Three Seas Initiative Turns Five Years Old, With Summit Focusing on Digital Sphere

Publication: Eurasia Daily Monitor Volume: 17 Issue: 153

Bulgarian President Radev, Estonian President Kaljulaid and Polish President Duda during the virtual 3SI Summit in Tallinn (Source: ERR.ee)

On October 19–20, Tallinn, Estonia, hosted the fifth summit of the Three Seas Initiative (3SI), a forum for dialogue involving a dozen European Union member states located in Central and Eastern Europe (ERR, October 19). The regional initiative was informally inaugurated in September 2015, on the sidelines of the United Nations General Assembly. Since then, the platform has undergone a deep transformation and continued, tangible institutionalization.

The 3SI emerged as a result of a joint Croatian-Polish initiative. It consists of 12 eastern EU countries covering 1.2 million square kilometers and including around 110 million inhabitants. The 3SI members’ total trade turnover equals 225.6 billion euros ($263.3 billion) per year (3siif.eu, accessed October 21). However, the 3SI’s importance also stems from its members’ geopolitical location, partly on the outskirts of the North Atlantic Treaty Organization (NATO) and the EU but squarely at the intersection of the north-south and east-west axes of the European continental peninsula. So even though the initiative is officially described as mainly economic in nature, focusing in particular on the development of energy, transport and digital infrastructure within the region, it undoubtedly has geostrategic and geopolitical potential too. This has sparked some controversies and concerns from various sides over the years as to the 3SI’s potential goals or implications, thus inducing the participating countries’ leaders to repeatedly issue statements to mollify such fears. Again, during the Tallinn summit, Slovenian President Borut Pahor emphasized that “3SI should never be seen as a bloc of certain EU member states against other EU member states” (YouTube, October 19).

Since launching this platform for cooperation five years ago, the 3SI member states have worked to progressively institutionalize it. Among the first key steps in this regard were the establishment of the 3SI Investment Fund, a network of chambers of commerce, the CEEplus stock index and even a technical secretariat. However, not all of the countries involved contribute to each of these specific initiatives—a serious structural disadvantage that leaves the 3SI politically incoherent.

Nevertheless, the 3SI has succeeded in winning the attention of key outside players, including Germany and the United States, both of which have observer status within the initiative, as well as the European Commission (EC) and, for negative reasons, Russia (see EDM, September 15). Moscow has been watching the initiative quite closely, especially due to Washington’s deep engagement in this regional set of projects. Indeed, the US has, in short order, become the 3SI’s most important external contributor and political patron.

From Washington’s perspective, the initiative is attractive for several reasons. First, the progressive development of energy infrastructure in Central and Eastern Europe is essential for diversifying regional energy sources and to facilitate better access to the regional natural gas market for US companies. Relatedly, the energy supply infrastructure being built out within the scope of the 3SI platform can be used to support neighboring countries that remain extraordinarily vulnerable to Russian pressure—namely Ukraine and Belarus (see EDM, July 7). Moreover, robust transport infrastructure remains crucial for the US as it continues to enhance its military presence in the region in support of its Allies and to deter Russia. Finally, the 3SI can serve as a potential regional counterweight to the Chinese 17+1 platform (see China Brief, May 29, 2019).

Due to the COVID-19 pandemic, the October 2020 summit had a semi-virtual character. High-level officials of all 12 participating countries were joined by representatives of the EC, the US and international private companies. Only two heads of state decided to join their Estonian counterpart at the summit in person: the presidents of Bulgaria, which will host next year’s summit, and of Poland, a driving force of the initiative. Indeed, this diplomatic gesture served to highlight Warsaw’s continued efforts to keep the initiative dynamic.

The summit in Tallinn resulted in further expansion of the 3SI Investment Fund, opened in 2019 by two banks, from Poland and Romania. The Fund will provide commercial loans to and catalyze further investments in the region’s 3SI-related transport, energy and digital infrastructure projects. As of October 2020, nine out of the twelve 3SI states actively back the Fund, with a total contribution of 913 million euros ($1.066 billion) (Twitter.com/3seaseu, October 19). During the summit, the Polish State Development Bank announced the decision to increase its investment into Fund by 250 million euros ($292 million), thus brining Poland’s total commitment up to 750 million euros ($875 million). Soon thereafter, US Under Secretary for Economic Growth, Energy, and the Environment Keith Krach, informed that the US International Development Finance Corporation intends to match 30 percent of other countries’ combined investments into the Fund, up to $1 billion (YouTube, October 19). In doing so, Washington sent a clear message to the private sector that the region is stable and secure, and thus worth investing in.

Not surprisingly, the Estonian hosts paid significant attention to the development of digital infrastructure in the region. At the Tallinn Summit, President Kersti Kaljulaid unveiled the “Three Seas Smart Connectivity” vision, which ambitiously aims to transform the 3SI region into a “global hotspot for smart mobility and energy innovation.” Smart connectivity implies a “digital layer that links physical infrastructure in transport and energy” that will permit “companies to develop and run business models spanning the entire region” (3seas.eu/smartconnectivity, accessed October 21). Like many countries around the world, the 3SI member states are currently working on developing domestic 5G grids. And notably, Microsoft and Google recently announced they would invest $1 billion and $2 billion, respectively, in Poland over the next year (The Economic Times , June 24).

The Tallinn Summit additionally served as a venue for a number of key bilateral initiatives among the participants. For example, in late evening of October 19, the Polish-Estonian Chamber of Commerce held its opening ceremony (Twitter.com/AndrzejDuda, October 19). And on the same day, Poland and the US finalized an agreement on “Cooperation Towards Developing Poland’s Civil Nuclear Energy Program” (Energy.gov, October 19).

After five years of institutionalized cooperation in the 3SI region, much work still remains to achieve its ambitious objectives. And though each subsequent summit raises the initiative to progressively higher levels of cooperation, the most crucial goal at the moment is to maintain political coherence and enthusiasm among the 3SI members—especially amidst the destabilizing coronavirus pandemic.