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CIAO DATE: 4/99
The Impact of the European Union on Baltic Co-operation
Latvian Institute of International Affairs
January 1999
When it comes to many political phenomena, we assume that they exist a priori, that they go without saying and that they always lead to positive consequences. We can say this about co-operation among the Baltic States. No sooner had they managed to restore their independence that various forums were imbued with the idea and the assumption that the next political step that these countries would take would be aimed at developing co-operation and, possibly, at establishing a new union.
Frequently the idea of Baltic unity was cultivated more outside Estonia, Latvia and Lithuania than it was in the three countries themselves, because the Baltic States did not have an experience in terms of sub-regional co-operation. In the first years of independence, the abilities of the Baltic States to implement foreign and security policies were fairly limited. All three countries won international recognition quite quickly, but becoming involved in the international system required more in the way efforts and resources than did obtaining recognition of the fact of sovereignty as such. For that reason, the first partners in the international environment were found among each country’s neighbours, and the initial operations of the Baltic States in terms of launching joint projects was a reaction to the fact that international communications channels at that time were somewhat limited.
As the participation of Estonia, Latvia and Lithuania in the political processes of the world increased, there were greater opportunities for the three to wage their national policies at the regional and global level. The sub-regional co-operation that begun was hampered by insufficient resources and political experience, and eventually it began to place obstacles in the way of implementing other opportunities. Because one of the most important tasks for the new, small and weak countries was to integrate into the structures of Europe and to expand their range of supporters, the Baltic States reduced their participation in Baltic co-operation projects. But in the eyes of the international society, the Baltic co-operation model continued to exist as powerfully as had been the case in the early 1990s.
The external image of “Baltic unity” led to an ambivalent reaction within the three countries themselves. Latvia sought to maintain the image and to affirm the ability of the Baltic nations to work in national unions, but Estonia and Lithuania began to feel that the process was not particularly useful. Both countries turned toward the intensification of bilateral relations with their immediate neighbours — Finland and Poland respectively. One of the first sceptics about Baltic unity was the Estonian prime minister Mart Laar, who asked in a 1995 newspaper article whether Baltic co-operation was a myth or reality. (Lars 1995) Given that the Baltic States have been independent for a relatively short period of time, we can certainly say that both the myth and the reality are in existence. But how can we separate the one from the other? How can we know when we are facing myths and when we are facing reality? The brief history of the three countries indicates that Baltic co-operation becomes reality at those times when the international environment is placing pressure or making threats that would have equal consequences (whether positive or negative) to all three countries. What’s more, when the three countries begin to mobilise their resources to avert the pressure or to achieve positive developments, the co-operation becomes a myth, because each country seeks out those methods of implementation that are most appropriate for it.
In this article I will try to use the European Union as an external factor that causes various national reactions in the attitude of Estonia, Latvia and Lithuania toward Baltic co-operation. The idea for this kind of approach was offered by the Danish researcher Hans Mouritzen, who in the book External Danger and Democracy: Old Nordic Lessons and New European Channels has analysed the effect of external threats on co-operation among the Nordic countries. The author reports to a classic theory of sociology that states that external conflict/danger to a group should increase its internal cohesion and centralisation. (Mouritzen 1997: 1, 5-26) This approach is comparatively easy to apply when we analyse direct external threats — e.g., the situation that existed in the relationship of the Baltic States with the USSR in the inter-war period, as well as that, which existed before the Russian armed forces were withdrawn from Estonia, Latvia and Lithuania in August 1994.
Of course, there is no real reason to talk of external dangers against the Baltic States at this point in time. That is why Mouritzen’s work has been the subject of criticism by another Danish expert, Nikolaj Petersen. He has cast doubt on the utility of using the European Union for an examination of this theory, arguing that the EU does not threaten anyone; on the contrary, it promotes mutual unity and integration. (Petersen 1998: 90-91) This scholarly quarrel is based on the way in which the respective theory is interpreted. If we reduce the classic sociological theory to evaluating the effect of threats against social groups, then the use of the EU would indeed be illogical. But if we want to analyse various kinds of external pressure — economic, political, ideological or otherwise — on the prospects for the survival and development of a social group, then this theory indubitably can offer explanations of the essence and specifics of the relationship among the EU, its member countries and the present-day candidate countries.
In order to look at the role of the EU in the future of the Baltic project, let us first focus on historical experience of Baltic co-operation. In the second part, we will examine how far Baltic co-operation has developed. Finally, we shall look at the way in which the EU and its enlargement strategy have affected the relationship among the Baltic States.
1. Is Baltic co-operation a new model?
In order to make any judgements about the state of co-operation among Estonia, Latvia and Lithuania and to avoid premature conclusions on its failure or successes, it is necessary to focus on historical experience of Baltic interaction. Such brief historical overview will help to identify those conditions and circumstances of importance for co-operation in the given area today.
Since the 13 th century up till the 16 th century different Baltic territories were under the German rule. The long period of the German presence in the region was interrupted by the aggression of Swedish, Danish, Polish and Russian troops. From the end of the 18 th century the Balts were part of the Russian Empire. Till the beginning of 20 th century the only one of the Baltic states—Lithuania experienced its independent status, by the year 1569 uniting with Poland established Polish-Lithuanian Commonwealth with large territories covering area from the Baltic to the Black sea.
Completely different historical lesson was taught to the Baltic States by turbulence in the international system in the 20 th century. As an outcome of the end of the World War I was independence of Estonia (February 24 th, 1918), Latvia (November 18 th) and Lithuania (February 16 th).
When the Baltic States established independent states they initiated the first attempts to create close inter-Baltic links. In the end of the World War I it was relatively easy to identify their common interests because they were based on security and defence concerns. Within the inter-war period, there were three basic ideas of Baltic unity. These proposals revealed the periods of development of Baltic co-operation at that time. The first idea which was put forward for consideration was that of the Entante Cordiale (EC). In fact, it was nothing more than the launching of the so-called ‘cordone sanitare’ based on co-operation among the states geographically located between Germany and Russia. The Latvian diplomats were planning to involve in the implementation processes Finland, Estonia, Latvia, Lithuania, Poland, Ukraine and Belarus. The difference among political actors became increasingly visible and fundamental as it moved from the North to the South. An obstacle for security co-operation was the permanently growing misunderstandings over territorial disputes, especially between Lithuania and Poland with respect to Vilnius (which led to political confrontation). Finland, acknowledging the heavy complex of contradictions, moved away from the idea of Entente Cordiale. Attempts of the states to establish a security region was overlapped by each state’s national security concerns, despite the clear realisation that these concerns could not be solved individually.
The Baltic States were left alone in a position of new political exploration. It was rather evident that there was no interest from the Scandinavian countries in security co-operation at that time, or from other European states for that matter. Therefore, in the beginning of the 1920’s, Estonia, Latvia and Lithuania started to elaborate on the establishment of the Baltic Union. Their starting point was a geopolitical location but, unfortunately, the national interests prevailed and the Baltic diplomats were not able to reach any agreements in this respect. After several years of searching for the best solutions, Estonia and Latvia signed an agreement on 1 November 1923, which laid the background for further co-operation in political and security affairs. Lithuania also expressed its willingness to join the agreement but ongoing disputes with Poland made this process slow and later impossible. The relations between Latvia and Lithuania, and Estonia and Lithuania, started to worsen. Meanwhile, Lithuania withdrew itself from the Baltic Union’s project. The inter-state relations in Europe and political behaviour of big powers in Europe forced the Baltic States to set up an alliance despite the failure of the first attempt. Germany was transforming into a fascist regime, Poland moved closer to Germany, and the Soviet Union posed threats. Lithuanian diplomacy with respect to Poland collapsed, putting Lithuania in an isolationist position the only way out of which was to join the treaty signed by Estonia and Latvia in 1923. In May 1934, Lithuania officially stated this fact. On September 12, 1934 in Geneva, the agreement “On Understanding and Co-operation” was signed by all three Baltic countries.
The establishment of the Baltic Entante should be assessed as a significant outcome of the early years of Baltic co-operation. At the same time, however, it should be mentioned that this political act was not only implemented too late, but the alliance was considered too small and weak and, thus, did not receive enough recognition from the general public and international community. But the basic point was that in terms of potential military threats, the Baltic Entante would not be able to avert military attack. The changes in political regimes in the Baltic countries toward authoritarianism nullified the achieved results of the Baltic co-operation. Consequently, the Baltic Entante was never tested.
The unsuccessful historical experience of Baltic co-operation led to the conclusion made mostly by political elite that today such project was impossible because it failed during 1920-1940. The above mentioned conclusion has been drawn from wrong premises. During the inter-war period the Baltic co-operation was rooted only in security and defence matters, thus, excluding comprehensive multi-channel relations. Therefore, the conclusion on failure or success of the Baltic co-operation has never been tested.
The common historical identity of the Baltic States developed only after 1940. The Soviet occupation in 1940 and 1944 demonstrated that the three countries were locked in the same geopolitical space, which belonged to the USSR. After the occupation they were functioning within the same economic, political and ideological structure, which helped to develop a sense of the common Baltic fate.
2. Baltic co-operation—how far?
The Baltic states are a newly established part of the modern system of international relations. It is quite complicated to describe their essence and the forms of their mutual interaction, because analyses are usually based on already prominent approaches and comparisons. One of the more common ways of comparing the co-operation among the Baltic States is to compare them to an existing model of co-operation among several countries. Conclusions, too, usually emanate from the consideration of whether a success or failure can be directly extrapolated to our region. One of the most commonly used comparisons is that with the co-operation that exists among the Nordic countries. That is a process with deep historical, cultural and linguistic links which over the course of the 20 th century established prerequisites for further integration in the economic, political and social spheres. The Swedish historian Hain Rebas, who is of Estonian origin, has written that as early as 1880, the Nordic countries were harmonising their legislation. In 1919 work began on the establishment of the Society Norden, which now has branches in nearly all Scandinavian cities. After 1939 government leaders met and consulted with each other quite regularly, and in 1952 the interparliamentary Nordic Council was set up. It was only in 1971, however, that the Nordic Council Ministers came into being. (Rebas 1997/98: 69) The author tried to use this impressive list of undertakings in order to show how old and close are the links among the five Nordic countries and how far the Baltic States are from links of this sort. This kind of comparison cannot, however, serve as proof of the idea that co-operation among the Baltic States is impossible in its essence, because the fact is that the co-operation has existed for less than 10 years. It is not possible, in other words, to compare an emerging union of countries with a model that is centuries old. 1 At the same time, we can see a great deal of similarity between the two co-operation models. If we look at the issue more deeply, considering more than linguistic and historical roots for co-operation, we can use the arguments of the newly emerged principle of regionalism, i.e., we can look at a wide variety of motivations for co-operation.
Danish researchers have expressed this thought in the following way: there have been three main causes of Nordic cooperation since World War II:
When it comes to the first of these reasons, we must say that the three Baltic States can be compared both quantitatively (they are small countries with limited resources, and none of them has expressed any hegemonic pretensions; this serves to promote the existence of the principle of equality in the mutual relationship) and qualitatively (all three have democratic countries and societies that are based on the fundamental values of traditional Western democracies). Unlike the Nordic countries, the Baltic States also have another powerful argument that favours co-operation: They all have identical foreign and security policy roles, i.e., full integration into the European Union and NATO.
The second reason for integration can also be fully applied to the Baltic States. The ideas that Estonia, Latvia and Lithuania hold with respect to “them” are identical. “They” are the processes to the East of the Baltic States — processes that are unclear, unpredictable and aggressive in form, influencing all three countries similarly. The sense of “we” is being established not in the context of a narrow Baltic understanding, but rather in terms of belonging to the Western European identity in terms of culture, history, politics and economics.
The third interpretation can also be applied to the Baltic States. The Nordic countries wanted to break out of the trap of bipolarity, and the Baltic States wished to break free from the Soviet Union. This could be done if the three countries worked together and presented a common front instead of standing alone. The co-operation model that was created by the Baltic States was seen by their Nordic neighbours as an alternative to the existing major-power hegemony, and the Baltic States have been seen as an experimental space in which the rules of the game of integration can be learned — rules that will soon be needed if there is to be full integration into the EU.
Another comparison that is commonly used to look at the Baltic States is the comparison with the Benelux countries. Here, however, we must conclude the opposite, i.e., that the co-operation of the Baltic States is more successful. Belgium, Holland and Luxembourg did not, in the first 10 years of the existence of the Benelux association, have a free market on agricultural products, while the Baltic States have already managed to achieve this. (Lejins 1997: 161-176) Despite this fundamentally important factor, however, the agricultural market does not represent the entire range of possibilities when it comes to co-operation, and it cannot be seen as a model for a union among states. We also must not forget that the Benelux co-operation was a reaction to the consequences of World War II, and indeed the co-operation served as the initial basis for the European Community. The Baltic States, for their part, entered an established and functioning process of integration, and they had to adapt to its terms.
In order to characterise Baltic State co-operation and to look at the future prospects for this process, we face problems that are related to the fact that it is difficult to define the term “Baltic region”.
Hain Rebas, for example, has written that there is no Baltic region at all, because Estonia has a linguistic and geographic link to the Nordic countries, while Lithuania has historically always been a country of Central and Eastern Europe. The author takes advantage of a fairly vivid image to illustrate this — the process of folk dancing. He writes that Estonian folk dances are just as slow and boring as Finnish and Swedish dances, while Lithuanian dances are almost acrobatic in their speed, reminding the viewer of the Ukrainian gopak. (Rebas 1997/98: 72) If regional belonging can be specified on the basis of folk dance comparisons, then this theme would be researched more by ethnographists and choreographers, but the truth is that regional issues are more the milieu of specialists in international relations and political science.
Problems rather emanate from other relationship structures — increasing intensity in the co-operation that exists in the Baltic Sea Region, which is bringing together countries both from traditional regions and from unclear regions. The Baltic region, in other words, is often seen as the Baltic Sea Region, and this is worrisome to the Nordic countries, which are asking with increasing frequency what has happened to “Nordisity” and whether the Nordic identity is not being threatened by the Baltic identity. There is good reason for these worries, because the more varied co-operation, the lesser significance can be attached to folk dances and linguistic comparisons, while common interests achieve greater importance.
A second problem emanates from the fact that the Baltic States are competing among themselves when it comes to involvement in Western structures. This is a natural phenomenon, on the one hand, because competition serves to promote development and increased welfare in a country. On the other hand, this competition sometimes becomes irrational in its manifestations, because it reacts to accidental announcements by Western politicians and institutions. For example, when the distinguished American expert Zbigniew Brzezinski claimed in the fall of 1998 that Lithuania is ready for NATO membership, this caused confusion not only in the relations among the Baltic States, but also in the White House and in Brussels. Neither entity has said that Lithuania is a short-term candidate for NATO membership.
Baltic co-operation has developed unevenly. The dynamics of this process have always been more dependent on external factors than on internal need. The basis for Baltic co-operation was created during the waning of the Soviet era, i.e., in the late 1980s. In 1988, representatives of the popular movements of the three Baltic republics met to discuss the new Soviet constitution that was then being considered; it would have limited the rights of the USSR’s constituent republics even more than had been the case previously. Another unifying factor was the work of Baltic deputies in the Soviet Congress of People’s Deputies. In November 1989, shortly before a session of the congress, the leaders of the Baltic popular movements met to declare their unity in the fight for independence. They adopted an agreement on common goals and common intentions with respect to co-operation. There were also reportedly discussions about the establishment of a Baltic market, as well as the establishment of a unified system of economic co-operation and of crediting. According to one of the leaders of the Latvian Popular Front, “It may seem peculiar, but Baltic unity under conditions of occupation was much closer and had much better results than was the case later. It is not difficult to notice that only the one-time dream of the Baltic market has come to pass to a greater or lesser extent, but this is true with respect only to the internal market, not the external market.” (Ivans 1998: 12) The more threatened were the Baltic republics in their efforts for sovereignty while they were still in the USSR, the more unified were their activities and the more powerful was their understanding of self-identity.
The very first foundations to the beginning of formalised Baltic cooperation were laid at the beginning of 1990 with declarations of national independence and in May 1990 with the signing of a joint declaration by Estonia, Latvia and Lithuania on mutual understanding and cooperation, thereby renewing the 1934 Geneva agreement and declarations. In June this declaration was followed by another one on national independence, which declared that the three states cannot join any agreements on a new Union and that the Soviet Constitution does not apply in the territories of the Baltics. From the aspect of unity the initial stage of cooperation between the Baltics was one of the brightest and most active, since the Baltic States were aware of sharing a common historical experience and common prospects for the future i.e. either all three would reclaim independence or they would be redrawn into a ‘’new Union’’. A sense of a shared past, present and future was the factor that forced Estonia, Latvia and Lithuania to search for common markers in the strategy for future action.
Having declared independence, Estonia, Latvia and Lithuania signed a large number of agreements on mutual co-operation in various fields, altogether 36. In April 1990 the newly created Baltic states initiated the first attempt to establish an institution facilitating mutual co-operation. As a result the Baltic Co-operation Council followed, which targeted mainly ministries of economics in order to promote and co-ordinate activities of these bodies. Unfortunately, the Council did not start to work. If we look at statistical date then at that time economic activity was very low. For example, in 1992 Lithuania’s trade with Latvia made up 5% and with Estonia only 1%. On the one hand, of course, sluggish economic co-operation is quite understandable, since during Soviet times the economies of the three countries had similar specialities and thereby could only offer each other similar goods and services once their economies became independent.
The reason for situation when countries would like to cooperage but attempts to implement failed could be found in following explanations. On the one hand, they were evidence of a wish to jointly resolve newly-created transitional problems and thereby lessen possible Soviet intervention and level of dependence on the USSR. On the other hand, their content, the haste in which they were signed and the lack of implementation mechanisms and control over implementation led to a situation where successful initiatives remained on paper and were not carried out.
1990-1992 initiatives for Baltic co-operation were developing at a rapid pace, but due to limited resources and experience their development was weak and only partial. The greatest activity was taking place in politics, especially after the coup of August 1991, because the international recognition of the Baltic States again placed the three countries in the same boat. This stimulated their co-operation in international organisations and at a regional level.
One definite integrating factor was the presence of Russian troops in the Baltic States. In view of the fact that this was an important, if not the most important national security issue for these states, the concentration of political efforts on this issue strengthened co-operation between Estonia, Latvia and Lithuania. Unfortunately an exaggerated concentration on the most pressing aspects of national survival overshadowed other important areas of co-operation.
1993 was a year of important changes for the Baltic states, when a line was drawn under the first successes and failures of domestic politics, perspectives for future work were defined and foreign policy priorities were assessed. Following national parliamentary elections and an evaluation of the relative strengths of political forces, all three states reached the same conclusion that the Baltic co-operation already existing had not been sufficiently effective and had hindered the entry of the three countries onto the international scene. In view of the fact that Estonia, Latvia and Lithuania chose the EU and NATO as their foreign policy priorities, it was clear that going down separate roads towards this aim would take much longer than co-ordinating their political activity. Pressure was posed by the closest Northern neighbours and international organisations. So, motivated by inner necessity and outside pressure, the Baltic states began activating shared initiatives. In the early 90’s, co-operation began on an institutional level, for example, in the Baltic Parliamentary Assembly 2 and in regular meetings between ministers and political parties. However, these institutions proved not to be sufficiently active. Therefore, the Baltic states chose to adopt a model of co-operation proven by the Nordic states. In August 1993 a Baltic states summit took place in Jurmala, which was attended by the three Baltic presidents, prime ministers and foreign ministers. During that summit the institutional foundations were laid for Baltic co-operation in the form of the Baltic Council of Ministers. However, formally the BCM was founded in 13 May, 1994 when the agreement was signed 3
The most important result of Baltic co-operation at that time was a draft of a Baltic free trade agreement which was signed in September. The emergence of this agreement provoked visions of a Baltic common market creating opportunities for Western investors, stimulating local manufacturers, forming a potential market of 8 million consumers and creating preconditions for rapid and successful movement towards the European Union. Thus, the BFTA was clearly linked with the Baltic integration into Western structures. Such important provisions were included in the BFTA as whether raw materials produced in one of the BS and further used for the production in the other would qualify for “Baltic origin” status when exported to EFTA countries, thus, enlarging trade potential of the area. It should be noted that in comparison with some other FTA, the Baltic states included agricultural goods in the agreement. Yet our experience over the past two years indicates that the signing of the free trade agreement has not been a sufficient basis for the Baltics as an effective economic region, since it has not been utilised to the full extent. The creation of a customs union does not necessarily result in a functioning region with a high level of interdependence.
In December 1993 it became evident that the Baltic states would like to coordinate their integration policies. Therefore, during a meeting of ministers of foreign affairs of the Baltic states a declaration was adopted, which stated that Estonia, Latvia and Lithuania would like to work out common positions on security, economics affairs and integration into European structures. This political endeavour coincided with Commissions decision to start negotiations with the BS on FTA, simultaneously underlining that the EU would support only those undertakings which could facilitate mutual Baltic cooperation. Actually, exactly the above mentioned Comission’s statement caused contradictions in Baltic cooperation, which exists up till present time. In different political documents the EU is emphasizing the significant role of Baltic cooperation but when it comes to decisions or opinions then cooperative elements have not been taking into account, Therefore, from the Baltic perspective it seems that political statements do not play so important role in enlargement process as an individual performance. That correspondingly leads to minimisation of Baltic interaction as such.
In 1995 the dual nature of Baltic cooperation was becoming increasingly apparent, with the realization that cooperation is a precondition for the survival of the three Baltic states but at the same time separate efforts and independent tactics were developed for reaching the foreign policy goals—membership of EU and NATO (Estonia relying more on Finland’s wide-range assistance and support and Lithuania moving toward the CEFTA, especially Poland).
In spite of all the contradictions, the development of Baltic co-operation is characterised with gradualism in all its aspects and a strengthening of mutual ties. At present, it is practically impossible to single out one of the priorities or to look at the process as a whole. Recognising the significance of economic and political co-operation, the greatest activity and success has been recorded in the area of security and defence, since it is based on the joint national interests, foreign policy aims and even basic physical existence of the three Baltic states.
The Baltic States may choose not to accept Baltic co-operation rationale and emphasise their differences, but this stereotype will remain, especially with respect to issues of European enlargement. Danish political scientist Lars Johansson sates that co-operation between the Baltic States is an indicator of how they will act within other international organisations. Given that the EU is sensitive about its structural and institutional changes, the behaviour that new partners bring to the EU decision-making process is important. The question may arise whether Estonia, Latvia and Lithuania will be reliable partners in the EU if they cannot agree amongst themselves and find optimal mechanisms for regulating political processes. Therefore, the attitude of Europe may be guarded. A survey of the decisions and their implementation mechanisms made as a result of Baltic co-operation (for example, on border crossings between the countries) shows that the administrative system is unprepared and decision-making is slow and inefficient. This is not a good sign when assessing their readiness to integrate into European structures. The Baltic States have very close links, especially in the field of security. If one of them is left outside of an institution while the others are accepted, the opportunity arises for Russia to expand its sphere of influence. This is something that the Baltic states, Europe and the international community as a whole do not want. The fact that the Baltic states have similar economies is somewhat of a constraint, but on the other hand the economies can be restructured and approximated to global economic processes, thereby finding their niche and integrating more swiftly into Europe. A Baltic economic zone could be one of the first steps in this direction. (Johansson 1995).
The dual nature of Baltic co-operation derived from the unclarity ‘why’ and ‘how’. Today’s story is more explicit. However, it does not mean that the implementation of mutual interactions is easier. On the one hand, Baltic co-operation could receive a new impetus—the EU. On the other hand, as closer to the EU the Baltic States get, as more competitive elements develop in their interactions.
3. European Union—a regional trouble-maker or a dove of co-operation?
The appearance of the European Union on the political agenda of the Baltic States occurred very rapidly, if we take into account that Baltic independence has existed only for seven years. The EU recognised the independence of Estonia, Latvia and Lithuania in September 1991. Beginning in May 1992, there were several significant agreements that set out the agenda for mutual relations, as well as the mutual rules of the game. From the very beginning of the new relationship, the EU has served as an external factor that serves to set out the main areas of co-operation, thus creating conditions for the integration process and its tempo. If we compare the most important agreements that have been signed between the Baltic States and the EU, we see that initially great attention was devoted to emphasising the role of mutual co-operation among the three countries. The way in which the agreements were prepared, the essence of the documents and the schedule for their signing — all of these testified to the fact that the EU saw the Baltic States as a unified group of countries and that Brussels felt that closer links among them would make their admission to the European Union all the easier. It could even be said that before the “Agenda 2000” document was published, the element of Baltic co-operation was very distinct in the relationship between the EU and the Baltic countries.
In order to prove the above mentioned arguments, the most significant treaties will be analysed from the Baltic co-operation perspective. In May 1992 the Agreements on Trade and Commercial and Economic Co-operation were signed with all three Baltic states. The agreement set the principles for co-operation which derive from common European value system—such as democracy, the rule of law, human rights and rights of minorities. However, these treaties were oriented towards trade and economic co-operation, by essence they were more politically relevant documents underlying the sovereignty of the Baltic states. These documents internationally demonstrated that the foreign policy goals of the three, namely, integration into European structure, were accepted by the EU. It would not be right to say that the agreements were not important from economical point of view. On the one hand, economies of the Baltic states in 1992 had all characteristics typical for transitional economies with limited resources to be involved into international activities. On the other hand, the agreements provided a necessary background for fostering the process of economic reforms and at the same time offering a legal framework for economic co-operation at present moment and more important in the future.
The Free Trade Agreements were signed in July 1994. The FTA was aimed to develop existing activities based on previous agreement in order to speed up the integration process. The FTA indicated the differences in the BS in their approach to the EU and integration process as such. This is the first document issued by the EU emphasising the necessity to develop co-operation among the Baltic states themselves and continue their integration into EU. So the message was given that the overall integration process is twofold and cannot be separated. Till the year 1995 when the FTA came into force Estonia abolished all kinds of projectionist measures and opened its market for the EU countries. Taking into consideration that the pace of reforms in the first half of 1990’s was slower in Latvia and Lithuania, soft approach to reforms comforting agricultural sector and hesitance to establish a legal framework favourable for foreign investments and foreign trade, the both approaching the implementation of FTA legged behind Estonia. Thus, the BS themselves indicated differences occurring in democratisation process.
Europe Agreements were signed in 1995 and came into force February 1998. On November 1994 the EU Ministers of Foreign Affairs issued a mandate for the Commission to start negotiations with the Baltic states. The negotiations started in January 1995. It was not a matter of deep and wide bargaining process but more a political approval that the Balts were approved as a part of enlargement process. It replaced the two previous arguments. it would be more precisely to say, that the first was substituted but the second was incorporated into the EA. However, from the Baltic perspective it was mostly political document, it had differences from the mentioned ones because has more comprehensive essence. It consisted of four main elements: political dialogue, free trade matters, co-operation and assistance and the promotion of trade expansion and economic development. The role of Baltic co-operation has been emphasised in these agreements as well. The interesting fact was that the texts were identical (annexes identifying more specific areas were different) but the interpretation of the agreements in integration process was ambiguous. Estonia did not mention a transition period, while Latvia and Lithuania included that. It caused mostly political consequences because all three countries named the year 1999 when they should be prepared for EU membership. Thus, it was not so important how to classify four years of European integration.
Agenda 2000. Opinions on candidate countries.
This is the first document produced by the EC, which is based on an individual approach. The individual approach created diverse reaction from the Baltic states, starting with cautious satisfaction from Estonian politicians and society, which realised the heavy burden of responsibility for further development, and ending with Latvia’s and Estonia’s dissatisfaction. The last both blamed the EC for using old data and ignoring real achievements of the countries. Although neither Latvia, nor Lithuania made attempts to find reasons why Estonia had been treated as a success story in the Baltics. An answer has been given by analysis of R. Davis and Paul G. Hare. They arrived at following conclusions:
“...Estonia has adopted the most radical economic reform policies: (i) a currency board regime which eliminates most discretion on the part of the monetary authorities to stimulate the economy; (ii) a liberal foreign trade regime (including eschewing all tariffs); (iii) has refused to refund depositors of failed banks; and (iv) has modelled its privatisation policies on the German Treuhandalstat.” (Davis, Hare 1997: 287)
Comparing with Latvia and Lithuania, who preferred soft reforms and projectionist policy, Estonia, as we can see by i, ii, and iv, had chosen more radical way of implementation of reforms. Very often they have been interpreted as unfavourable to local people. However, such understanding could be based on short-term vision. As the developments in Estonia proved—opening markets for foreign investments and creating favourable conditions for business, Estonian state and society would be able to benefit in long-term perspective. That became evident approaching the beginning of EU enlargement. AS a result of that in 1996 foreign investors brought to Lithuania USD 172 million compared with USD 700 million for Estonia. (Davis, Hare 1997: 288)
There is still a question whether the Commission’s Opinions have been so different with regard the Baltic states that it would be relatively easy to identify the success story of one. Comparison has been made by Finnish researcher Antti Kaski. He listed basic features and special remarks in a table:
ESTONIA
LATVIA
LITHUANIA
The table shows that the three countries have differences only in one area — most of the legislation concerning common markets that is already in force. These views create more questions than answers for the European Commission. In 1993 the European Union set out the so-called Copenhagen criteria which state very clearly the indicators according to which countries are to be evaluated. Opinions that have been produced since then, alas, have not observed these criteria, emphasising single elements instead of the overall process.
Questions also arise because of the fact that among Estonia’s achievements, readiness to participate in the CFSP is mentioned, while the same is not the case in the evaluations of Latvia and Lithuania. Let’s be honest: If we can find differences in such areas as competitiveness and minority rights, then in the area of the CFSP there are no fundamental or even less than fundamental differences. The various opinions are very contradictory, in the sense, that there is a clearly obvious political desire to find shortcomings in some countries so that the process of enlargement, which undeniably will represent and enormous test for the EU itself, can be postponed, while simultaneously pointing to achievements in other countries that are rather less than convincing. The fact that Estonia was named among the first group of countries to begin membership negotiations with the EU led to a varied set of reactions in the Baltic States. If Estonia’s achievements had been formulated and explained very clearly, the reaction would have been more balanced among Estonia’s neighbours, and that would have helped Latvia and Lithuania in mobilising their resources in order to make the integration process more efficient.
The EU’s decision to summon Estonia for negotiations was more political than objective in nature, and it did not have much to do with the Union’s stated criteria. On the one hand, it did serve to break the idea that the Baltic States are a geopolitical remote area, and that is quite important for all three Baltic countries. On the other hand, however, the decision created confusion and scepticism about the overall need for Baltic co-operation, given that, after all, it is given short shrift in the context of EU enlargement. Estonia’s movement into the front ranks of the process, of course, created discussions in the public and political elite in Latvia and Lithuania about the effect that the decision would have on the development of the other two countries under the framework of European integration. We can expect more positive consequences in this area than negative ones. Among the latter group there might be reduced flows of investment in Latvia and Lithuania, thus leading to a greater economic stratification in the Baltic region, as well as an increased lack of security in the two states that remain outside the active integration process. On the other hand, Estonia’s more rapid integration into the EU does provide opportunities for Latvia and Lithuania to speed up their own integration policies in several ways: the geopolitical problem which the Baltic States faced after the first round of NATO enlargement came to an end; the proof that there is no direct link between EU and NATO enlargement processes; the improvement of Estonia’s economic sector means development for neighbours as well 4 ; the matters of the second and the third pillars draw Latvia and Lithuania closer to the EU because by essence these issues are regional and require regional means of implementation; there is a set of functioning co-operation programmes among the Baltic states which cannot be interrupted, such as BaltBat, Baltnet, Baltron. It is impossible to imagine that Estonia unilaterally might withdraw from security and military co-operation.
The relationship and agreements between the EU and the Baltic States, as well as the “Agenda 2000” document, prove the logic of the interaction between the two sides: While the political actors are establishing their relations, the Baltic States are performing as a unified blocs, because it is important for all three not to remain outside the process of integration. Once the Baltic States start elaborating their national policies with respect to the European Union, however, they become individualised. However, the agreements that have been signed do not in ad of themselves describe the relationship between the EU and the Baltic States, because they do nothing more than to create the necessary environment and framework for further development. This means that there is a need to evaluate the reaction of the individual Baltic States vis-à-vis the rules of the game that have been proposed by the EU.
Competition among the Baltic states increased, and this overshadowed co-operation that had already been undertaken. The Lithuanian European affairs minister, Laima Andrikiene, has said that even before membership negotiations begin with Estonia, certain significant contradictions among the three Baltic states have already emerged. In an interview with the newspaper Diena, she said that there is now “very serious competition, and during such processes, friendly neighbouring countries become alienated.” ( Diena, 26 June 1997) Only a few weeks later, when the European Commission report was published, Latvian Prime Minister Andris Skele promptly declared that the Commission’s views would serve to split Baltic unity. ( Diena, 19 July 1997) However, Estonia has emphasised that it has no intention of stepping back from regional co-operation and that it is well aware of the serious responsibility which it has undertaken vis-à-vis the other two Baltic countries, both in terms of finding the most rapid and obstacle-free path to the European Union, and in terms of creating a favourable environment and atmosphere for Latvia’s and Lithuania’s movement toward the organisation. As a reaction to Latvian Prime Minister Guntars Krasts interview to the German newspaper Handelsblatt that Estonia’s membership in the EU might jeopardise co-operation among the three countries and that the whole area of Baltic co-operation was facing a question of “to be or not to be”, an immediate response from Estonian politicians followed. They argued that Tallinn is in no way planning to interrupt initiatives that have already been undertaken and that Estonia continues to see the Baltic Sea region as an important part of its policies. ( The Baltic Times, 11-17 September 1997)
A similar strategy was seen a bit earlier, in the spring of 1997, when the Lithuanians began to intensify their NATO enlargement policy. This followed the publication of a RAND Corporation research project which stated that at least one Baltic country should be admitted to the alliance. Estonia was named in that project, but Lithuania wanted to use the individual approach to promote its own membership aspirations. During this time Vytautas Landsbergis announced that the image of Baltic unity must be overcome. He compared the three Baltic States to mushrooms in a basket, saying that the Baltic people must break free of the “Baltic ghetto”. This idea is being cultivated all the more actively at this time, on the eve of NATO’s anniversary. This has happened because Zbigniew Brzezinski has chosen to emphasise Lithuania’s accomplishments in preparing for membership in the alliance.
A second example has to do with the fact that the EU is drawing close to the next step in this process — the publication of progress reports at the end of 1998. These could have an influence on the start and process of the negotiating procedure. In the fall of 1998, many statements were made that congratulated Latvia’s accomplishments, emphasising that Latvia had managed to move ahead even of some of the five countries in the first group. After the positive results in the referendum on Latvia’s citizenship law, which allowed the country to implement all of the major OSCE recommendations in this area, the international attitude toward Latvia became even more favourable. At the same time, Estonia suffered declined economic growth rates, and it postponed amendments to its own citizenship law. As the Vienna summit of late 1998 approached, some fairly peculiar signals began to emanate from Tallinn. For example, Estonia’s former foreign minister, Tomass Hendrik Ilves, who retains considerable influence and who was cited by The Economist as the most successful foreign minister in the post-Communist countries, has recommended that Estonia refrain from calling itself a Baltic country, because Latvia and Lithuania are destroying Estonia’s authority. Ilves fees that the Baltic States are just an idea, and one that is unstable and peripheral in nature. The former minister stated: “I saw that for years Estonia had suffered from the unsuccessfully planned policies of the other Baltic States. [..] Estonia is a post-Communist Nordic country, not a Baltic country.” 5
It is important that as Latvia’s accomplishments in the context of EU enlargement increase and surpass the achievements of Lithuania, the same politicians who once rejected the idea of Baltic unity are beginning to return to it. The author of the idea of the “Baltic ghetto”, Vytautas Landsbergis, for example, has forgotten his own theory that there should be no more talk of the Baltic States — a concept which he used to fee had a negative sound to it. When in November 1998 the European Commission issued a positive progress report about Latvia that suggested that it might be invited to begin negotiations sooner than its southern neighbour, Landsbergis began to argue that Latvia and Lithuania should be admitted to the process simultaneously.
Less attention has been paid to the relationship among the EU, the Baltic States and the Russian Federation. Despite the fact that Russia has mostly been an external force that has served to unify the Baltic States in the face of potential dangers, elements of competition and uncertainty have appeared in the EU context. The Baltic States clearly understand their advantageous geopolitical situation in the context of EU enlargement, because quite soon the EU’s external frontier will involve these countries, and this will mean access to rapidly developing “bridges” from the East to the West and vice versa. The economic interests of all three parties are affected here. There is already competition among Estonia, Latvia and Lithuania when it comes to providing transit services to Russia. Of the energy resources that Russia exports to Europe, 70% pass through Baltic ports and territories. Latvia controls the largest of these transit routes — the multimodal corridor from Russia to the port city of Ventspils. Lithuania, for its part, is building a high-capacity oil product terminal at Butinge, and in the future this may well provide significant competition to Ventspils.
This spirit of economic competition is supplemented by political factors, because, as we know, Russia has always seen Lithuania as the friendliest of the Baltic States. This means that Russia might give preference to the Butinge terminal in the future for purely political considerations. Latvia’s attitude toward the new terminal in Lithuania has focused largely on ecological arguments. The Latvian-Lithuanian maritime boundary has still not been agreed, because it has close links to the aforementioned issue — competition in the oil business with Russia. This range of problems remains in existence largely because both countries are small, with weakly developed economies and limited resources in developing a variety of production sectors. This means that attention is focused on existing facilities, possible profit volumes and future development prospects. In this respect all three Baltic States are in an identical situation.
The expansion of transit and port operations, however, does not involve only Latvia and Lithuania; Estonia has become more active in this area, as well. In 1997 the new port at Muga went into operation. When Russia implemented economic sanctions against Latvia in the spring of 1998, agreement was reached between Estonia and Russia about the increased transportation of oil products through Estonian ports.
The competition among the Baltic States with respect to the development of a Transeuropean multimodal corridor from the West to Russia will in the future be intensified by the more active involvement of Finland in the European Union, as well as by the way in which the EU resolves its relationship with Moscow. The concrete proposal of the “Northern Dimension” is already being worked out at the EU.
The operational agendas of various Baltic institutions also serve to prove the effect that the EU has had on the development of future Baltic co-operation. Before 1995 these agendas were dominated by internal issues, but after active European policies were implemented, all three Baltic States have begun far more actively to discuss policies that would foster European-Baltic integration.
On 7 February 1996 a meeting of the three Baltic foreign ministers took place in Vilnius. In contrast to previous occasions, this time issues of importance to the Baltic states and the international community were discussed. The resolutions were evidence by the three countries trying to integrate into European structures as equal partners, proving that Baltic co-operation, too, was moving forward. All three states again reaffirmed their unity on the road to the EU and NATO, discussing the possibility of establishing a common information infrastructure and transit procedure and relaxing the border regime between the Baltic States.
The visit of Estonian Minister of Foreign Affairs Ilves to Latvia in February 1997 came as a surprise after some years of exceptionalist policies, when he offered to establish an Estonian-Latvian common market as a first step towards a Baltic Customs Union.
After the Amsterdam summit the number of EU issues increases on the agendas of the Baltic institutions. In May 1998, at the 12 th session of the BA two groups of questions dominated: Latvia’s relations with Russia, and two aspects related to the EU—border control and energy resources.
At the same session the Estonian prime minister Mart Siimann advised the Baltic Assembly, a parliamentary cooperation body of the three Baltic states, saying the common effort of Latvia, Lithuania and Estonia to join the European Union (EU) and NATO would be a reason for their future cooperation. “Although the decision of the EU summit in December was not equally favourable to all the three Baltic states, we believe in the importance of continuation and further development of the traditional cooperation, especially in the field of economy,” the Estonian head of government said. (http://www.bns.lv. 9 May 1998)
Latvian Prime Minister Guntars Krasts followed his Estonian counterpart noting that the key issues of the Baltic cooperation were in harmony with the priority directions of the countries’ European integration. Lithuanian Justice Minister Vytautas Pakalniskis, who participated in the meeting in the stead of the prime minister, focused his address on the Baltic military cooperation.
At the meeting of Prime ministers (The Baltic Council of Ministers) in May 1998 the same approach was chosen as by the BA. The main conclusion, which could be drawn was that Baltic cooperation has been overlayed by EU enlargement issues. Several interstate agreements have been signed: On the removal of non-tariff barriers in mutual trade; the discussion focused on the free movement of goods, services and persons in the Baltic states; the officials also tried to lay the foundation of a Baltic customs union and a free market in the region; the officials had agreed to continue forming a common educational system. The agreement on recognition of education certificates was signed some months later.
The heads of government also talked about a draft agreement on the free movement of services. They acknowledged that Latvia, Lithuania and Estonia had different opinions of the effect of the agreement on the country’s accession to the World Trade Organization. They agreed to work actively toward the conclusion of the respective agreement at the end of next year. The premiers also agreed to continue work on the agreement on common transit procedure with a view to signing the document at the next meeting of the heads of government. They decided to intensify efforts in preparing the agreement on free movement of labor and called on experts to prepare a report to be presented at the next meeting of the heads of government. The developments in preparing an agreement on strategic export and import control was another issue for discussion.
The Latvian ex-prime minister Guntars Krasts noted that the Baltic states would find it impossible to join the EU, if they did not have a safe and stable system for the export and import of specific goods, like weapons. The officials also considered the introduction of a common data processing system in the police, customs and immigration institutions. They also praised the cooperation in combating organized crime and pledged to increase the common efforts in the future.
Conclusion
The relationship between the Baltic States and the EU has not developed evenly. There are at least two fundamentally important reasons for this. First of all, until the 1990s the enlargement of the EU involved the inclusion of sovereign and democratic countries into the Union. The latest enlargement creates a cardinal new situation for the EU, because the previous number of candidate countries was small, and this made it easier for the Union to prepare for the accession of new countries. Usually, moreover, the newcomers were appropriate for membership in terms of economic and political considerations. Second, the EU is undergoing a global process of transformation, and enlargement at this time is a complex and unpredictable process in terms of the international context. We could even say that the EU’s desire to admit new members, thus increasing its weight in the world, is greater than is the Union’s understanding of ways in which this enlargement can be implemented with minimal losses and contradictions. This has very much specified the relationship between the EU and its candidate countries.
Looking at the trends in Baltic State-EU relations, we can see that there is no clear attitude toward the role of various forms of co-operation in the expansion process. Given that the Baltic States have little experience in international policies, the fact that policies are defined and implemented unevenly has served both to promote and to hamper Baltic co-operation. On the one hand, the fact that the EU is operating as an external factor has served to promote Baltic integration amongst themselves, because the logic of the Second and Third Pillars, after all, is clearly based on co-operation. Regional co-operation at various levels has provided clear evidence of this. On the other hand, when the EU invited Estonia to begin negotiations, thus suggesting that Estonia was the most successful of the three countries and emphasising individual achievements instead of the co-operation experience that had been developed, the Union cast doubts on the idea that Baltic co-operation as such has any positive role to play in the integration process.
Despite this dual nature of Baltic co-operation, however, the EU has played an integrative role in the operational agendas of Baltic institutions. The Union has emphasised the logic of establishing regions in practice, because specific attention is being devoted to the establishment of a common economic space in Europe, emphasising those components that are of importance when countries seek to join the EU’s common market — the free movement of labour and services, for example, as well as the establishment of common controls over the import and export of strategic goods.
It is possible that new forms of co-operation will appear in the future. There are already regular consultations between the Baltic Assembly and the Nordic Council about EU integration. The view has been heard that there should be a meeting of the Baltic Assembly, the Nordic Council and the interparliamentary council of the Benelux countries.
The caution that the Baltic States have demonstrated with respect to Baltic co-operation can be explained through the fears that exist that this co-operation might be seen as an alternative to the European Union and that this might hinder the accession of the three to the EU. As the three countries gradually adapt their policies to the EU’s requirements, however, one of the resources through which policies can be implemented will inevitably be mutual co-operation as a supplement to the policy of Europeanization.
As the Baltic States strengthen their positions in Europe and in the international system, they must count on the existence of external pressure and on the fact that they have limited national resources in preserving their autonomy. As elements of rationalism come to the fore in the policies of the Baltic States, therefore, the forms and channels of co-operation will inevitably expand.
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Endnotes
Note 1: That is true, however, that similar elements can be found in any model of cooperation that has emerged under similar conditions. In 1948, for example, Denmark, Norway and Sweden wanted to establish a Scandinavian defense alliance, and similar ideas pop up from time to time in proposals made by politicians in the Baltic States. A bit earlier, in 1947, there was the idea of establishing a customs union. The proposal was tossed around for a dozen years, until the European Free Trade Association was formed in 1960. Similar discussions have been held under the auspices of the Baltic Council of Ministers, as well as among politicians in the Baltic States. In 1968 the Nordic countries started to talk about expanded economic cooperation, and after two years of negotiations there emerged a proposal to set up a formal Nordic Economic Union (NORDEK). The development of the European Community, however, made this initiative less attractive. (Sundelius, Wiklund 1979: 99-102) Back.
Note 2: Baltic Parliamentary Assembly was established in November 1991as a consultative and coordinating inter-parliamentary institution, which was designed as Nordic counterpart. Twenty deputies from each Baltic state are participating in sessions. Six Committees are involved in the BA activities—Legal, Social and Economic Affairs, Environment and Energy, Communication, Education, Science and Culture, and Security and Foreign Affairs. Back.
Note 3: The aim of the BCM is to promote regular cooperation on the executive level. Cooperation is taking place on three levels — the heads of the governments of the Baltic States, Ministers of Foreign Affairs of the BS, and the Cooperation Committees of the BCM. The BCM has been designed as the Nordic Council of Ministers. Back.
Note 4: Estonia’s more rapid integration with the EU will inevitably improve Estonia’s economic potential. It is no accident at the European Commission report on Estonia contained a considerable list of accomplishments that still lie ahead in the economic sector. What does that mean for Latvia? Simply that Estonia will have to seek out ways to improve its economic positions on the road to the EU. Obviously the current EU member countries will not be an easy target for economic development, because they all have stable economic structures and active economic competition. The fact is, therefore, that Estonia’s best prospects lie in Tallinn’s neighboring countries — Latvia and Lithuania. Estonian capital is already beginning to flow into Latvia, especially over the last year. Even though the overall level of Estonian investment in Latvia is not large, the fact is that investments are being aimed at large and significant companies. Thus, for example, the Hansabank-Latvija bank has been established; Estonians own 20% of the shares in the Saules banka bank and are planning to increase their holding to 100%; Estonians control 30% of shares in the insurance company “Saules laiks”; and one of Latvia’s largest meat processing plants, “Rìgas miesnieks”, has merged with an Estonian meat processing company, “Rakvere”. Back.
Note 5: See http://www.bns.lv: 30 October 1998. Back.
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