Kaliningrad, which borders the European Union and relies on railways and roads through Lithuania for most goods, has been cut off from some mainland Russia since June 17 due to sanctions imposed by Brussels. European officials are in talks to exempt the country from sanctions, which have hit industrial products such as steel so far, paving the way for an agreement in early July if EU member Lithuania abandons its reservations, people said. who refused to be named because the discussions are private. Sign up now for FREE unlimited access to Reuters.com Register The dispute over the isolation of the Russian enclave tests Europe’s determination to impose sanctions imposed after Russia’s invasion of Ukraine, fueling fears of escalation following other restrictions that have pushed Russia into bankruptcy. While Western powers have pledged to defend Ukraine, reiterating their resolve at this week’s G7 and NATO summits, it is proving difficult for Europe to face tough sanctions and avoid further escalation with Russia. That is why European officials, with the support of Germany, are seeking a compromise to resolve one of their many conflicts with Moscow, said one of the people. If the traditional route for Russian goods to Kaliningrad, first through ally Belarus and then Lithuania, is not restored, the Baltic state fears that Moscow could use military force to plow a land corridor through its territory. said the man. Germany, meanwhile, has troops stationed in Lithuania and could be drawn into a confrontation with its NATO allies if that happened. Europe’s largest economy is also heavily dependent on Russian gas imports and would be vulnerable to any flow cuts if the Kaliningrad dispute escalates. “We have to face reality,” said one person with direct knowledge of EU talks, describing Kaliningrad as “sacred” to Moscow. “(Putin) has much more power than we have. It is in our interest to find a compromise,” he said, acknowledging that the end result may seem unfair.
COMPROMISED AGREEMENT
A Lithuanian Foreign Ministry spokesman said he would continue to consult with the European Commission on sanctions and that any change from the bloc should not be singled out by the Baltic state. “Sanctions must be imposed and any decisions taken must not undermine the credibility and effectiveness of the EU sanctions policy,” he said. “As the crossing of Kaliningrad is possible through various EU Member States, the European Commission’s explanation of how the EU sanctions are applied … cannot be limited to Lithuania.” A representative of the European Commission noted in her statement on 22 June that Lithuania was applying EU restrictions and that the supply of basic goods in Kaliningrad remained unhindered. One person with immediate knowledge said they expected a compromise agreement to be reached by July 10 and a second person said it could be announced next week. A compromise could see the movement of goods between Russia and Kaliningrad exempted from EU sanctions on the grounds that it is not considered normal international trade because the enclave is part of Russia, said one of these people. This concession could only be made on the condition that the goods subject to sanctions are used in Kaliningrad and not exported through its port, where the Russian Baltic Fleet is based. That could be difficult to guarantee and could put Lithuania, which is in charge of determining the final destination of the goods, on a collision course with Russia, the man said. Another person said that humanitarian reasons could be used to create an exception for Kaliningrad, which lies between Lithuania, Poland and the Baltic Sea. He said, however, that Lithuania had serious reservations about doing what could be seen as a concession to Moscow.
ALCOHOL AND CEMENT
Lithuania, formerly ruled by Moscow, is now one of Russia’s harshest critics in the European Union and is at loggerheads with officials in Germany and Brussels who want to defuse tensions. So far, EU sanctions against Russia have prevented the transfer of iron, steel and metals to Kaliningrad via EU countries. The list of required goods will be extended to cement and alcohol from July 10, coal in August and petroleum products such as fuel in December. When the final phase begins, about half of the cargo sent to Kaliningrad from Russia will be penalized. Neither passengers nor food are prohibited and Kaliningrad can still be reached by plane or sea. While the United States and the European Union have immediately imposed sanctions to limit Russia’s access to international finance and its coal and oil sales, sanctions have done little to curb Russian military aggression. In recent weeks, Moscow has also turned things around for Europe by cutting critical gas supplies, prompting Germany to prepare for a ticket cut and watch the escalating Kaliningrad dispute with growing concern. Kaliningrad, which has a population of almost one million, was cut off from Moscow when Lithuania became independent during the break-up of the Soviet Union and residents had to cross EU territory to reach the rest of Russia by land. Dmitry Medvedev, Russia’s vice-president of the Security Council, said this week that restrictions on shipments of goods to Kaliningrad were part of a Western proxy war and that Russia had many ways to retaliate. “There are many opportunities, a significant part of which are of an economic nature and are capable of cutting off oxygen to our Baltic neighbors who have taken hostile action,” he told a Russian newspaper. “There is also the possibility of using asymmetric measures, which … will cause a critical escalation of the conflict.” Sign up now for FREE unlimited access to Reuters.com Register Writes John O’Donnell. Edited by David Clarke Our role models: The Thomson Reuters Trust Principles.
