PIIGS is an acronym used to refer to the five eurozone nations that were considered weaker economically following the financial crisis: Portugal, Italy, Ireland, Greece and Spain. Since the nations use the euro as their currency, they were unable to employ independent monetary policy to help battle the economic downturn.


On May 10, 2010, European leaders approved a 750 billion euro stabilization package to support these nations. The economic troubles of the PIIGS nations reignited debate about the efficacy of a single currency employed among the eurozone nations. Critics point out that continued economic disparities could lead to a breakup of the eurozone. In response, EU leaders proposed a peer review system for approval of national spending budgets in an effort to promote closer economic integration among EU member states.

Economic Impact

The PIIGS have been a major drag on the eurozone's economic recovery following the 2008 financial crisis, contributing to slow GDP growth, high unemployment and high debt levels in the area. Compared to precrisis peaks, Spain's GDP was 4.5% lower, Portugal's was 6.5% lower and Greece's was 27.6% lower as of early 2016. Spain and Greece also had the highest rates of unemployment in the EU at 21.4% and 24.6%, respectively. Sluggish growth and high unemployment in these nations is a major reason why the debt-to-GDP ratio of the eurozone rose from 79.3% at the end of 2009 to 93% in early 2016.

This chronic debt persists despite both the U.S. Federal Reserve's massive quantitative easing (QE) program, which has supplied credit to European banks at near-zero interest rates, and harsh austerity measures imposed by the EU on its member countries as a requirement for maintaining the euro as a currency, which many observers believe has crippled economic recovery throughout the whole region. Greece's public debt to GDP ratio is 180.1%, Ireland's is 91.4%, Italy's is 132.6%, Portugal's is 128.4% and Spain's is 98.9%.

A Threat to the Livelihood of the EU

Together, the PIIGS countries have cast doubts on the notion that Europe can simultaneously maintain a single currency and attend to the individual needs of each of its member countries. On June 23, 2016, voters in the United Kingdom will decide whether to remain a member of the EU. An exit from the EU, being termed as a potential "Brexit," would be the result of growing unpopularity toward the EU concerning issues such as immigration, sovereignty and the continued support of member economies suffering through prolonged recessions, which has raised tax burdens and depreciated the euro.