Symmetry Breaks

The IMF’s Christine Lagarde has been the latest to praise the Latvian austerity drive, holding it as an example for other countries to follow: “It’s important for other crisis-ridden countries to learn from Latvia. The programme there was a success”. She even went so far as to claim: “All the three Baltic countries have pursued similar economic policies and the results are similarly spectacular”. Meanwhile, economist Anders Aslund has claimed “the Baltic countries, on the contrary, have seen a stunning expansion of exports and manufacturing after the crisis that not even the greatest optimists predicted”. Aslund has even written a book on the Latvian recovery, co-authored with Latvia’s right-wing Prime Minister, Valdis DombrovskisHow Latvia Came Through the Financial Crisis. Increasingly the country is becoming the poster boy for the pro-austerity lobby, looking for successful examples.

Does the Latvian example provide a successful example of a country undergoing austerity, tackling…

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