Page 28 - Sphere No.15 (Nov 2005)

IN JUST OVER A DECADE, the former Soviet Bloc states of
Eastern Europe have sloughed off the shackles of socialism,
armed themselves with the tools of capitalism and forged out a
prominent economic role in the New Europe.
Such is the growing confidence of these formerly poor and
depressed states, that many are now fully-fledged members of the
European Union, their delegates sharing the same tables as emis-
saries from France, Germany, Britain and Spain.
Confidence is at such a soaring level that the new players,
particularly those in the Baltic states of Latvia, Estonia and
Lithuania, prefer to refer to themselves as founder members of
a New Europe, a subtle, self-given designation that suggests, not
inaccurately, that they are nations filled with fresh, innovative
and young-minded people, ready to challenge the old order.
Anyone who has spent time in Eastern Europe would gener-
ally agree with that description. In the time since the 1989 col-
lapse of the Soviet Union and the subsequent gleeful establish-
ment of independence by its former satellite states, they have
gone from grey and regimented places, firmly under the sti-
fling socialist thumb of Moscow, to bustling, energetic and
ambitious nations. Among the 10 new entrants to the EU last
year were the Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Slovakia and Slovenia.
Banker Michael Bourke has personally witnessed the seismic
changes: he was initially posted by the International Monetary
Fund to help the Baltic states modernise their banking systems.
The work was a great success, so much so that Mr Bourke ulti-
mately decided to become a more permanent part of the local
financial scene, taking up the role of president and chief execu-
tive officer with Rietumu Bank in the Latvian capital of Riga.
“When I first came in 1992 it was pretty miserable and
depressing,” he recalls. “There were not many shops or bars
and restaurants, and it was very quiet in the evenings. The
changes were slow at first but by the mid 1990s you could
begin to see the results – new hotels, bars and restaurants and
nightclubs began to emerge.
“It became easier and easier and easier, and then the main
airlines started flying in – Lufthansa and British Airways.
There was also a change in attitude and a change in style; the
big thing of course was the application to join the European
Union; they had to change the laws to get eligibility.”
The short, and dynamic, history of the bank Mr Bourke
heads up illustrates the changes well. It was founded from
scratch in 1992 as a western-style bank (the name translates
directly as Western Bank), aimed at corporate customers,
small to medium business and large companies and corpora-
tions. Within three years Rietumu had become the fifth largest
bank in the country and is still expanding rapidly.
A glance at a regional map quickly reveals why countries
like Latvia, and neighbours Estonia and Lithuania, have come
such a long way in such a short space of time. The nations are
small, and therefore adaptable to changing circumstances, but
more importantly all are located on the Baltic Sea, blessed
with ports that allow quick and cheap shipment of goods to
the world at large. Also, the countries are located just across
the water from Finland, a modern, affluent and open-minded
neighbour that has acted as a role model for entry into the
outside world, post independence.
The Baltic states, which have a combined population of around
seven million, have also been able to use their former Soviet satel-
lite status as a business advantage. The large pool of ethnic
Russians, and Russian speakers,
allows easy communication and
transactions between them and
their hulking neighbour.
The seeds of their freedom were
sown long before the Soviet
Union finally collapsed by an
unknown Polish shipyard electri-
cian called Lech Walesa. Some 25
F O C U S : E A S T E R N E U R O P E
Many former Soviet Bloc countries are now members
of the European Union and are in a hurry to enjoy the good life
By Mark Graham
EASTERN
Clockwise from top left:
The old days, queuing
in Lithuania in the early
1980s; Central Square in
Parnu, Estonia; family fun
at the Art Fair in Tallinn,
the capital of Estonia; fine
dining at the restaurant
“Bocca” in Tallinn.
SPHERE 26 PHOTOS: FOCUS, EXCEPT TOP LEFT, CORBIS