From the CIAO Atlas Map of Europe 

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Will the EU use Northern Dimension to solve its Kaliningrad dilemma?

Lyndelle D. Fairlie

August 1999

Copenhagen Peace Research Institute


Table of Contents

    What is Kaliningrad like and in what kind of cross-border region is Kaliningrad located?
      How extensive is the gray economy?
    What is the Northern Dimension?
      Lithuanian and Danish proposals within Northern Dimension
  EU / Russia Relations—Is Kaliningrad Just One More Russian Border?
    Would a regional focus offend Moscow?
    What new form will Tacis take?
      Tacis—A regional focus?
      Tacis—the past and future in Kaliningrad
    Will “grassroots” cooperation avoid high politics risks?
  The Role of EU Accession Partnerships with Poland and Lithuania: How is Kaliningrad Affected by Becoming A Russian Enclave in the EU?
    What is happening as Kaliningrad is increasingly being enclosed by the EU’s Schengen standards?
      Is there a solution to the Schengen part of the dilemma?
      Would tightening land borders divert problems to the sea?
      Do Kaliningrad borders appear in the EU’s CFSP?
    Which factors will affect Kaliningrad’s ability to compete with its Baltic neighbors?
      EU financial assistance to the EU candidates bordering Kaliningrad
      The adoption of the acquis communautaire by the neighbors
      Being an EU neighbor—the bigger picture
  Looking for “Best Practice” Solutions
    Should Northern Dimension borrow policies from the Stability Pact for South Eastern Europe?
      Would Euro-regions be invigorated?
    “Best practice” from BEAC and INTERREG?
    Are other analogies possible?
  The Role of EU Institutions and the Prodi Commission
  Conclusion and Recommendations




A Northern Dimension for the European Union is now taking shape. Originally a Finnish initiative, it tries to take a regional view of the Baltic area which includes member states, EU applicants such as Poland and the Baltic states and Russia. The Northern Dimension specifically mentions the Russian oblast of Kaliningrad. There is very little time left to develop an Action Plan which the EU Council can adopt at the December Helsinki summit. This essay addresses the question of whether or not the EU will use Northern Dimension to solve its Kaliningrad dilemma.

What is the EU’s dilemma? First, let us take a quick look at the big picture dilemma for the EU in the Baltic area. This analysis will then focus on the smaller geographical area of Kaliningrad and its neighbors. The big picture dilemma of Euro-Baltic relations was summarized by Thomas Christiansen when he wrote about what the future might look like in an EU enlargement scenario. In a 1997 essay, Christiansen noted Russia’s importance in the Baltic area but also noted that

“At the same time, it will remain outside the ambit of EU enlargement strategies. In this way, even if Poland and the Baltic states are gradually coming into a more structured relationship with the Union—passing from association to eventual membership—Russia’s non-membership of the Union will prevent the Baltic Sea from becoming a whole ‘internal’ EU sea. Consequently, the tension between the Union’s ‘external’ policies (development aid), on the one hand, and its ‘internal’ policies (structural funds, spatial planning, trans-European networks), on the other, is bound to continue, if to a lesser degree...A clear line would be drawn between Russia and the rest, not only with the moment of actual accession, but already in the years leading up to and preparing for membership. In this respect, enlargement could be viewed as merely pushing the EU’s border further east, but not changing the basic division between East and West that regionality in the Baltic is supposed to overcome. Indeed, focusing not just the evolution of the EU, but also region-building in the Baltic, on a distinction between Russia and the EU could well be expected to lead to greater divisions. Regionality in the Baltic would be bound to suffer.” (Christiansen 1997: 285-286).

When we move the clock forward from Christiansen’s 1997 scenario to 1999 and we zoom the camera lens in on the smaller area of the Russian oblast of Kaliningrad and its neighbors, Poland and Lithuania, we highlight the EU’s dilemma of how to enlarge to the east without creating new dividing lines in Europe. To understand the dilemma, one must first note a few facts. The Kaliningrad oblast is progressively becoming a Russian enclave within the enlarging EU. It became detached from the rest of Russia when the Soviet Union dissolved. Its neighbors, Poland and Lithuania, are increasingly adopting the EU’s acquis communautaire in preparation for membership.

The EU never planned to have a Russian enclave within it. The prospective enclave situation is an accidental by-product of the European Council meetings going back to Copenhagen in 1993. These meetings initiated the policy that all European countries which meet the criteria of having democracies and market economies would be eligible for EU admission. This meant that Poland and Lithuania would eventually be EU candidates if they met the criteria.

So the EU’s dilemma is this—how can it enlarge to the east and create tight future external borders without also establishing new dividing lines in Europe? When one looks at Kaliningrad, Poland and Lithuania, it is obvious that the EU has many more extensive obligations to Poland and Lithuania than it does to Kaliningrad because Poland and Lithuania are prospective EU members. On the one hand, the EU wants to prepare Poland and Lithuania for accession. Even now, they receive extensive financial assistance as part of preparation eventually to enter the single market, single currency and other aspects of the acquis.

In preparing for enlargement, the EU also wants to tighten its future eastern external borders. The Treaty of Amsterdam, which went into effect in 1999, helps to formalize that goal by requiring EU candidates eventually to adopt the Schengen acquis and aim at the eventual EU goal of having a common visa. If implemented, this goal will eventually result in enclosing Kaliningrad within Schengen borders, thereby requiring Kaliningraders to get a visa to visit the rest of Russia by land. This is likely to cause Kaliningraders to initiate human rights protests on the grounds that they should not need a visa to visit their own country by land. From the perspective of this issue of access between Kaliningrad and the rest of Russia, the EU is well on its way to creating new dividing lines in Europe. The visa issue is only one of many implications of becoming a Russian enclave in the EU but for many Kaliningraders, it is the first issue of which they became personally aware, although local press reports did not clearly explain that the changes which occurred at the Polish border in 1998 were part of Poland’s preparation for accession to the EU.

Although on the one hand the EU wants to enlarge to the east and create tight external borders as a by-product of enlargement, on the other hand the EU wants to cooperate with Russia and to help it to achieve goals such as a market economy and democracy. The EU is interested in bridging the gap between Russia and the prospective “ins” including Poland and the Baltic states. Basically, the EU approach has been to be careful to defer to Moscow and be sure that it does not get involved in Russian center-periphery federalism issues. Institutionally, this means that Russia is dealt with as part of the EU’s “external relations”. The Partnership and Cooperation Agreement (PCA) between the EU and Russia is regarded as the cornerstone agreement. It aims to encourage political, commercial, economic and cultural cooperation. Its main instrument for giving development aid to Russia is the Tacis (Technical Assistance to the Commonwealth of Independent States) program. In 1999, the EU added the Common Strategy of the European Union on Russia.

The PCA has been characterized in a recent report to the EU as providing “the overall framework for EU-Russia relations and the basis for EU’s comprehensive policy towards Russia.” (Working party 1998:6) From the Kaliningrad perspective, this is simply erroneous because it ignores the fact that Kaliningrad is affected not only by the EU’s agreements with Russsia but also by the pre-accession changes which are occurring in its neighbors, Poland and Lithuania. From Kaliningrad’s viewpoint, Christiansen’s prediction is gradually coming true.

The EU’s effort to deal with Russia as part of its “external relations” and its focus on deferring to Moscow in the hope of avoiding Russian center/periphery politics leads to the corollary that the EU treats Kaliningrad as if it were simply one more Russian border. This approach has the advantage of avoiding Russian center/periphery domestic political issues and is compatible with the EU’s approach of handling accession negotiations with Poland and Lithuania on a country by country basis rather than in a cross-border context. The regional cross-border perspective focusing on how Kaliningrad is involved with neighboring Poland and Lithuania is de-emphasized in order to minimize the possibility of “high politics” issues involving Russia and the EU. As a corollary to the goal of avoiding “high politics” controversies, the EU also hopes that the member states and candidates and their sub-national governments and NGOs will continue to cooperate with Kaliningrad in a grassroots, “low politics” approach, thereby minimizing the potential for controversy.

Treating Kaliningrad as if it is just one more Russian border allows the EU to play it safe with Moscow in the short term but is likely to lead to the type of problems Christiansen summarized because, in fact, Kaliningrad is not just any Russian border. It is unique because the EU has policies affecting Kaliningrad which evolve every day. They derive not from the EU’s agreements with Russia but rather as by-products of the EU accession process in which Poland and Lithuania are engaged. For example, it is these accession requirements which are gradually producing the situation whereby Kaliningrad will be enclosed by Schengen borders and Russians will be required to buy EU visas just to reach the rest of their own country by land.

So the EU’s dilemma is how to enlarge and strengthen future external borders without creating new dividing lines in Europe, in this case without isolating Kaliningrad. The proposed new structure of the Prodi Commission suggests that the overall dilemma suggested by Christiansen will continue along with the specific Kaliningrad dilemma because Russia will presumably be dealt with in the External Relations DG whereas accession will be dealt with in the new Enlargement DG. Northern Dimension could play an important role in helping to bridge the gap between the DGs and solve the problems outlined by Christiansen and this analysis—how can EU enlargement take place without creating new dividing lines in Europe?. How can enlargement avoid damaging the cross-border activity between Russia and its neighbors?

Russia, for its part, has its own dilemmas. Center/periphery politics has raised the question of how much autonomy sub-national units can be allowed. Is there a risk of separatism? Even if the center theoretically favors more power for regions, is it willing to trust this particular Regional Administration with more devolved authority? In addition, because Kaliningrad is still the headquarters of the Baltic Fleet there has been the question of whether it can have a military focus at the same time it is also trying to be an economic bridge between Russia and the west.

In 1999, the divisions within Moscow are most recently illustrated in differences between Ministries over the question of abolishing some of the Special Economic Zone privileges in Kaliningrad. The differences “reflect the fact that the Federal Authorities still have not developed an integral approach for the resolution of fundamental issues of development of Kaliningrad Region.” (East-West Institute 1999: 2) So if there is no internal agreement on how to develop Kaliningrad, it is hard to imagine a comprehensive Russian response in the Northern Dimension discussion on the subject of how Kaliningrad should relate to its neighbors.

In light of differences of opinion in Moscow, will the progress being made towards an EU Action Plan based on Northern Dimension make progress towards resolving the EU and Russian dilemmas? At present, there is little sign of such progress, although an agreement between Lithuania and Russia indicates that numerous cooperation projects for Kaliningrad might be suggested in the context of Northern Dimension. Denmark also placed high priority on cooperation with Kaliningrad at the CBSS meeting in June. Bi-lateral and multi-lateral cooperation is not new and is basically a natural by-product of EU enlargement to Poland and the Baltic states but now the Northern Dimension label is being attached to proposals. Now that Finland chairs the Council presidency it has the responsibility of not dropping the ball on implementing its own idea.

What is Kaliningrad like and in what kind of cross-border region is Kaliningrad located?

During the Soviet period, the Kaliningrad economy revolved largely around the military. Kaliningrad was the headquarters of the Baltic Fleet, as it is today. The military and related industries such as machine tools were very important to the economy as were industries based on natural resources such as fishing, fish processing, cellulose and amber mining.

The dissolution of the Soviet Union made Kaliningrad an exclave of Russia, separated from the rest of Russia by the newly independent states of Lithuania, Latvia and Belarus. The legacy of the Soviet period continues. A border treaty between Lithuania and Russia has been signed but not ratified. The new borders separating Kaliningrad from the rest of Russia have made it unique. In December, 1998 a Tacis report characterized the oblast this way: “The main feature of the crisis in the Kaliningrad oblast is its qualitative difference with the other regions of Russia, with a strong dependence on outside external relations (approximately equally important with mainland Russia and the Baltic region)” (Samson 1998: 7). Before the August, 1998 ruble devaluation, Kaliningrad was 80% dependent on imported food, much of it coming from neighboring Poland and Lithuania.

During the post-Soviet period, Kaliningrad’s economy suffered the loss of most of its main components. The end of the Soviet Union and Warsaw Pact and a reduced Russian military budget made the Baltic Fleet much smaller than in the past. Industries such as fishing and cellulose became increasingly uncompetitive when exposed to market forces. Agriculture is a depressed sector. Studies also indicate there is a substantial gray economy.

Moscow seems to have no clear policy for Kaliningrad. Initially, the ambivalence was partly due to the question about whether the future of Kaliningrad should be a military center or an economic bridge between Russia and the west. “In the traditional security paradigm, the strategic importance of Kaliningrad for Russia prevails over its economic significance, raising the issues of the “Kaliningrad corridor”, Kaliningrad’s dependence on Lithuania in energy supplies and land transit, fear of German revanchism or of German economic and cultural “infiltration”. Analysts warn that in case of NATO enlargement to the Baltic states, Kaliningrad would turn into a “thorn” inside the Alliance.” (Medvedev 1998: 149-150)

A recent illustration of the potential for Cold War residue to come center stage in Kaliningrad occurred in July 1999 when State Duma deputy speaker, Sergei Baburin, visited Kaliningrad. He “attacked Lithuania’s policy to integrate into NATO and blasted the pending Lithuanian-Russian border treaty. Baburin stressed he will do “whatever it takes” to prevent the treaty’s ratification in the Duma, adding that “only a madman, a fool, or a traitor can attempt to remove the obstacle to open Lithuania’s way into the military bloc”. (RFE/RL 27 July 1999)

Kaliningrad has tried to be both a military center and an economic bridge. A Free Economic Zone was originally set up to attract trade and investment but was later ended. There are varying interpretations about why the FEZ was ended. One interpretation was that it was the result of austerity pressures from the IMF. Lobbying by Kaliningrad convinced Moscow to allow a new Special Economic Zone (SEZ) which has similar economic goals. Implementation was not complete and there is still little foreign investment although BMW has produced the first car in its new Kaliningrad facility. Norwegian ships are being repaired at the Yantar shipyard. These economic activities take advantage of low wages and/or the SEZ advantage that goods produced by foreign manufacturers with certain minimum requirements of value added in Kaliningrad are eligible for export to the Russian market without the tax normally applied to imports.

One wonders if the SEZ will now be ended, essentially repeating the end of the FEZ, again under IMF pressure. In July, 1999 the Russian government announced various policies in conjunction with a request for financial support from the IMF. The SEZ may effectively be ended and other parts of the economy severely impacted by the following goals: a federal law to be adopted by the end of 1999 eliminating excise and VAT exemptions for goods imported to Kaliningrad, increasing in July, 1999 the list of commodities whose duty-free importation into Kaliningrad is subject to quotas and eliminating the tax-exempt import of cars. (Russian government and Central Bank 13 July 1999) These policies were advocated by the Ministry of Finance but other ministries disagreed. “For example, in the assessments made by the Ministry of Economics it is noted that the cancellation of the customs concessions in the SEZ would result in a number of various social/economic impacts.” (East-West Institute 1999: 1)

In some parts of north-west Russia, local leadership has been able to compensate partly for lack of support from Moscow. Novgorod Governor, Mikhail Prusak, has gained attention for his local reforms which attracted western investment. Kaliningrad’s leadership is not perceived as being as skillful or successful. There have been disputes between the Governor and the oblast Duma, even calls for the Governor’s removal and requests for Moscow to look into the disputes. Questions have been raised about whether or not Moscow has confidence in the Regional Administration. However, even the most experienced Russian oblast leadership would probably not have all the information needed to cope with becoming a Russian enclave in the EU.

The weakness of the Kaliningrad economy, the lack of clear policy by Moscow and the EU enlargement which will make Kaliningrad a Russian enclave within the EU have led to concerns. On balance, the overall impression observers have of Kaliningrad is that it is adrift without adequate attention from any policy-makers just at a time when EU enlargement demands such attention. A recent Tacis report concluded that “the negative aspects for Kaliningrad of the EU enlargement will dominate the positive ones. That means that the extension may have a depressive effect on Kaliningrad economy.” (Samson and Lamande 1998: 6) However, when this author interviewed Commission staff about their opinions of such a conclusion, the staff found the report’s conclusion to be counter-intuitive. Although they did not have empirical evidence, they had an expectation that being near the EU had to be a good thing because Kaliningrad would be near a dynamic economic trading bloc.

Considering these differences of opinion about the nature of the region in which Kaliningrad is located and its potential, the EU and Russia should study the area. The impression of this author is that both the Kaliningrad economy and the EU institutions are highly compartmentalized, meaning that there is very little perception of Kaliningrad in a regional context and very little perception of how hard security, soft security and economic sectors impact each other. This problem is portrayed on the graphic 1   on the next page which shows interactions as relations in a five level game sector by sector.

Before policies are introduced, first adequate data should be accumulated. Is compartmentalization a real problem? What kind of region is it? How much cross-border trade is there? How many people make multiple trips across borders every day? How important is this to the local economy? Is there a true cross-border Natural Economic Territory? (Scalapino 1995: 100) Do local people have perhaps less of an economic interest and more of a humanitarian interest to visit friends or relatives across borders? Which policies have what kinds of effects on people? If the main cross-border “glue” is economic, a prominent role might be indicated for certain organizations. On the other hand, if the main “glue” is humanitarian, other organizations may be appropriate. One factor is clear—Russians in Kaliningrad often wish to cross borders to visit their friends and family or do business in other parts of Russia. Eventually, authorities will need to deal with at least this much “glue” even if cross-border trade declines due to the ruble fluctuation against foreign currencies. There is no avoiding the question of why they should need a visa to visit their own country.

How extensive is the grey economy?

Before finishing with this survey of contemporary Kaliningrad, this section devotes additional attention to the allegations about the grey economy, partly because these allegations seem to have played a major role in what seems to be the ending of aspects of the current Special Economic Zone. A recent report said that “From the point of view of the Federal authorities the Customs procedures in the SEZ create conditions favorable for a high rate of crime and are a reason of the failure to receive proper revenues. The Ministry of Finance officials assert that the annual loss is hundreds of million dollars.” (East-West Institute 1999: 1)

If this is correct, the role of the grey economy may be substantial and the writings of Dallago and Friman may be useful in understanding the Kaliningrad oblast’s economy. They have suggested frameworks for analyzing transitional economies. Dallago has four categories of economic activity: the “regular economy” which operates within the law, the “irregular economy” which pursues legitimate goals outside the law, the “criminal economy” which pursues illegal goals and the “informal economy” which involves non-monetized activity. It may be that all of these operate in Kaliningrad. (Dallago, 1995, p. 31-63)

In his analysis of transit states, H. Richard Friman analyzes why some areas emerge as transit economies. Friman analyzes “openness to transit” and “access to target”. Friman writes that “Openness to transit refers to the extent to which exporters can gain access to and passage through the potential transit state. Access to target refers to the extent to which the potential transit state can gain entry into the intended final market sought by the exporter. The greater a country’s openness and access, the more likely the country is to become a transit state.” (Friman 1995: 68)

Kaliningrad is not a sovereign state but the same economic principles apply. In the post-Soviet period, its borders have become very porous with Poland and Lithuania. In addition, to the extent that the EU or Russia are “targets”, Kaliningrad’s “access to target” has improved dramatically in the post-Soviet period as both Poland and Lithuania have become EU applicants.

What is the Northern Dimension?

Just where is what the EU calls “added value” in Northern Dimension? In a communication to the Commission, the Finnish Ministry for Foreign Affairs explained “The essence of the Northern Dimension is, on the one hand, to emphasize the positive interdependence of the EU, Russia and the Baltic Sea regions. On the other hand, it aims at integrating Russia into European and global structures through increased co-operation. The ultimate goal of the Northern Dimension is to reduce all dividing lines” (Ministry for Foreign Affairs 1998). So where’s the beef? Northern Dimension reportedly involves opportunities for synergy, coordination regarding energy, particularly a gas study and soft security risks. Outgoing Commissioner Van Den Broek identified “Threats arising from illegal trafficking (drugs, illegal migration, nuclear material, money laundering).” (Van den Broek 1998) These are all EUROPOL mandates and perhaps when EUROPOL gets geared up, it could become a significant actor implementing these goals.

What will Northern Dimension mean for Kaliningrad? The Commission’s document “A Northern Dimension for the Policies of the Union” recommends “further programs of technical assistance and investment within Tacis and Phare..for projects spanning the Russia-Baltic and Russia-Poland borders.” Also, there is the suggestion that “Programs of technical assistance devoted to promoting customs co-operation, future administration training and co-operation in the fight against organized crime should be considered through cross-border co-operation programs, for border areas, i.e. for the Kaliningrad region of the Russian Federation.” (Dewar 1999)

Perhaps the focus on third pillar issues is to be expected. In an analysis of the implications of eastern enlargement of the EU, Peter Balazs argued that economic integration “is probably not the first step in integrating Eastern Europe into Western organizations...The functional integration of the CEECs should follow the three pillars of the Treaty on European Union in a reversed order. Confidence building in justice and home affairs, as well as security measures, necessarily precede economic integration.” (Balazs 1998: 80-81). If that is the case with CEECs, then one should also expect high priority to be placed on soft security risks in the EU’s relationship with Russia.

Lithuanian and Danish proposals within Northern Dimension

Only now are precise proposals being made. In June, 1999 potential beef has been suggested in a joint proposal from Lithuania and Russia. They have started consultations concerning “joint projects on transport, power engineering, science and education, across-the-border cooperation and other spheres”. (BBCSWB 6 July 1999) More specifically, Lithuania’s list includes the following projects: modernization of a transport corridor from Kaliningrad to Kaunas, construction of a second gas pipe between Kaliningrad and Lithuania and control of water resources of the Nemunas Basin including environmental protection programs, joint monitoring and cooperation in dealing the natural disasters. Other environmental proposals include deepening of a River Nemunas tributary to improve fish migration and restoration of the eel population in the Curonian Lagoon. In the field of education they propose to build on a public administration teaching program which has been undertaken by Kaunas University and Kaliningrad and the Baltic Institute of Economics and Finance. In the field of education they propose a Eurofaculty in Kaliningrad and having a long-term student exchange program building on the one now existing with Vilnius University, involving additional universities from other countries. They also propose cooperation to fight AIDS, establish an information center to help develop business, modernize border crossing posts, add a ferry line and border crossing facility and start an instructional program for Kaliningrad customs and border control officers. They hope to establish a center in Klaipëda for exploring possibilities of cooperation with Kaliningrad and arranging common technical aid and investment projects. (MFA Lithuania 7 July 1999)

Denmark’s prominent mention of cooperation with Kaliningrad at the June CBSS meeting hints of forthcoming proposals. A Programming and Steering Group has been set up with Denmark and Russian federal and Kaliningrad authorities. Sub-regional cooperation between Kaliningrad and the County of Bornholm was noted. New projects and types of structures will be considered along with multi-lateral possible cooperation involving Denmark, Russia, Poland and Lithuania. Denmark also said that “one issue of future major importance is, for example, visa-regimes.” (Danish speech at CBSS 14-15 June 1999)


EU / Russia relations—Is Kaliningrad just one more Russian border?

During interviews with Commission staff in June, 1999, it became apparent that in order to show respect for Russian sovereignty in Kaliningrad, the EU only deals with Kaliningrad via the agreements it has with Russia as a whole. Originally, the Partnership and Cooperation Agreement and its instrument, Tacis, were the main agreements linking Russia and the EU. In 1999 the Common Strategy of the European Union on Russia was added. The EU also relies on IFI, international financial institutions, as it does in dealing with the rest of Russia. This can be important. For example, in July, 1999, Kaliningrad received $56.7 million for reconstruction of its water treatment system. The EBRD is providing millions of dollars in loans. There are also grants from the Swedish and Danish governments. Also, the Northern Economic Corporation and the Kaliningrad city, oblast and federal budgets are all contributing. The project “stems from Europe’s grave concern over Kaliningrad’s deteriorating environmental situation, in particular the dumping of large amounts of raw sewage into the Baltic Sea.” (Vasileva 1999)

Dealing with Kaliningrad as if it is just like the rest of Russia may be appealing to the EU for several reasons. The EU can avoid getting involved in Russian center-periphery relations. This corresponds with the emphasis of some member states, notably Germany, which has historically placed priority on not offending Moscow. In addition, as previously noted, some Commission staff find it hard to believe the Tacis reports that EU enlargement will on balance have a negative effect on Kaliningrad. From that perspective, their expectation that EU enlargement will have a positive rather than negative effect on Kaliningrad, it should not be necessary to have special policies for Kaliningrad. Also, Finland’s experience in issuing many visas for Russians at least gives the EU hope that theoretically the same thing could be accomplished for Kaliningrad although no one has given any thought to exactly how a policy would work. In addition, interviews which this author conducted in the EU Commission in June, 1999 indicated that the lack of an EU regional perspective is due partly to the fact that accession negotiations with candidate countries such as Estonia, Lithuania and Poland are done country by country, thereby emphasizing sovereignty rather than cross-border regions.

This perspective is not uniform in the Commission. The sovereignty focus is allegedly prominent in DG1A, External Relations, but DGXVI, Regional Policy and Cohesion, values spatial planning and cross-border instruments. Perhaps Northern Dimension could urge some policy export from what is now DG XVI to DG1A and the new Enlargement DG. At the moment, Commission officials dealing with accession are not asked to collaborate with their colleagues who deal with programs applying to the neighboring Russian areas. Such collaboration would help achieve the synergy to which Northern Dimension allegedly aspires.

Would a regional focus offend Moscow?

The concern about not offending Moscow seems sufficiently pervasive among Commission staff interviewed by this author to warrant some more extensive consideration.

Perhaps inspired by some of its member states, it seems that the EU takes special care to please Moscow and underplay relations with the regions in order not to get caught in rivalry between Moscow and the regions. Currently, for example, even when making arrangements for Northern Dimension, the Commission deals directly with Moscow, not with the regions because of caution about the possibility of offending Moscow.

Historically, another by-product of avoiding getting involved in Russia’s center-periphery issues occurred when Kaliningrad City’s representative opened an office in Brussels in 1997. Commission staff reportedly felt uncomfortable and asked if Moscow knew if Kaliningrad’s representative was there. These kinds of issues will continue to come up. For example, in March 1998 a St. Petersburg city official expressed the hope that the CBSS would support the city’s establishment of a regional center of EU technical assistance with the prospect of turning it into an EU regional representative mission and establishment of a St. Petersburg representative mission in Brussels. (Federova 1998)

Reports vary on Moscow’s interest in Tacis projects for Kaliningrad. From the perspective of a “cooperation agenda”, the most promising factor may be the impression by Commission staff that Moscow is interested in learning about the EU via Kaliningrad as a case study. In addition, there is the impression that Moscow has always been interested in Tacis projects for Kaliningrad. As examples, two projects for which terms of reference are now being drawn up include a port project and a public administration project.

An alternative perspective is that Moscow is more interested in projects for the St. Petersburg area than it is interested in Kaliningrad. Sometimes this is thought to be a result of the simultaneous existence of the hard security realist agenda alongside the postmodern agenda of regional cooperation across borders.

However, even if one looks only at economic issues, Kaliningrad seems to be terra incognito for Moscow. For example, in July, 1999 Russian Deputy Minister of Transportation and Director of the Russian Sea Fleet Service, Aleksandr Lugovets, discussed a number of port projects and “emphasized that the realization of these projects makes it possible for a considerable part of Russian foreign trade that now travels through foreign ports to be redirected to Russian ports.” (Makova 1999) He said that “the ports under construction in the Batareinaya Bay (Baltic Sea) and in Primorsk (Gulf of Finland) are expected to transport crude oil, oil products, and liquid gas.” He announced that the Ust-Luga port under construction in the Gulf of Finland will begin to export coal by the end of this year. He also stated that “the development of the ports in Novorossiisk (Krasnodar Krai) and St. Petersburg are priorities for Russia.”

Why no mention of Kaliningrad? Perhaps Kaliningrad is perceived in Moscow as unpredictable economically in part because Lithuania can vary the amount charged for freight crossing its territory to Kaliningrad. This has been a sore point between the two countries in the past, as Russia complained that Lithuania deliberately made it cheaper to export through the Lithuanian port of Klaipeda than to export through Kaliningrad. To be fair, one must note that Kaliningrad can also be seen as economically unpredictable because of Moscow’s own policy reversals on matters such as the Free and later Special Economic Zones.

Overall, one gets the impression that Moscow does not seem to have a clear policy regarding Kaliningrad. Is it because of a general concern about giving too much autonomy to regions or is it a question of perceived incompatibility of the strategic significance of Kaliningrad with the role of economic bridge? Or is it being unsure whether or not it should trust the Regional Administration?

When regional cooperation is envisioned such as in Northern Dimension, Moscow reportedly views such cooperation with some suspicion because it entails the risk that the regions might be strengthened at the expense of the center. There is also the view that even when only economic and cooperation issues are under consideration, Kaliningrad still is low priority for Moscow simply because other Russian regions are perceived as having worse problems.

From a comparative perspective, Gerald Segal has argued in his analysis of increasing regionalization within China, that the west needs to understand and adapt to change. Segal wrote that “To do nothing in the face of these major changes in China would be to retain an outdated China policy, to miss new opportunities and to fail to deal with new problems that emerge as decentralization changes China’s domestic and foreign policy.” (Segal 1994: 346) One could make the same argument about Russia. How much good does it really do Brussels to pretend that Moscow is the only actor that is on the stage.

The EU preference for deferring to Moscow and dealing with Kaliningrad only in the same way it deals with the rest of Russia is sometimes described by scholars as a “realist” approach, meaning that the focus is on traditional sovereignty, in this case respect for Russian sovereignty, as the top priority within a system of statist territorial-oriented values. Often this is thought to be a somewhat old-fashioned focus which has been eclipsed by globalization. Scholars sometimes see this residue of “realism” to be located largely on the mental map of people on the eastern side of the Baltic Sea, so it may come as a surprise to see this perspective also alive and dominant in the Commission.

What new form will Tacis take?

The EU relies heavily on Tacis as its instrument for dealing with Russia. Therefore, this section of the essay focuses on what is happening to Tacis programs and what is the implication for Kaliningrad. The EU is now considering what changes should be made in the Tacis program. The current Tacis regulation will expire on 31 December 1999 and a new regulation is now being proposed to cover the years 2000-2006. The current debate in the EU Council partly focuses on the number of Tacis sectors which should be allowed. At this time “the Commission proposes to focus on fewer, larger and better projects in key sectors.” (Commission, no date) It seems that three sectors is the most commonly mentioned number for each recipient country. This is puzzling because studies have listed a great many sectors in which Tacis could be used as an instrument of cooperation between the EU and Russia. For example, reports written for the EU specified Tacis as the potential assistance instrument for the following sectors: trade and investment, regional cooperation, administrative reform, social security, technical assistance, training, tax collection, customs fraud, tax reform, budget management, legal reform, industrial policy, restructuring, agriculture, judicial capacity, nuclear safety, banking reform, energy, nuclear waste management and defense conversion.(Working party 1998 and Adomeit, Bradshaw and Rutland 1999).

When this author asked Commission staff what would happen when many of these sectors of potential assistance are eliminated and only three are chosen, they acknowledge that this has not been considered except for the possibility of looking at exceptions or sectors broadly defined. The trend towards reduction of Tacis sectors will probably contribute to Kaliningrad falling further and further behind its neighbors.

On other Tacis issues, Commission staff told this author that one reason why it is difficult to coordinate Tacis programs with programs for EU members is that the latter are budgeted on a multi-year basis whereas Tacis and even PHARE are budged annually. Still another question for the future is what will happen to the Tacis Small Project Facility.

Tacis—A regional focus?

The question has been raised about whether or not there should be a regional aspect to the Tacis programs: “If Tacis were to devise a regional program it might be best targeted at the more disadvantaged regions and could be seen more as humanitarian or social assistance.” (Adomeit, Bradshaw and Rutland 1999: 11) The report notes that in the past western assistance has been concentrated in the most successful regions. The idea was that the successful regions would serve as models. Kaliningrad would likely fall between both of these poles, being neither among the most successful nor among the poorest regions. From a Kaliningrad perspective, it would be better if there were a required regional component to the Tacis program. Kaliningrad should have a strong claim to such a component as it is the only potential Russian enclave within the EU. There was also a suggestion from the Leningrad Oblast that “it would be sensible to make a special subprogram within Tacis dedicated to financing projects within the Northern Dimension initiative.” (Narishkin 1999:1)

The Committee on Regional Policy in the European Parliament noted little interaction between North-Western Russia and the EU’s northern regions. It suggested “An attempt should be made under the Tacis CBC program to improve administrative procedures and contacts between local communities. The main failings of the Tacis program include the smallness of North-Western Russia’s share in the program funding in relation to the region’s needs and potential, although the region is directly adjacent to the EU. Moreover, only one tenth of the funding is devoted to basic structural investment. Crossing of borders ought to be facilitated, services developed and more border crossing points opened on Russia’s western border.” (Committee on Regional Policy 1999: 15) For all its concern about north-west Russia, neither the Committee on Regional Policy nor the Committee on Foreign Affairs, Security and Defence Policy mentioned Kaliningrad in their comments on Northern Dimension.

Tacis—the past and future in Kaliningrad

Big transport projects are reportedly a favorite kind of project from the Commission viewpoint because administrative complications are minimized. Reports about policy options for Kaliningrad’s future include such transport possibilities along the EU’s TEN highway system. If one wanted to argue in favor of transport connections which would better link Kaliningrad with other Baltic areas, one might argue that from a long-term viewpoint perhaps such transport links would create spin-off growth corridors as economic benefits spread to towns located near big roads and rail facilities. In this way, one might get spin-off improvement in other sectors even if Tacis projects were confined to three sectors, one of which would be transport.

One could argue that this is simply an extrapolation of speculation made about other areas in Scandinavia where growth is not expected to be uniform. Growth is instead expected to occur along certain northern “growth bananas” such as the Helsinki to Tallinn area and the forthcoming link between Denmark and Sweden when the Øresund bridge is completed. (Hedegaard and Lindström 1999: 24)

From a positive perspective, perhaps the most ideal outcome is the circumstance when one successful project leads to other ideas. In the case of Kaliningrad, the ECAT project in Kaliningrad generated a related proposal for another water quality project which will be funded. This initiative from within Kaliningrad is perhaps the optimal approach.

Looking beyond Tacis, from a broader perspective, a recent report on problems in EU external co-operation programs might offer opportunities for remedies which could be suggested within the context of Northern Dimension. The report said that “In general, EU funding instruments for external co-operation are perceived as being difficult to use. The main issues raised are: the problems of co-financing, the complexity of application forms, the limited chances of obtaining funding, the absence of dialogue with decision-makers and the instability/uncertainty of management arrangements and inconsistency of information provision, and the time delays in decision-making and the delays in project payments.” (BSSSC 1998:38)

Will “grassroots” cooperation avoid high politics risks?

There is some thought in the Commission that treating Kaliningrad as if it is just one more Russian border and authorizing a few Tacis projects is not optimal. Some staff are hoping that EU member states and their regional and local governments will engage in cooperation with Kaliningrad as they have in the past. It is thought that “grassroots” cooperation would hopefully avoid the problems which sometimes stem from high politics.

For example, in principle, the question of access between Kaliningrad and mainland Russia could theoretically arise in the same sort of way in which access to Berlin flared as a barometer of Cold War tensions. In the Berlin case, the approach used to try to avoid incidents was to make high politics agreements. In this case, it seems as if Commission staff would like to try the opposite approach—no high politics spotlight, thereby enabling low politics to get on with daily life in the region. Would that work in the whole region? What if there is unification of Russia and Belarus, bringing the combination only about sixty kilometers from Kaliningrad instead of the hundreds of kilometers which now separate Kaliningrad from the rest of Russia?

It is hoped that these “high politics” risks can be avoided by “low politics” cooperation. The sub-national interactions of actors across borders is part of what scholars call “post-modernism”, a development which downplays the predominance of states, sovereignty and territorial issues in favor of consideration of a multiplicity of actors. Scholars have sometimes analyzed the role of subnational actors as part of multi-level governance (Phillippart 1998) in the EU’s CFSP (Common Foreign and Security Policy). Philippart wrote that “Most scholars and observers do not expect to find third level actors involved in a domain touching at the core of national sovereignty.” (Philippart 1998: 80) The fact that Commission civil servants are in fact hoping that NGOs and local and regional governments will continue their cooperation with Kaliningrad illustrates that they recognize that “realism” and the high politics of treaties, traditional diplomacy and agreements between the EU and states are only part of the picture. In fact, there is an implicit acknowledgement that cooperation and positive results achieved at low levels may compensate for the political risks which “high politics” still entail.

The EU’s role abstaining from high politics, enabling low politics actors to engage in the kind of cooperation which Lithuania proposes within the context of Northern Dimension, does not take account of the fact that there are still EU policies affecting Kaliningrad for which Brussels and Moscow should accept responsibility. As neighboring Poland and Lithuania move to complying with EU product standards, pollution requirements, border management standards and all other aspects of the acquis communautaire, all of these will affect their Russian neighbor and it should not be the exclusive responsibility of member states’ local governments and NGOs to try to compensate for or fill gaps in these policies which the EU created.

The hope in the Commission that the neighbors will be cooperative also does not take into account the current anecdotal evidence that Poland has lost interest in Kaliningrad. Reports say that the Cooperation Council linking Polish and Russian borders has not met and that Poland did not allow funding for the Niemen Euroregion which would link Kaliningrad, Belarus, Poland and Lithuania. Polish President, Aleksander Kwasniewski and Ukrainian President Kuchma said in June, 1999 that they wish to prevent another division of Europe or “Yalta Two” and hope to keep an “open and friendly” border even after Poland joins the EU. “Poland is prepared to introduce those (EU) controls on its borders with Russia and Belarus, but seeks special facilities for Ukraine in order to anchor that country to Europe.” (Jamestown 2 July 1999)


The role of EU Accession Partnerships with Poland and Lithuania: How is Kaliningrad affected by becoming a Russian enclave in the EU?

What is happening as Kaliningrad is increasingly being enclosed by the EU’s Schengen standards?

During the Soviet period, Kaliningrad was part of the Baltic Economic Zone and Kaliningraders traveled freely to Estonia, Latvia, and Lithuania just as they did to the rest of the Soviet Union. After the independence of the Baltic states, Kaliningraders need a visa to go to Estonia and Latvia where they still have family, friends and business. There is no way to get a visa in Kaliningrad. This causes Kaliningraders to spend a lot of time and money when they have to leave the oblast to get a visa.

In recent interviews in Brussels, EU Commission staff indicated to this author that they regard this as a bilateral problem between Russia and its Baltic neighbors. Russia, in their view, should make arrangements with Estonia and Latvia for easier access for Kaliningraders. There is no sign that the Commission accepts responsibility for inspiring the EU candidate countries to do just the opposite— tighten entry requirements as part of their preparation for EU membership.

Tightening of borders is welcomed by the EU officials in charge of tight control of the movement of people. Use of the Schengen system is intended to facilitate movement of people and trade within the EU and applicant countries. EU candidates are inspired to make even more progress in this direction due to the Treaty of Amsterdam requirement that all candidate countries adopt the Schengen acquis and eventually use a common visa. Tightening of the borders moves in the opposite direction of the Baltic Schengen which had been suggested by former Prime Minister Chernomyrdin.

The Lithuanian border with Kaliningrad will be a test case of cooperation. At present, Kaliningraders have easier access to Lithuania than to Estonia and Latvia. They can go for 30 days to Lithuania with no visa, whereas Russians from the rest of Russia need a visa. This arrangement was made in a 1995 agreement signed with Russia, the Protocol to the Interim Agreement on Mutual Trips of Citizens.

Will Lithuania break the agreement it made with Russia? At the moment, Lithuania has said that visa-free travel for Kaliningraders will be continued but the policy might need to be reviewed in the future. Other observers say that Lithuania is not abrogating its agreement with Russia because it does not want to cause hard feelings with the Russians so long as the border treaty has not been ratified.

Kaliningraders’ anxiety about what might happen to their border-crossing privileges with Lithuania increased because of changes on their border with Poland. The Commission’s report on Poland’s Progress Towards Accession made the following assessment: “There has been steady progress on visa policy, one of the short-term priorities of the accession partnership. Waiver agreements with Armenia, North Korea and Vietnam have been rescinded, but the more urgent situation with Russia, Ukraine and Belarus has yet to be settled.” (Commission 4/11/98) Clearly under pressure to tighten its borders, at the beginning of 1998, Poland introduced a requirement for documentation clearly indicating the identity of individuals crossing the border. The requirement was introduced at a holiday period and involved long delays and confusion at the border. Lack of adequate information and the expense of new documents added irritation for those trying to cross the border. In 1999, Poland added a requirement of a minimum amount of money which people would have to bring with them when crossing the border. Kaliningraders began to wonder if Lithuania would be next to restrict their access. From the perspective of local Russians, the EU is increasingly seen as an organization which intends to make access more difficult and more expensive than access they enjoyed in the past.

Easy access to neighboring Poland and Lithuania had been particularly important to Kaliningrad because of its dependence on consumer imports and separation from the rest of Russia. Poland, Lithuania and Germany have been Kaliningrad’s most important foreign trade partners. Anecdotal evidence indicated that some shuttle-traders crossed the borders several times a day to trade in whatever product offered the most profitable price difference at the time.

The trend towards increasingly difficult and expensive border crossing arrangements in what was previously a border-free area of the Soviet Union but will increasingly become the new external borders of an enlarging EU is seen not only at Kaliningrad but also on the Russian border with Estonia. In 1998, Estonia made a change eliminating free visas to visit relatives. The cost of visas and a new requirement for what Russians regard as expensive medical insurance substantially reduced travel of Russians to Estonia. Russian authorities say that the changes “twice decreased” the number of people crossing the border. (Pskov office of the Russian Foreign Ministry 1999)

Simplified border crossings may also soon be a thing of the past. In June, 1999, it was announced that “Lithuania will have to refuse the simplified border-crossing stations on the border with Belarus...According to the EU standards, all posts of simplified border-crossing procedure should be closed.” (Lithuanian MFA 21-27 June 1999) Perhaps that is why a similar development is expected on the Estonian border with Russia in 1999 (Luha 1999: 6 citing Karjus)

Is there a solution to the Schengen part of the dilemma?

The eventual adoption of Schengen standards and a common visa by an enlarging EU raises the question of whether or not this policy will create new dividing lines in Europe. If current policies are eventually implemented, Lithuania will eventually be expected to abrogate its agreement allowing visa-free travel by Kaliningraders. One would expect that frustrated Kaliningraders may take their cases to human rights fora, arguing that they should not need a visa to reach the rest of their own country by land.

Some Finnish and EU officials argue that being eventually enclosed by Schengen borders should not pose a problem for Kaliningrad. The argument is that Finland issues many visas for Russians without a requirement of an invitation. All that is needed is the application and fee and a personal history which does not involve violation of Finnish laws. This premise is followed by the conclusion that if visas are not a problem for Russians going to Finland, then Kaliningraders should also not have a problem getting visas.

There are errors in applying this analogy to Kaliningrad. For example, it ignores the viewpoint that one should not need a visa to reach one’s own country. The Finnish-Russian border analogy also erroneously assumes an accessible, convenient place to apply, assumes ability to pay, and does not take account of the substantial role which has been played in shuttle-trading by people who make several trips across the border in one day to trade in whatever product has enough price difference across borders to provide economic incentive to traders. Research which has been done on this on Chinese borders implies that border shuttle-trade can be quite sensitive to the cost and difficulty of procedures: “...the trade advantage of a border province lies in the fact that, assuming normal relations, the communications and transportation costs with a specific foreign partner or partners approaches zero, what we call the ‘petty advantage’ of border trade...The transportation advantage of a border province is monopolistic at the border...Cross-border shopping can be alert to the smallest and most temporary comparative prices.” (Womack and Zhao 1994: 159-160)

Is there a solution to the Schengen dilemma? The EU needs a way to protect its forthcoming external borders with Russia but Kaliningraders need a way to visit their own country without a visa. This problem could be worked on in the follow-up to a statement approved at the ministerial meeting of the CBSS on 14-15 June, 1999. The communiqué included the statement that “The Council took note of the need to examine the possible effect of the enlargement of the EU with respect to the conditions for travel in the Baltic Sea Region. The Council supported the establishment of close contacts between the CBSS Commissioner, the CBSS Secretariat, the Council of Europe and representatives from the European Union for further examination of the issues.” (CBSS 1999)

As part of the follow-up on this communiqué, the EU and Russia should study the relationships among Kaliningraders and their neighbors to see what is needed. Is there a need for some arrangement to be made so Kaliningraders could visit Estonia and Latvia more easily? There are already consulates of Lithuania and Poland in Kaliningrad. Could they be expanded and allowed to also issue visas for Estonia and Latvia? If Lithuania is forced to require a visa of Kaliningraders, could that visa also be valid for Estonia and Latvia? From the perspective of Kaliningraders, any of these arrangements would be an improvement over the status quo. In June, Commission staff indicated to this author that eventually when there is a common visa, Kaliningraders will be able to go anywhere in the EU with just one visa. This is not a solution to the current problems and does not address the question of why Kaliningraders should need a visa to visit their own country.

Would tightening land borders divert problems to the sea?

The focus on tightening Russian land borders with Poland and Lithuania raises the question of whether or not more smuggling or illegal immigration would take place by sea. This might mean that in the future the model might come from Italy’s experience with the Strait of Otranto.

“The Strait of Otranto spans one of the greatest gulfs in living standards in Europe, the impact of which is intensified by the images broadcast by commercial Italian television, showing Albanians the good life in Italy. This strait is patrolled by an Italian air and naval group tracking the fast boats crossing at night with illegal immigrants. The Italian state authorities, influenced by the American example of management of the coasts of Florida, are considering sending logistic and police brigades and humanitarian aid to Albania and maintaining surveillance of the Albanian ports. In Rome, it is thought that policing the Otranto Strait might be one of the future missions of the Euromarfor, an Italian initiative, bringing together France, Spain and Italy in an effort to promote security in the western Mediterranean area.” (Foucher 1998: 244) One can well imagine that the future might feature a Baltic version of Euromarfor.

Do Kaliningrad borders appear in the EU’s CFSP?

Given the questions about Schengen and borders, one might expect that Kaliningrad’s borders with Poland and Lithuania would appear in the EU’s CFSP but that is not the case. In the EU’s agreements with Russia, cooperation on CFSP issues is mentioned but it is global cooperation in a forum such as the U.N. over issues such as Kosovo.

From Kaliningrad’s viewpoint, the important EU “foreign policies” are changes on the Polish and Lithuanian borders with Russia, not what is happening in the U.N.. One might imagine that the absence of Polish and Lithuanian borders in the CFSP occurs because in the Treaty of Amsterdam matters such as a uniform visa which are supposed to come into force five years after the Treaty came into force in 1999 have been moved over to the section on “community matters” whereas CFSP is a matter of inter-governmental cooperation in the Maastricht Treaty, pillar two. In short, the EU has segmented its thinking so that it is either thinking about pillar two or it is thinking about “community matters”.

The only CFSP issue mentioned in the Commission’s November, 1998 opinions about Polish and Lithuanian progress to accession was their lack of concurrence on the EU statement after western Ambassadors were asked to leave Minsk. One might speculate about how that will have an impact in the future. Will Poland and Lithuania be a bridge when the EU needs to make policy involving Belarus and Russia or will the opposite be the case? When they become members, will the regional interests of the two countries make it more difficult to come up with a unified position regarding Belarus and Russia?

Which factors will affect Kaliningrad’s ability to compete with its Baltic neighbors?:

EU financial assistance to the EU candidates bordering Kaliningrad

Kaliningrad benefits from the Tacis aid which the EU provides to Russia. However, a recent Tacis study of Kaliningrad expresses the following concern that the oblast will increasingly fall behind its Baltic neighbors due to assistance which the EU is providing to Poland and Lithuania because they are prospective EU members.

“An issue of considerable concern is the disparity between the financial support that the EU is providing to the applicant states, compared with what is available to Kaliningrad. There are two aspects to this. The first is the very large difference in Phare funding for Poland and Lithuania, compared with the Tacis funding for Kaliningrad. For instance, the Indicative Program for Lithuania for 1996 to 1999 amounts to Ecu 152 million. Furthermore, under Phare rules up to 25 percent of funding can be used for actual infrastructural works, which is not the case with Tacis funding.

A second consideration is that around Ecu 37 billion is being considered for allocation to the “first wave” applicant states under the planned provisions of Agenda 2000. Our estimates suggest that Poland, for example, would stand to receive not less than Ecu 4.5 billion from this program between 2000 and 2006. This money is intended to assist the structural transformation of her economy to accelerate the process of meeting accession requirements. Lithuania would expect similar assistance in due course. Furthermore, after these countries have joined the EU they could expect to benefit from the Structural Funds, as well as the Common Agricultural Program and other programs.” (IDI-EXA Consortium 1998: 53-54)

After this analysis was written, the EU added other instruments which would assist the applicant countries. One could hardly blame Kaliningraders if they were jealous of their neighbors’ eligibility for the following new programs. SAPARD, the Support for Agriculture and Rural Development Instrument is an EU tool which will aim to contribute to the implementation of the acquis concerning the common agricultural policy and related policies and to solve priority and specific problems for the sustainable adaptation of the agricultural sector and rural areas in the applicant countries. Perhaps a Tacis program along these lines would help Kaliningrad’s depressed agriculture sector.

Another pre-accession instrument is ISPA, the Instrument for Structural Policies for Pre-Accession. It will provide assistance in the area of economic and social cohesion, concerning environment and transport policies. Then there is the fishing industry. Although it is not a new instrument for applicants, one could hardly blame the declining Kaliningrad fishing industry if it were jealous of the Financial instrument for Fisheries Guidance which will support actions in the fisheries and aquaculture sector and the industry processing and marketing their products in some EU areas. Perhaps the EU and Russia should consider creating Tacis programs which would mirror these programs and thus help to ensure that Kaliningrad does not fall further and further behind its neighbors which are headed for EU membership.

The adoption of the acquis communautaire by the neighbors

Western observers who study Kaliningrad raise the question of how the oblast will be affected as its neighbors adopt the EU’s acquis. One viewpoint is that Kaliningrad will increasingly risk falling behind the neighbors as they adopt European product and environment standards. For example, there is already a concern about environmental standards affecting trucks. The move to a Euro 3 standard is, according to Russian sources, likely to result in a decreasing role for Russian transport because vehicles are not built to comply with EU standards. One Russian commentator noted “Poland and Lithuania have already started changing their fleets in anticipation. If we lose time, we will disappear from the freight market—our cars simply will not be allowed into Europe.” (Kaliningrad This Week 15-21 March 1999)

Similarly, would products produced in Kaliningrad be marketable in Poland and Lithuania if they do not meet EU standards. One view is that this potential problem could be dealt with by opening an EU information office in Kaliningrad partly devoted to product standards. (IDI-EXA Consortium 1998: 54) An alternative view is that such an office is unnecessary because the few enterprises in Kaliningrad which are successful have western partners which bring knowledge with them about the specific EU standards which are relevant.

Are new tools needed or do the tools in the Common strategy on Russia simply need to be implemented? For example, the Common strategy recommends more twinning programs between Russia and the member states. “The Commission will study the possibility of bringing Community programs into play for this purpose (TACIS, TEMPUS and DEMOCRACY). The Member States’ bilateral instruments will also be used...” (General Secretariat of the European Council 1999: 29) If extensive twinning programs were made available to Kaliningrad, it might partly deal with the problem that Kaliningrad will fall behind its neighbors. This is inevitable as the Commission’s plan is that eventually the applicant countries should be twinned with member states on all aspects of the acquis beginning with agriculture, environment, finance and justice and home affairs.

Being an EU neighbor—the bigger picture

Analysis in the previous sections focused on questions such as how Schengen borders and adoption of the acquis by Poland and Lithuania would affect Kaliningrad. If one goes beyond these specific questions and asks the broader question of how countries are affected by having the EU as a neighbor, one can gain insight into other changes which might occur in the future.

For example, note the following assessment from central and eastern Europe:

“There are, however, reasons for being cautious about a simple transfer of Western models to the Eastern borderlands. Different center-periphery relations ought to be considered. Jutta Seidel of the State Chancellery of the Free State of Saxony, speaking about her experience in organizing transfrontier co-operation between Saxony and Poland, and Saxony and the Czech Republic, emphasized the initial difficulties to be overcome, resulting from administrative centralization in the Czech and Polish Republics. According to Frau Seidel, it took years to create trust and willingness in Warsaw and Prague to allow the border regions a degree of planning autonomy, matching that of their German counterparts. This evokes a general problem of federal states (Germany, Austria) on one side of the frontier, and centralized nation-states on the other.” (Bort 1998: 100)

Having the EU as a neighbor also has implications for the government structure of non-EU member, Norway. Jervell has argued that in order to have effective cooperation with regions of neighboring EU members, Norway should re-organize its sub-national governments so that Norwegian regions would be large enough to work effectively with neighboring EU regions. (Jervell 1998)

The experience of central and eastern Europe and of Norway has implications for center-periphery relations in Russia. It implies that having the EU as a neighbor may imply that Russia would find it more useful to make certain kinds of changes in the powers of regions bordering the EU than it might otherwise be inclined to make. So far, there is no recognition of these dynamics in any EU documents or any Russian documents.

One should expect that policy changes resulting from these dynamics would not always be either easy or linear. Such dynamics have been problematic even in the EU, nevertheless in the EU’s relations with Russia. One can note Ole Waever’s analysis of EU members, Sweden and Denmark:

“It is worth considering the experience of a country like Sweden which has been challenged by the changed circumstances. Swedish foreign-policy makers have been forced to slaughter many sacred cows including neutrality, the commitment to non-membership of the EU, and the Swedish model. However, the panic that has precipitated this has not arisen from concerns about emerging relationships between the surrounding powers—Britain Germany and Russia—but from a general fear that Sweden has landed too far out in the circles; from a fear of becoming peripheral in the new politico-economic geography of Europe. Conversely, Denmark’s 1992 “no” to Maastricht was driven by a fear of coming too close to the center. Indeed, a large number of European controversies of the last few years can be directly traced to concerns regarding center-periphery, distance, and the dilemma between ‘getting in’ in order to achieve influence as against ‘keeping distance’ for the sake of independence.” (Waever 1996: 227)

One should expect that both Russia and the EU would have these types of anxiety as either the EU or Russia or both feared that one of them is getting too close to the other, becoming too “intrusive” for comfort.

Russian regions which border the EU might change their approach to Moscow and to each other in their attempts to get policy decisions which would help them in their relationships with the EU. Perhaps one would find a model in the behavior of Canadian provinces as they attempted to influence negotiations between the U.S. and Canada on a free trade agreement. Brian Hocking developed a typology of local government roles during the negotiation process. “These include: agenda setting, and aggregating and articulating regional interests (at the pre-negotiation stage); sustaining support for central government goals, providing a focus of opposition as terms of negotiation emerge, and serving as “surrogate negotiators” (at the negotiation stage); and legitimizing the outcome of negotiations, interpreting outcomes to regional interest groupings, and implementing decisions (at the post-negotiation stage).” (Hocking: 1993 summarized in Burns) In the future one can imagine that it won’t just be states engaged in a kind of calculation about bandwagoning or balancing policies in the Baltic region (Mouritzen 1998) but also regions of Russia, Norway and other countries.


Looking for “best practice” solutions

When one considers optimum policies for Kaliningrad, questions arise about what appropriate analogy might offer “best practice” solutions. Mention has already been made of examples as far flung as the Strait of Otranto and the Finnish/Russian border. This section of the essay will focus first on the Stability Pact for South Eastern Europe and then on possible lessons from the Barents Euro-Arctic Council and INTERREG. The last section includes a survey of other analogies.

Should Northern Dimension borrow policies from the Stability Pact for South Eastern Europe?

The EU could take as a starting point its Northern Dimension statement in which Kaliningrad was deemed worthy of special mention. Perhaps in light of the forthcoming creation of a Russian enclave within the EU at Kaliningrad, the new Prodi Commission may need to reconsider the previous Commission’s judgment that no new regional initiative is needed as part of Northern Dimension. Originally, the European Council meeting in Copenhagen in 1993 only established requirements that EU candidates have democracies and market economies. Perhaps one needs to build on the Stability Pact for South Eastern Europe and make regional cooperation a priority with institutional arrangements to implement the priority.

The Stability Pact for South Eastern Europe adopted at Cologne in June, 1999 attempts to deal with the consequences of the Kosovo war. In an effort to promote democracy and prosperity in the region, many international organizations have roles. The role for the EU includes giving the states in the area hope of eventual EU membership. In its evaluation of the progress the countries will be making, the EU “will consider the achievement of the objectives of the Stability Pact, in particular progress in developing regional cooperation, among the important elements in evaluating the merits of such a perspective.” (Commission DG1A 1999)

The mechanisms of the Stability Pact might offer a model for Northern Dimension. Participants have agreed to set up a South Eastern Europe Regional Table. It will be in charge of implementing the Stability Pact and is chaired by a Special Coordinator. There are three Working Tables on 1) democratization and human rights, 2) economic reconstruction, development and cooperation and 3) security issues. In addition, the EU is going to prepare a Common Strategy towards the Western Balkans.

Perhaps a Common Strategy is also needed for the Northern Dimension. At the moment the Common Strategy on Russia is helpful and could be built upon. It involves partly an inventory of what the member states are doing and will aim at coordination in achieving a shopping list of objectives. It contains some cross-border goals such as combating drugs and crime but there is no sign that it is seriously linked to accession negotiations for applicant states. In short, it does not deal with the overall question of whether or not there will be new dividing lines in Europe as Poland and the Baltic states prepare for membership, being “in” the EU whereas Russia and Belarus are “out”.

One can ask if the Stability Pact for South Eastern Europe does a better job of bridging the gap between the “ins” and the “outs”. The proposal is that Stabilisation and Association Agreements (SAAs), uniquely tailor-made for each country, should be made between the EU and five countries: Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia, (FRY), the Former Yugoslav Republic of Macedonia (FYROM) and Albania.

It may be that institutionally-sponsored incentives for regional cooperation such as the Stability Pact are necessary because other motivations have not proven sufficiently strong so far. One hypothesis which might be worthy of consideration is that border areas will not produce much cooperation if they are economically peripheral within their own states and if the area is perceived as too risky. The region in which Kaliningrad is located seems to be an obvious example of this situation. In the Polish roads budget, top priority is given to improving links between big Polish cities and EU cities, not improving links between rural north-east Poland and Kaliningrad.

Local traders often have incentive to engage in cross-border trade but not if the environment is too risky. Overall, Kaliningrad seems low on the priority list of both Moscow and Brussels and it is in asymmetrical relations with all of the states and institutions with which it interacts, meaning, for example, that Moscow is more important to Kaliningrad than Kaliningrad is to Moscow and the same is true with Warsaw, Brussels and Vilnius. The only modification to that generality is that Lithuania does have more stakeholders with an interest in Kaliningrad. For example, “Lithuania wants to sell its agricultural products in Kaliningrad and participate in construction programs there. One problem is that Russian construction companies owe their Lithuanian partners $30 million. The two sides are negotiating a way for the Russian side to pay by offering shares in Kaliningrad companies.” (East West Institute RRR 1 July 1999)

The recent news that part of the SEZ may be abolished as an austerity measure in the same way the FEZ may have been abolished highlights the sense that Kaliningrad is drifting. Foreigners might find trying to do business in Kaliningrad too challenging. They might feel more protected from risk if the area were included within something like the Stability Pact.

Would Euro-regions be invigorated?

Perhaps a stronger Common Strategy for the Northern Dimension or Stability Pact for the Northern Dimension might lead to more progress in invigorating the three Euro-region relationships which can involve Kaliningrad. Kaliningrad belongs to the Baltic Euroregion which began in 1998. It was established “as an international lobbying group of local governments from Poland, Sweden, Denmark, Lithuania, Latvia and Russia.” (PAP News Wire 1998) The President of the Baltic Euroregions said the most important task for cooperation between communes from various countries was subregional economic planning and construction of transport routes. (PAP News Wire 1998)

Kaliningrad also can participate in the Neman Euroregion which is designed to link Kaliningrad, Lithuania and Belarus. There was reportedly some Russian reluctance because of a perception that Poland did not want the chairmanship to rotate. In 1999, a new Euroregion named Saule is under consideration, involving the Kaliningrad towns of Slavsk, Sovetsk and Neman along with participants from Lithuania, Latvia and Sweden (Kaliningrad This Week 22-28 March 1999: 1). Perhaps more enthusiasm could be generated and more progress made if the participants were urged on by an institutional structure comparable with the one proposed for the Stability Pact for South Eastern Europe.

“Best practice” from BEAC and INTERREG?

An alternative might be that while Finland holds the Presidency of the Council perhaps it could take the same sort of initiative it did in the Barents Euro-Arctic Council when it succeeded in getting the Russian Republic of Karelia included even though it was much further south than comparable regions of other states in the BEAC. Analogously speaking, perhaps Kaliningrad could be included in a regional cooperation scheme. Perhaps one would get an effect reminiscent of what Pertti Joenniemi noted in assessing the effects of the Barents Euro-Arctic Council: “it invites the peripheries to cluster themselves in order to resist marginalization.” (Joenniemi 1999a: 34)

Still another alternative might be possible if the EU would pretend that Kaliningrad is already a neighbor of an EU country. This would allow use of the INTERREG programs. Models might be found in Interreg Barents which includes Murmansk oblast and Interreg Karelen which involves the Karelian Republic in Russia.

Many other border areas such as the Estonian-Russian border and the Lithuanian border with Belarus share similar problems. They are all rural areas which are not high on the priority list in their own national capitals. In Estonia, as with the Polish case, residents of Tartu, Estonia and Pskov, Russia might like to see their ferry link across Lake Peipsi restored but a recent report shows the Estonian priorities are on building the transport system included in the EU’S proposed system (Commission DG XVI 1998).

The portion of the hypothesis which focuses on the issue of the marginal role which border areas play for their own state is not the only relevant hypothesis. In the case of Mercosur, two hypotheses tested by Karen Remmer 2   were that regime similarities enhance the prospects for interstate cooperation and that democracy enhances interstate cooperation. Certainly, the regime difference between Russia and the regime direction present in EU candidates such as Poland and Lithuania handicaps cooperation possibilities. However, Lithuania has managed to take advantage of this circumstance. Although Lithuania places high priority on joining the EU and NATO, one of the ways it tries to accomplish that objective is to reach out to its Russian neighbor, Kaliningrad, in cooperative endeavors, thereby demonstrating to the western institutions that it has a track record as a good neighbor. Mouritzen (Mouritzen 1998) has written about the Baltic states “bandwagoning” with the west but Lithuania has effectively combined this strategy with a tactic of reaching back to the east as well.

Are other analogies possible?

One’s choice of analogy will depend partly on which vantage point the viewer uses. Those who focus on history or “hard security” issues may be comparing Kaliningrad with its predecessor, Koenigsberg, or with other peripheral areas of the Russian military if one is involved in issues such as negotiation of a new Conventional Forces in Europe (CFE) agreement or NATO enlargement. Similarly, a sovereignty-oriented perspective might cause an analyst to study West Berlin’s relationship to West Germany before German unification.

Orientation based on post-modernist issues and the area of EU governance might cause analysts to consider some of the following possible analogies when seeking “best practice.” Is or was Kaliningrad’s Special Economic Zone an adequate institutional framework for economic development and trade or can it be usefully compared to the free economic zones of its Baltic competitors? Can some EU policies being applied in the Baltic states and Poland also be applied in Kaliningrad? Is it comparable with other oblasts or should the oblast be upgraded to a republic within Russia? Should Kaliningrad receive more devolved authority analogous to the Aland Islands belonging to Finland? (Joenniemi 1999b: 12) Is it comparable with other exclaves? Such a perspective would bring to mind analogies such as Alaska’s relationship to the continental U.S. or West Berlin’s relationship to West Germany? Should it be considered an island? (Pedersen 1998: 109) Is it in some respects analogous to the other enclave within the EU, Switzerland? The city of Basle, in Switzerland, is not in the EU but its suburbs are in EU members, France and Germany. Regio Basilensis spans EU and non-EU territory and might offer some lessons of “best practice”.

From the perspective of new dividing lines, perhaps one could also learn from the Estonian border with Russia where what was previously one city is now divided between Narva and Ivangorod with Narva apparently headed for a future in the EU and Ivangorod, in Russia, remaining outside the EU. One could also look at the Polish border with Ukraine. As previously noted, Poland is more interested in having convenient border arrangements with Ukraine than with Russia and Belarus. Because Poland is on better terms with Ukraine than it is with Russia and has the expressed interest in good border relations, one could examine the Polish border with Ukraine to see what Poland can do when it is trying hard in comparison with what it is doing on its border with Russia at Kaliningrad.

Looking further afield for other analogies, one could ask: is Kaliningrad’s transition from being an oblast in the Soviet Union to also being a Russian enclave in the EU comparable to the changes in the British Commonwealth and EU as Britain chose to be a member of the EU instead of being focused on the Commonwealth? Is there any “best practice” which can be drawn from the Hong Kong analogy (Galeotti 1993: 58) sometimes made by visionaries? Has Moscow’s control loosened so much so that Kaliningrad is comparable to micro states engaging in the grey economy? If so, does the U.S. Commonwealth of the Northern Mariana Islands (CNMI) in the Pacific offer an analogy? They are islands which are “exempt from U.S. minimum wage and immigration laws, allowing factories to recruit Asian workers and pay them $3.05 dollars an hour, well below the U.S. minimum of $5.15 dollars.” (Jackson-Man 1998)

Which analogies will the EU use in order to develop policy? Is Kaliningrad’s best asset low-cost labor, which would call forth an analogy of Bangladesh (Dewarb 1998: 3)? From the EU’s viewpoint, is Kaliningrad seen largely as a potential source of “soft” security risks such as those named in Northern Dimension? The risks are all mandates of Europol and one would expect Europol to use analogies such as other non-EU areas which present comparable soft security risks.

From the EU’s economic viewpoint, is Kaliningrad simply one more potential source from which competitors could enter the EU? When this author mentioned to Commission staff in 1997 that the Korean vehicle maker, Kia, was going to begin assembly in Kaliningrad with the goal of exporting to the Russian market without tariffs, staff expressed an analogous concern. At the time, they were concerned about Daewoo’s attempt to enter the EU via Poland and they did not want any comparable foreign competitor trying to enter the EU via Kaliningrad. What will the EU’s view be about the announcement that a subsidiary of the third largest Chinese corporation plans to open moped production in Kaliningrad? (Kaliningrad This Week 5-11 April 1999) Depending on which analogies one examines, different “best practice” lessons emerge which theoretically could offer guidance for institutional change or policy applicability to the Kaliningrad case.


The Role of EU institutions and the Prodi Commission

There has been speculation that Russia has had the same problem that Henry Kissinger had when he asked the question: Does Europe have a phone number? This question arose partly because the troika consisted of the current, future and past presidents of the Council. Perhaps Russia will understand the EU better in light of forthcoming changes. For example, the troika will change. Two of the three members of the new troika will be in place over a longer period of time. Solana, as Mr. CFSP, and the Commissioner for External Relations, Chris Patten, if he is approved by the European Parliament, will be the anchors. The only regularly rotating member of the troika will be the current presidency of the Council.

On the other hand, there are also changes which could lead to perpetuation of current problems. There is a plan for an Enlargement DG and an External Relations DG. This will presumably mean that External Relations will deal with Russia and the Enlargement DG will handle accession negotiations. From the Kaliningrad perspective, this kind of compartmentalization in the Commission bureaucracy is what helps to produce lack of regional perspective. In order to get a truly regional perspective, one would need close cooperation between the External Relations DG and the new DG on Enlargement which will be headed by Gunther Verheugen.

Perhaps another helpful innovation would be to use the new Policy Planning and Early Warning Unit in the second pillar which is supposed to help with cross-pillar coherence. It could be asked to study the implications of Kaliningrad becoming a Russian enclave within the EU.


Conclusion and recommendations

Will the EU use Northern Dimension to help resolve its dilemma of how to enlarge to the east without creating new dividing lines in Europe? One thing seems clear—due to enlargement, EU member states and candidates in the Baltic area have cooperated with Kaliningrad in the past and will do so in the future. At present, the Northern Dimension label is being attached to cooperation proposals. If the fashionable label happened to be Mare Balticum or Hanseatic League Remembered, then those labels would be attached rather than the Northern Dimension label. So the question remains, will Northern Dimension add “value” or simply add labels to value which would occur in any case? Realistically, one must also ask how much value can be added in light of differences of opinion in Ministries in Moscow about how to develop Kaliningrad.

Even if Moscow is not moving forward with a clear plan for Kaliningrad’s development, the EU’s accession negotiations with Poland and Lithuania advance every day. If the EU really wants to avoid creating new dividing lines in Europe and an ever-increasing gap between the future “ins” and the “outs”, it should include within Northern Dimension an acknowledgement that the Copenhagen enlargement criteria and the subsequent Accession Partnerships with Poland and Lithuania are heading in the direction of making Kaliningrad a Russian enclave within the EU. The EU should acknowledge that one of the by-products of enlargement is that Kaliningrad is affected not just by the EU’s agreements with Russia such as the PCA and Common Strategy but also by the accession negotiations. The EU should also acknowledge that the Treaty of Amsterdam, when it is fully applied by candidates, may well lead to the circumstance that Kaliningraders will be expected to get visas in order to visit the rest of their own country by land. In short, Kaliningrad is not just one more Russian border.

If the EU acknowledged these circumstances, the next step would be to take responsibility for coping with these circumstances and to work with Russia to create mutually acceptable solutions. David Langdon’s cartoon portrays what happens when there are different perceptions of what is happening and no solution which pleases both parties.

Unless things change, this cartoon may symbolize the future of the EU and Kaliningrad: circumstances which do not please both parties. Although it is generally thought that Russia views the EU positively, there is some sign that the ramifications of enlargement are not always viewed positively in Moscow. The Russian National Security Concept (presidential decree no. 1300, adopted on 17 December 1997) refers to NATO and EU enlargement as a potential source of instability on the European continent. 3   Russia reportedly made this evaluation not just of NATO but also of the EU based on the experience it was beginning to have with EU expansion up to its borders.

Unfortunately for Kaliningrad, it is low on the priority list in both Moscow and Brussels. When one reads the Tacis books which have been written about Kaliningrad, the overall impression one gets is that the consultants were making a shopping list of what could be done in the future. Kaliningrad does not even have the bottleneck leverage which one found at the Brest crossing between Poland and Belarus. In 1997, when this author interviewed Commission staff in Brussels, it became apparent that even though some EU member states had passsed resolutions expressing disapproval of the policies of Lukashenko in Belarus and even though the EU as a whole was backing away from many contacts with Belarus because of his policies, they were not backing away from upgrading the Brest border crossing because traffic delays on the Polish border with Belarus were damaging EU trade.

Kaliningrad does not have even this distinction—it is not important enough economically to serve as a trade bottleneck. Therefore, when the EU looks at why it should help Kaliningrad, there is a tendency to focus on the soft security risks it could pose in terms of crime or health hazards. However, even though it does not constitute an economic bottleneck, it can pose the same sort of risk one found in the Luddite revolt. The Luddites were protesting not progress but their exclusion from progress. (Greider 1998: 39). If the gap continues to widen between Kaliningrad and its increasingly more prosperous neighbors, one wonders if the Luddite risk will become a reality in Kaliningrad.

There is still time for other states and the EU to join Lithuania and Denmark in making concrete proposals for cooperation with Kaliningrad within the context of Northern Dimension. The Finnish Presidency of the Council and the Prodi Commission face a challenge. At the moment it looks like there is much more energy and more tools in the Stability Pact for South Eastern Europe than there is in Northern Dimension. At the moment, there is no shortage of shopping lists. The PCA, the Common Strategy on Russia, the EU’s own Tacis reports and this essay offer many possibilities but it is time to take the shopping lists into the supermarket so the Helsinki summit in December can produce an Action Plan for Northern Dimension. Of course, success depends not only on the EU solving its dilemma but also on Russia resolving its dilemmas. The news that in 1999 the essence of the current operations of the SEZ may be ended highlights this problem. Kaliningrad will only flourish when the dilemmas no longer pose major obstacles.

The author wishes to express appreciation to the Copenhagen Peace Research Institute for funding this research and to the following people whose insights and/or background material are appreciated: Alyson Bailes, Stephen Dewar, Pertti Joenniemi, Sergei Medvedev, and staff in the Commission and European Parliament.



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Note 1: I am grateful to Bardy Anderson of the Graphics Department of Instructional Technology Services at San Diego State University for making the graphic for this project. I am appreciative of Kale Palese’s suggestion of giving the viewer an insight into the presence or absence of each of the five levels of actors on each floor of the skyscraper by showing five windows and by over time increasing or decreasing the size of windows and their color intensity to indicate changing power relationships. Catherine Christensen suggested the time dimension and linkage and dependency relationships among floors of the skyscraper.  Back.

Note 2: This research was noted in a paper given at a conference but no bibliographic reference was provided.  Back.

Note 3: Rossiyskaya Gazeta, 26 December 1997, p. 4 (This summary was provided to the author by Alexander Sergounin, Professor of Political Science, Nizhny Novgorod Linguistic University, Russia)  Back.