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Economy and Finance

The integration of the Baltic economies

The Baltic countries - Estonia, Latvia and Lithuania - share common features and a similar history. These three countries at the EU border with Russia regained their independence from the Soviet Union in the early nineties before joining the EU in...

Do the Baltics form an integrated economic area, or are they just neighbours? The recently issued ECFIN paper "The Baltics: three countries, one economy?" takes a quantitative look at the question.

There seems to be an integrated Baltic economy, i.e. an area driven for a sizeable part by common factors and economic links. Yet, there are also asymmetries, with Estonia being the most exposed to international developments, Latvia being less influenced by regional spillovers and Lithuania being a much less influential driver.

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Note: EA-16 is EA-19 excluding the Baltic countries. EU-25 is EU-28 excluding the Baltic countries.