New impetus for the Three Seas Initiative: Estonian leadership and Ukrainian perspectives

This years' Three Seas meeting was virtual due to the COVID-19 pandemic. Photo: Three Seas / Annika Haas 

International

Article by: Viacheslav Golub

On 19 October 2020, Tallinn hosted the 5th summit and 3rd business forum of the Three Seas Initiative (3SI), informally called the Trimarium.

Launched five years ago by the presidents of Croatia and Poland, Kolinda Grabar-Kitarovic and Andrzej Duda, the Three Seas Initiative brings together 12 EU member states between the Baltic, Black and Adriatic seas.

Its main goal is to build up the region’s infrastructure along the North-South axis through transport, energy, and digital projects to bridge the gap with Western Europe, which is much better connected by rail and road, electricity, and gas pipelines than the eastern part of the European Union. However, Ukraine is not a member. Nevertheless, there are several avenues Ukraine can undertake to get involved in this promising initiative.

Ukraine is excluded from most of the Central European cooperation initiatives, the largest of which is the Three Seas Initiative

Tallinn summit: main outcomes

This was the main foreign policy event of Tallinn in 2020; due to the COVID-19 pandemic, it was held as a virtual summit and web forum instead of a traditional in-person meeting.

Three out of ten presidents of the 3SI participating states (Estonian president Kersti Kaljulaid, Polish president Andrzej Duda and Bulgarian president Rumen Radev), as well as US Under Secretary of State for Economic Growth, Energy, and the Environment Keith Krach attended the summit in person, while others joined it online.

The agenda of the Tallinn summit had four main blocks:

  1. a presidents’ virtual panel followed by a high-level discussion and virtual press conference of the heads of states;
  2. a panel on Smart Money followed by a discussion held on the ministerial level;
  3. a short panel on defending democracy and connectivity in the cybersphere;
  4. and the last panel on Smart Connectivity.

During the first panel, presidents of the 3SI participating states spoke about the benefits of the Initiative to every individual country and the region as a whole via video link. European Commission Executive Vice President Margrethe Vestager and US Under Secretary of Energy Mark Menezes on behalf of the partners participated in a high-level discussion with the heads of states.

The second panel on Smart Money replaced the traditional business forum and was fully dedicated to the 3SI Investment Fund (3SIIF) as an important tool of financing infrastructure projects in the region. Ministers from nine 3SI participating states which joined or intended to join the 3SIIF discussed the possible ways of attracting investments to fill the infrastructure gaps in the region and prospects of project implementation.

During the third panel US Under Secretary of State for Economic Growth, Energy, and the Environment and Undersecretary for Political Affairs at the Ministry of Foreign Affairs of Estonia discussed national and regional security in the region, including energy, 5G, and cyberspace.

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The last fourth panel was dedicated to Estonia’s own contribution to the summit – the concept of Smart Connectivity, which aims at combining energy and transport infrastructure with digital platforms and services. It will boost the potential of the digital economy and transform the 3SI region into a global hotspot for smart mobility and energy innovation.

While preparing for the 2020 3SI summit in Tallinn, Estonia tried to bring more practical aspects to the initiative. After the ending of the summit, we can draw some deliverables of Estonian leadership in this undertaking.

First, the Three Seas Investment Fund was expanded and became fully operational.

The Fund was registered in May 2019 in Luxembourg and among its first contributors were Poland’s development bank Gospodarstva Krajowego and Romania’s national EximBank investing 500 mn euro. In 2020 Estonia, Latvia, Hungary, Bulgaria, Croatia, Slovenia, and Lithuania joined or pledged to join the Fund. Its total volume now accounts for 913 mn euro. At the summit, US Under Secretary of State Keith Krach reaffirmed Mike Pompeo’s announcement made during the 2020 Munich Security Conference to invest up to 1 bn euro on financing infrastructure in the 3SI region.

Second, Estonia made practical steps to increase the role of governments through organizing a ministerial panel in the framework of the web forum. Combining the efforts of governments and business will lead to better implementation of priority projects.

Third, a technical secretariat was created in order to facilitate the functioning and continuity of the 3SI cooperation platform.

Fourth, the initial list of priority interconnection projects which were approved during the 2018 Bucharest summit was updated – 20 new projects were added. The 3SI website now contains an interactive page where potential investors can get up-to-date information regarding a specific project.

Fifth, at the summit, Estonia introduced a Smart Connectivity vision paper which provides for wide implementation of innovative technologies such as smart energy, smart grid, smart logistics, autonomous vehicles moving on smart roads and railways to smart logistics centers.

In 2021 Bulgaria will host the next 3SI summit and business forum. At the virtual press conference, Estonian president Kersti Kaljulaid handed over a symbolic 3SI flag to her Bulgarian counterpart Rumen Radev.

Possible ways for Ukraine to get involved

The Three Seas Initiative has been discussed in Ukrainian expert circles for many years.

At its foundation, the format of the Initiative was not exclusively for EU members and Ukraine could theoretically take advantage of the window of opportunity to join in the first year of its creation. In 2016, Ukraine got an invitation to participate in the first 3SI summit in Dubrovnik (Croatia). However, no representatives from Ukraine was delegated to the event.

In order to avoid dwelling on events that took place five years ago, Ukraine should focus on its capabilities today. After all, every year, top officials voice Ukraine’s interest in the Initiative. However, it’s necessary to go beyond statements and shape the country’s priorities in the Black and Baltic Seas, as well as identify key projects. There are several possible scenarios for Ukraine to participate in the Three Seas Initiative.

Scenario #1. Political presence

Ukraine’s participation at the Presidential level is possible at the Summit at the invitation of the hosting country. To do this, it is necessary to strengthen dialogue, develop good relations at the bilateral level, and build up Ukraine’s uniqueness and the importance of joining with the countries hosting the summit. For example, these could be proposals to strengthen communication with neighboring countries in the region or extend the impact of 3SI projects beyond EU member states.

Scenario #2. A partnership format, like the United States or Germany

Despite Ukraine lacking resources to invest in the Three Seas Investment Fund, the country is geopolitically unique. Although the Initiative is based on infrastructure, issues of security and the neighborhood of Ukraine cannot be completely ruled out. All participating countries understand this, but it is up to Ukraine to raise the issue.

During a video conference in late September, Estonian president Kersti Kaljulaid mentioned Ukraine in the context of the Three Seas Initiative Investment Fund. According to her, if the Fund succeeds in funding projects in the 3SI participating states, it can be further used for the needs of Ukraine and the Western Balkans. After all, it is the lack of funding that hinders the implementation of the Ukrainian part of the 3SI projects.

The importance of Ukraine’s active participation in various regional initiatives should also be included in the same scenario. The best format for this is the EU Macro-Regional Strategy for the Danube Region (EUSDR), where Ukraine is a full participant and which it even plans to chair in 2022.

Adding to Ukraine’s advantage is that most of the projects, whether in the 3SI, or in the EUSDR, or in the EU’s Baltic macro-regional strategy, are intertwined and fall under identical goals and objectives.

Most countries do not focus on whether a participant is an EU member or a non-EU member. In addition, we should not forget about the Western Balkans, which also located in the region of the three seas, and the results of the projects in the 3SI will affect them.

The recently initiated Lublin Triangle trilateral regional format can help synchronize with the region’s developmental tasks.

Scenario #3. Project participation

This scenario is the most optimal and realistic one today. Positive results from Ukraine’s participation in the Three Seas projects will also help change the political format of the Initiative itself in the future.

In total, Ukraine was given the opportunity to join the implementation of 6 out of the 48 infrastructure projects within the 3SI: one in energy; two in the field of transport; three in the digital sphere.

The energy project envisages the construction of the gas interconnector Hermanowice (Poland) – Bilche-Volytsia (Ukraine), which is a part of the planned Baltic Pipe.

The gas interconnector Hermanowice (Poland) – Bilche-Volytsia (Ukraine) is a part of the planned Baltic Pipe. Image: Cepconsult.com

This pipeline, which will run through Norway, Denmark, and Poland, will transport Norwegian and liquefied American gas to Poland, the Baltic States, and Ukraine. The capacity of the gas pipeline will reach 5-8 billion cubic meters of gas. After its launch, Ukraine will be able to receive about 1 billion cubic meters.

https://twitter.com/BalticPipe_PL/status/1189857984266018824

In the field of transport, it is a flagship project – the Via Carpatia highway, which runs from Lithuanian Klaipeda to Greek Thessaloniki through Lithuania, Poland, Slovakia, Hungary, Bulgaria, and Greece.

In 2016, during a meeting of the Ministers of Infrastructure of Lithuania, Poland, Hungary, Slovakia, Romania, Bulgaria, the Czech Republic, Ukraine, and Turkey, it was decided to build three additional sections of highways in Ukraine.

According to the memorandum signed in 2017, the highway should pass through the Ukrainian cities of Lviv, Mostyska, Ternopil, Chernivtsi, Lutsk, Yahodyn, Rivne, Zhytomyr, Vinnytsia, Korosten, Uman, Odesa, Kyiv.

The Via Carpatia will include Ukrainian segments

The next is the Viking Train project. This railway route, which has been operating since 2003, passes through the cities of Klaipeda, Vilnius, Minsk, Kyiv, and Chornomorsk. Viking Train is an example of successful cooperation with the participation of the Eastern Partnership countries.

The Viking train

The E40 international waterway project, which had a good chance of implementation and would strengthen the Three Seas Initiative, also deserves a mention. Due to the political situation in Belarus, its future looks unconvincing. This priority was not mentioned at bilateral events during Zelenskyy’s and Duda’s last meeting in Ukraine.

Projects in the field of digitalization, in which Ukraine is involved, provide for the creation of digital platforms aimed at more efficient and faster administration of transport and logistics services online by processing large amounts of information, real-time monitoring of water resources in the Three Seas region, digital modeling of water pollution and drainage.

All of the proposed scenarios are complementary and will only be viable if they are addressed on an ongoing basis or incorporated into the region’s foreign policy priorities.

To sum up, it is important for Ukraine to actively monitor the events that will develop following the Three Seas Initiative Tallinn summit, consider the possibilities for participation in Smart Connectivity and other new projects of the Three Seas.

Geopolitical aspects

The economic and infrastructure benefits notwithstanding, the Three Seas Initiative is interesting to Ukraine from the geopolitical perspective. It шs an additional format to strengthen Ukraine’s relations with the US, as Washington fully supports the Initiative both politically and financially.

In 2017 US President Donald Trump attended the second 3SI summit in Warsaw where he expressed his commitment to the overall goals of the Initiative. During the 2020 Munich Security Conference, Secretary of State Mike Pompeo pledged to invest $1 bn to the development of energy infrastructure in the Three Seas region. In August 2020 top American diplomat visited Czech Republic, Slovenia, Austria, and Poland.

US interest in the region is driven by a desire to reduce the energy dependence of 3SI participating states from Russia, as well as to resist China’s expansion. Due to the participation of the United States as a partner state of the Initiative, the initial economic and infrastructure project acquired a geopolitical meaning.

It is worth mentioning that there is another competing undertaking in the region – the Chinese initiative “17+1”. This initiative includes all 3SI participating states (except Austria) and mainly aims at infrastructure development.

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The US is trying to resist China from entering into the region, as Beijing economic assistance is closely linked to political influence. Having declared a course towards the EU and NATO, Ukraine has to support Western-driven endeavors and avoid getting involved in geopolitical rivalry.

Note: A Ukrainian version of this article was first published at European Pravda.

Viacheslav Golub is an analyst at the Ukrainian Institute for International Politics.

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