COMMENT: The enigma of the Three Seas Initiative

COMMENT: The enigma of the Three Seas Initiative
Officials from the Three Seas Initiative members meet in Poland in May 2017.
By Max Kratschke of ViennEast May 2, 2018

Since its announcement in August 2016, the Three Seas Initiative (TSI) has proven itself to be a dark horse, raising more questions than it has answered. 

The TSI’s foundation was driven forward primarily by Poland and Croatia. The member states comprise, broadly, the eastern part of the EU: Austria, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. At its basis, it is a declaration with the official aim of facilitating cooperation between the 12 member states in terms of infrastructural and economic development, with no political element involved. The focus has been on energy diversification and improved transportation and communication links. 

The two major concrete projects thus far are the Via Carpathia and a liquid natural gas (LNG) infrastructure project. The Via Carpathia consists of a connecting highway that will reach from the Lithuanian seaport Klaipeda to the Greek trading hub of Thessaloniki on the Aegean coast. This project is noteworthy because the CEE region has poorly developed north-south transportation infrastructure, contrasting with the relatively well-developed east-west connectivity that is the result of German economic dominance. 

A second major project that is actively underway involves LNG. There is presently one operational LNG terminal in Poland and a second terminal will be completed in Croatia in 2019. The project involves the construction of distribution pipelines across the TSI member countries, with the aim of providing an alternative energy source to Russian gas. Most of the TSI states are heavily dependent on Russia for their gas supply, with the Nord Stream 2 pipeline expected to further exacerbate this situation. Diversification of gas sources would improve energy security and have the added potential impact of reducing Russian politico-economic leverage. 

Beware Poles bearing gifts?

From its outset, the TSI has generated suspicions that it is a vehicle for Polish geopolitical interests. Such suspicions were reinforced by some Polish news articles referencing the Intermarium — a Polish initiative during the inter-war period that unsuccessfully sought to forge an alliance of CEE countries against Germany and Russia — and the public political disputes between the Polish government and the European Commission. Elsewhere, Russian state-controlled media has similarly perpetuated the idea that the TSI is a veiled attempt to subvert the EU. 

The TSI participating states have emphasised that it is purely focused on non-political cooperation. Indeed, the large number of participating nations with diverse political orientations — which has been construed as a weakness by many pundits — may turn out to be a blessing in disguise, preventing the participating nations from coming to political agreements and thus impeding potential politicisation. 

The view from Brussels

The European Commission has kept its silence on the TSI, offering neither support nor opposition. Active support for an independent purely CEE-focused project would be novel, although it could improve Brussels’ insight and influence over ongoing projects, especially from a funding perspective. Although the modalities of Commission support could vary, should the Commission seek to bring the TSI within the wider EU remit, it would also reduce the influence of individual TSI participants and grant the TSI the mantle of being a legitimate EU project, rather than laying it open to accusations of being a rogue initiative used by recalcitrant members seeking to divide the EU. 

Moreover, since the TSI is an unofficial declaration, with no binding legal structures in place, it runs the risk of losing momentum and stagnating into meaninglessness if participating states lose their motivation to contribute. Thus far, the TSI is mostly funded by the participating states themselves, with little private investment. If the EU were to officially support the TSI, this would strengthen cohesion, motivate participating states to commit and thereby provide greater investor certainty. 

The European Commission’s white paper from 2017 references a scenario of an EU where those member states “who want more, do more”. It states that “coalitions of the willing” may arise to work together in chosen domains. In fact, the TSI could easily be seen as an example of such a coalition; thus, supporting initiatives like the TSI may actually prevent the EU from splintering into different tiers and keep all member states actively engaged. 

In this sense, the TSI is a coming of age of the CEE member states, which are collaborating on an intergovernmental level to achieve common goals. By officially endorsing the TSI and supporting it financially and organisationally, the EU would not only strengthen the initiative, but also be able to reduce the likelihood that the TSI becomes politicised, while helping to maintain its focus on matters of economic and infrastructural cooperation, providing a much-needed boon for the CEE region. 

Max Kratschke is a risk analyst at ViennEast, a Vienna-based business risk advisory specialised in CEE.