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Specific sub-regional cooperation among the EU states has been acknowledged only during the last decade: i.e. in 2009 the first EU strategy for the countries around the Baltic Sea area was adopted, which presently successfully integrated into its agenda the sustainability, digital and circular economy issues. Presently, regional and local authorities in the Baltic Sea states, including decision-makers, businesses and citizens are trying to cope with the modern challenges.
The EU Strategy for the Baltic Sea Region (EUSBSR) is the first among the EU coordinating efforts to intensify local/regional communities in resolving issues of common interest. The Baltic Sea region has enormous potentials for the whole Europe: it is the place for about 80 million inhabitants, it “unites” eight EU states: Denmark, Estonia, Finland, Germany (with its four northern territories), Latvia, Lithuania, Poland and Sweden; besides, Norway and Russian Federation participate in the strategy’s implementation; the latter was suspended due to invasion into Ukraine.
The regional issues are very popular among European readers: i.e. over one million hits in the EU regional policy’s website!
The last pre-pandemic “regular”10th annual forum was held in Gdansk/Poland in June 2019 and was devoted to smart specialisation strategy’s issues; other forums were conducted online. The forum sketched for the subsequent years the following main objectives: a) “save the sea”, b) “connect the region”, and c) “increase prosperity”; with a dozen of additional sub-objectives, 13 specific policy areas and 4 horizontal actions. Through the last decade of intensive cooperation, 77 projects have been completed and 94 are still in the implementation stages.
More on the EUSBSR in: Eteris E. Comprehensive EU strategy to target urgent regional challenges. In: http://www.baltic-course.com/eng2/modern_eu/?doc=149719&ins_print.
EU regional policy through macro-regional approaches
First of all, it is vital to remember that only about a decade ago politicians realised the need for an additional “tool” in the EU integration besides its “regular” socio-economic policies called macro- or sub-regional strategies. These strategies are in line with the EU’s general policies on regional development following the EU priorities in integration: e.g. in jobs and growth, digital single market, energy and climate, industrial development, migration issues, etc. However, there are some spheres that needed additional attention and common efforts from the sub-regional communities’ perspectives. The regional “influences” have grown from the lack of state governance to take a proper stand on local issues; these activities are supported by the EU institutions as well.
Second, the “additional tool” in EU’s integration in the form of sub-regional strategies, like the EUSBSR and three other, has been acknowledged as a vital impetus into the European general socio-economic integration and cohesion processes. Although these strategies do not have fixed budgets, the sub-regional cooperation is supported through various EU funds, as the regional policies are aimed at strengthening economic, social and territorial cohesion in order to reduce disparities between the levels of development of the various regions and the backwardness of the least favored regions, with a particular attention to rural areas and regions (art 174, TFEU).
Thus, to deliver on these objectives, Commission’s DG Regio provides support through the “financial interventions” by the European Regional Development Fund and the Cohesion Fund, together with the European Structural and Investment Funds; the latter include European social fund, European Agricultural Fund for Rural Development and European Maritime and Fisheries Fund. For example, in the previous EU long-term financial period 2014-19 the “regional funding” accounted for about one-third of the total, or about € 45 billion a year; more on present financial interventions below.
Reference to: https://ec.europa.eu/info/sites/info/files/file_import/regio_aar_2017_final.pdf
Third, the need for a “macro-regional” approach stems from the necessity for more coordinated efforts towards common problems that could not be solved by states alone. Eight EU states around the BSR wanted their regional and local communities to be more active in resolving some urgent issues. European Commission underlined that the EUSBSR has been a unique framework to address common challenges and inspiring introduction of perspective “functional areas” in strengthening territorial cooperation as a vital dimension of cohesion policy.
More on the Strategy’s importance in: “Better together-10 years-EU strategy for the Baltic Sea region. – Polish Ministry of Foreign Affairs publication, Warsaw, 2019. – 66 pp.
Fourth, the EUSBSR can address most urgent contemporary issues in an expert-like manner without administrative red tape. The latest spheres of cooperation included the circular and sharing economy issues, which are closely linked to the UN SDGs and serve as an important guidance in promoting these issues into the regional and local authorities’ agendas with the corresponding changes in political economy decision-making.
Baltic Sea region: EUSBSR’s lessons
The efficiency of the macro-regional cooperation and finding “common paths” to reduce national discrepancies while increasing competitiveness have been at the attention of the regional authorities in the Baltic Sea region (BSR) during last two decades. Actually, the idea of the “Baltic Europe” has been for the first time revealed to the European Parliament in 2006; already in June 2009 the strategy and the action plan (the first macro-regional strategy in the EU) were endorsed by the European Council with the final adoption in October 2009.
Interesting enough, already in 2014 the Commission published a report on the improvements in the governance models for the macro-regional strategies: e.g. “smart” and “green” growth issues (the items of the EUSBSR Copenhagen-2012 forum), which were in the EU priorities have been adopted as the BSR’ developmental goals in 2014. Hence, the EUSBSR’s forums have been constantly following the main EU policy’s guidelines: e.g. digital issues were in the work of Tallinn-2018 forum, as well as Gdansk-2019 forum with the issues of sharing/circular economy and 3S strategies, which have been at the same time within the EU political priorities.
Cooperation in the BSR, in principle, is “intergovernmental”: the member states are responsible in implementing the EUSBSR objectives; however the overall success of the strategy depends to a large extent on the member states.
See more in: Better together: 10 years EUSBSR, the booklet published by the Polish Foreign Affairs Ministry.
The EUSBSR has a multi-level governance structure: the states have national coordinators (in policy areas and in horizontal actions), which are linked to High Level Group consisting of senior civil servants from the states (formulating strategy’s policy), whereas the EU monitors the strategy and action plans’ implementation.
More in: Eteris E. Circular economy’s priority in the 10th EUSBSR Forum. In: http://www.baltic-course.com/eng2/modern_eu/?doc=149881&ins_print.
The last (due to pandemic) face-to-face EUSBSR forums were dealing with some sub-regional important problems for the three Baltic States: Latvia, Lithuania and Estonia. Thus, in regional perspective ideas from macro-regions and interregional cooperating (the competence of the DG Regio) the following most important directions in the Baltic Sea states macro-regional cooperation have been mentioned: innovations, resource efficiency, closer connections among the regions, attention to the European Semester issues*), more efficient use of regional funds, as well as Interreg issues, etc.
*) Note: on the European Semester’s issues, see: Eteris E. “Spring-2019: European economy’s account”, in: http://www.baltic-course.com/eng2/modern_eu/?doc=149746&ins_print
Climate change, circular economy and the SDGs are presently in the main directions in the EU’s policy agenda; therefore the member states are supposed to play an active part in the sub-regional development; however, so far, these issues are only on the initial stage in the EUSBSR and member states’ strategies. Politicians in the BSR are quite aware of the existing challenges and problems, although the difficulties lie in the “transforming” these issues into economic development and corporate entrepreneurship. Quite obvious that not all 17 SDGs will play a vital role in the sub-regional issues: the regional and local strategies have to elaborate concrete implementation measures: among the latter are certainly the sustainability issues of which the circular and bio-economy are only composite parts, though quite important.
The BSR’s politicians have been ambitious in setting the appropriate goals: suffice it to mention such initiatives as the “Baltic Sea as a region devoted to SDGs”, or “CO2 neutral BSR to 2050”, etc. It has become more complicated to implement the initiative than to pronounce them: such ambitious goals have to be economically feasible for SMEs. To follow the SDGs, companies need strong assistance from the states, with the governments’ impetus and specific programs: these kinds of issues are already on the agendas in the BSR’s states as “elaborating and formulating a model for an optimal SDGs implementation among the Baltic Sea countries”.
Facing expected changes
According to the regional officials, the Baltic States are facing a “profound change” in the BSR governance based on “closer cooperation, good action plans and communication”; in fact, it is about “a new narrative for the region”. Strikingly enough, these “changes” have not been fully integrated into the modern global and European trends, e.g. sustainability, bio- and circular-economy, digitalisation and scientific innovations, to name a few.
The changes include drafting a new type of a strategy with, e.g. circular economy issues and optimal action plans for the regions and local communities in circular and bio-economies’ practical implementation.
Presently, the political vision is within two perspective strategy’s scenarios: a) consolidation of the existing activities, and b) radical strategy’s overhaul with the focus on regional main problems, which are not yet sufficiently included into the EU-wide cohesion and regional policies. It is evident that the sub-regional concept in the EU regional policy will grow and expand; however, only time will show whether the “macro-regional” approach to national political economies will be taken seriously by the regional entrepreneurship.
In the European Commission’s EU financial planning for up to 2027 (in the seven years’ budget), includes priorities for green deal and climate actions; besides, the digital economy and digital society’s issues have already become important for the three Baltic States, they couldn’t be resolved without common approaches, mutual cooperation and European support.
On the EU Digital Single Market and DESI see: https://ec.europa.eu/digital-single-market/en/desi.
An efficient sub-regional cooperation in BSR is balancing between the national political economy’s guidance and that of the regional-EU’s planning: e.g. less activity in the former could result in more active part in the latter, and vice versa! Presently, due to the Nordic’s part’s role as important driver in sub-regional cooperation, closer adherence to the global and European challenges (the SDGs, digitalisation, green transition, etc.) the sub-regional “component” will flourish. Besides the BSR’s strategy there are several other organisations operating at the sub-regional-macro-level: e.g. Council of the Baltic Sea States, HELCOM or Vision and Strategies around the Baltic Sea (VASAB), to name a few; these and other organisations in the region make the EUSBSR management and guidance rather complicated.
At different summits during last couple of years a lack of political willingness from the heads of state and government has been visualized for active engagement in macro-regional cooperation: e.g. quite a few national ministers, prominent national leaders and/or high EU officials participated at the latest 2019-summit which ended without even a final declaration on perspective macro-regional initiatives. However, the summit’s motto sounded quite up-to-date: “reduce, reuse and rethink”, which provided a platform for discussions on present and perspective regional planning on sustainable and circular economy issues.
Circular economy in the EUSBSR
The EUSBSR has become a valuable opportunity for the states’ local communities to resolve some common challenges through a more active “operational efficiency”. Recently some of these trends have been summed up a perspective vision for a long-term circular economy development in the region.
Attention to circular economy in the BSR has been regarded as a “path to wellbeing of the people in the region”: this notion underlined a presently completely unsustainable but still dominating model in development, i.e. take-make-consume-dispose. It has to be radically re-arranged within a new political-economy’s model inserting a new concept: reuse, de-compose, recycle, de-consume, with additional validity of appropriate education and training in sustainability principles.
For example, presently Latvian recycling share is the lowest among states in BSR with 39%, compared to 46% in Lithuania, 47% in Estonia and over 50% in Denmark and Sweden. Thus, both new circular economy principles and waste management are becoming highly desirable aspects in sub-regional cooperation.
Another vital example in cooperation is about a business-driven approach to circular economy in BSR: several countries (Latvia, Lithuania, Finland and Poland) underlined the need for a kind of a “turn-out” in eco-efficient development patterns in the region. However, the public-private partnerships are not yet explored in circular economies’ models, nether there is a mutually recognizable business-led investment strategy in the regional strategies.
Sub-regional recovery and resilience
In line with the EU’s plans concerning perspective plans for recovery and resilience in the member states in the years to come, the sub-regional cooperation has acquired additional stimulus; among them are the following:
= Green resilience, which is about reaching European climate neutrality by 2050, while mitigating and adapting to climate change, reducing pollution and restoring the capacity of ecological systems to sustain countries’ ability to live well within planetary boundaries.
The impact of green transition in the states’ employment policies could be significantly larger in the recovery plans after the pandemic crisis. The green sector can generate around 4.2 million jobs in Europe, with a turnover of more than €700 billion. Job creation stemming from climate change policies will contribute to more inclusive job growth. By 2050, renewable energy jobs in the EU are expected to reach 2.7 million or 1.3% of EU employment. These numbers could be far higher in light of the potential impact of Next Generation EU and investment in green jobs.
General reference: European Commission/Brussels, 17.12.2019; COM (2019) 650 final. Communication from the Commission “Annual Sustainable Growth Strategy 2020” {SWD (2019) 444 final}. In: https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1578392227719&uri=CELEX%3A52019DC0650
= Digital resilience is about ensuring that peoples’ lives, work, education and communication, etc. in the digital age can preserve and enhance human dignity, freedom, equality, security, democracy, and other European fundamental rights and values. Strategic digital society and economy’s foresight in the member states can foster the human-centric shaping and appropriateness of digital technologies.
As experts acknowledged, a pervasive deployment of digital technologies in society goes hand-in-hand with a continuous appropriation by economy and society at large. Human-centric orientation in digital technologies can for example advance health care systems, improve universal access to basic services, and increase the effectiveness and inclusiveness of education and training systems.
More in: https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_1588
Financial support
The EU’s 2021-2027 long-term budget (LTB), together with NextGenerationEU, represents a combined financial support of over €2 trillion to help repair the economic and social damage caused by the coronavirus pandemic and steer the transition towards a modern and more sustainable EU-27. The “budget package” consists of the LTB with about €1.2 trillion combined with the temporary recovery instrument, NextGenerationEU, of €806.9 billion.
The EU “regional policy” is included partially in three LTB’s “headings”: 1. Single Market, Innovation and Digital with total 161 billion (€149.5 bn of LTB and €11.5bn from the NextGenerationEU program, NGEU); 2. Cohesion, Resilience and Values with the total €1 203.2 trillion (€426.7 bn from LTB and €776.5 bn from NGEU), and 3. Natural Resources and Environment with the total of €419.9 bn (€401bn from LTB and €18.9 bn from NGEU).
Source: https://ec.europa.eu/info/strategy/eu-budget/long-term-eu-budget/2021-2027/spending/headings_en
The main supporting program in sub-regional funding is the LTB “Heading 2: Cohesion, Resilience and Values”; under this spending category the EU-wide programs aimed to strengthen the cohesion among EU states. In this way, the budget will assist in reducing disparities among the EU regions and across the states, promote sustainable territorial development. In addition, through investment in young people, health and actions to protect EU’s values, the programs seek to make the EU-27 more resilient to modern challenges and future crises.
The Recovery and Resilience Facility and REACT-EU are the two main programs under the NextGenerationEU plan, which are also included in this heading.
Reference to: https://ec.europa.eu/info/strategy/eu-budget/long-term-eu-budget/2021-2027/spending/headings_en#heading-2-cohesion-resilience-and-values