However, the temptation to reach the prosperity of Western Europe overnight prevailed, and the vicious circle of wages and prices kept tightening. Economies kept going and wage increases of 20–30% a year became a fact of life. In Latvia, salaries more than doubled between 2004 and 2008 opening a wide wage-productivity gap.
In the future, we can learn from this experience as we progress towards economic union and capital markets integration. This governance model is in fact a valuable, practical example of the EU’s motto: “United in diversity”.