Russia's response will deal a tangible blow to the Lithuanian economy

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to the business newspaper Vzglyad on the possible Russian retaliatory sanctions against a partial ban on Russian transit of goods through Lithuania to Kaliningrad.

Lithuania in its anti-Russian zeal has gone too far. It banned the Russian transit of goods through Lithuania to Kaliningrad. Moreover, Lithuania may soon cut off gas supplies to the Kaliningrad region, which pass through the Minsk-Vilnius-Kaunas-Kaliningrad pipeline, Croatian media write, citing sources. Lithuania presents the situation as the implementation of the EU sanctions, but Moscow sees this as a deliberate imposition of tougher restrictions on Russia.

“A full-fledged land blockade of Kaliningrad can significantly complicate the lives of ordinary residents. First of all, there may be problems with the delivery of simple consumer goods, including food and groceries. Secondly, with the export to Russia of the products of Kaliningrad enterprises, which are strongly tied to the all-Russian market,” Sergey Kondratiev says.

“If the gas transit through Lithuania to the Kaliningrad region is stopped, then, firstly, deliveries of Russian LNG from the Leningrad region to Kaliningrad will be promptly arranged. Secondly, over the past seven to eight years, large coal-fired power plants have been introduced in the region as a backup capacity in case LNG supplies are somehow limited,” the expert notes.

So far, Russia has maintained a fairly benevolent attitude towards Lithuania. For example, Lithuanian products remain on Russian shelves.

“However, if Russia is interested in Lithuania lifting the ban and the transit situation normalizing, then Russia’s retaliatory sanctions should not be diplomatic, but have a tangible effect on the Lithuanian economy and budget,” Kondratiev believes.

Therefore, the first thing Russia can do in response is to refuse to buy Lithuanian goods and prohibit their re-export through other EU countries, so that Lithuanian goods cannot enter the Russian market through neighboring Latvia, for example. That is, an export ban should be introduced not by the supplier country, but by the origin of the goods.

Secondly, Russia may ban the supply of goods sensitive for Lithuania from Russia.

However, Russia should be careful about cross-border trade and ties so that citizens of neighboring regions can visit each other, because Lithuania and Poland have already made life difficult for ordinary people.