PIIGS and the Eurozone

Paul Krugman at New York Times uses the good old pie chart to give us a better mental picture of the sovereign debt problems which have given the market slight jitters recently.  PIIGS is the new pop lingo (similar to garbage words used to help people convince themselves they are smarter than others like "green shoots", "tranches", "haircuts", "contagion").  PIIGS is an acronym for Portugal, Ireland, Italy, Greece, and Spain which are 5 countries (there are others with less spotlight on them now) in the Eurozone with debt problems so bad there is some worry the governments might default on debt.  Some people (including Krugman in this pie chart) are kind of leaving Italy out of that for now.  If it becomes "contagion" (oh, excited! my IQ just jumped 2 points!), it could possibly even cause probs here in America.

As Krugman shows, those PIIGS economies (not counting Italy yet) accounts for 20% of Eurozone GDP.  So it is cause for deep concern, but not quite at worry stage for Americans yet.  One of the big problems (though not the root problem) is individual countries in the Eurozone are less able to adjust to capital inflows and outflows because they all use the Euro.  As Krugman points out, one of the ironies of this is Spain had a relatively good balance sheet before the crisis hit.