Fitch: troubled eurozone members can learn from Baltics

TALLINN -- Fitch rating agency has said in a recent report that the troubled economies on the outskirts of the eurozone should look to the Baltic states for guidance.

"Estonia, Latvia and Lithuania faced severe economic crises in 2008-09 and have shown that although it was painful to correct large macroeconomic imbalances and return to growth with a fixed euro exchange regime, it was not impossible," said associate director of Fitch's sovereign team Michele Napolitano.

The report said that the troubled economies should aim to model their macroeconomic strategies after those that worked in the Baltic states, citing a number of specific examples set by the three countries. 

"Some of the lessons from the Baltic States are that severe macroeconomic adjustments are more likely to succeed where economies are open and flexible, the authorities undertake decisive and early fiscal austerity measures including cuts in public wages, there is strong social cohesion and political consensus behind austerity, and external support is provided to underpin confidence in banks where necessary," the report said.

The report is entitled "The Euro Area Crisis: Lessons from the Baltic States" and is available at www.fitchratings.com