The Euro Zone monetary authorities are crowing about the success of Latvia, because they held the hard peg to their currency.

It appears that their GDP may grow this quarter, after as Matthew Yglesias observes, their GDP feel by 4.2% in 2008, 18% in 2009, and will fall slightly this year.

This is not success. As Paul Krugman writes, “They have made a desert, and called it successful adjustment.”

Compare their progress to those of the Icelanders, Dr. Krugman supplied the graph pr0n) who devalued, and eschewed austerity.

Note also that Iceland’s meltdown was the most severe this far seen, but, because they eschewed the nattering nabobs of negativism that are the pain caucus, they had what amounts to the mildest and shortest downturn.