While Greece flails, are the rest of the stricken Pigs taking off?

The other eurozone bailout recipients - Portugal, Ireland and Spain - are showing an improvement

Just desserts: in Madrid, the government is hoping to be rewarded for strong GDP growth when voters go to the polls later this year (Alex Segre/Alamy)

At a meeting of the eurozone’s finance ministers earlier this month, Maria Luis Albuquerque of Portugal offered early repayment of some of the €78bn (£58bn) that the country received in emergency bailout funds in 2010.

Portugal now has “significant reserves that will allow the country to face eventual periods of volatility with tranquility”, she told the Lisbon Parliament before meeting her colleagues from other countries.

Her Government wants to avoid paying hefty interest payments to the troika – the European Commission, International Monetary Fund and European Central Bank – which rescued it from the financial mire, arguing that Portugal is already back on track. During the same eurozone meeting, Ms Albuquerque and her opposite numbers from Ireland and Spain joined Germany in insisting that Greece’s new anti-austerity Government should stick to the crippling conditions that accompanied its €240bn bailout.

Portugal, Ireland, Greece and Spain were lumped together at the height of what is simply known across Europe as “the crisis”. The Pigs – a term that executives at Barclays banned staff from using for fear that it might upset clients – looked an apt if rude description for countries that for too long had binged on cheap debt and booming construction sectors and allowed citizens’ benefits to go well beyond the means of their governments.

Back in 2010, bond yields soaring above 7 per cent became front-page news; the Pigs were going bankrupt at a rate of knots, threatening not only the continued existence of the euro, but the entire European project itself.

But that was then. While Greece’s new Government has been given a mandate to pay hardball over the terms of its colossal bailout, the other Pigs are slowly returning to health. In Spain, Pablo Iglesias, the leader of Podemos, an insurgent political party that was born just a year ago, made what appeared a blindingly obvious statement earlier this week when he said that “Spain is not Greece”.

The message was clear, however. During the Greek election campaign, Mr Iglesias appeared on a platform with Syriza’s Alexis Tsipras, the man who would be elected Prime Minister, as he spat bile at Brussels and Berlin.

But Mr Iglesias knows the same line will not work at home. While the Greek economy contracts, Spain is becoming one of the darlings of the eurozone. Its GDP has been positive for six straight quarters and is growing at its fastest rate for seven years. Spain goes to the polls soon, probably in November, and Podemos is expected to focus its fire on corruption scandals engulfing the governing PP party, rather than the economy.

Mariano Rajoy, the Spanish Prime Minister, says that Podemos threatens to wreck the recovery. In the entire European Union, only Hungary’s economy grew faster than Spain’s in the fourth quarter of 2014. Spanish GDP was up by 0.7 per cent on the previous three months.

“Three years of austerity have Spain’s budget deficit moving in the right direction, while ambitious labour market reforms have spurred job creation and a wave of [foreign direct investment] inflows,” said Tom Rogers, a senior eurozone economist at Oxford Economics. “Unemployment remains painfully high [over 23 per cent] but Spain is clearly moving in the right direction, and as such has been repeatedly praised for its efforts by European policymakers.”

In Ireland, boasts about Celtic Tigers have long gone – the country’s debt binge put paid to that – but Dublin is also enjoying an economic resurgence. The Irish economy will grow by 3.5 per cent this year and by 3.6 per cent in 2016, the European Commission predicted earlier this month – well above the overall 1.3 per cent average growth expected for the bloc. “[This] shows that, for the first time since mid-2007, more consumers expect their household finances to improve rather than worsen in the year ahead,” said Austin Hughes, chief economist at KBC bank. “This marks a notable change in thinking.”

As in Spain, there is a general election in Portugal this year, and its Government is playing the same hand as Spain’s in stressing the improving economy as a reason to keep it in office. Lisbon’s once- daunting current account deficit is now in surplus, bond yields are at historic lows and unemployment is falling.

So the Pigs are no more? While it was always crass to put Spain, Ireland and Portugal in the same camp as the Greeks (for one thing, Athens’s bailout dwarfed that of anywhere else), it is true that the worst is probably over for Madrid, Dublin and Lisbon.

There are still problems, however. While Mr Rajoy will laud the Spanish recovery, about one in four of the working population are officially unemployed.

In Ireland, a weak euro is helping an export boom, while deflation is a real risk. Even President Higgins said recently that the Irish economy cannot be used as an exemplar elsewhere.

Ms Albuquerque’s offer to repay Portugal’s debt early is likely to be accepted. The Portuguese economy grew by 0.9 per cent last year – the first full year of growth since 2010 –and will do better this year. But still there are problems. The IMF worries, for example, that October’s election will lead to fiscal giveaways, rather than what it considers to be necessary belt-tightening

“Portugal continues to face significant challenges,” the IMF said recently, cautioning against a weakening reform momentum and calling for efforts to reinvigorate structural reforms to reorientate the economy towards higher investment and exports.

Winston Churchill once said that a turning tide in the Second World War was perhaps only the end of the beginning of the allied campaign. In this latest crisis to befall Europe, the same is probably true for at least three quarters of the Pigs.