MARKED by biting winds, icy roads and a cruelly unenthusiastic sun, January, Charlemagne dares to venture, is not the best time to visit Latvia. But this year it is not a bad time to be Latvian, for the small Baltic state of 2m citizens has just taken over the presidency of the European Union’s Council of Ministers, and the government is giddy with excitement.

The presidency rotates among member countries every six months, offering a chance to steer some of the EU’s political and legislative work. For minnows like Latvia it is a chance to bask in attention they rarely receive. For its time at the helm Latvia wants to focus European minds on three priorities: competitiveness, the digital single market and foreign policy. That may sound less than scintillating, and it is true that the presidency wields less power than it did before the European Council of heads of government appointed a permanent president. Yet it is worth paying attention to Latvia, for on two challenges that confront Europe in 2015—how to kick-start growth, and what to do about Russia—it has an interesting story to tell.

Latvia’s economic adventures of the past decade make Spain, Ireland and Greece look like models of sobriety. After joining the EU in 2004 the Latvians enjoyed a riotous few years of partying, as hot money fuelled annual growth of over 10%, only to face the mother of hangovers when the financial crisis hit in 2008. Ignoring recommendations from the IMF and others to break their peg to the euro and devalue the currency, the Latvians instead embarked on a brutal programme of “internal devaluation”: improving competitiveness by slashing wages and prices. After losing access to capital markets (and accepting a $10.5 billion bail-out from the IMF and EU) the government administered a whopping dose of austerity worth 17% of GDP over four years.

Misery ensued. Output fell by a quarter between 2007 and 2009, and unemployment peaked at 21%. Latvians took advantage of the EU’s free-movement rules to seek work abroad; the population has fallen by 200,000 since 2005. But growth returned in 2010, under a re-elected government, and Latvia has lately boasted one of Europe’s perkiest economies, thanks in part to strong exports. Last year Valdis Dombrovskis, the bookish prime minister who oversaw the recovery, was rewarded with a plum job in the European Commission overseeing the euro.

Outside the euro, which it joined only last year, Latvia was a sideshow to the austerity wars raging within the single-currency area from 2010 to 12. But the participants were happy to recruit it to their respective causes: for the austerians, as proof that pain now means gain later; for their foes, as a demonstration of the agonies that budget-slashing brings. Sometimes lost in the crossfire was the point that the experience of a small, open economy may not readily transfer to larger, more closed ones. “We have no obvious lesson to offer,” says Alf Vanags, director of the Baltic International Centre for Economic Policy Studies. “We dug ourselves a hole, and we climbed out of it.”

In the past some in Latvia, still the EU’s fourth-poorest member, have grumbled about the forbearance shown to richer bailed-out countries. Today they proclaim no intention to use their presidency to lecture their euro-zone partners. Instead the priority is to push through a pan-European investment plan proposed by the European Commission. But, winks Zanda Kalnina-Lukasevica, parliamentary state secretary for EU affairs, Latvia will be delighted to share its experience “if anyone’s interested”.

Latvia may prove more assertive on foreign policy. In late May Riga, the capital, will host a summit with the six countries of the EU’s “eastern partnership”: Ukraine, Belarus, Moldova, Georgia, Armenia and Azerbaijan. Hatched in 2009, the partnership was meant to draw the six closer to the EU through free-trade deals and so on, but its technocratic methods turned out to have geopolitical consequences. At the previous summit, in Vilnius in late 2013, Ukraine’s then-president, Viktor Yanukovych, triggered domestic protests that led to his downfall by rejecting, under heavy Russian pressure, a free-trade agreement with the EU. Russia’s annexation of Crimea and invasion of eastern Ukraine followed.

Some Europeans tire of the apparently endless troubles of their eastern neighbours, and EU officials are anyway rethinking their strategic approach. Amid such scepticism the Latvians, whose historical experience of occupation, struggle and redemption within the EU has left them with strong sympathy for those left outside, see it as their job to stop interest from flickering out. One result may be liberalised visa regimes for some. Edgars Rinkevics, the foreign minister, also suggests there may be specific offers for Belarus, where he detects faint signs of softening in Alexander Lukashenko’s thugocracy.

Living with Russians

One-third of Latvia’s population speaks Russian as a first language, and at the height of Russia’s adventurism in Ukraine some fretted that the Kremlin’s next trick would be to agitate among such a large minority. So far there has been little sign of trouble, although last year Latvian authorities temporarily banned a Russian television channel for broadcasting “war propaganda”. Fears of renewed tensions between Latvia’s linguistic groups, even if overdone, might spur officials into tackling problems of integration they have too often ignored.

If so, that would be a happy consequence of a war that has deeply unnerved the region. The Crimea annexation, in particular, stirred folk memories of the Soviet occupation of the Baltic states in 1940. Today Latvia and its neighbours enjoy the security guarantees of NATO, the solidity of EU membership and a seat at the euro table. Events a few hundred miles to their south help explain why they fought so hard to obtain them.