Analytics, EU – Baltic States, Financial Services, Forum, Latvia, Round Table

The article is prepared for the Round Table “Regional economy’s transformation in the Baltic Sea Area”, organised by the Baltic International Academy, Latvian Employers Association and International Web-Magazine “The Baltic Course” on 21^st of October in Riga, Latvia. 

Development strategy for the Baltic Sea region: new EU’s priority

The EU Swedish presidency’s initiative to elaborate a strategy to boost development among the Baltic Sea member states was an important step in the right direction. The Baltic Sea region is facing a number of pressing challenges, e.g. deteriorating state of the sea, barriers to trade and energy supply, poor transport links and a general lack of effective coordination. Our three Baltic States are viewed in Europe as strategy’s active partners.

The Commission on 10 June 2009, following intense debates and consultations from September 2008 to February 2009, adopted the Strategy.  

Background

Eugene Eteris.

The Member States requested the Commission to prepare an EU strategy for the Baltic Sea Region already in December 2007. Present proposal is the result of a public online consultation launched by the Commission in November 2008 and of numerous public debates, which took place in the eight Member States involved.

In its initial proposal presented on 10 June 2009, the European Commission launched a sub-regional strategy to boost development among the Baltic Sea countries.  

Since 2004 the Baltic Sea region is almost totally composed of the EU member states, except for a couple of Russian regions’ territory (Kaliningrad and Leningrad regions). The need for a special strategy is obvious: the Baltic Sea region is facing a number of pressing challenges, such as deteriorating state of the Baltic Sea, barriers to trade and energy supply, poor transport links and a general lack of effective coordination.

The Strategy was presented in the fall of 2008 by the then Commissioner for Regional Policy, Danuta Hübner (the new Commissioner, Pavel Samecki has taken the post in mid-2009, instead of the resigned D. Hubner). The Strategy was aimed, above all, at maximizing the development potential of the Member States and the regions around the Baltic Sea area, which is home to nearly 100 million people.

EU Financial support

Eight EU member states, plus some territories of the Russian Federation share a large portion of the 8 thousand km Baltic Sea coastline.

According to the EU Commission sources, between 2007 and 2013, the Baltic Sea Region will benefit from more than €50 billion of investment support under the Cohesion Policy and other EU funding. The support includes the following priorities:

-                      € 27 bln for improved accessibility (transport infrastructures, etc.),

-                      about  € 10 bln for the environment,

-                      € 6.7 bln for competitiveness, and

-                      € 697 million for security and risk prevention.

These figures and the description of the Strategy can be found in the Region Policy DG (Panorama Inforegio, Nr. 30, Summer 2009, pp.27) “The EU Baltic Sea Region Strategy”: towards a sustainable, prosperous future”.

Commission’s opinion

“The EU Strategy for the Baltic Sea Region is a major step as it marks a new way of working together in the Union. It does not imply new laws or institutions but is rather based on the will of governments and citizens in the Member States and regions to meet urgent, shared challenges. The Commission is proposing a comprehensive action plan, based on a thorough consultation with national and regional governments, business, NGOs and academia. The EU is well placed to coordinate the work that needs to be done in order to make the most of available resources to save the Baltic Sea, boost trade and improve the quality of life of everyone in the region.”   Commissioner for Regional Policy, D. Hübner.

Challenging issues

The Baltic Sea Region is facing several challenges: the state of the sea is deteriorating due to excessive discharges of nitrates and phosphates and biodiversity is under threat. Economies need to be better inter-connected. Statistics indicate an over-reliance on trade with immediate neighbours. The Baltic region is hampered by long distances, internally and with the rest of Europe: it takes 36 hours by train to reach Tallinn from Warsaw. Another concern is the isolation of Lithuania, Latvia and Estonia in terms of energy supplies. Finally, with the increasing number of oil tankers using the sea as a highway, the threat of accidents is increasing.

Regional importance

Eight EU Member States since 2004 and Russia surround the Baltic Sea presently. Many reports and action plans have been produced in the past; however, they had a limited effect. There is a strong need for better coordination of the numerous bodies involved. Many of the current sub-regional challenges are in the EU policy fields. EU Structural Funds programmes in the region provide a basis to strengthen cooperation. The Commission addresses its proposals to the Member States but also recognises that many of the challenges can only be met by good cooperation with Russia. The Commission recommends boosting this cooperation through existing initiatives, notably the “Northern Dimension”, the common policy of the EU, Russia, Norway and Iceland.

Baltic Development Forum-BDF

Bad weather in the global economy and the Baltics is a good opportunity to think over long-term solutions to common problems. This is the challenge of the present Baltic Sea Area Strategy.

An influential think-tank, at this October BDF’s Summit in Sweden, will focus on such issues as: how to support a common EU-strategy for the Baltic region; how to deal with the pressing issues of climate change and energy supply; and how to regain growth in the region; in short, how to boost development in this part of Europe.

The urgency of the present situation makes all discussions this year even more useful for the decision takers – especially for those in the business sector, as their active participation is crucial to the region’s recovery. This is time for some extra efforts in order to maintain the strategy’s momentum.

“First of a kind” strategy

The strategy takes the form of a communication and an action plan with a list of 80 flagship projects, some of which have already been launched. There are the following four cornerstones of the sub-regional strategy:

• Environmental sustainability (e.g. process waste water);
• Prosperous development (e.g. promoting innovation in small and medium enterprises);
• Accessible and attractive sub-region (e.g. improving transport links);
• Safety and security (e.g. better accident response and safety).

This is the first time that the EU has developed such a comprehensive strategy at the level of a sub-region. It could be seen as inspired by a similar approach in the Mediterranean are during recent French EU Presidency, or in Danube basin in perspective.

In particular, the strategy constitutes a first step towards the sub-regional implementation of the EU integrated Maritime Policy.

Between 2007 and 2013, the Baltic Sea Region will benefit from more than €50 bln of investment support under the Cohesion Policy and other EU funding, including €27 bln for improved accessibility, nearly €10 billion for the environment, €6.7 billion for competitiveness and €697 million for security and risk prevention.

Examples of Baltic States development projects

- Phosphates will be removed in detergent in all Member States with the aim of reducing nutrients in the sea.

- A “Baltic Energy Market Interconnection Plan” will be implemented to better connect Latvia, Lithuania and Estonia to European networks.

- The ‘Rail Baltica’ will connect Warsaw to Tallinn by 2013 with a target railway-train speed of 120 km per hour.

- A joint maritime surveillance system will be created.

- A fund for innovation and research will be set-up, using national and private funding to tailor research activities to the specific strengths of the region.

Commission’s initiative for business

Small Business Act and the Union’s SMEs development initiative in the last couple of years, have formed a “Enterprise Europe Network” aimed at providing both business support for SMEs and making easier access to finances.

The Network offers support and advice to businesses across Europe and helps them make the most of the opportunities in the European Union. The services are specifically designed for small and medium enterprises (SMEs) but are also available to all businesses, research centres and Universities across Europe.  

The Enterprise Europe Network is made up of about 600 partner organisations in more than 40 countries, promoting competitiveness and innovation at the local level in Europe and beyond. The Baltic State are not excluded from the process.

Useful links:

- Baltic portal: http://www.balticsea.net

- Actors in the Baltic Sea Region: http://ec.europa.eu/regional_policy/cooperation/baltic

-  The Enterprise Europe Network is a part of the EU's Competitiveness and Innovation Framework Programme (CIP): http://ec.europa.eu/youreurope/business/index_en.htm

- The strategy and projects can be found at: http://ec.europa.eu/regional_policy/cooperation/baltic