Tuesday, 21 June 2011

Baltic Collapse, Polish Growth

An article contrasting the economic performance of the Baltic States and Poland can be found here. The article does not cover all areas of this topic but it is an interesting read.

In light of the crisis in Greece and the eurozone at the moment it is worth reflecting on what has happened in Central-Eastern Europe. The article shows the economic catastrophe that occurred in the Baltic States , which was partly due to the huge credit bubble that had been inflated prior to the global financial crisis crisis. These countries then carried out extreme austerity policies (pushed by the EU) leading to soaring unemployment and collapsing economies.

In contrast in Poland, there had been no such credit bubble prior to the crisis (although there are signs that this is now being inflated) and once the crisis impacted on the country it carried out a devaluation of its currency instead of maintaining a currency peg to the euro as was done in the Baltics.

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