Even though house prices rose more in the GIIPS
than in Germany, it is reaffirmed that "there was no simple core versus periphery distinction".
When controlling for the euro adoption, a significantly negative influence for GIIPS
and a positive but insignificant evidence for the core euro area is obtained.
We also show in Appendix B how the wage share in national income has decreased for the GIIPS
countries till the financial crisis--except for the case of Greece, which has an exceptionally low wage share, however.
This development can be seen for GIIPS
in the left part of Fig.
We include the five GIIPS
countries, Germany as a reference, as well as Denmark and the UK as non-euro members.
The euro-area average, however, remained stuck at 10 percent as unemployment rates in the GIIPS
continued to climb long after the official recession had ended.
industrial competitiveness for the GIIPS
and an increase in industrial
With gross debt less than the Euro area's prescribed 60 percent of GDP, the newcomers, with the exception of Hungary, are currently in a much better debt position than the GIIPS
Two results stand out; first, an increase in the share of construction over total value added has a large and highly significant negative effect on the current account balance; second, euro adoption has a large and significant negative impact on the current account balance of GIIPS
countries (Greece, Ireland, Italy, Portugal, and Spain).
On the convergence/divergence path of the GIIPS
and NMS countries compared to Germany see Wagner (2013b, 2014).
If policies of fiscal devaluation were followed in the GIIPS
countries in a coordinated fashion, and if the reverse policies were pursued in surplus countries such as Germany, the result could be a rebalancing of demand across the euro area.
There is no doubt that the GIIPS
have been living beyond their means.