Each PIIGS country suffered a distinct kind of debt crisis before austerity was imposed.

Evidence

Austerity policies were likewise supposed to provide stability to the Eurozone countries, not undermine them. Portugal, Ireland, Italy, Greece, and Spain (the PIIGS of Europe) have all implemented tough austerity packages since the financial crisis hit them in 2008. Greece’s bloated public-sector debt, Spain’s overleveraged private sector, Portugal’s and Italy’s illiquidity, and Ireland’s insolvent banks ended up being bailed out by their respective states, blowing holes in their debts and deficits. The answer to their problems, as with the US debt-ceiling agreement, was supposed to be austerity. Cut the budget, reduce the debt, and growth will reappear as “confidence” returns. — Mark Blyth, Austerity, 29

Categorization

• XREF: The differentiated diagnosis — Greece public debt, Spain private overleveraging, Ireland bank insolvency — is the key against-the-grain point Mattei-style critiques deploy against one-size-fits-all austerity. — connects to: Each great economic transformation produces its own characteristic type of crisis — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 517; The 2010 PIIGS crisis was a shift in risk perception, not underlying risk — Mark Blyth, Austerity: The History of a Dangerous…, 198

Broader Connections

• Each great economic transformation produces its own characteristic type of crisis #expands (0.72) — Yanis Varoufakis, Technofeudalism, 517