ABSTRACT
Introduction The two quotes above, from one the key founders of the Lithuanian popular movement for independence from the Soviet Union, reflect two distinct eras. The first quote aptly captures the determined optimism with which Lithuania embarked upon the capitalist road in the early 1990s. Conversely, the second quote reflects the tragic pessimism that has now gripped the minds of even those of its most fervent supporters some two and a half decades later, as they survey the dilemmas now facing the Lithuanian nation. To understand this shift, the impacts of the global financial and economic crisis in terms of its socio-economic impacts need to be understood. In this chapter we argue that austerity policies adopted in the Baltic states since late 2008 have accelerated the formation of bifurcated labor markets of a character that is particular to these post-communist countries. Using Lithuania as an example, we suggest that this process of bifurcation is reflective of the underdevelopment of the country’s economy, as well as its dependent and peripheral position within European Union and the global economy. More specifically, harsh austerity policies combined with the effects of previous massive EU transfers have accelerated the fragmentation of the labor market into primary sector and secondary sectors that, in turn, have contributed to the further social and political fragmentation of the wider society-resulting into ‘two Lithuanias’—a process of societal disarticulation that is producing a new generation of ‘winners’ and ‘losers.’
