Negotiated responses to the crisis in the Baltic countries

Abstract

This article reviews the negotiated responses to the crisis at different levels of social dialogue in the Baltic countries. The Baltic countries form a relatively coherent group of small open economies that can be classified as belonging to the neoliberal type of central and eastern European capitalism. Their responses to the crisis were consistent with such classification: flexible labour markets absorbed the main impacts of the crisis through rapid increases in unemployment, as well as nominal and real drops in wages. A negotiated response was either not sought at all by governments or was of minor importance at all levels of interaction between the social partners. If anything, national-level social dialogue deteriorated, remaining at a low level even after the crisis had peaked. Based on qualitative examples from Estonia and Lithuania we show that, at company level, responses to the crisis varied.