The Eternal Quest for Stability

Exactly a decade before the pre-crisis period, Eastern Europe generally enjoyed a steady and bountiful increase in economic growth year by year. They have literally conquered a huge part of the economic theater, achieving a successful market economy, and have even managed to significantly narrow the gap of their income levels with Western Europe. Of course, problems were here and there, but it was nothing that the sturdy, growing economy could not handle.

But one global event caused the entire economy to collapse. It was none other than the tragic global crisis of 2007-2010. For Europe, it was specifically during the year 2009, opened by a sudden halt in economic growth, followed by a deep recession afterwards. The GDP lowered down to 6%, nothing like the 7% GDP that they had during 2007. Economy varied country per country, so naturally the effect of the crisis would also differ in impact within each country. This was especially tragic for Latvia, which suffered 18% GDP reduction, Lithuania and Ukraine, both suffering from 15% GDP reduction.

Fortunately, the worst seems to have passed already. Stabilization slowly is rising again as exports rebounds and as the domestic demand improves. We now need to address the most important questions of all: What lead the economy to this kind of tragedy? How can economies restart again? What must be done to maintain stability so that such events never happen again?

Capital should flow from richer to poorer countries; at least that