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European Integration Moves Forward: The Three Seas Initiative

European Integration Moves Forward: The Three Seas Initiative

Since 1945, the United States has promoted European economic, political, and energy integration, and one recent way it has promoted these goals is by supporting the Three Seas Summit and Business Forum, which took place in Bucharest, Romania, on September 17-18 this year. The Three Seas Summit is a flexible, informal, presidential political platform launched in 2015 and now comprises all states between Germany and the former Soviet Union as well as the Baltic states.

The Three Seas Initiative aims to stimulate faster regional development bracketed by the Baltic, Black, and Adriatic Seas through multilateral commitment by boosting connectivity among member states, with special focus on infrastructure, energy, and digital interconnectivity. Thus, its overarching rationale is achieving real convergence and integration among EU member states as well as enhanced EU unity, cohesion, and coherence. American involvement is also crucial as it provides security through NATO and catalyzes strengthened cooperation. President Donald Trump’s attendance at the 2017 summit in Warsaw demonstrates American support for these goals. In particular, Trump emphasized several crucial infrastructural projects across this area: the floating LNG terminal on Croatia’s Krk island, the Greece-Bulgaria Interconnector, and the Bulgaria-Romania, Hungary-Austria (BRUA) pipeline bringing gas from the Black Sea to Central Europe

Integration Projects

The Bucharest summit listed many projects in its digital, energy, and communications priorities. Regarding energy, it emphasized building or completing projects that will tie Central and Eastern Europe together and lead energy flows to Italy and Germany. And their emphasis fully conforms to President Trump’s priorities.

These plans and projects strengthen regional cooperation, integrate members more closely with the EU, create enormous economic opportunities, enhance their internal resilience, weaken Russian efforts to use energy against them, and generate powerful forces of attraction pulling Ukraine into closer integration with Europe. This strengthens Ukraine domestically and enhances its capability for eventual EU membership. These projects also buttress the EU despite the severe attacks against it.

However, to actually produce the desired outcomes, it is necessary to move from plans and rhetoric to implemented projects and doing so requires credible financing. In this vein, the Bucharest Summit signed a letter of intent to create an investment fund. With this in mind, the simultaneous Business Forum meeting encouraged businesses from member states, the EU, the U.S., and neighboring non-member states to forge direct contacts with international financial institutions and each other to find new business and investment opportunities The Forum will devise economic criteria to assess projects’ compatibility with the EU’s policies, decide which projects should be pursued to attract other states that are not members of the initiative, and focus on projects that integrate economic actors into truly multilateral cooperative projects. It also will prioritize projects already included in different EU programs and project priority lists. Last, the Forum created a network of Chambers of Commerce from participating states to bring together key economic actors to support the Forum’s activities and coordinate multilateral projects emphasizing existing or new interconnectivity projects in the Three Seas area, in particular in the fields of transport, energy, and digital.

Combatting Russian Leverage

Therefore, this summit’s clear purpose, as Romanian President Klaus Iohannis indicated, was to move from declarations to concrete, economically credible, and financially supported programs having maximum visibility and economic-political payoffs for all concerned. Obviously, to reach that goal, Washington, Brussels, and Berlin must support the initiative and these specific projects. Given the emerging opportunities for supplying Europe with gas from non-Russian sources, if tangible progress can be made in building further interconnectors across Eastern Europe, we could see over time a multi-country network bringing energy to Europe from producers other than Russia. That outcome would reduce Moscow’s ability to use energy as a corrupting and leveraging instrument of power and policy. Infrastructures and pipelines connecting suppliers to producers and terminals, like the existing terminals in Poland, Croatia, and Lithuania, would reduce Russian leverage and encourage the development of a European and/or Eurasian gas market where gas becomes nothing more than a freely traded commodity, not a political weapon.

The recent EU-U.S. agreement on talks to reduce all tariffs and trade barriers on all non-automotive industrial goods demonstrates the EU’s desire to import more U.S. liquefied natural gas (LNG). That desire fully comports with the Trump administration’s ambitions to export more gas to Europe. Moreover, this U.S. policy also entails providing support for U.S. oil companies to help other countries develop their own resources as Exxon is now doing with Romania.

Admittedly, there are obstacles to greater U.S. shipments beyond Russian resistance and support for Russia. Many, if not most, of the members of the initiative are landlocked, so U.S. exports cannot reach them directly. This issue highlights the need for interconnectors connecting these countries to terminals like those in Poland, Lithuania, and Croatia or for building pipelines like the BRUA that will connect countries to non-European suppliers. Second, U.S. prices exceed Russian prices. Nevertheless, such exports, even where they do not displace Russian supplies, force other suppliers like Russia to slash prices as Gazprom did by 20% for Lithuania due to the credible threat offered by U.S. competition. And reportedly other prices on European contracts fell due to America’s presence in the European gas market.

Thus, even if consumers still buy Russian gas, their terms are better, prices are cheaper, and economic leverage vis-à-vis Moscow is enhanced. Therefore, this initiative could enable Central and Eastern European states to do what they need to do to lower energy costs and their dependence upon Russia.

The U.S. too must relieve legislative and administrative obstacles to gas exports, build more terminals, and make its price more competitive with those of Russian and other suppliers. Current trend lines and the building of the kinds of infrastructure supported by this initiative and the existing Croatian, Lithuanian, and Polish terminals will help materialize these outcomes. Indeed, U.S. LNG has already gone to Poland and Lithuania, and the Polish and U.S. governments are discussing a long-term agreement on U.S. gas supplies for Poland.

While it may be too late to stop the Nord Stream II pipeline through the Baltic, this initiative’s projects, combined with the globalization of gas production and U.S. support, could mitigate that pipeline’s negative political and economic consequences.

Ultimately, if the ideal of a purely commercial market is reached, Russia can continue supplying anyone who wants its gas and there will be many takers for it. But the political leverage it has gained will decline over the long term if the projects associated with this initiative are successfully implemented.

Stronger Ties to the United States

The strong American delegation at the Bucharest summit shows that Washington grasps the organizers’ objective of having U.S. support catalyze stronger transatlantic economic, political, and military ties given the threats to the organizers of the Summit and the overall initiative.

For example, Romania acutely understands that Russia’s seizure of Crimea and its buildup in the Black Sea makes its maritime zone contiguous to that of Russia. This development puts it at great risk from both maritime operations and land attacks to the Dniester or beyond. Indeed, the treaty on Crimea’s annexation to the Russian Federation states that “the demarcation of Black Sea territorial waters is established based on the international treaties made by the Russian Federation.” According to the Munich-based expert, Vladimir Socor, “This vague wording appears to imply that Russia deems the agreements made with Ukraine on territorial demarcation with other countries are no longer valid, and suggest that Russia might try to negotiate and modify the current demarcation agreements.”

Thus, Romania now experiences “periodic threats of annihilation for hosting American ballistic missile defense, exercises simulating Romania’s invasion, and repeated violations of air (and naval) space.” But Russian pressure is not confined to military threats either by land through Transnistria and Moldova or by sea and air from the Black Sea. Russia’s maritime and other incursions or probes apparently also target Romania’s efforts to secure its energy independence and integrate with Western energy institutions and companies.

But this initiative responds to those threats. At a time when the linked projects of the democratic integration of Europe and the Transatlantic Alliance face constant attack, the Three Seas Initiative displays the members’ abiding faith in the viability and vitality of those projects. Therefore, those projects contain classical American interests: free markets, democratic polities, and European integration and peace. Russia’s efforts to sponsor coups in Montenegro and Macedonia, its aggression in Ukraine, and threats to Romania demonstrate what Europe can expect if this initiative or similar ones fail for lack of support. Today, from the Black Sea to the Baltic Sea, Europe faces myriad threats many of which are either aggravated by or directly caused by Russia. This initiative and projects associated with it deserve staunch, bipartisan, and enduring U.S. support.

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