Lithuania’s Presidential Election Is Boring — And That’s Fine

Lithuania's outgoing president, Dalia Grybauskaitė, speaks at an event celebrating the country's fifteen years in the EU, May 1
Lithuania’s outgoing president, Dalia Grybauskaitė, speaks at an event celebrating the country’s fifteen years in the EU, May 1 (Office of the President of the Republic of Lithuania/Robertas Dačkus)

Former finance minister Ingrida Šimonytė and economist Gitanas Nausėda have advanced to the second round of Lithuania’s presidential election. Prime Minister Saulius Skvernelis placed third and has announced he will step down in July.

The remaining candidates are both center-right, so the outcome of the runoff on May 26 should not affect Lithuania’s politics in a major way. Even so, the result is largely a happy one. Read more “Lithuania’s Presidential Election Is Boring — And That’s Fine”

Estonia’s President Sends Wrong Message Meeting Putin

President Kersti Kaljulaid of Estonia meets with her Russian counterpart, Vladimir Putin, at the Kremlin in Moscow, April 18
President Kersti Kaljulaid of Estonia meets with her Russian counterpart, Vladimir Putin, at the Kremlin in Moscow, April 18 (Kremlin)

For the past decade, the Baltic states have maintained a strict policy toward Russia: no official state visits by presidents, prime ministers or other high-ranking officials.

That changed last week, when Estonian president Kersti Kaljulaid visited a newly renovated embassy in Moscow and stopped by the Kremlin for a cup of tea with Vladimir Putin.

In itself, the meeting does not carry much weight, as nothing crucial was said or done. But it sent the wrong message. Read more “Estonia’s President Sends Wrong Message Meeting Putin”

Baltic States Have Most to Fear from Trump Victory

Estonian prime minister Taavi Rõivas and NATO chief Anders Fogh Rasmussen deliver a news conference in Brussels, April 3, 2014
Estonian prime minister Taavi Rõivas and NATO chief Anders Fogh Rasmussen deliver a news conference in Brussels, April 3, 2014 (NATO)

For Eastern Europe and the Baltic states in particular, a Donald Trump presidency could be disastrous. The Republican has created doubt about whether or not the United States would honor NATO’s collective defense clause, Article 5, under his leadership.

Hillary Clinton, the likely winner on Tuesday, will have to ease Eastern European anxieties while at the same time supporting a genuine European defense policy that is based on a considerable hike in budgets. Read more “Baltic States Have Most to Fear from Trump Victory”

United States Deploy Artillery, Tanks to Eastern Europe

The United States will permanently deploy artillery and tanks in the Baltics and Eastern Europe, Ashton Carter, President Barack Obama’s defense secretary, announced on Tuesday in a move that is almost certain to upset their former Soviet master, Russia.

Vladimir Putin, the Russian leader, announced earlier that the country would add more than forty intercontinental ballistic missiles to its nuclear arsenal to offset NATO deployments in the east.

The deployments are meant to reassure NATO member states that joined the alliance after the Soviet Union collapsed in 1991. The three Baltic states, which have few armed forces of their own, have been especially unnerved by Russia’s aggression in Ukraine in the last year. Read more “United States Deploy Artillery, Tanks to Eastern Europe”

North Europe Deepens Defense Cooperation Against Russia

Defense ministers from eight Northern European countries agreed on Thursday to expand cooperation in order to counter an increase in Russian incursions of their airspace.

Meeting in Oslo, the ministers from the three Baltic states, Denmark, Finland, Norway, Sweden and the United Kingdom agreed to do more to share intelligence and widen cross-border air force training in the region. Officials from Germany, Iceland, the Netherlands and Poland also attended. Read more “North Europe Deepens Defense Cooperation Against Russia”

Estonian Border City Putin’s Likeliest Next Target

Tallinn Estonia
Tallinn, Estonia at night, January 25, 2013 (Mariusz Kluzniak)

After Russia’s annexation of the Crimea, the Moldovan breakaway region of Transnistria might seem the likeliest target for future Russian territorial claims. Indeed, the region, which, like the Crimea, has a majority ethnic Russian population, requested admission into the Russian Federation last week. In a 2006 referendum, 97 percent of Transnistrians voted to join Russia.

But Daniel Berman, a PhD candidate at the London School of Economics, points out at his blog that Russian annexation of Transnistria is actually unlikely. Whereas the Crimea was historically part of Russia and is separated from the country only by a narrow waterway, Transnistria shares no border with Russia. Rather it borders on the west of Ukraine — the very region that seeks deeper integration with the rest of Europe instead of Russia. Read more “Estonian Border City Putin’s Likeliest Next Target”

Lithuania, Poland to Revive Military Brigade with Ukraine

Polish Leopard tank
A Polish Leopard 2 tank takes part in a military exercise, September 27, 2006 (Ministerstwo Obrony Narodowej)

In response to Russia’s seizure of Ukraine’s Crimea, Lithuania and Poland agreed on Thursday to revive a joint military brigade with the country and deepen defense cooperation.

The three former Soviet satellite states agreed as early as 2007 to erect a multinational unit but efforts stalled in recent years. Russia’s invasion and annexation of the Crimean Peninsula, which headquarters its Black Sea Fleet and has a majority ethnic Russian population, prompted the countries into action. Read more “Lithuania, Poland to Revive Military Brigade with Ukraine”

The Curious Case of Estonia: Where Austerity Works

The Economist has a good story about tiny Estonia, which is turning out to be a textbook example of how austerity works to regain competitiveness and economic growth.

The small Baltic nation, which joined the euro this year, implemented “shock therapy” liberalization after the Soviet Union collapsed in 1991 — and prospered because of it before it felt the effects of the global economic downturn, starting in 2009.

Estonia maintains a flat income tax rate, low corporate taxes and few barriers to international investment and trade. It has performed particularly well in finance and information technology and built strong trade relations with Finland, Germany and Sweden. Read more “The Curious Case of Estonia: Where Austerity Works”

Is Austerity Failing?

In his latest New York Times column, economist Paul Krugman criticizes the “pain caucus” in Europe, notably the European Central Bank (ECB), for insisting that sound money and balanced budgets will somehow fix all of the continent’s fiscal woes. Austerity, he argues, is failing and American policymakers would be ill advised to repeat it in their own country.

Krugman’s column is unfortunately so filled with mischaracterizations and outright blunders that it is difficult to purely dissect his Keynesian alternative. In fact, he doesn’t offer much of an alternative to austerity at all except to suggest “debt reduction,” which means restructuring. He has traditionally championed stimulus though and blamed the “arrogance” of Europe’s policy elite for “pushing” the continent into adopting a single currency well before it was supposedly “ready for such an experiment.” Krugman then is no fan of the euro and hasn’t ever had much respect for Europe.

The ECB, writes Krugman this week, claims “that raising interest rates and slashing government spending in the face of mass unemployment will somehow make things better instead of worse” but only half of that statement is perfectly true. Frankfurt has been urging budget cuts but kept interest rates low at the same time not to make matters worse in the highly indebted eurozone countries of the south. Austerity, moreover, is not supposed to get people back to work directly. The point is to avert sovereign bankruptcy as would have happened in Greece and possibly Ireland without European support by restoring confidence on bond markets.

Krugman characterizes this as “belief in the confidence fairy — that is, belief that slashing spending will actually create jobs, because fiscal austerity will improve private-sector confidence.” That’s more accurate although budget cuts in themselves won’t create jobs. The private sector will if it has confidence in future growth.

But, “the confidence fairy hasn’t shown up,” writes Krugman. Case in point? Greece, Portugal and Spain where unemployment remains high. He is right but also disingenuous in pretending that those countries have fully implemented austerity measures yet — while not considering the nations that have. Read more “Is Austerity Failing?”

Cameron Brings Northern Europe Together

During a two day Nordic Baltic Summit, the British prime minister said that, “right across the north of Europe there stretches an alliance of common interests.” He believes Britain, Scandinavia and the Baltic nations can lead in European job growth and prosperity.

Political and business leaders from Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden joined Prime Minister David Cameron for the summit in London. There is much the countries have in common, he professed. Read more “Cameron Brings Northern Europe Together”