In Latvia, Riga has become a ghost town

The third-poorest country in the EU, Latvia punitive welfare conditions and the exclusion of Russian-speakers from surrounding nations has lead to a depopulation of 30,000 a year.

Early this year, Latvia’s parliament voted to join the eurozone. The country has endured two economic shocks in recent decades – in the early 1990s and in 2008, when it had the deepest recession in the world. Growth and eurozone membership in January 2014 are supposedly the reward.
Some measure of Latvians’ real feelings can be taken in the results of the local elections in June, won decisively by the social-democratic Harmony Centre, which ran on an antiausterity platform. Yet Latvian national politics is marked by a division between ethnic Latvians and the Russian speakers – people of Russian, Belarusian and Ukrainian descent –who make up a third of the population. Thousands of these are denied citizenship and do not have the right to vote.
Harmony Centre is dismissed as a Russian party by the ruling coalition of neoliberals and the far-right National Alliance and remains in opposition, despite winning more seats than any other single party in the 2011 parliamentary election.
Latvia is the third-poorest country in the EU; 12.8 per cent of the adult population is unemployed. The dole lasts only nine months. Youth unemployment has almost halved from a peak of 42 per cent in 2010 – but soon the government, apparently following the UK’s lead, plans to turn welfare into workfare, with forced jobs such as road sweeping. The result has been depopulation. Approximately 30,000 people a year are leaving Latvia. Those who migrate are young and often well educated.
The effects are visible in the capital, Riga. A few minutes by tram outside the old town, which is showered with public money, a different reality emerges. Areas such as the Moscow District are crammed with crumbling tenements and emptywooden houses; it could be the set for a ghost town in a low-budget western. The dereliction is leavened only by alcohol and second-hand clothes shops. Among this are budget hotels to cater for the stag-party trade, which completely ignores the deprivation all around.
Official history is sliding backwards, too, with rising ethnic nationalism leading to events such as the absurd annual commemoration of Latvian Waffen SS divisions as a necessary evil, undertaken to fight the Soviets.
The anti-Russian politics is only a veil. Behind it is an attempt to justify privatisation and austerity. Despite its crisis, the eurozone has a special attraction for the former communist countries that have found themselves among the happy few in the EU since 2004. Estonia, Slovakia and Slovenia all joined the euro – this was proof to some that they had finally vanquished the “ghosts of communism” and were showing their true worth.
Latvians are often compared favourably with the Greeks as thosewho meekly accepted austerity and are now reaping the rewards. Yet that lack of resistance stemmed from the cynical manipulation of ethnic differences – which is now dividing Latvian society. 
A man walks by a currency exchange in Riga. Photograph: Getty Images.

Agata Pyzik is a Polish writer publishing in Polish and English in many publications in the UK and in Poland, including the Guardian, Frieze and The Wire. Her main interest is (post) communist Eastern Europe, its history, society, art. She's finishing a book on postcommunism called Poor But Sexy for Zero Books. She lives in London and has a blog.

This article first appeared in the 19 August 2013 issue of the New Statesman, Why aren’t young people working

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.