Floundering PIGS

Europe’s unstable countries are trying to get back on their feet. Ireland, once again a Celtic Tiger, leads the pack. The post-austerity era has begun.

Once upon a time, there were the PIGS (Portugal, Ireland, Greece and Spain). When Italy started edging dangerously close to default at the end of 2011, the group grew to become the PIIGS. Even as the sovereign debt crisis and failure to respect the fiscal compact was placing global finances at serious risk, it seemed that the vilification and public shaming of countries was allowed. The reforms imposed by Brussels in the final phase of the Barroso Commission were enacted (under significant pressure from fiscal hardliners such as Germany, Finland and Holland). The result was deep austerity and the subsequent political instability that is still shaking the European political landscape. Political fragmentation and the risk of ungovernability has led to instances of cross-party agreements and grand coalitions, such as in Spain, for example, where such a situation is unprecedented. In some cases, longstanding historical divisions have been overcome such as those in Ireland between Fianna Fail and Fine Gail.

But let’s begin with the Spanish case, an interesting example of this new phase. Following months of political stalemate that rendered the country ungovernable, Spain will return to the polls on 26 June for general elections. The elections held in December 2015 resulted in a fragmented parliament that was incapable of nominating an executive. So what coalitions might be formed on the basis of new election results which, at the time of going to press, can only be guessed at with the aid of opinion polls? Some analysts believe that the political crisis could favour the two centre-right parties: the Partido Popolar (PP) led by the current prime minister, Mariano Rajoy, and Ciudadanos (Citizens), a  moderate-centrist party founded in 2006 in Catalonia. In the December elections, the PP and Ciudadanos won a combined total of 163 seats, a figure that fell short of the 176 seats needed to form a majority. Both parties are opposed to Catalan independence and have a shared vision on economic issues, but an alliance would mean overcoming Ciudadanos’ profound misgivings about Mariano Rajoy, following a series of scandals involving the PP. 

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