PI(I)GS

You can't open the papers without coming across an article about the PIGS (Portugal, Ireland, Greece and Spain) or the PIIGS (same as above plus Italy). These are the countries whose economies are in such a parlous state that they threaten to bring about the collapse of the single European currency. Economics is a self-fulfilling science (if it is a science at all) so the more people who believe this and above all the more people who intervene in the financial markets based upon those beliefs, the more likely it is to happen. If 100 people bet that Racing Santander will beat Atletico Madrid tonight that doesn't make it any more likely that they will. If 100 hedge funds and investment banks bet on Greece defaulting on her sovereign debt however then they do increase the probability of Greece defaulting. These large financial institutions are not just pundits they are also participants; it would be like placing a bet against a team and then walking into their dressing room and kicking a few of the players in the shins.

At first I laughed when I saw the acronym PIGS; another little proof - like the Yummy Mummies who inhabit Nappy Valley in South-West London, the scrubbers with their muffin tops or the old dears with their bingo wings - of Anglo-Saxon verbal inventiveness. But now it is beginning to piss me off. After all, England's finances are hardly in great shape. As in the recent showdown with Iceland the prosecutor looks as guilty as the accused in this case. And all the tough talk from Germany about making Greece pay for its mistakes is irritating me as well. The argument here is that it would set a dangerous precedent if one EU country were to bail out another; this is the same line of reasoning that makes it illegal for the EU as a whole to do so. Fair enough but where was this argument when we were dealing with the banks? Apart from Lehmann Brothers it seems that every single troubled financial institution turned out to be "too big to fail". With all due respect to AIG, UBS, Northern Rock and the like wouldn't the bankruptcy of Portugal, Ireland, Italy, Greece and Spain have rather more important consequences? It is a patronising and frankly racist mindset that sees the problems of the swarthy skinned and the potato eaters as being separate from those of the more "civilized world". There was a joke doing the rounds a while ago - "What's the difference between Ireland and Iceland?" "One letter and six months". I would say another six months might be all it takes for England with it's colossal debt to realize it is not all that different either. And then another six for the US of A.