LiU professor in the New York Times
Short-term stabilisation, but at what cost? This is the question asked by Charles Woolfson, professor at REMESO, in the New York Times article on the harsh measures the Lithuanian government were forced to implement to face the rising budget deficit that threatened to bankrupt the country.
In the shadow of the Greek turbulence Lithuania has quietly implemented one of Europe's hardest savings programmes. Anyone who would like to see what austerity really looks like should pay a visit to this Baltic country writes the New York Times in its April 1st edition. The article then goes on to give an account of the Lithuanian savings measures.
Civil servants' salaries were reduced by up to 30 percent, taxes were increased and pensions were reduced by 11 percent. By doing this Lithuania managed to reduce its public spending by 30 percent and regain credibility on the international credit market.
But the price is high. Ever growing queues at soup kitchens, soaring unemployment and a shrinking economy are perhaps the most visible effects. The number of suicides, which were already among the highest in the world, have also increased.
“The internal devaluation strategy may have succeeded in delivering short-term stabilisation, but at what cost?” asks Charles Woolfson in the article. He is Professor of Labour Studies at REMESO, the LiU Institute for Migration, Ethnicity and Society.
He also pointed to the great wave of emigration from Lithuania in the wake of the crisis. Many emigrated when Lithuania joined the EU in 2004, however this is different.
“Then it was the migration of the hopeful, now it is the migration of the despairing.” says Charles Woolfson.
The article in full can be found at:
Last updated: 2010-04-15