Baltics could face huge fines for leaving Russia and Belarus grid

A 2001 treaty between the Baltic states, Russia and Belarus could potentially result in paying fines of several billion euros as the countries leave the former Soviet electricity network, reported a Monday story on Delfi.lt, linking to a report on Lithuanian National Radio and Television (LRT).

With two major electricity links due to be finished this year, the Baltic states hope to soon become part of the EU energy network, allowing them to import electricity from Sweden and Poland. 

However, Russian President Vladimir Putin has recently claimed such a move would be very unwise economically and might cost billions. In an interview to La Serra newspaper last June he said that the Baltic withdrawal from the Russia-dominated electricity market might cost Moscow up to €2.5bn, reported Delfi.lt. 

Gediminas Kirkilas, chairman of the European Affairs Committee at the Lithuanian parliament, told LRT that Brussels was indeed considering reimbursing Moscow for its losses. "Yes, there are talks to that effect, there has even been a study which quotes slightly lower figures than the one mentioned by the current president of Russia. We are talking about a billion euros. 

I would not rule out the possibility that the EU might try to convince us to pay compensation for our withdrawal," Kirkilas said.

The BRELL treaty, signed in 2001 under the government of Andris Bērziņš of the now defunct People's Party, regulated electricity supply among the Baltic states, Russia and Belarus.

It was signed between the national operators of the Baltic states - Lietuvos energija, Latvenergo, Eesti Energia, - and Russian "РАО ЕС России" and Belarus' "Белэнерго", thus potentially making it costly for all the Baltic states. 

According to Delfi.lt, the treaty includes a clause saying that should any of the parties wish to quit, the others are entitled to compensation for any losses they might incur. According to LRT, Russia and Belarus might claim compensation from the Baltic states for the cost of building power lines and other infrastructure to ensure reliability of their power supply.

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