Focus on Trump and Brexit
On June 13-14, the 8th Annual Forum of the EU Strategy for the Baltic Sea Region and the 19th Baltic Development Forum (BDF is a Copenhagen-based think-tank and networking organization) took place in the Ministry of Foreign Affairs in Berlin. Both forums, already traditionally, are held in parallel. Although the ministry’s building was constructed as the Reichsbank of Nazi Germany and, later, was turned into the headquarters for the Socialist Unity Party, which was the Soviet-dominated East Germany’s ruling party, now talks there were centred on the Baltic Sea region’s business cooperation and preservation of all the main democratic values-guarding the European Union.
The EU Strategy for the Baltic Sea Region was adopted by the European Council in 2009. It was the first EU strategy of a particular region of the EU. Later, the EU strategies were adopted for the Danube basin, the Ionicadriatic area and the Alpine region. The EU Strategy for the Baltic Sea Region involves the EU Member States in the Baltic region: Lithuania, Latvia, Estonia, Finland, Sweden, Denmark, Poland, and the Baltic Sea coastal lands of Germany. Some countries outside the EU – Norway, Russia, Iceland and Belarus – also participate in some projects under the Baltic Sea Strategy. It deals with issues which are too large for the national level and too small for the pan-european level.
“It was an idea of the EU Member States to create the EU Strategy for the Baltic Sea Region. It started as an ecological initiative, because all the states around the Baltic Sea seek to stop polluting it. The European Commission supported this initiative of the EU Member States. It is up to the region’s member states to continue the strategic activities or not,” Peter Schenk, official at the Directorate General for Regional and Urban Policy of the European Commission, told The Baltic Times.
Schenk mentioned two ongoing projects under the Strategy, which he finds especially useful: CHEMSAR and EFINDOR. The main objective of the CHEMSAR project is to create uniform operational plans and standard operational procedures in hazardous incidents in the Baltic Sea. The project involves partners from Estonia, Finland, Germany and Lithuania. EFINDOR is a sustainable forest management project, which also promotes increasing biomass production. The latter project involves partners from Sweden, Poland and Lithuania. “The Strategy is great for business matchmaking,” Vilma Gaubyte, director of the Lithuanian Biomass Energy Association, told The Baltic Times in Berlin.
Guido Kemmerling, official of the German Foreign Ministry from the Task Force Annual Forum 2017 of the EU Strategy for the Baltic Sea Region, during his briefing, told journalists that he is especially satisfied that Oleg Kravchenko, one of the deputy ministers at the Belarusian Foreign Ministry and some Russian officials arrived to the forum. “We have a political problem with Russia – no doubt. And there are [the EU] sanctions against Belarus. However, perhaps, we can influence the situation in those countries,” Kemmerling said.
Actually, Russia, unlike Belarus, showed little interest in participating in the Berlin forum. “Only very lowlevel officials arrived to the forum,” Nataliya Smorodinskaya, senior researcher of the Moscow-based Institute of Economics at the Russian Academy of Sciences, said to The Baltic Times.
Kravchenko mostly spoke about the transport connections of Belarus with the eight EU Member States, which participate in the EU Strategy for the Baltic Sea Region.
According to Kemmerling, Lithuania is predominantly interested in the transport issues at the EU Strategy for the Baltic Sea Region forums. “At the forum, we mostly talk about the Baltic Railway connections, which combined with our good logistical infrastructure, such as airports, provides good business opportunities. The forum is a perfect stage to present our transport-related opportunities, including our connections with the third countries [non-eu countries], such as a Viking railway connection for cargo between Lithuania, via Belarus, to Ukraine. The Rail Baltica [railway Warsawkaunas-riga-tallinn-helsinki], which is the main project in the Baltics, will help to connect the North Sea area with the Baltic Sea area – it will be a corridor from the Netherlands to the Baltic States. It is also important because of the cargo coming from China by railways to Lithuania,” Lithuanian Transport and Communications Deputy Minister Ricardas Degutis told The Baltic Times.
Algirdas Sakalys, Lithuanian expert on transport issues, said that the connection with Eastern countries has great perspectives. “However, the East has its specifics – they can celebrate a national day and not be available for 10 days in some Central Asian countries,” Sakalys told The Baltic Times.
Degutis said that Via Baltica (highway Warsaw-kaunasriga-tallinn) was not discussed at the forum. However, he expressed satisfaction that the current Polish government shows interest in the construction of this highway in the territory of Poland. Until now, the road from Warsaw to the Lithuanian border was nicknamed by Lithuanians as the “road of death” due to its poor quality and high rate of accidents. “Each day, some 11,000-13,000 vehicles go from the Polish border to Kaunas and some 4,000 of them are trucks. 2020-2023 is the target date to build a motorway-level quality road from Warsaw. It would cut the number of fatalities on the road,” Degutis said.
Romualdo Massa Bernucci, senior official of the Luxembourg-based European Investment Bank presented the business mood statistics at the Baltic Development Forum in Berlin. According to his data, Estonian, Latvian and, especially, Lithuanian businessmen are the most pessimistic among all the businessmen of the countries of the Baltic Sea Region. “They point to the difficulty of finding staff with appropriate skills. They also complain about the insufficient access to finances for their businesses,” he said.
The geopolitical situation has impact on business – no wonder that the Baltic Development Forum presented its Political State of the Region Report titled “External Earthquakes, Internal Adaptation? Brexit, Trump and the Baltic Sea Region” in Berlin. It was written by several authors from the Baltic Sea region.
“Lithuania and Latvia are among the countries that export more to the UK than they import (Estonia imports more than exports). Furthermore, the UK is the second-largest net payer in terms of contributions to the EU’S common budget, while the Baltics are still on the receiving end. Standard & Poor’s rankings, which analysed the EU countries most vulnerable to the economic impact of Brexit, showed that Lithuania is the leading nation, due to the possibility of a decreased EU budget, the number of migrants living in the UK and other factors. Lithuania is closely followed by Latvia, while Estonia took up sixth place after Hungary, Poland and Slovakia. According to other estimates, the Baltic States could expect a loss of less than 0.5 per cent of GDP up to 2030 due to the Brexit, while the EU average is slightly higher. Brexit, as well as the European Commission’s White Paper on the EU’S development scenarios, also caused a wide-ranging debate on the future of the EU. The opinion among the Baltic States is on a similar pro-eu tone. For example, Lithuanian President Dalia Grybauskaite clearly emphasised willingness to be among the most integrated countries of the EU, as it is a core interest of Lithuania. She also said that the EU needs to adapt to the changing circumstances and not be afraid of change, even if that means some states leaving the union. Latvian President Raimonds Vejuonis agreed that the EU is strong enough to overcome any difficulties and that Europe has no other alternatives. Estonian President Kersti Kaljulaid also noted that there is no problem with multi-speed Europe if countries working more closely together allow for others to join that cooperation,” reads the article by Linas Kojala, Director of the Vilnius-based Eastern Europe Studies Centre.
He also wrote that initial Lithuanian fears regarding the Donald Trump presidency are not so strong now, due to the U.S. administration’s reassurances on the NATO issue.
“Brits are lost. The Baltic region should be more proactive towards the UK. For example, the Brits should be invited to the Baltic Development Forum,” said Andris Piebalgs, Chairman of the Latvian Unity Party and former EU commissioner, who took part in the forum’s discussion on the report.
Some authors of the report were present in the Berlin forum. “Now Germany is the leader of the Free World,” said Per Carlsen, retired Danish diplomat and moderator of the discussion, presenting Jana Puglierin, Head of the Alfred von Oppenheim Centre for European Policy Studies at the German Council on Foreign Relations, who was one of the authors of the report.
“For us, Germans, it was a difficult awakening,” Puglierin said about Brexit and Trump’s victory. She added that, after Trump’s election, anti-american feelings are strong in Germany, but she did not find those feelings in Poland and the Baltic States. Puglierin accented that Berlin prefers to lead through international institutions, especially the EU, and, anyway, German Chancellor Angela Merkel remains faithful to the Trans-atlantic Alliance.
Agnieszka Lada, Senior Analyst at the Warsaw-based Institute of Public Affairs and one more author of the report, told the audience in Berlin that the current Polish government is ideologically close to the British Conservatives and Trump. Therefore, Poland, unlike Germany and the Baltic States, wants “a weaker EU”. However, she added that Poland shares with the Baltic States the same view on the region’s security matters.
“Brits are lost. The Baltic region should be more proactive towards the UK. For example, the Brits should be invited to the Baltic Development Forum,” said Andris Piebalgs, Chairman of the Latvian Unity Party and former EU commissioner, who took part in the forum’s discussion on the report.”
German Foreign Minister sigmar Gabriel addresses the 8th Annual Forum of the EU strategy for the Baltic sea Region in Berlin, which now is described by some as the new capital city of the Free world.