The credit markets in Europe have witnessed fast-paced development, where the credit extended to households has increased considerably during the last decade. After seeing a range of property bubbles and overvalued real estate markets across Europe, a legitimate question is whether the amount of mortgage credit outstanding has reached its limit for certain countries? The various episodes of the ongoing eurozone debt crisis have received a lot of attention, but they have to some extent overshadowed the debate on how the loan repayment ability of households will be affected after the resolution of the crisis. Will the more indebted European households manage to keep their heads above water as new and more stringent economic conditions take hold across some of the eurozone countries?
This commentary takes a closer look at the mortgage credit developments of households in the eurozone peripheral countries of Portugal, Ireland, Greece, Italy and Spain, nations that have been in the spotlight throughout the European sovereign debt crisis (from 2010 to the present). They have gone under the unpleasant acronym of the PIIGS nations, a term that has been frequently used by the international economic press to describe the boom–bust odyssey that some of these markets have exhibited.
Πηγή: ECRI