ClubMed (so also in German), in a mischievous acronym [= new word formed from the first letters of several words] also Pigs (namely Portugal, Ireland, Greece and Spain)

In the language of financial journalists, the aforementioned four members of the Eurozone, with some also adding Italy. At present, these still have similar economic conditions, namely, above all, lower productivity growth with higher unit labor costs than the eurozone average and therefore lower competitiveness. – Greece tricked its way into joining the monetary union in 2001 by the then Socialist government reporting false figures to the Commission in Brussels. Neglected structural reforms and careless spending policies caused the public deficit in Greece to rise to over ninety percent of GDP by the end of 2008. As a result, a mass flight from Greek government securities began in the fall of 2008, further undermining the country’s credit rating. – If monetary union had not existed, the ECB calculates that the currencies of Spain, Portugal and Greece would have depreciated by up to fifteen percent; at the same time, however, the DEM would have had to appreciate by a similar amount. Thus, a currency adjustment of up to thirty percent would have been necessary to compensate for the differences in European production costs. – In spring 2010, European banks held EUR 140 billion of Greek and EUR 120 billion of Iberian government bonds in their portfolios. Any default by the issuers would have brought numerous institutions in the EU close to insolvency. – See devaluation, fiscal, fear, perverse, bond spread, adjustment, symmetric, purchases, central bank, bail-out, dysfunctionality, currency area, euro bonds, common, European Monetary Union, fundamental error, European Monetary Fund, EMU blow-up, ECB sin-fall, fiscal pact, government spreads, Helleno enthusiasm, wage policy, coordinated, Plan C, return ideology, seven percent limit, TARGET abuse, redistribution, central bank-induced, imbalances, intra-EMU, contract compliance, growth differentials, intra-currency area, exchange rate effect, real, competitive status, surveillance. – Cf. ECB Annual Report 2008, pp. 93 ff. (different competitiveness of individual EU member states; overviews), Deutsche Bundesbank Monthly Report of November 2011, p. 43 (premiums on Pigs’ government bonds since 2009), BaFin Annual Report 2011, pp. 131 f. (life insurers’ investments in Pigs’ states).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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