ROB GIFFORD: This is Rob Gifford in London, where, despite Britain's many problems, the press has been wallowing in its acronym for the countries of Southern Europe. The first letters of Portugal, Italy, Greece and Spain spell it out: PIGS. But former senior economist at the IMF, Simon Johnson, says Britain should not be gloating at countries like Greece.</s>SIMON JOHNSON: Greece is an extreme example, but unfortunately, the budget situation in these other countries are also weak. And I would have to add the U.K. to this list. You know, unless you can persuade the markets that you're really going to bring the budget under control within the foreseeable future, you're going to have big trouble.</s>ROB GIFFORD: The concern is that British debt could possibly rise to a hundred percent of GDP by 2013. One big difference, though, is that Britain is not in the euro currency, so it still controls its own interest rates, and the exchange rate of the pound sterling gives flexibility. Alistair Newton of Nomura in London thinks the Southern European countries are very different from Britain.</s>ALISTAIR NEWTON: They already had larger fiscal deficits because of structural impediments in their economy. And it's those structural impediments which need to be addressed in those economies. The U.K. dealt with many of those issues during the 1980s and 1990s.</s>ROB GIFFORD: The big structural issue is labor market reform, a hot topic across the Irish Sea, as well, where some say the I in PIGS should be Ireland, not Italy. But says, Alistair Newton, Ireland has by and large taken the tough measures in public spending that Southern Europe is baulking at.</s>ALISTAIR NEWTON: The Irish government made a number of very tough decisions bringing in a biting austerity program. And I think both Ireland and the U.K. have benefited from, to an extent, is that during the boom periods, both benefited from a considerable influx of foreign workers from Eastern Europe, in particular. And a lot of those workers actually went home when the slowdown came.</s>ROB GIFFORD: Rob Gifford, NPR News.
Although Britain is not in the Eurozone, it too is massively in debt. Ireland, which does use the Euro, is suffering the hangover from its "Celtic Tiger" days, when its booming economy was the talk of Europe.