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 You are in: Under Secretary for Political Affairs > Bureau of European and Eurasian Affairs > Bureau of European and Eurasian Affairs Releases > Bureau of European and Eurasian Affairs Remarks > 2003 > December

The Baltic Sea as the Development Engine of Europe

Juhan Parts, Prime Minister of the Republic of Estonia
Remarks at the Business Forum of the Annual Conference of the Baltic Sea Seven Islands Cooperation
Kdrdla, Estonia
December 5, 2003

Ladies and Gentlemen, distinguished guests,

Dear friends,

First, allow me to thank the organizers of this business forum and to congratulate Hiiumaa on the successful chairmanship of the Baltic Sea Seven Islands. The Baltic Sea Seven Islands Cooperation is a perfect example of an efficiently functioning cooperation network evolving on the coasts of the Baltic Sea.

As the crow flies, the distance from Sõrve peninsula to Gotland is as long as the distance separating the peninsula from Tallinn. When traveling by sea from Kuressaare, the closest capital is Riga, not Tallinn. When Estonia, Latvia, Lithuania, and Poland accede to the European Union (EU), the Baltic Sea will practically become an internal sea of the European Union. This is a historic moment. The Baltic Sea is like mortar that binds us, the Northern states of the EU, firmly together. Our Northern Mediterranean will be the new mare nostrum, and I am convinced that the Baltic Sea region has good prospects of becoming the fastest growing region in Europe.

The heading of my speech is “The Baltic Sea as the Development Engine of Europe”.

The Baltic Sea in the role of Europe’s development engine is not just a hope that we share with the other Baltic Sea nations. It is a challenge that the whole of Europe is looking forward for us to tackle. It is also a challenge to Estonia as the current chairman of the Council of the Baltic Sea States.

How to tackle this challenge? Here, five major themes can be mapped for us to consider together before we proceed.

First, the European Union is first and foremost a political union of states on our continent, a union whose essence is defined by two words: ”the Europe of regions”. And the Baltic Sea region is no doubt one of the key regions of this Europe. To be brief: we have to face the task of linking our efforts to the Northern Dimension policy. The further development of that policy is one of the key issues of the Baltic Sea Region in the European context.

Second, we have an efficiently functioning international cooperation structure that is called the Council of the Baltic Sea States. This is the only political and organizational structure that, due to the countries that participate in its work, today has a real dimension reaching into the European Union – thus, it is an Euro-political structure that has functioning cooperation ties with Russia. When shaping the development of the Baltic Sea Region, this circumstance should by no means be underestimated.

Third, in today’s globalising world, I would like to draw your attention to the so-called renewed North-European Partnership (e-PINE) of the United States, which is a result of the Northern European initiative and a further development of the U.S.-Baltic Charter, cooperation with the Nordic countries and the Baltic countries in 1+8 format. Even if the latter was announced quite recently, the continuous interest of the U.S. in such issues as the security of our region, as well as regional social problems, and the strengthening of business contacts can only be received with the warmest welcome.

The fourth – and this is perhaps the most vitally important question when the Baltic Sea is concerned – is the environmental status of the Baltic Sea. The Baltic Sea is the environment, which all our countries, but especially all our islands, who participate in the B-7 forums, are directly dependent on. Just as they are dependent on clean air and water. Therefore, the issues of the environmental safety of the Baltic Sea must never be considered secondary. And this is why examples of productive cooperation between countries in this field are especially important. The prohibition of the environmentally dangerous single-hull oil tankers is a good example. I would like to welcome the decision of the International Maritime Organization from yesterday to speed up the prohibition of single-hull tankers by five years. This is a big step forward in the protection of the Baltic Sea.

And fifth – which is perhaps closest to the theme of my address today – I would like to refer to the Lisbon process of the European Union. The aim of the process is, by the year 2010, to shape the European Union into the most competitive and knowledge-intensive economic space in the world by enhancing economic growth, environment-friendly entrepreneurship and social welfare. It is this process that will help us to achieve our goals fastest. The countries around the Baltic Sea are ahead of some other EU countries in several fields already today.

This is the general background. Let us now be more specific and take a look at the figures describing the Baltic Sea Region. In recent years, our region has had the fastest economic growth rate in Europe. The region of St. Petersburg area is the fastest developing in Russia after Moscow. Even today, the Baltic Sea region is one of the innovation centers of the European Union: in the field of information technology, it has good prospects for becoming Europe’s research center. This is true also about other new technologies, such as biotechnology and gene technology. The present EU members and the acceding countries in of the Baltic Sea region – Finland, Denmark, Sweden, Germany, and Estonia – continue to be on the top of the global list when competitiveness figures are concerned.

Thus, we have to admit that our potential is adequate. Whether we will be able to make full use of it, and to develop the Baltic Sea region into the most competitive region of the EU, will depend on two circumstances. First, on how the acceding countries will be able to use the support coming from the EU structural funds, and second, on how regional cooperation will develop within the region – including cooperation with northwestern Russia and Kaliningrad, and the rest of the Baltic Sea region.

Let us begin with the first of the two abovementioned issues. If we are to face the truth, it has to be admitted that figures related to living standards and enterprising activity are considerably lower east of the Baltic Sea when compared to the neighbors on the western shore. Entrepreneurship rate in Estonia measured in the number of small and medium-sized enterprises per 1000 inhabitants is still 4 times lower than the respective figure in Germany. Yet I refuse to believe that Estonians are 4 times less industrious than Germans. This depends on development support that the state can offer to entrepreneurs, and it is here that we should take a closer look at the opportunities that the EU has to offer.

Through its support funds, the EU offers co-financing by different measures that ought to enhance both regional enterprising and infrastructure. Thus, Estonia has been allocated about 2 billion kroons from the European Social Fund, and this includes more than 100 million kroons allocated to the promotion of economic competitiveness, mostly by means of investing into human resources. 1.145 billion kroons from the EU Regional Development Funds have been allocated to strengthen the competitiveness of enterprises, and divided as follows:

  • 164.5 million shall be allocated for supporting the development of enterprises; 
  • 151.4 million for supporting the development of the infrastructure of enterprising; 
  • 606,5 million shall be used for promoting research and development activities, 227.2 million kroons for fostering research and development and innovation, and 227.2 million for the development of tourism.

From the same fund, 2.2 billion kroons have been allocated for financing local development and infrastructure projects – this means transport and environment infrastructure, as well as the development of local living environment. Why am I reciting these figures? Just to show you that there are funds to help us change people’s life on local plane, to make their environment better and friendlier, so that we all can look forward to a better life.

Special funds have been allocated for financing the projects concerning the infrastructure related to the islands and island environment. Let me bring a few examples: after accession, 15.6 billion kroons from the Cohesion Fund have been allocated for launching the preparations for the research in establishing a fixed link between Saaremaa and the mainland. For 2005-2006, a total of 6 million Euros have been allocated for the renovation of the ports of Rohuküla, Heltermaa, Kuivastu, and Virtsu. For the year 2004, 21.6 million Euro, also from the Cohesion Fund, have been allocated for solving the sewage problems of the Matsalu river basin, and 7.5 million Euro for building up sewage systems on the islands. All these, I would like to repeat, are potential resources of development, whose actual application will depend on the eventual existence of the respective projects, as well as our own efficiency. Or inefficiency.

The tenacity that the people of Hiiumaa and Saaremaa have shown in utilizing the EU funds currently available in Estonia leaves nothing to be desired. But observe that the future opportunities will be dozens of times greater! In order to make use of those resources in an efficient and purposeful way, the development goals and priorities on long-term plane have to be set down clearly by Hiiumaa and Saaremaa already today. Of course, all municipalities have equal freedom to apply for financing, but yet it is clear that larger projects, prepared on professional level, will also have greater chances to succeed. I mean projects created in cooperation between municipalities and covering – why not? – the whole county. Both enterprises and municipalities have to make considerable efforts here, and settle for more efficient cooperation.

And I mean cooperation covering the whole of the Baltic Sea, not limited to one country. Hence the necessity to develop wider regional cooperation. We should avoid developments that would make the waters of the Baltic Sea an insurmountable barrier between us and prevent cooperation with regions that will remain outside the EU. First and foremost, I mean the regions of Russia bordering on the Baltic Sea.

The cooperation on the coasts of Baltic Sea should rest on three pillars: exchange of knowledge and transfer of best practices, environmental issues and protection of common interests on EU level.

In the framework of the Lisbon process, nearly every country has made detailed plans for domestic working programmes. Estonian Success 2014 concentrates all those activities that the Government wishes to carry out in order to enhance Estonia’s competitiveness, and regional cooperation plays a very important role there. Open cooperation enables all of us to learn not only from our neighbors’ mistakes but also from their success, to exchange knowledge and transfer and apply the best practices.

Sustainable economy as a goal of the Lisbon process means that in the course of regional cooperation, we shall not only develop industry and enhance competitiveness, but also consider environmental issues, trying together to look for solutions. Environmental issues can be addressed on several levels, all interconnected: the Baltic Sea level, the national level (e.g. the development of environmental technology in cooperation with enterprises), and the regional level. And only when working together and linking those levels to each other shall we be able to come to satisfactory results.

As the third aspect of our cooperation, I mentioned representing the interests of the Baltic Sea jointly on the EU level. I am very glad that the organizers of this meeting today set an example to us all. The Baltic Sea Seven Islands has from 1996 had a joint mission to Brussels, which has been successful in promoting the interests of the islands and explaining the priorities of the Baltic Sea to our partners. We should learn from their experience and I invite everyone, especially the entrepreneurs on our islands, to do so.

Thus, the Baltic Sea cooperation is not just an empty phrase. It has not been so in the past, and shall not be so in the future. It is our key to success. Only with a cooperation that is closer, more substantial and more energetic on national, regional, municipal and enterprise level can we make full use of the advantages of our region.

The Baltic Sea is the central axis of the economy of Northern Europe. Whether our region will be able to direct the economic developments also in the rest of Europe and in the whole world, depends on our ability to cooperate.

To conclude this address, I would once more like to thank Hiiumaa for hosting this forum – and both Hiiumaa and Saaremaa for representing all Estonia in this organization, and all of you for the opportunity to share with you my ideas on Baltic Sea cooperation.

I would also like to thank the City of Kärdla for your kind hospitality. Be just as brave in the future in representing your island and all Estonia! As a token of gratitude, and as a remembrance of today’s visit, I would like to deliver a gift to the Mayor of Kärdla – the national flag of Estonia, whose 120th anniversary shall be celebrated all over Estonia next year. Let these national colors always be flying over Hiiumaa!

Released on February 5, 2004

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