Speech about the European Baltic Sea Strategy

Dear Mr. Deputy Ambassador Vinthen, Dear professor Nagel, Dear professor Henningsen, Dear Sir or Madam, I am delighted to have the opportunity to speak to you here today about the Baltic Sea Strategy. Five years after EU enlargement, the Baltic Sea has become a European sea. Nine countries border it: eight EU members and Russia. More than 100 million people live near the Baltic Sea, Europe’s only inland sea!

But this region is facing immense challenges: the Baltic Sea region is characterised by the wide geographical area it covers, its low population density and the differences in the development of the region’s states. And the water quality of the Baltic Sea is deteriorating. To some extent, transport links are merely adequate, while the region also faces trade barriers and problems regarding energy supplies. These problems can only be overcome together and within the EU framework.

Baltic Sea cooperation in recent years has made a positive contribution to cooperation among EU members in the Baltic Sea region, the accession of the countries bordering the Baltic Sea to the EU, and the development of the partnership with Russia. But that is not enough: there is a lack of cooperation between the partners!

A discussion lasting a good three years – in which I was involved on several occasions and at various levels in my capacity as Deputy Chairman of the German Bundestag’s Committee on the Affairs of the European Union – has now reached a respectable conclusion. In June, the European Commission presented its Strategy for the Baltic Sea Region. For the first time in its history, the EU is pursuing a strategy at ‘macro-regional’ level. And I am optimistic that it will be adopted by the Council in October. Undoubtedly there will still be amendments, additions and updates in certain places.

The Baltic Sea Strategy is unique, innovative and integrative.

It is unique in the EU, because for the first time in the EU’s history it brings together different levels in a long-term strategy: the European, national and regional levels.

It is innovative for the EU, because it goes far beyond traditional regional policy, and at the same time includes Russia.

It is integrative, as it defines clear objectives in the fields of the economy, the environment, infrastructure and safety and security for the Baltic Sea region.

The EU Strategy for the Baltic Sea Region stands for a new and innovative approach to integration. This initiative could become a model for other regions within the EU. This sets the bar high!

What specific priorities are set by the EU Baltic Sea Strategy? What problems is it likely to face? And above all: what role does energy policy play? Energy policy is taking on an ever more important role in the EU, and above all in the Baltic Sea region: security of supply, sustainability and competitiveness are the core objectives of European energy policy. Particularly during an economic crisis, a secure, efficient and sustainable supply of energy is needed!

The pressure to take action on energy is immense. Each winter we experience a new energy crisis involving Russia. The Baltic states are also directly or indirectly affected by this, as they aren’t connected to the western European energy grid!

Before I turn to specific issues relating to energy policy in the Baltic Sea region, I would like to examine the core objectives of the EU Baltic Sea Strategy.

Within the framework of the Baltic Sea Strategy, the countries bordering the Baltic Sea have committed themselves to cooperate more closely in the development of their region and to maximise the region’s development potential.

The strategy’s priority areas are the environment, the economy, infrastructure and (civil) security. In concrete terms, this means: One important environmental priority is preserving the ecosystem and biodiversity. In the economic field, one core area is the promotion of innovation and business. Regarding infrastructure, one key issue is overcoming the historical division of the energy grids and security of supply. There is an urgent need for a joint energy grid to be established. Safety and security refers, for example, to shipping safety and traffic monitoring, as well as the creation of effective emergency-response capacities.

The implementation of the Baltic Sea Strategy requires political leadership. The European Commission, national administrations and regional organisations (e.g. Helcom) will be working together intensively – more intensively than to date.

The Commission is not establishing any additional structures, or assigning additional personnel or funding for this strategy. It is coordinating (as in the past) existing programmes, taking on the task of monitoring progress and producing progress reports. In addition, the Commission is a coordinator between the Baltic Sea states in the practical implementation of the projects.

We now have the opportunity to raise the profile of various institutions and define objectives and functions more clearly. Moreover, my view as a member of the Baltic Sea Parliamentary Conference is that it is not necessary for every institution to do everything!

The EU Strategy for the Baltic Sea Region also restores a sense of purpose and objectives to regional cooperation. Sensible and coordinated cooperation is now essential! Because the global economic and financial crisis cannot be overcome by one country acting alone.

One vital field for future innovation is security of energy supply. It must be prioritised in the coming years. A rapid rise in the proportion of electricity generated using renewables, a massive expansion in offshore wind parks, greater cross-border electricity transmission and new conventional power stations make it essential, in my view, to quickly expand the extra-high voltage transmission grid (“super grid”) in Europe. Cross-border transmission of electricity within Europe is still difficult, because transmission capacities at the borders are too low and energy is lost. Greater cross-border transmission capacities would facilitate electricity trading with neighbouring countries, which would also benefit consumers in Europe.

Above all, it is necessary to overcome the division in the energy supply system between western and eastern Europe, a by-product of the confrontation between East and West. It is an anachronism that the Baltic states still do not have any direct electricity connections with western Europe. Projects such as the existing Estlink electricity cable between Estonia and Finland, and other cable links planned in the Baltic Sea, are essential first steps in this context.

Alongside reducing energy losses in the transmission, feeding-in and storage of electricity, another important point is security of gas supplies. Europe currently obtains around 24 per cent of its gas supplies from Russia. In this context, the high-profile Nord Stream pipeline project in the Baltic Sea is of particular significance – not just for Germany, but for western Europe as a whole! In order to avoid becoming dependent on a single supplier, the EU is supporting the Nabucco pipeline project, which is intended to run from eastern Turkey to Austria, via Romania, Bulgaria and Hungary. The Nabucco project is a necessary additional route for gas supplies and an important, forward-looking project to diversify gas supplies in Europe. It is, however, in competition with the Blue Stream project.

The Baltic Sea Strategy includes an important aim in the energy sector: the 20-20-20 goal to be achieved by 2020. The aim is:

• to cut emissions by 20 to 30%,
• to increase the share of renewable energies by 20 % and
• to boost energy efficiency by 20%.

This goal makes clear the fact that climate protection must go hand in hand with efficient energy policy; these two instruments complement one another and impact on one another. Yet questions of political power also shape energy policy. The interests of energy providers, consumers and environmental protection associations must all be reconciled.

Indeed I would go further: energy policy should not be categorised as low politics. It should be categorised as high politics. It affects the security of states, since the security of energy supply for whole economies is at stake. Energy interests are founded on huge political, economic and military power. The cui bono question ("to whose benefit?") often needs to be asked. The discussion concerning the Baltic Sea pipeline is a good example.

Energy efficiency means protecting the environment. The EU's Baltic Sea Strategy aims to achieve a regional energy strategy. Exchange of information and cooperation on energy efficiency must be boosted in the region. Two core aims have thus been defined in the cooperation framework:

• Establishment of the Baltic Sea as a "green region". Stockholm and Hamburg can serve as beacons in this respect. Both cities have been nominated as European Green Capitals.
• Promotion of efficient heating systems, in particular to encourage the building of ecologically efficient housing; as well as the transfer of knowledge via networks and best-practice models.

Advantage is being taken of the high potential for innovation which exists within the energy sector. As Vice-Chairman of the Working Group on Energy set up by the Baltic Sea Parliamentary Conference I can confirm this! The working group has from an early point been committed to boosting the building of offshore wind parks in the Baltic Sea region. This means that electricity-grid linkage in the Baltic Sea region must be improved even further. The aim is to feed wind energy into the networks of the Baltic Sea states in a safe fashion and without significant losses of energy.

Diversification in the energy field and the establishment of security of energy supply go hand in hand. Wind, solar energy and renewable energies must be used to create a new ecological energy mix which also brings independence. An offshore wind-farm project, ensuring coordinated cooperation between different countries in the field of wind energy is a good example of this.

Integrating the Baltic States into European energy grids is extremely important for security of energy supply in the Baltic Sea region!

The Baltic Energy Market Interconnection Plan (BEMIP) can help to achieve this. This action plan encompasses the following three fields:

1. Integration of the electricity market: a regional electricity market is planned in the Baltic States in line with the rules of the Single Market. This approach includes, for example, the abolition of regulated tariffs, an end to restrictions on cross-border transactions and complete liberalisation of the private-household market.
2. Integrated electricity grids: alongside the "Nordic Master Plan" and the Polish-German integrated network, the wind-power projects involving the Nordic and Baltic regions together with Poland are also of key importance. The extension of these networks represents a boost for energy security in the Baltic States.
3. Domestic gas market and infrastructure: the idea in this field is to increase security of energy supply through diversification of transport routes and energy sources. This includes, for example, integrated networks, liquefied gas plants and gas storage facilities. Naturally, this is an ambitious task!

In my view, the Baltic Sea Strategy includes constructive approaches in both the field of energy efficiency AND that of security of energy supply!

The Baltic Sea region is rich in energy resources, yet it is economical in using this energy. Since 1990, for example, energy consumption has remained stable; whilst GDP has risen by 28%. And CO2 emissions in the energy and transport sectors were reduced by 13% between 1990 and 2005. This is linked on the one hand with structural changes within the economy, but also with a shift to a greater proportion of renewable energies. And changes in consumption have also had an impact.

The projects in the framework of the Baltic Sea Strategy will give a further boost to energy efficiency. Indeed, these projects could even serve as examples of best practice for the whole of Europe. This represents a major opportunity to further underpin the Baltic Sea region's position as an area which can serve as a beacon within Europe. Wider use of renewable and environmentally-friendly energies also presents new opportunities. Wind parks in Denmark and Germany are setting an example.

Involving Russia is immensely important, particularly for Germany as an energy partner. The Russian Federation does not belong to the EU and has not been involved in the development of the Baltic Sea Strategy, yet Russia is involved at different levels:

• Firstly via the Helcom cooperation projects, since Russia is a member of Helcom.
• Secondly, by means of projects organised by the European Commission
• Thirdly through the Nordic Dimension.

In this way, the EU's Baltic Sea Strategy serves to combat another danger: the isolation of Russia. All countries benefit from integration of Russia at various levels (environment/business).

This approach is in line with the consensus reached at the Baltic Sea Parliamentary Conference in 2007. The intention is for all infrastructure projects in the Baltic Sea framework to be analysed to check that they are environmentally sound and in line with the goals of security of energy supply for the whole of the Baltic Sea region. The EU's Baltic Sea Strategy achieves this!

Yet one risk does exist: the overloading of the Baltic Sea Strategy. What I mean, in concrete terms, is that the Baltic Sea Strategy though it can present examples of best practice and possibly serve as a beacon, cannot replace a common energy policy within the EU!

So far, the European Union has not managed to speak with one voice in the energy field, though the Lisbon Treaty for the first time explicitly contains clauses concerning energy solidarity: Articles 122 and 194.

Furthermore, it is true that a common external energy security policy can only succeed if it is underpinned by a functioning single energy market. In addition, security of supply should be viewed as a cross-cutting task, to be taken into account in all policy areas, such as in the field of environmental policy. It makes no sense in planning coal-fired power stations to view security of energy supply and environmental protection as mutually exclusive.

Energy efficiency requires long-term goals with sanctions attached; so far the Member States have displaced scant interest in this idea.

Of course, the EU's Baltic Sea Strategy can by no means achieve all of this; such things go beyond its remit and it is at these points that the EU must once again take on political responsibility.