Between 2008 and 2010 Latvia – a small country on the Baltic Sea coast and a member of the European Union (EU) – lost a huge 21.7% of its real gross domestic product (GDP). It is one of the largest recent GDP falls not only in the history of the EU, but also globally. But the crisis described in this article is not the classical ‘boom and bust’ cycle-type crisis: Latvia had to face cyclical, structural, financial and global problems simultaneously. This article briefly describes the anatomy of the crisis in Latvia.