Tiit Vähi, a former PM and head of the management board at Port of Sillamäe, a gateway for Russian exports to Europe, said his company has prepared a crisis plan for a backlash from sanctions.
He told Äripäev today only projects 90 percent complete would be finished, with the rest scrapped if trade volumes drop dramatically, also costs such as sponsorships and charity would be limited and staff numbers cut.
“Already in December of last year I predicted the beginning of a [new] Cold War and non-existent economic growth for Estonia in 2014,” he said, adding that the situation was worse than he thought, with both the EU and US on one side, and Russia on the other side, trying to pull a 48-million population nation into their sphere of influence, instead of trying to boost the Ukrainian economy.
Russia will answer with its own economic sanctions and build military bases in Belarus, move Iskander missiles to Kaliningrad, arm Sevastopol and strengthen border areas, he said.
Cargo volumes on Estonian railways dropped 20 percent last year and have shown signs of decreasing further. Vähi said in May at a transit conference that the decline began in 2007 after the Bronze Soldier riots, which were heavily criticized by Russia. He estimated the loss to the Estonian economy at 500 million euros annually.
Russia to counter with import bans
Transit expert Raivo Vare said Russia will first impose bans on agricultural and food products.
A number of Estonian dairy and fish producers were hit with bans at the end of last year and in January, with Estonian authorities working to bring the companies in line with Russian requirements, which differ from EU standards. Most of the bans have now been lifted.
Russia recently announced import bans on Polish fruit and vegetables, saying the imports had unacceptable levels of pesticide residues.
The ban could cost Poland 1 billion euros annually.