betekenis van het woord PIIGS

Echte stresstest voor banken komt nu pas

De echte stresstest voor Europese banken moet nog komen, nu een aantal banken in de zogenaamde PIIGS/Club Medlanden nog voor het einde van dit jaar 122 miljard dollar aan obligaties moeten geherfinancierd krijgen.

Shockingly, Arnold Schwarzenegger compares California to Greece, Ireland and Spain

At his big press conference yesterday, where he announced absolutely terrible budget cuts in California, Arnold Schwarzenegger went there, comparing his state to the PIIGS of Europe.

His exact quote, via Reuters: You see what is happening in Greece, you see what is happening in Ireland, you see what is happening in Spain now... We are left with nothing but tough choices.

‘It’s the beginning of the endgame for…’ Belgium?

Sharp-eyed readers may have noticed a little dig in Independent Strategy’s note on sovereign contagion. Belgium, it seems, could be next in line for the contagion treatment, according to the research house:

The countries in the ‘contagion area’ of the Eurozone (namely Spain, Portugal, Greece, Ireland and unexpectedly, Belgium) account for about one-fifth of Eurozone GDP.

Yet Belgium is a mess. Its sovereign debt to GDP is 100%, up from a trough of 84% a few years ago, and its budget deficit is 5% of GDP.

Belgium’s public debt is held abroad to the tune of 69% of GDP and its private sector foreign liabilities are another 162% of GDP, giving a total percentage of foreign credit dependence (charitably excluding inter-company borrowing) only surpassed by the UK and Ireland in the EU (where banks have huge FX liabilities) — see Figure 3.

On these ratios, Belgium leaves the PIIGS at the starting block. And Belgium’s overall securitised debt burden (public and private) is only surpassed by that of Ireland.

Why are the Greeks protesting?

The Greeks are protesting on the streets because they can smell a rat before they even see it. Their instinct tells them that the fine detail of the austerity measures will inevitably lead to incredible hardship, belt tightening and long term debt servitude. Their sovereignty and hence their freedom and future will be greatly restricted.

Moreover they realise that the rescue package is nothing more than a belated attempt by the strong men of Europe and the IMF to save the collective bacon of the other PIIGS rather than to bring Greece back from the edge of the abyss. In fact Greece would have been cut loose had it not been for its potential to contaminate the whole system.

Harde cijfers

De afgelopen week keek ik behoorlijk op van harde cijfers van de Bank voor Internationale Betalingen over de risico’s van Nederlandse banken in de PIIGS-landen. In Griekenland zitten we voor zo’n 11 miljard euro. Terecht maken we ons daarover grote zorgen.

Zorgen
Over Ierland maken we ons eigenlijk geen zorgen. Dat zou wel moeten. Want in Ierland zitten we voor 30 miljard. Ik schrijf hier bewust ‘we’ want in geval van nood springt de belastingbetaler bij. In Ierland is de nood hoog, maar klotst het water nog net niet over de rand. Kwestie van tijd. In Portugal, ook zo’n kanshebber op megaproblemen, bedraagt het uitstaande risico 12 miljard euro, zo’n beetje de omvang van het risico van Griekenland. Ik ga nog even door. In Italië, dat ogenschijnlijk gezond is, liggen de belangen nog gevoeliger. Daar zitten de banken voor 68 miljard Euro in. Iedere burgereconoom die recent een keer in Italië is geweest weet dat het land dik in de problemen verkeert. Dat was al zo toen ABN-Amro het Italiaanse Antonveneta overnam. Sindsdien is het alleen nog maar erger geworden.