Real Estate Investor Magazine South Africa February 2016 | Page 18

COVER STORY
Eurozone to stimulate growth. The PIIGS nations
(Portugal, Ireland, Italy, Greece & Spain) have been
bailed out repeatedly by the European Union and the
IMF, with mandatory austerity measures imposed
on their populations. Not only has austerity been
unpopular, such measures may have also restricted
growth by reducing aggregate demand and keeping the
debt burdens in these nations high.
Greece, which recently defaulted on an IMF loan,
has been the hardest hit. The Greeks had elected an
anti-austerity government, which called a popular
referendum, rejecting EU bailout terms and calling
for an end to austerity. Even though Greece itself
represents a relatively small portion of the Eurozone,
the fear is that if Greece leaves the European common
currency, other countries will follow and contagion
will spread, putting an end to the euro experiment. A
collapse of the euro would have widespread negative
consequences for the world economy, possibly bringing
on recessions.

“I’ve been worried for the last five, six
months about the market and the economy
and the dangerous spot that we’re in