1. The Baltic States in the EU
Prof. Dr. Mindaugas Jurkynas
Vytautas Magnus University (Kaunas)

2. Aim
Critical thinking
Better understanding of the EU and the Baltics

3. Plan The EU and Europeanisation Why the EU? The Baltic Way
Inside paradise?
The role of the EU Presidency
Eastern Partnership

4. Discussion: EU: pro et contra

5. EU in 5 minutes

6. EU Key Statistics

7. EU vs Others
37 300
27 800
24 700
10 793
10 035
10 000
6 400
3676
1 326
468 EU
China
Japan
Russia
United States EU
China
Japan
Russia
United States
Size of economy: Gross Domestic Product in
billion of euros, 2006
Wealth per person: Gross Domestic Product
per person in Purchasing Power Standard, 2007 7

8. Enlargements
1952
1973
1981
1986
1990
1995
2004
2007
Kas bus toliau? Ar reikia Turkijos ir Ukrainos? 8

10. 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?

11. Post-Communist Transformation
Quadruple transition:
Market Economy
Democracy
Nation and State building
Transatlantic integration

12. Why Europe?
1995 Association agreements with EU, start of negotiations, 2004 membership
Come-back Home
Security (soft) and “El Dorado”
Cooperation, Joint-decision making,
Active foreign policy (upload)

13. 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.

14. Political developments
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:
continuing the liberalization of the internal market;
carrying out the action plan for the Growth and Stability Pact in order to build a sustainable economic basis for the EU;
Euro

15. 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.

16. 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.

17. 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’.

18. 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)

19. 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 (non-citizens)
- 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.

20. EU’s attractive and negative aspects, according to Latvians_ +
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
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 ( )
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

21. 2- Economic developments
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
By the enlargement all sectors had stabilized their position in economic structure. Minor fluctuation, except for construction
Stimulation of imports/exports (exports mostly directed to EU)

22. Positive and negative aspects+
Success story. “Tiger”
From , the increase of foreign investments in Latvia’s economy were 4 times higher than in % 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 _
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)

23. 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.

24. Emigration/immigration
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
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.
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
Negative demographic indicators : low birth rate (0,4% of increase/year)
Elderly people (>60 years old) : 33,8%

25. Positive and negative aspects of the accession_
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 ??) +
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

26. 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)

27. 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.

28. 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.

29. Positive effect of market economy – foreign direct investment
Source: Statistical Office of Lithuania
Source: Eurostat,

30. Difficulties of post-Communist transition: rampant inflation
Source: Statistical Office of Lithuania

31. Decreasing living standards and high unemployment
Source: World Development Indicators Database
Source: Statistical Office of Lithuania

32. ... also: Bankruptcies in the banking sector.
Nomenclature-favoured privatisation.
Policy oriented towards big business
Corruption.

33. 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.

34. Are Lithuanians pro-European?
Source: “UAB Vilmorus”

35. 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 right-wing radical politicians.

36. 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.

37. Positive effect of EU membership:
The EU’s financial support stimulated annual GDP growth by an additional 1 %.
Source: Statistical Office of Lithuania
Indirect negative effect via stimulated economic growth – Balassa-Samuelson effect.
However, one of the main problem – emigration (between 2004–2009 over people emigrated).

38. 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.

39. Electricity interconnections with Sweden (NordBalt) and Poland (LitPol Link)
An important step towards integration to a competitive and integrated EU internal market.

40. 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.

41. Lithuania is totally dependent on imported gas from Russia.
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.

42. Russia and Geopolitics External border Energy security
Context
Periphery
Russia and Geopolitics
External border
Energy security

43. Getting used in “paradise”
Schengen – Yes
Euro – No
European Neighbourgood – Yes
Energy security – No
EU-Russia relations – No/Yes

44. Votes in the Council of the EU

45. Majority voting: 255 votes out of 345 14 out of 27 states
62 proc. ES inhabitants ( ,3)
Atkreiptinas dėmesys, kad norint priimti sprendimą kvalifikuota balsų dauguma visos trys sąlygos yra privalomos, t.y. praktikoje, paprastai, yra skaičiuojama ar susidaro blokuojanti balsų mažuma. Tuo atveju, jei šalis narė ar jų grupė nesutinka su siūlomu sprendimu ir nori, kad ES teisės akto projekto tekstas būtų papildytas ar pakeistas – būtina suformuoti blokuojančią mažumą, priešingu atveju, jos, paprasčiausiai, bus „išbalsuotos“.

46. From 2014: 55 proc. States 65 proc. Inhabitants
Taip, iš ties, sistema nėra paprasta, tačiau neišsigąskite, jei nesuprantate, kaip ES Tarybos posėdyje reikės greitai paskaičiuoti ar yra pakankama kvalifikuota balsų dauguma, ar ne – tuo tikslu jau dabar yra sukurtos kompiuterinės programėlės palengvinančios mūsų darbą  , jas galima rasti ir įvairiose elektroninėse svetainėse ES tema.

47. 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

48. Lithuanian EU Presidency priorities
External Borders
Energy Security
Eastern Partnership
Baltic Sea Strategy

49. Baltic EU policy future vectors
Networking
Growth and development
Value convergence
Security and Stability eastwards

50. 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

51. Eurosceptics on Commission

53. 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

54. 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 € million;
Ukraine € 494 million

55. Challenges for the Eastern Partnership
Enlargement fatigue
Performance of Eastern Partnership countries
Russia
Southern EU neighbours
Limited Resources
EU: EP – non-zero-sum, EP countries – zero-sum

56. Baltic Role 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

57. 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

58. 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

59. 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

60. 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