Portugal, Italy, Ireland, Greece and Spain are often referred to as the PIIGS nation. They are bundled together in this rather animalistic acronym due to the common denominator of being the weaker of the Eurozone nations.

Portugal was to begin with the weakest link in the Euro chain. The majority of labourers in Portugal are low skill workers. This saw them lose the low cost of labour benefit to Asia. Portugal is seeking a €80 billion ($114.4 billion) bailout currently. Portugal has been showing very poor growth, as low as 0.7%. Debts are high and therefore Portugal is seen as high risk. In addition to its debt, Portugal has little to keep its country going, with high unemployment and wages to be paid.

Ireland was becoming known as the new hub of technology. Homegrown talent was booming in the 90’s. Ireland was also attracting technology talent to its shores. This led to a boom in commercial property. Ireland’s normally conservative banks went the whole hog to lend to real estate developers. Pretty soon the bubble burst. Its unsold units soon meant banks were in crisis. To prevent a complete collapse of the banking system, the government intervened with some expensive bailouts. Ireland’s high reliance on the wholesale lending market means it is paying more than what it can get from its domestic mortgages. Unemployment is high as is the default rate in mortgages. In 2010, Ireland received euro 85 billion financed in part from the European Financial Stability Mechanism, IMF, European Financial Stability Facility, UK, Denmark and Sweden.

Italy was more in the news for its former Silvio Berlusconi’s parties and eventually angry mobs on the streets, reminiscent of Emperor Nero. Italy was once an economic powerhouse exporting its goods to cash rich Europe. A leader in luxury goods, automobiles, and food products, it stares at recession year upon year. Italy is looking at a further shrinkage of its economy by 0.4% in 2012. Italy is being pushed by its partners to introduce strong pro-growth reforms. Italy’s low growth and therefore high borrowing costs have been at the root of its economic crisis with a debt standing at 120% of its GDP. A low growth forecast globally in 2012 could only spell more trouble for the Eurozone’s second largest economy Italy.

The Greece crisis is well documented. Years of excesses and piling debt put Greece in a spot. Austerity measures were announced and steep taxes were on their way. Soon the Greek government had a civil revolt on their hands with their citizens refusing to bear a major part of the debt. Finally the Eurozone countries intervened with a bailout, under the condition that Greece would restructure its financial system and clean up its operations. Greece has got a 50% write-off, of its debt and a bailout of €110 billion. It also cut wages by 10% of its public employees, who constitute 25% of the population.

Spain has been grappling with an economic crisis since 2008. A construction boom that fuelled credit and growth in 2007, burst in 2008. Spain tries to re-stimulate growth, while unemployment rises. Low skill workers from the construction boom find it tough to get new jobs. Mid 2009 sees Spain looking at a massive public deficit. Austerity measures are announced. Wage cuts are put in place and greater transparency is introduced from its individual regions. Spain sees a growth rate of 0% in 2011’s last quarter.

The forecast for 2012 for the Eurozone is not good. Low growth and huge debt plague the PIIGS in particular. However France is soon expected to join the bandwagon. Germany still relies heavily on exports. World over demand is reducing. Many economies in Asia are getting stronger and are seeking their share of the world economic pie. Countries like France and Germany are facing internal pressure not to bail out the PIIGS countries. Austerity measures are being implemented. The need of the hour seems however seems to be growth inducing measures through government expenditure. The pressure of debt and low growth will be over-whelming for these nations in particular.