“All the Baltic states, not only Estonia, are pretty well prepared for every type of crisis,” said Ansip in a press conference in the Latvian capital Riga today, with Latvian Prime Minister Valdis Dombrovskis and Lithuanian Prime Minister Andrius Kubilius.
The Baltic countries cut spending and raised taxes beginning in 2008 to slash budget deficits after a real estate- fueled boom-turned-bust. Latvia’s deficit is expected to fall to about 3.8 percent of gross domestic product this year from 7.7 percent of GDP last year, Ansip said, citing a conversation he had with Dombrovskis.
Estonia, which had a budget surplus last year, plans another surplus this year, he said.
Austerity measures adopted in the Baltics, which suffered the EU’s deepest recessions in 2009, are a lesson for the European periphery as it struggles through a sovereign-debt crisis, Fitch Ratings said on Aug. 25.
Estonia, Lithuania and Latvia “have shown that although it was painful to correct large macroeconomic imbalances and return to growth with a fixed-euro exchange regime, it was not impossible,” said Michele Napolitano, associate director on Fitch’s sovereign team, in a report today.