The Baltic States: In Search of the Way out of the Crisis

Abstract

Ambitious targets were set up at the start of independent development of the Baltic States. But they were met only partially. The Baltic recession which has been lasting for more than two years now and definitely will continue through this year has turned out to be the deepest in the EU. Reinforced by the global economic crisis this recession has put an end to their initial development model. Now all the three states need new ideas and a new growth strategy. Among other factors, the current crisis is rooted in active deindustrialization, politically-led privatization and politically-biased orientation only to the EU. Now it is clear that service, transit and tourism are not sufficient for sustainable growth. Closer cooperation with the East is part of the solution.