Over half of European countries today are small nation states. Among the members of EU one third have population less than 6 millions. The legitimation of small states does not lie solely on their economic performance; they are primarily valued due to their role in ensuring cultural and social sustainability for their people. After all, the survival of Europe’s cultural traditions and distinctive social character, which is usually contrasted with the American “melting pot” model, depends on this. Looking at the reactions of different nations during the crisis, it is a good reason to reread Max Weber’s discussions regarding the role of the Protestant mentality in the early years of capitalism and to ask what role people’s deep and distinctive historical and cultural traits play in today’s world economy.

The first victims of the crisis in Europe were the small countries: Iceland, Ireland, Estonia, Latvia and Lithuania. The financial crisis clearly demonstrated that surviving the pitfalls of globalisation is not just a problem for post-communist countries. When the crisis broke out, the free fall of the Baltic economies, which early had attracted attention with their rapid growth, caused some Western experts to smirk derisively. However, it was these countries that were able to implement the most radical measures to emerge from the crisis. In a situation where much larger and more powerful nations could not find the strength to struggle out of economic and social chaos, the tiny Baltic countries have become models of resolve. The Economist ended the article devoted to the Baltic countries by saying, “Good- bye “eastern Europe”; welcome to the “new north””. This is a remarkable testimony to that fact that not only Estonia, but all three Baltic states together, are starting to be viewed in the West as part of the northern, not eastern, part of Europe.

When praising the governments of the Baltic countries for this decisiveness one should not forget to thank the extraordinary tolerance of the people. The price of the recovery has included severe cuts in public finances, shrinking family budgets and a wave of emigration among the skilled labour. Lack of public unrest and strikes despite severe austerity measures taken in Estonia and Latvia have been surprising for the external observers. This patience of people could be interpreted in different ways, it could be seen as a sign of the weak civil society, especially trade unions, on the one hand, but on the other hand it has been perceived as expression of rational public attitudes or even as a sense of the “national borderline situation” of these countries. The people of the Baltic states have viewed their countries’ peril as a personal challenge and have exhibited a collective desire to protect the countries from the destructive impact of the global crisis. References have also been made to the earlier experiences of the Baltic countries, when they coped with the post-communist economic collapse in the early 1990s by implementing radical economic reforms. Anders Aslund has compared this decisiveness and readiness to tackle economic difficulties with the activeness and self-sacrifice of the “Singing Revolution” era (Aslund& Dombrovskis 2011: 121).

In contrast to the rational contractual relationships between the state and its citizens that are typical of Western Europe, the Baltic people have a much more emotional and collective relationship with their state, which Roger Brubaker has called “a national sense of ownership” regarding the state. The national sense of danger that characterizes the Estonians, Latvians and Lithuanians is created by the experience of having lost and regained their statehood. When trying to explain the paradox that appears in Estonia and the other Baltic countries, where despite the social troubles of the people, they continued to support liberal economic policies and were ready to express support for a governments that made drastic cuts, the Finnish political scientist Henri Vogt has used the concept of “nation-liberalism”. Unlike traditional nationalism, nation-liberalism does not focus only on the sustainability of the nation as an ethno-cultural community, but also values individual economic efforts as an input to national economic competitiveness, which is symbolically interpreted by citizens as a proof of their common “national strength”. One could say that this kind of attitude is a side effect of post-communist transition, when Central and East European countries were constantly put into situation of the long distance runners, with the team of Western experts measuring their achievements. When Estonia in the middle of the crisis was able to pass the criteria of Eurozone, people celebrated this event like a victory on the Olympic games. Commenting on the results of Estonia’s last election, which kept the rightwing coalition that made the drastic cuts in power, Finnish political scientist Henry Vogt writes:

All acts societal thus include a national dimension; people’s daily work efforts are not only meant to advance the well-being of the individual but also that of the entire nation – in spite of the individualistic tendencies that one can also easily observe in the country. In Scandinavia, by comparison, such mechanisms are much weaker. --- Within the national Gemeinschaft the fact that some people have had to suffer (more than might have been necessary) confirms the fact that the nation is something sufficiently valuable to suffer for; through this suffering the nation is knit together. In other words, instead of the universalising social-democracy that prevails in the Nordic countries and that acts as the foundation of their societies, Estonia’s primary mentality is based on the particularism that materialises in terms of cleavages and contrasts both within society and towards its neighbours, combined with a strong sense of economic freedom. This may appear as a ruthless type of society, but it is certainly in many respects a dynamic and exciting one. (Vogt 2011: 40)

In an environment of cutbacks and rapidly increasing unemployment, the universal social insurance systems related to health care, pension insurance and unemployment insurance proved their usefulness for maintaining balance in society during a crisis. But the financial sustainability of these systems was put under serious doubts. At the same time, the shortcomings in labour market flexibility also became apparent. The Danish ‘flexicurity’ model advertised as a good example for Estonia did not work as it was planned, because the government stepped back from the line of tripartite agreements reached before the crisis, and implemented only flexibility side without security guarantees. By implementing employment cutbacks and salary cuts it was possible to improve the general economic situation at the expense of the workers, but, because there was no coordinated labour, salary, retraining and coping policy to increase people’s sense of security, many were left alone with their worries and the only option was to “vote with their feet”. The worst results of crisis lie not in short-term economic difficulties but in long-term feelings of distrust against the own state capacity to provide secure future for the young generation. The outflow of young generation is threatening sustainable future of all three Baltic nations. The crisis also pushed Estonia forward to seek new models for sustainable economic and social development, to find out new political pathways in order to enhance social cohesion in society. Recent polls had shown that Estonian Social democratic Party lead by the young party leader Sven Mikser had gained momentum and passed the ruling neo-liberal party not by proposing populist counter-austerity and anti-EU policy, but calling to move on: toward smart economy and more efficient and balanced fiscal policy, toward the state caring about the worries of ordinary people and applying more democratic and participatory decision making procedures, and towards more deeply integrated European Union.

The global economic competition presents small European nation-states with a difficult choice related to maintaining the vitality of their languages and cultures. Economic pressure favours large transnational companies. For small nations it could be even economically beneficial to forget about national identity and implement an English language education in order to succeed in global competition and to open one’s borders to foreign labour that has been educated elsewhere. But economic rationality cannot be the only reason why people are affiliated to their nation states. People in small countries are increasingly worried about their cultures when the economy, financial system, political decision-making, science and and education are becoming increasingly internationalised. What changes should occur in the role of nation states and their associations, including the European Union, in this process? These are questions that must eventually be answered by all European countries. Not only small nations but also already also big ones like Spain or Italy has experienced how vulnerable they are in the rising tide of globalisation. In this situation capacity of European Union to provide collective economic and political security and safeguard cultural diversity for the diverse family of European small, medium-size and big nations needs to be supported and strengthened.

The crisis had pulled European nations more closely together and at the same time pushed them apart, back to their ‘natural’ national interests. The very foundations of the European Union as ‘community of values’ seem to be shaken. The solidarity and openness as leading European principles are cracking under pressure of economic hardships. It is time to reflect upon the fundamental values of European integration, to question honestly, without hypocrisy, what is the ultimate reason to go on with European Union not only in economic terms but also in terms of social and cultural sustainability. Europe is not solely a common market place; it is a cultural area, a civilization in itself. It is time to return to the unsolved fundamental constitutional issues of EU, to put under scrutiny the efficiency of the EU bureaucratic decision-making system and its capacity to react adequately to the ongoing deep changes in the world economy and politics. It is also time to enhance the opportunities of EU-citizens to affect the choices made in Brussels and from the other side, to secure fair and equal rights and responsibilities to all member states, old and new. In order to do this, we need effective European public sphere for critical and reflexive international debate. The future of Europe should not to be solved by leaders alone behind the closed doors, without broader consensus building and mutual understanding between citizens of Europe.

References:

• Estonian exceptionalism. The Economist, 14/07/2011

• Aslund, A., Dombrovskis, V. (2011). How Latvia Came through the Financial Crisis. Washington: Peterson Institute for Inter- national Economics.

• Vogt, H. (2011). Estonia – ever more firmly in the nation-lib- eral course? Baltic Rim Economies, Quarterly Review, No 2,31/05/2010. Electronically available at www.tse.fi/pei