VILNIUS — The falling euro will see mixed results for the Baltic economies as the euro fell by around 14 percent against the U.S. dollar.

The Greek debt crisis has seen the value of the euro fall sharply. The Baltic states have suffered harshly during the global economic crisis because their currencies have been pegged to the euro. Unable to devalue their currency, they had to perform internal devaluations including wage cuts and layoffs.

The euro is at a 14-month low against the [private_supervisor]U.S. dollar, with one dollar buying €0.80. The devaluation of the euro means that countries not in the eurozone are becoming more competitive.

The drop in the value of the euro will hurt Lithuania in particular in the short term as it it is dependent on Russian gas for energy. The price of gas is already a sore point for Lithuania after the country lost its main source of energy, the Ignalina nuclear power plant, at the start of the year.

Lithuania trades the least in imports and exports with EU countries, importing 50 percent from Europe and exporting 68 percent to EU members. Comparatively 71 percent of both Latvia’s import and export is with EU countries. Estonia imports 78 percent of products from the EU and exports 67 percent.

SEB Bank economist Vilija Tauraitė said the drop in the euro will make life difficult for Lithuanians, rubbishing claims that it will help the country get new export deals and take the country out of the crisis.

“I guess we will lose more in imports than gain in exports because those countries that choose dollars, except Russia, are not big export partners for Lithuania. Besides, most contracts with Russia are in rubles and euros,” she told Baltic Reports.

Some 30 percent of Lithuania’s imports are for energy consumption, almost all of which come from Russia.

“Imports becomes more expensive – a more expensive dollar means more expensive energy. It will also lead to inflation, and if this goes on for a few months, there may be some increase in electricity price starting from next year,” she said.

She said that Latvia and Estonia will likely see no net result from the devaluation because they trade more with EU partners and are more self sufficient energy wise. Estonia is completely self sufficient for electricity and heating because of its huge oil shale reserves.

Danske Bank’s pan-Baltic analyst Violeta Klyvienė told Baltic Reports that in a positive scenario it could have a neutral effect on Lithuania and a positive effect on the two northern countries. For Lithuania it might be worse though.

“This issue might be a negative one. There is a clear situation with Russia that is negatively affected. I don’t think this will have a significant positive effect [on exports]. However, Russia is an important partner and Poland is as well. There will be some advantages, but on the other hand, the majority of the countries are in the euro zone,” she said.

Optimistically, the loss in value of the euro could have a good effect overall though, especially for Latvia and Estonia.

“There could be a negative positive or neutral effect — I think it could be neutral or positive. Latvia and Estonia are more concentrated on Nordic economies. For them it might be more positive.”

The devaluation of the euro is expected to be temporary an economist told Verslo Žinios. The low value of the euro should last until the PIIGS countries (Portugal, Ireland, Italy, Greece and Spain) sort out their economies. The euro/dollar exchange rate is expected to return to its former value after the summer.

[/private_supervisor] [private_subscription 1 month]U.S. dollar, with one dollar buying €0.80. The devaluation of the euro means that countries not in the eurozone are becoming more competitive.

The drop in the value of the euro will hurt Lithuania in particular in the short term as it it is dependent on Russian gas for energy. The price of gas is already a sore point for Lithuania after the country lost its main source of energy, the Ignalina nuclear power plant, at the start of the year.

Lithuania trades the least in imports and exports with EU countries, importing 50 percent from Europe and exporting 68 percent to EU members. Comparatively 71 percent of both Latvia’s import and export is with EU countries. Estonia imports 78 percent of products from the EU and exports 67 percent.

SEB Bank economist Vilija Tauraitė said the drop in the euro will make life difficult for Lithuanians, rubbishing claims that it will help the country get new export deals and take the country out of the crisis.

“I guess we will lose more in imports than gain in exports because those countries that choose dollars, except Russia, are not big export partners for Lithuania. Besides, most contracts with Russia are in rubles and euros,” she told Baltic Reports.

Some 30 percent of Lithuania’s imports are for energy consumption, almost all of which come from Russia.

“Imports becomes more expensive – a more expensive dollar means more expensive energy. It will also lead to inflation, and if this goes on for a few months, there may be some increase in electricity price starting from next year,” she said.

She said that Latvia and Estonia will likely see no net result from the devaluation because they trade more with EU partners and are more self sufficient energy wise. Estonia is completely self sufficient for electricity and heating because of its huge oil shale reserves.

Danske Bank’s pan-Baltic analyst Violeta Klyvienė told Baltic Reports that in a positive scenario it could have a neutral effect on Lithuania and a positive effect on the two northern countries. For Lithuania it might be worse though.

“This issue might be a negative one. There is a clear situation with Russia that is negatively affected. I don’t think this will have a significant positive effect [on exports]. However, Russia is an important partner and Poland is as well. There will be some advantages, but on the other hand, the majority of the countries are in the euro zone,” she said.

Optimistically, the loss in value of the euro could have a good effect overall though, especially for Latvia and Estonia.

“There could be a negative positive or neutral effect — I think it could be neutral or positive. Latvia and Estonia are more concentrated on Nordic economies. For them it might be more positive.”

The devaluation of the euro is expected to be temporary an economist told Verslo Žinios. The low value of the euro should last until the PIIGS countries (Portugal, Ireland, Italy, Greece and Spain) sort out their economies. The euro/dollar exchange rate is expected to return to its former value after the summer. [/private_subscription 1 month] [private_subscription 4 months]U.S. dollar, with one dollar buying €0.80. The devaluation of the euro means that countries not in the eurozone are becoming more competitive.

The drop in the value of the euro will hurt Lithuania in particular in the short term as it it is dependent on Russian gas for energy. The price of gas is already a sore point for Lithuania after the country lost its main source of energy, the Ignalina nuclear power plant, at the start of the year.

Lithuania trades the least in imports and exports with EU countries, importing 50 percent from Europe and exporting 68 percent to EU members. Comparatively 71 percent of both Latvia’s import and export is with EU countries. Estonia imports 78 percent of products from the EU and exports 67 percent.

SEB Bank economist Vilija Tauraitė said the drop in the euro will make life difficult for Lithuanians, rubbishing claims that it will help the country get new export deals and take the country out of the crisis.

“I guess we will lose more in imports than gain in exports because those countries that choose dollars, except Russia, are not big export partners for Lithuania. Besides, most contracts with Russia are in rubles and euros,” she told Baltic Reports.

Some 30 percent of Lithuania’s imports are for energy consumption, almost all of which come from Russia.

“Imports becomes more expensive – a more expensive dollar means more expensive energy. It will also lead to inflation, and if this goes on for a few months, there may be some increase in electricity price starting from next year,” she said.

She said that Latvia and Estonia will likely see no net result from the devaluation because they trade more with EU partners and are more self sufficient energy wise. Estonia is completely self sufficient for electricity and heating because of its huge oil shale reserves.

Danske Bank’s pan-Baltic analyst Violeta Klyvienė told Baltic Reports that in a positive scenario it could have a neutral effect on Lithuania and a positive effect on the two northern countries. For Lithuania it might be worse though.

“This issue might be a negative one. There is a clear situation with Russia that is negatively affected. I don’t think this will have a significant positive effect [on exports]. However, Russia is an important partner and Poland is as well. There will be some advantages, but on the other hand, the majority of the countries are in the euro zone,” she said.

Optimistically, the loss in value of the euro could have a good effect overall though, especially for Latvia and Estonia.

“There could be a negative positive or neutral effect — I think it could be neutral or positive. Latvia and Estonia are more concentrated on Nordic economies. For them it might be more positive.”

The devaluation of the euro is expected to be temporary an economist told Verslo Žinios. The low value of the euro should last until the PIIGS countries (Portugal, Ireland, Italy, Greece and Spain) sort out their economies. The euro/dollar exchange rate is expected to return to its former value after the summer. [/private_subscription 4 months] [private_subscription 1 year]U.S. dollar, with one dollar buying €0.80. The devaluation of the euro means that countries not in the eurozone are becoming more competitive.

The drop in the value of the euro will hurt Lithuania in particular in the short term as it it is dependent on Russian gas for energy. The price of gas is already a sore point for Lithuania after the country lost its main source of energy, the Ignalina nuclear power plant, at the start of the year.

Lithuania trades the least in imports and exports with EU countries, importing 50 percent from Europe and exporting 68 percent to EU members. Comparatively 71 percent of both Latvia’s import and export is with EU countries. Estonia imports 78 percent of products from the EU and exports 67 percent.

SEB Bank economist Vilija Tauraitė said the drop in the euro will make life difficult for Lithuanians, rubbishing claims that it will help the country get new export deals and take the country out of the crisis.

“I guess we will lose more in imports than gain in exports because those countries that choose dollars, except Russia, are not big export partners for Lithuania. Besides, most contracts with Russia are in rubles and euros,” she told Baltic Reports.

Some 30 percent of Lithuania’s imports are for energy consumption, almost all of which come from Russia.

“Imports becomes more expensive – a more expensive dollar means more expensive energy. It will also lead to inflation, and if this goes on for a few months, there may be some increase in electricity price starting from next year,” she said.

She said that Latvia and Estonia will likely see no net result from the devaluation because they trade more with EU partners and are more self sufficient energy wise. Estonia is completely self sufficient for electricity and heating because of its huge oil shale reserves.

Danske Bank’s pan-Baltic analyst Violeta Klyvienė told Baltic Reports that in a positive scenario it could have a neutral effect on Lithuania and a positive effect on the two northern countries. For Lithuania it might be worse though.

“This issue might be a negative one. There is a clear situation with Russia that is negatively affected. I don’t think this will have a significant positive effect [on exports]. However, Russia is an important partner and Poland is as well. There will be some advantages, but on the other hand, the majority of the countries are in the euro zone,” she said.

Optimistically, the loss in value of the euro could have a good effect overall though, especially for Latvia and Estonia.

“There could be a negative positive or neutral effect — I think it could be neutral or positive. Latvia and Estonia are more concentrated on Nordic economies. For them it might be more positive.”

The devaluation of the euro is expected to be temporary an economist told Verslo Žinios. The low value of the euro should last until the PIIGS countries (Portugal, Ireland, Italy, Greece and Spain) sort out their economies. The euro/dollar exchange rate is expected to return to its former value after the summer. [/private_subscription 1 year]

— This is a paid article. To subscribe or extend your subscription, click here