Half a continent away from Athens, Milda is unimpressed. Watching reports of the Greek predicament on the news, the Latvian pensioner has little sympathy for her counterparts 1,800 miles to the south.I remember being in Poland in 1996. The Poles thought that their long term prospects were better than those of the former East Germany. I asked why, and they told me "Because we know that we have to do this for ourselves. Nobody is going to help us out."
“Can’t they get by on €120 a week?” she asks, referring to the latest cash limits on pensioners introduced in Greece. “Life’s less expensive down there. It’s warmer, they don’t have to pay for heating or winter boots, and fruit and vegetables must be cheaper.
From central European minnows such as Slovakia to Baltic eurozone republics such as Latvia and Lithuania, hard-pressed pensioners and workers earning barely €500 a month are at a loss as to why Greece should qualify for more largesse.
Milda’s monthly pension is €293 a month , well under half the current level in Greece. When Latvia went through a similar debt crisis in 2009, it imposed swingeing budget cuts and tax increases worth about 15% of GDP over three years. Output fell by a quarter and unemployment soared to more than 20%. The population fell as people left in droves.
These measures were hugely controversial at the time, and many people thought they would lead to catastrophe. The US economist Paul Krugman predicted at the end of 2008: “Latvia is the new Argentina.”
By the second half of 2010, however, the economy had started to grow again, and from 2011 to 2013 Latvia was among the fastest growing countries in the EU. Despite the fact that the currency was not devalued, exports are now at record highs, some 60% above where they were before the crisis.
A couple days ago, ASM826 posted about the implosion of K-Mart. It's so bad that they're starting to look like Venezuelan supermarkets:
There was an old saying in Africa, back during the Cold War. If the ruling elites wanted their kids to grow up to be socialists, they would send them to university in Paris. If they wanted them to grow up to be capitalist, they would send them to university in Moscow.
Basic needs of the people are not being met in the South American country where socialism is in full effect. There have been shortages of toilet paper and diapers, people have to wait in line to pay over $700 for a condom, and most recently the government is asking for a share of produce from shopkeepers following a food crisis.