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Expert article 854 Baltic Rim Economies, 21.12.2011 Quarterly Review 5�2011 The great potential of the Baltic Sea cooperation By Jyrki Katainen The Baltic Sea has always offered an open route for trade to many countries. To this day, we continue to depend on seafaring. The Baltic Sea region is our home field. The players around it range from the small and dynamic Estonia to the leading EU Member State Germany and to the vast Russian Federation. However different we are, geographic proximity is a natural reason for close cooperation. It is important to keep the EU Baltic Sea Strategy high on the EU agenda. It is crucial for the future of the Strategy that its objectives are clear and specific. Concrete objectives motivate the Member States and local partners to implement the strategy effectively. The Baltic Sea Region has a tradition of cooperation in the sector of competitiveness and the single market. This cooperation needs to be strengthened. In the EU Strategy for the Baltic Sea Region we have existing mechanisms to prevent and remove obstacles of implementing the EU internal market. We have structures to share best practices regarding the implementation of the Services Directive and implementation of the Commission’s important recommendation on improving the functioning of the single market, among other things. The Baltic Sea area should be made an area that fully utilises the Single Market framework. This will mean: 1) Identifying and removing remaining Single Market barriers, 2) A high level of commitment for the work to boost implementation; and 3) Intensified problem-solving. All this will require resources. I am convinced that it is worth it. If we manage to develop the Baltic Sea area into a true Single Market, it will benefit the EU as a whole. It will serve as a pilot area for a well-functioning Single Market, creating a model of best practices. A well-functioning single market relies on good implementation. The method for enhancing the single market in the Baltic area should be built on tight cooperation between the EU countries around the Baltic Sea. I call for the relevant ministries in the different countries to establish an expert network – a high level single market task force – that would work on the implementation of single market legislation and other policies important to business. The aim should be a uniform regulatory environment that would make cross-border business as easy as possible. In order to make the Baltic Sea area really connected, transport infrastructure is of major importance. One target of the EU Baltic Sea Strategy is to make transport connections faster and travel times shorter. The next Financial Framework will hopefully place stronger emphasis on transport corridors such as the Bothnian Corridor and Rail Baltica. These corridors will improve the integration of Baltic Sea States into the single market. Inexpensive energy is another basic requirement for competitiveness. Finland has highlighted the importance of developing the EU´s internal energy markets. Well functioning energy markets give the best signals for investment and improve energy security. Finland is willing to support efforts to find positive solutions for electricity imports from third countries, and especially from Russia, to EU Member States. However, from the Finnish point of view, it is necessary that the rules for trading electricity with third countries are agreed simultaneously with the desynchronisation plan for the Baltic States’ electricity grid. The health of the Baltic Sea’s ecosystem remains of great concern. Recently, however, some positive developments have been reported: the number of protected areas has increased, currently covering over 10 per cent of the Baltic Sea marine area. 2 Nutrient input remains one of the key threats to the Baltic Sea ecosystem. It is quite clear that agriculture, airborne nitrogen input from both land and sea-based activities, and untreated municipal wastewater are the main sources of excessive nutrient input into the sea. In this regard, progress has been made in reducing point source discharges. For diffuse sources, the situation is far less satisfactory. Illegal oil spills have decreased. However, the remarkable growth of maritime traffic in the Baltic increases the risk of potential major pollution accidents. Safe navigation is the basis for protection against oil and chemical pollution. Additional measures to further improve maritime safety are needed. The Baltic Sea is not a sea within the EU. Any meaningful cooperation in the area will require cooperation with Russia. The value of Russia’s accession to the WTO cannot be overstated. Both Russia and its trading partners like us benefit hugely from Russia’s integration into the global, rules-based system of trade relations. We expect that Russia’s membership in the WTO will give a new boost to the overall investment and business climate in Russia. This will certainly help all of us in the region. Practical, small-scale cooperation with Russia is needed as well. I have learned with great interest about the initiative of the City of Turku and the Regional Council of Southwest Finland, namely the Turku process. The goal is to develop concrete projects and hands-on cooperation with regional partners in Russia, such as the City of St. Petersburg, Region of Leningrad, Kaliningrad, as well as their companies, chambers of commerce and universities. This is a good example of cooperation that deserves our support. The fact that this is done in close cooperation with key partners such as the City of Hamburg and the European Commission/DG REGIO, further enhances its potential. The Turku process, in which also the Centrum Balticum think tank actively participates, is a concrete example of what cities and regions can do to promote regional cooperation. The Northern Dimension is a concrete tool for cooperation between the EU, Russia, Norway and Iceland. It has not appeared on the front pages lately, but it has actually been a success story, with new cooperation and new partnerships. It also gives us a good structure for equal cooperation with all our partners. I see great potential in the Baltic Sea cooperation with the three E´s – Europe, the economy and the environment. Especially I want to underline the potential that lies in removing the remaining Single Market barriers. � Pan-European Institute � To receive a free copy please register at www.tse.fi/pei � *** This article is based on the speech by PM Katainen at a seminar concerning the future of Europe in Turku on 12 December 2011 Jyrki Katainen Prime Minister Finland
Expert article 855 Baltic Rim Economies, 21.12.2011 Quarterly Review 5�2011 The new threats to Northern-Europe By Mart Laar It is largely known, that security in the Baltic Sea region has been concern to nearly all countries around the Baltic See. This has not been “the Sea of Peace”. For centuries the Baltic Seas has actually been “the See of wars”. Wars on the Baltic See were nearly permanent, devastating all countries around. Even on the times, when the confrontation was not “hot” as during the times of the Cold War, was all the area extremely militarized. Peace arrived to the Baltic See after the collapse of the Soviet Union. By now nearly all countries around the Baltic See had joined either European Union or NATO or both. For some time it looked so as history had ended for the Baltic Sea countries. This was a very naïve hope. By now history has returned to the Baltic Sea. Russia’s strong military buildup and rearmament program have made this clear to everybody. During next year Russia’s military budget will grow more as 20%. Kreml is demonstrating its muscles on every occasion, taking more and more confronting line towards NATO. Huge part of this military buildup is concentrating to Baltic Sea region, where Russia’s military strength is significantly increased. This does not include only agressive exercises, but also development of newest weapon systems here, including new missiles and radars. It is hard to say, why all this is done, but Russia is Russia. For the Baltic See countries this nevertheless means need for more cooperation. A month ago the Defense Ministers of Baltic and Nordic countries gathered to meeting in Örebrö in Sweden. In discussions participated also Defense Minister of Great Britain and high level representatives from United States, Germany, Netherlands and Poland. Soon this fact demonstrates clearly how far the cooperation among countries around the Baltic See and Northern-Europe has gone. Northern-Europe’s understanding of defense is not always similar to other EU countries. Several countries are actually swimming here against common European tide. Sweden is not anymore neutral country, but participating in international missions as in Libya. When in most countries defense budgets are going down, then in Estonia it will reach 2% from GDP. When many countries in Europe have given away their conscript army, then Finland and Estonia not. At the same time, countries gathered in Örebrö had very similar understandings in all main areas and questions, cooperation between then is strong and real. They also raised Europe’s attention to several new threats to our security in modern World. One of them is cyber threat. Only some years ago these threats looked mostly theoretical. By now they have become real. First this was realized by Estonia. Cyber attacks against Estonia (a country where we vote online in national elections and conduct 98% of our banking over the internet) in 2007 nearly undermined the functioning of our society. Cyber attacks embody the fundamental trait of new security threats – they target our societies’ dependence on technology, trade and openness. They are a cheap and effective tool that advantage the attacker and can be used by states, criminals, terrorists, organized crime, and empowered individuals. Effective cyber security is not cheap and requires unprecedented cooperation between civil and military authorities, the public and private sector. 3 Europe’s comprehensive approach to security fits the threats we face from cyberspace, but the EU has been slow to react to changing circumstances. Member states policies could be far better coordinated. The EU has in the last year been victim to several embarrassing attacks in which gigabytes of sensitive data were lifted from Commission, Council and Parliament computers. At the same time cyber security issues are enormously important namely for Northern Europe. It is largely known that largely thanks to their fast development in e-area these countries are specially vulnerable to all possible cyber attacks. Recent cyber attacks against Finland with significant political context are sad example of these new threats. Strong e-development is at the same time strong asset to fight these attacks. When we can share our knowlidge and experience Northern countries can do lot of good not only for themselves but for all Europe. That was the reason, why in Örebrö was decided to start to work on Nordic cyber defense detachment, what we can offer when it is needed to European Common Defense and Security policy. At the beginning of the next year experts from the Nordic countries will arrive to Tallinn to NATO’s Cyber Defence Center of Excellence to prepare concrete steps toward common activities in the field of cyber security. Other fields of cooperation are also discussed among so called NB8. Both European Union and NATO are talking about the need to cooperate more. In NATO it is called “smart defense”, in EU “sharing and pooling”. NB 8 had done soon before they were called to do this. Common procurement – by example Estonian-Finnish radar procurement or cooperation in Baltic Defense College are only some examples how useful such common projects can be. In Örebro several other possibilities for enhanced cooperation were discussed, by example common exercises. This all can strengthen security around the Baltic Sea and giving more possibilities to raise the share of NB 8 in Europe. There has been lot of talk on economic or environment cooperation in the Baltic Sea area, now has arrived time to step up with the defense cooperation also. Mart Laar Defence Minister Estonian Ministry of Defence Estonia � Pan-European Institute � To receive a free copy please register at www.tse.fi/pei �
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