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The Case of the Baltic Region EU-Ukraine Relations

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The Case of the Baltic Region EU-Ukraine Relations May 2015 I S S U E n o . 3 Maroš Šefčovič From energy islands to Andrej Plenković an Energy Union – the EU-Ukraine relations case of the Baltic region – parliamentary co- operation perspective Yana Toom Dorothee janetzke- EU-Russia Wenzel relations – a The Arctic Policy of view from the Federal Republic Estonia of Germany To receive a free copy, register at www.utu.fi/pei The Pan-European Institute publishes the Baltic Rim Economies (BRE) review which deals with the development of the Baltic Sea region. In the BRE review, public and corporate decision makers, representatives of Academia, as well as several other experts contribute to the discussion. Pan-European Institute ISSN 1459-9759 Editor-in-Chief | Kari Liuhto (responsible for writer invitations) Technical Editor | Saara Majuri University of Turku Turku School of Economics Pan-European Institute Rehtorinpellonkatu 3 FI-20500 TURKU, Finland Tel. +358 2 333 9567 www.utu.fi/pei 29.5.2015 Baltic Rim Economies ISSUE # 3 expert articles Maroš Šefčovič 5 Eoin Micheál McNamara 20 Jerzy Kaźmierczyk 37 From energy islands to an Energy The Baltic States and EU-Russia Human capital development in Union – the case of the Baltic region relations – questions of security after Polish banks the Ukraine crisis Andrej Plenković 6 Vladimir Olenchenko 38 EU-Ukraine relations – Kirsi Ahlman 21 Baltic States – the stages of parliamentary co-operation Making the most of the Baltic Sea investment activity perspective Region by promoting co-operation Raivo Vare 39 Yana Toom 7 Yuliy A. Nisnevich 22 Estonian perspective – Russian EU-Russia relations – a view from Corruption in Russia – the heritage transit Estonia of the Communist regime Timo Seppälä 40 Dorothee Janetzke-Wenzel 8 Ari Aaltonen 23 Gross domestic product and The Arctic Policy of the Federal Dim outlook for the Russian exports versus domestic value Republic of Germany economy added – Ericsson Eesti As in the Estonian economy Andrii Olefirov 9 Nadezda Volovik 24 Affinity in historical ties and destinies U.S.-Russia trade development ALEXANDER PAKHOMOV 41 is driving pragmatic co-operation after the onset of a sanctions era Russian outward investments – lost between Ukraine and Finland chance or а new stage Veera Laine 25 Jarmo Viinanen 10 Minority marginalization as an Daniel Göler 42 Towards an ever closer partnership internal threat A country on the move – migration – enhanced security policy co- and demographic crisis in Latvia Robert Person 26 operation between Finland and Ukraine 2015 – the challenges of Nikita Mkrtchyan 44 Sweden governing from the center Main directions of internal migration Kimmo Kääriäinen 11 flows in Russia Nicolai N. Petro 27 The Evangelical Lutheran Church The heart of the conflict in Ukraine TOMASZ MICHALSKI 46 of Finland and its international co- Demographic situation in the operation in the Baltic Sea region Ihor O. Lishchynskyy 28 southern and south-western part Elisabeth Braw 12 Monotowns in Baltic Rim countries of Baltic Europe and Ukraine Russian activities in Europe – the Hannu Niemi 47 real and phantom kind Ilan Alon & Tom Lairson 29 The Donelaitis Society and its role Sergey Kulik 13 Will China form a new Anti-Western in building bridges between Finland alliance with Russia? Ukrainian crisis – economic and Lithuania challenges for EU and Russia Jouko Rautava 31 Vasilii Martynov & Irina Sazonova 48 Christopher J. Weafer 15 Russia and China – different Åland Islands from a Russian players playing different games Sanctions and weak oil add urgency perspective to already overdue Russia reforms Björn Hasselgren 32 Vladimir Kuzin 49 Konstantin Khudoley 16 Successful co-operation in the Kaliningrad region development Baltic Sea Region has to be based Russia and European Union – what and corruption perception on institutional underpinnings can be expected in the future? Alexander Barinov 50 Vatanyar Yagya & Sergey Kustov 33 Jussi Kurunmäki 17 The exclave of Kaliningrad and Turku and St. Petersburg – The Baltic Sea Parliamentary the problem of its economic interregional co-operation as a Conference and the Ukraine crisis development basis of international relations Andrei V. Belyi 18 Elena Zimovina 51 Jaana Mäkikalli 35 Russia-Baltic energy relations Population of the Kaliningrad World Trade Centers enhancing region – development stages and Natalia Zaslavskaya 19 the global economies characteristics of the ethnic The EU and Russia – searching to Andrzej Rzońca & Leszek Balcerowicz 36 structure overcome the crisis There are no reasons to fear deflation in Poland 3 www.utu.fi/pei 29.5.2015 Baltic Rim Economies ISSUE # 3 expert articles Elena Romanova 52 Maija Sirola 56 Xénia Szanyi-Gyenes & György Mudri 60 Recent development of economic The times they are a-changing – Regulation of food taxes in the light well-being of rural areas of the Baltic Sea research and funding in of market disturbances Kaliningrad region support of sustainability action Delaney Michael Skerrett 61 Alexander Sebentsov & Maria Zotova 53 Marianne Lehtimäki & Tiina Mertanen 57 Integration and inclusion and the Kaliningrad region on the EU To make BSR maritime cultural continued promotion of the Estonian borderland – from the “unsinkable heritage count language aerocarrier” to the “laboratory of Kaapo M. Seppälä 58 Artiom Zheltov 62 collaboration” Augmented reality ahoy! There is The “Inevitable future” scenario- Tatyana Kuznetsova 54 more than cleantech innovations building methodology The “Baltic Region” research journal coming up for the Baltic Sea Anssi Klemetti 63 seafaring! Dejan Romih 55 Germany’s economic presence in How to increase the value of JAANA KERTTULA 59 the Baltic Sea region Slovenia’s exports of goods and Protection Fund for the Archipelago services to Estonia, Latvia, and Sea – funding practical work towards Lithuania? achieving a healthier sea Pan-European Institute To receive a free copy, register at www.utu.fi/pei 4 www.utu.fi/pei 29.5.2015 Baltic Rim Economies ISSUE # 3 Maroš Šefčovič From energy islands to an Energy Union – the case of the Baltic region Expert article • 1778 hese are critical times we’re living in. The year of 2015 will It goes without saying that a region which is highly dependent on be remembered in history as a major milestone in the Eu- few dominant suppliers is by definition not competitive. Inter-connec- ropean transition towards low-carbon economy, and in the tivity between the Baltic region and Europe’s continental network is global fight against climate change. In December this year, crucial for providing the Baltic markets with competitive prices and global leaders will convene in Paris to negotiate an interna- service. Once energy flows freely across European borders, consum- Ttional framework for reducing our carbon footprint, right before it might ers will have access to more suppliers and can choose the best serv- be too late. The EU has set itself ambitious goals for reducing its own ice and price. emissions, and through diplomatic channels we encourage our global But we are not stopping there. Citizens are no longer passive con- partners to follow a similar path. sumers; they are becoming ‘prosumers’ – This year has also seen an aggravation consumers who can also produce energy in the Russian-Ukrainian crisis. Apart from The envisioned single and supply it into the energy grids. This the heavy humanitarian price, paid largely will allow individuals to benefit from lower by civilian population, the ongoing crisis energy market will prices of energy produced by others. With destabilised the energy market, and sent a smart grids in place, a sunny day in Riga strong message to European consumers of provide Europe with should lower energy prices in Tallinn; and Russian energy that their supply might not a windy day in Warsaw should lower en- be secure. energy which is secure, ergy prices in Vilnius or even in Minsk! Finally, the year 2015 marks the launch of (The Energy Union does not stop at the the most ambitious European energy project competitive, and EU borders). since the Coal and Steel Community of the sustainable. When it comes to the industry, the 1950s. The need to decarbonise and to en- challenge is to retain Europe’s leading sure energy supply, along with the desire to role in global investment in renewable en- render the energy market more competitive has brought European ergy. But the energetic transition is not only about the energy sector; leaders to a dramatic realisation that a profound change was needed. the change we are bringing about will benefit all industries. Current In February 2015, the European Commission therefore announced its wholesale gas prices are still more than twice as high as in the US. five-year strategy for creating a viable ‘Energy Union’. This reduces the competitiveness of our industries, especially those The envisioned single energy market will provide Europe with en- which are energy-intensive. And as if it’s not enough that we pay high- ergy which is secure, competitive, and sustainable. Security will be er prices, we are also highly dependent on too few dominant suppli- gained through diversification of sources and suppliers of our energy. ers, making us vulnerable to disruptions and price distortions. Such Competitiveness of the market will be reached by removing barriers market imbalances have recently made it necessary for the Commis- between energy markets and creating one European market. Sustain- sion to issue a Statement of Objection against Gazprom. ability lies in Europe’s commitment to cut greenhouse gas emissions Finally, when it comes to sustainability, the three Baltic countries by at least 40%; increase the share of renewable energy to at least are all on track to meeting the EU’s commitments, mentioned above. 27%; and improve energy efficiency by at least 27%. However, continued investment in renewable energies has great po- Each of these three elements will have a significant on the en- tential for consumer empowerment and for boosting their economies, ergy market of the Baltic region.
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