The Baltic Innovation Fund, announced on Wednesday, takes in €40m from the European Investment Fund (EIF) and €20m each from the national investment guarantee agencies of Latvia, Lithuania and Estonia. The EIF will select private-sector fund managers who will then have to raise matching funds (at a minimum) from their usual contacts.

There are no set targets regarding how much of this cash will go to the technology sector, but, given the existence of budding tech startup scenes in all three countries, it would be vastly surprising if they didn’t get a significant share.

“This particular region of the European economy has shown good dynamism in that area, and we hope this will be a further stimulus for that kind of activity,” EIF northern Europe chief Graham Cope told me. “We’re leaving the scope of investment opportunities very wide to allow the fund managers full freedom [but] equity of this nature tends towards certain sectors. Technology is one of them; so are life sciences. We’re looking at growth-focused sectors.”

It is, as I mentioned above, unusual for European countries to band together in this way. Indeed, Cope noted that the EIF has already got similar arrangements in place with individual countries such as the UK, but had not until now dealt with multiple states at once.

But there’s a reason for that: Latvia, Lithuania and Estonia are all pretty tiny, which makes it very hard to attract venture capital there.

“The individual Baltic markets are quite small on their own, and all individual entrepreneurs there are thinking pan-Baltic if not pan-European,” Cope said. “We guided the member states to work together to create Baltic market activity [through critical mass]. It’s more in line with the way private investors see the market, as well.”

The action will apparently start next year, when the EIF will start to process transactions with between three and six fund managers. The cash is expected to support a four-year investment period.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Google and the Ghost of Silicon Valley Past
• Will cloud computing push the BRIC market to the front?
• Facebook’s tactical retreat on privacy

As many as 10,000 customers in the Baltic republic withdrew large amounts of capital from both Swedbank and SEB, emptying cash machines of $29 million and leading to local reports of long queues and spreading concern.

The banks — which both deny that they face any problems — say that the alarm was sparked by a groundless Twitter rumor suggesting Swedish banks were preparing to withdraw their business from the country, and that their ATMs would soon become useless.

That seemed to be enough to work up customers in the Baltic state — which, with a population of 2.2 million people is around the size of Utah. According to Reuters:

One man, standing in a queue at a Swedbank ATM in central Riga, said he had heard a report the bank was about to go bust. He declined to give his name. A woman, who also declined to be identified, said her son had called her and told her to get her money out of the bank, but that she didn’t know anything more.

The news may have been spurious, but it tapped into the wider mood of worry: two weeks ago the Latvian government stepped in to take over struggling local bank Krajbanka. It seems like the rumor was perfectly built to infect the public.

But was this a “Twitter bank run”?

I am always skeptical of anyone ascribing public action to social media, as if people themselves play no part in events.

Take, for example, the London riots earlier this summer, which politicians and many media outlets were quick to describe as “Twitter riots” or take aim at BlackBerry Messenger.

Turns out that although messaging was used by some rioters for loose, spontaneous coordination, the meme was spread largely by word of mouth. In fact, recent academic research suggests that social media was actually positive overall.

“Politicians and commentators were quick to claim that social media played an important role in inciting and organising riots,” Professor Rob Procter of the University of Manchester told The Guardian recently. “In contrast, we do find strong evidence that Twitter was a valuable tool for mobilizing support for the post-riot clean-up and for organizing specific clean-up activities.”

Despite my hesitation, however, early indications here seem to suggest that this actually was a problem exacerbated by Twitter.

In fact, the Latvian financial regulator made a public statement saying that customers had “no need to worry” and that the run was the result of a “groundless wave of rumors… on Internet media and social websites”.

Recognizing this is important, because it shows that spreading incorrect real-time information can have drastic — even tragic — outcomes.

We’ve already seen the damage that real-time feedback loops can have on highly automated systems like the financial trading markets — sending stocks plummeting in seconds as poor data causes software to make a cascade of increasingly negative decisions.

Imagine the potential for this sort of problem. Sure, this time Swedbank and SEB were able to absorb the impact, but it’s not hard to imagine a situation where the accelerated spread of information actually ends up causing the problem it’s warning people about.

I doubt this is the last time we’ll hear a story like this.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Google and the Ghost of Silicon Valley Past
• The 2013 task management tools market
• How consumer media will change in 2013