The Baltic States’ Success Story in Combating the Economic Crisis: Consequences for Regional Cooperation within the EU and with Russia

The global economic downturn of 2008 and the financial and ongoing fiscal crisis in the eurozone have proved to be extremely painful for newer EU Member States Latvia, Lithuania and Estonia. At the same time, however, the crises have revealed some significant differences between these three small, seemingly homogenous countries, and especially in the effectiveness of their anti-crisis policies. The diverse results of these policies were shaped in several respects by internal factors, such as the sensitivity of their economies to foreign markets or the different response times of the governments to the first signs of the economic downturn as well as the socio-political background at the time of the crisis. However, the Baltics have indeed learnt lessons, as each one implemented austerity-style policies. Since 2011, economic growth has accelerated in all of the Baltic States, and their struggle with the crisis already seems to be a unique success story that affects regional cooperation as well as relations with Russia.