Russia's war against Ukraine has had significant impact on EU's eastern border regions - study

  • 2024-05-03
  • LETA/TBT Staff

RIGA - Russia's full-scale war of aggression against Ukraine has had a significant impact on the eastern border regions of the European Union (EU), according to conclusions of an assessment of the Russian war's impact on the border regions.

The assessment was commissioned by the Environmental Protection and Regional Development Ministry.

It concludes that the Baltic economies have been feeling the negative consequences of Russia's invasion of Ukraine more acutely compared to other EU member states.

This has been due to the Baltic states' heavy dependency on Russian energy imports, the decreasing importance of transport and logistics in the countries' economies, as well as investors' reluctance to invest in the bloc's eastern border regions, which can have further consequences for  the countries' medium-term economic growth. 

As regards Latvia's eastern border, the assessment concludes that the consequences of Russia's war of aggression in Ukraine have left the Latgale region economically isolated from the East and the South, closing transit corridors and export markets.

Since cohesion policy for less developed regions requires faster growth, increased attention is needed on boosting their competitiveness.

The assessment also reveals the views of entrepreneurs from different sectors in the countries covered by the study on the impact of the war and the ways in which the entrepreneurs have been able to adapt to it. One of the key findings of the assessment is that the Baltic region is still rather unknown to foreign investors and buyers, specifically in the context of the security situation and information about companies.

The study found that foreign customers often do not understand the price increases that have occurred as a result of the impact of the war and therefore choose other suppliers. Some companies have already been able to successfully switch to other export markets, but in some sectors this has meant significant cost increases.

As reported, Prime Minister Evika Silina (New Unity) has ordered the establishment of a special thematic committee on the socio-economic development and strengthening of security in Latvia's eastern border area.