The Baltic States in the economic and monetary union: standing in the shadow of Germany or helping to counterbalance the ‘south’
ENThe Baltic States have been guided in EMU by two motives of,first, being part ofthe EU’s core to hedge against external security risks and, second, main taining economic policy tools to catch up with the rest of the EU. Their approach to co-operation with Germany has been influenced by the latter’s role in reinforcing military presence of NATO in the Baltics and the importance of economic linkswith Germany. However, their preferences diverge from those of Germany onsome issues of EMU governance such as banking union or tax harmonisation. With respect to the debates on eurozone reform, the Baltic States haveremained cautious and largely adopted the role of‘fence-sitters’. They express their support for the implementation of thefiscal rules already inplace and thus stand in the shadow of Germany in the latter’s debate with the ‘South’. They coordinate their positions with the Nordic EU members, which excludes Germany, allowing it to play the role of a mediator between the‘South’and the ‘North’. Given the emergent ‘institutional fabric’ of the relationship to Germany, the Baltic States use both bilateral contacts to Germany and multilateral venues to pursue their preferences.
