On 14 and 15 May 2009, the Southeast Europe Association (Suedosteuropa-Gesellschaft / SOG) in close cooperation with the German Association for East European Studies (Deutsche Gesellschaft für Osteuropakunde / DGO), organised an International Conference on the topic “The Black Sea Region: New Challenges and Opportunities for Regional Cooperation” in Berlin / Germany. The conference convened regional experts and researchers from the wider Black Sea Region and EU countries, representatives of international organisations, IFIs and institutions of cooperation in the region, the German Federal Foreign Office and other Federal Ministries, the German Bundestag, etc. The meeting in Berlin was a follow-up to a series of high profile International Conferences the SOG organised with various partners in 2007 and 2008, all focusing on regional cooperation in the Black Sea Region. 1 In view of recent developments in the Black Sea region – e.g. the Russian-Georgian conflict and the Turkish-Armenian rapprochement – as well as the latest EU initiative of the Eastern Partnership introduced in the beginning of May 2009, the conference analysed the implications for the future of Black Sea cooperation. Representatives of each littoral state were invited to identify the key national expectations from Black Sea cooperation as well as the national visions, strategies or obstacles for various forms of integration. The national experts were asked to assess the role of the relevant international organisations, ranging from the EU and NATO to GUAM or the CIS. Next, representatives of international and regional organisations dealing with the macroeconomic development of the region were asked to outline their organisations’ strategies and assessment of the region’s potential as well as the projected impact of the global economic crisis. Finally, the institutional complementarity of Black Sea Synergy (BSS) and the EU’s new Eastern Partnership (EaP) were assessed, as well as two strategic regional challenges – energy security and conflict management. Three interrelated key issues emerged in the debates: • Leadership: At present, regional cooperation and synergies in the Black Sea Area clearly lack sufficient leadership that would be necessary to bridge the obvious lack of converging interests. Thus, a stronger institutionalised coordination mechanism would be helpful. A strong commitment by the EU and its member countries, in particular the three EU Black Sea states, accompanied by visible regional projects and programs, is essential. Considering Russia’s undeniable role as a regional power (albeit lacking a regional strategy of its own) and the recent reinvigoration of Turkey’s regional role, proper engagement of both countries would be equally essential. • Synergy: The complementarity and division of labour among the key formats for regional cooperation – EaP, BSS, Black Sea Economic Cooperation (BSEC), etc. – require further attention, clarification and elaboration. Overall, the speakers at the conference agreed that the EU and other organisations should focus on flagship projects with regional ownership, and a bottom-up approach responsive to the region’s shared objectives. This would increase the potential for synergy, rather than a top-down grand strategy of overly ambitious agenda’s that eventually fails to produce the much-needed tangible results for the Black Sea region’s populace. Sectoral partnerships around areas such as transport, energy, and environment seem to be most promising. • Conflict resolution: As external actors are eventually caught by the existing conflicts in the region, conflict resolution should be integrated into any regional approach. While new approaches to some of the conflicts experienced over the last year are quickly caught up by realities, negligence cannot be afforded either. In this context, Russia’s role as a “hybrid actor” poses particular challenges. New Challenges In his introductory statement Minister of State Gernot Erler, the President of the Southeast Europe Association, stressed that the wider Black Sea region represents a geopolitical bridge between Europe, Russia, Central Asia and the Middle East which bears enormous economic potential. At the same time the region is severely destabilised by pending conflicts, struggles for resources, weak national institutions, critical (international) economic developments and poorly developed bilateral relations. Erler pointed out that political stability and social, human and economic development in the region can only be reached by means of international and regional approaches of cooperation and exchange. The encouragement of cooperation is also considered as an important contribution to master general European and global challenges. Thus it is the main political aim of supra-national stakeholders and also represents a key element of Germany’s foreign policy agenda. In Germany’s view, infrastructure, energy, transport and research are crucially important. According to Erler, numerous international missions, mediation bodies and other initiatives – amongst others the EU Monitoring Mission in Georgia, the presence of the UN in conflict areas, or the OSCE Minsk Group – already serve as appropriate instruments, as a basis to foster stability and development. Numerous other regional and international initiatives like the Regional Cooperation Council (RCC), the Black Sea Economic Cooperation (BSEC) or the Black Sea Synergy (BSS) promote cooperation. Erler emphasised that Germany strongly welcomes and encourages these initiatives and underlined that the country traditionally supports the intensification of cooperation in the region through manifold projects. Germany is going to participate in the conference of the Danube Cooperation process to establish a Council of the Danube Cities and Regions on June 11th in Budapest. Furthermore the country supports the development of an EU Strategy for the Danube Region and a respective European Council mandate for the European Commission. Apart from this Germany has reinforced the EU’s European Neighbourhood Policy through the creation of a Neighbourhood Investment Facility (NIF) which couples bilateral contributions with common infrastructure projects. The country increases the NIF`s leverage effect with financial resources and the KfW as Germany’s cooperation institution plays an important role concerning the financial support and the implementation of the projects in the partner countries. Germany also promotes the active reinforcement of the BSS – an initiative launched under the German EU presidency – which has to become fully capable of acting through concrete projects. In this sense Germany also supports the initiatives of littoral Black Sea EU members to speed up the implementation of the Synergy, to strengthen the initiative alongside with the Eastern Partnership and to draw up a respective roadmap. Furthermore the country advocates the establishment of Sectoral Partnerships for the BSS as networks in which partners engage in regional cooperation in specific sectors. German support for international cooperation schemes notwithstanding, Erler stressed the key importance of seeking complementarities among the different approaches. He also emphasised that the country spares no efforts to foster measures of single states in the region for confidence building and cooperation on the bilateral level. National Perspectives The Bulgarian speaker underlined the supportive attitude of the Bulgarian government concerning cooperation in the Black Sea region. At the same time he stressed that the presence of many controversial regional forces with diverging, clashing interests represent an important political challenge for his country’s related foreign policy agenda. Bulgaria has to consider its own interests, the interests of its allies in the region, the interests of the Euro-Atlantic community and the interests of Russia and Turkey as the major regional powers. Bulgaria’s foreign policy agenda focuses on balancing among these different stakeholders which impedes the elaboration of more active cooperation policies of its own. Vital Bulgarian policies and interests focus on the support of an active EU agenda for the Black Sea region as well as on the creation of an agenda and the support for a strategy for regional security. Furthermore Bulgaria’s foreign policy aims at the encouragement of an environment of reform, democracy and development to provide opportunities for the EU to expand its strategies and instruments to the East. The Bulgarian speaker underlined that the future of regional cooperation as a whole is crucially dependent on the strategic aim to coordinate the interests and the policies of the European Union and of Russia. According to him the current policy of Russia is completely opposed to the democratisation and stabilisation efforts in the post-Soviet space. Apart from this the Bulgarian speaker emphasised that the EU has to consider and to coordinate its activities with the interests of Turkey which has specific visions concerning special aspects of regional cooperation and Black Sea security. The speaker from Romania pointed out that the activation of Black Sea Sectoral Partnerships, an active involvement of Russia and Turkey in new EU cooperation initiatives, a pan¬European free trade area and different forms of regional and international cooperation especially in the fields of energy, transport and environment represent important conditions for the stabilisation and the development of the region. He criticised the “inflation” of regional cooperation organisations and initiatives. According to the Romanian position the new EU initiatives will not be successful without the recognition of the sovereignty of all the states involved, without an appropriate framework and without seeking complementarities and correlations among the approaches. As far as environmental issues were concerned, he regarded as important the set-up of proportional tax on water transport taking into consideration the pollution risk. For the multimodal transport field he recommended the promotion of technical assistance and know-how transfer. For the combat of cross-border organised crime the Romanian speaker called for the set-up of a regional cooperation platform consisting of EU agencies, countries bordering the Black Sea and regional organisations like the SECI Centre in Bucharest. Apart from this he demanded the development of regional energy markets in littoral states of the Black and Caspian Seas and their neighbouring countries in order to facilitate a gradual integration between them and the EU market. According to the Romanian position within the framework of a European Energy Security Strategy an internal energy market with liberalised European electricity and gas markets has to be fostered. Further proposed EU-actions are the formulation of long-term measurable objectives in key sectors, the set-up of partnerships for co-financing schemes, the involvement of Belarus in selected Black Sea Synergy activities and last but not least the encouragement of related academic research. The speaker from Moldova mainly focused on internal and bilateral factors which impact Moldova’s regional policies and impede the country’s consistent and active involvement in regional cooperation schemes. Among these he mentioned Moldova’s geographical sandwich-situation as a very small country between Romania and the Ukraine which make the country’s regional policies quite “chaotic”. Besides he drew attention to a lack of important economic push factors for regional cooperation due to the lack of natural resources like oil or gas. Furthermore, he made clear that Moldova faces severe identity problems, being attracted by the East and the West and ergo by two completely different poles. Beyond that the Moldovan speaker emphasised that deficits concerning the quality of governance importantly impact all the policies the governments promote and impede the country’s modernisation process. In this sense he referred to the still unsolved, “frozen” Transnistrian conflict as the most relevant factor which influences the development of the country and the security in the region. Besides he described the unstable political situation in the country especially since the last general elections in April 2009 (in which the ruling Communists won a majority in the single-chamber parliament) with violent protests in Chişinău against vote-rigging and against Moldova’s government. The speaker summed up that Moldova faces a quasi-authoritarian system with a highly polarised society in which dialogue and cooperation are real challenges. Stabilisation and the development of democracy in the country remain fictions. Turkey has emerged as one of the key actors and a major regional power in the Black Sea region. The speaker from Turkey claimed that the establishment of any comprehensive regional organisation in the region without the participation and cooperation of Turkey would be “neither efficient nor reliable”. Indeed, Turkey’s neighbourhood as perceived by Ankara, is stretching out to the Black Sea, the Balkans and the Mediterranean, the Caucasus, the Middle East, the Caspian and Eurasian regions, with the Black Sea and Caucasus regions given specific priority. As concerns recent EU initiatives like the Black Sea Synergy and Eastern Partnership, these were welcomed by Turkey. But, as the speaker put it, “Turkey would continue cooperating with the West, but whenever possible it will seek to engage partners on its own terms”. Leading government officials in Ankara, too, have recently stressed that the EU is an important but not an indispensible partner in order to confirm Turkey’s European identity. Indeed, Turkey’s recent initiatives in its neighbourhood have been both multi-dimensional and remarkable. Turkey’s means for promoting regional stability and cooperation encompass a new “multidimensional strategic partnership” with Russia, initiatives for settling regional conflicts, bi-lateral rapprochement, not least for securing alternative energy transportation routes. Turkey has recently launched a “Caucasus Stability and Cooperation Platform” advertised as a regional forum for all regional actors. The speaker stressed that this Platform “is by no means an anti-Western Turkish-Russian Axis”. Nevertheless, the actual rapprochement with Russia is considered as vital by Turkey, given Turkey’s energy dependency from and trade volume with Russia (equalling the volume of trade between Germany and Russia). The recent Turkish-Armenian “normalisation process” constitutes an initiative that has been received with great sympathy at least in the West. Turkey daring constructive and courageous steps in overcoming one of the most long-lasting conflicts of the region, considers itself as an example for others to resolve their frozen conflicts. Ankara also offers its good services to facilitate such conflicts, first of all between Armenia and Azerbaijan. Turkey is well aware of its own importance for Europe and the West in general having remarkably increased. From a Turkish perspective, Europe has its price to pay for profiting from Ankara’s role in securing stability and energy flows in/from the Black Sea region. As an example, Ankara obviously will not sign the Energy Community Treaty, as long as Brussels has not opened the Energy Chapter in the EU accession negotiations. Armenia and Azerbaijan are states in the South Caucasian region without access to the Black Sea. They are both part of ENP and of the EaP of the European Union alike. Lacking itself major energy sources, Armenia is becoming an important link within the system of transnational infrastructure, mostly energy supply routes, and therefore – as the speaker from Armenia put it, “becomes more and more attractive for both regional powers and those, which do not border it”. The speaker emphasised the historical importance of a possible opening of the Armenian-Turkish border and establishment of diplomatic relations between the two countries. These would bring about fundamental changes in the structure of relationship between all countries in the Black Sea and Caspian regions. The Armenian speaker praised the opportunities emerging from an prospective understanding with Turkey. Both countries, as well as the EU, NATO and US would profit. That is also why Russia (as well as “regional countries sharing with Russia common interests” – a clear reference of the speaker to Azerbaijan) are likely to obstruct any such move as it is contrary to their foreign policy interests. Azerbaijan rejects the recent Turkish-Armenian agreement, claiming that the solution of the conflict over Nagorno Karabakh would be a precondition for any such step. Russia, according to the Armenian representative, is supposed to insist on its military presence in part of Nagorno Karabakh even after a solution of the conflict there, a price that Turkey, the US and EU would have to pay if the Turkish initiative would succeed. The speaker stressed that an agreement between Turkey and Armenia would pave the way for better relations of Armenia with the EU within the EaP framework. Azerbaijan sees its major role in the region as a producer of oil and natural gas that is already delivered to the world market on a big scale via the Mediterranean and Black seas. Obviously, economic policy plays a major role for Azerbaijan’s understanding of regional cooperation, inclusively the opening up of the country’s resources to foreign investors. Regional cooperation is mainly focused on energy cooperation. The country considers itself as a “locomotive” for energy and transportation projects in the region. In the presentation of the speaker from Azerbaijan, two issues were striking: Firstly, the country considers itself trapped in a frozen conflict (over Nagorno Karabakh) that is perceived as an issue of foreign occupation and separatist interference by its neighbour Armenia – a conflict that obviously prevents any further moves to a potential cooperation with Armenia. Secondly, Turkey is seen as a kind of “golden gate” to the West as most of the existing and projected energy transportation routes (like Nabucco) pass through Turkey. Also, the projected railway link from Baku via Tbilisi to Kars (Turkey) is seen as a potential link between Europe and Asia. Although from a much different “point of departure” the predominant role that Turkey is presently playing for both Armenia and Azerbaijan became very obvious, with Azerbaijan as an “old ally” watching Turkey’s recent rapprochement with Armenia with suspicion, and Armenia trying to overcome old enmities for the sake of a prospective access to Europe and the world. Russia’s President Medvedev has lately put strong emphasis on mapping “regions of privileged interest” to Russia, and the Black Sea Region is seen to be on top of the list. Still there is no clear vision or strategy on the Black Sea Region. In comparison to the Nordic Dimension (Baltic Sea) cooperation, which has at times been a success story especially in terms of cooperation in the environment sector, the geopolitical competition in the Black Sea region leads to more clashes of interests between Russia, the US, and NATO. Therefore, in order to best promote its interests, Russia focuses more on developing bilateral relations – in particular to Turkey and possibly Romania – rather than engaging in multilateral initiatives of questionable value. There is also an expectation to bring Russia and Turkey into the Eastern Partnership. This includes participation of Russian NGOs in civil society summits and activities developing in that context. Ambitions of Black Sea countries to become NATO members will be countered with a view to postpone such event for decades. The assessment of Russia’s role in Black sea regional cooperation as well as its position vis-à¬vis the newly created Eastern Partnership and its ENP predecessor was discussed controversially. No doubt, Russia is a key actor in the region and no regional-cooperation scheme can be realistically exclude Russia. Nevertheless, the speaker argued that Russia is at best a reluctant participant and prefers bilateral arrangements with individual countries to regionalism. The participants in the debate argued that Russia tends to perceive European initiatives for the region as interference in its “sphere of influence,” but, as it lacks a tradition of regional cooperation, actually fails to propose alternatives modes or frameworks of regional cooperation. As far as Russia’s attitude towards the new EaP initiative was concerned, the speaker argued that this initiate is not a relevant framework for Moscow, unlike bilateral EU-Russia relations. While there seems to be irritation in Russia because of her perception to be excluded from the EaP, participants argued that Russia rejected participation in ENP not too long ago and has become a “strategic partner” of the EU since. Moreover, EaP allows for the inclusion of other countries (in addition to the six) in specific endeavours. Thus, Russia may be a partner on a functional basis in EaP. The speaker from Ukraine argued that his country is, for geographical and other reasons, a key player in regional cooperation. Ukraine may even be perceived as a sub-regional leader. One telling example of Ukraine’s constructive role is its defence of the territorial integrity of Moldova. In this context it is noteworthy that the much-applauded EU border mission EUBAM related to the Transnistrian conflict is actually stationed on the Ukrainian side of the border and would never have come about without Kiev’s full support. NATO membership is seen as number one priority for Kiev, with the view to provide a security cover for the Black Sea region. Although the population is split over a prospective membership, this is likely to be overcome in the NATO accession process. Developing a Black Sea security initiative, trade cooperation, membership in the Energy Community, and participation in peace-keeping activities are seen as desired areas of increased regional cooperation. The speaker from Georgia noted that Tbilisi plays an active part in Black Sea regional cooperation, both on an inter-state and on a civil society level. The country has joined many respective initiatives including BSEC, GUAM, and the ENP. Unfortunately, much of the existing awareness of a common regional identity was lost during Soviet times, when the Caucasian republics formed the periphery of an empire rather than constituent parts of a region. For the long term, membership in EU and NATO is Georgia’s stated objective, but regional cooperation is an important supplement, even though the actual potential of regional initiatives should not be overestimated. At present, the EU’s Eastern Partnership looks most promising for realising Georgia’s ambitions, but clearly there is a need for strong leadership. Expectations are high, but regrettably, the NATO issue has increasingly been instrumentalised in domestic politicking. Since Russia has failed to abide to the agreement that ended the armed conflict of August last year, security is on the top of the national political agenda. Economic Perspectives Economic models indicate that the Black Sea region has a substantial but not sufficiently exploited growth potential, both in terms of intra-regional trade and external trade relations. Regional economic integration, however, should be complementary to integration in the world economy rather than protectionist vis-à-vis the global economy. The main challenges for better global integration and regional coordination concern enhancement of logistics, infrastructure and trade facilitation. No less important – so-called “behind-the-border” obstacles should be reduced, e.g. licensing, certification as well as general business rules and principles and still wide spread corruption, in order to improve the business climate. Last, but not least, in the long term, the quality of products and quality guarantees should be enhanced. As part of the overall “economic geography” developments throughout the world, economic growth is bound to hasten the process of concentration on potential “regional centres of growth, such as Kiev, Istanbul and Bucharest, with other cities such as Chişinău or Sofia orienting themselves towards these “forces of density”. The new OECD Eurasia Competitiveness Program’s objective is to make the most of the above growth potentials of the region and to tackle the known impediments. Again, the demand-driven prioritisation of specific economic sectors is the method of choice. Each state of the region has to make choices where and how to enhance its competitiveness in well-defined sectors. In view of the high dependency on foreign investment and the non-sustainable factors of relative competitiveness in terms of low cost production, a strategy to enhance human capital despite brain drain and to develop financial markets and the general business climate of the region are imperative. As the activities of the Union of Black Sea and Caspian Confederation of Enterprises (UBCCE) demonstrates, the challenges of fostering trade and investment no longer is shouldered by international financial institutions (IFIs) and organisations only, but regional ownership is emerging. The UBCCE weighs in to push for national economic reforms and produces assessments of reform impact and the region’s competitive opportunities vis-à-vis the surrounding economic superpowers – Europe, the USA and Japan, Russia as well as India and China. In terms of economic models, there are no reasons why the global economic crisis would hit the Black Sea region harder than other regions, as long as policy makers resist the temptation to increase economic barriers and opt for protectionist strategies. The expected consequences of the global crisis for the region have already led a return of migrants and gastarbeiter with a corresponding loss of remittances for the local economies. Additionally, attracting foreign direct investment will become more difficult in view of the global constraints on investment capital. Over the past two decades, waves of FDI have first supported the economic transition in Central-Eastern Europe, next in Southeastern Europe and currently in the Black Sea region. Due to the global crisis, this influx of FDI is already stagnating. The relative advantages of the region in terms of relatively low costs of labour and services are bound to loose out to economies further east. Nevertheless, no national or regional policy of protectionism should stop the above globalised economic processes. Institutional Configurations At present, regional cooperation and synergies in the Black Sea Area clearly lack sufficient leadership that would be necessary to bridge the obvious lack of converging interests. Thus, a stronger institutionalised coordination mechanism would be helpful. In particular, it would be necessary to pragmatically strike a balance between the bilateral and the multilateral dimensions of cooperation. Sectoral partnerships around areas such as transport, energy, and environment seem to be most promising. A strong commitment by all EU member countries and the three EU Black Sea states in particular, accompanied by visible regional projects and programs, is essential to create synergies between the EaP and other regional initiatives. Proper engagement of Russia and Turkey would be equally essential. Conflict resolution should be integrated in any regional approach, because any external actor is eventually caught by the existing conflicts. Moreover, nobody can rely on the existing frozen conflicts to remain frozen. While the new approaches to some of the conflicts experienced over the last year are quickly caught up by realities, negligence cannot be afforded either. In this context, Russia as a “hybrid actor” – with changing roles of being a moderator, a peace-keeper or a conflicting party – is a particular challenge. As one speaker put it, “it is not possible to solve conflicts without Russia, or against Russia, but it might well need to be taken into account that they also cannot be solved with Russia”. Typically, the bilateral relations of the EU with the countries of the Black Sea region differ, some of them being member states of the EU, Turkey being a candidate for membership, others countries being covered by the new EaP, and Russia being a strategic partner. Strategically, the BSS represents the regional approach of the EU with intra-regional cooperation as its main objective. The new EaP conversely stands for bilateral and multilateral relations between the BS region and the EU with convergence to European standards as its main objective, based on country specific National Action Plans. In specific policy fields the two frameworks may overlap, but a general distinction in terms of membership and orientation is evident. Thus, the EaP core endeavour of creating a deep and comprehensive framework of free trade with the BS region is interlinked with the development of a network of free-trade agreements within the region, the ultimate goal being to open the EU’s internal market with its four “freedoms” – free flow of capital, goods, services and eventually people – to these countries. The 2007 EU initiative of the BSS is often praised as a new regional approach as it definitively succeeded in putting the BS region on the international agenda and in redefining it as a region in its own rights with common potentials and challenges. BSS has been less of a success, however, in terms of concrete projects driven by shared interests from the region. In contrast, the EaP has set out to identify regionally owned priority projects from the start, e.g. SME development. Nevertheless, in addition to the concrete shared projects, the EaP has an unmistakable symbolic dimension. In the view of some of its architects in the EU, the EaP might imply a future accession perspective for at least some of the neighbourhood countries involved. Similarly, one of the EaP’s most attractive and powerful instruments, a system of visa-free travel between the EU and the EaP countries is subject to intense debate within the EU and linked to functioning readmission treaties and European security concerns in other member states.