In Lithuania: cut, cut and cut again

Credit rating agencies said the worst appeared to have passed for Lithuania, Latvia and Estonia after the crisis .  But NYT writes that if many indebted countries want to see what austerity looks like, they might want to visit this Baltic nation of 3.3 million. Lithuania cut public spending by 30 percent — including slashing public sector wages 20 to 30 percent and reducing pensions by as much as 11 percent. Even the prime minister, Andrius Kubilius, took a pay cut of 45 percent. The baltic countries rode a boom driven by banking and real estate earlier this decade. Low interest rates spurred a housing boom. Many Lithuanians took out low-interest-rate mortgages denominated in foreign currencies. With the crisis, house prices plunged and thousands lost their jobs and began to default on their debts. Now austerity has exacted its own price, in social and personal pain. 


The article of NYT about Lithuania is among the most emailed of the week from Business section.  Another proof of Lithuanian power?