Acronyms can have a life of their own; they multiply, and draw inspiration from the animal world. The “BRIC” made its debut in 2001, and was later joined by the “S” of South Africa. The initials have grown to the point of giving life to a powerful strategic alliance capable of challenging the G7, and acronym fever has now become unstoppable; a new group of emerging economies (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa) have been labelled “CIVETS,” (a nocturnal mammal native to Asia and Africa). More prosaic and less flattering is the acronym “PIGS,” (Portugal, Ireland, Greece, Spain), the overweight swine that lived like kings on public debt. It isn’t clear if the noticeable absence of a second “I,” for Italy, is thanks to a respect for proper spelling or a sign of enduring confidence in the country.
The borrowing of names from the animal kingdom continued with the recent addition of “FISH,” a new group made up of France, Italy, Spain, and Holland. Its existence has been confirmed by citations in financial publications and talk among international investors, although it is still not considered a group of equals. The problems – some in common, some individual – of Italy and Spain are well known, and France has recently been grouped together with its Mediterranean neighbors. Nevertheless, their financial base remains strong, especially so in the case of Holland, but the acronym does appear incongruous due to the differing situation of the public finances in the four countries.
“FISH” was born in the confluence of a series of considerations. Europe has staved off the Euro crisis; it is still possible, but no longer probable. Mario Draghi and Angela Merkel will save the currency whatever it takes and will not allow any of the members to leave the alliance, the weakening of which would hurt Germany the most, and counting on a Greek or Cypriot exit is also no longer a safe bet. Now it is the ability to grow again that is under scrutiny, and all four FISH have come up with negative numbers. Italy is accustomed to it, but for Holland it is uncharted territory. The Netherlands may well have been included to spread pessimism across Europe. It is a negative mark for a country that has been among the best performers ever since its inclusion in the old alliance with Austria and Belgium, the so-called “Mark area.”
Demonstrating that the entire continent is fragile – including France and Holland – leaves Germany, its offshoots, and the limited involvement of the Scandinavian countries as the only stable elements in the region. Given that finance is based on expectations, undermining investor confidence is anything but a neutral move, even if it is done via a simple arrangement of letters.
