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39                   Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 
ISSN 2562-8429 

 

 

 

 

 
 
 
 

The Baltic States: Keeping the Faith in Turbulent Times1 
 

Vello Pettai2 
 University of Tartu 

 
 
 
Abstract 
As the Baltic states commemorated the centenary of their first appearance as independent states in 
2018, their celebrations were mixed with feelings of ambiguity about the road travelled since then. 
Although today we often see Estonia, Latvia, and Lithuania as 'post-communist' countries, their 
experience with communism was actually much harsher than in Central Europe, since, for nearly 
fifty years, the three countries were forcibly a part of the Soviet Union. This has made their journey 
back into the European community all that more remarkable, and it has also served to keep these 
countries somewhat more resistant to the dangers of democratic backsliding. After all, their 
continued independence and well-being are intricately dependent on keeping the European liberal 
order intact. Nevertheless, the winds of populism have also begun to buffet these three countries, 
meaning that they have been struggling to keep their balancing act going. This article reviews the 
development of the Baltic states over the last 20 years, both in terms of domestic politics and EU 
accession and membership. It profiles the way in which the three countries have been trying to 
keep their faith in democracy and liberalism alive amidst ever more turbulent political and 
economic times. 
 
  

                                                      
1 Research for this article has come from the European Union’s Horizon 2020 research and innovation programme 
“POPREBEL: Populist rebellion against modernity in 21st-century Eastern Europe: neo-traditionalism and neo-
feudalism” under grant agreement No. 822682. The publication reflects only the author's view and the EC is not 
responsible for any use that may be made of the information it contains. 
2 Vello Pettai is Professor of Comparative Politics at the University of Tartu.  



40                   Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 
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Introduction 

It is difficult to begin this manuscript without a personal disclaimer. On September 14, 2003, I 
went to a cinema in Tallinn to see the recently released and widely acclaimed movie about life in 
post-communist eastern Germany, Goodbye Lenin. As I walked out of the theater reflecting on my 
time warp back to 1989-1990, I looked around at the sparkling glass high-rises in the downtown 
area and the trendy shops doing a bustling business on the retail floors. I walked calmly to a nearby 
taxi stand offering a row of freshly branded KIA sedans. I climbed into the first car and asked the 
driver to take me to a school in my residential part of town. When I reached the school and entered 
its gymnasium, I seized the ballot being handed to me by the electoral official and proceeded to 
vote a resounding “Yes” to European Union accession.  

In this respect, I am complicit in the broadscale change that will be recounted in this article about 
political, economic, social, and foreign policy developments in the Baltic states since 2004. I am 
not only one who helped make the decision whether to join the EU or not, but also one who laid 
the groundwork for that transformation by living in, and commenting on the politics of, the region, 
going back to before re-independence in 1991. Had I known at the time that it would all go so 
(relatively) fast, I wouldn’t have made some of my more hesitant predictions about how quickly 
the Baltics might emerge from their “post-Soviet” shadows. Had I known how quickly I would 
hold in my hand an electronic ID card with which I could cast future electoral votes via the internet 
from practically any corner on Earth, I would have been less distraught over how long it would 
take to overcome Soviet bureaucracy. Had I been able to imagine Baltic soldiers serving in 
Kosovo, Lebanon, or Mali as part of international peace-keeping missions, I might have been more 
visionary about how geopolitics might evolve. 

None of this is to say that what has evolved in the Baltic states has been uniquely positive and 
successful. But it is to take advantage of the benefit of time – not only since 2004, but also going 
back another 15 years – in order to place into context some of the events and processes we might 
meanwhile have started to treat with a self-evident presumption. When I was first asked to 
contribute to this retrospective on EU accession 15 years ago, my mind went back immediately to 
that sunny autumn day in Tallinn, and I knew that this article could not start with just a standard 
introduction. From here, however, it will proceed in the more conventional manner. Namely, it 
will provide a general overview of political development in the Baltic states over the last two 
decades. Thereafter, it will recall some of the main aspects of the pre-2004 accession process. 
Third, it will devote a lengthier section to a discussion of the Balts’ experience with membership 
since 2004. And lastly, it will enumerate some future challenges for the Baltic states, both as 
nations and as member-states in the European Union. The title of the article is meant to capture 
some of today’s uncertainty that arguably is felt in particular by the Baltic peoples. These countries 
have in many ways come the farthest of any of the “new member-states” – all the way from behind 
the walls of the Soviet Union. Yet, is their faith in the European project that much stronger, or will 
it, too, erode amid the current period of turmoil? 

Political development 

The political development of the Baltic states since re-independence in 1991 has seen a fairly 
steady progression toward consolidated democracy. All of the three major indices of democracy 
that go back to the early 1990s (Freedom House, Polity, and Varieties of Democracy) show the 
three states having already attained a solid level of electoral democracy by 1994. The protection 



41                   Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 
ISSN 2562-8429 

 

 

 

of civil liberties, rule of law, and judicial independence has also been good, with more specific 
databases such as “Nations in Transit” or V-Dem’s Liberal Democracy index showing consistent 
adherence to the norms of liberal governance. Even during the last five years, the countries have 
remained firmly in this camp with no signs of the backsliding seen in some other regional 
countries.  

Constitutionally, of course, the countries are different, with Estonia and Latvia sticking to 
parliamentary regimes and Lithuania opting for a semi-presidential form of government. Neither 
regime has proven particularly problematic, although Lithuania did undergo an ordeal in 2004, 
when Parliament decided to impeach and then remove from office President Rolandas Paksas for 
abuse of power. 

The three states’ party systems have also evolved in slightly different directions. Figure 1 shows 
the effective number of electoral and parliamentary parties – a measure meant to capture not only 
the direct number of parties, but also their proportional weight. In the early 1990s, we see that 
Lithuania started with the most consolidated party system, anchored very much upon an anti-
communist vs. ex-communist cleavage. Nationalist politicians organized around the Homeland 
Union confronted former communist leaders from the Lithuanian Democratic Labor Party. But 
over the last 15 years, this configuration has become more fragmented, with a series of protest 
parties emerging and sometimes also disappearing. During this same time, Estonia and Latvia 
gradually reduced their number of parties, with Estonia actually reaching a point in 2011 where 
just four parties were elected to Parliament. But, since 2010, Latvia has shown a renewed trend 
toward fragmentation. Not only have protest parties emerged more forcefully, but also various 
centrist parties (such as the once-powerful Unity Party) have splintered. 

Figure 1: Effective number of electoral and parliamentary parties in the Baltic states 

 
In Figure 2, we look, therefore, at an additional metric that has been called ‘party system age’ 
(PSA) (Kreuzer and Pettai 2013). PSA attempts to assess how much a given party system has been 
perturbed over the years by organizational changes in parties, including the formation of electoral 
alliances, mergers, fissions, and new parties. The argument is that, not only does the relative 
electoral strength of parties matter, but also whether they are durable organizations that remain 

2

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92 96 00 04 08 12 16
Election year

Lithuania

Data source: Baltic electoral data; own calculations

Eff. nr. electoral parties Eff. nr. parliamentary parties



42                   Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 
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committed to a brand and imply accountability. Using this measure, we see that Latvia and 
Lithuania have had particular difficulty in consolidating a consistent set of political parties, while 
Estonia has had more success in this realm.  
 
Figure 2: Party system age in the Baltic states 

 
Some of this party fragmentation has also translated into lower levels of cabinet duration. As 
Figure 3 indicates, the first cabinets that have come together after a parliamentary election have 
lasted the least amount of time in Latvia – on average just 372 days, or barely a year. Overall, the 
highest average first-string cabinet duration is in Estonia (739 days). However, Lithuania has been 
steadily mounting in this category, being the only country in the Baltics to have had a cabinet 
survive the entirety of a parliamentary term (Algirdas Butkevičius, 2012-2016). 

 
 
 
 
 
 
 
 
 
 
 
 
 



43                   Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 
ISSN 2562-8429 

 

 

 

Figure 3: Average cabinet duration in the Baltic states, 1992-2019 

 

A fourth interesting point of reference concerning political development in the Baltic states relates 
to the ideological orientation of their governments. Drawing on the ParlGov dataset (Döring and 
Manow 2019), we can calculate the weighted left-right orientation of each Baltic government and 
plot these values in Figures 4-6. We can see that, whereas Estonia and Latvia have been led 
predominantly by right-wing governments (with values above the midpoint of 5), Lithuania has 
followed a more alternating path, switching between right- and left-wing cabinets. Moreover, the 
general ideological tilt of Estonia and Latvia is more to the right, with the few truly left-wing 
parties being more isolated or relatively moderate. 
 
 
  

739

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Estonia Latvia Lithuania

1st string 2nd string 1st string 2nd string 1st string 2nd string

  1st string = first cabinet formed after a parliamentary election
     2nd string = all subsequent cabinets before a new election
Data source: Döring and Manow (2019), author's own calculations



44                   Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 
ISSN 2562-8429 

 

 

 

Figure 4: Left-right orientation of cabinets and opposition in Estonia, 1992-2019 

 
Figure 5: Left-right orientation of cabinets and opposition in Latvia, 1992-2018 

 
Figure 6: Left-right orientation of cabinets and opposition in Lithuania, 1992-2018 

 

1

2

3

4

5

6

7

8

9

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 Legend: Left-right orientation of each party in cabinet & opposition weighted by its proportional
size in the cabinet/opposition. Data source: Döring and Manow (2019), author's own calculations

1

2

3

4

5

6

7

8

9

10

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Government Opposition

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 Legend: Left-right orientation of each party in cabinet & opposition weighted by its proportional
size in the cabinet/opposition. Data source: Döring and Manow (2019), author's own calculations

1

2

3

4

5

6

7

8

9

10

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 Legend: Left-right orientation of each party in cabinet & opposition weighted by its proportional
size in the cabinet/opposition. Data source: Döring and Manow (2019), author's own calculations



45                   Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 
ISSN 2562-8429 

 

 

 

A final hallmark of political development for Estonia, Latvia, and Lithuania has been their overall 
success in ensuring good governance (Vilpišauskas 2014). As measured by the Bertelsmann 
Transformation Index (2018), the three countries have remained near the top 15 countries in the 
world in terms of their governance performance (with Estonia consistently placing among the top 
five) (Figure 7). While corruption is still often cited as a problem (particularly in Latvia and 
Lithuania), the countries’ scores on this indicator have improved noticeably over the last decade. 

  
The main focus of concern for the Baltic states has been ethnic politics, with Estonia and Latvia 
facing the most challenges given their sizeable Russian-speaking minorities.3 After 1945, these 
populations had grown significantly, thanks to Soviet policies encouraging Slavic migration to the 
Baltic region. By the late 1980s, Russian speakers amounted to some 35-40 percent of the 
population in Estonia and Latvia.4 Although in recent years these proportions have fallen (to 27 
percent in Estonia and 30 percent in Latvia), the risk of ethnic tensions has remained an ever-
present danger, not only internally, but also geopolitically, vis-à-vis Russia.  
 
In particular, Estonia and Latvia drew sharp criticism for adopting stark legislation in 1991 that 
denied automatic citizenship to Soviet-era settlers, as well as to their descendants (even if they 
were born in the republics). While legally, the two states were in their right to do so (since these 
non-citizen populations had come to the Baltics under what most Western countries had 
acknowledged was an illegal Soviet occupation), the move generated overnight an unprecedented 

                                                      
3 While there is no formal definition of who constitutes a “Russian speaker,” for the purposes of this analysis, all 
ethnic Russians, Ukrainians, and Belarussians (as counted in different national statistical estimates) are encompassed 
in this category. 
4 In Lithuania, Lithuanians constitute roughly 87 percent of the population, and in 2018, the largest minority groups 
were split about evenly between Poles and Russians (5.6 and 4.5 percent, respectively). See Dambrauskas (2017). 

1

5

10

15

W
o
rl
d

 r
a

n
ki

n
g

2006 2008 2010 2012 2014 2016 2018

Estonia Latvia Lithuania

Data source: Bertelsmann Transformation Index (2018)

Figure 7: Country ranking of the Baltic states on the Governance Performance 
indicator of the Bertelsmann Transformation Index, 2006-2018 



46                   Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 
ISSN 2562-8429 

 

 

 

proportion of stateless people (up to 40 percent of the population) that overlapped to a very large 
degree with the non-titular population. As a result, many Russian speakers not only were fearful 
of more restrictive language and education laws that nationalist politicians were now keen to enact 
under independence, but in addition, they had in many cases lost their basic voting rights in these 
countries, threatening their ability to make their interests heard at all through the political system. 
While Estonia did agree to give all permanent residents voting rights in local elections, this did not 
change the national representation of ethnic minorities. As a consequence, the first free Estonian 
parliament elected in 1992 did not have a single Russian speaker among its 101 members, despite 
this minority constituting 35 percent of the population. Even today, minority representatives 
remain underrepresented in both countries’ legislatures.5 

In the years that have followed, both Estonia and Latvia have moved to develop minority 
integration policies that focused on promoting naturalization among non-citizens as well as 
improving Russian speakers’ ability to communicate in the national languages. As a result of these 
programs (many of which were financially supported by the European Union), by 2017, the share 
of stateless people in Estonia and Latvia fell to just 5.9 percent and 11.1 percent, respectively 
(Statistikaamet 2017a; Centrālā statistikas pārvalde 2019b). A series of sociological surveys 
conducted during the 2000s also showed that, while minorities’ knowledge of Estonian and 
Latvian was improving only slowly, among younger generations, the progress was steadier. One 
study from Latvia showed that, in 2014, fully 77 percent of young people aged 18-24 who were 
not native Latvian speakers said they could either freely or fluently communicate in Latvian (Lauze 
2016, 56). The comparable figure in Estonia was lower, just 63 percent, but still an increase of 15 
percentage points over 2011 (Kruusvall 2015, 74). 
 
Still, many flashpoints have ensued between the Estonian/Latvian governments and their Russian-
speaking minorities during the last 25 years. Most notably, in 2007, an Estonian government 
decision to relocate a World War II memorial (known as the Bronze Soldier) in the capital city of 
Tallinn sparked two days of rioting by Russian youths (Ehala 2009). Equally, the Latvian capital 
of Riga witnessed sometimes tense demonstrations by Russian minority protestors over low 
pension levels (1998) and educational reforms aimed at increasing the amount of Latvian language 
instruction (2004 and 2017-18). In one notable wave of mobilization in 2012, minority activists 
were able to force the holding of a national referendum on whether to make Russian the second 
official language of Latvia. The constitutional amendment was defeated by a resounding margin 
of 75 to25 percent. However, it showed that ethnopolitical issues remained a sensitive matter. 

Ethnicity has mirrored itself in the party system with not only prominent Estonian and Latvian 
nationalist parties in existence, but also minority-dominant parties holding key stakes in the 
electoral market (Nakai 2014, Higashijima and Nakai 2016, Nedelcu and DeBardeleben 2016). 
Both the Center Party in Estonia and the Harmony Center party in Latvia claim to be broad-based 
political organizations, but during elections, the parties obtain between 65 and 75 percent of their 
vote from Russian speakers. Their respective support is particularly strong in the two capitals 

                                                      
5 It should be noted that political participation among Russian speakers in Estonia and Latvia is in general much lower 
than among the titular nations. In this respect, underrepresentation is also prompted by apathy. However, because up 
to half of the Russian-speaking population does not hold citizenship of their home country (because they either remain 
stateless or have opted for Russian Federation citizenship), they are also not a segment of the population that politicians 
will court during elections. The question of citizenship therefore remains a self-reinforcing problem for political 
interest representation. 



47                   Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 
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(Tallinn and Riga), as well as in Russian-speaking regions in both countries (Ida-Virumaa in 
Estonia and Latgale in Latvia). For more than 20 years, this factor has caused both parties to be 
largely rejected during any national coalition formation. Only in Estonia was this rule broken for 
a couple of short-lived periods during the 2000s, and never in Latvia. While a major shift did occur 
in Estonia in 2016, when the chair of the Center Party, Jüri Ratas, became prime minister (and 
continued in that role after elections in 2019), this was not exactly a landmark watershed of inter-
ethnic cooperation, since both of his coalitions included staunch Estonian nationalist parties, who 
saw it as their role to make sure the Center Party did not push policies that were too favorable for 
the Russian-speaking community. Hence, a fair amount of mistrust continued. 

 

The EU Accession Process 

Both the successes and difficulties of the Baltic states’ democratic development since 1991 fed 
into their process of European Union accession during the late 1990s and early 2000s. During this 
initial period, the EU was unsurprisingly hesitant about taking in three ex-Soviet republics too 
soon. Not only was there a perception that the three states were too under-developed to cope with 
EU membership, but also geopolitical concerns were raised, as Russia continued to accuse the 
Baltic states (particularly Estonia and Latvia) of discriminating against Russian minorities and 
neglecting Russia’s broader interests (Raik 2003). As Russian president Boris Yeltsin sought 
precariously to modernize Russia and turn it to the West, it was unclear whether actively 
encouraging Baltic aspirations to join the EU (not to mention NATO) might not overturn the apple 
cart.  

From the Baltic point of view, the determination to push their case for EU membership was 
unrelenting. Particularly successful was Estonia, when in 1997, it was able to land a spot in the 
first group of ex-communist countries called to start negotiations with Brussels. While ultimately 
this did not lead to these countries joining the EU any earlier, it was an important signal for the 
Baltic states that not only could they make the case that successful political and economic reform 
can overcome past legacies, but also that geopolitical and ethnic minority issues would not prove 
a veto to their future integration with the West. As noted, the EU would still pay attention to 
minority integration policies, most prominently in Estonia and Latvia (Galbreath 2003, Gelazis 
2004, Adrey 2005, Hughes 2005, Pettai and Kallas 2009). This would include not only supporting 
integration programs and language training, but also encouraging the Balts’ active participation in 
the Council of Europe’s Framework Convention for the Protection of National Minorities and other 
monitoring forums. But this basic turning point in Western assessments of how to deal with the 
Balts’ ethnopolitical challenges was crucial for moving the process forward. 

In terms of the nuts and bolts of accession, a range of scholarly works and reports have already 
examined this process in detail (Pettai and Zielonka 2003, Vilpišauskas and Nakrošis 2003, Hogan-
Brun 2005, Maniokas 2005, Feldman 2006, Norkus 2007, Van Elsuwege 2008, Jacobsson 2009, 
Grigas et al. 2013, Kerikmäe et al. 2018). Suffice it to say that, because of their small size and their 
eagerness to join the EU, the Baltic states did not pose much of a headache in terms of any of the 
major chapters of the acquis communautaire that needed to be negotiated. As Vilpišauskas (2003) 
recounts, Estonia, Latvia, and Lithuania had to do some adjustments in terms of their agricultural 
policies as well as free trade relations at the time with Ukraine. They also negotiated a number of 
transition periods for raising various excise taxes to EU levels and adopting a range of EU 



48                   Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 
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regulations regarding environment, transport, and other areas. For Lithuania, two specific issues 
concerned the EU’s demand for a closure of the Soviet-built Ignalina atomic energy station and 
the future of transit movement to and from Kaliningrad. The former related to how much the EU 
would support Lithuania financially in this task, while the latter involved assurances that 
interaction with Kaliningrad would remain facilitated without this adversely affecting Lithuania’s 
future chances of joining the Schengen border area. 

By December 2002, all three Baltic states had completed their negotiations, and the stage was set 
for final ratification of the accession via referendums in 2003. During the period of membership 
negotiation, popular opinion about the European Union fluctuated in the Baltic states. For example, 
Whitefield et al. (2006, 194) found that support for the EU was strongest among (a) those who 
believed they would stand to benefit from the new opportunities, (b) those who viewed the EU as 
a security guarantor for the future, and (c) those who saw the EU as part of a national-cultural 
return to Europe (see also Ehin 2001). Interestingly, while some surveys showed that support for 
accession among Russian speakers was initially high, this appears to have tapered off by 2004, as 
many minority residents may have begun to realize that joining the EU would mean a more 
definitive turning away from Russia and the former Soviet Union. Likewise, many Russian 
speakers had become disillusioned with the prospect that the European Union might somehow 
defend their rights more forcefully vis-à-vis the Baltic governments. In the event, the fact that 
neither Estonia nor Latvia was forced to noticeably change their citizenship policies during the 
course of accession indicated that minority interests would have to be promoted in other ways 
(Pettai 2004). 

The final referendum results were relatively unsurprising (Figure 8). Political elites in all three 
Baltic states pulled all the stops in order to get people to vote yes. The pro-EU campaigns 
highlighted both the expected economic benefits of membership and the geopolitical significance 
of locking the three countries into the Western community (Mikkel and Pridham 2004, Pettai and 
Ehin 2005). Anti-EU arguments focused on retaining national sovereignty and the dangers of being 
absorbed by a European behemoth. In terms of the ethnic factor, Russian speakers in Estonia 
proved to be greater supporters of the EU than those in Latvia. Even in the overwhelmingly 
Russian-speaking city of Narva in Estonia’s northeast, the ‘yes’ vote obtained a majority of 57 
percent. Meanwhile, in Latvia, several parts of the eastern Latgale region, including the city of 
Daugavpils, voted strongly against membership (up to 67 percent). Since only citizens could vote 
in the referendum, this meant that a sizeable share of the core minority community had reservations 
about shifting the Baltic states toward the European Union. 

  



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Figure 8: Results of the EU accession referendums in the Baltic states, 2004 

  

The Experience of Membership 

Since 2004, the expectations that the Baltic peoples had for EU membership have largely been 
fulfilled, be it in terms of political integration, economic advancement, national security, or 
European identities. This section will profile these various issues, while acknowledging that not 
everything has been smooth sailing.  

Political integration 

Perhaps the most direct manifestation of the Balts’ success with EU accession involves being at 
the table and participating actively in EU institutions. All three nations have had their share of 
prominent EU commissioners (e.g., Dalia Grybauskaite, Valdis Dombrovskis, Siim Kallas). Baltic 
members of the European Parliament have stood out for their focus on EU foreign policy (e.g., in 
support of Ukraine) and in favor of tough sanctions on Russia. Several Baltic MEPs (such as 
Vytautas Landsbergis, Tunne Kelam, and Sandra Kalniete) have drawn attention to issues of 
historical memory in the EU, seeking recognition for the suffering of peoples under communism 
alongside that under Nazism. Likewise, the European Parliament has been the venue for several 
Russian-speaking politicians from the Baltics to advocate their views. The Latvian MEP Tatjana 
Ždanoka was elected three times to the EP and used that rostrum often to criticize her own country 
about the plight of Russian speakers.  

Across the overall spectrum of member-states in the EU, it is not possible to say that the Baltic 
states constitute a particular regional bloc, even in collaboration with the other 2004 accession 
countries. If anything, the Baltic states have sought to maintain close coordination with Finland 
and Sweden. This, in turn, has often brought them into alignment with the Netherlands and 

66.8

33.2

64.0
67.0

32.5

73.0

91.0

8.9

63.0

0

20

40

60

80

100

P
e
rc

e
n

ta
g
e

Estonia Latvia Lithuania

Data source: Baltic electoral data; own calculations

Yes No Turnout



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Denmark – two member-states who are generally seen as more sovereignty-minded with the EU 
(Taylor 2018). At the same time, the Baltic states took a relatively cautious stance during 2017-
18, when the European Commission launched legal action against the Polish government’s alleged 
attempts to circumscribe the country’s courts. During one public occasion, Lithuanian President 
Dalia Grybauskaite went out of her way to express solidarity with her southern neighbor (Delfi.lt 
2018). 

Economic advancement  

It goes without saying that the economic benefits of EU accession for the Baltic states have 
generally been positive. According to one study, Estonia had the highest level of per capita support 
from the EU’s various structural funds of any former communist member-state. (Varblane 2016, 
124). This figure amounted to 2540 euros per person during the period of 2007-2013. The 
comparable totals for Latvia and Lithuania were around 2000 euros. Overall during the entire 
period of 2007-2020, Estonia, Latvia, and Lithuania were set to receive a total of seven, nine, and 
13.6 billion euros, respectively. The share of this funding in relation to each country’s GDP has 
also grown from around two percent in the mid-2000s to almost five percent by the 2010s (Kondor-
Tabun and Staehr 2015, 2; Varblane 2016, 125).  

With respect to spending, most of this money flowed into transportation projects, environmental 
sustainability, educational programs, R&D funding, and regional development. In basic terms, this 
meant investment in new roads, water treatment facilities, job training programs, higher education 
support, and rural improvements. During the 2010s, prominent attention was given to the 
ambitious Rail Baltic project, the creation of a high-speed rail link from Tallinn down to the Polish 
border (via the cities of Pärnu, Riga, and Kaunas, with a side branch to Vilnius). The objective 
was to facilitate commercial transport through the region and indirectly extend the link up to 
Finland through an eventual tunnel between Tallinn and Helsinki. The concomitant environmental 
costs, however, were equally a point of contestation, since the completely walled-off rail corridor 
would require special bridges and other accommodations for wildlife and local traffic to cross the 
straightaway. Additional concerns were raised about the long-term cost of maintaining the railway, 
since EU funds would only be given for building the project. 

This question of sustainability became a heightened worry as the EU’s financial period of 2014-
2020 started coming to an end. Studies of the effects of EU cohesion funding have shown that 
when the level of such support surpasses a threshold of around 2.3 percent of GDP, its effect is to 
substitute for member-states’ own spending in these areas, thereby creating a dependency that is 
difficult to compensate if and when EU funding declines sharply (Šlander and Wostner 2018, 730). 
In the Baltic states, this effect was particularly apparent in infrastructural spending and research 
funding. This problem of ‘substitution’ was also driven by the EU’s own strict monitoring of 
programming and allocation rates among the recipient countries, meaning governments would 
attempt to spend money as quickly as possible and thereby be particularly tempted to substitute 
their own national spending with EU funds.6  

                                                      
6 As will be discussed below, the financial crisis of 2009-2010 further exacerbated this trend, since the EU decided to 
speed up its disbursement of funds in an attempt to spur economic activity in these recipient countries. This meant, 
however, an even stronger substitution effect taking place(see Kondor-Tabun and Staehr 2015, 17). 



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EU membership for the Baltic states therefore had a very important fiscal and financial impact. 
More broadly, however, it is important to acknowledge the psychological effects of membership 
in terms of stabilizing investor confidence, commercial relationships, and economic activity in 
general. Although studies of the effect of EU accession on growth rates in the post-communist 
region have been inconclusive, it is clear that in terms of providing a more viable and promising 
market economic perspective for the Baltic peoples, EU accession was a worthwhile choice. The 
Baltic states have gained more opportunities and perhaps less vulnerabilities vis-à-vis the global 
market by being tightly integrated with their European neighbors. Moreover, the same argument 
that was noted above regarding political integration applies here: being at the table, in terms of 
crafting decisions on the euro, European financial regulations, tax harmonization, or any other 
policy area, matters. 

However, as one pair of comparative researchers put it, “The economic side of…Eastern 
enlargement is...a hybrid bag of effects for the EU’s eastern countries because membership in the 
EU is not a tide that lifts all boats” (Jovanovic and Damnjanovic 2014, 1). This was felt in 
particular during the global financial crisis of 2009-2010. By now, it is well known that the Baltic 
states took one of the deepest hits in the EU during this collapse, with GDP contracting between 
14 and 17 percent in 2009 and unemployment hitting nearly 20 percent. This tumble was even 
more stark, thanks to the above average growth rates of seven to eight percent during the early 
2000s. Yet, as many analysts have shown (Brixiova et al. 2010, Kattel and Raudla 2013, Staehr 
2013), these issues are linked, in that the economic boom starting around 2000 was not only 
beginning to show signs of going bust in 2008; it was also sent into a freefall when the rest of the 
world began to ripple from the wider financial crash (Lehmann Brothers, etc.).  

In this respect, the Baltic countries faced some particularly difficult choices that involved not only 
the usual options of fiscal austerity, but also how to navigate sensitive (at the time) political 
ambitions about joining the euro zone. As was often discussed during the crisis, the Baltic states 
might have improved their economic situation by suspending the process of approximating their 
national currencies with the euro and by devaluating the exchange rate of these monies in order to 
regain competitiveness in export markets. However, this would have caused domestic problems 
for people who had to pay back loans in euros. And it would have constituted a major setback in 
what had heretofore been a very steady and successful EU integration process (Kattel and Raudla 
2013). 

In the end, the three countries opted for what was known as internal devaluation by radically 
cutting their national budgets (in particular, public sector wages), tolerating large-scale deficits (up 
to nearly ten percent of GDP), and suffering some major bank failures (Parex in Latvia and Ukio 
in Lithuania).7 While Estonia was able to cover some of these shortfalls thanks to some national 
savings that had been accumulated during the boom years, Latvia and Lithuania were less prepared. 
Latvia, in particular, was forced in December 2008 to turn to international donors (including the 
IMF and the EU) for a 7.5 billion euro stabilization package. Lithuania, meanwhile, was not able 
to bring its budget back into balance until 2014. Long-term state debt in Latvia and Lithuania also 
grew as a percentage of GDP from around 15-20 percent to 40 percent, while Estonia’s remained 
around ten percent (Kattel and Raudla 2013). 

                                                      
7 For details, see Kattel and Raudla (2013), Staehr (2013). 



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The fact that the Baltic states were EU members during this particularly severe global crisis was 
probably on the whole a good thing. While the EU could not directly engineer economic recovery 
nor even hold off future periods of speculative economic growth through regulation, it did provide 
a more integrated context in which to deal with the challenges the Balts would face. However, this 
participation also cut both ways. During 2011 and 2012, the three countries would be pulled into 
the difficult political decisions that the EU needed to make as result of the Greek debt crisis. The 
three nations’ parliaments would have to ratify their states’ participation in the European Stability 
Mechanism (ESM), which in many cases proved controversial; in Estonia, the decision to help bail 
out Greece would even be contested in that country’s constitutional court.  

These stresses of EU membership were compounded in 2015, when the Baltic states would be 
called upon to accept a share of the millions of refugees and migrants caught up in Turkish, Greek, 
and Italian transit camps. Ultimately, the quotas set for Estonia, Latvia, and Lithuania were 
relatively low (between 600 and 1100 people). However, the policy generated a fair amount of 
backlash for several reasons. One was the impression that these countries themselves were still 
developing and couldn’t afford the resources to be spent on sheltering and potentially integrating 
newcomers over the long term. Another involved the irony of refugees coming into the country 
just as the three nations had gone through a period of large-scale out-migration of their own people. 
Since re-independence, the population of the Baltic states had gone down by as much as 25 percent 
(Figure 9).  

  

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Data sources: Statistikaamet 2017b, Centrālā statistikas pārvalde. 2019a,
             Lietuvos Statistikos Departamentas 2019; own calculations

Figure 9: Proportional declines in the resident population of the Baltics states, 1995=100% 
 



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On the one hand, all three countries have had continuously negative population growth (deaths 
surpassing births) for some 25 years, sometimes amounting to 0.6 percent of the population. On 
top of that, however, out-migration has been an even greater problem with, for example, a net 
average of 26,000 people leaving Lithuania and 14,000 leaving Latvia each year since the mid-
1990s (see also Berzins and Zvidrins 2011, Lulle 2014). Particularly during the economic crisis, 
the totals soared to up to 77,000 per year in Lithuania. In Estonia, these numbers have been more 
modest, and in fact, by 2015, the country had turned around its migration balance, even though the 
natural population growth rate continued to be negative (Figure 10).  
 

 
National security 

Tough decisions regarding the Greek debt emergency and the refugee crisis put Baltic commitment 
to European solidarity to the test. These were among some of the first real moments where the 
Balts were asked reciprocate for the staunch support they had been getting from Europe regarding 
some of their own foreign and security policy concerns. On the latter score, the need was often 
perceived as existential: the EU and NATO constituted the two most fundamental pillars of Baltic 
foreign policy. Having these two organizations safeguard Baltic security was the main reason why 
Estonia, Latvia, and Lithuania had joined them in the first place. And, by and large, the Balts got 
what they wanted, especially in relation to ever more vigilant stances toward Russia.  

In part, this trend began after the 2007 Bronze Soldier riots in Tallinn, since it soon became clear 
that Russia had tried to exacerbate the events by sending activists of its own to Estonia. And it was 
alleged that Russia was behind some of the cyberattacks Estonia witnessed during the crisis. 
Wariness of Russia continued in 2008 after the armed conflict between Russia and Georgia over 
South Ossetia. This event, in particular, prompted the Balts to begin demanding from NATO that 
the alliance put in place a clearer contingency plan for defending Estonia, Latvia, and Lithuania, 
should Russian expansionism turn in their direction. Lastly, after the 2014 Russian annexation of 

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Note: Migration data for Estonia not available before 2004. Source: see Figure 9.

Natural population growth Migration balance

Figure 10: Natural population growth rates and migration flows in the Baltic states, 1995-2018 



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Crimea, the masks were taken off, and a wholesale effort was undertaken to put NATO boots on 
the ground in the Baltics. The United Kingdom took responsibility for placing rotating troops in 
Estonia, Canada in Latvia, and Germany in Lithuania. In addition, the United States played a role 
in the advanced deployment of materiel. The Balts themselves, meanwhile, tried to adhere to the 
NATO call for Member States to spend at least two percent of their GDP on defense. Estonia 
fulfilled this criterion, while Latvia and Lithuania fell somewhat short (in part because of the 2009 
financial crisis). 

Within the European Union, the Baltic states lobbied for tough sanctions against Russia, and 
through mid-2019, these continued to hold, despite occasional calls for their relaxation from other 
EU countries. This prolonged demonstration of EU unity was a bit of a surprise even for the Balts 
themselves. Such policies were all the more challenging given that the EU’s outreach to other 
neighboring countries like Ukraine, Georgia, or Moldova (via the Eastern Partnership) had proven 
less effective than originally hoped. The Balts had sought to contribute their own efforts to 
initiatives through training agreements and policy exchanges with these other countries. This, too, 
was part of their effort to advance their own security through common EU policies. 

Support for the EU 

The upshot from the Baltic countries’ experience with membership in the EU can be seen in various 
questions from the EU’s regularly commissioned Eurobarometer (2019) surveys. On the whole, 
Balts have expressed average or above-average support for the EU across a number of the 
questions. In particular, this is apparent from around 2012 onwards, when reverberations from the 
economic crisis began to subside. For example, when asked whether they are satisfied with how 
democracy works in the EU, Lithuanians respond positively on average 13.5 percent higher than 
the mean level in the European Union (see Figure 11). When asked whether they are optimistic or 
pessimistic about the future of the EU, Lithuanians again exceed the EU mean in terms of their 
optimism, by an average of 15 percent between 2012 and 2019 (Figure 12). 

Estonians, too, were generally backers of the EU, although their support did slip noticeably during 
the refugee crisis. Their image of the EU as being positive declined markedly in 2015 and has only 
slowly recovered since (Figure 13). As can be seen in Figure 12, their level of optimism about the 
EU also took a tumble during this period. Lastly, Latvians exhibited the most reticence about the 
EU, including immediately after accession in the 2000s (see both Figures 12 and 13). At one point 
during November 2011, the number of Latvians with a positive image of the EU was almost equal 
to that of those with a negative image (21 compared to 18 percent). In this instance, one could see 
that the bulk of erstwhile supporters of the EU had shifted mostly to a ‘neutral’ stance (60 percent); 
the number of negative views of the EU didn’t really increase. Still, it was a low point.  

 

  



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Figure 11: Levels of Baltic satisfaction with the way democracy works in the European Union, 
2004-2019, Eurobarometer surveys 

 

 
 
 
 
 
 
 

40

50

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1/1/2004 1/1/2006 1/1/2008 1/1/2010 1/1/2012 1/1/2014 1/1/2016 1/1/2018

EU Estonia Latvia Lithuania

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1/1/2007 1/1/2010 1/1/2013 1/1/2016 1/1/2019

EU Estonia Latvia Lithuania

Figure 12: Levels of Baltic optimism about the future of the European Union, 2007-2019, 
Eurobarometer surveys 



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Figure 13: Baltic respondents’ image of the European Union, 2007-2019, Eurobarometer 
surveys 

 

Future challenges 

In 2018, the Baltic states celebrated the centenary of their first declarations of independence in 
1918. This anniversary was – in contrast to the rest of Eastern Europe – not one of having actually 
had a hundred years of statehood. Instead, the milestone came with a rather sundry mix of feelings. 
On the one hand, Baltic independence in 2018 had now lasted longer than that between the two 
World Wars. At the same time, the combination of these two periods of independence had yet to 
surpass the amount of time spent under Soviet and Nazi occupation from 1940 to 1991. In other 
words, a curious ambiguity hung in the air regarding what there was to be actually fêted. 

Still, one of the oft-repeated mantras from that year was that the people of Estonia, Latvia, and 
Lithuania had never in their history lived as well as they did now. By this was meant that not only 
had the socio-economic status of the three nations improved greatly over the last quarter-century, 
but also, geopolitically, the countries were much better positioned to deal with regional security 
threats, as well as to build partnerships with their neighbors. As nation-states, the three Baltic 
peoples also now had the sovereignty and wherewithal to protect and develop their languages and 
cultures.  

All of this should have made for buoyant and assertive celebrations. And while there was no 
shortage of fireworks and other pomp bestowed on the 2018 festivities, there was also a feeling of 
discontent, particularly in Estonia and Latvia, as right-wing populist forces gained political 
momentum. In the October 2018 Latvian parliamentary election, a new anti-establishment party 
called “Who owns the state?” came second in polling (14.2 percent) and for a while appeared 
poised to nominate the next prime minister – until it became clear that the party leader would not 
be given security clearance by Latvian law enforcement agencies. Coupled with a strong upsurge 
by another, previously minor party (the New Conservative Party), the Latvian party system became 
once again highly fragmented and cut along fairly divisive lines. The appointment of Krišjanis 

20

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1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018

EU Estonia Latvia Lithuania



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Kariņš as prime minister (from Parliament’s smallest party) more than three months after the 
election only served to epitomize the difficult political constellation in which the country was now 
situated.  

Likewise, in Estonia in 2018, observers braced themselves for what was expected to be a swelling 
of support for the right-wing radical Estonian Conservative People’s Party (EKRE) in advance of 
March 2019 elections. During the electoral campaign, EKRE’s leaders railed against a ‘deep state’ 
they claimed had taken over Estonian government; they promised to give power back to the people 
through more referendums; and they pledged an unprecedented spending program geared towards 
clearing state debt. When the party scored nearly 18 percent (coming in third), the result was 
ominous enough for many observers. However, when Prime Minister Jüri Ratas (from the second-
place Center Party) decided to outmaneuver the actual winner of the election (the Reform Party) 
and form an alternative majority coalition embracing EKRE and the conservative Pro Patria party 
in order to stay in office, the level of angst was raised even higher.  

Even in Lithuania, Prime Minister Saulius Skvernelis was forced in September 2018 to turn to a 
somewhat more long-standing, but still widely seen as populist, party, Order and Justice, in order 
to shore up his majority in parliament. While the basic political orientation of the government 
didn’t change, the shakiness of the cabinet (and in particular of the junior partner, the Social 
Democrats) showed that established parties were crumbling there, too.  

While some analysts endorsed the inclusion of populist forces in these governments as helping 
perhaps to blunt their future appeal, it was unclear whether the recipes these politicians offered 
would actually help to alleviate the problems the two countries faced. Lavish promises of new 
spending on expanded social welfare programs ran counter to a fairly entrenched neo-liberal 
economic orthodoxy in the Baltics. At the same time, in what seemed like a perpetual downward 
spiral, all three countries were caught up in a succession of retrenchment plans meant to deal with 
their continuous demographic declines. Starting with closed-down rural schools and hospitals, 
moving to redrawn and consolidated administrative districts, and ending with reductions in the 
size of Parliament itself (broadly discussed in both Lithuania and Estonia), the actual evolution of 
government in these countries seemed little like the épanouissement that the centenaries had 
proclaimed. 

While the Balts still had much to be grateful for in terms of national security via NATO and the 
European Union (particularly vis-à-vis Russia), these two factors were not givens over the medium 
term. If the countries did not maintain a solid level of governance and respectability, it was unclear 
whether partners like the United States (with an increasingly transactionalist view of foreign 
policy) might not relax some of their security commitments. Equally, the European Union was in 
a great period of flux, with Brexit topping the agenda. Not only was the UK’s departure from the 
EU a political headache, but also its consequences for future EU budgets would be of great concern 
for net recipients from the EU like the Baltic states. Financial support from Brussels was set to 
decline steeply, which in turn would put even more pressure on national finances amid shrinking 
tax bases.  

The ambivalent position of the Baltic states was thus palpable. As the three nations in Europe that 
had gained perhaps the most, thanks to the end of the Cold War – restored national independence, 
reintegration with the European community, and economic modernization – they had a strong 
incentive to keep the faith and support the liberal order that had helped them reach their centenary 



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as free peoples. However, many of the same fissures that had begun to afflict that venerable system 
were also now ripping through their own societies and sapping the strength to develop even further 
during the next hundred years.  

In this respect, the Baltic states did not differ from some of the symptoms of ‘democratic fatigue’ 
(Rupnik and Zielonka 2013) or the ‘hollowing of democracy’ (Greskovits 2015) that other post-
communist countries had experienced.8 However, the challenge was to figure out the interplay 
between distal and proximate factors that contributed to these trends. Interestingly, the long-term 
legacies of Soviet rule appeared to have made the Baltics slightly more immune to the risk of 
democratic fatigue in that more people felt a vested interest in making liberal democracy and 
European integration work after a half-century of foreign incorporation. Because the countries had 
travelled the farthest in terms of political, social, and economic change since 1989, their 
populations persisted the longest in maintaining a belief in those commitments.  

Hence, to paraphrase a distinction brought out by Grigore Pop-Eleches and Joshua Tucker (2017), 
the Balts’ experience of living through communism seemed to outweigh their experience of living 
in post-communism in a positive sense. That having been said, the nature of life in post-
communism had also changed 30 years after the fall of the Berlin Wall. This existence was no 
longer simply about the immediate political choices that national leaders made after 1989. It was 
also about the reverberate effects of developments far outside the region, be it the 2009 global 
financial crisis, the migration upsurge, or democratic fatigue taking hold in ‘consolidated’ 
democracies such as the US, the UK, or France. The rise of right-wing populist forces in the Baltics 
therefore seemed to be much more attributable to these broader trends rather than to tendencies 
within specifically post-communist democratic consolidation. To remedy these emerging ills, a 
much more concerted and uniform re-equilibration of liberal democracy as a whole would be 
required. 

  

                                                      
8 See Cianetti (2018) for an especially trenchant analysis with regard to Estonia and Latvia. On popular support for 
institutions, see Gudžinskas (2017). 



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