichés, both true and incomplete. The same way a travel guide carefully avoids anything seemingly unattractive, this book shows much of what we find embarrassing, oftentimes rightly, and at times unfairly. Either way, it’s just an artifice with which to highlight a specific aspect of life in the PIGS. In the end, what stands out the most is the glaring absence in these images of all that is positive, beautiful and promising in our countries – and that still endures.