Why are Baltic States posing as anti-Greece?
Greek Prime Minister Alexis Tsipras has condemned the requirements of his country’s creditors as ‘blackmail’; Guardian columnist Zoe Williams has called their plan a ‘moral crusade and a collective punishment of the Greeks’. But the EU’s poorer member states seem to be jumping at the chance to showcase themselves as anti-Greece. Baltic leaders now feel that lecturing Greece about austerity establishes these countries firmly in the Northern European family.
‘In 2009 our tax revenues slumped by a third and we managed to overcome these difficulties without external aid, without asking anything from the institutions [of the IMF and EU],’ said the Lithuanian minister of finance, Rimantas Šadžius. Curiously, in this quote he extended the ‘we’ to the Conservative-led government of the time, to which his Social Democratic Party was in opposition until 2012.
Social Democratic Prime Minister Algirdas Butkevičius earlier called Conservative-imposed austerity ‘raging wild capitalism’, and another leading politician of the same party, Irena Šiaulienė, emphasized that ‘no [other] EU country dared to make savings at the expense of pensioners’ and that neighbouring Latvia was ‘brave’ to borrow from the IMF and implement its conditionalities.
Speaking to other members of the Party of European Socialists, Šadžius himself said that ‘Europe needs to move away from the austerity-only policies of the past. Europe needs growth and investment,’ but in discussions about Greece, he maintained that it was unfair for his even poorer country, the newest member in the eurozone, to bail out Greece, with its higher wages and pensions. The statement was reiterated in Latvia: a spokesperson for Finance Minister Janis Reirs insisted on ‘equal attitude towards Greece as there has been to other [bailed-out] countries’.
According to the Guardian's Ian Traynor, one of the most vocal critics of Greece is Valdis Domrovskis, who ‘led Latvia out of the mess and into the euro’ and is now a vice-president of the European Commission. But comparisons to Greece are echoed in nearby Estonia as well. Estonia, the richest of the Baltic States and the earliest to adopt the euro, proudly presents itself as the most meticulous follower of the EU’s budget rules. Kathimerini, an English-language newspaper in Greece, quotes Estonian politician Kaja Kallas saying ‘If we owed so much money to others and had received so much from them, we would keep quiet and try to be as polite as possible and get along with everybody.’
However, the Baltic States are not the only ones favourably portraying their stoicism amidst the crisis. Their stories have been picked up by international pro-austerity observers. Bloomberg analysts are particularly keen on such comparisons. Back in 2013, Anders Aslund published an article titled “Why austerity works and stimulus doesn’t”, drawing on experience of Latvia and Greece.
The Swedish economist, who earlier helped engineer market reforms in Russia, Ukraine and Kyrgyzstan, was an informal adviser to the said Latvian ex-PM, Dombrovskis during the crisis. The two authored a book, How Latvia Came out of the Financial Crisis, celebrating Latvia as a success story. In his Bloomberg article, Aslund criticizes Greece for ‘late’ austerity, corruption and insufficient cuts to the public sector, whereas Latvia sliced the number of government agencies by half.
Latvia is not the only one to receive praise from pro-austerity analysts. Estonia, according to Bloomberg's Tallinn-based reporter Ott Ummelas, is the ultimate ‘anti-Greece’ country. Steve H Hanke of the US-based libertarian Cato Institute explained that keeping monetary issues on track was at the core of Estonia’s policy in early independence years, to maintain its self-sufficiency and establish its international credibility. Hanke was one of the advisers to the Estonian government on setting up the country’s currency board and engineering the now-abolished Estonian kroon’s peg to the deutschmark in the early 1990s. Calling Greece ‘that fiscally reckless Balkan nation’, he reiterated the strongly held Estonian belief that ‘everything is nothing, without stability’.
During the crisis, just like in the early 1990s, receptive governments of the Baltic States eagerly tested economic theories on their soil. Austerity measures thus emerge as a déjà vu of free market reforms in the early 1990s, guided by enthusiastic pro-market Baltic politicians and their Western advisers. Just like then, public-sector cuts and market liberalization are portrayed as necessary, if painful, measures to stay on the right track. This time, however, instead of finding the ultimate ‘other’ in the ‘homo sovieticus’ stereotype, Baltic pro-austerity reformers have picked Greece.
Even for those Baltic politicians who oppose austerity at home, posing as anti-Greece becomes a statement of belonging in the European family. The Syriza government’s unequivocal flirting with Russia, almost on the eve of the IMF’s deadline for loan repayment, fuels the urge to do so. With European solidarity still shaky regarding tensions with Russia, the Baltic States are ever more eager to show themselves as proper Europeans.
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