My family’s from Estonia, so I’m obligated to pay attention to any news story about this nation with the fraction of the population of New York City. A much circulated piece about Estonia’s financial success in the wake of the global economic crisis has resulted in some praise for the country’s financial policy.
It’s the euro zone Jim, but not as we know it.
Sixteen months after it joined the struggling currency bloc, Estonia is booming. The economy grew 7.6 percent last year, five times the euro-zone average.
Estonia is the only euro-zone country with a budget surplus. National debt is just 6 percent of GDP, compared to 81 percent in virtuous Germany, or 165 percent in Greece.
A Wall Street Journal piece on Estonia from a few days ago is under the paywall, though they seem to approve. Andrew Stuttaford of the National Review commented on both pieces.
And so frugal, disciplined, post-Soviet Estonia could (conceivably) end up bailing out Spain.
It’s a rum thing, euro-zone “solidarity”.
Paul Krugman decided to argue that Estonia is a poor example of the success of austerity measures. He notes that the country hasn’t returned to the peak GDP from the third quarter of 2007.
So, a terrible — Depression-level — slump, followed by a significant but still incomplete recovery. Better than no recovery at all, obviously — but this is what passes for economic triumph?
Estonian President Toomas Ilves will have none of that. He tore into Krugman on Twitter.
When he was a student at Columbia, Ilves had been active within the Estonian-American community. My dad had met him a few times, so it was weird that an acquaintance of the family became President of Estonia. It’s stranger still that he has suddenly become a favorite of American conservatives.
Let me say, I doubt it is real.
Still, this one of those things where everyone’s talking about it so if I don’t link it, then I seem like I’m not paying attention.
So, I will say: The account is unverified, and I sort of doubt that the President of Estonia would get into a Twitter fight with Paul Krugman (even if he feels his country has been slighted), but, whatever, here it is.
As Drew says, “I want to believe!”
Reasons To Believe? @RBPundit says “scroll back through his timeline,” suggesting a parody sockpuppet would not spend so much time posing as the President of Estonia just to goof on Paul Krugman.
@tommccammon says that the account’s use of a joke — “is this a Columbia vs. Princeton thing?” — indicates authenticity, as the President of Estonia did in fact attend Columbia. He says Ilves is also known for being a “direct” politician, which I take to mean combative.
I suppose we’ll soon know.
Allahpundit of Hot Air and used the opportunity to score some political points, calling it the twitter war of the year and asking if a Romney/ Ilves ticket was possible.
Decades spent under Soviet rule have apparently inured them to the tumult of recessions. If you want to see what real austerity looks like, check out the graphs Cato posted last month comparing spending in the UK, which, to hear Krugman types tell it, is supposedly in the grip of lunatic libertarian budget-slashing, to spending in the Baltic nations. Ilves himself addressed the imbalance in Europe in an essay published by the Hoover Institute in March:
[T]he inability or unwillingness of parts of the EU-17 to submit to agreed-upon rules will be defended by an appeal to the position that “our democracy cannot withstand the kind of austerity demanded of us.” The first shoots of this position we have already seen emerge. Yet let us be clear about what this means: Fiscally responsible countries will be asked to support fiscally profligate countries in the name of democracy…