Moscow Punishing Lithuania for Its Support of Ukraine

June 5, 2014
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Staunton, June 5 – Russia is redirecting its trade flows away from Lithuania in order to punish Vilnius for its outspoken support of Ukraine and opposition to Russian aggression there, a shift that has cut the flow of oil through the Butinge terminal by more than a third from a year ago and is costing Lithuanians money and jobs.

In the first four months of this year, statistics show, the flow of goods has increased in most of Russia’s Baltic Sea ports, Riga, and “to a lesser extent, in Liepaja and Tallinn, but it has fallen significantly in Lithuanian ports and in Kaliningrad, which is dependent on crossing Lithuanian territory.

Compared to the same period last year, goods traffic through Ust-Luga in Leningrad rose 3.5 percent and through St. Petersburg 9.9 percent. Riga port traffic grew 21 percent, Liepaja 7.2 percent and Tallinn three percent. But flows through the Lithuanian port of Ventspils fell by 3.9 percent, through Klaipeda by 16 percent, and through the Butinge terminal by 34.5 percent.

These shifts are against a total growth over this period of 2.39 percent in good traffic for all the ports of the eastern shore of the Baltic Sea.

Butinge suffered the biggest hit because redirecting oil flows is easier than shifting other kinds of good traffic, experts say. And that is something the Lithuanian authorities are learning the hard way because, according to one pro-Moscow commentator, they have “ignored” the fact that these facilities were built “as part of a single economic complex” in Soviet times.

Aleksandr Nosovich adds that “any problems with Lithuanian energy and transport, be they the Ignalina atomic power station or the Lithuanian railways or with the Klaipeda port or Mazeikai oil processing plant turn out to be connected with politics. That is what is taking place now” with Russia punishing Lithuania for its pro-Ukrainian and anti-Russian rhetoric.

Normund Grotins, a Latvian who is regional vice president of the Alliance for European Democracy, concurs. He says that the decline in trade across Lithuania is “a result of the presidency of the country in the European Union” and that Lithuania’s actions are going to have consequences for Estonia and Latvia as well.

Indeed, Nosovich says, “it is now possible to speak about covert sanctions.”

The Russian analyst suggests that Moscow is being very selective. Given greater cooperation with or at least less public condemnation from Latvian officials, the Russian side has restricted trade flows there less than it has done in Lithuania, something he says should be a clear lesson to all.

He then asks “Does business and especially big business and that connected with the government want to link itself with countries which work to undermine international cooperation, against Russia (and also Belarus) on the basis of abstract geopolitical ideas and to the detriment of their own economic profit?”

“The Lithuanians,” Nosovich says, “have already driven themselves into a dead end who now wants to have strategic cooperation with ‘a besieged fortress’?” Latvia and Estonia, he suggests, “still retain the chance not to fall into the same situation.”

Besides the obvious misapplication of the term “besieged fortress” which applies with far greater force to Russia under Putin than to any of these other countries, these Russian actions point to three new realities: First, Moscow is throwing its economic weight around in many places where the broader international community is not paying close attention.

Second, the Russian authorities are pursuing a divide and conquer strategy here in much the same way they have done elsewhere, seeking to pit one or another Baltic country against the other two in the hopes of weakening all three NATO and EU member countries. Unfortunately, they have had some success in this regard.

And third, what Moscow is doing with oil exports via Baltic ports provides yet another argument for those who want to see Europe’s dependence on Russian energy supplies reduced because obviously what the Russian government and its dependent firms are doing now to the Baltic countries, it could do to other European countries as well.