The Seimas of the Republic of Lithuania,

having regard to the Resolution of the Seimas of the Republic of Lithuania of 19 April 2007 on the Baltic Sea Strategy;

welcoming the Communication of 10 June 2009 from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions concerning the European Union Strategy for the Baltic Sea Region and the Action Plan for Implementation of the Strategy;

noting the Presidency Conclusions of the European Council of 30 October 2009 endorsing the European Union Strategy for the Baltic Sea Region and calling to act speedily to ensure its full implementation, hereby r e s o l v e s:

 

Article 1.

To approve the parliamentary report drafted by the Committee on European Affairs of the Seimas of the Republic of Lithuania on the European Union Strategy for the Baltic Sea Region and the Action Plan for Implementation of the Strategy: Lithuania’s Standpoint” (attached).

 

Article 2.

To propose that the Government of the Republic of Lithuania consider and submit proposals concerning implementation of the conclusions of the parliamentary report drafted by the Seimas Committee on European Affairs.

 

 

speaker of the seimas                                                            irena degutienė

                                                                                                                                                                            Annex to

Resolution No XI-665

of the Seimas of the Republic of Lithuania

of 20 January 2010

 

 

 

 

EUROPEAN UNION STRATEGY FOR THE BALTIC SEA REGION AND THE ACTION PLAN FOR IMPLEMENTATION OF THE STRATEGY:

LITHUANIA’S STANDPOINT

 

Parliamentary report

 

 

 

 

SUMMARY

 

On 16 November 2006, the European Parliament adopted a resolution calling to come up with a Baltic Sea Strategy for the Northern Dimension. In December 2008, the European Council took a decision placing the European Commission under the obligation to draft such a document by June 2009. On 10 June 2009, the European Commission issued a Communication to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions concerning the European Union Strategy for the Baltic Sea Region (COM(2009) 248). The drafting of the Action Plan for implementation of the Strategy (SEC (2009) 712) was concurrently commenced. On 29-30 October 2009, the European Council adopted the European Union Strategy for the Baltic Sea Region and endorsed the conclusions noting the following: ‘This Strategy constitutes an integrated framework to address common challenges, i.e. the urgent environmental challenges related to the Baltic Sea, and to contribute to the economic success of the region and to its social and territorial cohesion, as well as to the competitiveness of the EU.’ Moreover, the European Council called upon all relevant actors to act speedily and ensure full implementation of the Strategy, which could constitute an example of macro-regional strategy. Therefore, the European Commission is under the obligation to present to the Council a progress report on this Strategy by June 2011.

On 19 April 2007, the Seimas of the Republic of Lithuania adopted a resolution welcoming the initiative of the European Parliament as regards the drafting of the European Union Strategy for the Baltic Sea Region; the new policy of the European Union would promote a close cooperation of eight EU Member States in the fields of environmental protection, economy, culture, education and security. 

On 6 and 11 February 2009, the Seimas Committee on European Affairs resolved to form a working group of the following composition: Petras Auštrevičius, Vytenis Povilas Andriukaitis, Gediminas Kirkilas and Egidijus Vareikis, and obligated it to draft a parliamentary report on the European Union Strategy for the Baltic Sea Region reflecting the standpoint of the Seimas of the Republic of Lithuania as an institution of parliamentary supervision on this important issue. Advisers of the Office of the Committee on European Affairs of the Office of the Seimas Julius Glebovas, Evaldas Sinkevičius and Assistant Tadas Paulavičius participated in the drafting of the parliamentary report.

The Baltic Sea Region is currently home to approximately 100 million people. The importance of the Baltic Sea and the impact of the region from the geopolitical perspective grew considerably as a result of the major enlargement of the European Union (the EU) in 2004, with the Baltic Sea almost becoming the EU’s ‘lake’. The majority of such challenges as ecology and environmental protection, sustainable development and security of the population are becoming a joint decision and well-coordinated action of all countries of the region rather than a concern of a single EU Member State. The Baltic Sea Region has old traditions of cross-border and regional cooperation, which consolidated and took new forms in the past decades, following the opening of national borders and elimination of the obstacles created by the Cold War.

Regardless of considerable disparities in terms of economic development, the Baltic Sea Region can provide excellent examples of the development of a competitive and knowledge-based economy, hence enhanced cooperation and the taking advantage of best practices are among the guarantees of success.

All eight EU Member States, namely, Denmark, Estonia, Latvia, Poland, Lithuania, Finland, Sweden and Germany, are participants of the EU Lisbon strategy, which is a cornerstone initiative ensuring the global competitiveness of EU Member State economies. It should also be noted that the EU Member States located in the Baltic Sea Region are still not fully integrated into the economic and monetary union, because as few as two out of eight EU Member States are full-fledged members of the euro zone.  In its own turn, Lithuania must take advantage of the neighbourhood opportunities provided in the area of cross-border cooperation and development of economic relations with Belarus and the Kaliningrad Oblast of the Russian Federation.

Ecology, climate change and environmental sustainability are among the key problems of the Baltic Sea which the countries of the entire Baltic Sea Region come across. The EU Strategy for the Baltic Sea Region raises requirements to enhance the region’s sustainability and security. It should be acknowledged that a simple, clear and efficient cooperation that would also be well-coordinated and based on concrete actions is currently needed to address ecological and environmental challenges and should also involve other states of the region: Norway, Russia and Belarus.

The parliamentary report raises the issue of eutrophication, the environmental threats posed by implementation of the Nord Stream project and stresses the aspect of energy security. A strategic position which is favourable from the transport perspective promotes intensive maritime activities in the Baltic Sea. Another important issue addressed in the report is combating crime. Cross-border crime requires close cooperation and coordinated action of border and law enforcement services. In its turn, Lithuania is particularly interested in as speedy and efficient as possible implementation of decisions in the field of energy taking into consideration regional cooperation.

The Baltic Sea Region is important in terms of ensuring a smooth passage of transit cargoes from the West to the East and from the East to the West. The transport infrastructure of the Baltic Sea Region is of considerable importance for the global economy. It should be noted that due to its specific features, the common transport policy must include not only EU Member States, but also the non-EU Member States located on the eastern coast of the Baltic Sea.  The transport projects not linked with the East-West transport corridors under construction lack long-term viability.

In implementing the Strategy for the Baltic Sea Region, a matter of importance is seeking enhanced action coordination not only among the countries’ institutions or the public sector. Stressing cooperation in the private sector is equally important, because all activities at sea and in the areas around the sea require integrated management and implementation of the principles of sustainable development. In this respect, the role of the states which have been assigned the function of action coordination is of utmost importance.

The Seimas of the Republic of Lithuania believes that the initiative of the EU institutions, namely, the EU Strategy for the Baltic Sea Region, will constitute a decisive factor stipulating, in political and legal terms, the instruments of enhancing cooperation of the countries around the Baltic Sea, setting of mutual priorities and their joint and efficient implementation.

This parliamentary report aims at urging the Government of the Republic of Lithuania, the country’s social and economic partners, non-governmental organisations, also other states of the region to actively implement the EU Strategy for the Baltic Sea Region and create additional political preconditions for improving the welfare and security of the Baltic Sea Region.

 

 

We shall strengthen the role of Lithuania as an active state of the Baltic Sea Region by making use of the Lithuanian Presidency at the Council of the Baltic Sea States in 2009-2010 and taking an active part in the development and implementation of the EU Strategy for the Baltic Sea. We shall promote regional cooperation of the Baltic Sea States in the fields of energy, transport, environment, cultural heritage protection, tourism development and strengthening of human relations, and we shall involve the Kaliningrad Oblast of the Russian Federation and Belarus into this cooperation. Programme of the Government of the Republic of Lithuania approved by Resolution No XI-52 of the Seimas of the Republic of Lithuania of 9 December 2008 (Official Gazette, No 146-5870, 2008).

 

INTRODUCTION

 

The Baltic Sea was formed several tens of thousands years ago. It was known for the amber found in it (approximately 80 per cent of amber in the world is extracted in the Baltic Sea Region), which became an important object of international commerce as early as in the times of the early Roman Empire. The Baltic Sea linked the nations around it from the economic, political and cultural perspectives.

It should also be acknowledged that the history of the Baltic Sea Region States, notwithstanding a relatively small territory of this region, has never experienced a single prevailing tendency providing the region with a sense of community. For instance, in the Middle Ages, the states of Northern Europe were first and foremost competing among themselves and did not have a major impact on the development of Lithuania and Poland in this region. Germany’s interests were focused on various neighbouring regions of Europe, hence the Baltic Sea Region evidently lacked Germany’s attention and possibilities of exerting impact. Russia has been present in the Baltic Sea Region for a period as short as three centuries and its presence was highly limited for a long time.

The impact of the Baltic Sea on the development of the way of living of the nations around the Baltic Sea is also rather complex. Over centuries, the sea has had a tremendous importance for Danes or Swedes, while its impact on the life of Lithuanians has been considerably smaller. The Vikings, who were dominant in the western part of the Baltic Sea at the beginning of the previous millennium, do not even have comparable equivalents on its eastern coast. Religious differences of the region (between Lutheran Protestants in the north and Roman Catholics in the south) also show the heterogeneous nature of the region’s identity. The languages prevailing in the region should be given particular attention: Germanic, Scandinavian, Baltic, Ugro-Finnic and Slavic languages. Especially relevant is the fact that in this region, there are the most archaic living Indo-European languages, that is, the Lithuanian and Latvian languages. In a territorially compact area, there are a large number of completely different languages leading to other ethno-cultural differences, which provide no basis for claiming the existence of a single dominant ethnic identity of the region.

However, regardless of the existing differences, the development of the Baltic Sea Region States has always been closely linked with the sea, which had and still has an impact on the development of the culture of the nations, shaping of self-awareness and national identity, the economic, social and political environment.

The Baltic Sea Region was particularly exposed to consequences of the coercion of the totalitarian regimes and the Cold War. For fifty years, the region was divided by the Iron Curtain, which forcibly separated the states of the eastern and southern sides of the sea (Lithuania, Latvia, Poland and Estonia) from the democratic life in the West based on sovereignty, human rights and the rule of law.

Civil resistance and aspiration for freedom encouraged the Baltic nations and Poland to seek liberation from the totalitarian oppression in the 1980s. The national liberation movements (Sąjūdis in Lithuania, Solidarność in Poland, Tautas Fronts in Latvia and Rahvarine in Estonia) were the principal centres of civic and political initiative which gradually altered the totalitarian system existing in Eastern Europe. The re-established independence of the Baltic States and democratisation of Poland permitted to take a new view of and evaluate regional cooperation through consolidation of democracy and market economy of the West. Solidarity of the states of Northern Europe and Germany, active and year-long support provided to the Baltic States in consolidating statehood, improving administrative resources and sharing the experience of political and economic reforms should be given a high praise.

The comprehensive reforms of a political and economic system carried out in the 1990s provided an opportunity and a firm foundation for a full-fledged come-back of the Baltic States and Poland to the western way of living. Extraordinarily speedy and radical reforms of the states of the south-eastern coast of the Baltic Sea allowed these states to join the European Union and NATO thus reinforcing in essence the political, economic and security foundations of the entire region. It may be claimed that the Baltic Sea Region has never had more European and trans-Atlantic dimension than it has currently. The EU Strategy for the Baltic Sea Region provides a historic opportunity of directing the development of the entire region towards consolidation of democracy through ensuring economic welfare as well as sustainable and environmentally-friendly interaction with the environment.

The Baltic Sea Region is currently home to approximately 100 million people: 15 million – within 10 km of the sea, 29 million – within 50 km of the sea and approximately 22 million people live in 250 thousand settlements, out of which 90 per cent are concentrated within 10 km of the sea.  The largest number of residents in the Baltic Sea Region, if measured within 50 km of the shores of the Baltic Sea, lives in Poland (45 per cent), Russia (12 per cent) and Sweden (10 per cent), with less than 6 per cent in each of the remaining countries. The Baltic Sea Region is home to approximately 23 per cent of the entire population of the EU, however the gross domestic product (GDP) generated by the region falls below 20 per cent of the EU level.

Approximately 67 per cent of the largest and fastest growing European enterprises entered in the 2007 Europe’s 500 belong to the states of the Baltic Sea Region. It is worthwhile noting that in 2007, this list contained 23 Lithuanian companies, whereas in 2006 such enterprise were as few as 4.

Accession to the EU of the states located on the south-eastern coast of the Baltic Sea (Estonia, Latvia, Poland and Lithuania) has opened up new opportunities for taking advantage of the EU internal market. Over the past 15 years, these countries have created their own fast growing market economy and reached the average level of convergence with other states of the region. The geopolitical position, geographical proximity, a similar organisational model of society and historical as well cultural traditions assisted in promoting cooperation between the states of the region of benefit to absolutely all countries along the coast of the Baltic Sea. Investment of Germany and the states of Northern Europe in the countries of the south-eastern coast of the Baltic Sea have promoted the economic growth and competitiveness in these countries, has helped to update the infrastructure, acquire experience in developing the economy, public services and public administration. The private sector of Germany and the states of Northern Europe has been provided with an opportunity to take advantage of a favourable investment environment by developing business and take up a significant share of the market in the Baltic States and Poland ranging from banking, telecommunications and transport to retail trade in oil products and generic products.

Over the past decade, the Baltic Sea Region has experienced a growing economic activity, the growth of economic competitiveness and employment. During the pre-crisis period, the GDP of the entire region had been growing for the past 6-7 years on average by approximately 6 per cent per annum. It should be pointed out that the potential of the countries of the Baltic Sea Region is being directed towards enhancement of competitiveness through promotion of research and development (R&D). Of considerable importance is the fact that the countries, especially those located in the north-western part, are making targeted investment in this field: Sweden (3.6 per cent of the GDP), Denmark (2.55 of the GDP) and Finland (3.47 of the GDP). Consequently, Finland, Sweden and Denmark have been listed as most competitive world economies for a number of successive years. In their own turn, during a certain period the countries of the south-eastern part (Lithuania, Latvia and Estonia) were considered as the fastest developing economies in Europe and sometimes even referred to as the ‘three Baltic Tigers’.

The region is still characterised by a significant role of agriculture, which for the majority of the countries was a direct route towards industrial development and economic growth. Approximately 20 per cent of the territory of this region is used for agricultural purposes, mostly in Poland, Germany, Denmark and Sweden; 17 per cent of the territory is unused and another 8 per cent is occupied by water bodies. The majority of them are located in the Gulf of Bothnia and the Gulf of Finland. The remaining territory is populated. The agriculture and animal husbandry sector of the Baltic Sea Region is characterised by a fast introduction of innovations, successful scientific research in the processing of products, a well-developed and efficient end consumers’ supply chain. The agricultural sector plays an important role in using renewable energy resources in households and especially in the field of transport (use of biofuel in vehicles).  A mention should also be made of the fact that much attention in the region is devoted to ecological agriculture and animal husbandry.

Intensive farming in the region also poses ecological challenges. Ecology and environmental protection are no longer the concern of a single EU Member State, but a joint decision and well-coordinated action of all the countries of the region. Specific measures of cooperation between the EU Member States of the region cannot be considered without stressing the need of better coordination of actions with Norway, also calling for the Russian Federation and Belarus to solve their topical and sensitive issues together with the entire region. The Baltic Sea Region must and can become not only the EU’s gateway to Central Asia and the Far East. It is necessary to further develop relations, consolidate the existing transport and energy infrastructure, which would help to bring Europe and Asia closer to each other.

On the other hand, the present-day economic crisis allows the assumption that integration of the Baltic Sea Region States remains too weak, and disparities in the level of development are too large. The interdependence of economic and social relations is not sufficient and does not promote mutually beneficial cooperation between the countries of the region. Therefore, joint effort towards not only interconnection of the region’s infrastructure and energy networks with external factors, but also additional measures for promotion of cooperation between the countries of the region is required. Much attention needs to be devoted to the unresolved problems of consolidation of the region’s energy integration and common energy security, long-term effort and investment are required to alter the situation in the desired direction.

Political initiative was needed to overcome the fragmentation of the EU Member States of the Baltic Sea Region and direct their effort towards attainment of common goals. It is probably not accidental that the origins of the EU Strategy for the Baltic Sea Region can be traced to a political institution, namely, the European Parliament. The Baltic Intergroup of the European Parliament undertook the first steps towards initiation of broader discussions on these topics. The active involvement of the Baltic Intergroup led to adoption by the European Parliament on 16 November 2006 of a resolution inviting to shape a Baltic Sea Strategy for the Northern Dimension. In December 2008, the European Council took a decision placing the European Commission under the obligation to draft such a document by June 2009. 

On 19 April 2007, the Seimas of the Republic of Lithuania adopted a resolution welcoming the initiative of the European Parliament to develop the EU Strategy for the Baltic Sea Region; this new policy of the European Union would encourage eight EU Member States to more closely cooperate in the areas of environmental protection, economy, culture, education and security involving in this cooperation also the regions of the Russian Federation, namely, the Kaliningrad Oblast and the St. Petersburg Region. The resolution notes that all required actions and decisions must be taken at the national, regional and international levels in order to implement this strategy; the Baltic Sea states should provide for sufficient funding of programmes and actions in the Baltic Sea. The Seimas of the Republic of Lithuania urged national parliaments of the Baltic Sea states to actively join and participate in the shaping of the parliamentary policy of development and implementation of the Baltic Sea Region Strategy. Much attention must be devoted to dealing with the emergency situation in respect of the ecological condition of the Baltic Sea with a view to preventing new ecological disasters, hence all the states carrying out activities in the Baltic Sea are invited to abide by high environmental protection standards, the principles of justice and joint responsibility.

Having regard to provisions of the mentioned resolution of the Seimas as well as the preparatory work and initiatives of the Government of the Republic of Lithuania, the Seimas Committee on European Affairs resolved on 6 and 11 February 2009 to form a working group charged with drafting of the parliamentary report on the EU Strategy for the Baltic Sea Region reflecting the standpoint of the Seimas of the Republic of Lithuania as an institution of parliamentary scrutiny on this matter of high importance. While drafting the parliamentary report, the working group organised round table discussions with the public, social and economic partners as well as state institutions. The discussions were held on the following topics: competitiveness, environmental protection, security, transport and the policy of protection of consumer rights.

This report aims at urging the Government of the Republic of Lithuania, the country’s social and economic partners and non-governmental organisations to be active in implementing the EU Strategy for the Baltic Sea Region, create additional political preconditions for promoting the welfare and security of the Baltic Sea Region. 

The Seimas of the Republic of Lithuania believes that the key priorities of the EU Strategy for the Baltic Sea Region should be as follows:

Regional cooperation around the Baltic Sea

 

The Baltic Sea Region has already developed long-standing traditions of trans-national and regional cooperation. A brief mention should be made of the main institutions and initiatives of regional cooperation.

·The Baltic Assembly and the Baltic Council of Ministers – the expanding cooperation between Lithuania, Latvia and Estonia led to establishment, in Tallinn in 1993, of a permanent organisation of international cooperation, namely, the Baltic Council, acting through the Baltic Assembly and the Baltic Council of Ministers. The aim of the Baltic Assembly is to promote inter-parliamentary cooperation. This is a consulting and coordinating international organisation established to discuss and develop joint projects and common interests at the political level. The main political achievements of this organisation: speedy withdrawal of the military units of the Soviet Union from the Baltic States; efficient coordination of accession to the EU and NATO; development of the common economic, educational and information technologies space of the Baltic States; cooperation in the field of culture; harmonisation of legislation, etc. Establishment of the Baltic Council of Ministers provided the cooperation between Estonia, Latvia and Lithuania with a solid institutional foundation.

·The Council of the Baltic Sea States – the Council was established in 1992 in Copenhagen as a non-formal regional political forum having the principal aim of promoting integration processes and establishing closer relations in the region. The activities cover all areas of inter-state cooperation in the Baltic Sea Region, excluding military defence. The Council of the Baltic Sea States consists of eleven states – Denmark, Estonia, Iceland, Latvia, Poland, Lithuania, Norway, Russia, Finland, Sweden, Germany – and the European Commission.  Belarus, Italy, Spain, the USA, the United Kingdom, Netherlands, France, Romania, Slovakia and Ukraine have been granted the observer status.

·The NB8 – the group consists of eight Scandinavian and Baltic states – Denmark, Iceland, Norway, Finland, Sweden and Estonia, Latvia and Lithuania, which have cooperated on a regular basis since 1992 in various fields and at the political level. Participants of the meetings of the countries’ representatives discuss topical issues of international politics, various practical cooperation issues. A mention should also be made of the NB6, which unites only the EU Member States: the Baltic States and the countries of Northern Europe – intergovernmental cooperation in the field of EU policy manifested through adjustment of positions and search for joint solutions.

·The Nordic Council of Ministers and the Nordic Council – two organisations responsible for official cooperation between the Nordic countries. These councils include five countries – Denmark, Iceland, Norway, Finland, Sweden – and three autonomous regions – the Aland Islands and the Faroe Islands as well as Greenland. The Nordic Council, established in 1952, is the forum for inter-parliamentary cooperation whose aim is to support and develop cooperation of the countries in the areas of legislation, culture, public transport, environmental protection, social policy and economy. The Nordic Council of Ministers, established in 1971, is the forum for inter-governmental cooperation ensuring an improved cooperation between the Nordic countries and promotion of the northern identity. This cooperation has recently expanded and currently covers the issues of foreign policy and security. The membership of the Baltic States of the Nordic Investment Bank is one of the signs of convergence of the Nordic countries with the Baltic States towards each other, a practical instrument and also a significant political signal and a good example of the forms of a search for closer regional cooperation.

·The Barents Euro-Arctic Council consists of Denmark, Iceland, Norway, Russia, Finland, Sweden and the European Commission. The organisation was established in 1993 with a view to developing regional cooperation between the northmost regions of Norway, Finland, Sweden and North Western Russia. The original aim was to promote economic and social cooperation and thus contribute to sustainable development in the North.

·The members of the Arctic Council are Denmark (including the Faroe Islands and Greenland), Iceland, the USA, Canada, Norway, Russia, Finland and Sweden. The organisation was founded in 1996 in Ottawa and is the top-level intergovernmental forum for development and promotion of cooperation, coordination between the states of the Arctic region involving the communities of local residents. The objectives of such cooperation are sustainable development and environmental protection in the basin of the Arctic Ocean.

·The Northern Dimension is the European Union initiative approved in 1999 and promoting cross-border cooperation between the Nordic countries, the Baltic States and Russia. The main areas of cooperation are as follows: 1) economy, business and infrastructure; 2) human resources, education, culture, scientific research and health; 3) environmental protection, nuclear safety and natural resources; 4) cross-border cooperation and regional development; 5) justice and home affairs.

·The European Neighbourhood Policy pursues the aim of sharing experience and benefits gained as a result of the EU enlargement in 2004, also bringing of the EU neighbouring states together for enhanced mutual integration. The guidelines for the European Neighbourhood Policy were published in 2003. The European Neighbourhood Policy covers the Mediterranean countries in Africa and Asia, the states of the Commonwealth of Independent States (excluding Russia and Kazakhstan), the Caucasus and Eastern Europe.

• The Eastern Partnership – the European Union initiative inaugurated in 2009 and having the purpose of creating close relations with Eastern neighbours of the European Union – Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. This stands for enhancement of political relations, development of economic integration, conclusion of free trade agreements, facilitation of travel and the possibility of introducing a visa-free travel regime, cooperation in the areas of energy security and other fields. This initiative will be based on four policy platforms: democracy, good governance and stability; economic integration and convergence with EU policies; energy security and contacts between people.

Taking into consideration a broad network of regional cooperation bodies, the experience of institutional cooperation and the impact of the previously introduced EU initiatives, the EU Strategy for the Baltic Sea Region should avoid the risk of activity duplication and not reflect the current internal institutional limitations. The Seimas of the Republic of Lithuania believes that the real added value of the Strategy for the Baltic Sea Region may emerge through a closer and more efficient cooperation of the EU Member States inside the EU. The benefits of EU membership and the possibility of joining effort in addressing challenges and seeking security and stability in the entire EU provide a historic opportunity. Moreover, the Strategy for the Baltic Sea Region may make a future contribution to a closer cooperation between the EU and the EU’s neighbours in the Asian continent.

 

PART I

ECONOMIC INTEGRATION AND COMPETITIVENESS

 

The Baltic Sea Region States are distinguished by high human development index scores. Such data are provided in annual reports of the United Nations Development Programme. These reports are drawn up on the basis of the indicators of life expectancy at birth, literacy and the standard of living.

 

 

Lithuania’s standpoint

 

In recent years, the membership of the European Union has positively influenced various areas of life, starting with economy and social development, and has made an impact on the overall living standard.  Harmonization of the rules of the free movement of people, goods, services and capital has decisively influenced economic growth and development of the new EU Member States.  In the last ten years, Lithuania's economy has been rapidly developing, which has created new possibilities for economic competitiveness and human welfare.  Yet the current economic crisis has adjusted the short-term objectives of public policy in the economic sphere.

Lithuania’s economy remains open but highly dependent on foreign trade. In 2007, exports and imports of goods amounted to, respectively, 44.6 per cent and 59.1 per cent of the gross domestic product. The main partners of Lithuania in foreign trade are the Baltic Sea Region countries and neighbours – Latvia, Russia, Germany, and Poland.  The market of Lithuania is well-known to the investors of this region, because 61 per cent of foreign investments are from the Baltic Sea Region countries. 

The backbone of Lithuania’s economy is small and medium-sized enterprises.   Basically they prevail in all sectors. Regulation of activities of these enterprises as well as the tax system in force continue looking for further possibilities of improvement, therefore, it is important to further implement the provisions of the “Small Business Act” for Europe (2009).  In this field the best experience and achievements of the region may be used on a broader scale, seeking to facilitate the regulation of establishment and activities of small and medium-sized enterprises.  Another equally important aspect is a possibility to enter the market.  The provisions of the Directive on services in the internal market must be transposed into national law by the end of 2009. It is likely that the efficient and targeted implementation of the provisions of this EU Directive will contribute to wider and simplified possibilities for service providers to participate in economic activities.   This in turn would contribute to economic growth, the increase in competitiveness and employment.

The principal objective of Lithuania is to improve business financing conditions and energy saving opportunities, to use EU funds more efficiently, and to promote exports and investments.  It must be admitted that at present the measures by which fiscal stability is sought are especially painful to the financial position of the State and the family household.  Successful integration in the internal market of the European Union previously encouraged to seek an active membership in the economic and monetary union. It must be admitted that an actual schedule of joining this Union has been noticeably corrected by the economic crisis.  It is currently assumed that the euro may be adopted when it will be adequately prepared for this, but the realistic date is 2012-2013.

The recent years of economic crisis should not be the reason to abandon the planned structural reforms; on the contrary – it is a possibility to accelerate them.  Lithuania has already revised its legal base and started implementing the reform of higher education.  This is a permanent and long-term process; so far it is too early to see its positive results.  Revision of the education reform seeks to:

·  create preconditions necessary for an essential step forward in the quality of research and higher education;

·  ensure availability, acceptability and adequacy of higher education;

·  achieve that the system of research and higher education become an accelerator of the prosperity of the State;

·  efficiently use the funds allocated by the State.

When implementing the reform of higher education Lithuania must continue expanding regional relationships in the field of research and higher education, thus creating a more favourable and common area of higher education in the Baltic Sea Region.    The Seimas of the Republic of Lithuania invites the Government of the Republic of Lithuania to take further actions encouraging the exchange of students and teachers, to support the preparation of coordinated study programmes, to promote university and higher education cooperation.   

The current state of the economy and the competitiveness indicators in Lithuania show that in the short run we will compete mostly with those countries which go through the “efficiency improving” stage, i.e. the aim will be to increase productivity and efficiency of services and manufacturing. Although at this stage the factors of cooperation between innovations and business (manufacturing) are not the most important, the capability to shift towards the knowledge and innovation economy more rapidly than other countries with similar economies may become an essential condition for increasing Lithuania's competitiveness. During this period it is therefore very important to answer the question how of to develop and enhance the country's competitive potential and to provide an advantage through the promotion of research, innovation or experimental development. The Seimas of the Republic of Lithuania considers that, in order to achieve these objectives, it is necessary, first of all, to recover the scientific potential, secondly, to provide sufficient financial stability. The development of the scientific potential is related to the enhancement of activities of research establishments. When legal preconditions are created, it will be possible to observe the emergence of spin-off enterprises under higher education institutions of Lithuania.

On 21 March 2007 the Government of the Republic of Lithuania adopted Resolution No 321 on the Approval of the Concept of Integrated Science, Studies and Business Centres (Valleys). An integrated science, studies and business centre (Valley) is the concentrated potential of research, higher education and business open to science, which possesses the common or related infrastructure and purposefully contributes to the creation of knowledge society and knowledge economy. Lithuania plans to develop the following five projects of the valleys:

· Vilnius Technology Valley Saulėtekis The vision – one of the largest and most efficient clusters of studies, science and modern business of Eastern Europe in the field of applied physical sciences and technologies. The nucleus – the centre of physical and technology sciences – is a new, modern infrastructure of studies, science and technologies concentrated within the territories of the universities and ensuring an open access to research equipment for all researchers and business entities. The following are research areas suggested for the development (breakthrough areas): 
1) laser and optical technology, 2) materials science and nanotechnology, 3) semiconductor physics, electronics and organic electronics, 4) civil engineering.

·Vilnius Valley Santara The vision – a cluster, with the highest capacity in Lithuania, known in the world and successfully integrated into the national economy, of studies of life and natural sciences, biotechnologies, information and communication technologies, as well as related research, business and medical practice. The nuclei: BIOMOL (biotechnology, biopharmacy, molecular medicine and polymeric materials) and INFO (modelling, information and communications technologies). The following are research areas suggested for the development (breakthrough areas):  1) biotechnology, biopharmacy, molecular medicine and polymeric materials; 2) modelling, information and communications technologies.

·Integrated Science, Studies and Business Centre – Kaunas Valley Santaka.The vision – to concentrate the intellectual, administrative and financial capacity and to create an applied research and innovation park – the largest in Lithuania. The nucleus – the infrastructure intended for carrying out public and private research, establishing high-tech and research companies; specialists with appropriate education; creation of services having high added value and receptive to knowledge; development of scientific research activities and cooperation with industrial enterprises; support to the development of new enterprises; assistance to industrial enterprises through the exchange of technological and business skills on the issues of intellectual property, patents and quality control. The following are research areas suggested for the development (breakthrough areas):  1) sustainable chemistry and pharmacy; 2) mechatronics and related electrical technologies, biomedical engineering; 3) future energy; 4) information and communications technologies.

· Integrated Science, Studies and Business Centre – Kaunas Valley Nemunas. The vision – an effectively functioning integrated science, study and business centre for agriculture, forestry and food business carrying scientific research and experimental development activities of international level which are necessary to increase the competitiveness of the Lithuanian economy and for sustainable development. The nucleus – by developing the existing base to create a sectoral integrated science, study and business centre in accordance with the best foreign examples of university research centres. The following are research areas suggested for the development (breakthrough areas): 1) agrobiotechnology, bioenergy and forestry; 2) food technology, safety and healthiness.

• Integrated Science, Studies and Business Centre Valley for the Development of the Maritime Sector of Lithuania. The vision – to create a nucleus of marine knowledge economy concentrating  territorially scattered marine science and studies institutions and their branches, to optimize, on the basis of a common infrastructure, the interaction between these institutions and to allow for closer interaction of marine science, studies and business. The idea is that this Centre would strengthen not only the links of maritime business and marine science, but it would also implement Lithuania's interests and obligations under the European Union's Integrated Maritime Policy in the environmental, marine innovations and other areas. The following are research areas suggested for the development (breakthrough areas):  1) marine environment; natural resources and aquaculture, environmental protection and coastal management, recreational resources and tourism; 2) maritime technologies:  maritime transport and ports, maritime constructions and technologies, maritime mechatronic systems.

The Seimas of the Republic of Lithuania hopes that the actual implementation of the Integrated Science, Studies and Business Centre (Valley) for the Development of the Maritime Sector of Lithuania will start in December of 2009.  LTL 1 878 billion are planned to be used in 2007-2013 for funding all the Valleys.

The concept of the development of the national Valleys must contribute to the development of regional ties, establishing useful ties with other institutions of the Baltic Sea Region. The Seimas of the Republic of Lithuania considers that the emergence of regional, integrated, efficient science, studies and business clusters may be one of the priority goals of the Strategy for the Baltic Sea Region.

In order to achieve these objectives financial resources serve as a great encouragement. When approving the national budget of Lithuania, the Seimas of the Republic of Lithuania paid particular attention to the harmonization of certain funding programmes with the Lisbon Strategy, with a priority focus on the development of scientific research and innovations. The European Union's structural support and the action programmes designed for its implementation are also contributing significantly to the increase of the country's competitiveness.

Lithuania has to take advantage of all the possibilities of regional cooperation, absorbing best practices, improving business promotion, developing entrepreneurship and, in particular, strengthening the efficiency of small and medium-sized business. Horizontal regional relations in various sectors are also of great importance.

Amid the economic crisis in the country Lithuania continues to focus on faster implementation of the Lisbon Strategy.  The implementation of the Lisbon Strategy should help ensuring the competitiveness of Lithuanian enterprises and the growth of the Lithuanian economy.

It is very important that the competitiveness of the Baltic Sea Region Member States be evaluated according to the structural indicators of the implementation of the European Union's Lisbon Strategy. For example, the National Lisbon Strategy Implementation Programme and the documents related to the use of the EU structural assistance are implemented integrally in Lithuania. More than half of the EU structural assistance for 2007-2013 (54.6 per cent) is intended for the implementation of the goals of the Lisbon Strategy. This example shows how important it is to support initiatives not only in good will and with political commitments, but also by allocating financial resources.

Lithuania has to make progress and seek to attract investments of the Baltic Sea Region more successfully, particularly in the innovative sectors of economy and research and development.

One of the weak aspects of the Strategy for the Baltic Sea Region is the fact that this initiative of the European Commission is not based on definite financial instruments. It is proposed to finance the implementation of activities in 2007-2013 through the EU structural funds, financial support of international financial institutions (the European Investment Bank, the Nordic Investment Bank, the European Bank for Reconstruction and Development), financial resources of the Baltic Sea Region countries and private sector funds. It should be remembered that the Lisbon Strategy of the European Union did not produce the definite implementation results until the revision of the priorities and goals of the Lisbon Strategy during the preparation for a new financial period of the European Union, linking them with specific financial resources. Therefore, it is nevertheless appropriate to envisage that individual financial instruments would be provided from a new financial period of the European Union (2014) for the activities related to the implementation of the Strategy for the Baltic Sea Region which would allow for the implementation of the objectives and priorities important and common for the whole region.

Coordinated actions of Estonia, Latvia, Lithuania and Finland as well as Russia and Belarus are necessary for the development of cross-border economic relations.

Moreover, Lithuania must take advantage of the neighbourhood opportunities provided in the field of development of the co-operation and economic relations across the border with Belarus and the Kaliningrad Oblast of the Russian Federation. The Seimas of the Republic of Lithuania is of the opinion that Lithuania could become a bridge in the development of economic relations of the countries of the whole Baltic Sea Region with the said countries. On the other hand, Russia and Belarus do not show active efforts to cooperate; for example, Russia has not yet signed an agreement on cross-border cooperation with the EU and this does not provide all the opportunities to participate in the INTERREG projects.

 

 

We will support the active global role of the EU in reducing the climate change  impact, assessing the specific situation and common objectives of the countries. We will support EU initiatives, propose new initiatives which promote the use of low-pollution renewable energy sources, energy saving, research in the field of alternative energy. The Programme of the Government of the Republic of Lithuania approved by Resolution No XI-52 of the Seimas of the Republic of Lithuania of 9 December 2008  (Official Gazette, 2008, No  146-5870)

 

 

PART II

ENVIRONMENTALLY SUSTAINABLE AND SAFE PLACE TO LIVE

 

Lithuania’s standpoint

 

As already mentioned, the problem of eutrophication of the Baltic Sea is of key importance to Lithuania. A matter of no less concern is the fact that some infrastructure projects in the Baltic Sea may have a negative impact on the state of the ecosystem of the Baltic Sea primarily because there is a chance that they will be implemented in those parts of the sea which contain quite a lot of the chemical substances sunk during the First and the Second World Wars.

The European Commission’s initiative regarding the Strategy for the Baltic Sea Region lacks an environmentally-friendly approach in the creation of such large-scale infrastructure projects.

The implementation of the projects such as Nord Stream poses a threat to the entire ecosystem of the Baltic Sea because of the contact with the large amounts of the chemical substances sunk during the First and the Second World Wars and lying on the seabed. It is no less important that negative effects would be caused to the Baltic Sea also because of secondary pollution as a result of the movement of the bottom sediments during the construction of a pipeline, and because of potential disasters and catastrophes in highly intensive shipping. The project may cause a negative impact on the sites of the Natura 2000 Networking Programme of the European Union. The EU Strategy for the Baltic Sea Region should therefore emphasize the obligation of all the EU Member States to adhere to the environmentally-friendly approach in the implementation of large-scale infrastructure projects and the need for independent environmental impact assessments of such projects.

The documentation pertaining to the transboundary environmental impact assessment of the project Nord Stream is not sufficiently exhaustive and must be supplemented. Some parts of the project’s environmental impact report, for example an analysis of alternatives, an assessment of the impact on the socio-economic environment, an ecotoxicological impact analysis, a description of engineering geological conditions must be supplemented not only by the extension of the conducted analysis, but also by new research data and their evaluation. It is unclear how the damage caused during the implementation of the Nord Stream project will be compensated and how the losses will be reimbursed; the overall impact of the project on the ecosystem of the Baltic Sea has not been assessed yet. The said shortcomings of the Nord Stream project raise doubt as to the cost-efficiency of the project and increase concern over ecological and social aspects.  Currently it has to be stated that the Nord Stream project causes a potential threat to the Baltic Sea and the countries of this region.

Despite the fact that all the countries through whose territorial or economic zone waters the planned Nord Stream gas pipeline will pass have already issued permits to construct the pipeline, after the project is implemented, it will be necessary to conduct a post-project analysis the scale of which will be possible to determine only with detailed environmental monitoring results. It is therefore particularly important that the Baltic Sea Region countries agree on a common environmental monitoring system which would include both the environmental monitoring programme and the exchange of monitoring results and conclusions among the countries in the region.

 

 

 

Nord Streamgas pipeline project and protected areas

Source Institute of Ecology of Vilnius University

 

 

The Strategy for the Baltic Sea Region reaffirms that all Baltic Sea Region countries are related by mutual dependence on the state of the ecology of the Baltic Sea. However the availability of sanctions for ensuring the implementation of the Action Plan varies from country to country.  The participation of Russia and Belarus in the coordinated actions has an important significance for the environmental sustainability of the Baltic Sea, but the document and the Action Plan proposed by the European Commission lack precision with a view to including these countries in the joint environmental and other projects. In this aspect it is very important to draw attention to the plans of Russia and Belarus to build nuclear power plants in the basin of the river Nemunas (near the rivers Neris and Nemunas), because it will be impossible to avoid a significant negative impact on the Lithuanian environment (in particular on the ecosystem of rivers, and in the event of accidents – also on the territories adjacent to the Republic of Lithuania and the people living there), which requires protection under the EU directives and international conventions. The issues of storage, processing and emplacement of nuclear fuel and other radioactive waste of nuclear power plants is also a cause of concern. The impact of the development of this atomic energy infrastructure must be evaluated in a responsible manner and coordinated with the neighbouring countries on the basis of a precedent process of the Nord Stream project.

The Baltic Sea Region can claim to be the ground for climate change mitigation because of the importance of the environmental protection, by maintaining a vulnerable balance of the sustainable development and environmental protection characteristic of the Northern regions.

The Baltic Sea Region countries, especially Finland, Sweden, Estonia and Latvia, have large territories covered with forests. In Finland forests cover 72 per cent of the country’s territory, in Sweden – 66 per cent (see table blow). Large areas of forests, which are the largest in the EU, significantly contribute to the prevention of climate change in Europe and the whole world.  Preservation of “green lungs” and expansion of such areas is a significant environmental measure.

 

Lithuania’s standpoint

 

It is particularly important for Lithuania to ensure safe navigation and to improve protection measures in case of emergencies at sea and on land. Russia is exploiting the D-6 oilfield near the Lithuanian shores and is planning to expand oil extraction within this territory. The Seimas of the Republic of Lithuania believes that it is necessary to upheave the EU position on Russia's involvement in joint and bilateral actions in drawing up oil spill response plans, mitigating consequences and compensating for damage caused by pollution.

Seeking closer cooperation and coordination of actions between border guard and law enforcement services, the existing structures, such as the Task Force on Organised Crime in the Baltic Sea Region, should be made better use of. The main fields of activity are as follows: improved and increased exchange of information; joint concrete and operative measures; judicial cooperation; special surveys, training and other cooperation. It should be emphasized that Russia is also participating in this network. This network could therefore serve as good practice for cooperation between EU Member States and non-EU Member States within the Baltic Sea Region.

With a view to ensuring safety and security, cooperation projects should be supported and secured by adequate financial instruments. It is expedient to set up a Joint Crime Prevention Fund of the Baltic Sea countries, which could administer and finance regional projects. Such a fund, as a financial cooperation instrument, could support the following projects:

·joint actions of the Baltic Sea countries in the field of the prevention of crimes and the reduction of other criminal phenomena;

·crime prevention projects in a single Baltic Sea country, provided the results delivered by such projects would have significant positive impacts on other Baltic Sea countries as well;

·measures constituting a certain component in international cooperation projects which involve not only the Baltic Sea countries, but also other EU Member States or third countries. Such projects would be supported on condition that criminal phenomena targeted by the project also occur in the Baltic Sea countries and the results delivered by such projects will have significant positive impacts on other Baltic Sea countries as well.

The funds of such a Joint Crime Prevention Fund of the Baltic Sea countries could be made of contributions of all eight countries of the Baltic Sea Region, including EU financial instruments. The activities of the Fund would build on a crime prevention programme agreed by the countries of the Baltic Sea Region; the programme would be focused on strategic trends to address cross-border crime challenges, as agreed by the Baltic Sea countries. Calls for projects could be launched on the basis of these trends. Proposals could be submitted by research institutions and other institutions and non-governmental organisations operating in this particular field in the Baltic Sea countries.

 

Lithuania’s standpoint

 

Lithuania is particularly concerned about responses to regional energy challenges to be as quick and efficient as possible. The European Union Strategy for the Baltic Sea Region devotes particular attention to supporting the integration of the energy markets and enhancing energy efficiency and security. One of the main objectives is to end the energy isolation of Lithuania and the other Baltic States from the European Union, to enhance energy security and to decrease dependency on a single supplier. Under such circumstances, it is very important to raise the above-mentioned issues relating to threats to the ecosystem of the Baltic Sea in a coordinated manner.

The High Level Group chaired by the Commission and composed of representatives of Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Sweden and Poland (as well as Norway as an observer) prepared a plan for the implementation of concrete projects. The main objectives of the Baltic Energy Market Interconnection Plan are as follows:

·  the full integration of the three Baltic States into the European energy market;

·  the strengthening of interconnections between the Baltic States and their neighbouring countries.

Additional generation capacities are also very critical for the integration of the Baltic energy market. The Baltic Sea Region has very good prospects for developing renewable energy sources: hydropower and biomass. For instance, bioenergy may cover about 30 percent of the gross energy demand as opposed to 16 percent for the whole EU. Balancing wind power plants with hydro generation provides opportunities to become a leading macro-region in this area among EU Member States. Generation development plans differ from country to country in the region but the following projects are most relevant for Lithuania:

Project	Short description	Implementation deadline	Project value
New CHP plant in Lithuania	New combined cycle turbine unit with a capacity of 444 MW	2012	EUR 328 million
Visaginas Nuclear Power Plant	New nuclear power plant with stakeholders from Poland and the other Baltic States. Maximum power generation capacity of 3,400 MW	2018	EUR 2.5-4 billion
Development of wind energy capacities in Lithuania	The target is to achieve the total capacity of 200 MW by 2010, and 500 MW by 2020 in this field	2020	N/A
LitPolLink: Elk (Poland) – Alytus (Lithuania)	Interconnection line construction (2009-2015) between Alytus and the Lithuanian border (double circuit 400 kV interconnection line with 2x500 MW BtoB converter station) Interconnection line construction (2014-2015) between Elk and the Polish border (Alytus direction)	2015	EUR 261 million
Lithuanian grid reinforcement (LitPolLink)	Construction of Alytus-Kruonis and Visaginas-Kruonis	2020	EUR 93 million
Lithuanian grid reinforcement (NordBalt)	Construction of Klaipėda-Telšiai and Mūša-Panevėžys	2013	EUR 43 million
NordBalt	HVDC undersea cable of 700-1000 MW capacity between Hemsjö/Nybro (Sweden) and Klaipėda (Lithuania)	2017	EUR 600-750 million
Integration of the natural gas markets of the Baltic countries	Third party access to all pieces of infrastructure, but in particular transmission and storage, when technically and economically feasible.	Pending decision
AmberPolLit	Natural gas pipeline connecting Lithuania to Poland via the Yamal-Europe pipeline or the national Polish gas system (330 km, capacity: at least 3 bcm/year)	2014	EUR 292 million
Upgrade of the Lithuanian-Latvian natural gas pipeline	Upgrade of capacities, including an increase in the pipeline capacity (2 extra bcm/year)	Beginning of 2010	N/A
New LNG terminal in Lithuania	Liquefied natural gas terminal (3 bcm/year)	2018	EUR 270-320 million
Natural gas storage facilities in Lithuania	New strategic natural gas storage facilities in Syderiai (up to 0.5 bcm)	2015	EUR 347 million

 

In implementing the Strategy for the Baltic Sea Region, Lithuania is charged with the task of monitoring the implementation of the Baltic Energy Market Interconnection Plan. It is expedient to establish tools in this field for measuring progress towards the set objectives on a regular basis, as this would accelerate the integration of the isolated energy markets, reduce the vulnerability of the Baltic energy markets and their dependency on a single external supplier. It is also important that the Baltic Interconnection Plan be focused on the priority of integration of the EU internal market and the reduction of dependency on a single external supplier in order to avoid the extension of its scope.

Furthermore, Lithuania’s preparedness to implement the provisions of the third package on the EU internal energy market, particularly practical models for the separation of activities, becomes relevant in the field of energy security.

 

forestry and fisheries

 

Active participation in implementing the EU Strategy for the Baltic Sea Region, coordinating main areas and flagship projects would enable Lithuania to pursue active policy in the European Union and the Baltic Sea Region in safeguarding Lithuania’s national interests. This would considerably strengthen relations of Lithuanian institutions with peer institutions in the region and the EU. Lithuania, together with other countries, had responsibility as lead partners for the priority area related to sustainable agriculture, forestry and fisheries.

In the Strategy for the Baltic Sea Region, the following actions are proposed in this priority area:

·  continue the adaptation of the Baltic fishing fleet capacity to the available resources;

·  reduce discards;

·  improve control and stop illegal fishing;

·  develop and improve coordination and cooperation among Member States and stakeholders;

·  develop sustainable strategies for wood;

·  enhance the combined effects of the rural development programmes;

·  enhance the combined effects of the European Fisheries Fund programmes.

The evaluation of the current potential of Lithuanian institutions, social and economic partners and businesses allows stating that Lithuania is ready to participate in:

·Project on Establishing a Forum for Inventive and Sustainable Manure Processing with a view to reducing the increasing amounts of algae and nutrients in the Baltic Sea; seeking, in cooperation with other countries, to protect Baltic coastal and marine ecosystems; giving more consideration to the use of agricultural waste for the production of renewable energy resources thereby contributing to the mitigation of climate change.

·Project on Creating a Network on the Implementation of EU Food and Feed Legislation for exchanging information between Member States about forthcoming legislation on foodstuffs and feedstuffs both at national and EU levels. This area requires discussions about barriers to trade (if any), and exchanges of good practices for official food and feed control.

·Project on Encouraging Sustainable Aquaculture Production Methods seeking to develop fishery in closed water bodies.

Although no specific projects have been proposed in the area of rural development, Lithuania is nevertheless ready to give attention to supporting alternative agricultural activities in rural areas and creating new jobs.

 

 

 

 

The main priorities of the Lithuanian policy on the European Union are development of a common EU energy policy, proper functioning of the EU internal market, connection of the Lithuanian energy and transport infrastructure to West European networks, development of science and innovation, EU eastward enlargement, and adequate evaluation of the crimes of totalitarian regimes on the EU level. Programme of the Government of the Republic of Lithuania approved by Resolution No XI-52 of the Seimas of the Republic of Lithuania of 9 December 2008  (Official Gazette, 2008, No  146-5870)

 

PART III

Common transport policy and consumer protection

 

Lithuania’s standpoint

 

Although the proposed EU Strategy for the Baltic Sea Region identifies the likely areas of cooperation within the region, it does not provide additional financial stimuli for it. This is not a tendency to be welcomed, taking into consideration the fact that transport infrastructure investment is considered to be the best means of stimulating economy in individual states during the crisis.

It should be noted that owing to its specific features, the common transport policy must include not only EU Member States, but also the non-EU Member States located on the eastern coast of the Baltic Sea.  The transport projects not linked with the likely East-West transport flows do not reflect the prospects of the transport corridor. Attention should be focused on the projects which could be competitive, secure, ecological and economically beneficial for the majority of states.

The intermodal East-West transport corridor links the well-established transport nodes and networks of Europe and Asia. Presently, there seems to be a tendency of increase in transport flows in the East-West transport corridor significantly outpacing other corridors of the trans-European transport network. Therefore, creation of favourable conditions for the development of commercial relations between Europe and Asia is a matter of utmost importance.

It must be stressed that the infrastructure of the East-West transport corridor belonging to Lithuania is recognised as an economic project of national importance, which would enable to speed up its modernisation, improve the quality of the country's transportation services and create favourable conditions for attraction of private capital investment.

Although Lithuania occupies a small part of the territory of the East-West transport corridor, it is of importance for the transit of intercontinental freight flows. It is in Lithuania that roads end and waterways begin, hence development of land transport links between Europe and Asia is highly promising, because, as compared with maritime transport, it would permit to significantly shorten freight transportation time.

The East-West transport corridor is among the key projects of the development of intermodal transport in Lithuania. Implementation of this project will directly contribute to enhancement of the efficiency of the Lithuanian transport sector and will significantly affect the country’s economy.

The main present-day challenge faced by the European Union is the free movement of services. Although the region’s road infrastructure is well-developed, rail, air as well as maritime and inland water shipping links are scarce. Intermodal transport links could revitalise the free movement of services in the region and create conditions for a clearer vision of the movement of capital and foreign trade.

Lithuania supports the EU’s policy in developing an integrated maritime transport policy through a new approach. In this field, further coordinated action among the Baltic Sea Region states is needed in creating maritime transport clusters and cross-sectoral clusters, also regional excellence centres of maritime transport science.

Account should also be taken of a growing interest in the European and Asian markets. The ASEM Transport Ministers’ Meeting held in October 2009 in Vilnius showed a considerable interest of the states in cooperation and development of an efficient transport system connecting Europe and Asia. The adopted Vilnius declaration stresses the importance of strengthened cooperation of the countries of Asia and Europe seeking to achieve sustainable transport development, mutually beneficial economic relations and increase potential economic growth of the global economy. This declaration aims at opening up a faster, cheaper and safer route for freight transportation to Europe.

Rail transport development is and may be economically feasible only in the case of long-distance transportation of freight. The European Union initiative concerning a European rail network for competitive freight is a proper and acceptable response to the present-day challenges. Such initiatives could also make a practical contribution to solution of the problems relating to climate change.

The project of Rail Baltica on the eastern coast of the Baltic Sea is equally important.  The time limits laid down for implementation of the project and the project’s objectives must be complied with.  On the other hand, account needs to be taken of this project’s cost efficiency. The project is viable, however during an economic crisis and with a view to speeding up the development of the Rail Baltica, it needs to be seen not only as a transport link, but also as a logistics project. Initiatives on public logistics centres, airparks and other infrastructure facilities likely to enhance the attractiveness and economic return of the Rail Baltica project are to be welcomed. Lithuania welcomes the effort of the European Commission in coordination of Rail Baltica by appointing an official in charge of the project. On completion of implementation of the Rail Baltica project, an extension of the project to St. Petersburg (the Russian Federation) could be considered.

The Strategy for the Baltic Sea Region as proposed by the European Commission lists the East-West Green Transport Corridor among priority projects. The Green Transport Corridor is a transport and services corridor based on information technologies solutions and enhancing the efficiency of the entire logistic chain. This corridor will be used solely for environmentally-friendly means of transport, mostly maritime transport and rail. The Baltic Sea is likely to become a significant gateway for Europe's trade with Asia. The East-West Green Transport Corridor is an integral part of the development of the entire planned East-West transport corridor. Such a project is attractive also from the point of view of EU funding allocated for it (EUR 6 million of EU financial support). Lithuania, Russia, Sweden, Denmark and Germany participate in the development of this corridor. This may serve as a good example of creation, through the development of a part of the transport corridor, of preconditions for the states of the Baltic Sea Region to become important partners of all the EU Member States in developing external trade with Asian countries. Such a project ensures improved political, economic, social and cultural relations with eastern neighbours, namely, Belarus and Russia.

The development of motorways of the sea in the region is equally important. There is sufficient potential for this purpose in the eastern part of the Baltic Sea, however a suitable and up-to-date infrastructure is lacking. The Klaipėda-Karlshamn project is among the projects which could speed up the development of the motorways of the sea in the East-West direction. This is one of the first projects for the implementation of which the European Union allocated funding. The implemented investment is likely to make a contribution to the increase in overall capacity and ensuring of efficiency of the East-West transport corridor.

The East-West transport corridor is a complex project, hence the priorities of its implementation need to be identified. The development of Klaipėda State Seaport is a matter of crucial relevance for Lithuania. The decisions of the Government of the Republic of Lithuania concerning recognition of this seaport and the relating infrastructure as an economic project of national importance enable to enhance the competitiveness of the entire East-West transport corridor in regional and global markets. One of the key objectives of contemporary transport systems is to promote intermodal transport and ensure interaction between different modes of transport. The infrastructure complex of the Lithuanian part of the East-West corridor is an important connecting and constituent element road and rail transport networks being a part of the entire EU transport network, enabling to implement strategic interests and political goals, also affecting economic, social and political life.

At first sight, air transport appears to be a less complex field and is facing less challenges. It should be stressed that a highly favourable attitude of consumers towards air travelling has shaped in the Baltic Sea Region over a rather short period of time. This is fast, simple and convenient as well as secure. Even most distant regions can become easily accessible thanks to air transport. Development of aviation within this region could speed up the mentioned free movement of services. Nevertheless, the prospects of development of this mode of transport in the region should undergo further analysis and evaluation.

Pipeline transport can ensure an efficient transportation of energy resources. An alternative system of gas supply is a matter of importance for the countries of the eastern part of the Baltic Sea. This would assist in dealing with the issues of energy independence discussed in the previous part. It should be underlined that decisions and their implementation must be coordinated primarily between the three Baltic States, namely, Estonia, Latvia and Lithuania, as regards selection of the location of the terminal in one of these states which would be the most suitable from the perspective of cost efficiency and logistics.

Lithuania should seek to ensure that the mentioned action in the area of development of transport and communication takes the form of specific cooperation projects. The following should be distinguished:

·        the East-West Green Transport Corridor;

·        a speedy and efficient implementation of the Rail Baltica project;

·        the strengthening and joining of Via Baltica links;

·        the strengthening of EU border-crossing infrastructure and its adaptation to current needs;  

promotion of the region’s inland waterways shipping, in particular searching for cooperation opportunities with the non-EU Member States.

 

Lithuania’s standpoint

 

Much attention in the EU Strategy for the Baltic Sea Region is dedicated, as mentioned above, to environmental and transport infrastructure projects.  Undoubtedly, the implementation of these projects will enhance consumer protection standards and provide opportunities to reinforce the attractiveness of the Baltic Sea Region.  It can be expected that the implementation of safety and security projects will ensure a higher standard of living of the population in the region.  

It must be admitted that although tourism is singled out in the EU Strategy for the Baltic Sea Region as a separate action and the action is proposed by the European Commission, it still lacks content and specific projects. Tourism, as part of free movement of services, has a large potential, and a separate study needs to be carried out to assess it and determine its strengths and opportunities. The study and subsequent pilot projects could be implemented across the entire EU.

Ecotourism and rural tourism are of particular significance as Lithuania has a massive natural potential for tourism:  the coastal nature complex, inland water bodies (Lithuania has 2 850 lakes, 760 rivers) and forests, which occupy 33 per cent of the country’s territory. Protected areas are particularly appealing to tourism (5 national and 30 regional parks and 26 reserves).  Numerous health and recreation resources of resorts may satisfy a huge demand for wellness services and resort development. The following towns have a status of a resort: Birštonas, Druskininkai, Neringa and Palanga; they have an abundance of scientifically tested mineral water and medicinal peat resources and a microclimate favourable for health promotion (rehabilitation).  The available natural resources allow for development of more intensive recreational activities. Druskininkai and Birštonas have inland waters and recreational forests suitable for that activity, Palanga has the Baltic Sea, sea beaches, recreational forests and the unique Palanga Botanical Park, Neringa has the Baltic Sea, the Curonian Lagoon, beaches and dunes, as well as recreational forests.  Lithuania has an immense potential in this area which starts to be put to an increasingly better use.  However, the rural tourism sector is still in need of support, particularly in the areas of infrastructure and information services.

Cross-border cooperation initiatives with Belarus and the Kaliningrad Oblast (Russian Federation) are maintained and promoted. The respective agreements with Belarus and Russia are under way, which will enable persons residing within the distance of 50 km on both sides of the border to cross border unhindered. The Seimas of the Republic of Lithuania is of the opinion that such cooperation projects will reinforce the importance and attractiveness of relations between the EU and Russia as well as the EU and Belarus.  On the other hand, the possible threats of such cooperation, namely illegal migration, increased volumes of smuggling and crime rates, cannot be forgotten.   Thus it is necessary to take measures to prevent such threats, to ensure the necessary material resources and adequate technical preparedness for the implementation of the agreements on the local border traffic. 

The EU Strategy for the Baltic Sea Region does not contain a separate part dedicated to consumer protection. This, to a certain extent, is an acknowledgement that in this respect the states of the region are an example to the other EU Member States or third countries.  On the other hand, with a view to creating more favourable conditions and bringing citizens closer to the European Union and its institutions as well as to decision-making processes, it is expedient to seek ways to implement it.  

One example of how EU citizens are encouraged to participate in the European Union decision-making process is the activity of the European Economic and Social Committee and the Committee of the Regions. These EU cooperation forums could become a good basis and a regional formation for talks on the activities and results achieved.

 

PART IV

CONCLUSIONS

 

The Baltic Sea Region represents a unique part of the European continent.  Here, the EU’s only internal sea connects the EU Member States with the Russian Federation (the Leningrad Oblast) and its western part – the Kaliningrad Oblast.  An opportunity provided by transport by sea and territorial proximity, as well as historical links and political and economic integration allow for a new evaluation of the Baltic Sea Region’s prospects for future development and forms of further cooperation.    

The Baltic Sea Region had suffered a lot of losses due to partitions of Europe carried out by the totalitarian regimes in a relatively small territorial space inhabited by related European nations.  This led to the creation of the forced phenomenon of the Iron Curtain in the second half of the 20^th century. Subsequent democratic changes in the region, the re-establishment of independence of the Baltic States and the end of the Cold War changed the geopolitical situation of the region itself and the neighbouring regions.

The last decade of the 20^th century changed the Baltic Region in substance following the integration of the states of the region into the transatlantic and European structures.  Currently 8 EU Member States – Denmark, Estonia, Latvia, Poland, Lithuania, Finland, Sweden and Germany all seek to make a more effective use of the benefits of membership in international organisations, to enhance their visibility in the region and to reinforce mutual cooperation.

The changes of the recent decades have created favourable conditions for a new evaluation and reinforcement of the identity of the states of the Baltic Sea Region.  The political and economic reforms of the states of the south-eastern coast of the Baltic Sea – Estonia, Latvia, Poland and Lithuania, constitute a phenomenon of unique experience and results, which could serve as a good example for other states seeking European integration.  Although this is not a predetermined process, its comprehensive benefit for the whole region and in a broader sense – to the whole Europe moving towards unification, would be considerable.

 

General conclusions and proposals

 

Conclusions and proposals regarding the individual areas of cooperation

 

Proposals relating to coordination of the implementation of

the Strategy for the Baltic Sea Region

 

part V

region’S COMPETITIVENESS INDICATORS AND ANALYSIS

 

Direct foreign investment per capita, 2007 (million Euros)

 

Competitiveness Report by the Government of the Republic of Lithuania, 2008

 

Largest sea ports in the Baltic Sea Region

(calculated in TEU – conventional shipping container units)

 

Data of the International Sea Port of Hamburg, 2009

 

Share of nuclear energy generation, as compared to the total power generation, 2009

IAEA data

 

 

 

 

 

 

 

 

 

Number of nuclear power reactors in operation, 2009

 

IAEA data