Mike Collier in Tallinn -

One year ago, Anti Poolamets was seen as, at best, a party pooper and at worst a crackpot when he told Estonia that by joining the Eurozone it had bought "the last ticket on the Titanic."

The leader of "Save the Estonian Kroon" campaign riled many by refusing to recognise the country's achievement in becoming the 17th member of the zone after a gut-busting fiscal consolidation effort.

When Prime Minister Andrus Ansip withdrew €20 from a cash machine on January 1 and waved it triumphantly in the air, the port of Tallinn enjoyed a party atmosphere similar to that accompanying the fated ocean liner's maiden voyage. Twelve months on and, while the northernmost of the Baltics boasts the EU's fastest-growing economy with the economy expected to expand by 8% in 2011, Poolamets' warning seems positively prophetic. "Finance Minister Jurgen Ligi wanted to see this as the peak of his political career," Poolamets claims, "but he may be the hero of the most embarrassing situation in Estonian history in last 100 years."

Clearly, Estonia's economic prospects in 2012 are inextricably linked to the fate of the Eurozone, with many analysts worrying over the impact of the slowdown further west, and even the likelihood that the Baltic bounce could hit a brick wall.

On December 14, the Estonian central bank sounded a stark warning, forecasting that "economic growth will decelerate sharply in 2012," and warning that should "the external situation deteriorate even more, a recession cannot be ruled out." Given the huge doses of austerity they've swallowed since 2008, that would be a tough pill for Estonians, and their Baltic neighbours, to take

Many Estonians, sick of listening to Greeks moan about measures that are paltry compared to the ones they have undergone, would welcome cutting the debtor nations adrift and the frustration is even detectable in a more combative tone from

Even Ligi, despite pushing through a less-than-stringent 2012 budget which includes the country's first targeted deficit in three years at 2.1% of GDP, is not immune. "Europe tends to think a 3% [budget] deficit is good and we can live in deficit all the time," he told the Baltic Economic Forum in Riga on November 24. "They are forgetting... you will never have growth always. The EU spends 3% of its GDP on interest. If borrowing becomes more expensive Europe will be in trouble - and it is in trouble."

"We are not happy to buy time for Greece, but we are happy that Greece, Portugal and Ireland are reforming themselves. The example of the Baltic countries has to be brought to southern Europe," Ligi added.

That's also the feeling in Latvia, which was supposed to have a dull 2011 during which it plodded slowly out of the world's deepest recession (a cumulative contraction of 24% of GDP in 2009-10 according to the International Monetary Fund). That it has largely continued to do so despite a bewildering series of distractions - an unprecedented referendum to dissolve parliament, snap elections, political back-stabbing, and the near-collapse of national airline airBaltic (which is expected to have made a loss of €85m in 2011) - says something about the stoicism of ordinary Latvians.

However, they're also clearly rattled as they head into 2012 following the collapse of Krajbanka in November. Stirring memories of the disastrous failure of Parex bank in 2008, early December saw a mini-run on the country's largest bank Swedbank on the back of rumours on Twitter.

The good news is that the elections showed Finance Minister Andris Vilks remains one of the most trusted figures in the country, and when Latvia finally concludes its €7.5bn loan programme with the IMF and EU on December 22 (less than €5bn was actually taken in the end) it should be in line for immediate ratings upgrades from the major agencies, which will reduce borrowing costs. "There is no more bad news in the banking sector," Vilks tells bne. "Liquidity levels are on a par with the EU average and the economy is growing.

"We've had plenty of challenges, but we've overcome them. I think the markets and the international lenders now trust us," he says, anticipating that Latvia will go to the markets for up to €1bn in funding in 2012.

Having steamed ahead during the first three quarters of the year, Lithuania would do well to forget the last three months of 2011. That bodes ill for 2012, and the country looks like it faces another tough 12 months, particularly with elections due in the second half of the year.

The collapse of Snoras - the parent bank of Latvia's Krajbanka - saw the state forced to find more than €1bn it hadn't bargained on and has kicked off a debate about whether it could be forced to turn to the IMF after staunchly resisting such a move for years.

While official policy in Vilnius is to beat its own path, the spectre of the IMF is likely to hover in the background at the very least throughout 2012 should market conditions deteriorate. In December, Finance Minister Ingrida Simonyte slashed Lithuania's 2012 growth forecast from 4.7% to 2.5%.

A second body blow came with the announcement on December 9 that Poland was pulling out of the planned €5bn Visaginas nuclear power plant to concentrate on its own power projects. Though Lithuanian officials attempted to shrug off the news, it puts the project - which has had more false starts than Usain Bolt after a triple espresso - in serious jeopardy.

The other putative partners are hardly brimming with enthusiasm either. Latvia is playing hardball over the location of a proposed liquified natural gas terminal for the region and is dropping hints that unless support for putting it in Riga is forthcoming, there's little reason for it to back Visaginas.

Estonia is fed up of delays and seriously considering building its own plant with Finnish help, and the Lithuanians have hardly ingratiated themselves with the EU for funding by saying they need even more money to take care of the old Ignalina nuclear plant that they decommissioned two years ago.

Lisa Ermolenko at Capital Economics summarises the Baltic outlook by suggesting that although "[t]he Baltic States are in a better shape now than they were in 2008/09, growth will still slow next year."

Indeed, just as elsewhere in Central Europe, the bounce that the Baltics put back in their step in the first half of 2011 is already fading. "Despite the impressive annual rates of growth posted in the third quarter, quarterly growth is already easing (it slowed to 1.3% in third quarter from 1.8% in the second quarter in Lithuania, from 2.0% to 1.3% in Latvia and from 1.7% to 0.8% in Estonia)," points out Ermolenko. "At a country level, Estonia should remain the region's leader, while Latvia will lag behind. All told, we expect growth to slow from 8.0% to 2.5% in Estonia, from 6.0% to 2.0% in Lithuania and from 5.0% to 1.8% in Latvia."