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Latvia's losses due to EU sanctions against Russia and its reaction at €70 mln — official

September 23, 2015, 19:10 UTC+3 RIGA

The losses amount to 0.25% of the GDP

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© ITAR-TASS/Stanislav Krasilnikov

RIGA, September 23 /TASS/. Latvia has suffered serious losses worth €70 million euro or 0.25% of the GDP from European Union’s anti-Russian sanctions and Russia’s retaliatory measures, Raimonds Aleksejenko, deputy state secretary of the Latvian Ministry of Economy, said on Wednesday.

Aleksejenko told a meeting of a parliamentary commission for the affairs of the Baltic States that three branches of Latvian industry were the worst hit by sanctions. First of all, milk producers and milk processing plants have suffered losses not only due to the Russian food embargo imposed in August last year but also due to the fact that milk prices had dropped by 14% over that period of time. Latvia’s transportation sector was damaged by the weak rouble while fish processing plants also suffered losses because Russia used to be their main market.

Exports into Russia dwindled by approximately 10% after Russia has imposed a trade embargo last year. But Latvia has managed to compensate that loss by increasing exports to other countries, Aleksejenko went on to say. According to the Latvian Ministry of Economy, about a third of Latvian exports fall on the EU members. In the eastern direction, the figure has dropped insignificantly while exports to third countries has risen from 14% to 25%.

"Producers of dairy and fish products have an opportunity to switch over to other markets and other goods. Many companies have done that. There are no opportunities for diversification in the transport sphere because only 10% of transported cargoes are not linked to the eastern markets," Alekseyenko explained.

The European Union imposed economic sanctions on Russia on August 1, 2014. On June 22, the EU Council at the level of foreign ministers extended the sanctions until the end of January 2016.

In August 2014, Russia imposed a package of retaliatory measures to the sanctions imposed by the United States, Australia, Canada, the European Union and Norway. Russia banned the imports of fruit, vegetables, meat and dairy products into Russia for a year and extended the food embargo until August 5, 2016, inclusively, in June 2015.

In addition to that, Russia’s ban on imports of canned fish from Latvia and Estonia came into force on June 4, 2015.

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