EU close to compromise on Kaliningrad to defuse confrontation with Russia

Trade through Lithuania to the Russian enclave of Kaliningrad could return to normal within days, two knowledgeable sources told Reuters, as European officials are closer to a compromise agreement with the Baltic state to ease tensions. has been created with Moscow.

Kaliningrad, which borders European Union states and relies on railways and roads through Lithuania for most goods, has been cut off from some commercial transport from Russia since June 17, as part of sanctions imposed by Brussels.

European officials are in talks to exempt the region from sanctions, which have so far hit products such as steel, paving the way for an agreement in early July if Lithuania lifts its reservations, conditional sources said. of anonymity.

The Kaliningrad isolation debate is testing Europe’s determination to impose sanctions following Russia’s invasion of Ukraine, fueling fears of escalation as other restrictions have pushed Russia to default on its foreign debt.

While Western powers have pledged to defend Ukraine, reiterating their determination at both the G7 and NATO summits this week, it is proving difficult for Europe to stick to tough sanctions while avoiding further escalation with Russia.

That is why European officials, backed by Germany, are seeking a compromise to resolve one of the many controversies with Moscow, one source said.

If the traditional route for Russian goods to Kaliningrad, first through Belarus and then Lithuania, is not restored, the Baltic state fears that Moscow could use military force to open a land corridor through its territory. cited a source.

Germany, meanwhile, has troops stationed in Lithuania and could be drawn into a confrontation on the side of its NATO allies if the situation escalates.

Berlin is also heavily dependent on Russian gas imports and would be vulnerable to any flow cuts if the Kaliningrad controversy escalates.

“We have to face reality,” said one person with direct knowledge of the EU talks, describing Kaliningrad as “sacred” to Moscow.

“Putin has a lot more influence than we do. It is in our interest to find a compromise,” he said, acknowledging that the end result may seem unfair.

Compromise agreement

A Lithuanian Foreign Ministry spokesman said Lithuania would continue to discuss the implementation of sanctions with the Commission and that any change from the bloc should not stand out to the Baltic state.

“Sanctions must be applied and any decisions taken must not undermine the credibility and effectiveness of the EU sanctions policy,” he said.

“As transit through Kaliningrad is possible through various EU Member States, the Commission’s explanation of how EU sanctions are to be applied cannot be limited to Lithuania.”

A spokesman for the commission noted the June 22 statement that Lithuania was implementing EU restrictions and that the supply of basic goods to Kaliningrad remained unhindered.

One person with immediate knowledge of the issue said a compromise was expected by July 10 and a second person said something could be announced next week.

A compromise could stipulate that the movement of goods between Russia and Kaliningrad would be exempt from EU sanctions on the grounds that it is not considered normal international trade because the enclave is part of Russia, one of these sources said.

This compromise could only be made on the condition that the cargoes subject to sanctions are used in Kaliningrad and not exported through its port, where the Russian Baltic fleet is based.

That would be difficult to secure and could put Lithuania, which is in charge of determining the final destination of the goods, in a state of conflict with Russia, the source said.

Another person said that humanitarian reasons could be used to make an exception for Kaliningrad, which is located between Lithuania, Poland and the Baltic Sea.

He said, however, that Lithuania had serious reservations about doing something that could be considered a concession to Moscow.

Alcohol and cement

Lithuania is now one of the strongest critics of Russia in the European Union and is at odds with officials in Germany and Brussels who want to defuse the controversy.

So far, EU sanctions against Russia have prevented the transfer of iron, steel and metals to Kaliningrad via EU countries.

The list of products subject to sanctions will be extended to cement and alcohol from July 10, to coal in August and to petroleum products, such as fuel, in December. Once the final phase is in place, sanctions will be imposed on about half of the goods shipped to Kaliningrad from Russia.

Passengers and food are not banned and Kaliningrad is still accessible by air or sea.

While the United States and the European Union have immediately imposed sanctions to limit Russia’s access to international finance and coal and oil sales, sanctions have done little to hurt Russia’s military machine in Ukraine.

In recent weeks, meanwhile, Moscow has cut critical gas supplies, prompting Germany to prepare for a coupon and watch the escalating Kaliningrad controversy 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 the shipment of goods to Kaliningrad were part of a Western proxy war and that Russia had a number of ways to retaliate.

“There are many possibilities, a significant part of which are economic in 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,” he warned.