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A modern cable bridge spans the Daugava River in Riga, Latvia.
A modern cable bridge spans the Daugava River in Riga, Latvia.
(Valerijs Kostreckis/iStockphoto)

MARTIN WOLF

Baltic approach to crisis is no model for euro zone

The idea that suffering is good for both the soul and the economy is widely held. To “austerians,” a financial crisis is a mark of moral turpitude, to be redeemed only by suffering. But an economy exists on earth, not in the afterlife. Those who advocate the path of austerity need to show that it is not just moral, but effective. How is this to be done? By pointing to successful examples. In Europe, that example is often the Baltics and, above all, Latvia, a crisis-hit country that was rescued and is now – we are told – blooming. Is it? And, if it is, does this bring lessons for others? The answer to both questions is: only up to a point.