Europeanization by foreign banks: Latvia from 1995 to 2004

Abstract

This article investigates the role of the Swedish, Finnish, and German banks during Latvia’s accession into the European Union from 1995 until 2004. It claims that private foreign banks with EU origins used their conditionality and socialization capacities to Europeanize Latvia. In the capital-scarce Latvian economy banks were able to project conditionality and influence the implementation of structural reforms in the legal and political system. Private foreign banks were important also due to their capacity to outcompete the domestic economic actors; they established meaningful social interaction with decision-makers in Latvia, and actively used persuasion and socialization strategies on Latvian institutions.