PIGS forced to accept budget restrictions!

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PIGS forced to accept budget restrictions!

In Europe, Obstacles To A More Perfect Union

by Rob Gifford, National Public Radio July 16, 2010

"If you speak to someone German or in the Germanic camp, they say it's simple," Rennie said. "They say we need Germanic-style rigor and discipline, and people need to live within their means and not borrow and spend too much."

But those in the southern Europe bloc led by France have a different idea.

"They also say it's simple," Rennie said. "We need redistribution from rich to poor and low borrowing costs to countries being fleeced by evil wicked Anglo-Saxon speculators."

These disagreements have slowed the European response to the Greek crisis, and continue to split the continent in terms of how to move ahead.

But what of the countries that are seen as the problem, known by their unfortunate acronym, the PIGS: Portugal, Italy, Greece and Spain?

South Must Learn From North

In a small restaurant on a cobbled street in the shadow of Lisbon's Se Cathedral, a performer sings fado, the music genre of the traditional Portuguese lament. Though not as profligate as Greece, Portugal still has plenty to lament about its financial predicament, including lax collection of taxes and a bloated public sector.

Miguel Judice, president of the Portuguese Hotel Association, is sitting listening to the music. He loves the euro. It brings so many benefits to the country, he says, and being part of the euro has made it much easier for tourists to come to Portugal.

But he admits things in Portugal need to change. "If you are living in a civilized country you need to pay taxes," Judice said. "They're better at that in Sweden than in Portugal."

Judice says there is no doubt that in financial matters and tax affairs, southern Europeans need to learn from their Northern cousins.

Even so, observers have been encouraged that there have been almost no protests so far at the austerity measures proposed in Portugal, and that demonstrations in Greece have died down.

It seems the PIGS are prepared to take their medicine, but it is likely to be a long haul. As one commentator described it, the patient's life has been saved, but even when he comes off the ventilator, he's going to be in bad shape.