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This article reflects on the European Court of

This article analyses the 2008 economic crisis and its outcomes for the Baltic states. It locates the causes of the crisis in the slow economic growth that began just prior to the demise of the Bretton Woods system in the 1970s. This article then gives a genealogy of European economic policy responses to the crisis, tracing them from the emerging 'freshwater' school of economics (e.g., University of Chicago, et al.) that arose in opposition to Keynesian theory. The more immediate cause of the 2008 crisis, long in the making, was its reliance on private debt to sustain economic demand in lieu of profit enhancing wage suppression. Following the 2008 financial shock, EU policymakers crafted policy that placed the burden of adjustment on labour. A program of austerity was chosen in much of the EU, at odds with the post-war European 'social model'. This represented a retreat from the notion of a European project that encouraged liberalization of economic policy but at the same time could be harmonized with a social dimension to create a distinctive 'Social Europe'. Nowhere was this austerity more vigorously applied than in the Baltic states. Its effects are examined here, along with lessons to be derived from that experience.

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