A few weeks ago a senior Estonian political leader said to me that he believed that the biggest threat to Estonia's security came from Latvia. It was not, he explained, that he had any ill-will towards Estonia's southern neighbour, but their failure to get to grips with the economic crisis could have paralysing consequences for the whole of northern Europe, including Estonia. Now concerns about Latvia are once again increasing. The emergency financing from the IMF and the EU needs to be rolled over and the government is going through a budget process that is contemplating massive cuts in expenditure, despite the fact that the Latvian economy has already shrunk by nearly 20% year on year. As the respite given by summer tourism now comes to an end, the Latvian government is facing what looks like a moment of truth. Although both Estonia and Lithuania have enacted generally coherent and organised responses to the economic crisis, Latvia's leaders have descended into a wave of...
Musings on World events from the perspective of a Social and an Economic Liberal.