By Olga Marie Brathaug
In Europe, unemployment is increasing. But in the Baltic states unemployment has gone down as a result of tough economic measures introduced after the financial crisis in 2008.
Compared with a year ago, unemployment has increased in twenty EU countries and has fallen in seven of the twenty-seven Member States. The average EU unemployment rate was 10.7 percent in December 2012. The largest decreases were in Estonia, Latvia, and Lithuania. The highest increases were registered in Greece, Cyprus and Spain.
According to the latest official Eurostat statistics, the Estonian economy grew by nearly 8 percent from 1011 to 2012, while growth in Latvia and Lithuania were over 5 and 7 percent, respectively. The latest Eurostat figures show that unemployment in the Baltics is declining fastest within the EU, but it´s still high, between 12-15 percent in the Baltic States.
The numbers are almost too good to be true, but conditions are getting much better in the Baltics. The economic downturn was very deep, but the crisis was short, says Morten Hansen, an economics professor at Riga office of the Stockholm school, according to Norway´s leading daily newspaper Aftenposten.
The Baltic countries have tied their currencies to the euro. They could not devalue their way out of the crisis. Instead, they enforced a brutal diet, the toughest one in Europe. Hospitals and schools got shut down. A third of all public employees were fired. Wages in the private and public sectors were shaved, like pensions and benefits.
Salaries have been cut, costs reduced and the economy has been reformed. Southern Europe has barely started this process, says Hansen to Aftenposten. Exports have increased substantially and are now higher than before the crisis and account for 60-80 percent of GDP in the Baltic States.
61% of Latvian exporters are planning to increase exports this year by 4% compared to last year. This was determined in the ongoing Citadele Index study that is conducted by the Citadele Bank and the SKDS public opinion research firm.
53% of Latvian company export managers companies say they expect an increase of up to 10% in exports this year.
Business people are far more cautious about export growth volumes this year than they were last year, but the total number of companies which are planning to boost exports is gradually increasing, says Citadele Bank board member Santa Purgaile to OREANDA-NEWS, newspaper in Riga.