Friday, 24 July 2009

The Collapse of the Baltic Tigers

In a previous post we highlighted the plight of the three Baltic States (Estonia, Latvia, and Lithuania – see post). We see the recent events in the Baltic States as the European example of the Icarus Effect – economies that have flown high and which have now hit the ground with a hard landing. As this has happened, there has been a political price to pay, and we now need to address what that price might be.

The Baltic States occupy an uncomfortable boundary between the EU and Russia. In recent years they have been suborned by membership to the EU and NATO. However, their ‘westernisation’ is relatively recent and – taking the recession into account – not that successful. Russia seems to have a ‘reconquest fantasy’ which it regularly plays out in wargames adjacent to the border.

What we also tend to forget is that each of the three Baltic Tigers has significant Russian minority as part of its population (25.6% in Estonia, 28.0% in Latvia, and 5.1% in Lithuania). This part of the population tends to look to Russia for its cultural and political lead. As time unfolds, it is not unimaginable to envisage Russian intervention in the Baltic States to support the Russian minorities. After all, this is what happened in Georgia last year.

And so, as we think about the longer future, the eastern edge of the EU might not be as stable as it appears. Global recession is placing the A8 nations under great strain, which is creating the possibility of Russian adventurism in the region.

As Icarus hits the ground, the shockwaves could reverberate far and wide!

The Collapse of the Baltic Tigers - By Edward Lucas Foreign Policy

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