The implosion of the Union of Soviet Socialist Republics (during the final months of 1991) brought an end to Moscow’s political domination of the non-Russian Soviet republics. Despite the initial caution of President George H. W. Bush, who was concerned that Western encouragement of local nationalisms in the USSR might undermine Soviet leader Mikhail Gorbachev, for nearly three years Bush’s negotiating partner in the Kremlin, the United States and other countries quickly recognized the Baltic states’ independence when they became the first of the Soviet republics to exit the USSR. Freed from the foreign domination they had endured for five decades, the Baltic states would follow the trail blazed in 1989 by Poland, Hungary, and the other former people’s republics—a path that led away from Moscow and toward the West.
Like the new leaders of the former satellites, the men and women who took power in Vilnius, Riga, and Tallinn tended to be nationalists who conceived of their countries’ “return to Europe” as a hedge against the resurgence of Russian imperialism, for only membership in Western institutions could provide them with the security they would need to maintain their independence and markets to replace what they had lost with the demise of the integrated Soviet socialist economy. Thus one of the challenges facing all three Baltic states during the post-Soviet years was to balance their commitment to national sovereignty with the practical need for cooperation with their European neighbors (and with each other) within the framework of international institutions.
The achievements of the past quarter century have been remarkable. All three Baltic states have become members of the North Atlantic Treaty Organization (NATO) and the European Union (EU) and all three have maintained an unequivocal commitment to democratic procedures, even if their national minorities have justifiably complained about discrimination and exclusion. Presidents, prime ministers, and political parties have come and gone since the tumultuous 1990s, but as of this writing in late 2014 the Baltic states remain politically independent (if economically tethered to the policies of the EU) and their commitment to free markets and political liberty has proven resilient. But these successes have been accompanied by domestic political dissension, ethnic confrontation, and economic uncertainty.
Whatever the differences among and within them, Estonian, Latvian, and Lithuanian societies have chosen to reject Moscow’s grip and have instead elected to return to Europe, and with that to accept European norms where political freedom, human rights, and the rule of law are concerned. If Moscow still tends to view the Baltic states—like it does Georgia, Kazakhstan, and Ukraine—as being within the Russian sphere of influence, the leaders of the Baltic states have made it clear that their countries are and always have been fundamentally European, even if they are first and foremost Estonian, Latvian, and Lithuanian.
The Baltics did not resume their lives as independent states with clean slates, for each had to decide what must be created anew, what must be discarded as unusable, and what could be recycled as part of that country’s “usable past.” It was to this usable past that Baltic leaders appealed when making their case for independence in 1989–1991, as activists in all three republics claimed that their goal was not to secede from the Soviet Union but rather to restore the republics whose independence was quashed in 1940. Framing the pursuit of independence in terms of maintaining legal continuity with the interwar republics— statehood was not something to be achieved but to be restored—Baltic nationalists tended to view the Soviet period as an unfortunate parenthesis in the Baltic grand narrative.
Stressing the legal continuity between the post-Soviet and the prewar republics, the leaders of Latvia and Estonia elected to make their interwar constitutions the legal basis of the restored republics. Latvia made its choice on August 21, 1991, four months before the Soviet Union was formally dissolved by the leaders of Russia, Ukraine, and Belarus. As the coup by Soviet hardliners unraveled that summer day in Moscow, in Riga Latvia’s Supreme Council seized the moment and declared the constitution of February 15, 1922, to be the law of the land, with no revisions or amendments. The political system of the restored Latvian state was to be based on that which existed before Soviet annexation in June 1940: the parliament (Saeima) would consist of 100 representatives elected for three-year terms by all citizens aged 18 or over on the basis of proportional representation (selected from party lists). Initially the president was to be elected by the Saeima for a term of three years, but in 1997 terms for representatives and the president were extended to four years. While the post is largely ceremonial, the Latvian president’s responsibilities include the appointment of a prime minister, who in turn nominates other cabinet ministers. Few actions by Latvia’s new political elite made more clear their concern with maintaining continuity with the prewar republic than the Saeima’s selection of Guntis Ulmanis (b. 1939), a grandnephew of Kārlis Ulmanis (prewar Latvia’s last president), to be the country’s first post-Soviet president. He served in that capacity from July 1993 to July 1999, when he was succeeded by the vigorously pro-European Vaira Vīķe-Freiberga (b. 1937), a former university professor in Canada and Latvia’s first female president (1999–2007).
Estonia’s leaders debated a new constitution for nearly a year before a new governing document came into force in July 1992. The resulting text was firmly based on the principles of the 1920 constitution, whose emphases included democratic freedoms and protection for ethnic minorities. Among the most important differences, however, were the new constitution’s provisions for a clear separation of powers as well as its adoption of a presidency, elected by a unicameral legislature (Riigikogu) consisting of 101 members, in place of a State Elder as the country’s ceremonial leader. While members of the Riigikogu are elected on the basis of proportional representation and serve four-year terms, the president’s term of office is five years. Estonia’s first post-Soviet president, Lennart Meri (1929–2006), spent nearly a decade in office (1992–2001), during which time he worked to enhance executive power while taking an active role in both domestic and foreign affairs. Meri’s negotiations with Russia’s president Yeltsin in 1994 were critical in achieving one of Estonia’s (and all three Baltic states’) top foreign policy priorities: the final withdrawal of Russian forces.
After briefly resurrecting its prewar constitution, Lithuania’s leaders rejected it as too authoritarian and elected to create a new document that would reflect the experiences of democratic countries such as the United States, France, and postwar Germany while retaining some elements of Soviet-style government—including the combining of some legislative and executive functions and provisions for social rights such as free medical care. After two years of debate in Lithuania’s Supreme Council, the new constitution was approved by a voter referendum on October 25, 1992. As during the prewar period, the legislature is the Seimas, a popularly elected body consisting of 141 members, 70 of whom are chosen on the basis of proportional representation, with the remainder elected from single-member districts on the first-past-the-post principle. The executive branch consists of a popularly elected president, who serves a five-year term, and a prime minister, who is chosen by the president with the approval of the Seimas. As in Estonia and Latvia, the Lithuanian president’s role is largely ceremonial and consultative with regard to domestic affairs, but the office has considerable power to shape foreign policy.
In reestablishing the democratic basis of their resurrected states, the Baltic republics rejected the single-party system of authoritarian rule that had guided and punished them during the Soviet era and returned to the uncertain world of political pluralism. In some cases the leaders who rose to the top during the struggle for independence— notably former Sajūdis leader Vytautas Landsbergis, who chaired the Lithuanian Seimas from 1996 to 2000 while heading the conservative Homeland Union coalition—maintained their prominence through the 1990s and beyond. Yet the political arena was now open to those who had experienced repression or exile during the Soviet era and who had not been well known during the years of the Singing Revolution. Indeed, the presidents of the post-Soviet Baltic states have thus far included one whose family had been sent to Siberia during the Stalin era (Lennart Meri, who was earlier known for making ethnographic films about the Finno-Ugrian peoples), two whose families had fled to the West during World War II (Vaira Vīķe-Freiberga and Valdus Adamkus, a civil servant in the United States before serving as president of Lithuania, 1998–2003 and 2004–2009), and another who was born in Sweden (Toomas Hendrik Ilves, elected president of Estonia in 2006). Such people have competed in the same arena as former Soviet apparatchiks such as Estonia’s Arnold Rüütel (president 2001–2006) and Lithuania’s Algirdas Brazauskas (president 1993–1998 and prime minister 2001–2006). The post-Soviet political scene was varied, colorful, and combative in all three Baltic states during the 1990s, but it was not long before the new systems stabilized and their leaders charted a sometimes controversial course for Europe.
While ethnic Estonian, Latvian, and Lithuanians were empowered by the return to independence, the Baltic political arena was explicitly discriminatory from the outset. All three Baltic governments barred former Soviet security (KGB) agents from standing for parliament and obtaining high positions in the state administration, but it was in Latvia that the approach to past “collaborators” was the most confrontational. If the winners in the struggles of 1988–1991 were suspicious of the losers, their insecurities were not unfounded, not least because 40 years of Soviet migration patterns had turned Latvia’s cities into Russian colonies. At the end of the Soviet era Latvians comprised only a bare majority of the population of the republic that bore their name and were a minority in Riga and Daugavpils, the republic’s first and second largest cities. Adding to the insecurities of Latvia’s new rulers were the activities of the Communist Party of Latvia during the 1991 coup, for which its former first secretary Alfrēds Rubiks was sentenced to eight years in prison. Yet even if it was clear enough that the party’s first loyalty was to Moscow rather than Latvia, the Saeima rejected a proposal to forbid former Communist Party officials and members from running for parliamentary seats.
As in Latvia, the Estonian government made every effort to remove the Soviet/Russian elites during the country’s first years of independence. Top civil servants from the communist past were dismissed and replaced by a cadre of unusually young officials who were well educated but had no experience in governing. The purge and the laws on citizenship and language (discussed in greater detail below) also ensured that the government remained under the confident control of Estonian nationalists for years to come, which naturally fed the resentments of Soviet-era immigrants whose sense of insecurity was further heightened by the loss of a direct connection to Moscow as well as the factory closures and layoffs that accompanied the country’s economic reforms. It was the lack of protection from Moscow that made possible the adoption of restrictive citizenship laws by the governments of Estonia and Latvia in the early 1990s. These laws, which were arguably the most significant measures enacted in the Baltic states to limit nonnative influence, effectively prevented hundreds of thousands of Soviet-era immigrants from voting in the parliamentary elections of 1992 and 1993.
Yet even if the way democracy was practiced (and limited) during the first post-Soviet years mirrored some of the ethnic and social divisions of the interwar era, the postcommunist states have weathered the various political, economic, and social crises of the 1990s and early 2000s with considerable resiliency. Governance is often messy in the Baltic states, but the commitment to democratic procedures has been firm for more than two decades. Moderate parties of the right-center (Estonia and Latvia) and the left-center (Lithuania) tend to gather the most popular support and continue to be voted into and out of power, which they share with coalition partners whose agendas may differ considerably from their own. These are systems that encourage compromise and cooperation, yet they are also systems in which political power is firmly in the hands of the titular nationality. While minorities have sometimes suffered from exclusion and disenfranchisement, nowhere in the Baltic states have they been silenced or repressed.
Perhaps the main difficulty the outsider encounters in trying to make sense of politics in the post-Soviet Baltic states has been the sheer number of parties and coalitions that compete for power. Many of the political groups that mushroomed in the early 1990s have changed their names, been subsumed into other parties, or, having failed time and again to garner enough votes to gain parliamentary representation, simply disappeared. While many political parties exist at the margins of national politics, are local in nature, or are merely singleissue parties, observers who are more familiar with the politics of larger countries (or, as in the case of the United States, political systems dominated by only two mass parties) may be confounded not only by the number of political parties that are active in the Baltic states but also by how few people even the largest parties represent. Few are massbased organizations with broad memberships; some are financed by private businesses. For all the dozens of parties that have registered to compete in local and national elections in the Baltic states, it must be remembered that Lithuania in 2015 is a country of only three million people, Latvia two million, and Estonia a mere 1.3 million.
Of the 897,000 who voted in Estonia’s 2007 parliamentary election— the first election in the world to use electronic voting (although few chose to vote this way)—Estonians could choose among 11 political parties. As coalition government is the norm in all three Baltic states, every voter in Estonia is aware that it is extremely unlikely that any one party will win a majority and govern alone. The winner of the 2011 election, with 27.8 percent of the vote, was the Reform Party, a pro-free market party that has participated in the government of Estonia for nearly its entire history since its founding in 1994 by Siim Kallas, then the president of the Bank of Estonia (hence its original nickname, the Party of Bankers). Its primary competitor over the past two decades has been the right-center Pro Patria Union (Isamaaliit, or “Fatherland Union”), whose history can tell us much about the complexity and fluidity of politics in Estonia, where minute differences on policy can cause a party to splinter just as easily as political expediency can encourage parties to merge or form alliances.
A party of national conservatism and Christian democracy whose main slogan was “A clean break with the past,” the Pro Patria Union was born at the end of 1995 on the basis of a merger between the Estonian National Independence Party (a creation of the late Soviet era) and the National Coalition Party Pro Patria.1 The fact that several political organizations were vying for the support of Estonia’s conservative voters led to another merger in 2006 that brought about the union of Pro Patria Union and Res Publica, another party that identified itself as conservative. While the merged party, known as PPRP and chaired by Mart Laar (b. 1960), only placed third in both the 2007 and 2011 elections to the Riigikogu, the merger ensured that Estonia’s conservatives would be able to compete more effectively against the more cohesive if less popular political left.
The consolidation of political forces that took place in the early 2000s weeded out some of the single-issue parties and ensured a certain balance in Estonian politics between the parties of the right, center, and left. While the Estonian Centre Party, which was formed on the basis of the Soviet-era Popular Front and continues to be chaired by Edgar Savisaar, is Estonia’s leading centrist party, the Social Democratic Party (SDE), known between 1996 and 2004 as the Moderate People’s Party, is the most popular party on the left. Upholding the social market economy and the welfare state while remaining committed to a Nordic identity for Estonia, the SDE has even produced a president, Toomas Hendrik Ilves (b. 1953). However, it typically underperforms in parliamentary elections—in Estonia it is difficult to garner popular support for policies necessitating a large public sector—and is usually in the opposition both in the national government and in most major cities.
If the first elections in the restored Republic of Estonia in 1992 yielded a Riigikogu that provided representation for no fewer than nine parties (and none for the Communist Party of Estonia’s successor party, the Estonian Democratic Labour Party, later renamed the Estonian Left Party), only four parties earned seats in the 2011 elections and only two (the Reform Party and the Centre Party) entered the government. A similar trend toward consolidation can be seen in Latvia, where eight parties were awarded seats in the 1993 elections to the Saeima, compared to five in the 2010 and 2011 elections. Both countries have also seen increased political participation by (and representation for) their Russian-speaking communities as more Soviet-era migrants become naturalized citizens.
Of the Baltic states Lithuania has been the most ideologically diverse and politically fragmented. In the parliamentary election of October 2012 no Lithuanian party earned more than 19.82 percent of the vote, and that went to the Democratic Labour Party, which emerged from the reformist Lithuanian section of the Communist Party of the Soviet Union (CPSU) and even today is sometimes thought to be under the influence of the Kremlin. Close on its heels was the Social Democratic Party of Lithuania (18.37 percent), a Marxist party of the left. Together they formed a coalition with two other parties, including one that represented the country’s Poles.
Despite frequent allegations of corruption, social democracy has had greater sway in post-Soviet Lithuania than in either Latvia or Estonia, countries where left-wing parties tend to be aligned with the interests of the Russophone minorities. That many Lithuanians missed some aspects of the Soviet welfare state was apparent in the October 1992 elections, when the Democratic Labour Party (44 percent) and the Social Democratic Party (6 percent) together earned half the vote in what was clearly a rebuke of the conservative–nationalist Sąjūdis movement. Voters blamed Sąjūdis, which had been cr eated during the last years of the USSR as an opposition movement before taking the reins of government, for failing to deal effectively with the negative effects of the economic collapse, including runaway inflation, a decline in living standards, and unemployment. With Sąjūdis’s defeat and the return of the Democratic Labour Party, Lithuania became the first transition country where a former communist party regained power in free elections—a pattern that would soon be repeated in Poland and Hungary.2
While the Lithuanian left has maintained its seat at the table and has participated in several parliamentary coalitions, its main competitor on the right since 1993 has been the Sąjūdis offshoot Homeland Union, a conservative–nationalist party whose electoral fortunes have oscillated between political dominance (it held 70 seats in the Seimas following the 1996 elections) and marginalization (it earned only nine seats in the 2000 elections, with a plurality of 42 going to the Democratic Labour Party). Mergers with the Lithuanian Nationalist Union and the Lithuanian Christian Democrats in 2008 briefly made Homeland Union– Lithuanian Christian Democrats (TS-LKD) into Lithuania’s largest party, but its popularity plummeted in the wake of the 2008–2010 economic crisis, following which it was excluded from government.
Latvian voters also have a wide array of parties from which to choose, with no fewer than 13 parties competing in the parliamentary election of September 2011. In Latvia’s first post-Soviet elections, held in July 1993, the leading vote-getter was Latvia’s Way, a right-of-center party of ethnic Latvians, which earned 32.4 percent of the vote. Despite declining electoral support, Latvia’s Way remained a powerful force in Latvian politics and was part of every coalition government (and produced most of the country’s prime ministers) until November 2002, when it garnered just under the 5 percent of the popular vote that is needed for representation. The early popularity of Latvia’s Way was supplanted by the rise of New Era, which first competed in elections to the Saeima in 2002, when it campaigned on its promises to combat corruption and tax evasion. As is the case with many political parties in the Baltic states, New Era reacted to its subsequent decline in popularity by merging with two other parties to form Unity, a center-right party that serves as a counterweight to the left-wing Harmony Centre Alliance. As in Estonia, the Latvian right has been dominant but at the same time it has suffered from political fragmentation, divided between Unity, the People’s Party, For Fatherland and Freedom/LNNK, and Latvia’s First Party/Latvian Way.
Perhaps the most remarkable story in Latvian politics during the past decade has been the rise of Harmony Centre (Saskaņas Centrs), a social-democratic alliance whose members include the Socialist Party of Latvia and the Social Democratic Party “Harmony,” which itself emerged from a merger of several left-wing parties. All tend to favor increased social spending and are guarded about Europe, but what unites them is their concern with minority rights, for the Harmony Centre Alliance is above all the party of Latvia’s ethnic Russians. From its founding in 2005 the alliance has been headed by the former journalist Nils Ušakovs (b. 1976), who in 2009 became the first mayor of Riga of Russian descent since Latvia attained its independence in 1991. Harmony Centre’s broad appeal to Latvia’s Russophone community and its support for strengthening ties with Russia are also the reasons it has never participated in government, which has always been dominated by parties composed of (and appealing to) ethnic Latvians. Yet Harmony Centre’s stronghold is Riga, where the population of Russians and Latvians is more or less evenly balanced, and where for a time Ušakovs’s personal popularity seemed to transcend the ethnic divide. The alliance even gained the support of some Latvians, whose frustration with a government they accuse of catering to the country’s wealthy businessmen (oligarchs) caused many to seek an alternative to the usual parties.
Overall, there are several conclusions one may draw about the political environment in the postcommunist Baltic states: (1) they have generally been dominated by members of the titular nationality, although the political participation of non-Latvians and non-Estonians has increased over the years; (2) most political parties tend to be short-lived, with numerous parties failing to last for more than one or two election cycles; (3) the restrictive citizenship laws enacted by Estonia and Latvia hurt the left by diminishing the electoral base for parties representing the interests of labor; (4) the fact that citizens of the Baltic states tend to vote more on the basis of personality or their feelings on a single issue rather than on the basis of party identification has hindered (but not prevented) the consolidation of political forces in these countries; and (5) until recent years governments tend to be very short-lived.
The last point merits some elaboration. Between 1992 and 2003 Estonia had eight governments, but only four governments between April 2003 and 2014. Latvia had eleven governments between 1993 and 2004, but only seven in the decade that followed. Between 1992 and 2001 Lithuania had eleven governments, but only five governments from July 2001 through the end of 2014. Despite the volatility of the Baltic governments during the postcommunist years, the domestic and foreign policies of Estonia, Latvia, and Lithuania have been fairly consistent since the 1990s. No matter which government is in power, the policies adopted in all three Baltic states have been shaped by a general consensus concerning the desire to be seen as a completely sovereign, liberal, democratic nation-state in an economically integrated Europe.
By the time the Baltic states regained their independence in the summer of 1991, their economies were in free fall. In all three countries a catastrophic decline in production was coupled with hyperinflation that ate away at a living standard that had been the envy of other Soviet citizens since the 1950s. Once part of an integrated economic system geared largely toward Soviet needs rather than local ones, the Baltic states were now on their own: each had to reconstruct its banking network, substitute local currencies for the inconvertible Soviet ruble, replace the system of centralized planning with market mechanisms, privatize state-owned properties and enterprises, and reorient its foreign trade toward Europe while attracting Western investment.
Few questioned the conviction of most Baltic leaders that the old Soviet command economy had failed to keep pace with that of the capitalist West and must be reinvented. Thus the debate in the Baltic states, as in much of the former Soviet bloc, centered not on the desirability but the pace of the transition to a market-based economy. Advocates of what was called “shock therapy,” a term that was used to describe the neoliberal reforms adopted in Poland beginning in 1989, argued for the most rapid economic reform possible in the belief that a semi-reformed system would simply perpetuate the distortions of the Soviet era and would deter investment. Moreover, supporters of shock therapy believed that the restoration of a market economy based on private property and the rule of law would facilitate the Baltic states’ “return to Europe.” Gradualists, who quickly lost the debate in Estonia but whose views resonated more widely in Lithuania and Latvia, urged a more measured approach to the transition, arguing that the negative short-term effects of shock therapy would undermine political reform and cause unnecessary suffering.
Eager to join Western institutions such as NATO and the EU, which many believed would ensure their future security and economic wellbeing, the Baltic states followed the advice of the International Monetary Fund (IMF), upon which all three depended for economic aid, and adopted the liberal economic path of rapid reform. While the Democratic Labour Party government (1992–1996) in Lithuania was initially reluctant to pursue this approach, it too succumbed to Western pressure to embrace the economics of shock therapy.
The early years of transition, especially 1992 and 1993, were the most excruciating for many, for this was an era of decay and uncertainty as well as one of creation and reinvention. As unemployment steadily rose, inflation in all three countries approached or exceeded 1,000 percent in 1992, destroying whatever savings people had managed to accumulate while making even the most basic foodstuffs, as well as rent and services, prohibitively expensive. Meanwhile, the decay of the Soviet military–industrial complex caused great hardship in the manufacturing sector throughout the former USSR. Factory workers in struggling enterprises—in the Baltics such people tended to be disproportionately Russian—saw their future prospects vanish as privatized factories shed employees or folded.
During the early years of this transition Baltic governments could do little to mitigate the ill effects of unemployment, unmet material needs, and general hopelessness. Adopting tight monetary policies, they were consequently unable to provide much of a cushion for those who were worst affected. Pensioners, whose numbers in the Baltic countries were then proportionally twice as large as in western Europe, found government austerity measures especially painful. Moreover, with state subsidies for research, education, and cultural activities sharply reduced, Baltic universities and institutes, orchestras and theaters, and journals and libraries had to slash their budgets while searching for alternate sources of income.
Only after the introduction of local currencies in 1992 (Latvia and Estonia) and 1993 (Lithuania) was it possible for the Baltic governments to combat the greatest scourge facing local consumers— runaway inflation—which fell to the double digits in 1993–1994 and the single digits by 1997. By this time, the economies of all three states had turned the corner. Having contracted by as much as one third in 1992 alone, in 1994 the growth in the gross domestic product (GDP) for all three Baltic countries was positive for the first time since 1989. If the early phase of the transition produced misery and hardship in all three Baltic countries, the reforms began to bear fruit by the end of the 1990s. An economic boom that lasted from 2000 until 2007 earned them the nickname “Baltic tigers,” for the Baltics enjoyed some of the fastest growth rates in Europe during the early years of this century. Yet even this stunning growth, more than 10 percent per annum at the height of the boom, did not necessarily improve conditions for people at the bottom of the economic ladder. Poverty remained a feature of rural life in all three Baltic states as the gap between the worst off and those in the middle and upper classes grew.
Estonia carried out its economic reforms first and most resolutely, with the aid of massive investment from Scandinavian countries. Adopting a tight monetary policy, Estonia limited government subsidies and expenditures, including pensions for the elderly, while cutting excessive taxation. If at first Latvia and Lithuania moved less decisively than Estonia, by the mid-1990s they too had developed the basic features of a market economy.
The key to economic reform in the Baltic states, as in the other former communist countries of eastern and central Europe, was the privatization of businesses and property that during Soviet times had been owned and run by the state. The idea was not only to right a historic wrong, but also to reestablish an ownership society on the basis of private property. In all three countries, small enterprises and farms were privatized first, while medium-size and larger enterprises were privatized afterward, generally after 1994. In Latvia and Lithuania, political opposition arising from public concerns about corruption and insider dealing, compounded by the sheer complexity of the process, discouraged the sort of rapid privatization that was achieved in Estonia; the result was a slower and more tortured transition to private ownership in these countries.
There were two main methods of privatization: cash sales of enterprises to core investors, which many saw as the most efficient way of restoring economic viability, and voucher systems, whereby residents received shares in enterprises based on certain criteria, such as (as in the Estonian system) their years of active employment and service in the economy. The system adopted by Latvia, however, illustrates one of the problems of voucher-based privatization: launched in May 1993, the Latvian plan called for all residents to receive 1 certificate for each year of residence in Latvia, plus 15 additional certificates if they could prove Latvian citizenship prior to June 1940. While the vouchers were freely tradable and the system ensured widespread participation in the privatization process, the country’s Soviet-era immigrants saw the process as inherently discriminatory.
Indeed, in all three countries, the privatization process brought forth charges of discrimination, favoritism, and collusion. A common allegation during the early stage of privatization, and one that was often true, was that managers and former senior Communist Party officials were able to purchase shares at a discount and thereby retain control of the firms they had run during the Soviet period. Moreover, with privatization came the pain of streamlining and rising unemployment as well as the psychological difficulties of adjusting to the “risk and reward” mentality of the private sector. Many firms drifted under the new conditions, with the managers often expecting that losses would be smoothed over with government subsidies, as was common during Soviet days. More successful was the transfer to private owners of smaller enterprises such as restaurants, small shops, and services, where the smaller scales of operation facilitated innovative approaches to management. By the first decade of the 21st century however, the process of privatization was nearly complete in all three Baltic states and most of the largest enterprises had been sold off even if the state still holds sizable stakes in certain enterprises, such as the Latvian government’s ownership of its national airline.
The issue of land reform posed no less a challenge to the new governments, each of which prioritized the return of farmlands to their pre-collectivization owners from the moment they secured their independence. As the old collective farms began to disintegrate, much of the land was transferred to private hands. However, the transition was far from smooth, as claims exceeded the acreage available and the plots transferred to private owners were often too small to be economically viable. Meanwhile, competing claims to the same properties and the lack of proper official documentation in many cases held the process up for several years.
Agriculture’s share in the Baltic economies declined dramatically after 1991, and the proportion of the population employed in the agricultural sector dropped commensurately as the amount of fallow land increased. For example, in Lithuania, whose economy was the most dependent on agriculture during the Soviet era, the proportion of the population employed in agriculture dropped from 19.2 percent in 1998 to 7.9 percent in 2008. By the latter date agriculture comprised only 4.4 percent of the country’s total GDP, half of what it had been a decade earlier. Meanwhile, employment in Lithuania’s financial sector doubled while the industrial sector held more or less steady, employing around one-fifth the country’s work force and producing about one-quarter of its GDP.
The economic profiles of Latvia and Estonia are similar. Agriculture produces only about 5 percent of Latvia’s GDP and 4 percent of Estonia’s. With the disappearance of Estonia’s collective farms, employment in agriculture declined by a whopping 80 percent since the end of the Soviet era, with most of the displaced workers finding employment in other sectors of the economy. Industry is responsible for 30 percent of Estonia’s economy and about one-quarter that of Latvia. In all three countries services account for the bulk—60 to 70 percent—of GDP.3
By most measures, these are modern economies that have retained few vestiges of the old Soviet system. Estonia in particular has made its mark in the technology sector, with the free communications service Skype (which was bought by Microsoft for $8.5 billion in 2011) as its best-known start-up. Yet even Estonia’s burgeoning technology sector has its roots in the Soviet era: in its early years Skype, whose software was created by Estonians, was housed in the Institute of Cybernetics, founded in 1960 as an institute of the Estonian Academy of Sciences. While some have claimed that it was the radicalism of Estonia’s postSoviet leaders that was responsible for the country’s early economic successes, it could also be argued that Estonia hit the ground running as the communist system collapsed; after all, the republic had been a laboratory for Soviet economic experiments since the 1960s and it inherited certain structural advantages that were lacking in the other republics, such as the prevalence of light industry and its greater economic decentralization.4
Still, being severed from the USSR’s integrated economic system meant that the Baltic states would have to reorient their economies away from Russia (while reaping the benefits of Russia’s transit trade with the West) and toward Western markets. The transition took place with stunning speed: while in 1991 the republics of the Soviet Union absorbed 94 percent of Estonia’s exports and provided 84 percent of its imports, within a year these figures had dropped to 35 percent and 40 percent.5 A similar pattern could be seen in Latvia and Lithuania, and in all three countries the transition accelerated after the collapse of the Russian ruble in August 1998 and continued after the Baltic states joined the EU in 2004.
Today the states of the EU, especially the northern ones, are the biggest trade partners of all three Baltic countries. In 2011, 61 percent of Lithuania’s exports (led by refined petroleum, dairy and wood products, fertilizers, and chemical products) were delivered to EU members, and 16 percent of Lithuanian exports went to Russia.6 In 2012, the main destinations for Estonia’s exports (machinery and electrical equipment, followed by oil shale and electricity) were Sweden (16 percent), Finland (15 percent), and Russia (12 percent).7 Latvia’s main exports include wood products, base metals, machinery, and electrical equipment. And while Russia is the destination of 11 percent of Latvia’s exports, the bulk go to EU countries (70 percent), mainly Lithuania (16 percent), Estonia (13 percent), and Germany (8 percent).8 While all three remain dependent on Russia for oil and natural gas, Lithuania has the Baltic states’ only petroleum refinery, Mažeikiai Nafta, in the Baltics. Privatized in 1999 (when it was bought by the U.S.-based Williams Companies, which then sold it to the Russian oil company Yukos—a transaction that prompted Prime Minister Rolandas Paksas to resign in protest) and subsequently upgraded, the majority of Mažeikiai is currently owned by the Polish company PKN Orlen. Processing oil that mostly comes from Russia, Mažeikiai exports the majority of its products to EU states and the United States.
The banking systems created in the Baltic states in the 1990s illustrate some of the costs and benefits of economic reform in the region. While the transition to market-based economies would not have been possible without the construction of banking networks in each of the Baltic countries, the frequent scandals associated with the financial sector have frequently undermined public and investor confidence. The most notorious case during the early years of the transition was the collapse of Latvia’s largest commercial bank, Baltija Bank, in May 1995, which caused thousands of depositors to lose their savings and nearly brought down the entire Latvian banking system. Likewise, at the end of the year, two of Lithuania’s largest banks were declared insolvent and Prime Minister Adolfas Šleževičius, who was reported to have used inside information to withdraw his savings before the suspension of operation, was ousted by the Seimas. Banks were also a factor in the 2008–2010 financial crisis as international investors began to withdraw their assets in the wake of the burst real estate bubble. As a result of the crisis, the government of Latvia acquired a 51 percent stake in the troubled Parex Bank, the country’s largest, which in turn forced the government to take out a loan from the IMF and the European Commission. The Lithuanian government was likewise forced to nationalize the commercial bank Snoras in late 2011 following a public uproar about the 3.4 million litas (about one billion euros) that disappeared from its accounts.
Just as their residual dependence on Russia in the 1990s caused the Baltic countries to suffer in the wake of the Russian financial crisis of August 1998, the vulnerabilities of the Baltic economies were once again revealed during the worldwide financial crisis that struck a decade later, for by 2008 the Baltic states were deeply embedded in the world financial system and were dependent on the foreign credit that dried up following Lehman Brothers’ bankruptcy in September of that year. If Latvia, whose economy grew by 12.2 percent in 2006, was the leader of the “Baltic tigers” during a period of dynamic economic growth, it quickly became a poster child for the global recession: in 2009 alone the Latvian economy contracted by nearly 18 percent—its worst performance since the early 1990s. As unemployment soared past 20 percent, 130,000 Latvians (and twice as many Lithuanians), mostly young and male, left their places of birth to seek employment opportunities in the EU, the United Kingdom, the United States, and elsewhere between 2009 and 2012.
If Lithuania and Estonia suffered less from the crisis than did Latvia, it was mostly a matter of degree, for all three Baltic economies had grown with extraordinary speed only to experience the sharpest reversal of fortune in all Europe. All three experienced a “housing bubble” (i.e., an overheated property market) that radically inflated real estate prices in the region’s largest cities before bursting. The cost of purchasing an apartment in Tallinn and Vilnius nearly doubled between 2004 and 2007; in Riga the cost of an apartment, measured in price per square meter, rose by 267 percent. As real estate prices began to be corrected in late 2007, the Baltic economies decelerated; by 2008 the Baltic tigers had fallen into a recession as global liquidity evaporated, unemployment skyrocketed, and gross wages declined. In December it was announced that Latvia, the country that was hit worst by the crisis, would be the target of an IMF stabilization program amounting to $10.5 billion (7.5 billion euros)—more than one-third of the country’s GDP.9 While Lithuania and Estonia avoided the IMF, all three Baltic governments introduced severe deficit-cutting measures (cutting pensions, slashing the wages of state employees, increasing income and excise taxes) and all three intervened in the affairs of their troubled banks. “Education, health care, central administration: hardly any public sector category was spared by [Latvia’s] reforms,” one observer noted.10
The austerity measures were pushed through the Baltic parliaments virtually without debate, which in Latvia simply reinforced public perception about the relationship between the business oligarchs and the country’s political elites. The reforms created widespread hardship, inspired public protests in Vilnius and Riga in January 2009, and caused some political instability in Lithuania and especially Latvia, where the government of Prime Minister Ivars Godmanis had to fend off a vote of no confidence by the Saeima (it was replaced in February by a more free-market right-center government under Valdis Dombrovskis). Yet even if the Baltic states suffered a cumulative GDP contraction of 18 percent in 2008–2009—among the worst performances in Europe—they were spared the widespread social unrest that plague Greece and Spain. Despite popular anger at corruption in Latvia and Lithuania even the radical left failed to make political headway.
While the fiscally conservative policies adopted by the Baltic states were inarguably painful to many, their defenders can claim that they also quickly paid off as the Baltic states began to claw their way out of the recession. By 2011 the Baltic economies were recording some of the highest growth rates (8.3 percent in Estonia, 5.5 percent in Latvia, and 5.9 percent in Lithuania) in Europe. Unemployment, which in early 2010 reached 20 percent in Latvia, 19 percent in Estonia, and 17 percent in Lithuania (the EU average peaked at 9.6 percent), remained a major problem for years afterward in Latvia and Lithuania, whereas in Estonia it had fallen to 6.9 percent by the second quarter of 2014 thanks in part to the country’s ageing labor force.
One of the most pressing domestic issues in the contemporary Baltic states concerns the integration of the region’s Russian-speaking minorities. When the Soviet Union collapsed in 1991, nearly two million Russian-speakers resided in the Baltic states, their future status uncertain. This was a concern not only to the Baltic governments, but also to Russia, the Soviet Union’s legal successor, for the Russian government now took on the role of “protector” of the more than 20 million Russian-speakers who were stranded in the former Soviet republics. If in 1990 Boris Yeltsin, then speaker of the Supreme Soviet of the Russian Soviet Federative Socialist Republic (RSFSR), said that if the Baltic states opted for independence Russia would be the first to sign treaties with them, then as president of the Russian Federation (1991–1999) he soon began to change his tune, putting pressure on the Baltic states to observe the “human rights” of the region’s Russian-speakers.
Despite the Russian president’s rough warnings, Moscow’s role in the region was generally passive in the 1990s, and it was during the Yeltsin years that the Baltic states and Russia managed to negotiate the Russian army’s exit from the Baltic states. This did not come easily, as the Russian foreign ministry demands included: temporary bases in the Baltics; guarantees of Russia’s military transit rights to Kaliningrad, its last remaining military outpost on the Baltic Sea (this condition affected Lithuania above all); financial compensation for the vacated bases; and guarantees for the social and political rights of Russian-speaking residents and of retired Soviet officers.11 With the Baltic governments rejecting these stipulations, negotiations dragged on for several years.
Most of Russia’s complaints were directed at Latvia and Estonia, whose treatment of their Russian-speaking minorities was a major impediment to negotiations. Lithuania’s more accommodating stance did not go unnoticed in Moscow, which agreed to a timetable for withdrawal by August 31, 1993. With the encouragement of the U.S. government, on April 30, 1994, Latvia reached a compromise agreement with Russia over Skrunda, the location of a Soviet-built missile attack early warning system that Russia had hoped to keep.12 On the same day the Russian and Latvian presidents and prime ministers signed an accord stipulating that Russian troops would withdraw from Latvia by August 31, 1994. Latvia also agreed, reluctantly, to provide residence permits for members of the Soviet military who retired there.
Estonia’s difficult negotiations with Russia required the diplomatic skills of President Lennart Meri, who demanded that Yeltsin provide him with a specific date by which the nuclear submarine base at Paldiski, located 45 kilometers west of Tallinn, would be shut down. Like his Latvian counterpart Guntis Ulmanis, Meri ultimately agreed to grant retired military personnel and their families residence permits, but only after the two sides had reached an agreement about Paldiski. Although accounts of the negotiations in Moscow suggest that they were facilitated by Yeltsin’s growing inebriation, the result was a treaty that guaranteed the withdrawal of Russia’s military presence by August 31, 1994.13
The agreements that resulted in Russia’s complete military withdrawal from the region were facilitated by a shared desire on behalf of the governments of Russia, Estonia, and Latvia to improve their relations with the West. The Baltic states hoped to clear the path for eventual admission to the EU and NATO, while Russia sought Western aid and investment as it reformed its economy. Early negotiations over the Estonian-Russian and Latvian-Russian borders were less successful, as Russia refused to even consider Estonian and Latvian demands to nullify the border changes that were made at the end of World War II (see chapter 6). As many central European countries shared frontiers that were imposed upon them after World War II, European leaders were reluctant to set a precedent by condoning Estonian and Latvian demands that the Russian Federation recognize their interwar borders. Estonian foreign minister Jüri Luik summed up Estonia’s dilemma this way: “Nobody would like to have us in the [EU] if we have unresolved border issues. Estonia’s eastern border would become the EU eastern border and the unresolved border disagreement or conflict would become a conflict for the EU.”14
It was not until 2005 that Estonia and Russia signed the treaties that delineated their land and sea borders (these were ratified by the Riigikogu but not by the Russian Duma). Latvia and Russia came to a quiet agreement about their mutual border the following year. By this time the three Baltic states constituted the easternmost boundaries of both the NATO alliance and the EU, while a resurgent Russia, now enjoying a period of spectacular economic growth buoyed by rising energy prices, was under the leadership of Vladimir Putin (b. 1952), a highly disciplined former KGB officer who was determined to restore vertical power at home and Russia’s great power status abroad.
The Baltics’ relationship with Russia is nearly inseparable from Moscow’s expressed concerns about the Russian-speaking minorities who constitute about one-quarter of the population of Estonia and Latvia and less than one-tenth of Lithuania’s more homogeneous population. While Lithuanians have felt less threatened by their national minorities, many Latvians and Estonians see their Russian-speaking communities as an unwanted legacy of the Soviet era, when waves of colonizers arrived to work as administrators, party functionaries, and industrial laborers, while tens of thousands of Balts were relocated, at first forcibly and later voluntarily, to the other Soviet republics.
How the situation looked after nearly five decades of Soviet rule can be seen in the figures produced by the Soviet census of 1989, which showed that only 52 percent of Latvia’s population consisted of ethnic Latvians, with most of the rest being ethnic Russians or Russian-speakers. Ethnic Estonians comprised a mere 61.5 percent of Estonia’s population in 1989, with nearly all the remainder comprising Russophones, most of whom were unable to speak the totally unrelated (and difficult to learn) Estonian language. Only Lithuania exited communism with its titular population relatively unthreatened: ethnic Lithuanians continued to comprise about 80 percent (and rising) of the population of their own republic, while the rest were mostly Poles and Russians. Now masters in their own homes, Estonian and Latvian leaders were committed to ensuring the survival of their nations, even if this meant that their states would consist of two unequal communities.
Even today hundreds of thousands of Russian-speakers in Estonia and Latvia do not identify with their host state and feel as if they have been marginalized and disenfranchised. Although large numbers of them voted for independence in 1991, most Russian-speakers were disappointed at the resulting nation-state, for they now found themselves to be unequal members of an ethnic minority living in a vaguely foreign land that was suffering from the ill effects of a postimperial hangover and whose leaders remained wary of its ethnic minorities. The events of the late 1980s and early 1990s destroyed forever Moscow’s pretense that there was a united “Soviet people” bound together in eternal friendship under the benevolent guardianship of the Russians. If there remained multiple ethnic communities in the Baltic states, there were now only two legal communities: citizens and noncitizens—those with rights and constitutional protections, and those without.
Alone among the Baltic states, Lithuania adopted the so-called “zero option,” which based citizenship on territory rather than ethnicity and set neither language nor residence requirements for those living in the republic prior to the enactment of the citizenship law in November 1989. A second law published in December 1991 set the conditions for acquiring citizenship by means of naturalization: anyone who lived in Lithuania for 10 years could apply for Lithuanian citizenship provided they could speak Lithuanian and were willing to take a loyalty oath.
By early 1993 more than half of Lithuania’s ethnic Russian, Polish, Belarusian, and Ukrainian inhabitants had received citizenship, and by the end of the millennium 99 percent of all residents of Lithuania had citizenship. Forty thousand others, however, chose to emigrate, thus reducing Lithuania’s Russian population to just over 300,000. If the remaining Russians (5.8 percent of the population in 2011) and Poles (6.6 percent) who are concentrated in the poorer eastern part of the country have found Lithuania to be more hospitable to non-Lithuanians than Estonia or Latvia is to its Russian-speaking minorities, this is in part because of the Lithuanian government’s more liberal and inclusive approach to its national minorities. Nevertheless, despite the international agreements that protect the right of Poles to use Polish in eastern Lithuania, tensions between representatives of the central government and local non-Lithuanian officials have flared on occasion, and Polish activists have frequently complained about unfairness with regard to education (they have demanded a “Polish” university), cultural rights, and access to public-sector employment.15
Citizenship policies in Latvia and Estonia were far tougher on their national minorities, in particular the Soviet-era immigrants, who were not granted automatic citizenship but were instead made to go through the naturalization process. Thus while the citizens of the preoccupation republics and their descendants were automatically declared citizens, the remainder—those who had come to the republic after June 1940, as well as their descendants—would have had to choose among four options: (1) apply for naturalization on the basis of specific language and residency criteria; (2) opt for Russian citizenship while remaining in Estonia or Latvia; (3) leave; or (4) remain “stateless,” without the basic social and political rights accorded to citizens. Such policies disenfranchised the bulk of their Russian-speaking inhabitants. It was Estonia’s dramatically reduced electorate—nearly one-third of the country consisted of “aliens” without Estonian citizenship—that in 1992 produced a Riigikogu that lacked even a single Russian-speaker. Latvia’s first postcommunist elections produced a 100-member Saeima with seven ethnic Russians.
During this period of uncertainty many Estonians and Latvians wished that the Russian immigrants would simply “go back to Russia,” a voluntary program for which the Latvian government even offered financial assistance in the hopes of avoiding an entrenched conflict between the majority and minority communities.16 In the summer of 1993 the Estonian Riigikogu forced the issue by passing the Law on Aliens, which demanded that all noncitizens be registered and that they obtain new residence and work permits or face deportation. By this time tens of thousands of Russophones had left Estonia and Latvia for Russia and other former Soviet republics.
To many observers it seemed that by enacting strict naturalization requirements the governments of Estonia and Latvia were in effect discouraging the integration of their Russophone populations, for at the time of the USSR’s breakup relatively few of the region’s Russophones knew the Estonian or Latvian languages and many considered the language exams unreasonably difficult to pass. Nevertheless, under pressure from Moscow, the EU, and other international organizations, the citizenship laws of Estonia and Latvia were amended to simplify naturalization procedures and thus speed up the integration process. Although naturalization rates slowed after 1999, between 1992 and 2012 a total of 154,439 people gained Estonian citizenship and the number of stateless residents had fallen to 92,351—a number that is slightly exceeded by the number of residents of Estonia who were citizens of the Russian Federation (94,638). As of 2014 about half of Estonia’s minority population lacked Estonian citizenship. Authors of a report on the issue concluded that “naturalisation has brought new members to the Estonian citizenry, made it ethnically more diverse and moved the country closer to full democratic participation.”17 At the same time, it may well also be the case that Estonia has managed to maintain a functioning political partly because of its willingness to allow Russian-speaking communities, concentrated in the northeast corner of the country, a large degree of cultural autonomy. It is possible that a policy of relative separation rather than integration may even have contributed to a growing acceptance of the Estonian state on the part of Russian-speakers.18
While Estonia’s Russian-speaking minority is concentrated in Narva and Tallinn, Latvia’s ethnic minorities are more broadly dispersed throughout the country; thus a policy of granting an ethnic enclave self-governance or cultural autonomy was less feasible there. Yet Latvia too has modified its policies since the early 1990s when, like Estonia, it adopted restrictive citizenship policies that granted automatic citizenship only to people who were citizens of Latvia in June 1940 and their descendants. Such a policy left some 28 percent of Latvia’s residents—673,398 people—with undetermined status until the passage of a citizenship law in 1994, which required those who wished to become naturalized citizens to pass tests on the Latvian language and history.
Yet the goal of Latvia’s citizenship law seemed to be aimed less at integrating the Russian community as quickly as possible than its opposite: the law’s designers wished to ensure that Latvia would not be flooded by a rush of applicants, an outcome some Latvians believed would threaten their survival as a nation. But with the number of applicants turning out to be lower than expected—from 1995 to 1998 only 15,853 residents applied for naturalization—many Russians chose to remain stateless or take on citizenship in the Russian Federation.19 The muddled policies of the Russian Federation in the 1990s facilitated this choice, as all former Soviet citizens qualified for natural-born Russian citizenship upon request. However, Russia’s policy of allowing individuals living in the “near abroad” who opted for Russian citizenship to maintain citizenship in their country of residence was opposed by virtually all of Russia’s neighbors, who suspected Moscow of implementing a strategy that would allow it to dominate the territories of the former USSR by creating millions of dual citizens.20
Responding to pressure from the EU and other Western institutions that Latvia wished to join, Latvia amended its citizenship law in 1998 to liberalize its requirements (the number of applicants nearly tripled in 1999), but language proficiency remains the main obstacle on the path to citizenship for most Russophones, a point that is reinforced by the fact that 41 percent of all applicants failed the language exam in 2011. A similar rate of failure was reported in Estonia earlier in the century. That in recent years only 2,000 to 3,000 residents of Latvia have bothered to apply for naturalization in any given year while 304,283 remained noncitizens as of October 2012 is revealing of Latvia’s failures in that arena.21
In recent years the main concern of the Russophone minority in Latvia has been the legal status of the Russian language in a country where at the dawn of the millennium more people were fluent in Russian than in Latvian. As in Estonia, Latvian law considers Russian a foreign language (mirroring Soviet-era policies, the Latvian state now requires Russian children to study Latvian in elementary school), despite the fact that 37 percent of the population speak Russian at home. In an effort to force Latvia’s publicly financed schools to use Latvian exclusively, in 2010 the National Alliance coalition, which united the conservative party For Fatherland and Freedom/LNNK and the ethno-nationalist party All For Latvia! for the 2010 parliamentary election, began collecting signatures to force a referendum on the issue.
Such expressions of Latvian nationalism in the political arena had the unintended effect of mobilizing the Russophone organizations, which in turn began to collect signatures in an effort to get their own referendum placed on the ballot that would make Russian Latvia’s official second language and that would give Russian equal status to Latvian in government institutions. While the drive succeeded in collecting enough signatures to trigger a referendum in early 2012 (whereas the Latvian initiative failed), the results simply mirrored Latvia’s ethnic divisions, with 25 percent voting in favor and the remainder rejecting the proposed amendment to the Latvian constitution.
If at first Latvia’s president Andris Bērziņš (since 2011) hesitated to take sides, he nevertheless characterized the Russians’ efforts to make Russian a second language in Latvia as “a deliberate incitement” before urging people to “go and protect the Latvian language.”22 A statement made at that time by Latvia’s former president Valdis Zatlers (2007–2011) that “Latvian has always been the only language in Latvia” may be taken as proof that Baltic politicians, like people everywhere, are not always comfortable with certain inconvenient truths.23
In his annual address to the Federal Assembly in April 2005, Russian president Vladimir Putin offered an outline of Russia’s recent history that has sometimes been mistaken as nostalgia for communism but in reality reflected a Russian imperial worldview that sharply contradicted the Baltic narrative of a “return to Europe.” “Above all,” Putin reminded his audience, “we should acknowledge that the collapse of the Soviet Union was a major geopolitical disaster of the century. As for the Russian nation, it became a genuine drama. Tens of millions of our co-citizens and compatriots found themselves outside Russian territory.” This was Putin’s inconvenient truth: Russians were traumatized by the loss of their empire; left unsaid was what should be done to heal the wounds of the Russian nation.
Two weeks later, on May 9, Putin played host to world leaders at the 60th anniversary of the Allied victory over Nazi Germany. On his way to Moscow, U.S. president George W. Bush fils stopped in Riga, where he delivered an address to Latvia’s president Vaira VīķeFreiberga, Estonian president Arnold Rüütel, Lithuanian president Valdas Adamkus, and other dignitaries. “The Baltic countries have seen one of the most dramatic transformations in modern history, from captive nations to NATO allies and EU members in little more than a decade. The Latvian, Estonian, and Lithuanian people showed that the love of liberty is stronger than the will of an empire.” Fully embracing the Baltic interpretation of postwar history, Bush continued: “The captivity of millions in Central and Eastern Europe will be remembered as one of the greatest wrongs of history.” Never before had a U.S. president acknowledged what many Balts had long regarded as a shameful betrayal. It was an apology for which Estonians, Latvians, and Lithuanians had waited for nearly 60 years.
Despite the show of solidarity in Moscow, where the Russian and U.S. presidents stood side-by-side on the reviewing stand on Red Square to watch goose-stepping soldiers march past, these speeches were delivered at a difficult moment in Russian-Western relations and reflected their divergent views both of recent history and of Europe’s future. In many important ways Russia and the West continued to be divided long after the fall of the Iron Curtain: while the West has promoted democracy, liberal economic reforms, and military cooperation in countries that once took their orders from Moscow, Russia’s rulers continue to see the region between the Baltic and Black Seas as part of its own security perimeter. Millions of Russians and Russianspeakers from Estonia to Ukraine live in a zone whose past has been shaped by the bloody conflicts of the 20th century and whose present is influenced by a broadly shared desire for democracy and economic security that many associate with membership in Western institutions.
For such countries, the year 2004 was a turning point as a series of former Soviet satellites were invited to join an enlarged NATO, following an earlier round of NATO enlargement in 1999, and an expanded EU. That the Baltic states were admitted to these institutions was, in Putin’s view, not only an insult to Russia but also a betrayal of an alleged promise made in 1990 by U.S. officials to then-Soviet leader Mikhail Gorbachev that NATO would not expand eastward. Having stomached NATO’s admission of the Baltic states, Putin further suspected the West of intervening in neighboring Ukraine, where in November 2004 massive demonstrations broke out in response to irregularities in the recent presidential election. While Western leaders looked upon Ukraine’s “Orange Revolution” with sympathy, the Russian president saw the West’s support for democracy in Ukraine as an affront to Russia and a direct threat to Ukraine’s Russian minority, which generally sought closer political and economic ties with Moscow rather than Europe. It was Putin’s alleged concern for the rights of Russians in the territory of Ukraine that prompted Moscow’s shocking seizure of Crimea in the spring of 2014—a unilateral border revision that triggered alarm bells in the Baltic states, which began to make preparations to deal with potential Russian aggression. If Russia could behave in such a manner in Ukraine, a neighbor that Russia accuses of persecuting its minority communities, might its leaders not be tempted to intervene in the Baltics where the Russian-speaking communities really do suffer from discrimination?
While irritation with the Baltic republics with regard to the rights of Russian speakers has been a consistent feature of Moscow’s foreign policy for nearly a quarter century, the Kremlin’s outrage is expressed most loudly when the Balts commemorate recent history in a manner that insults the Soviet-Russian memory of World War II. When geriatric former members of the Latvian Legion—a unit of the Waffen-SS created by the Nazis during World War II—gather at Riga’s Freedom Monument every spring to commemorate their efforts to defend Latvia from the Soviets, they have always been met by counterdemonstrations attended by Russophones who accuse the Legion of having served the Nazis and who furthermore accuse sympathetic Latvian demonstrators of glorifying Nazism. Latvian nationalists who gather in support of the Legion, on the other hand, tend to see its members as anti-Soviet heroes who were unfairly maligned and punished during Soviet times. Latvian leaders have wisely distanced themselves from the Legionnaire Day celebrations: the government abandoned it as an official commemoration event in 2000 and Riga’s mayor Nils Ušakovs tried to get the demonstrations banned. The annual event draws the attention of the international media and does little to heal relations between Latvia’s estranged communities or between Latvia and Moscow.
While Legionnaires take center stage in Latvia every March 16, veterans of the Red Army gather every May 9 at Riga’s Victory Park, created in the 1980s to commemorate the Soviet Union’s defeat of the fascist invaders. In the absence of any Lenin monuments around which to rally, in the 1990s the imposing war monument at the center of Victory Park became a symbol for people who feel nostalgic about Soviet times and who harbor resentments against the Latvian state. For Latvian nationalists, on the other hand, the monument is a symbol of a Soviet occupation they regard as genocidal in intent, and hence of a great evil perpetrated by Russia’s leaders for half a century. Like Legionnaire’s Day, the May 9 celebrations do much to stir up tensions among the country’s Latvians and Russian-speakers.24
The controversies surrounding the World War II commemorations are a reflection of the way Latvians and Russians remember the recent past. If most Latvians remember Soviet rule as being far worse than Nazi rule, for the Russian-speaking community the idea of Russia as an aggressor or that the Baltic states were “occupied” is completely alien; for Russians the main evil is “fascism”—a term that is often conflated with local (i.e., non-Russian) nationalism of any kind on the frontiers of the Russian state. Some members of the Russian-speaking community even take the questionable view that the Red Army saved Latvia’s independence: if the Red Army hadn’t defeated Hitler, said Boriss Cilevičs, a Saeima representative from the pro-Russian Harmony Centre and a native of the largely Russian city Daugavpils, there wouldn’t be an independent Latvia today.
The way history is remembered and represented in the Baltic states today has fallen into predictable patterns—demonstrations that organize masses of people representing “we” (victims) against an insidious “they” (perpetrators) are met with criticism and counterdemonstrations, only to be repeated the following year—and it sometimes seems as if there is little common ground among people with opposing views. Two of the three Baltic presidents took a stand against the official Russian view of World War II, a view that is embraced by many Baltic Russians, by declining Putin’s invitation to attend the V-E Day 60th anniversary summit in Moscow in May 2005. Only Vaira VīķeFreiberga attended, but in doing so the Latvian president felt compelled to write an editorial in which she lamented the impact of Russia’s refusal to own up to its history of aggression against its neighbors:
After the war, Germany made great efforts to atone for the unspeakable crimes committed under the Nazi regime. This process began with an honest evaluation of the country’s Nazi-era history and continued with Germany’s unequivocal renunciation of its totalitarian past. Russia would gain immensely by acting in a similar manner and by expressing its genuine regret for the crimes of the Soviet regime. Until Russia does so, it will continue to be haunted by the ghosts of its past, and its relations with its immediate neighbors will remain uneasy at best.25
Likewise, when asked about the future of Estonian-Russian relations in early 2006, Toomas Hendrik Ilves, Estonia’s former foreign minister and soon-to-be president, replied:
As long as Russia fails to come to terms with Estonian independence, or, on a greater scale, the “greatest tragedy of the 20th century,” Mr. Putin’s characterization of the collapse of the USSR, I doubt we will see much of a change. This has little to do with Estonia. We see Russia treat Poland, Ukraine, [and] Georgia in exactly the same neurotic way that has more to do with its own inability to deal with its past than anything Estonia has or has not done.26
Six months after he took office, President Ilves faced a major crisis in Estonian-Russian relations when the Estonian government decided to relocate a Soviet war memorial situated in the center of Tallinn.27 Erected in 1947 by the Soviet regime, the Monument to the Liberators of Tallinn commemorated the Red Army soldiers who conquered the city at the end of World War II. The site’s sacralized nature was reinforced in later years by the reburying of soldiers near the monument, to which an “eternal flame” was added in 1964. While the monument had survived the removal of Soviet-era monuments that took place in the Baltic states and in other former communist countries, Estonian authorities decided to rename it the Bronze Soldier and extinguish its eternal flame. For Estonians the statue symbolized their national tragedy; for Russians it was a symbol of shared suffering during the Great Patriotic War, the Russian name for World War II.
The decision by Estonian authorities to remove the polarizing statue was preceded by a series of incidents involving the erection
The Monument to the Liberators of Tallinn, popularly known as the Bronze Soldier, was erected in 1947 to commemorate the fallen soldiers of the Soviet Red Army during its struggle against Nazi Germany. Following a riot in April 2007, the polarizing monument was relocated to the outskirts of the city. (AFP/Getty Images)
of controversial war monuments and the desecration of others. Now it was decided to ban all displays of Soviet symbols, including those commemorating the Great Patriotic War. On the evening of April 26, 2007, a largely Russian-speaking crowd began protesting the exhumation of the soldiers buried underneath the Bronze Soldier that had begun that morning, but soon the protest turned into vandalism and looting while the surprised government held an emergency meeting at which it was decided to move the monument immediately in order to forestall even worse disturbances. What followed was a full-scale crisis in Tallinn, as the statue’s removal prompted two nights of rioting and escalated tensions between the Estonian and Russian governments.
While the Kremlin denounced the move, state-controlled Russian media exacerbated the situation with its misrepresentations of the events surrounding the monument’s relocation away from the city center. Over the following days and weeks Estonia fell victim to a cyber-attack that disabled the country’s entire Internet structure (observers pointed to Russia, which denied the charges), while the Russian youth group Nashi (“Ours”) blockaded the Estonian embassy in Moscow for a week. The incident also had economic repercussions, as a Russian boycott of Estonian goods was accompanied by a significant decline in Russian oil transit through Estonia—a threat not only to Estonia, but to other European countries dependent on Russian energy supplies. As the disturbances dissipated, the statue was reerected in a military cemetery on the outskirts of the city, where members of the Estonian government participated in a solemn opening ceremony on May 8, 2008.
The events surrounding the removal of the Bronze Soldier, like the controversial commemorative events in Latvia, demonstrate how far apart nationalists on both ends of the ethnic continuum remain in the Baltic states. Yet the recurrence of such incidents may also suggest that it is not only the independence of the Baltic states that Russia and many local Russian-speakers find so unnerving: it is the Europeanization of the former Soviet republics that is at the heart of the matter. Independence was one thing, but the integration of the Baltic states into NATO, the EU, and other Western institutions over which Russia exercised little influence was a slap at Russia’s pretensions to “great power” status.
Russia’s troubled relationships with the Baltic states can best be appreciated by considering its even more troubled relationships with certain other former Soviet republics, notably Georgia and Ukraine, where political disagreements that partly concern the ex-Soviet states’ ties to the West have escalated to the point of armed conflict. During the presidency of the young, Western-educated, and mercurial Mikheil Sakaashvili (2004–2013), Georgia sought NATO membership as protection from Russia while Tbilisi acted to rein in the breakaway republics of Abkhazia and South Ossetia, both of which were cleansed of Georgians during the 1990s. Rejecting Georgia’s push for NATO membership (an ambition that was tacitly encouraged by U.S. officials like Condoleezza Rice), Moscow supported the sovereignty of the breakaway republics with enormous financial subsidies and by issuing their residents Russian passports. After years of simmering, the situation in South Ossetia finally turned hostile in the summer of 2008. Insisting on Russia’s right to protect Russians who live abroad, Russian president Dmitri Medvedev (2008–2012) approved the buildup of Russian forces that prompted Sakaashvili to launch a misguided preemptive attack on South Ossetia on the night of August 7–8. If Sakaashvili believed that the West could come to Georgia’s defense, or that Russia would be intimidated by that possibility, he was mistaken, for Russia responded with force as the West looked on with caution.
With Georgian forces retreating from South Ossetia after only a few days of fighting, Russia’s president ordered an end to military operations. In the aftermath of the conflict, Medvedev laid down five principles that would guide Russia’s defense of its national interests. Among them: “[P]rotecting the lives and dignity of our citizens, wherever they may be, is an unquestionable priority for our country. Our foreign policy decisions will be based on this need.”28 Often seen as a liberal foil to former president Vladimir Putin, who was prime minister during the Medvedev presidency, Medvedev was no less committed to protecting Russia’s interests in the “near abroad” than his predecessor (who was the same person as his successor).
Still more ominous for the Baltic states were the events that began to develop in Ukraine, another aspirant for membership in Western institutions, in late 2013 when demonstrators took to Kiev’s Independence Square (Maidan) to protest a decision taken by President Viktor Yanukovych to end the negotiations that would bring about a closer political association between Ukraine and the EU. Unfolding amidst a worsening economic crisis that the Russian government intended to exploit to bind Kiev to Moscow—Russia offered $15 billion in loans to trump the EU’s paltry offer of $838 million (€610 million)—the unrest resulted in Yanukovych’s ouster in February 2014 by a rebellious Ukrainian parliament. Ignoring the chants of hundreds of thousands of Ukrainians at Maidan, the Kremlin insisted that the revolution was engineered by Western governments working in tandem with the “fascists” who had seized power Ukraine.
While enjoying the world’s attention as it played host to the elaborately staged Winter Olympic Games in Sochi, Russia began to support “self-defense forces” in Crimea as a prelude to annexing the region to the Russian Federation, which was swiftly accomplished in March 2014. A strategically important peninsula located on the Black Sea, Crimea was, according to Ukraine’s 2001 census, populated mostly by Russians (58.5 percent), Ukrainians (24.4 percent), and Crimean Tatars (10.2 percent). The Russian actions in Crimea, ostensibly motivated by the need to protect ethnic Russians from abuse, prompted local forces in the eastern, mostly Russian, parts of Ukraine to announce on May 16 the formation of a separatist Donetsk People’s Republic, which to date has been recognized only by the Russian-backed Republic of South Ossetia. Although Moscow denied aiding the rebels—just as it initially denied having anything to do with events in Crimea—there can be little doubt that the breakaway republic has benefited from Russian military and logistical support. The tremors in Crimea and eastern Ukraine were felt in Lithuania, Latvia, and Estonia, whose leaders were at one with the United States and the EU in declaring Russia to be the culprit.
While Putin, who returned to the presidency in May 2012, appeared to be wary of making a full-scale military commitment to protecting the Donetsk People’s Republic, in the summer of 2014 Western countries tried to force the Kremlin to retreat from its Ukrainian adventures by imposing economic sanctions. Russia returned the favor by banning food imports from the United States, Australia, and the countries of the EU—a restriction that posed a greater challenge to the foodexporting countries of eastern European in particular. (As of 2014, Russia was the market for 19 percent of Estonia’s food exports; it was also the destination for 22 percent of Lithuania’s and 43 percent of Latvia’s food exports.) However, the fact is that Europeans, already divided over how to respond to what is believed to be Russian aggression, are more dependent upon energy supplies from Russia than Russia is on food supplies from Europe. If energy is Russia’s trump card, then few countries are more vulnerable to potential energy sanctions than the Baltic states, which are not connected to the gas pipelines of other EU states and have no means of accessing non-Russian gas. Estonia, with its tiny population and booming oil shale industry (the second largest after that of China), has some protection against a possible cutoff of Russian energy supplies; the other Baltic states, however, are almost entirely reliant on natural gas and oil from Russia and hence are more vulnerable to Russian sanctions.29
While nobody would argue that the Baltic states carry the same weight as Ukraine in the historical consciousness of Russia’s political elites, the lesson is clear to all: Russia will protect its national interests and act as a guarantor for the rights of Russians living in the “near abroad.” Short of an act of war against Estonia, Latvia, or Lithuania, it is hard to imagine anything else the Kremlin could have done to further cement the ties between the Baltic states and Europe than to snatch Crimea away from Ukraine, encourage a separatist movement in the eastern part of that troubled, divided country, and bellow about the threats to Russians living in neighboring countries while dangling the threat of withholding energy to its customers.
Integration into the economic and security institutions of the West was a goal of Baltic governments almost from the very moment they achieved their independence in the early 1990s. Simple pragmatism dictated that the Baltic states would also have to maintain amicable relations with Russia—after all, Russia, its enormous neighbor to the east, maintained troops and bases in all three Baltic states until 1994—but a consensus quickly emerged that the road to security and prosperity led westward: instead of joining the Commonwealth of Independent States (CIS) that formed after the collapse of the USSR, the Baltic states’ new partners would be Poland, Scandinavia, and the countries of the European Union, a supranational organization that was formed on the basis of the existing European Community in November 1993.
Among the Baltic republics, Estonia had the closest relations with Western countries during the Soviet period and reached out to its neighbors with the least hesitation once Moscow reluctantly loosened its grip. A close cultural affinity to Finland and the ties that were cultivated during the Soviet era helped Estonia to attract significant Finnish foreign investment during the early years of independence. By the mid-1990s Swedish investment was even more substantial, while Finland soon emerged as Estonia’s largest market and greatest source of imports. By cultivating such ties with its northern neighbors, Estonia sometimes portrayed itself more as a Scandinavian than Baltic country in an attempt to “sell” itself to the West—a tendency that at times irritated some Latvians and Lithuanians.
Nevertheless, Latvia and Lithuania followed a path similar to that of their northern neighbor in the belief that membership in international institutions, above all NATO and the EU, would mean greater stability and security. Even if many west European leaders believed that inviting the Baltic states to join the EU would be the morally correct thing to do, their concerns about the aspirants’ domestic stability and economic preparedness meant that the Baltic states’ quest for integration into Europe initially got a mixed reception. Moreover, Western countries were concerned about the possible influx of cheap labor from the east (i.e. “Polish plumbers”), which in turn might increase unemployment and depress wages within the EU. On the other hand, some European leaders believed that membership in the EU and other Western institutions might be the best way to ensure that the region would avoid political extremism, ethnic conflict, environmental catastrophes, or a reversion to communism.
Admission to Western institutions was not a given: these would have to be earned by meeting the strict criteria for membership in each of these organizations. European Commission President Jacques Delors warned in the early 1990s that it could take 15 to 20 years before the former communist countries would be ready for membership in the EU. Nevertheless, in June 1993 the European Council in Copenhagen declared the enlargement of the EU to include central and eastern European countries as an explicit goal. Qualified countries, however, would have to meet the “Copenhagen criteria”: (1) they would possess stable institutions guaranteeing democracy, the rule of law, human rights, and protections for minorities; (2) they would have functioning market economies and the capacity to manage market competition within the EU; and (3) they must be willing and able to take on the “obligations of membership,” which entailed harmonizing legislation, creating a single market, and forging common policies with other member states.30
While the Estonians, Latvians, and Lithuanians were now the rulers of their own countries, the external pressure to reform their legal and economic systems was considerable. It was the criticism coming from the West that forced Estonia and Latvia to tame their nationalism specifically by modifying their citizenship requirements. Following a series of visits by Max van der Stoel in 1993, the Conference on Security and Cooperation in Europe’s High Commissioner on National Minorities, the Estonian government removed the language condition for certain sectors of the population such as the elderly and disabled people. Likewise, Latvia implemented some of Stoel’s recommendations, such as the granting of citizenship to all children born in Latvia.31 The easing of naturalization procedures for Soviet-era migrants resulted in a greater number of Russian-speakers obtaining citizenship, rendering them eligible to stand and vote in parliamentary elections. It seems unlikely that Latvia and Estonia would have adopted the more minorityfriendly policies without European pressure. Russian criticism, on the other hand, counted for little; it was mostly the prospect of gaining membership in the EU that caused the governments to change their legislation.
A particular concern for Lithuania during its EU (and NATO) candidacy was Kaliningrad, a Russian exclave of 950,000 people, which for years after the Soviet collapse remained one of the Russian Federation’s most highly militarized regions. In 2002, President Putin demanded that residents of Kaliningrad, which was cut off from the Russian mainland after 1991, be granted visa-free travel across Lithuania to the Russian proper. Lithuanian officials objected to what they saw as a violation of their country’s sovereignty, for under this arrangement Lithuania would become a corridor through which Russia could move troops and equipment to and from the oblast’. At first the EU refused to make exceptions for those territories that did not belong to the future Schengen Area, comprising those European countries (now numbering 26) that abolished border controls at their common frontiers. In the end, however, Russia and the EU reached a compromise whereby special visas called Facilitated Transit Documents would be issued to those passing through the Schengen Area, including Lithuania, on their way from Kaliningrad to the Russian mainland (and vice-versa).
The populations of the Baltic states were sensitive to the loss of sovereignty that EU membership would entail. What would be the benefit, many asked, of exchanging Moscow’s domination for that of Brussels? Euroskeptics were also anxious about higher prices and tax increases; they worried about the ability of local agriculture to compete with European producers. Estonians were particularly concerned about the potential for foreign interference in domestic affairs: in 2002 only 32 percent of the Estonian population favored joining the EU. Lithuanians seemed to be less anxious about the loss of sovereignty, with 48 percent of its citizens polling in favor of joining the EU. If Latvians shared the Estonians’ initial skepticism, the promise of economic prosperity weighed more heavily as 67.5 percent of the voting population voted in favor in the referendum on EU membership that was conducted in September 2003.32 Indeed, the more inevitable future membership in the EU appeared to be, the more the Baltic populations supported it. In Lithuania and Estonia, which conducted their referenda after the other candidate countries had obtained popular consent for EU membership, the results were, respectively, 69 percent and 90 percent in favor of joining.
Since their ascension to the EU on May 1, 2004 (along with Poland, Hungary, the Czech Republic, and four other countries), the Baltic states have been praised for having business-friendly climates and for their economic competitiveness. In 2014, the Heritage Organization’s Index of Economic Freedom placed Estonia at number 13 (higher than the United Kingdom, Finland, Germany, Sweden, the Netherlands, and Taiwan), Lithuania at number 22, and Latvia at number 55 among the 177 countries that were ranked (Russia and Ukraine came in at 139 and 161, respectively).33 Yet the Baltic states’ entry into the EU did not happen without controversy and political turbulence, for states that adapt to the EU’s regulations become the followers of rules imposed upon them from the outside. As one civil servant remarked of the rules on fisheries to which Lithuania was expected to adapt: “All the new items, such as control, fishing control, common organization of the market, structural issues, they were new to us. So, we had to implement them and we were not able to implement [them] ourselves without help.”34 One of most controversial examples of EU compliance in Lithuania concerned Ignalina, a Chernobyl-type nuclear power plant whose closing encountered fierce opposition from the Lithuanian populace who depended on it for energy and jobs. Unit One was shuttered at the end of 2004, while Unit Two, which continued to supply the majority of the country’s electricity, was closed in December 2009. The decommissioning of the power plant, one of Lithuania’s few domestic energy resources, also left Lithuania more dependent on Russian oil and natural gas.
Latvia’s EU candidacy meant that it had to demonstrate progress in the struggle against the corruption that has blighted a country where successful business leaders called “oligarchs” (among them Aivars Lembergs, Andris Šķēle, and Ainārs Šlesers) parlayed their financial success into political influence while building extensive networks within the government, business, and media that turned a blind eye to their sometimes shady practices. To this end Latvia established the Corruption Prevention and Combatting Bureau (KNAB) in 2002, which investigated high-level graft and violations of campaign finance laws. When acting Prime Minister Aigars Kalvītis tried to dismiss KNAB’s director, citizens rallied in central Riga in support of the agency, forcing the minister to resign at the end of 2007. As noted earlier, another antigovernment demonstration broke out in January 2009 in response to unpopular austerity measures and once again the focus of popular anger was the oligarchs who pulled the country’s political and economic strings. The Saeima’s refusal to comply with a KNAB investigator’s request to lift the parliamentary immunity of Ainārs Šlesers, the subject of a corruption investigation, sparked a full-scale crisis in 2011 that settled down only when President Zatlers dissolved the parliament prior to September’s parliamentary elections, which saw the evisceration of the parties associated with the oligarchs. While it is possible that the Latvian government would have acted to tackle official corruption even without outside incentives—that is, to demonstrate its readiness for ascension into the EU—the reality is that corruption was generally seen as a given and it was only when the World Bank recommended that Latvia create an agency empowered to fight corruption that the government began to commit itself to meaningful reform.35
While EU requirements forced the Estonian, Latvian, and Lithuanian states to close down dangerous power plants, tackle high-level corruption, and enact reforms in a number of other areas as well, economic liberalization and integration into the EU also meant an influx of foreign investment that undermined local control over key sectors of the economy. In all three countries Scandinavian banks took over the financial sector: by 2006 some 60 percent of Latvia’s financial sector was foreign owned; in Lithuania and Estonia it was more than 90 percent.36 Optimistic about the impact of the Baltic states’ integration into the EU, Scandinavian banks offered very low interest rates to the Baltic populations, which in turn fed a speculative housing market as private sector debt tripled in all three Baltic states between 2000 and 2008. As the Baltic states became attractive destinations for foreign investment, foreign money flooded the real estate market and inflated housing costs, profits, and wages, which in turn likely contributed to the severity of the financial crash’s impact in the Baltic states.
Nevertheless, since 2011 the economies of Estonia, Latvia, and Lithuania have rebounded impressively and have been among Europe’s most vigorous. Optimists may be able to convince themselves that this kind of growth is sustainable, yet a sober examination of the Baltic states’ demographic trends—all three have ageing work forces and declining populations—makes it exceedingly difficult to imagine their economies continuing to grow at such rates. Meanwhile, all three have entered the Euro zone, with Estonia adopting the common currency on January 1, 2011, Latvia in 2014, and Lithuania in 2015, thereby completing a transition that has taken nearly a quarter century.
If entry into the economic institutions of the West initially encountered some skepticism among the Baltic populations, accession to NATO was almost universally hailed by the Baltic political classes (except Russian-speakers and those on the far left) as essential for their future security. Few outside Russia remember how controversial a proposition this was in the 1990s, when the former communist countries of east central Europe began to ready themselves for entry into an alliance that was founded as an explicitly anti-Soviet institution of collective security. Even the U.S. diplomat and historian George Kennan, who is credited with formulating the West’s “containment” doctrine at the dawn of the Cold War, warned against an enlargement of NATO that, being neither “necessary nor desirable,” was certain to provoke Moscow and likely to result, eventually, in a return to authoritarianism in Russia and a new cold war.37
If an irritated Kremlin reluctantly acquiesced to the admission of the central European states (Poland, Hungary, the Czech Republic) to NATO, the Baltic states were a different story. The prospect of Lithuania joining the alliance caused Russian officials and generals to suggest that Russia might be forced to deploy tactical nuclear weapons in the neighboring Russian exclave Kaliningrad, which would then be surrounded by NATO states.38 But Russia has never made the region into a nuclear threat; nor has there been a heavy redeployment of Russian troops to the region.
The presidents of the Baltic states (from left to right: Toomas Hendrik Ilves of Estonia, Andris Bērziņš of Latvia, and Dalia Grybauskaitė of Lithuania) meet with U.S. president Barack Obama on September 3, 2014, in Tallinn, Estonia, just prior to the NATO Summit in Wales, United Kingdom. (AP Photo/Charles Dharapak)
Aside from Russia’s very serious objections and the lack of enthusiasm on the part of France and Germany, there were still other obstacles to the Baltic states’ being admitted to NATO. One of them, the history of antagonism between Lithuania and Poland, was resolved with the signing of the Lithuanian-Polish Friendship Treaty in 1994. Still, questions remained. What would these small states bring to the alliance? Would the Baltic countries simply be consumers of security or would they be able to make substantial contributions to the defense of the alliance? Moreover, NATO countries spend on average about 2 percent of their GDP on defense: would the Baltic states be able to reach and maintain this standard?
During their campaign to gain acceptance for their states’ entry into NATO, Baltic leaders insisted that they were dedicated to increasing and improving their defense capabilities. They had already demonstrated their commitment to regional cooperation—something they failed to do in the 1930s—by forming BALTBAT (1994), a combined infantry battalion, BALTRON (1997), a joint naval squadron, and BALTNET (1996), a coordinated Baltic air surveillance network. During this period the Baltic militaries worked to bring their forces in line with NATO standards while participating in the latter’s Partnership for Peace program when it was launched in 1994. This allowed the Baltic states to participate in joint planning, training, and exercises with NATO military forces, including NATO peacekeeping operations in Bosnia and Kosovo. Such efforts were rewarded in November 2002 when it was announced at the Prague Summit that seven countries (Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia) had been invited to begin the negotiations that would lead to their accession to NATO. Sixteen months later, on May 1, 2004, the Baltic states became three of NATO’s newest members—a development that prompted criticism from Russia and outpourings of relief and gratitude from Baltic politicians.
Although the current defense defending of Latvia (0.9 percent of GDP) and Lithuania (0.8 percent) falls short of the 2 percent prescribed by NATO, all three Baltic states have been active supporters of U.S. security efforts in Europe and elsewhere, contributing small forces to the U.S.-led wars in Iraq and Afghanistan. Baltic leaders likewise view the United States’ presence in Europe as essential to the continent’s security. While the U.S. commitment to Europe’s defense is hardly in doubt, its military presence declined during the administration of Barack Obama, who took office in January 2009. Later that year the United States scrapped its plans to install missile-defense complexes in the Czech Republic and Poland, and in 2013 it withdrew its last remaining battle tanks from Germany. At a time when Washington was distracted by the ongoing turmoil in the Middle East, terrorism in North Africa, and uncertainty in Afghanistan, the Obama administration hoped to ease the growing tensions with Moscow by touting a “reset” of their relationship—a policy that was greeted with considerable skepticism by its domestic critics and those in the Baltic states.
However, in 2014 the Russian-Ukrainian conflict caused the Obama administration to once again reassess its relationship with Russia and consequently to strengthen its commitment to Europe. While at that time the United States maintained only a small fraction of the forces it had once stationed in Europe, Washington reassured states that felt threatened by potential Russian aggression by bolstering U.S. defense forces in east central Europe and rotating more ground and naval forces for training and exercises in Poland and the Baltic countries. Since 2004 NATO has carried out Baltic air patrols from a former Soviet base near Šiauliai in Lithuania. NATO’s presence in the region further increased when the Estonian government agreed in the spring of 2014 to let it conduct its Baltic Air Policing patrols at Ämari Air Base near Tallinn. Latvian officials have been particularly vocal in calling for the establishment of permanent NATO bases in the Baltic states—a proposition that has caused some disagreement among the allies. Although Germany’s president Angela Merkel, who did much to raise Germany’s profile in international affairs during the early decades of the 21st century, has repeatedly reassured the Baltic governments that NATO is committed to their defense, she has opposed the establishment of NATO military bases or any long-term deployment of NATO troops in the eastern Baltic region. All would agree, however, with Latvian prime minister Laimdota Straujuma’s assertion that Russia’s actions in Ukraine had “fundamentally changed the security environment in Europe.”39
The world has changed dramatically since the Baltic states were absorbed by the Soviet Union at the end of World War II. Few at that time could have imagined that half a century later Moscow’s empire would disappear and that Germany, having been reduced to rubble and shamed before the entire world, would thoroughly rehabilitate its reputation as it peacefully took its place at the center of European political and economic life. Only the most optimistic Baltic patriots could have envisioned a free Estonia, a free Latvia, and a free Lithuania in the protective embrace of a united Western world. Perhaps least of all could one have imagined amidst the rubble of 1945—Stunde Null in Germany, the moment when Stalin was at the height of his powers and an Iron Curtain was soon to descend across the continent—a summit of Western leaders taking place in a Baltic capital, as happened in Riga in late November 2006. “As NATO allies,” U.S. president George W. Bush told the assembled guests at the Grand Hall of the University of Latvia, “you will never again stand alone in defense of your freedom and you’ll never be occupied by a foreign power.”
As in all things, history will be the final judge.
1. The National Coalition Party Pro Patria was founded in 1992 and led by the young historian Mart Laar, who served as the country’s prime minister from 1992 to 1994 and again from 1999 to 2002.
2. Lithuania was the only one of the three Baltic states in which an ethnic minority party, the Union of Lithuanian Poles, was represented in the parliament following the first post-Soviet elections. In general, however, ethno-national parties have had limited electoral success in Lithuania as Polish and Russian politicians have sought to cooperate with mainstream Lithuanian parties.
3. Central Intelligence Agency, The World Factbook, entries for Estonia, Latvia, and Lithuania, https://www.cia.gov/library/publications/the-world-factbook/ (accessed August 5, 2014); Ellus Saar and Marge Unt, “Falling High: Structure and Agency in Agriculture during the Transformation,” Journal of Baltic Studies 41, no. 2 (June 2010): 220.
4. Dorothee Bohle and Béla Greskovits, Capitalist Diversity on Europe’s Periphery (Ithaca, NY: Cornell University Press, 2012), 124–31.
5. Toivo U. Raun, Estonia and the Estonians, 2nd ed. (Stanford, CA: Hoover Institution Press, 2001), 255.
6. “External trade of Lithuania,” Baltic Export, http://balticexport.com/?article=lietuvas-areja-tirdznieciba (accessed August 5, 2014).
7. “Last year exports of goods grew moderately,” Statistics Estonia, February 11, 2013, http://www.stat.ee/65312 (accessed August 5, 2014).
8. “Foreign Trade Statistics,” Investment and Development Agency of Latvia, http://www.liaa.gov.lv/trade-latvia/foreign-trade-statistics (accessed August 5, 2014).
9. Anders Åslund, The Last Shall Be First: The East European Financial Crisis, 2008–10 (Washington, DC: Peterson Institute for International Economics, 2010), 35–38. The amount the Latvian government actually borrowed from the IMF was considerably smaller (€4.5 billion), and it was repaid by 2012.
10. Doug Bandow, “The Triumph of Good Economics: ‘Austere’ Baltic States Outgrow Their European Neighbors,” Forbes, April 15, 2013, http://www.forbes.com/sites/dougbandow/2013/04/15/the-triumph-of-good-economics-austere-baltic-states-outgrow-their-european-neighbors/ (accessed August 20, 2014).
11. Richard C. M. Mole, The Baltic States from the Soviet Union to the European Union (London and New York: Routledge, 2012), 123.
12. The radar installation was blown up on the orders of Latvian authorities on May 4, 1995. The fascinating history of Skrunda is well told by Māris Goldmanis, whose blog Latvian History, written from a Latvian nationalist perspective, is a treasure trove for anyone interested in the modern history of that country. “Skrunda Soviet Radar Station,” March 2, 2013, http://latvianhistory.com/2013/03/02/skrunda-soviet-radar-station/- (accessed August 19, 2014).
13. “Mart Laar: Meri and Yeltsin bargained over the treaties like at a bazaar in Bukhara,” Postimees, July 25, 2014, http://news.postimees.ee/2868095/mart-laar-meri-and-yeltsin-bargained-over-the-treaties-like-ata-bazaar-in-bukhara (accessed August 19, 2014).
14. Mole, 132.
15. Dovile Budryte, Taming Nationalism? Political Community Building in the Post-Soviet Baltic States (Burlington, VT: Ashgate, 2005), 161–70.
16. Mole, 83.
17. Priit Järve and Vadim Poleshchuk, “Country Report: Estonia,” EUDO Citizen Observatory (January 2013), http://eudo-citizenship.eu/docs/CountryReports/Estonia.pdf (accessed August 6, 2014).
18. Budryte, 9.
19. Dual citizenship was forbidden to those who wish to become naturalized citizens in all three Baltic states, largely due to the fear that dual citizenship would allow Russia to take measures to “protect” its citizens in those countries. This prohibition forced Valdas Adamkus, who would serve as Lithuania’s president from 1998 to 2003 and from 2004 to 2009, to renounce his U.S. citizenship in 1998 after a legal battle in Lithuania’s courts. Lithuania changed its law in 2002 in such a manner that would allow ethnic Lithuanians residing in another state to retain their Lithuanian citizenship. Budryte, 152.
20. Igor Zevelev, Russia and Its New Diasporas (Washington, DC: United States Institute of Peace Press, 2001), 131–58.
21. Kristine Krūma, “Country Report: Latvia,” EUDO Citizen Observatory (February 2013), http://eudo-citizenship.eu/docs/CountryReports/Latvia.pdf (accessed August 6, 2014).
22. “What’s My Language?” The Economist, February 14, 2012, http://www.economist.com/blogs/easternapproaches/2012/02/latvias-referendum (accessed August 13, 2014).
23. “Vote on Russian Language in Latvia an ‘Incitement’—Berzins,” RIA Novosti, January 17, 2012, http://en.ria.ru/society/20120117/170808891.html (accessed August 19, 2014).
24. In June 1997, members of the radical Latvian nationalist organization Pērkonkrusts, a revival of an interwar organization of the same name, even tried (and failed) to blow up the monument at the center of Victory Park—an act of terrorism that justly prompted the condemnation of Latvia’s Russophone community.
25. Vaira Vike-Freiberga, “Rights and Remembrance,” The Washington Post, May 7, 2005, http://www.washingtonpost.com/wp-dyn/content/article/2005/05/06/AR2005050601217.html (accessed August 13, 2014).
26. “There is no such thing as a ‘Baltic interest’,” The Baltic Times, March 1, 2006.
27. Martin Ehala, “The Bronze Soldier: Identity Threat and Maintenance in Estonia,” Journal of Baltic Studies 40, no. 1 (March 2009): 139–58; Marko Lehti, et al., “Never-Ending Second World War: Public Performances of National Dignity and the Drama of the Bronze Soldier,” Journal of Baltic Studies 39, no. 4 (December 2008): 393–418. The contests over historical memory are also discussed in several chapters in the edited collection by Eiki Berg and Piret Ehin, Identity and Foreign Policy: Baltic-Russian Relations and European Integration (Burlington, VT: Ashgate, 2009).
28. “Interview given by Dmitry Medvedev to Television Channels Channel One, Rossia, NTV,” President of Russia, August 31, 2008, http://archive.kremlin.ru/eng/speeches/2008/08/31/1850_type82912type82916_206003.shtml (accessed August 17, 2014).
29. The construction of Nord Stream, a natural gas pipeline that runs from Vyborg in Russia under the Baltic Sea to Germany, bypassing the Baltic states and eastern Europe, rendered the Baltic states still more vulnerable to Russian pressure, as it allows Moscow to threaten their energy supplies without affecting its west European markets.
30. John Van Oudenaren, “EU Enlargement: The Return to Europe.” In Europe Today: National Politics, European Integration, and European Security, ed. Ronald Tiersky (Lanham, MD: Lexington Books, 2004), 125.
31. Mole, 91.
32. Ibid., 161–62.
33. “2014 Index of Economic Freedom.” The Heritage Foundation, http://www.heritage.org/index/ranking (accessed August 20, 2014).
34. Jenny Svensson, “Governance through Mediation: EU Twinning in Lithuania.” In The European Union and the Baltic States: Changing Forms of Governance, ed. Bengt Jacobsson (London and New York: Routledge, 2010), 68.
35. Gabriel Kuris, “Surmounting State Capture: Latvia’s Anti-Corruption Agency Spurs Reform, 2002–2011,” Innovations for Successful Societies, http://www.princeton.edu/successfulsocieties/content/data/policy_note/PN_id215/Policy_Note_ID215.pdf (accessed August 20, 2014).
36. “The Baltic States in the EU: Yesterday, Today and Tomorrow,” Notre Europe, http://www.notre-europe.eu/media/balticstateseu-grigaskasekampmaslauskaitezorgenfreija-ne-jdi-july13.pdf?pdf=ok (accessed August 20, 2014).
37. Richard Ullman, “The US and the World: An Interview with George Kennan,” The New York Review of Books, August 12, 1999, http://www.nybooks.com/articles/archives/1999/aug/12/the-us-and-the-world-an-interview-with-george-kenn/ (accessed August 25, 2014).
38. Richard J. Krickus, The Kaliningrad Question (Lanham, MD: Rowman & Littlefield, 2002), 3.
39. “Merkel Pledges NATO Will Defend Baltic Member States,” The Baltic Times, August 18, 2014.