The old PIGS are airborne, even as northern countries fall to earth
The political stars in Europe these days are found down in what used to be termed “the periphery”. On January 30th António Costa led his Socialist party to an absolute majority in Portuguese parliamentary elections, obviating the need for ungainly coalitions of the sort now hobbling Germany.
Better yet, the southerners are achieving the rare feat of combining political success with reforms to economies previously thought unreformable. Mr Costa has gained plaudits since 2015 as a lefty who also knows how to balance a budget. Italy’s technocrats are overhauling its creaking courts and overly generous pensions—necessary, urgent changes that governments of all stripes have for decades shirked.
To austere types in Berlin or Helsinki who tormented southerners during the eurozone’s darkest hours a decade ago, the periphery’s success is evidence that tough love works. In their telling, it is the threats and badgering doled out at interminablesummits that put southern Europe on the righteous path of tighter budgets. The beatings continued and morale improved. Reformed economies were in better shape to handle the pandemic.
For now, though, the southern bloc is enjoying its time in the sun. Its reforms provide backing for its views on the future of the union’s economic governance. Arguing against the hasty return of strict deficit limits is easier if steady-type funding resonates more with Dutch voters if they feel their money has supported useful reforms in countries with which they share a currency.
Convergence between north and south takes some venom out of what remain poisonous debates around who makes the’s rules and how they are enforced. Beyond being a good thing in itself, a fast-growing southern fringe lets both the austere and their opponents believe their pet economic policy is what created a richer Europe. While the argument drags on about why
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