The Contradictions of Austerity 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 neoliberal post-communism, and the subsequent wider global economic and financial crisis in which these new open-market 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 free market solutions, not least in terms of the significant ‘exit’ of their labor forces Today ‘recovery’ appears to be on the horizon We look beyond basic financial metrics claiming a success story for the Baltic austerity model to reveal the damaging economic and social consequences, first of neoliberal 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 successful integration in the now-faltering wider European project Jeffrey Sommers is Associate Professor of Political Economy and Public Policy in Global Studies and Africology, and Senior Fellow of the Institute of World Affairs at the University of Wisconsin– Milwaukee Charles Woolfson is Professor of Labor Studies at the Institute for Research on Migration, Ethnicity, and Society (REMESO), Linköping University, Sweden Routledge studies in the European economy Growth and Crisis in the Spanish Economy, 1940–1993 Sima Lieberman Work and Employment in Europe A new convergence? Edited by Peter Cressey and Bryn Jones Trans-European Telecommunication Networks The challenges for industrial policy Colin Turner European Union – European Industrial Relations? 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individual chapters, the contributors The right of the editors to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988 All rights reserved No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data The contraditions of austerity : the socio-economic costs of the neoliberal Baltic model / edited by Jeffrey Sommers and Charles Woolfson pages cm Baltic states—Economic policy Neoliberalism—Baltic states Baltic states—Economic conditions—21st century Baltic states —Social conditions—21st century I ommers, Jeffrey William II Woolfson, Charles HC243.C66 2014 330.9479—dc23 2013043287 ISBN: 978-0-415-82003-5 (hbk) ISBN: 978-1-315-81297-7 (ebk) Contents List of illustrations List of abbreviations Notes on contributors Preface Foreword by James K Galbraith Introduction: the Baltics and the political economy of austerity JEFFREY SOMMERS AND CHARLES WOOLFSON Austerity, internal devaluation, and social (in)security in Latvia JEFFREY SOMMERS Stockholm syndrome in the Baltics: Latvia’s neoliberal war against labor and industry MICHAEL HUDSON Failed and asymmetrical integration: the Baltics and the non-financial origins of the European crisis ERIK REINERT AND RAINER KATTEL The Lithuanian labor market under the impact of crisis: the formation of the new austeriat ARUNAS JUSKA AND CHARLES WOOLFSON Balancing between exit, voice, and loyalty: labor market policy choices in Estonia MARKKU SIPPOLA Conclusion: the neoliberal Baltic austerity model against Social Europe CHARLES WOOLFSON AND JEFFREY SOMMERS Postscript: a very Baltic tragedy – the collapse of the Maxima supermarket in Riga, Latvia CHARLES WOOLFSON AND ARUNAS JUSKA Index List of illustrations Figures Labor productivity as a percentage of German labor productivity (1960–2007) Development of share of wages in gross domestic product (1995–2012) Per capita gross domestic product compound annual growth rate in world regions (1000–2012) Germany: share of profits and wages in gross domestic product (1995–2012) Greece, Spain, Portugal: share of profits and wages in gross domestic product (1995–2012) The Baltics: share of profits and wages in gross domestic product (1995–2012) Estonia: share of profits and wages in gross domestic product (1995–2012) Latvia: share of profits and wages in gross domestic product (1995–2012) Lithuania: share of profits and wages in gross domestic product (1995–2012) Dual labor markets in European Union core and peripheral countries Wages in public and private sectors in Lithuania (litas, 2005–12) Lithuanian government’s budget (billions litas, 2004–12) Bifurcation of the labor market in Lithuania Emigration, immigration and emigration rate (2003–12) Tables Baltic, Anglo-Saxon, and Scandinavian social protection and labor market institutions juxtaposed Employment, gross salary, and consumer prices in Estonia, Finland, and EU-27 Abbreviations BELL CEE CIS DDR EC ECB EMU ERM EU FDI GDP GINI GSP ICT IMF LAFTA LBAS LFMI LIZDA NAFTA NATO OECD PIIGS PPP SSE Riga US USSR VAT WTO WW II Bulgaria, Estonia, Latvia, and Lithuania Central and Eastern Europe Commonwealth of Independent States German Democratic Republic European Commission European Central Bank Economic and Monetary Union European Exchange Rate Mechanism European Union foreign direct investment gross domestic product measurement of inequality Greece, Spain, and Portugal information and communication technologies International Monetary Fund Latin American Free Trade Association Lithuanian Trade Union Confederation Lithuanian Free Market Institute Latvian Teachers Trade Union North American Free Trade Agreement North Atlantic Treaty Organization Organisation for Economic Co-operation and Development Portugal, Italy, Ireland, Greece, and Spain purchasing power parity Stockholm School of Economics in Riga United States Union of Soviet Socialist Republics Value Added Tax World Trade Organization World War II economic fluctuations 122; workers as individual profit-maximizers 131 U (Economic and Monetary Union) 66 nia: admission to eurozone 143; alternative pathway to sustainability 132; anti-socialist political climate 121; aspirations to join the euro 119; austerity programme 118; drug use 123; economic growth and recovery 118, 122, 125; economic shock therapy 118; emigration see emigration, Estonia; EU structural funding support 73; financial crisis 2008 118–119; GDP decline 73; GDP growth 7, 9, 73; government expenditure cuts 8; high quality goods 72; homicide rates 123; internal devaluation 118–119; loyalty and influence 132; monetarist policy 119; one-nation ideology 119; optimism of people 125–126; poverty growth 123; profit to GDP ratio 79; removing remnants of communism 119–120; social politics 121–123; social protection comparisons 122; taxation increases 9; tax revenue ratio to GDP 2012 26; wage falls 8, 8–9 nian Ministry of Social Affairs 123, 124 A (Trade Union of Estonian Commercial and Servicing Employees) 129 : currency devaluation option 142; Estonian entry into 143; financial structure of 65; internal devaluation 142–143; Latvian entry into 143; Lithuanian application to join 143–144; low-risk entrants 144; mortgages in Baltic states 142; redenominate loans into local currencies option 142 pe: Americanization of economic policy 4; credit creation 5; economic liberalism in 1980s 5; enlargement of 7; monetary union 5; see also Eastern Europe pean Central Bank (ECB): commercial borrowing from 53; debt serfdom 110; rigid monetary policy pean Commission (EC): praise for Latvia’s austerity programme 18; recommendations for Lithuania 99; responsibility for employment and industrial relations 146; rigid monetary policy 4; scoreboard of social indicators 145–146; Social Model 146 opean Eastern Enlargement as Europe’s Attempted Economic Suicide? 64–65 pean Industrial Relations Observatory 119 pean Regional Development Fund (ERDF) 96 pean Social Fund (ESF) 96 pean Union (EU): automotive industry 83; Common Market 65, 83; concerns for Latvian austerity programme 26; convergence of interest rates 65; debt serfdom 110; downward pressure on wage levels 82; economic integration 65; enlargement of 64–65, 82–83; greater national controls required 144; integration 65, 83–84; low-cost labor from Eastern Europe 89; members’ vulnerability to economic crisis 139; peripheries of 77–78; productivity of Southern European countries 69–70; promotion of austerity management 139; social peace in 66; Southern Europe learning capabilities 72; structural funds see Structural Funds; symmetrical integration 65; unravelling the euro single currency 144; welfare colonialism 82 zone: Estonian entry into 143; exploitation of Baltic states 51; Latvian entry into 143; Latvian opposition to joining 143; Lithuanian application to join 143–144; Lithuanian opposition to joining 144 hange Rate Mechanism (ERM) 66 ange rates: flexible 66 concept of 120 or-priced equalization 64 or-priced polarization 64 70 Robert, Prime Minister 55–56 nd 123, 124, 125, 126, 127, 129, 143 E (finance, insurance and real estate) sectors 58 l policy 53–55 ax 50–51, 54 : cost of production 59–60 es, Steve 50 production 75 onn 68 k, Andre Gunder hwater economics 4–6 uyama, Francis 139 ico Investment Limited 155 up poll: austerity programme 144–145 P: in Baltic states 7, 73; in Estonia 7, 9, 26, 73; in Latvia 7, 9, 18, 33, 73; in Lithuania 7, 9, 73; in United States 77 many: collaboration between labor, industry and government 138; labor productivity comparisons 69–70; low labor cost growth 71; public sector labor force 93; reunification 83; short-term gains from financial crisis 2008 141; wages to GDP ratio 78 alization: crisis of 107–108 manis, Aivars, Prime Minister 143, 145 ce: long-term unemployment 127; median at-risk-of-poverty-gap 123; overvaluing the currency 79; public sector debt 3; wages to GDP ratio 78 milton, Alexander 76 chman, Albert O 74, 120, 130 mburg Zolitūdē 155 meland Party 94 Latvia Came Through the Financial Crisis 19, 24 son, Michael 110 gary 56, 82, 93, 123 rtrophy 106 , Toomas 129 (International Monetary Fund): concerns for Latvian austerity programme 26; debt serfdom 110; praise for Latvian austerity programme 24–25; structural adjustment policies 25 rfect competition 64 ion: in democratic countries 66; irresponsible 66; in Southern Europe 66 malization of secondary labor market: favourable conditions for FDI 98; flexibilization measures 99; ‘from above’ 98; ‘from below’ 98, 100; illegal income 101; informal economy 98, 100, 100–101; insecurities and vulnerabilities of private sector workers 101; low-wage economy 100; minimum wage increase 100; narrowing of formal job rights 98; private sector income 101; rewriting of labor contracts 100; trade unions undermined 99; undeclared work 100 national Monetary Fund (IMF) see IMF national Organization for Migration (IOM) 104 national trade theory 59–60 nd 123, 127 nskas, Gintaras 154 economics 59–60 mala 52 as, Toomas 162 ins, Arvis 159 mpars, Artis 161 konen, Urho 55, 138 nesian economics ovskis, Rihards 158 gman, Paul 142 158 : anti-labor tax policy 60; bearing burden of austerity 2; flat tax in Latvia 54; productivity in European periphery 69–70; taxation on 54 or Code (Lithuania) 99 market, Estonia: acquiescence of workers 127–128; alien’s passports 129; consumer prices rising 124, 125; deteriorating conditions of Russian-speaking workers 128–129; employment rates 123–124; gross average monthly salaries 124; ideal market conditions 125; limited trade union influence in 129; living conditions falling 125; Russian minority in 128; subject to economic circumstances 130; unemployment trends 124, 127; wage falls 125; wage increases 124–125; wages in public and private sectors 125; workers commuting to Finland 124 market, Lithuania: beginnings of rupture 88; bifurcated 87, 89; Communist Party involvement in privatization 88; emigration increase 79, 89, 92, 105, 106–108; financial crisis 2008 88; fragmentation of 89; median hourly wage in 88; poverty level increases 88; primary sector see primary labor markets, Lithuania; private sector wages 95; privatization of 88; public sector jobs 95–96; public sector stability 94; public sector wages 95; realization of normality of austerity 89; secondary sector see secondary labor markets, Lithuania; trade union demonstrations 90; unemployment 94; unsustainable credit boom 88; wage declines 88 arde, Christine 3, 25 der 83 dsbergis, Professor Vytautas 87, 112 n America: evaluations and defaults on debt 66 ia: 2010 census 31; absent protest narrative 18–19; agricultural exports recovery 36; austerity measures 18, 24, 26; bailout funds 18, 24, 34, 56; balance-of-payments task 58–59; banking sector recovery 33–34; birth rate decline 31; break from Soviet rule 17; business deregulation 165; carpetbaggers 23–27; central bank philosophy 53; credit extension in foreign currency 52; debts to foreign banks 60; easy credit 29; economic contraction following financial crisis 2008 44, 46; economic development neglect 37–38; education cuts 30–31; elections 21–23, 57; emigration increase 27, 31, 46–47, 79; ethnic Russian population 22; eurozone entry 143; EU structural funding support 73; exemplar economic model 32; export increases 33; farmers’ protests 19; FDI inflow 34; fish canneries 140; foreign banks dependence and support for 44, 45, 52, 55, 56; forestry recovery 34–35; formal press freedom 21; gas price rises 29; GDP falls 18, 73; GDP growth 7, 9, 33, 73; Georgetown Gang 25; global accolades for austerity programme 17, 18, 24; government claims of people’s support for austerity 21; government expenditure cuts 8; grain exports 35; healthcare cuts and protests 19–20, 30; history of 17; homicide rates 123; income inequality 28; independence 17; industrial credit 54; infant mortality rates 28; innovation ranking in Europe 36; interests aligned with creditors 51; internal devaluation 25; investment decreases 31–32; land map 54; Laval un Partneri episode 6–7; long-term unemployment 127; macroeconomic policies 25; manufacturing recovery 35–36; mass protests against austerity measures 19; Maxima supermarket tragedy see Maxima; Maxima supermarket tragedy; mental health disorder increases 28; money laundering 34; neoliberal economic design 50; new construction laws 164; offshore tax havens 141; oligarchs 21; Parex crisis 24, 33–34; political crisis 23; political parties 22–23; polls opposing entry into eurozone 143; post-Soviet economic profile 52; poverty increases 27–29; profit to GDP ratio 79; property and mortgage holders 26; protests’ dwindling in size 20; public sector expenditure cuts 46; redistribution of wealth 27; relative freedoms of people 21; reorienting economy towards Western Europe 50; Russian economic linkages 52; sacrificing national economic interests 44, 45, 51; serving the banking sector 24; social infrastructure cuts 30; social protection spending 29; suicide rates 28; taxation 9, 26–27, 47–48, 54, 60–61; tax revenue ratio to GDP 2012 26; tax shift alternative 60–61; teachers’ protests 19; tent city protest 20; transport system recovery 37; unemployment growth 9, 32, 46, 127; unproductive loans 53; violation of basic economic principles 58; wage falls 8, 8–9; wheat price rises 37; wood processing industry 140 ian Confederation of Free Trade Unions 20 ian Free Trade Union Confederation (LBAS) 19 ian Teachers Trade Union (LIZDA) 19 al un Partneri bergs, Aivars 23 al capitalism: collapse of negotiation between labor and capital 138; dictatorship of capital 139; end of history theory 139; see also capitalism; working classes Jürgen 129 oln Land Erste 155 on Treaty 5, 53, 141, 144 Friedrich 76 uania: administration and allocation of Structural Funds 96, 97; anti-crisis measures 90; aspirations of middle-income young people 91–92; austeriat 106–108; birth rate decline 108; circulation of elites 97; competing with Chinese exports 109; dependence on EU transfers and overseas remittances 97; ‘double deficit’ impact 92; education system 102, 103–104; emigration increase 79, 89, 92, 105, 106–108, 111–112; EU-financed nomenklatura 97; eurozone application 143–144; eurozone opposition 144; EU structural funding support 73, 105; export increases 109; financial crisis 2008 88; GDP decline 73; GDP growth 7, 9, 73; government expenditure cuts 8; high-value added industrial production 93; hypertrophy of the public sector 106; independence movement 87; influx of EU money 95–96; Labor Code 99; labor market see labor market, Lithuania; profit to GDP ratio 79; protesters attack parliament 90–91; public sector expenditure 94; public sector reform 94; riot police battles with protesters 90–91; social and political fragmentation of wider society 87; social protection bureaucracies 93–94; social protection provisions 92; Structural Funds increases and receipts 97; students’ desire to study abroad 103; suicide rates 123; taxation increases 9; trade union demonstrations 90; university enrolment 103; wage differentials 106; wage falls 8, 8–9; winners and losers 91–92 g standards: attack on 2; in Baltic states s: productive 53; unproductive 53 of action: definition 121 of appropriateness: definition 121 of exchange: definition 121 ty, concept of 120 stricht Treaty 4, 5; criteria (fiscal and inflation targets) and rules: 18, 64, 73, 141–142 uila workers 72 x, Karl 138 ima: compensation agreements 155; complaints about abuse of labor force 156; construction faults with other supermarkets 163; corporate culture 154, 156; lack of employee voice 156; ownership of supermarket building 155; pampers for check-out staff 157; responsibility for supermarket tragedy 155; safety crime 149, 157; sales 154, 156; size of 153, 153–154; stores and employees 154; toilet breaks for employees 157 ima supermarket tragedy: alarm signals ignored 152; check-out points 152; collapse of roof 151, 153; competitive tendering bidding process 163; construction industry regulations 160; construction work 151–152; corporate manslaughter 159; criminal investigation by authorities 158–160, 162–163; development of store 151; driving out smaller retail competition 151; evacuation procedures ignored 152; exemplar of limitless access to goods 151; fall of government 151; fire exits blocked 152; lack of corporate criminal accountability 150; liquidation of state regulatory institutions 160–161; loss of lives 151; new construction laws 164; public enquiry into 162; roof collapse incidents elsewhere 163; safeguard of merchandise from theft 152; safety crime 149, 157; suggestions of collusion between government and construction industry 161–162; supermarket chain 151; survivors 153; underdeveloped legal system 159 ico 70; maquila workers 72 , C Wright 97 e, Richard 46 stry of Education (Lithuania) 103 ky, Hyman 7071 errand, Franỗoise chau, Wolfgang 75 onal Sciences Awards (Lithuania) 103 onal Tripartite Council 20 ns: acting in self-interest 49 ssary production costs 54 TS (not in employment, education, or training) 146 way 79, 94 mavičius, Nerijus 154, 155 hore banking/money xvi, 7, 12, 33–35, 38, 52, 61 nizations: logic of action 121; logic of appropriateness 121; logic of exchange 121; schools of study of 120–121 sa 105 guay 66 x crisis 24, 33–34 alkis, Dainius 105 kur, Hanno 130 GS 10, 24, 56, 110 nd 29, 56, 75, 82, 84, 144, 153 zi scheme 65–66, 66, 71 ugal: wages to GDP ratio 78 ed Workers Directive 6–7 AE 155 ariat 107 ary labor markets: corporate segments 92; in developed countries 89, 92; in developing countries 89 ary labor markets, Lithuania: austeriat 106–108; austerity policies’ impact on 87; beginnings of 88; bureaucratic enclosure 97–98; Communist legacy 93; emigration increase 79, 89, 92, 105, 106–108; employers’ aim to reduce wages and terms 106; employment in public sector 92–93; jobs and social sciences qualifications 105; job security in public sector 106; middle-class aspirations to join 91–92; part-time and insecure workers 107; patronage of public sector 104; precariat 107; profits of businesses 106; protection of 88–89; scarcity of private sector jobs in 93; size of public sector 93; social reproduction of 101–105 itivization 64 ma 129, 133n1 erty taxation 9, 26, 48, 54, 58, 61 ic Security Service (PSS) 90–91 e, Juris 161–162 epp, Elle 129 mond, Daniel 76 &RE 158, 162 gan, Ronald 4, 5, 14n2, 50 : charges 54; economic 48, 49, 54, 55; monopoly 48–49 ort on the Manufacturers 76 se, Einars 25, 26, 160 rdo, David 67–68 City Council 161 Construction Supervision Department 161 Technology University (RTU) 158, 162–163 tragedy see Maxima supermarket tragedy 156 sevics, Ilmars 25 ia: Baltic history, xv, 10, 17, 47, 50; ethnic divide and politics, 12, 21–25, 57, 61, 62, 119, 127–129, 133n3, 151, 161; emigration 118; homicide rates 123; suicide rates 123; trade and offshore money, 29, 33, 36, 37, 39n12, 52, 56, 58; use as political diversion, 10; violence and crime rates 123 ovskis, Toms 158 y crime 149, 157, 165 anas Centrs (Harmony Center) party 22–23 ndinavia: collaboration between labor, industry and government 138; joining the EU 69; labor productivity in 69–70, 70 umpeterian dynamics 64, 65, 67, 70, 72 70 ndary labor markets: in developed countries 89; in developing countries 89 ndary labor markets, Lithuania: austerity policies’ impact on 87; beginnings of 88; informalization of 92, 98–101; pauperization of 88; private sector job insecurity and low wages 106; slow jobs growth 105 ola, M 111 eris, Atis 20 akia: long-term unemployment 127 enia 123 h, Adam 139 S quick loan industry 29 al democracy: alternative to communism 138; social compact with the working classes 138 al Europe 1, 36, 38: epitaph 144–145; idea of 145; incompatible notion of 5; lack of wage floors and minimum worker protections 7; liberalization and integration of European economies 2, 4; redesign of the EU project 147; social dimension 145; transference of model al Model 1, 4, 5, 11, 14, 36, 142, 145, 146 al reproduction of primary labor market: brain drain 103; generalized skills required for 103–104; public sector employment aspirations 102; public sector patronage 104; scrutiny of education system 102; shortage of skilled workers 101–102; shortage of technology sciences students 102, 103; students’ aspirations to study and work abroad 103, 104; students’ preference to study social sciences 102; university enrolment 103 mers, Jeffrey 110 hern Europe: definition 84n2; inflation in 66; learning capabilities of 72; productivity of 69–70 et Union: Baltic history/occupation/independence from, xv, 10, 12, 17, 19, 22, 23, 25, 27, 57, 87, 91, 118, 119, 121, 127–129, 138, 140, 150–151; collapse in Baltics, 6, 13, 33, 45, 50; Post-Soviet institutions, xvi, 30–32, 93, 103, 138–139; Soviet economy, 34–38, 52, 54–56, 58, 61, 65, 70, 83, 88 alstaat 121 n: long-term unemployment 127; median at-risk-of-poverty-gap 123; overvaluing the currency 79; symmetrical integration 83; transition help from EU 72; wages to GDP ratio 78 ding, Guy 107 kevičius, Ignas 155, 157 e Construction Supervision Bureau 164 e Labor Inspectorate 156 socialism 93–94 stics Estonia 129 nerte, Inara 162 ouis (USA) 77 kholm School of Economics in Riga 29 kholm syndrome: meaning of 51 ngthening the Social Dimension of the Economic and Monetary Union 145–146 ctural Funds: Baltic real estate market 7; ERDF 96; ESF 96; funds to Lithuania 96–97; long-term investments 71; purpose of 96; recycling capital 5; redress of productivity imbalances 141; support for Baltic states 73 cs, Dr Aivars 158 dbanka 24 den: median hourly wage in 88; preservation of banking system 24; public sector workforce 94; trade unionism in metrical integration: European integration through 1980s 67; integration of European South 65; single market creation 70; in Spain 83 as Fronte (National Front) party 22 avoidance/tax dumping 7, 12, 34, 38, 141–142 ion: classical fiscal policy 53–55; on economic rent 54, 60; flat tax 54; increases in 9; on labor 54, 60; in Latvia 9, 26–27, 47–48, 60–61; property 54; pro-rentier tax cutters 54; reforms 60–61; shifting from labor to rent 48 cher, Margaret 5, 50 A (there is no alternative) 57 o 155 national mercantilism 75 sparency International, Latvia 162 aine 56, 123 n of Greens and Farmers 23 ed States of America (USA): expansion of debt 5; freshwater economics 4–6; GDP composition 77; issuer of world’s reserve currency 4; prototype of successful developmental state 76–77; wages to GDP ratio 78 cessary production costs 54 akov, Nils 161 ininkija 94 s, Valdis 19–20 spils 52 nonian life-cycle 70 otiba (Unity) party 23 nins, George (Juris) 25 aus Prekyba (VP) see Maxima us 90–91, 105 e, concept of 120 a, Inese 162 94 swagen 70 e dumping 6–7 es: in Baltic states 73, 79; disparity with increase in profits 106; in Germany 78; in Lithuania 88, 95 hington Consensus 50–51 are colonialism 72, 82 , Martin 67 king classes: degraded working environment in Baltic states 139–140; ideological alternative to unrestrained capital 138; immiseration of 139; new austeriat 139; social compact with capitalist order 138; see also capitalism; liberal capitalism ld Bank 97 ld Health Organization (WHO) 97 ld Trade Organization (WTO) 66 dē 151 ... Esposito The Contradictions of Austerity The socio- economic costs of the neoliberal Baltic model Edited by Jeffrey Sommers and Charles Woolfson The Contradictions of Austerity The socio- economic costs. .. from the British Library Library of Congress Cataloging-in-Publication Data The contraditions of austerity : the socio- economic costs of the neoliberal Baltic model / edited by Jeffrey Sommers. .. populations of the ‘New Europe.’ The Baltic states reveal not just the contradictions of austerity, but the underlying contradictions of the current project of European integration itself Freshwater economics