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'PIIGS' on a rampage
Fri, 1 Oct Pre-Open

Europeans are an unhappy lot these days. Despite enjoying one of the best lifestyles in the world, they are unhappy. Especially citizens that belong to the ‘PIIGS’ (Portugal, Ireland, Italy, Greece and Spain) group of nations.

Protests erupted across Europe this Wednesday. As per a Moneynews report, Greek doctors and railway employees walked out, Spanish workers shut down trains and buses, and one man even blocked the Irish parliament with a cement truck.

The denizens of these countries are unhappy about their respective government’s moves towards budget-slashing, tax-hiking and pension-cutting. These are all part of the austerity plans of European governments desperately seeking to take control of their disastrously huge debt burdens.

Source: IMF

But with such stiff opposition by its own populous, one wonders what the worst case scenario could be if the government goes ahead with such austerity measures? Perhaps a slight fall in GDP. And a consequent trivial restraint in living standards until the time government debt comes down to more manageable levels. Is that such a bad eventuality to evoke such strong protests?

After all, even a cursory comparison with India shows just how much of a different level the people of the PIIGS countries are really on. India’s per capita GDP, and indication of the living standards of the average Indian, was about US$ 1,000 in 2009, compared to about US$ 51,000 for the average Irish citizen.

With such a vast difference, it is surprising that bringing in a little curtailment in their lifestyles is proving such an onerous task for Europeans.

Further, the stark difference in GDP per capita with India also shows just how much scope there is for us Indians to increase our living standards before we even come close to the saturation point that Europeans are facing. It also gives some sense of the amount of scope that corporate India has to enable this increase in living standards, and grow by leaps and bounds in the process.

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