Written By
Paul Tracy
Updated July 27, 2021

What are PIIGS?

The Eurozone nations of Portugal, Ireland, Italy, Greece and Spain make up a group of financially weak countries often referred to in the financial media by the acronym PIIGS.

How Do PIIGS Work?

The Eurozone is made up of 16 different countries that all use a single currency, the Euro. In the mid-2000s, Eurozone countries could borrow at relatively low interest rates, and some of the financially weaker countries were able to borrow much more than they can now afford to pay back.

The Portuguese Finance Minister has decried the use of the term PIIGS, saying that it is pejorative and racist. The Financial Times and Barclays Capital have banned the use of the term in its publications.

Why Do PIIGS Matter?

Some believe that the growing divide between the EU's financially weak countries and financially strong countries like Germany and France could ultimately lead to the breakup of the EU. As investors force Greece, Ireland and Spain to adopt austerity measures to get their budgets under control, strikes, riots and civil unrest have broken out across those countries.

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