Chapter 2: The Baltic States: Convergence with the European Social Model or further liberalization?
New member states of the European Union (EU), such as the Baltic States, provide a different perspective for a study of the European Social Model (ESM) because transition to a market economy principally started only after they had regained independence, 20 years ago. This process included building new social protection systems and labour market institutions. After 20 years of transition, income levels remain low compared with the EU average, despite strong average growth and convergence. The Baltic States are also characterized by relatively low levels of social expenditure and other differences from the ‘old’ member states. The approach to welfare in the Baltic countries is driven by the limited possibilities of the state to provide social welfare and even enforce the law, but also by ideological considerations. The right-wing politicians in the Baltic States found the Bismarckian model too solidaristic (‘socialist’) and turned to liberal welfare policies.
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