Publication

This commentary discusses the validity of relying on individual small country examples as evidence that a particular strategy for overcoming the economic crisis, such as fiscal austerity, works best. The author compares the economic particularities of Latvia, Estonia, Iceland and Greece. Seeing that the economic preconditions of these countries are so different, the author concludes that deriving a strategy based on the experience of a single country is not a valid approach. The one generalization that can be made, however, is that avoiding austerity does not allow a country to avoid the problem of achieving both fiscal and external sustainability.