Ireland looks to have managed cutting public spending without widespread opposition, social unrest or government collapse, but now the question is how the euro zone's other fringe economies can achieve the same trick. But the heavily indebted economies, insultingly dubbed the PIIGS – Portugal, Italy, Ireland, Greece and Spain – are far from identical. Athens has no choice but to try to follow Ireland – despite Greece's reputation as being particularly prone to street violence and instability. Likewise Portugal, although its attempts are seen as being more half-hearted. Spain's position looks awkward, and is beginning to unsettle investors. A year ago, markets were piling pressure on Ireland as its debt-fuelled property boom collapsed, with some investors speculating it could be forced out of the euro altogether. But harsh reforms have largely restored market confidence. Crucially, the public looks to have reluctantly accepted the measures, including public sector pay cuts of between 5 and 15 percent. Fears the ruling coalition could collapse and spark elections have receded. Indeed, polls suggest the government has received a modest popularity boost for its tough approach and few expect a repeat of last year's national strike. There has been little public sympathy for a work-to-rule protest from public servants against pay cuts. “Ireland is seen as having done well,” said Nomura political analyst Alastair Newton. “But I'd be reluctant to assume that because of that the same will carry across to other European countries. The main lesson of Ireland is one that can't be repeated – that it's best to start early.” Greece has been slower to act, punished savagely in debt markets this year pushing up the cost of its borrowing and with markets openly discussing the prospect of default or rescue by the EU or IMF. It has now proposed a three-year deficit-cutting plan, although it has yet to detail where exactly the axe will fall. Fear of a repeat of December 2008 street violence is seen holding the government back from tougher action. “I would certainly expect some social unrest in Greece this year,” said Newton. “You still have the students and the anarchists. It could produce some market volatility in its own right.” The peak period of risk in the coming months would be in the late spring and early summer – Greece has a tradition of civil unrest fading away over the hot summer period. Nevertheless, like the Irish, Greeks seem more open to the idea of austerity than ever before. Opinion polls show 55-60 percent of people willing to support harsh measures if applied fairly. As in Ireland, unions threaten strike action but have little wider public support. The Socialist government has a majority, only took power in October and can still blame its predecessor for many of the country's woes. Portugal, seen likely next in line after Greece for market pressure, is in a more complex position. The Socialist government lost its parliamentary majority in elections last year, meaning it has to negotiate with other parties. The largest opposition party, the Social Democrats, have agreed to abstain from voting on the budget allowing it to pass with a simple majority – but investors and ratings agencies say government plans for deficit reduction are not ambitious enough . An opposition-led bill on regional spending also worries, hitting markets on Thursday. Like Italy, Portugal saw a relatively small boom immediately before the financial crisis, and its citizens have become used to austerity, potentially reducing unrest risks now. In contrast, Spain's population seems to have yet to adapt to its rapidly changed fortunes. Spain has survived having the euro zone's highest unemployment rate – some 20 percent – through relatively generous benefits and one of the world's largest stimulus packages. Under market and ratings pressure, it has pledged 50 billion euros in cuts, but has not said where. This week, the government backtracked on pension reforms. With elections due 2012, the Socialist government and much of the populace put their hopes in an imminent economic recovery. But few analysts believe official growth projections. Many fear disappointment looms, potentially bringing further instability – including clashes with unions if the government goes back on promises to loosen rigid job protection laws. The shifting pattern of investor worry is already driving markets. The cost of insuring Irish debt in the credit default swap market is well down from its heights last year – around 150 basis points from 400 last year, meaning it would now cost 150,000 euro to protect 10 million euros of five
