ABSTRACT
The Nordic countries and the Baltic States are all small states exposed to international organizations. Small states tend to a varying degree to form alliances either with larger states or international organizations, or both. With an 'independent' central bank—the European Central Bank—and limited room for fiscal policy, the European Union (EU) has attempted to divorce economic policy from politics. But it is widely contended that economic policy should also be decided democratically, with the involvement of elected politicians informed with help from experts. Fixed exchange rates, an independent central bank and limited fiscal policy operate to reduce the role of democratically-determined economic policy. World Bank Group assistance began to be phased out in the Baltics once they became EU member states in 2004, thus qualifying for assistance from various EU funds both prior to and following EU accession, as well as loans from the European Investment Bank and the European Bank for Reconstruction and Development.
