The Domino Effect
Back in 2010, the euro-zone members and the International Monetary Fund agreed to a 100 billion euro bailout package to help Greece. In return for this, the Greek government planned tax increases and deep cuts in pensions and public service pay. It is reported that Greece has not implemented the planned changes. Therefore, the need for obligatory terms is under greater demand.
Because of the falling euro and as a result of the financial crisis the other weak members of the euro-zone were faced with the inability to repay their debts. In November of 2010, the EU and IMF agreed to an 85 billion euro bailout package to the Republic of Ireland, followed by a May 2011 bailout of 78 billion to Portugal. In July of 2011, a second bailout package of 109 billion euros was agreed to for Greece.
Due to increased fear that any of these countries could default on their public debts, Portugal, Ireland, Italy, Greece and Spain were been given the unfortunate acronym of PIIGS.