Default risk and fiscal sustainability in PIIGS countries

Abstract

During the entire period of existence and expansion of the European Union, the integration of the economies of the new countries of the union was strengthened. Thus, in the 1990s, the term "PIIGS countries" was born, which became the most widespread after the financial crisis in the EU in 2008, and which was often used in relation to the southern European countries of the EU (Portugal, Ireland, Italy, Greece and Spain), which were the most affected from growing debt and economic vulnerability. There have always been less developed states and more problematic countries in the economic environment, which today fall under the classification of peripheral countries of the European Union. The subject of research in the article is the default risk and fiscal stability of the PIIGS countries. The goal is to identify existing default risks and existing violations of fiscal stability in the PIIGS countries. The objective is to research the dynamics of the development of the economies of the PIIGS countries in the conditions of modern crises and challenges. General scientific methods are used, such as system analysis - to determine the peculiarities of the development of the economies of the PIIGS countries, the method of comparative analysis, thanks to which the peculiarities of the economies of the PIIGS countries, the peculiarities of their debt and fiscal policies are analyzed. Also, comparative analysis is used to study the difference between the PIIGS countries in terms of their default risk and fiscal sustainability. The following results were obtained: based on the analysis of the debt and fiscal stability of the PIIGS countries, problematic aspects were identified and the components of the economies of these countries were determined, as well as the factors influencing the risk of default and the quality of the fiscal stability of the PIIGS countries were calculated. Conclusions: The article identifies default risks for each of the PIIGS countries and their level of fiscal sustainability. Various methods of solving economic problems for the PIIGS countries have been studied and proposed, which will help these countries avoid default and improve their fiscal sustainability. Each of the PIIGS countries was studied separately. This made it possible to draw acceptable conclusions about each country.