The Contradictions Of Austerity

The book discusses the contradictions of austerity in the Baltic states, which have experienced negative effects due to the implementation of neo-liberal policies. The book argues that the Baltic states' "miracle" was actually a result of their unwavering commitment to liberalized economies, which has led to significant population loss and economic instability.

The great financial crisis of 2008 and the ensuing global economic and financial turmoil have launched a search for models for recovery. The advocates of austerity present the Baltic States as countries that through discipline and sacrifice showed the way out of crisis. They have proposed the Baltic model of radical public sector cuts, wage reductions, labor market reforms and reductions in living standards for other troubled Eurozone countries to emulate. Yet, the reality of the Baltic austerity fix has been neither fully accepted by its peoples, nor is it fully a success. This book explains why and what are the real social and economic costs of the Baltic austerity model. We examine each of the Baltic States by connecting national level studies within a European and global political economy, thereby delivering comparative breadth that supersedes localized understandings of the crisis. Thus for each of the three Baltic states, individual chapters explore the different economic and social dimensions of neo-liberal post-communism and the subsequent wider global economic and financial crisis in which these newly financialized economies have found themselves especially vulnerable. The austerity model adopted by Baltic national governments in response to the crisis reveals the profound vulnerabilities created by their unwavering commitment to liberalized economies, not least in terms of the significant exit of their labor forces and consequent population loss. This book looks beyond basic financial metrics claiming a success story for the Baltic austerity model to reveal the damaging economic and social consequences, first of neo-liberal policies adopted during transition, and latterly of austerity measures based on internal devaluation. Combined these policies undermine the possibility of longer-term recovery and even social and economic sustainability, not to mention prospects for successful integration in the now-faltering European project that has departed from its Social Model roots. Review: 'This book promises to become the defining study on the impact of austerity in the Baltics, otherwise known as the 'Baltic miracle.' The Baltic miracle has been heralded by partisans of neoliberal austerity as demonstrating the success of their economic therapy, despite the pain for the affected populations. As these carefully argued and well-documented studies reveal, if this 'miracle' counts as success, one would hate to imagine what failure might be. As the editors rightly argue, the import of these incisive inquiries is also a stark warning to the European Union, and the world, as the neoliberal assault steadily demolishes the social model that was Europe's great contribution to modern civilization.' - Noam Chomsky 'The crisis of 2008 put Europe's Periphery in a state of civil war between those who had not caused the crisis, and were asked to pay for it, and the few who had caused it but insisted on remaining in power. The Baltic countries were the first battleground on which the powers-that-be fought for their survival wielding the lethal weapon of austerity. They made a desert , called it peace , and then exported it to Ireland and Europe's South hidden behind claims of success in the Baltics. Never before has spectacular economic policy failure been so effectively re-packaged as success and pressed into service so as to enfeeble, humiliate and usurp a whole Continent. By deconstructing the official version of austerity's effects on the Baltics, this book contributes greatly to those who care for Europe and for the truth.' - Yanis Varoufakis 'This is a book by scholars of great integrity and independence, who have spent years on the ground in the Baltics or close by.' - James Galbraith, Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the Lyndon B. Johnson School of Public Policy at the University of Texas. Author of the forthcoming The End of Normal: The Great Crisis and the Future of Growth. 'This book offers a detailed, knowledgeable, concise and exceptionally clear examination of the impact of the global cris