The Austrian Business Cycle Theory (ABCT), developed largely by Ludwig von Mises
and F. A. Hayek
, predicted the present crisis and explained its causes in advance. Many commentators aware of this theory warned that after the real estate bubble went bust, a new one would form in the sovereign debt markets. Expanding fiscal budgets in a recessionary environment would ultimately lead to a situation in which highly indebted governments needed a bailout. For Greece and the other PIIGS (Portugal, Ireland, Italy, Greece and Spain), that burden now largely falls on their friends and allies within the European Union.