Jorge Marcano | The Lithuania Tribune
According to world renowned and influential former Polish finance minister, Leszek Balcerowicz, Western European countries should emulate Baltic-type financial reforms. In a BNS interview, the former central bank governor from Poland declared that “the Baltic countries are the model for the internal devaluation. This also included Lithuania. The downturn was due to a huge private credit boom, which went bust. But then the Baltic governments took needed reforms, including fiscal consolidation and some structural reforms, and this has worked. If you contrast this with Greece, you see that Greece has delayed reforms. Greece did not suffer from a private credit boom, but from systematic fiscal overspending,” Mr. Balcerowicz stated.
Various foreign analysts emphasised that Lithuania, Latvia and Estonia have successfully weathered the financial crisis and now register encouraging and solid economic growth. Nonetheless, there are some like Nobel laureate, Paul Krugman who have criticised the harsh austerity measures adopted by the Baltic countries as well.
In contrasting remarks during the BNS interview, Balcerowicz added that “I think the Baltics are a good example for some Western economies, which are still struggling with economic problems, because they are delaying the necessary adjustment,” the Polish former minister highlighted. Earlier on, during an exclusive interview with The Lithuania Tribune, Mr. Balcerowicz mentioned that “people who are for fiscal discipline are credible, they are good in government. Those who promise more spending are dangerous.” Balcerowicz concluded.
Regardless, the latest data presented by the EU Statistical Office, Eurostat, points out that the Baltic States have been amongst the top economic performers during the last five quarters of the year, within the internal market. Lithuania’s economy increased by 2.8% in the second quarter of 2012, whilst Latvia posted GDP growth of 4.3% and Estonia, 2.5%, respectively.