Taking a leaf out of the Baltic’s books

NEAR a former Soviet naval base and dilapidated Cold War-era housing estate, this 84-year-old Latvian plywood factory is the kind of success story of which EU policymakers dream as they struggle with economic meltdown in southern Europe.

New automation has helped this firm survive what many describe as the world’s deepest recession. About 15% of workers were fired after sales in 2009 plummeted over 30%. The remainder saw wages cut and four-day weeks. But now production at the company, which has more than 2,000 workers, exceeds pre-crisis levels, part of a cog in a Baltic economy that is now Europe’s fastest growing.

Latvia, Lithuania and Estonia, were known as “Baltic tigers” in the boom years before 2007. But housing bubbles and excessive spending saw economic collapse.