Transcript The Baltic States in the EU

The Baltic States in the EU
Prof. Dr. Mindaugas Jurkynas
Vytautas Magnus University (Kaunas)
Aim
• Critical thinking
• Better understanding of the EU and the Baltics
Plan
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The EU and Europeanisation
Why the EU?
The Baltic Way
Inside paradise?
The role of the EU Presidency
Eastern Partnership
Discussion: EU: pro et contra
EU in 5 minutes
• http://www.youtube.com/watch?v=sO75ZsvM
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EU Key Statistics
• http://epp.eurostat.ec.europa.eu/tgm/table.do?t
ab=table&plugin=1&language=en&pcode=tec001
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• http://epp.eurostat.ec.europa.eu/tgm/table.do?t
ab=table&init=1&plugin=1&language=en&pcode
=tec00115
• http://epp.eurostat.ec.europa.eu/tgm/table.do?t
ab=table&language=en&pcode=tec00118&tableS
election=1&footnotes=yes&labeling=labels&plugi
n=1
EU vs Others
37 300
27 800
24 700
10 793
10 035
10 000
6 400
3676
1 326
EU
China
468
Japan
Russia
Size of economy: Gross Domestic Product in
billion of euros, 2006
United States
EU
China
Japan
Russia
United States
Wealth per person: Gross Domestic Product
per person in Purchasing Power Standard, 2007
7
Enlargements
1952
1973
1981
1986
1990
1995
2004
2007
8
Europeanisation
• Europe: Ideas, values, politics, culture, organisational
principles and practices
• ‘Good’ Europe – democracy, human rights, tolerance, etc.
• ‘Bad’ Europe - bureaucracy, discrimination …Eurovision(?)
• Broad: Europeanisation is a change inside and outside the
EU – good governance, human rights, security standards,
abolition of death penalty
• Narrow: Download and Upload
• EU as norm entrepreneur
• What is European common denominator?
Post-Communist Transformation
Quadruple transition:
1.
2.
3.
4.
Market Economy
Democracy
Nation and State building
Transatlantic integration
Why Europe?
• 1995 Association agreements with EU, 1997-99 start of
negotiations, 2004 membership
• Come-back Home
• Security (soft) and “El Dorado”
• Cooperation, Joint-decision making,
• Active foreign policy (upload)
Estonia
• Estonia’s transition - liberal economic reforms and decisive
political independence.
• Membership in western organizations such as the EU and
NATO.
• Estonia has been more successful than its Balhigh
expectations tic neighbours.
• Accession to the EU and NATO has triggered of fast progress in
welfare and security in Estonian society.
Political developments
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After the collapse of the Soviet Union on
August 20, 1991 the Resolution on the National
Independence of Estonia was adopted.
• Estonia - a parliamentary democracy.
• Estonia’s central foreign policy goal was to join
the EU and NATO.
• Three priorities after the accession:
1. continuing the liberalization of the internal
market;
2. carrying out the action plan for the Growth and
Stability Pact in order to build a sustainable
economic basis for the EU;
3. Euro
Economic developments
• Estonia’s economic growth: economic freedom, inflation,
external trade.
• The long-term aim is to raise the income level close to the level
of the old EU member states.
• Radical economic reforms.
• Economic reforms: high-speed privatization, a liberal trade
policy, fixed exchange rate currency, balanced state budget.
• Rapid economic growth started in 2000–2001, as foreign
economic actors started to invest in greater numbers.
• Estonia created special stabilization reserves to prevent the need
for public loans in crises years.
• The EU has had a generally positive effect on Estonian economic
developments.
Social developments
• Social reforms have been conducted on liberal economic needs.
• Successful reform of the pension system, which consist of three pillars: low
fixed state pension pillar, income based second pillar and voluntary
contribution option.
• The healthcare system is mostly state-financed.
• Estonia has one of the highest levels of inequality in the EU.
• Long-term social problem - the integration of Russian-speaking minority.
• At the EU level the Estonia does not support common social security
initiatives, but support the initiative of a common European pension age.
• The Estonian labour market has been highly unstable.
Conclusions
• Fast reformer
• Euro
• EU – the best possible hope for building up the welfare
state and guaranteeing social security.
• Estonia’s transition process is internally seen a success
story.
• Estonia did well in institutional integration, achieving
political stability and economic liberalization, but has
been lagging behind in social development.
• But what is Estonia’s role today as a member state? Estonia as a ‘policy taker’, ‘potential policy taker’ or
‘conditional policy supporter’.
Latvia
- Latvia’s progress towards democracy and economic transition
after the renewal of its independence, its return to the
transatlantic space and adhesion to European Union.
- How EU policies and how Human and Material investments had an
influence on the Political, Economic and Social developments
(pre-accession and post-accession to EU)
- Level of Europeanization and Latvian people’s opinions about it
The main key-word characterizing Latvia’s attitude towards the
EU is, according to the author, AMBIVALENCE. (love/hate
relationship)
About EU matters : ambivalence and contradictions
• Since independence (04/05/1990) LV’s government had a pro-European stance
• This project only became clearer and started in 1994, after the departure of the
Russian Military Forces
• Great discontent and disappointment when Estonia was the only one invited to
fulfill the Copenhagen criteria in 1998.
- Latvia had still a slow pace of implementation of the citizenship law (noncitizens)
- Had an insufficient anchorage in the market economy, establishment of
democratic institutions and public administrative capacity
- High risk of corruption
- Baltic mutual coordination was not seen as a significant factor to allow all
3 Baltic
states to be treated as a unit
• Contradiction between the Eurosceptical mood of the population and the
politicians who have to take pro-European decisions.
EU’s attractive and negative aspects, according to Latvians
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Logic of historical development
Will to escape from sequestration (“closed
doors”) and move toward democracy
EU democratic states were acknowledged
as models during the occupation and after
independence
Conditionality of EU is accepted by
politicians and society as a rule to
transformation
After the adhesion, the GDP growth rates
increased rapidly (12%) and salaries
doubled or tripled in some sector,
compared to the year prior of accession
New experience, transition from socialism
to democracy, changes seen for the best
Latvia’s experience of Sovietism was
required to help ex-Soviet countries
(European Neighbourhood policy). The
Baltic states are seen as a role model by
contributing to the development of
democracy and juridical institutions
(Moldova, Ukraine, Georgia…)
More intensive Baltic states’ cooperation
(EU matters)
Baltic and Nordic countries’ cooperation
Relations with Russia became more
pragmatic
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• EU integration policy seen as a threat
to National Sovereignty
• Latvia’s fate was once decided by
Moscow and now by Brussels
• Limited experience of independence
(1918-1939)
• Lack of comprehension, faith and
interest in EU activities, doubt that the
EP would change anything for the better
• When the global crisis triggered in
2008, membership has restricted Latvia
from personal manœuvre (the elite was
not prepared). Fell to the bottom
2- Economic developments
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Wanted to be incorporated into economic relations with Europe and the Western
world
Overcome an unilateral dependence on the former USSR market. Economic
structures have been reorganized in a relatively short period
Reduced agriculture (forestry, fishery…) and industry. Increased the services sector
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By the enlargement all sectors had stabilized their position in economic structure.
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Minor fluctuation, except for construction
• Stimulation of imports/exports (exports mostly directed to EU)
Positive and negative aspects
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Success story. “Tiger”
From 2004-2007, the increase of
foreign investments in Latvia’s economy
were 4 times higher than in 2000. 80%
of them are from EU member states.
Investments per employee increased
from 3000 € in 2004 to 6000 € in 2007
Loans available through banks
Growing emphasis on interventionist
measures in economic and financial
policy
Anticipate
security
based
on
transparency,
mutual
openness,
interdependence
and
mutual
vulnerability
Export stability
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• Latvia’s economy is too small, unstable
and uncompetitive
• Fear to be taken over by foreign companies
• Had no opportunity to go through the
“normality” of EU integration, because four
years after accession life under a “crisis
regime” began
• Lack of trust in the Common European
Currency. People tend to think that euro will
not bring any economic benefit to the
country. (Only 36% of people think it should
be introduced)
3. Social developments
Two main issues Latvia had to deal with after the renewal
of independence was the problem of citizenship, due to
the complexity of its very special ethnic composition
(non-citizens and dual citizenship) and emigration.
Emigration/immigration
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Black sheep in LV/EU relations. Negative attitude towards immigration.
Free mvt of labor is seen as suspicious (flooding of workers during the Soviet period)
Dangers to the stability of labor market, identity, security…
In 2002, 67% feared that foreigners would buy up land, 70% that foreign manufacturers would
squeeze out locals, 58% feared an influx of refugees to LV, 64% feared that LV producers might
lose their market share in other countries.
Not a very large amount of migrants in LV, most of them come from the ex-soviet bloc, Turkey
and India
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BUT, when EU came out with proposals to restrict the movement of workers from the new
member states, Latvia perceived it as a discrimination and a lack of solidarity.
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Most Latvians are leaving for UK or Ireland. At first the government thought they would come
back, believing that the sense of belonging would be stronger and more important than
material values. Emigrants proved them wrong.
In 2005, 50,000人 had left the country and since then 80,000~100,000人 (600人/month)
Lack of labor force, families left behind (social pbs, children not attending school…), threat to
Latvian culture and language (accommodation to their new life, influence
of English in the language…)
NO RETURN
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Negative demographic indicators : low birth rate (0,4% of increase/year)
Elderly people (>60 years old) : 33,8%
Positive and negative aspects of the accession
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Good for the development of democracy
and welfare
Possibility to travel and study abroad,
individual experiences
Nostalgia. Appreciation of Latvian culture,
more interests in national traditions and
values.
Free flow of information to spread western
societies’ features in LV
Juridical base put in order (modernized
rules, new laws)
International commitments are observed
Citizens have a better access to the
defense of their rights through specialized
agencies
Improvement of social inclusion
Rise in the accumulation and use of the
social capital
•Fear of external environment, insecurity
• Loss
of
sovereignty,
socially
and
economically fragile
• Inability to compete with older EU member
states
•Risk of poverty is still high (esp. families w/
children). 26% of LV under the poverty line
(267€/191LVL per month)
•Insufficient financing of social policies
(unemployment increases)
• Social questions are not a priority (lack of
interest or economic crisis ??)
CONCLUSION
• Considerable progress (law/judiciary)
• Stable economic structure, which is a characteristic of a
country open towards competitiveness
• Better recovery from the crisis thanks to membership
status
• Progression towards euro
• Modernization of agriculture, successful source of exports
• Migration and ethnic composition: very complex
• EU support for Education and Science
• EU support of the preservation and development of Latvian
national culture and language (greatly appreciated)
• Society trusts a bit more EU institutions (getting better)
Lithuania
• Is Lithuania a part of Europe which corresponds to
Western model of state governance?
• Lithuania’s post-Communist transition politics.
• Lithuania’s Europeanisation.
• Lithuania’s opinion on its EU membership.
• The great challenges for Lithuania after Big Bang of
2004.
Post-Communist transition:
• The reestablishment of Lithuania's independence on
March 11, 1990.
• Adoption of Constitution, 1992.
• Multiparty system emerged.
• Necessary structural reforms, including commitment
to democracy, maket economy and human rights.
• Withdrawal of Soviet military in August 1993.
• Introducing of a national currency (Litas, 1993) and
the Currency Board (1994).
• Main goal – transatlantic and European integration.
Positive effect of market economy – foreign direct
investment
Foreign direct investment, 1997–2004, billion €
Billion €
3,804
4
Source:
Statistical
Office of
Lithuania
2,694
3
1,876
2
1
3,953
3,077
2,381
1,201
0,808
0
1997
1998
1999
2000
2001
2002
2003
2004
Year
Annual GDP growth, 1991–2004, %
%
20
10
Source:
Eurostat,
http://epp.eu
rostat.ec.euro
pa.eu/
0
1990
-10
1992
1994
1996
1998
2000
2002
2004
-20
-30
Year
Difficulties of post-Communist
transition: rampant inflation
Inflation in Lithuania, 1993–2004, %
%
500
410,2
400
300
200
72,2
100
0
1992
39,7
1994
24,6
1996
8,9
5,1
1998
0,8
2,7
2000
3,7
5,7
2002
10,9
4,5
2004
Year
Source:
Statistical Office of Lithuania
Decreasing living standards and high unemployment
Gini index in Lithuania, 1988–2004
0,3603
0,4
Source:
World
Development
Indicators
Database
0,3
0,34
0,23
0,32
0,31
0,32
0,23
0,36
0,34
0,31
0,2
0,1
0
1988
1990
1992
1994
1996
1998
2000
2002
2004
Year
Unemployment in Lithuania, 1991–2004, %
%
20
Source:
Statistical
Office of
Lithuania
14,6
16
16,4
13,8 12,4
13,2
12
7,3
8
3,6
4
17,4
11,4
6,2 6,7
4,5
3,4
0,3
0
1990
1992
1994
1996
1998
2000
2002
2004
Year
... also:
• Bankruptcies in the banking sector.
• Nomenclature-favoured privatisation.
• Policy oriented towards big business
• Corruption.
Europeanisation: downloading process:
• An official membership application in December
1995.
• Transferring of aquis communautaire.
• Corresponding to the Copenhagen criteria.
• Decommissioning of the Ignalina nuclear power
plant.
Are Lithuanians pro-European?
Opinion on the Lithuanian membership in the EU, 1999–2004 and
2004–2010, %
%
Joining the EU
90
82
80
70
75
70
69
17
16
68
75
65
69
71
15
17
60
47
50
40
30
38
49
35
26
26
33
22
20
14
20
14
15
8
10
0
1999 2000 2001 2002
01
03
01
03
Source:
“UAB Vilmorus”
2003 2004 2004 2005 2006
01
05
10
06
05
For
Against
2007 2008 2009 2010
06
10
07
08
Year, month
Joining the European Union, 2004:
• “Return to Europe” or “return home “.
• Enhanced security and modernisation (participation
in joint decision making at EU level).
• Participation in Single European Market (the EU’s
four freedoms).
• A way to suppress nationalistic views among rightwing radical politicians.
Europeanisation: uploading process:
• Lithuania as “a regional centre of cooperative
initiatives” with Poland, the Baltic States and the
Nordic countries.
• Close relationships and cooperation with the USA.
• Support for further integration within the EU (the
EU’s Reform treaty).
• Raising energy security issues (need of “speaking in
one voice”).
• Lithuania as an exporter of European norms and
experiences to Eastern neighborhood.
Positive effect of EU membership:
• The EU’s financial support stimulated annual GDP
growth by an additional 1 %.
Annual GDP growth, 2005–2010, %
%
20
10
7,8
7,8
9,8
1,3
2,9
Source:
Statistical
Office of
Lithuania
0
2005
-10
-20
2006
2007
2008
2009
2010
-14,7
Year
• Indirect negative effect via stimulated economic
growth – Balassa-Samuelson effect.
• However, one of the main problem – emigration
(between 2004–2009 over 168 000 people emigrated).
The great challenges:
• The Baltic states are “closed energy island”:
– the prevailing import of primary energy resources
from Russia;
– the dependency of gas supply on Russia;
– the fact that there are no interconnections with
the energy systems of Western Europe.
• “Speaking in one voice”.
• Positive factors are emerging.
Electricity interconnections with Sweden (NordBalt) and
Poland (LitPol Link)
• An important step towards integration to
competitive and integrated EU internal market.
a
The New Nuclear Power Plant – a response to the
current energy insecurity in the Baltic region
• This is also efforts to satisfy future electricity
demand.
• ... and European Union efforts to combat climate
change.
Liquid natural gas (LNG) terminal and Lithuania–Poland gas
pipeline – a need for diversification
• Lithuania is totally dependent on imported gas from
Russia.
• LNG terminal and Lithuania–Poland gas link – a
response to Russia’s attempts to use energy export s as
a tool for political pressure.
Context
–Periphery
–Russia and Geopolitics
–External border
–Energy security
Getting used in “paradise”
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Schengen – Yes
Euro – No
European Neighbourgood – Yes
Energy security – No
EU-Russia relations – No/Yes
Votes in the Council of the EU
Majority voting:
255 votes out of 345
14 out of 27 states
62 proc. ES inhabitants (305 586,3)
From 2014:
55 proc. States
65 proc. Inhabitants
Lithuania’s Political Weight
• Votes in the Council of the EU - 2,03%
• EU Parliament seats - 1,63%
• Commissioners, auditors, judges – 3.7 %
• Lithuanian GDP - 0,14% EU GDP
• Lithuanian inhabitants - 0,71 % EU
Lithuanian EU Presidency priorities
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External Borders
Energy Security
Eastern Partnership
Baltic Sea Strategy
Baltic EU policy future vectors
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Networking
Growth and development
Value convergence
Security and Stability eastwards
European Challenges and the Baltics
• Euro zone, Economic sustainability and
Competitiveness
• Enlargement
• Sustainable energy and climate change
• Migration
• Big powers
• Liberalisation of service sector
• Evaluation of totalitarian regimes
Eurosceptics on Commission
• http://www.youtube.com/watch?v=YWSYMpu
CFaQ
Eastern Partnership
• Essence – Faster reforms in democracy and rule of
law, move closer to the EU
• Reward for progress: Free-trade and visa free
travel and sectoral cooperation for the beginning
– more fore more
Armenia € 98.4 million;
Azerbaijan € 92 million;
Georgia €120.4 million (additional funding up to € 500
million will be available to cope with the consequences
of the war in Georgia in August 2008),
Moldova € 209.7 million;
Ukraine € 494 million
Challenges for the Eastern Partnership
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Enlargement fatigue
Performance of Eastern Partnership countries
Russia
Southern EU neighbours
Limited Resources
EU: EP – non-zero-sum, EP countries – zerosum
Baltic Role
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Values and interests
Small states, soft power and norms (Nordic?)
Baltic experiences and knowledge
Where else to go?
What is it we want?
The aim is to create a ring of friends and bring those
countries closed to the West via dialogue
Lithuanian Presidency and Ukraine
• Signing EU-Ukraine Association Agreement and
the start of the Ratification
• Finishing association and free trade agreements
with Moldova and Georgia (perhaps signing)
• Visa liberalisation with Ukraine and Moldova
• Progress with Armenia in Association agreement
• Visa facilitation and readmission with Armenia
and Azerbaijan
Ukraine and EU
• Ukraine is an essential country for reforms in
the Eastern Partnership region
• 2012 EU Council conclusions: Association will
be in case of a progress in selective justice,
election reforms, and general reforms (19
guideline roadmap)
• Ukraine’s reforms lag behind Georgia’s and
Moldova’s
• Ukraine “sits on two horses” – no go
Ukraine and EU
• EU dilemma: strict conditionality or green light
“to help Ukraine to mount just one horse”
• Visegrad and the Baltics: losing Ukraine means
the end of EP
• Association agreement gives obligations
• Nordic states and Benelux oppose
• UK absent
• Germany, Sweden and Poland as a bridge – new
suggestions for Ashton
Ukraine and EU: what can be done?
• Coalition of the willing in the EU
• More networking on political, university,
intellectual, NGO level, media
• Positive message for the opposition
• Strict message to the ruling elite and oligarchs
– how deep is your ‘love’ to Russia?
• We need more …the US
• We need a strategic patience