Resentment in the Baltics

Like everywhere else in Europe, Greece has been dominating the headlines on Latvian television for the last few months. A news presenter explains that the harsh economic conditions under which the Greek people now live are not a surprise to Latvians, who until recently lived under similarly strict austerity rules.

During the global financial crisis, the Latvian economy went from boom to bust in the space of nine years. Latvia then received an international bailout in exchange for severe austerity measures and structural reforms. Wages and pensions were slashed, thousands of people were made redundant and unemployment soared.

After swallowing the bitter pill of austerity, the economy is finally growing again and Latvians have mostly put the tough times behind them. But the Greek crisis is bringing back some bad memories.

Widespread resentment

One man on the streets of the capital, Riga, believes that the Greeks will never be able to do what the Latvians did. He expresses the prejudices which many people hold in Latvia.

"Greek people don't want to work. It's warm there and they don't want to make an effort. It's just not in their nature," he said. "It's warm all the time and they don't have to buy winter tires for cars. Greeks don't need fur coats and they don't have to pay for heating."

This attitude is fairly prevalent, as a female passerby confirms.

"I think that Greeks have to face up to the challenges that we experienced. They have to tighten their belts," she said. "I suffered during the crisis, too, and they have to accept the situation. I did, life goes on."

Many Latvians genuinely don't understand what the Greeks have to complain about. "I think they're used to the good life and generous benefits," said another Riga resident. "I heard Greek pensioners complaining on the news that their pension was 2,600 euros ($2,816), but now it's 1,300. Well, 1,300 euros! If you compare that to our pensions of 300 and 400 euros - well, judge for yourselves!"

And it's not just the average man or woman on the street who think like this. Latvian politicians are also resentful. Among them is Andris Vilks, the country's former finance minister, in office during the austerity drive. Vilks told Latvian Television recently that the Greeks have a populist government that just doesn't want to do anything.

"The situation is red-hot. Everybody wants to help, but I think that the level of tolerance towards Greece is too high," he said. "Well, at any rate, it's not accepted in the Nordic and the Baltic countries because it's too brutal, what the Greeks are doing. It's real cheating. I would even say that it's very brutal cheating, typical of the east."

'Tighten your belts'

The financial crisis hit the Baltic states after the collapse of the Lehman Brothers investment bank in America in 2008. Banks stopped lending and Latvia suffered the deepest recession in Europe at that time.

"The recession in Latvia lasted for eight quarters - two years exactly," explained Morten Hansen, the head of the economics department at the Stockholm School of Economics in Riga. "People don't think about that so much perhaps, but it's been over for about five years now. Basically all these austerity measures, they were so-called 'front-loaded.' So they hit almost at once, starting in the summer of 2009.

"It meant that the downturn was really sharp and caused a lot of people deep suffering. There is absolutely no doubt that things were very tough here. That is one major reason for the differences of opinion towards austerity in Latvia and Greece."

Hansen admitted that Latvia was in big trouble because the government spent too much money when times were good. Greece, he said, is in trouble for the same reason, but its government spent even more money over a much longer period of time.

Hansen said that Latvians, Estonians and Lithuanians see themselves as Europeans and they would do almost anything to remain in the European family. But, he wonders whether deep down the Greek people really have that same feeling of belonging to Europe, and that makes him question whether they are really committed to staying within the eurozone when push comes to shove.