Surrounded by forest, a white granite pillar topped by a ring of golden stars near the village of Purnuskes marks "the geographical centre of Europe". Things are looking bleak.

The Baltic state of Lithuania - sandwiched between Latvia and the Russian exclave Kalingrad - faces an economic contraction of 18 per cent for 2009.

To that the government has said it will add a 30 per cent increase in household power prices in 2010, as it fulfils a condition of European Union membership and shuts Ignalina, the Chernobyl-style nuclear power plant that provides 70 per cent of Lithuania's power.

EU officials in Brussels pressed for the closure at the start of the century, when the bloc was embarking on its eastern enlargement. Their goal was to lower the risk of a repeat of the Chernobyl nuclear explosion of 1986.

Neither recession nor energy security were factors when the sculpture was symbolically unveiled on May 1, 2004 as Lithuania, once occupied by the Soviet Union, joined the EU. It is described by the country's tourism website as marking "the poignant return of Lithuania to the family of European nations".

But from the beginning of the year - when temperatures can drop to minus 30 degrees Celsius and rivers freeze - the closure made Lithuania more dependent on an increasingly irregular supply of power from its former occupier.

"It's the worst crisis ever," said Jan Glushachenkov, a 44-year old former excavator driver who lives next to the sculpture above a compass mosaic.

Speaking to Reuters in the still hush around the column near the village 26 km northeast of Vilnius, Mr Glushachenkov said he has already been out of work for almost a year.

He pointed out the more pressing risks Brussels now faces in closing the reactor with the country's 3.5 million people locked in recession: "People will have to emigrate or to go to steal".

Population losses due to net emigration since 1990 already amounted to about 10 per cent, according to a 2008 report from the OECD.

For those who stay, things will be tough. Mr Glushachenkov's neighbour Ludwik Trypucki, an 86-year-old farmer, said the shutdown will lift his monthly power bill to about 18 per cent of his 800 Lithuanian litas (€220) pension. He already pays 120 litas per month.

"I understand they had to close it if it was unsafe to operate, but they had to agree in advance to get cheaper electricity. Now it's unclear where that will come from," he said.

Lithuania plans to import electricity from Estonia, Russia and Ukraine, via neighbouring Belarus. A small amount will be imported via cable from Finland and Latvia.

The increasing energy dependence on Russia, which will also supply gas for a fossil fuel-powered electricity plant, comes as relations between the countries remain edgy.

Lithuania objected to Russia building a gas pipeline to Germany under the Baltic Sea and attempted to block the start of EU-Russia talks on a strategic partnership.

Some in the Baltic region fear a planned pipeline under the Baltic Sea from Russia to Germany, Nord Stream, could offer Moscow a direct energy lever with Europe, enabling it to cut off countries' gas to wield diplomatic pressure.

Russia has in the past been a reliable gas supplier to Lithuania, although it has cut oil supplies to a Lithuanian refiner, Mazeikiu Nafta, now owned by Polish oil group PKN Orlen.

Prime Minister Andrius Kubilius is hopeful countries in the region will be happy to sell Lithuania electricity surpluses the downturn has created in their countries, and pointed to long-term power contracts Lithuania has signed.

"Lithuania will become more dependent on imports of energy resources after Ignalina's closure. That will reduce our energy security, but we feel assured about the next year," he told Reuters.

The EU has allocated so far about €820 million in aid to decommission the plant, deal with the nuclear waste and upgrade a fossil fuel plant, but the central bank points to the shutdown's broader impact.

"A 30 per cent hike in electricity prices will slash gross domestic product by one percentage point and will increase inflation by almost one percentage point," said Raimondas Kuodis, the central bank's chief economist.