The EU Kaliningrad Policy: Mapping Kaliningrad's Place inside the European Union [1 ed.] 9783428534135, 9783428134137

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CHEMNITZER EUROPASTUDIEN

Band 12

The EU Kaliningrad Policy: Mapping Kaliningrad’s Place inside the European Union By Irina Ochirova

Duncker & Humblot · Berlin

IRINA OCHIROVA

The EU Kaliningrad Policy: Mapping Kaliningrad’s Place inside the European Union

Chemnitzer Europastudien Herausgegeben von Frank-Lothar Kroll und Matthias Niedobitek

Band 12

The EU Kaliningrad Policy: Mapping Kaliningrad’s Place inside the European Union

By Irina Ochirova

Duncker & Humblot · Berlin

The Philosophical Faculty of the Chemnitz University of Technology accepted this work as doctoral thesis in the year 2009.

Bibliografische Information der Deutschen Nationalbibliothek Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://dnb.d-nb.de abrufbar.

All rights reserved. No part of this book may be reproduced, translated, or utilized in any form or by any means, electronic or mechanical, without the expressed written consent of the publisher. # 2011 Duncker & Humblot GmbH, Berlin Typesetting: Werksatz, Berlin Printing: Berliner Buchdruckerei Union GmbH, Berlin Printed in Germany ISSN 1860-9813 ISBN 978-3-428-13413-7 (Print) ISBN 978-3-428-53413-5 (E-Book) ISBN 978-3-428-83413-6 (Print & E-Book) Gedruckt auf alterungsbeständigem (säurefreiem) Papier entsprechend ISO 9706 * ∞

Internet: http://www.duncker-humblot.de

To my brother

Acknowledgements This book builds on a doctoral thesis submitted at the Philosophical Faculty of the Chemnitz University of Technology in September 2009. I am grateful to many people for help, both direct and indirect, in writing this dissertation. I would particularly like to thank Prof. Dr. Matthias Niedobitek for his unconditional guidance and continuous encouragement. I am extremely thankful to Prof. Dr. Beate Neuss for her invaluable supervision and advice. I want to express my gratitude to everyone who helped me with the proofreading and provided technical assistance. A special debt is owed to Judith Rasson who was tremendously kind and did a splendid job of proof-reading and correcting the thesis. This book would not have been possible without the financial support from the charitable Hertie Foundation, the International Office of the Chemnitz University of Technology and the Free State of Saxony. I owe a great deal to my friends and colleagues whose moral support, care and attention kept me going through the writing of this thesis. Their incredible belief in my capacities inspired me all these years. My greatest and warmest thanks go to my family for all kind of support, their loyalty, love and understanding. Chemnitz, August 2010

Irina Ochirova

Table of Contents I.

II.

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15

1. The problématique of the Kaliningrad Oblast . . . . . . . . . . . . . . . . . . . . .

15

2. The objective and relevance of the analysis . . . . . . . . . . . . . . . . . . . . . . .

19

3. Theoretical and analytical framework . . . . . . . . . . . . . . . . . . . . . . . . . . . a) The concept of “inside” and “outside” the EU in academic discourse b) The Kaliningrad Oblast in the academic discourse on the “inside / outside” dichotomy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) The institutional / legal border of the EU: Forms of integration with the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Kaliningrad’s integration with the EU in academic discourse and a review of literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21 21 24 28 41

4. Methodology and analytical approach . . . . . . . . . . . . . . . . . . . . . . . . . . .

49

5. Summary and overview of Chapters . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55

The legal and political status of the Kaliningrad Oblast . . . . . . . . . . . . .

60

1. The Kaliningrad Oblast in the context of EU Eastern enlargement: a historical, geopolitical and economic perspective . . . . . . . . . . . . . . . . . . a) The Kaliningrad Oblast and its historical background . . . . . . . . . . . b) The Kaliningrad Oblast and its geopolitical significance in the context of the EU enlargement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) The Kaliningrad Oblast and its economy ante and post the EU enlargement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

60 60 64 69 78

2. The legal capacity of the Kaliningrad Oblast in international relations . 80 a) The Kaliningrad Oblast as a subject of the Russian Federation . . . . 80 b) The Kaliningrad Oblast in the system of Russian federalism . . . . . . 84 c) Russian federal legislation on the external legal capacity of the subjects of the Russian Federation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 d) The external legal capacity of the Kaliningrad Oblast and its international activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 e) The political status of the Kaliningrad Oblast in academic and political discourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 f) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 3. The status of the Kaliningrad Oblast in the framework of Russian federal policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

10

Table of Contents a) b) c) d) e) f)

On the status of the Kaliningrad Oblast . . . . . . . . . . . . . . . . . . . . . . . The Russian federal policy towards the Kaliningrad Oblast . . . . . . . The status of the Kaliningrad Oblast as a Special Economic Zone . . The Kaliningrad regional strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . The status of the Kaliningrad Oblast as a pilot region . . . . . . . . . . . . Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

III. Overview of EU-Russia relations and their implications for Kaliningrad

IV.

111 112 117 125 128 133 135

1. The dynamics of the development of EU-Russia relations . . . . . . . . . . . a) The formation of EU-Russia cooperation . . . . . . . . . . . . . . . . . . . . . b) The EU and Russia in the context of the EU Eastern enlargement . . c) The building of the EU-Russia strategic partnership . . . . . . . . . . . . . d) Disparities and controversies between the EU and Russia . . . . . . . . e) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135 135 141 151 155 166

2. The Kaliningrad Oblast in EU-Russia relations . . . . . . . . . . . . . . . . . . . . a) The outset of the EU-Russia dialogue on Kaliningrad . . . . . . . . . . . b) The EU-Russia negotiations on Kaliningrad transit in 2002 . . . . . . . c) The Kaliningrad compromise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

170 170 178 182 188

3. The political and legal foundation of EU-Russia relations . . . . . . . . . . . a) Russia in the system of the EU’s external policies . . . . . . . . . . . . . . b) The Partnership and Cooperation Agreement: Objectives and an institutional set-up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) The Partnership and Cooperation Agreement: A critical assessment d) The Kaliningrad Oblast in the institutional and legal framework of EU-Russia relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e) The four Common Spaces in the long-term perspective of the EURussia strategic partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f) The place of the Kaliningrad Oblast in the four Common Spaces . . g) Perspectives on a new bilateral agreement and Kaliningrad’s place in it . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . h) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

190 190

223 228

The involvement of the Kaliningrad Oblast in EU policies . . . . . . . . . . .

231

1. The political position of the EU towards the Kaliningrad Oblast . . . . . . a) The European Parliament . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . aa) General remarks on the European Parliament . . . . . . . . . . . . . . bb) The European Parliament on the Kaliningrad Oblast . . . . . . . . cc) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) The Council of the European Union . . . . . . . . . . . . . . . . . . . . . . . . . aa) General remarks on the Council of the European Union . . . . . . bb) The Council of the European Union on the Kaliningrad Oblast

231 231 231 233 240 241 241 243

193 201 203 210 215

Table of Contents

11

cc) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) The European Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . aa) General remarks on the European Council . . . . . . . . . . . . . . . . bb) The European Council on the Kaliningrad Oblast . . . . . . . . . . . cc) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) The European Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . aa) General remarks on the European Commission . . . . . . . . . . . . . bb) The European Commission on the Kaliningrad Oblast . . . . . . . cc) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e) Other institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . aa) The Economic and Social Committee on the Kaliningrad Oblast bb) The Committee of the Regions on the Kaliningrad Oblast . . . . cc) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. The EU’s policy towards the Kaliningrad Oblast . . . . . . . . . . . . . . . . . . a) The general framework of the EU’s Kaliningrad policy . . . . . . . . . . aa) The European Commission’s country programmes . . . . . . . . . . bb) The cross-border cooperation component of the EU’s Kaliningrad policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . cc) The Northern Dimension policy . . . . . . . . . . . . . . . . . . . . . . . . dd) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Policy dimensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . aa) The political and human dimension . . . . . . . . . . . . . . . . . . . . . . (1) Democracy and human rights . . . . . . . . . . . . . . . . . . . . . . . (2) Education and training, culture and research . . . . . . . . . . . (3) Public health and social policy . . . . . . . . . . . . . . . . . . . . . . bb) Economic dimension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) Economy sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Economic infrastructure (transport and energy) . . . . . . . . . (3) The environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . cc) The security dimension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) Justice and home affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . dd) Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

250 252 252 254 256 256 256 258 264 264 264 268 270 271 274 274 274 279 285 291 292 292 292 298 308 315 315 321 326 330 330 339

V.

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

343

VI.

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

352

1. Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Primary sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Statements, press releases and other official sources . . . . . . . . . . . . .

352 375 375 389

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

393

Acronyms AIDS AIKE BALTOPS BEAC BRD BSEC CAP CARDS CBC CBSS CDU / CSU CEES CES CFE CFSP CIS COTIF CSDP DG EAM EBRD EC ECAT ECT ECTS EEA EEC EGTC EIB EIDHR ENP ENPI

Acquired Immune Deficiency Syndrome Association of International Experts on the Development of the Kaliningrad Oblast Baltic Operations Barents Euro-Arctic Council Bundesrepublik Deutschland Black Sea Economic Cooperation Common Agricultural Policy Community Assistance for Reconstruction, Development and Stabilisation Cross-Border Cooperation Council of Baltic Sea States Christlich Demokratische Union Deutschlands / Christlich Soziale Union Common European Economic Space Common Economic Space Treaty on Conventional Armed Forces in Europe Common Foreign and Security Policy Commonwealth of Independent States Convention concerning International Carriage by Rail Common Security and Defence Policy Directorate General Extended Associate Membership European Bank for Reconstruction and Development European Community Environmental Centre for Administration and Technology Treaty establishing European Community European Credit Transfer System European Economic Area European Economic Community European Grouping of Territorial Cooperation European Investment Bank European Initiative for Democracy and Human Rights European Neighbourhood Policy European Neighbourhood and Partnership Instrument

Acronyms EPP-ED ESAPP ESDP ESSN EU EurAsEc Euratom Eurojust Europol FDI FEZ FRTD FTA FTD FYROM GATT GB GDP GDR GRP HELCOM HIV IBM IBPP IBRD ICT IFI INTERREG IPA IRP ISPA Lien MEDA MEP MI NATO NC NCM ND NDEP NDI ND

European People’s Party and European Democrats Energy Saving at Public Premises European Security and Defence Policy European Senior Service Network European Union Eurasian Economic Community European Atomic Energy Community European Judicial Cooperation Unit European Police Office Foreign Direct Investment Free Economic Zone Facilitated Railway Transit Document Free Trade Area Facilitated Transit Document Former Yugoslav Republic General Agreement on Tariffs and Trade General Practitioner Gross Domestic Product German Democratic Republic Gross Regional Product Helsinki Commission Human Immunodeficiency Virus Integrated Border Management Institutional Building and Partnership Programme International Bank for Reconstruction and Development Information and Communication Technologies International Financial Institution Community Initiative concerning Border Areas Investment Promotion Agency Intellectual Rights Property Instrument for Structural Policies for Pre-Accession Link Inter European NGOs “measures d’accompagnment” Member of European Parliament Model of Modular Integration North Atlantic Organization Nordic Council Nordic Council of Ministers Northern Dimension Northern Dimension Environmental Partnership Northern Dimension Initiative Northern Dimension Policy

13

14 NDPC NDPHS NDPTL NGO NIP NIS OECD OJ OSCE PCA PDO PHARE PIP PPC PSC PSE RDA RECEP RSFSR SAA SAPARD Seabird SES SEZ SMEs SMGS SPF TACIS TB Tempus TEU TF-OC TFEU Tros TIR UN USA USSR VAT WEM WTO

Acronyms Northern Dimension Partnership on Culture Northern Dimension Partnership in Health and Social Wellbeing Northern Dimension Partnership on Transport and Logistics Non-Governmental Organization National Indicative Programme Newly Independent States Organization for Economic Cooperation and Development Official Journal Organization for Security and Cooperation in Europe Partnership and Cooperation Agreement Port Development Options Action Plan for Coordinated Aid to Poland and Hungary Productivity Initiative Programme Permanent Partnership Council Political and Security Committee Socialist Group Regional Development Agency Russian-European Centre for Economic Policy Russian Soviet Federative Socialist Republic Stabilization and Association Agreement Special Accession Programme for Agriculture and Rural Development Sustainable and Efficient Air Transport in the Baltic Sea Region Single Economic Space Special Economic Zone Small and Medium-sized Enterprises Soglashenie o Mezhdunarodnom Zheleznodorozhnom Soobwenii Small Project Facility Technical Assistance to the Commonwealth of Independent States Tuberculosis Trans-European Mobility Scheme for University Studies Treaty on European Union Task Force on Oraganized Crime in the Baltic Sea Region Treaty on the Functioning of the European Union Training of Retired Officers Transports Internationaux Routiers United Nations United States of America Union of Soviet Socialist Republics Value Added Tax Wider Europe Matrix World Trade Organization

I. Introduction 1. The problématique of the Kaliningrad Oblast The Kaliningrad Oblast appears to be unique for various reasons, all of them pertaining to historical, (geo)political and (geo)economic dimensions. Primarily, it is probably the only region of the Russian Federation that, in comparison with other provinces of the country, has no distinct “location-specific” 1 past in Russian history: a “war child”, 2 it appeared to be Russian relatively recently, as an outcome of World War II. Until then, it had been part of Eastern Prussia; the ambiguous legacy of its European past caused some external nationalist forces to contest its status quo as an indispensable part of the Russian Federation in the 1990s. Understandably enough, this in turn fuelled Moscow’s fears of possible separatist tendencies in the oblast and made it sense a danger to its territorial sovereignty. Also, the Kaliningrad region stands out for its geopolitical situation because it is geographically separated from mainland Russia – about 400 kilometres away from the nearest border 3 – by foreign countries (Lithuania and Belarus). Its administrative frontiers coincide with the Russian state border. Variants of land transit include routes which run through Lithuania and Belarus, Lithuania and Latvia, Poland and Belarus, with air transportation and a waterway route to St. Petersburg less utilized. 4 The total perimeter (including the sea border) of the oblast’s territory is 648 kilometres, with 20 border-crossing points to connect transport with foreign states by land, sea and air, through which from 20,000 to 25,000 people and from 7,500 to 8,500 vehicles cross the border daily. 5 1 Pertti Joenniemi / Stephen Dewar / Lyndelle D. Fairlie, The Kaliningrad Puzzle: A Russian Region within the European Union, The Baltic Institute of Sweden, 2000, p. 8. 2 Vadim Smirnov, Where is the “Pilot Region” heading?, in: Russia in Global Affairs, No. 4, October-December 2009, p. 1. 3 See James Baxendale / Stephen Dewar, Introduction, in: James Baxendale, Stephen Dewar and David Gowan (eds.), The EU & Kaliningrad. Kaliningrad and the Impact of EU Enlargement, London: Federal Trust, 2000, p. 9. 4 See Lyndelle Fairlie, Kaliningrad Borders in Regional Context, in: Lyndelle D. Fairlie and Alexander Sergounin, Are Borders Barriers? EU Enlargement and the Russian Region of Kaliningrad, The Finnish Institute of International Affairs and Institut für Europäische Politik, 2001, p. 10. 5 See Yuri Zverev, Kaliningrad: Problems and Paths of Development, in: Problems of Post-Communism, vol. 54, No. 2, March-April, 2007, p. 16.

16

I. Introduction

In geographical terms, the oblast has been Russia’s exclave since 1991, meaning that it is the state’s detached part encircled by territory of other states. 6 Meanwhile, the region is an enclave of the European Union and NATO, being enveloped by their member states (Latvia, Lithuania and Poland). More properly, however, the Kaliningrad Oblast should be defined as a semi-enclave, since it is not completely surrounded by the EU and has a sea-border. 7 In particular, the Kaliningrad Oblast has access to the Baltic Sea and it is the westernmost unit of the Russian Federation, giving it continuing importance in Russia’s security in the Baltic region. The exceptional geographic situation of the Kaliningrad Oblast raised numerous concerns over the feasibility of the region’s turning into a so called “double periphery” in the economic and also the political sense on the eve of the EU Eastern enlargement. 8 This outlook was advanced by one observer who pictured the region’s state of affairs as a “three-dimensional periphery”. 9 The oblast would allegedly 1. become a remote part of the Russian mainland and the Russian economy, 2. would simultaneously find itself on the rim of the European Union, its economy and policies, 3. and it would also be situated on the periphery of the domestic politics of its immediate neighbours, Lithuania and Poland. Indeed, while these two latter states, then-EU candidate countries, were undergoing profound development transformations thanks to financial support through EU preaccession structural aid, Kaliningrad suffered from the disastrous consequences of its post-communist economic transformation. Its traumatized stand generated a whole catalogue of problems, scrutinized by numerous experts. 10 This list started from the poor economic situation in the oblast, a large shadow economy, a lack of infrastructure (transport, energy), dependence on energy supplies from mainland Russia, a high degree of environmental pollution, organized crime, 6 See Evgeny Vinokurov, Integration of an enclave into the international economy: changing patterns of Kaliningrad’s economic specialisation, in: International Journal for Economic Policy in Emerging Economies, No. 1, 2007, p. 31. 7 See Evgeny Vinokurov, How Do Enclaves Adjust to Changes in External Environment? A theory of enclaves and the case of Kaliningrad, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), in: Adapting to European Integration? The Case of the Russian Exclave Kaliningrad, Manchester University Press, 2009, p. 51. 8 See Pertti Joenniemi et al., p. 9 and Natalia Smorodinskaya, Kaliningrad Exclave: Prospects for Transformation into a Pilot Region, Moscow: Institute of Economics, Russian Academy of Sciences, 2001, p. 2. 9 Sander Huisman, A new European Union policy for Kaliningrad, Occasional Paper No. 33, March 2002, Institute for Security Studies, Paris, p. 35. 10 See, for instance, Hanne-Margret Birckenbach / Christian Wellmann, The Kaliningrad Challenge: an Introduction, in: Hanne-Margret Birkenbach and Christian Wellmann (eds.), Kaliningrad Challenge. Options and Recommendations, Münster: Lit Verlag, 2003, pp. 8 – 9; James Baxendale / Stephen Dewar, p. 13; and Alexander Sergounin, The Future of Kaliningrad: a Pilot Project or Exclave? Policy Paper, International Policy Fellowships, Budapest, 2003, p. 3.

1. The problématique of the Kaliningrad Oblast

17

drug abuse and illegal migration, communicable diseases (primarily AIDS), a low level of social development and the list still seemed far from exhausted. Against the background of its evolving neighbours, these problems posed a risk of creating a wide social and economic development gap between the region and the adjacent European countries. It consequently made commentators foretell further possible impoverishment and marginalization of the oblast, its falling into a “black hole” – if not a “hell hole enclave” 11 – in Europe. 12 The direct effect of the enlargement was the fact that it challenged the movement of people and goods, bringing forth problems correlated with such issues as visas, borders and freedom of movement. Specifically, it raised questions about local cross-border mobility for economic and humanitarian (family contacts) purposes as well as the freedom of Kaliningrad residents and Russian citizens in general to travel freely from one part of their country to another. On top of that, and more importantly, the unique location of the Kaliningrad Oblast between Russia and the EU has placed it under the influence of and dependence on policy-making of both these actors: “conditions determining the region’s socioeconomic development are regulated by Russian and EU legal acts”. 13 Prior to the enlargement, analysts noticed that: how Russia and Kaliningrad address the issues of, for example, transit, crime, environment and trade, will inevitably affect, and require the involvement of EU member states. Equally, how the EU deals with such matters as infrastructural development, Schengen and the Single Market in the newly acceded member states will have a profound effect on Kaliningrad and hence Russian interests. The one cannot afford to ignore the other. 14

This posture has led to different marked effects. On the one hand, its setting in the centre of Europe, particularly its direct bordering of EU Member States, as well as different interests of diverse international actors active in the region presuppose a certain necessity for the Kaliningrad Oblast to deal with its neighbours, sovereign states, and the EU directly and therefore meets the requirements for a subject of international relations. 15 Yet, due to its constitutional status under Russian legislation, the oblast cannot be part of international relations and pursue an independent path in the international arena. Hence, the 11

Christopher Patten, Russia’s Hell-Hole Enclave, in: The Guardian, April 7, 2001. See, for example, Christopher S. Browning, The Internal / External Security Paradox and the Reconstruction of Boundaries in the Baltic: The Case of Kaliningrad, in: Alternatives, Vol. 28 (4), 2003, pp. 545 – 546. 13 Alexey Ignatiev / Petr Shopin, Kaliningrad in the Context of EU-Russia relations, in: Russian Analytical Digest, No. 15, February 20, 2007, p. 14. 14 James Baxendale / Stephen Dewar, p. 14. 15 See Natalia Smorodinskaya, Kaliningrad Exclave: Prospects for Transformation into a Pilot Region, p. 3. 12

18

I. Introduction

peculiarity of Russian federalism and centre-periphery regional relations add additional leverage in the Kaliningrad situation. On the other hand, Kaliningrad is essentially an important and unavoidable object in EU-Russia relations, where it has repeatedly been defined as a common challenge for both the EU and Russia. While it is often treated by the expert community within the security discourses of Russia, the EU and Lithuania and viewed as a potential threat in the Baltic Sea region, it is also presented as a case which creates new opportunities for cooperation, first and foremost for EU-Russia cooperation. Artistically, Kaliningrad is portrayed as “a point where Europe’s East meets its West, allowing to keep up intensive economic, political and cultural exchange between Europe’s two halves”. 16 From the outset of the EU-Russia dialogue on Kaliningrad, the two sides’ approaches diverged widely: whereas the EU feared the possible negative spinoffs from the oblast into the whole Baltic Sea region and their undermining of the regional security, in a nutshell soft security risks, Russia was preoccupied with fears for the oblast’s isolation from the mainland which could violate its state sovereignty. Therefore, while having to cope with the challenges produced by the Kaliningrad situation, both actors – partly due to their different natures and overall state of bilateral relations – faced a need to pass through manifold tests. As such, the Kaliningrad Oblast embodied a test case for the EU’s geopolitical subjectivity and its abilities as an external actor; 17 the specific question of Kaliningrad transit served to “test what the Russian political elite and media have learned and are learning about the EU”. 18 More significantly, however, the Kaliningrad Oblast appeared to be a test case for overall EU-Russia relations. 19 In that, the exceptionality of the Kaliningrad state of affairs persistently called for both sides to apply “new thinking”: 20 this is described as a shift from dealing with the Kaliningrad situation in terms of modernist discourse (embracing traditional issues of territoriality, hard security, sovereignty and national interest) into thinking in post-modernist logic (in line with such premises as globalization, regionalization, internationalization, microregionalism, trans-regionalism, cross-border cooperation). 21 16 Ramūnas Janušauskas, Four Tales on the King’s Hill. The “Kaliningrad Puzzle” in Lithuanian, Polish, Russian and Western Political Discourses, Polish Academy of Sciences, Warsaw, 2001, p. 23. 17 See Pami Aaalto, A European Geopolitical Subject in the making? EU, Russia and the Kaliningrad Question, in: Geopolitics, Vol. 7, No. 3, 2002, pp. 143 –174. 18 Paul Holtom, The Kaliningrad Test in Russian-EU Relations, in: Perspectives on European Politics and Society, 6:1, 2005, p. 31. 19 Ibid., pp. 31 – 54, also see Leonid Karabeshkin, Kaliningrad as a Test Case for Russian-European Relations: Overcoming Identity Othering and Asymmetric Conflict, KU Leuven, Chair Interbrew-Baillet Latour Working Paper No. 16, 2002. 20 Pertti Joenniemi et al., p. 7.

2. The objective and relevance of the analysis

19

Although the Kaliningrad Oblast has been repeatedly presumed to have a potential for creating conflict between the EU and Russia, it has also presented new opportunities for EU-Russia cooperation. This refers first and foremost to the economic dimension within the overall Russia-EU paradigm, whereby the oblast has been often prescribed – though also contested – a role of a “gateway” between Russia and the West, a spot of trade and investment flows between the two sides. 22 Introduced by the ex-governor of the Kaliningrad Oblast, Yuri Matochkin, 23 the label “Baltic Hong Kong” has been extensively used to describe the regional economic potential and opportunities in Europe. In purely economic terms, the Kaliningrad Oblast takes a particular stance due to its special status of Special Economic Zone (SEZ), granted under national law. Aside from that, “the region represents an outstanding chance for developing pan-European integration and stability”, 24 whereby it simultaneously offers Russia practicable means to be integrated in Europe. To this effect, the experts’ community sees the role of the Kaliningrad Oblast as a pilot region where European standards, practices and regulations could be applied and evaluated and further extended to other Russian regions.

2. The objective and relevance of the analysis Apart from the fact that the case of the Kaliningrad Oblast is a phenomenon per se, it is also challenging and worth academic effort because although the oblast has not yet assumed the role of a pilot region where concrete patterns of EU-Russia integration could be tested in both practical and political terms, it has already turned into a spot which is situated essentially inside the EU in more than a purely and exclusively geographical sense. The main goal of this thesis is to examine the ways in which the Kaliningrad Oblast is anchored in the European Union. More particularly, it aims at testing the hypothesis that the Kaliningrad Oblast is to a certain extent included or integrated into the EU. By measuring the degree of Kaliningrad’s being “inside” the EU against the broader background of the EU’s boundaries (of which more below) the paper eventually analyses the form of Kaliningrad’s inclusion in the EU (beyond formal membership) and thus spells out and assesses the EU’s policy geared towards the Kaliningrad Oblast. 21

Ibid., p. 27, and see also Christopher S. Browning, pp. 562 –566. See Pertti Joenniemi / Andrey Makarychev, Process of Border-making and BorderBreaking: The Case of Kaliningrad, Working papers in EU Border Conflict Studies, Danish Institute for International Studies, No. 7, March 2004, p. 10; and Stephen Dewar, Myths in the Baltic, in: James Baxendale, Stephen Dewar and David Gowan (eds.), p. 176. 23 See Richard Krickus, The Kaliningrad Question. Lanham, Md.: Rowman & Littlefield, 2002, p. 93. 24 Hanne-Margret Birckenbach / Christian Wellmann, p. 7. 22

20

I. Introduction

What likelihood exists for qualifying the Kaliningrad Oblast as de facto situated inside the EU? Is it credible to argue that the EU pursues a politics of inclusion with respect to the Kaliningrad Oblast? So go the principal research questions of this thesis. The provisional idea that the Kaliningrad Oblast might be situated inside the EU apart from as seen geographically departs from manifold outlooks expressed in a variety of academic discussions. First of all, as it will be reviewed below, this concerns comments that the dichotomy of “inside / outside” the EU has been losing a clear line of demarcation between “in” and “out” under the circumstances when the EU’s boundaries (in geopolitical, cultural but, above all, institutional terms and in relation to the EU’s neighbours to the East and South-East) become increasingly “fuzzy” 25 as opposed to hard and fixed external borders. This is especially evident when one takes into account the variety of existing models of integration with the EU taking on multiple faces, such as the so-called “virtual membership” which presupposes de facto integration without de jure membership via, for instance, association in EU policies and its institutions or other markedly looser forms of cooperation, all of them scrutinized at some later point in this chapter. Secondly, the supposition stems from the voices heard in the late 1990s – highlighted in detail below – that Kaliningrad is rather inside than outside the EU or that it is simultaneously on the inside and the outside of the Union. However, while advocating a greater degree of Union politics of inclusion as regards the Kaliningrad Oblast and tending to focus mainly on the EU’s discursive practices, these authors have failed to elaborate further on the concept of Kaliningrad’s being inside the EU more extensively. While prior to the eastern expansion of the EU the discourse on Kaliningrad’s inclusion in the EU was mainly dominated by recommendations, suggestions and appeals, this paper seeks to research the actual state of affairs, proceeding from the status quo of the Kaliningrad Oblast as a federated unit of the Russian Federation allegedly included into the EU. This research focus is of special relevance due to the fact that it has hitherto been underexplored, if ever, in the mainstream literature on Kaliningrad. The approach taken in the analysis is interdisciplinary and involves the adoption of both political and legal perspectives. The novelty of the inquiry lies in the fact that it represents a first attempt to particularize a policy tailored by the EU with regard to the Kaliningrad Oblast, applying the notion of the politics of inclusion to the EU’s relationship with a subject of a third country, and hence not an independent state, which has had no template thus far capable of explaining it. Avoiding the usage of restrictive interpretations and taking a fresh look at the category of inclusion of a federated unit in EU policy are not impossible since such an endeavour has recently been 25 Jan Zielonka, Europe as Empire. The Nature of the Enlarged European Union, Oxford: Oxford University Press, 2007, p. 4.

3. Theoretical and analytical framework

21

undertaken, albeit the focus of that study relates to the examination of the effects of Europeanization or the transfer of the patterns of EU governance in the Kaliningrad Oblast as a case study. The review of the overall academic literature on the Russian exclave below shows this.

3. Theoretical and analytical framework a) The concept of “inside” and “outside” the EU in academic discourse The dichotomy of the “inside / outside” or “in / out” of the European Union has gained ground in different contexts of academic discourse and has also been applied specifically to the case of the Kaliningrad Oblast on several occasions. In academic discourse, the paradigm “inside / outside”, “in / out” and “insiders / outsiders” arises along the lines of different concepts, including the theoretical underpinnings of the EU’s “boundaries” and the long-lasting debates on the “final frontiers” of the EU, or put another way, its finalité. Attempts to define the boundaries of the EU have long been the focus of various theories of European integration. Thus, the multi-level governance approach which is characterized by the conceptualization of “the EU’s system of rule as mixing elements of foreign and domestic policy, and relying on partnerships, networks and interactive dependencies” 26 puts forward the notions of the Union’s network governance and the boundaries of the EU. While the former implies such a mode of governance, in which the EU’s decisions are made and executed by a multiplicity of levels and actors, the latter signifies the boundaries constructed by the EU acting in accordance with the pattern of governance between the Union itself and the wider Europe. In turn, these boundaries essentially mark the relationships of inclusion and exclusion between the EU and the outside world. Michael Smith distinguishes four kinds of boundary in the EU context: geopolitical, institutional / legal, transactional and cultural. 27 The geopolitical boundary draws a line and differentiates between the insiders (countries and institutions inside the EU) marked by a high degree of stability and the less stabilized outsiders in the post-Cold War era, with both categories entailing geopolitical as well as geoeconomic differences. Furthermore, the institutional / legal boundary principally separates the ‘community of law’ from the outside environment. Yet, as rightly pinpointed by Pami Aalto and as will be described below in 26 Pami Aalto, European Union and the Making of a Wider Northern Europe, London and New York: Routledge, 2006, p. 31. 27 See Michael Smith, The European Union and a Changing Europe: Establishing the Boundaries of Order, in: Journal of Common Market Studies, Vol. 34, No. 1, March 1996, p. 13.

22

I. Introduction

more detail, “many of the Union’s institutional and legal norms are simultaneously extended into the wider European area by voluntary association and imitation”. 28 The transactional boundary essentially implies the division into insiders and outsiders based on the EU’s single market and its protection from outsiders, who nevertheless aspire to access it and operate with EU Member States on equal terms, especially against the contemporary realities of interpenetration and globalization. Finally, the cultural boundary entails the construed differences of culture of the insiders and outsiders, with the former category in essence meaning the EU as “a powerful community of values” 29 and the latter being perceived by the EU as a threat. In the meantime, in a case when all four boundaries are in place, the EU may perform as “a force for division, threat and discrimination”. 30 The dichotomy “in / out” stands alongside the debate on the ‘final frontiers’ of the EU or its widening – as opposed to the debate on the ‘internal frontiers’ of the EU correlated with the questions of the deepening of the EU – and this was intensified against the background of the EU’s eastern enlargement(s). According to Michael Emerson, the matter of the EU’s frontiers should be approached from different angles: from a geographical sense and from geo-political considerations, political assumptions and finally to the extent of the process of Europeanization. 31 By the same token, while “the frontiers of the European Union are mainly an institutional matter”, “the extent of the Europeanization is a societal matter”, with both “moving in constant interaction”. 32 In an attempt to conceptualize the notion of Wider Europe and assess the EU’s efforts to shape a European Neighbourhood Policy (ENP) as an alternative to EU enlargement, Emerson speaks of the increasing blurring of the frontiers between “in” and “out” (of the EU) which has become more evident in EU policy practice. 33 To this end, the dichotomy of “in / out” seems to be far too simplistic because “the EU’s frontiers are becoming fuzzier, both within Europe and outside it” 34 and 28

Pami Aalto, European Union and the Making of a Wider Northern Europe, p. 32. Michael Smith, p. 17. 30 Ibid., p. 18. 31 See Michael Emerson, The Wider Europe Matrix, CEPS Paperbacks, Centre for European Policy Studies, Brussels, 2004, p. 82. Europeanization could be defined as the EU’s impact on both Member States and non-member states in the areas of domestic legislation (legal obligations), policy priorities and administrative structures (objective changes) and impact on non-governmental actors (subjective changes leading to the adoption of European norms of business, politics and civil society). See Michael Emerson, European Neighbourhood Policy: Strategy or Placebo?, CEPS Working Document, No. 215, November 2004, p. 2, and David Phinnemore / Lee McGowan, A Dictionary of the European Union, London: Europa Publications, 2004, p. 213. 32 Michael Emerson, The Wider Europe Matrix, p. 82. 33 Ibid., p. 1. 34 Ibid., p. 83. 29

3. Theoretical and analytical framework

23

given the fact that there is a variety of alternative forms of inclusion in the EU (in relation to the formal EU membership) the meaning of being “in” or “out” of the EU is predestined to change. Generally, the relationship between the EU and its European environment is often described in terms of the notions of inclusion and exclusion enshrined in the EU’s “boundary politics”, with its two models being the politics of inclusion focused on access and the politics of exclusion focused on control. 35 By its nature, the EU rests upon the politics of exclusion with the (primarily geopolitical and cultural) boundaries having been manifest in the context of the EastWest confrontation in the Cold War international system as well as the institutional / legal boundary clearly separating the outside world from the “community of law”. In such politics, the focus lies “on hierarchy, control and difference which demande[d] major adjustment of state strategies and institutions before insider status could be conferred, whilst a complex hierarchy of agreements emerged to contain the expectations and strategies of outsiders”. 36 Although a whole range of association and other agreements has appeared between the EU and its neighbours, the very fact of their generation did not diminish the clear lines between insiders and outsiders. What is more, these agreements allegedly reinforced these lines “by creating a hierarchy of access and privilege both in economic terms and sometimes in broader political terms”. 37 The politics of inclusion has been shaped under the influence of various objective realities including the globalization and the changes correlated with the end of the Cold War. As such, the geopolitical and cultural boundaries have been considerably modified, even leading some of the states of the post-Soviet block to aspire membership in the EU. In a similar vein, the institutional and legal boundary has undergone certain transformations, not the least for reasons of “the increased density of institutions in Europe as a whole, not merely the EU” 38 in post-Cold War Europe. As a result, the EU has tried new ways of transcending the traditional logics of the politics of exclusion and diversifying the method of using its relationships with the outside world, which is especially illustrative in cases of the 1993 – 94 accession negotiations, the Europe agreements and the partnership and cooperation agreements with the ex-Soviet republics. In this way, the politics of inclusion results in a growing fuzziness of the EU’s boundaries through the EU’s efforts to concentrate on variety rather than difference and on the redrawing of boundaries rather than on their maintenance, thus attaching to them the meaning of crossing rather than that of defending. Yet, in spite of the development of the logics of the politics of inclusion from the side of the EU, and 35 36 37 38

See Michael Smith, p. 12. Ibid., p. 20. Ibid. Ibid., p. 22.

24

I. Introduction

the fact that “more is included in the EU” taking into account different forms of association and the evolution of the initiatives in the framework of the European Neighbourhood Policy, “this does not mean that a politics of inclusion has fully established itself”. 39 Hence, the question remains open as to whether the EU has managed to overcome the boundary problem – and this could especially refer to the institutional / legal boundary – as well as how the EU is able to solve the possible tensions between the politics of exclusion and the politics of inclusion. b) The Kaliningrad Oblast in the academic discourse on the “inside / outside” dichotomy The Kaliningrad Oblast has also been placed in a context where some scholars contemplate the EU’s boundaries. The paradigm of the “inside / outside” (the EU, but also Russia) has been examined from the perspective of the geopolitical boundary conceptually split up into two narrower perspectives: the perspective of location and the perspective of sovereignty. 40 While seen from the former, Kaliningrad is situated outside Russia and inside the EU, the latter perspective, on the contrary, is suggestive of Kaliningrad’s being objectively inside Russia and outside the EU since Russia exercises full sovereignty over the oblast and holds no EU membership aspirations. The obscurity of borders between these two parameters (inside and outside Russia and the EU) essentially entails a dilemma of the EU’s politics of exclusion and inclusion, posing the so-called “internal / external security paradox of the EU” 41 and calling for the EU to find a balance between its external and internal security goals. The external security goal is thus reserved for the EU’s intention of avoiding dividing lines in Europe and contributing to peace, prosperity and stability in the neighbourhood. An approach like this could be well exemplified by the Northern Dimension (ND) policy, the politics of inclusion. Importantly, northern Europe is marked as a region where the Union has substantially extended the boundaries dividing it from its neighbours, first and foremost through the regionalist involvement of the Baltic states and Russia into the intensified cross-border and interregional cooperation. 42 In its turn, the internal security goal is illustrated by the Schengen policy and in practice indicates the EU’s intentions to prevent soft security risks 39

Ibid., p. 25. See Lyndelle Fairlie, p. 13. 41 In his academic study on the European integration discourse, Christopher Browning found it ironic that while, internally, the EU was a sort of postmodernist project, externally it rather followed the path of a modernist state-like actor with a strong focus on security and sovereignty issues and hence an exclusionary policy (as in the case of the Kaliningrad Oblast). See Christopher Browning, p. 556. 42 See Pami Aalto, European Union and the Making of a Wider Northern Europe, pp. 32 – 33. 40

3. Theoretical and analytical framework

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stemming from neighbours by means of tightening the external borders; this way, through the politics of exclusion, and leads to the Union acting as a “fortress Europe”. In light of this, Lyndelle Fairlie identifies two groups divided over the ways of perceiving the problem of Kaliningrad: the “status quo” school of thought and the alternative school of thought. 43 In the former stream, Kaliningrad’s borders do not particularly differ from the existing EU’s Finnish-Russian border and hence the available foundations of the EU-Russia cooperation (the Partnership and Cooperation Agreement (PCA), the EU’s Common Strategy on Russia and the Northern Dimension policy) are regarded as sufficiently equipping the EU and Russia with opportunities for cooperation. While the adherents of this school make a clear distinction in the paradigm between “inside” and “outside” (of the EU) and disagree on the argument that the Schengen border erects new dividing lines in Europe, their opponents point to the clear tension between the EU’s the external and internal security drives, claiming that the Schengen policy aims at achieving the internal security goals at the expense of policies directed towards the external security. The supporters of the “status quo” school believe that the EU provides a sufficient number of programs (such as the TACIS, Euroregions, Northern Dimension), capable of encouraging efficient cross-border cooperation with Kaliningrad. In the meantime, the counterargument of their opponents is that these cross-border instruments do not fully address such issues as visas. Consequently, while one side refuses to perceive external security as being in contradiction with internal security (visa) requirements and therefore discerns a need for changes in the EU paradigm of policies and programmes, the other side criticizes the EU’s tendency to concentrate on internal security concerns and instead propagates the intensification of regional cooperation in the Baltic Sea space as part of the EU’s external policy which would help avoid divisions between the EU and its neighbours. This debate was caused by the EU incorporating Schengen law in the EU’s first pillar in the Amsterdam Treaty, which factually obliged candidate countries to apply the Schengen aqcuis and admittedly threatened a balance between the EU’s internal and security needs or the politics of exclusion and the politics of inclusion. In some academic discourses, this duality of “inside / outside” is interpreted as a manifestation of the polarity of “modernist / postmodernist” modes of thinking about the new Europe. 44 Particularly, Kaliningrad is recognized as “obviously a special case that overlaps the usual borderlines between the inside and outside” 45 and a spot which may be perceived as both Russian and European or “as a junc43 44 45

See Lyndelle Fairlie, p. 16. See Pertti Joenniemi et al., p. 6. Ibid.

26

I. Introduction

ture in a world of networks”. 46 While the modernist view of the geopolitical trend sees the case of Kaliningrad through “the conventional statist and ‘linear’ thinking” 47 in terms of territorial sovereignty, the postmodernist conceptual lenses signal a post-sovereign mode of thinking, allowing an understanding that although the European Union is something external for Russia it is at the same time also part of the inside. The location of a small part of Russia within the sphere of the Union’s policies has come to signify for both the EU and Russia a blurring of the distinction between a clear-cut “inside” and “outside”. The Kaliningrad Oblast is thus construed as simultaneously Russian and European or as a site that is both “in” and “out”, thus depriving Russia of coherence. The challenge for the EU is to arrive at a decision “whether Kaliningrad is truly eligible for a place at the table of the European family” and, more specifically, “whether the region can be provided with a treatment different from the rest of Russia – and what such a treatment would mean – against the background of the policies that the EU has been pursuing until recently”. 48 At the time, the EU was criticized for a lack of understanding that “Kaliningrad is as much ‘in’ [the EU] as it is ‘out”, 49 which was manifest in EU policy-making wherein Kaliningrad was “treated as an outsider, and not as in-between case that does not fit a departure premised on the existence of a clear inside and an outside”. 50 For the Union, Kaliningrad appears to be: a site that forces [the EU] to think more thoroughly about the tension between its internal and external security policies, and calls for systematic efforts to bring about cross-pillar coherence and to do ways with an excessively fragmented approach across a range of documents and agencies. It calls for a move to transcend the established borderlines and to bend – if not break – the existing rules, thereby bringing about a more flexible Union. 51

The experts’ calls for a differentiated approach from the side of the EU towards the Kaliningrad Oblast have been supported by the existing examples of the EU’s flexible treatment of the Aland Islands (part of Finland) outside the customs policies of the EU and with regards to Greenland and the Faroe Islands (part of Denmark) outside the EU, as well as Cyprus and Gibraltar. At the same time, it was pinpointed that any differentiation in the line of the EU would need to be accompanied by Russia’s effort to reach a new conceptualization of its political space and on the whole would depend on the ability of the EU and 46 Pertti Joenniemi, Kaliningrad, Borders and the Figure of Europe, in: James Baxendale, Stephen Dewar and David Gowan (eds.), The EU & Kaliningrad. Kaliningrad and the Impact of EU Enlargement, London: Federal Trust, 2000, p. 164. 47 Pretty Joenniemi et al, p. 7. 48 Ibid., p. 22. 49 Ibid., p. 24. 50 Pertti Joenniemi, Kaliningrad, Borders and the Figure of Europe, p. 168. 51 Ibid., p. 170.

3. Theoretical and analytical framework

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Russia to develop their relationship. The eventual proposition was that, on the one hand, Kaliningrad should be treated as “part of the Union’s inside” and, on the other hand, it should be qualified as “being primarily an integral part of Russia”. 52 The innovative thinking to be applied to Kaliningrad boils down to: placing Kaliningrad within the framework a ‘Europe of regionalities.’ It is not a Europe consisting of processes within and between clearly bounded territorial entities (regions in a traditional sense), though on a smaller territorial scale than the state, but part of a setting with binary, territorial divisions being replaced by a multitude of regulatory spaces which are horizontally and vertically overlapping. 53

In the early 2000s, talks arose in academic circles advocating the “semiintegration” of Kaliningrad into the EU: “in order to foster the Union’s external security and enhance the EU-Russia relationship, the border with Kaliningrad should be open and porous with the semi-integration of Kaliningrad into the EU”. 54 One of the patterns of describing the relationship between the EU and its neighbours departs from the vision of the EU as an empire which is characteristic of academic works belonging to different international relations streams including constructivism and the English school approaches as well as critical geopolitics. 55 This pattern revolves around the idea of a concentric model of European integration. 56 Applied to the context of the EU’s external relations with northern European states, this model depicts the Union (Brussels and the EU institutions) as a centre or an empire with fuzzy borders and with its interests stretching throughout the Baltic Sea region, including, among others, the 52

See Pertti Joenniemi et al., p. 27. Ibid. The principle of (postmodern) regionality, as opposed to the principle of (modernist) territorial sovereignty laying down a particular focus on the clear demarcation of subjects and borders, advocates the perception of borders not in terms of difference but rather as space for interaction and opportunity and as based on politics of networking and multiplicity. See Pertti Joennimi, Regionality: A Sovereign Principle in International Relations?, in: Heikki Patomöki (ed.), Peaceful Changes in World Politics, Tampere: Tampere Peace Research Institute, No. 71, 1997. 54 Christopher Browning, p. 546. 55 See, for instance, Jan Zielonka. 56 On the whole, there is a range of geometric models drawn up to describe the EU policy towards its neighbours systemically: to name some, a) the hub-and-spoke model which rests on bilateral relations between the centre and smaller states or entities, b) the cobweb model represented by the centre / hub and the successive concentric circles (neighbouring states or entities) with elements of both bilateral and multilateral relations, c) the matrix model (the representation of the relationship between the centre and a region based on policy domain segregation, and d) the Rubik cube model replicating the matrix model but presupposing more than one centre / hub in the system. See Michael Emerson, The Wider Europe Matrix, pp. 21 – 23. 53

28

I. Introduction

Baltic states, Poland and Russia, who in turn are circles (groups of insiders, semi-insiders and semi-outsiders / close outsiders) that surround the centre and are differentiated according to their degree of integration with the centre. 57 In this way, the EU is represented as a hub with a cobweb system (neighbouring states and entities) around it. 58 The group of insiders is represented by Member States participating in all sectors of common policy (Finland and Germany). Semi-insiders embrace the Member States that opt out from some policies (Denmark and Sweden) and the then-candidate countries who, being on the way to full integration to the Union, currently remain outside some policy sectors due to transition periods (EU labour market, the European Monetary Union). In the meantime the third circle is constituted by close outsiders and semi-outsiders who are all together comprehended as wider Europe, including Russia and its northwestern regions. While the status of close outsider focuses on the position of the country which is formally “outside” the EU but simultaneously affected by EU integration, the status of a semi-outsider is applied specifically to Russia’s northwestern regions, which can not be considered in either the group of insiders or outsiders due to “their geographical interface with the Union and their participation in the Union’s ND process”. 59 In the model of a concentric EU-led order, the Union centre clearly has to encounter another hub, Russia, and overlap with the so-called “Russian order”. In this fashion, with both the EU and Russia acting as two cores surrounded by concentric circles, “Kaliningrad may be seen as being located at the intersection of such circles”. 60 Should the oblast be portrayed as a semi-outsider moving in the EU’s centre or, in the same fashion, as an insider revolving around its centre – Russia, one should realize that the overlapping of the two hubs is unavoidable and hence entails crucial implications for Kaliningrad’s situation. c) The institutional / legal border of the EU: Forms of integration with the EU In accordance with the foregoing, underneath multiple tendencies and developments throughout the world in general and in the process of European integration in particular, the EU borders have tended to become increasingly fuzzy. The strict division of the “inside” and “outside” has been markedly modified, and this is especially manifest as regards the EU’s institutional / legal boundaries. To date, being integrated with the EU does not necessarily bring with it a formal or de 57

p. 34. 58

59 60

See Pami Aalto, European Union and the Making of a Wider Northern Europe, See also Michael Emerson, The Wider Europe Matrix, pp. 22 –23. Pami Aalto, European Union and the Making of a Wider Northern Europe, p. 37. Pertti Joenniemi, Kaliningrad, Borders and the Figure of Europe, p. 169.

3. Theoretical and analytical framework

29

jure membership in the EU. Clearly, the substance of ultimate inclusion in the EU includes first and foremost the legal membership model, but, in the same vein, it does not axiomatically dismiss optional forms going beyond membership, whereby the levels of flexibility, intensity and breadth of integration vary. 61 All in all, apart from the membership model, two other patterns of inclusion presupposing closer cooperation with the EU can be identified: a) economic integration exemplified by the European Economic Area (EEA) and b) Association and the European Neighbourhood Policy. 62 In turn, the association with the EU has, until recently, been grounded in types of agreements such as the Europe Agreement (EA), the Association Agreement (with Turkey), the Stabilization and Association Agreement (SAS) (with the Balkans); the Partnership and Cooperation Agreement / PCA (Newly Independent States / NIS) and the Free Trade Agreement (Club Med). Membership is the deepest and final form of European integration, with acceding states becoming parties to the EU founding treaties and accepting the precedence of Community Law, and, since the Treaty of Lisbon has come into force, EU law over national legislation, its binding nature and the obligation to observe the principles laid down by the Union’s law. 63 Essentially, states that join the EU fully enter the EU’s decision-making process, fully realize the EU acquis, and participate in the internal market, both the European Monetary Union and the Schengen area (after a transition period), the Common Foreign and Security Policy and the European Security and Defence Policy / ESPD (recently re-named Common Security and Defence Policy / CSDF) as well as other EU policies. Membership rests upon pre-accession conditionality as its principal instrument. Conditionality has been established by the membership conditions envisaged in Article 49 and 6 (1) of the Treaty on the European Union (TEU) and in the 1993 Copenhagen criteria – originally defined for the countries of Central and Eastern Europe and afterwards extended to any EU candidate country and prescribed in the instruments of the pre-accession strategy. 61 See Wolfgang Quaisser / Steve Wood, EU Member Turkey? Preconditions, Consequences and Integration Alternatives, Forost Arbeitspapier Nr. 25, Oktober 2004, München, pp. 54 – 55; Canan Atilgan / Deborah Klein, EU-Integrationsmodelle unterhalb der Mitgliedschaft, KAS Arbeitspapier Nr. 158, 2006, Berlin, p. 7; Steven Blockmans / Adam Łazowski, The European Union and its Neighbours: Questioning Identity and Relationships, in: Steven Blockmans & Adam Łazowski (eds.), The European Union and Its Neighbours. A legal appraisal of the EU’s policies of stabilization, partnership and integration, The Hague: T.M.C. Asser Press, 2006, pp. 3 –18. 62 See Barbara Lippert, Beefing up the ENP: Toward a Modernisation and Stability Partnership, in: Johannes Warwick and Kai Olaf Lang (eds.), European Neighbourhood Policy. Challenges for the EU-Policy Towards the New Neighbours, Barbara Budrich Publishers, 2007, pp. 182 – 183. 63 See Kirstyn Inglis, Chapter 3. EU Enlargement: Membership Conditions Applied to Future and Potential Member States, in: Steven Blockmans & Adam Łazowski (eds.), pp. 61 – 62.

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I. Introduction

Article 49 TEU dictates the eligibility conditions enabling a membership application and the procedure for this application; in particular, it stipulates that any European State which respects the Union’s values and principles may apply to become a member of the Union. In the meantime, the principles that an aspiring state is required to comply with and that are common to the Member States constitute the foundation of the Union and include the principles of liberty, democracy, respect for human rights and fundamental freedoms and the rule of law. The Copenhagen criteria, in turn, envisage that the candidate country possesses: 1. stable institutions which guarantee democracy, the rule of law, human rights and respect for and protection of minorities; 2. a functioning market economy and the capacity to face competition within the Union, and 3. the ability to meet the obligations of membership and pursue the aims of a political, economic and monetary union. Finally, the fourth criterion is chiefly related to the receiving Member States; constituting a cornerstone of the contemporary internal debate over the future of EU enlargements, it specifies that the Union’s absorption capacity should also be an important factor in EU decisions pertaining to membership. 64 The EEA-EFTA (European Economic Area) countries, Norway, Iceland and Liechtenstein, are regarded as the most integrated of all EU non-members because the integration takes place on the level of the EU legal system. 65 This model of integration embodies deep economic integration pertaining to the establishment of a common market based on the EU acquis and the four freedoms (goods, capital, labour [restricted] and services). Besides, the EEA (multilateral) agreement – which is by nature an association agreement – covers provisions on competition law as well as on enhanced cooperation in areas like transport, research and development, education, consumer safety, the environment and social policy. 66 These countries may also participate in certain EU programmes and take part in their development and management by participating in the corresponding committees. The EEA agreement foresees a certain institutional framework formed by the EEA Council (ministers of EU and EEA states as well as members of the European Commission), the EEA Joint Committee (the European Commission and EU and EEA government representatives), the EEA Joint Parliamentary Committee and the EEA Consultative Committee and the EFTA Court. While the EEA represents a high-level free trade area it generally does not envisage participation for non-EU member states in the political process of the EU.

64

Ibid., p. 64. See Adam Łazowski, Chapter 4. EEA Countries (Iceland, Liechtenstein and Norway), in: Steven Blockmans & Adam Łazowski (eds.), p. 96. 66 Agreement on the European Economic Area, OJ L 1/1 (1994). 65

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While Switzerland is not a stakeholder in the EEA it is still part of the EU integration process from both an economic and legal perspective since the numerous bilateral treaties concluded with the EU envisage partial approximation of its domestic legislation to the EU law. 67 Accordingly, Switzerland is empowered to participate on key elements of the EU internal market as well as in certain aspects of the area of freedom, security and justice, but it has no political and institutional capacity to influence the decision-making process. While political dialogue is carried out at the highest political level, cooperation takes place within the framework of joint committees established by each bilateral agreement. The concept of association is multifaceted and encompasses several models. It starts with Partnership and Cooperation Agreements, which demonstrate the lowest degree of integration, and stretches to Europe Agreements, which essentially provided the states involved with an associated status and subsequently led them to full EU-membership. While agreements of the former type were concluded with the NIS countries, aimed at stabilization, and dwelt upon regional cooperation or partnerships, the EAs were directed towards the Central and Eastern European countries and were grounded on the ultimate goal of their full integration or accession to the EU. 68 As contrasted to the former, the integration approach inherent in the EAs was found to be successful in stimulating economic reform and political stability and enlargement in particular was recognized as being the most sufficient and powerful EU foreign policy instrument. The EAs established a framework for political dialogue and economic relations within a free trade area, thus fostering economic, cultural, social and financial relations as well as adjusting national legislation to Community Law. Being a part of the pre-accession strategy, the EAs led to a complete integration of these countries in the European Union. In the meantime, the Partnership and Cooperation Agreements are less ambitious and although, as in the case of the Russian Federation, they envisage the establishment of a free trade area in a long-term perspective, they mostly provide non-preferential treatment in trade aimed at encouraging economic cooperation and thus fail to include provisions for the liberalisation of the four freedoms of movement (goods, persons, services and capital) while the idea behind any association is the establishment of a free trade area. Clearly, in institutional terms, the EAs provided more extensive scope for institutions (Association Council and Accession Partnerships) than the PCAs 67 See Adam Łazowski, Chapter 5. Switzerland, in: Steven Blockmans & Adam Łazowski (eds.), pp. 148 – 149. 68 See Antonio Missirolli, The EU and its Changing Neighbourhood: Stabilization, Integration and Partnership, in: Roland Dannreuther (ed.), European Foreign and Security Policy: Towards a Neighbourhood Strategy, 2004, p. 12.

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do. Likewise, the fundamental difference between the two cases is reflected in different types of legal bases. The legal basis of the EAs as well as Stabilization and Association Agreements was Article 310 of the Treaty on European Community (ECT), whereas the PCA were based on Articles 133 and 300 of the ECT which were EC trade and cooperation agreements, respectively. 69 The EU financial programs predestined for these two types of states included the pre-entry assistance (PHARE, SAPARD, and ISPA) for the EAs signatories; the TACIS programme was reserved for the PCA holders. The associated status is also inbuilt in the Stabilization and Association Agreements with the Southeastern European states, parties to the Stabilization and Association Process established at the Zagreb summit in 2000. 70 The countries of the Western Balkans were thus granted a promise of EU membership in a long-term perspective provided they met the conditions as determined by the Copenhagen criteria after it became clear that the previous EU stabilization approach based on regional cooperation and short of prospects of full integration proved to be unsatisfactory. 71 Currently, the EU approaches them on the basis of the conditionality principle which is prescribed in the bilateral Stabilization and Association agreements as well as in the so-called European Partnerships which are the EU’s policy tools for presenting the short-term and long-term priorities for reforms in each Western Balkan country. 72 In terms of economic integration, trade liberalization and partial adoption of the acquis (predominantly related to the internal market) are envisaged in the SAAs and EU financial assistance in the framework of the CARDS program 73 was delivered. 74 69 See Christophe Hillion, Chapter 14. Russian Federation (including Kaliningrad), in: Steven Blockmans & Adam Łazowski (eds.), p. 469. Article 310 of the ECT legalized the establishment of an association between the EC and a third State: “the Community may conclude with one or more States or international organizations agreements establishing an association involving reciprocal rights and obligations, common action and special procedure”. Article 133 of the ECT constituted a legal basis for the EU’s trade policy. It regulates the legal procedure of concluding trade agreements with third countries. Article 310 of the ECT regulates the conclusion of international agreements. Under the Treaty of Lisbon which came into force on December 1, 2009, Article 310 of the ECT moved to Article 217 of the Treaty on the Functioning of the European Union (TFEU), and Articles 133 and 300 of the ECT correspond to Articles 207 and 218 of the TFEU. 70 See Steven Blockmans, Chapter 10. Western Balkans (Albania, Bosnia-Herzegovina, Croatia, Macedonia and Serbia and Montenegro, including Kosovo), in: Steven Blockmans & Adam Łazowski (eds.), pp. 315 – 355. 71 The Declaration of the Zagreb Summit, November 24, 2000. 72 Council Regulation (EC) No. 533/2004 on the establishment of European partnerships in the framework of the Stabilisation and Association Process, OJ L 86/1 (2004). 73 CARDS stands for the Community Assistance for Reconstruction, Development and Stabilisation. 74 Since 2007, the CARDS programme was replaced by the Instrument for Pre-Accession Assistance.

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Another type of agreement presupposing an associated status for EU partners is represented by bilateral Association Agreements 75 or Free Trade Agreements 76 similarly based on Article 310 of the ECT with the Mediterranean countries. In like manner, these countries are parties to the multilateral political framework Euro-Mediterranean Partnership inaugurated at the 1995 Barcelona conference with a view to dealing with instability in the Mediterranean region. Without an ultimate accession perspective, these agreements foresee preferential treatment in trade and partial approximation of the relevant (economic) legislation; they aim at the eventual establishment of a Euro-Med free trade area by 2010 and provide an institutional set up consisting of an Association Council and an Association Committee; they also contain political provisions on human rights and political dialogue. The cooperation is grouped into three areas: a) political and security cooperation, b) economic and financial cooperation, and c) cooperation in social and cultural areas. The EU financial aid to the states of the Mediterranean region was channeled through the MEDA 77 programme launched in 1995. 78 In 1963, the (Ankara) Association Agreement was signed with Turkey, which has also held the status of candidate country since the 1999 Helsinki European Council. Party to a customs union with the EU established in 1995, Turkey has halfway harmonized its legislation with the economic EU legislation. 79 The institutional composition of the EU-Turkey association consists of the Association Council, which is entitled to adopt decisions and make recommendations, the Association Committee assisting the Association Council, and other subcommittees such as the Parliamentary Committee, the Customs Cooperation Committee and other bodies. Under the association regime, Turkey is eligible for participation in the European Environment Agency, it may in principle take part in other EU programmes, and, in addition, Turkey cooperates closely with the EU in the area of ESDP / CSDP. As to the financial assistance, Turkey fully partakes in the pre-accession strategy and benefits from different EU funds, with the priority areas for the aid identified in the Accession Partnership of 2000. For various reasons, not least connected with both political and public opposition to the further EU Eastern enlargement in general and the potential economic, political and institutional consequences of Turkey’s membership in the EU in particular, Turkey’s way to accession to the EU has been hampered 75 See Karolien Pieters, Chapter 12. The Mediterranian Countries (Morocco, Algeria, Tunisia, Libya, Egypt, Jordan, Syria and Lebanon, in: Steven Blockmans & Adam Lazowski (eds.), p. 403. 76 See Wolfgang Quaisser / Steve Wood, p. 58. 77 MEDA stands for “measures d’accompagnement”. 78 Since 2007, MEDA was replaced by the new financial instrument, the European Neighbourhood and Partnership Instrument. 79 See Edgar Lensk, Chapter 9. Turkey (including Northern Cyprus), in: Steven Blockmans & Adam Lazowski (eds.), pp. 283 – 313.

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and the finality of its pre-accession preparations is not yet visible. Instead, voices (from France and Germany, predominantly German CDU / CSU) have been increasingly heard to offer Turkey a sort of “privileged partnership” as a surrogate for formal EU membership. 80 Although this concept has not received an official definition, it admittedly implies a special status which would go beyond a customs union and lead to the creation of Comprehensive Free Trade Area and / or include Turkey’s membership in the EEA. Furthermore, the concept supports the intensification of political dialogue in foreign and security relations and specifically the integration into CFSP and the ESDP / CSFP, integration as regards the field of the then-EU’s third pillar by means of relevant agreements in the area of police and judicial cooperation in criminal matters, and eventually strengthening of partnership projects and financial support. In short, the concept signals enhanced cooperation in certain fields such as the internal market and the four freedoms, political dialogue and cooperation in the area of justice, security and home affairs. While it foresees further approximation to EU standards it simultaneously excludes participation in the Union’s common policies as well as in EU institutions, retaining only consultation rights in the Council of the European Union. 81 At the same time, there have been other propositions as regards functional equivalents to enlargement / EU membership, emulating the concept of “privileged partnership” and basing on the EEA model. Thus, some authors suggest that the concept of an “Extended Associate Membership” (EAM) should be introduced as an integration alternative to “a final integration level”, either as a temporary or a permanent model, although not excluding the perspective of full membership. 82 An integration archetype like this would essentially mean full participation in an “Extended European Economic Area” in the economic sphere based on the existing EEA. The internal market (with competition rules) would be extended to the holders of an EAM status, however, unlike in the EEA, specific sectors would be excluded and labour market access would be restricted. Participation in the European Monetary Union is not foreseen, but is also not excluded. Clearly, the countries concerned would have to adopt most of Community economic law and would enjoy the right to take part in the decision-making structures of the EEA, and as the EAM – extending the EEA concept – would also represent a customs union, EAM members would be entitled to exercise the right of consultation as regards the EU’s position in trade negotiations. 80 See Steven Blockmans / Adam Lazowski, Chapter 19. Conclusions: Squaring the ring of friends, in: Steven Blockmans & Adam Lazowski (eds.), p. 634, and Andreas Maurer / Max Haerder, Alternatives to Full Membership of the EU, in: Kai-Olaf Lang (ed.), European Neighbourhood Policy. Challenges for the EU-Policy Towards the New Neighbours, Opladen: Barbara-Budrich Publisher, 2007, p. 204. 81 See Canan Atilgan / Deborah Klein, pp. 12 – 14. 82 See Wolfgang Quaisser / Steve Wood, p. 51 – 53.

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Furthermore, economic integration would be accompanied by partial political integration, namely, participation in the Council’s meetings with an opportunity to present opinions and positions but without the right to vote, as well as intense cooperation in ESPD, which would require the establishment of a special council for EDSP coordination. The other proposition of the proponents of this model is employment opportunities for EAM countries’ personnel in European institutions, principally the Commission. Eventually, EAM status would enable partial integration in the EU Structural and Cohesion Funds, and although participation in the Common Agricultural Policy (CAP) would be excluded, a focus on rural development would be made. In the context of the debate over Turkey’s integration into the EU, the concept of a “gradual integration” (abgestufte Integration) has been put forward again as an alternative to formal accession into the EU. 83 This model presupposes a gradual, step-by-step, inclusion of Turkey in EU political structures and a partial integration of various sectors. The difference of this model from that of a privileged partnership model and the EAM lies in the fact that, apart from close economic integration, it offers partial political integration with the right for a co-decision (not only the right of consultation) in the sectors pertaining to the integrated areas, although a veto right in the Council of the European Union is ruled out. 84 In addition to that, the dynamics (graduality) of the model consisting of three stages – as opposed to the previous static levels – is believed to be able to stimulate Turkey’s aspirations and efforts to further the internal democratization and consolidation process, since it is being treated as a candidate country rather than as a third type. 85 The “European Economic Area+” (EEA+), which is closely modeled on the relationship between the European Union and Norway, part of the EEA, represents another attempt to sketch a feasible model of integration. 86 Accordingly, this model presupposes not only participation in the EU internal market and the application of the EU acquis in this area and the establishment of the four freedoms, but also a consultation right for the neighbours in the Council of the EU and their partaking in the EU’s programmes designed for the Internal Market. As such, although this integration pattern does not foresee the membership 83 See Cemal Karakas, Für eine abgestufte Integration. Zur Debatte um den EU-Beitritt der Türkei, HSFK-Standpunkte 4/2005. 84 Ibid., pp. 6 – 10. 85 A similar to the above model of integration of third countries into the EU was proposed in the “junior membership” (Junior-Mitgliedschaft) scheme applied for the case of the Western Balkan states but also potentially relevant for other states, so far deprived of a membership perspective. See Franz-Lothar Altmann, EU and Westlicher Balkan. Von Dayton nach Brüssel: ein allzu langer Weg, SWP-Studie, Januar 2005. 86 See Elmar Brok, Eine neue Erweiterungsstrategie für die EU, in: Die Politische Meinnung, Nr. 433, Dezember 2005.

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I. Introduction

perspective, it stipulates that the participating countries would gradually adopt up to 70 percent of the EU acquis before both sides will decide on possible accession perspectives to the EU. The most recent and factual model of the EU’s neighbours’ integration with the EU is the European Neighbourhood Policy, an attendant product of the EU Eastern enlargement. 87 The EU came to formulate this new and ambitious policy approach for two principal reasons: on the one hand, the new immediate neighbourhood brought forth by the enlargement – arguably a potential source of instability due to their asymmetrical economic and political development – raised the EU’s concerns over its external security. On the other hand, this development posed the question of the EU’s identity and hence the degree of its enlargement capacity, especially taking into account the enlargement fatigue that the EU had already come close to and explicit membership aspirations of some of its eastern neighbours. 88 The ENP thus targets at the EU’s neighbours: the Southern Mediterranean states, the Western Newly Independent States and the three South Caucasus republics and it represents a mode of integration that brings these states closer to the EU and simultaneously aims to substitute a perspective of formal membership in the EU. By means of this policy, the EU seeks to maintain freedom and security in the neighbourhood through strengthening political cooperation based on shared values and common interests, to contribute to the neighbours’ prosperity through assistance in implementing economic reforms and a guarantee of deeper economic integration. At the same time, whilst sharing the advantages produced by the 2004 enlargement with the neighbours and trying to avoid dividing lines, the EU in essence expects to ensure its own security. 89 Although a new policy, the ENP has neither replaced nor collided with the EU’s existing policies and instruments towards the ENP partners constituted by the PCAs and the Euro-Mediterranean Agreements, but it has rather “served as the framework for the proper enforcement of these instruments”, 90 supplementing 87

COM (2003) 393; COM (2004) 373; COM (2006) 726; COM (2007) 774; and COM (2008) 823. 88 See, for instance, Michael Emerson, European Neighbourhood Policy: Strategy or Placebo, and Marco Overhaus, The New Neighbourhood Policy of the European Union: Editorial, in: Marco Overhaus, Hanns W. Maull, and Sebastian Harnish (eds.), The New Neighbourhood Policy of the European Union. Perspectives from the European Commission, France, Germany, Poland, Ukraine and Moldova, Foreign Policy in Dialogue, Vol. 6, Issue 19, 2006, p. 3. 89 See Irina Ochirova, The European Neighbourhood Policy and the Constitution for Europe, in: Matthias Niedobitek and Jiři Zemánek (eds.), Continuing the European Constitutional Debate, Berlin: Duncker & Humblot, 2008. 90 Steven Blockmans / Adam Łazowski, Chapter 19. Conclusions, in: Steven Blockmans & Adam Łazowski (eds.), p. 633.

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and revitalizing them. The EU’s offer to its neighbours in the framework of the ENP is an enhanced or “privileged” relationship consistent with the EEA model, whereby “prospect of a stake in the EU’s Internal Market and further integration and liberalization to promote the free movement of persons, goods, services and capital (four freedoms)” is offered as a countermove to “concrete progress demonstrating shared values and effective implementation of political, economic and institutional reforms, including in aligning legislation with the acquis”. 91 Recent efforts to strengthen the ENP have resulted in plans to offer the application of key instruments of the pre-accession strategy pertaining to administrative capacity building, such as Taiex and Twinning, in cooperation with the partner states as well as to offer certain EU agencies and programmes to partner countries. 92 In operational terms, this policy presupposes an extensive use of the preaccession strategy instruments such as Action Plans, regular Country Reports and negotiations as well as the application of the principles of differentiation and conditionality. The principal financial tool of the ENP is the European Neighbourhood and Partnership Instrument (ENPI), which replaced the previous geographical programmes such as TACIS and MEDA, as well as thematic programmes like the European Initiative for Democracy and Human Rights (EIDHR), which have been turned into a single policy-driven instrument guaranteeing coherence, simplified assistance programming and management. 93 The novelty of the ENPI lies in its cross-border cooperation component, which is compelled to finance joint programmes between ENP participants and EU Member States sharing a common border. While the ENP currently reinforces the functioning of the existing legal foundations, in the future and upon the implementation of the Action Plans, it foresees a new generation of EU international agreements to be concluded with the neighbours to replace the previous contractual forms of the relationship, until recently called European Neighbourhood Agreements in official documents, essentially deep and comprehensive free trade agreements. 94 In the meantime, the latest European Commission’s Communication of December 2008, proposing the establishment of the so-called Eastern Partnership in the framework of the ENP, 95 explicitly states that the new treaties to be signed with Eastern partners will be 91

COM (2003) 104, p. 4. See Barbara Lippert, EU-ENP and Russia-clash or cooperation in the triangle?, in: Partnership with Russia in Europe. Economic and Regional Topics for a Strategic Partnership, Fifth Roundtable Discussion, Potsdam, march 19 –20, 2007, Friedrich-Ebert Stiftung, pp. 21 – 22. 93 Regulation No. 1638/2006 of the European Parliament and of the Council laying down general provisions establishing a new European Neighbourhood and Partnership Instrument, OJ L 310/1 (2006). 94 COM (2004) 373. 92

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association agreements. 96 These agreements will “create a strong political bond and promote further convergence by establishing a colder link to EU legislation and standards”, 97 stretching to the cooperation area in the Common Foreign and Security Policy and Common Security and Defence Policy. Until recently, the legal provision in EU legislation that allowed such conclusions was Article 310 of the ECT and it has currently moved into Article 217 of the Treaty on the Functioning of the European Union. The Treaty of Lisbon explicitly introduced a legal basis for the EU’s neighbourhood policy in Article 8 of the Treaty on European Union. Being an ambitious and comprehensive policy, the ENP has come under considerable criticism in both the political and academic communities. Some have explained the shortfalls of the ENP by its path dependency on the enlargement strategy / policy and a lack of foreign-policy focus. Instead, they put forward a new type of association agreement for modernization and stability appropriate for the Eastern European countries, essentially detached from the enlargement policy and designed in terms of foreign and security policy. 98 While not foreseeing a membership perspective, such agreements will go beyond the free-trade association agreements with the Mediterranean states. The principal components of the association would be dedicated to two thematic foci: firstly, modernization that covers the economy and trade, democracy, and institution-building political dialogue as well as aid; and, secondly, stability that enhances foreign and security dialogue and cooperation as well as internal security. Apart from a more active participation and greater responsibility for the decision-making process in their national reform programmes, the agreement’s provisions would enable the partner countries to take part in the EU decision-shaping and also partake in the institutional framework based on an observer status. In general, the proposal revolves around the principal idea of avoiding any likenesses between the ENP and enlargement policies and attaches the clear shape and content of a foreign policy while at the same time integrating the neighbours into the EU. Above all, it has been suggested that the EU create an overarching framework, a panEuropean Confederation of Tasks (Confed Europe), which would be based on functional and sectoral cooperation stretching into three dimensions: the political and humanitarian dimension, the economic dimension and the security dimension. Along with the EU it would comprise Eastern European (associated) states without membership perspectives as well as possibly the EFTA countries and Russia. 95 The Eastern Partnership was lanched at the Prague Eastern Partnership Summit in May 2009. See Joint Declaration of the Prague Eastern Partnership Summit, Prague, May 7, 2009. 96 COM (2008) 823, p. 4. 97 Ibid. 98 See Barbara Lippert, Beefing up the ENP, p. 185.

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In contrast, in an opinion tabled by some members of the European Parliament, there is a conceptual, political and legal gap between the EU Enlargement Strategy and the ENP. 99 Their first proposal is that the EU’s Enlargement Strategy: should be flanked by a more diversified range of external contractual frameworks and that these frameworks should be structured as mutually permeable concentric circles, with countries being offered the opportunity, under strict but clear internal and external conditions, to move from one status to another if they so wish and if they fulfill the criteria pertaining to each specific framework. 100

The other suggestion refers to the Eastern neighbours of the EU who do not currently enjoy a perspective for membership but who meet certain democratic and economic conditions. With them, the EU should “establish an area based on common policies covering, in particular, the rule of law, democracy and human rights, foreign and security policy cooperation, economic and financial issues, trade, energy, transport, environmental issues, justice, security, migration, visafree movement and education”. 101 While the general goal should be to assist the neighbours in the adoption of EU standards and closer integration with the EU, the EU should enable the partners to shape the common policies on the basis of specific decision-making mechanisms jointly and provide adequate financial assistance. However, proposals on a ring of concentric circles around the EU have found response mostly in the academy rather than in political discourses of the Member States. 102 As a sublimation of these efforts to transcend the existing models of integration and offer potentially applicable models, a Model of Modular Integration (MI) has been brought forth which is essentially derived from the “realities of the differentiated integration” 103 inside the EU and essentially implies “(part-) membership with permanent opt-ins”. 104 This integration would occur specifically on two levels: on the level of policy, sectoral (modular) integration into institutions will take place, and on the level of polity the partner states would be offered competences to participate in the Council (including veto power) and co-decision rights in the European Parliament, but no right to nominate a Commissioner. Complementarily, the MI would begin to use the EEA and its institutions “as the basis of the whole Neighbourhood Policy”, 105 including the 99

See Elmar Brok, Report on the Commission’s 2007 enlargement strategy paper, Committee on Foreign Affairs, European Parliament, A6 –0266/2008, 26. 6. 2008, p. 7, as reported in: EU-27 Watch, No. 7, September 2008, EU-Consent. Constructing Europe Network, Institut für Europäische Politik, Berlin, p. 14. 100 Ibid., p. 7. 101 Ibid., p. 7. 102 See EU-27 Watch, No. 7, p. 14. 103 Andreas Maurer / Max Haerder, p. 209. 104 Ibid.

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I. Introduction

complete internal market and Customs Union as well as the financial instrument of the ENP. The ultimate goal thus is seen as “an end to enlargement policy with an aim to full membership; introduction of flexible, overlapping areas of integration”. 106 It follows from above that the whole range of the forms of integration of the EU with its neighbours may be grouped into three models: a) the membership model, b) the economic model and c) the association model. The latter pattern represents a multifaceted and heterogeneous concept. While an association with the EU may lead an associated state to the formal EU membership, an association is yet often a means for the EU – as officially determined for example in the “Eastern Partnership” of the European Commission and intensively discussed in academic circles – to generate and offer aspiring neighbouring states an alternative scenario to further EU expansion since the EU has increasingly been facing multiple uncertainties concerning its absorption capacity and the typical dilemma of enlarging versus deepening. 107 This is aggravated by the fact that the proposed institutional reforms laid down in the Treaty of Lisbon – which essentially aim at strengthening the EU’s legal capacity – still have not been executed thus far. Furthermore, efforts made hitherto by the EU to increasingly pursue a politics of inclusion towards its neighbours, albeit without offering them a voice in the decision-making, has fed talk among the academic community of designing innovative patterns of integration based on the principles of association. In some important respects, the common feature of all these types of integration is the fact that they all target sovereign states and not their subunits, as is the case of the Kaliningrad Oblast. However, they all also testify to the simple fact that even states that are short of a feasible perspective for joining the EU, perhaps from their own unwillingness but mostly from reluctance by the EU, may be integrated with the EU up to a point and thus be located “inside” rather than outside the Union. This “insideness” can be measured against several factors which can be detected from the above study of integration patterns and frameworks. They are: a) the level of integration in the EU legal system, in particular as regards economic integration and the volume of the adapted acquis, b) the level of ambition of the integration model as regards the requirements, conditionality and final aims; c) the density of the joint institutional framework and d) the integration on the level of the participation in the EU’s financial programmes and participation in EU programmes and policies (in association with policies).

105

Ibid. Ibid. 107 See, for instance, Anne Faber, Die Weiterentwicklung der Europäischen Union: Vertiefung Versus Erweiterung?, in: Integration, No. 2, 2007. 106

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Seen in this light, one can speculate that not only the academic community but also the actual developments in European integration regarding the forms of inclusion herald a change in the conventional modernist thinking on the clear division between “in” and “outside”. This makes it not inconceivable that Kaliningrad could also be inside the EU. Throughout this paper, the aforementioned determinants of integration of third states with the European Union will serve as a basis for assessing the EU’s policy towards the Kaliningrad region and in particular for measuring the degree of Kaliningrad’s integration with the Union; they are further refined and spelled out in Chapter I.4. d) Kaliningrad’s integration with the EU in academic discourse and a review of literature Some forms of integration with the EU have also been virtually fitted to the case of the Kaliningrad Oblast in some academic discussions. This predominantly concerns the concept of association as an appropriate form for anchoring Kaliningrad in the EU. While statements on this topic appeared on the political tribune only randomly in the early 2000s, 108 academic discourses stemming mostly from Kaliningrad elaborated on this issue more actively, albeit not yet fruitfully. 109 Thus, although failing to explain the meaning of an “associated membership” 110 in the EU, Sergey Naumkin identified this model as the most plausible one of the whole range of models for Kaliningrad’s possible integration with the Union. Others were discarded as mostly unlikely: German ownership and Germanisation, the status of a republic or a region of the Russian Federation with a special status and an independent state. Integration appeared to be the most appropriate scenario for Kaliningrad, surpassing scenarios of indifference and isolation.

108 Thus, German Chancellor Gerhard Schröder was the first politician to voice an idea of an associate status for Kaliningrad in January 2001 and this was reiterated by Sergey Shakhray, former Russian Deputy Prime Minister. See Sergey Naumkin, Possibility of Kaliningrad Integration into the Single European Space, Masterarbeit zur Erlangung des akademischen Grades Master in Baltic Sea Region Studies, Humboldt Universität zu Berlin, Berlin, 2004, pp. 16 – 17. 109 See, for instance, Sergey Naumkin, 2004; Vladimir Kuzin / Sergej Naumkin, Kaliningrad i associirovannoe chlenstvo v ES. Mif ili real’nost’?, Kaliningradskij fond “Resursnyj informacionno-analiticheskij centr”, Kaliningrad, 2001, available at: http ://koenig-ngo.net and Anatolij Gorodilov / Mihail Dudarev / Stanislav Kargopolov / Aleksander Kulikov, XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz / XXI century, Kaliningrad: Jantarnyj skaz, 2003. 110 Segey Naumkin, p. 27. While there are such denominations as “associated country” and “associated territory” in EU legislation, the category of “associated membership” does not exist. See Michael Emerson, The Wider Europe Matrix, p. 62.

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Whilst speaking of an association between the EU and the Kaliningrad Oblast on the basis of an association agreement, the author insisted that this agreement could be guided by the example of the EEA and Swiss agreements, thus in effect favouring an economic integration of the oblast into the Union, short of a status as a political component. He went so as far as to advocate the inclusion of economic issues, the issue of the environment, transport, of the movement of services, labour and capital and freedom of movement, provisions on investments, and financial assistance. In addition, he foresaw the harmonization of legislation and policies on the social development of the oblast in the association agreement, as well as the participation of Kaliningrad representatives in some EU institutions. A similar proposal was presented by a group of scholars from Kaliningrad, who made the case that the Kaliningrad Oblast should be integrated into the European Union as an “associated member” and adapt to the European Union legislation while the Russian Federation should preserve its sovereignty over the oblast. 111 Clearly, the authors also contemplated on the legal arrangements on the oblast’s legal status under constitutional and international law which would be required subsequently to endow the oblast with associate status. Thus, their reasoning was that the European Union and the Russian Federation should conclude a treaty on the delineation of sovereignty and jurisdiction over the Kaliningrad Oblast, whereby the oblast should eventually be placed under the joint jurisdiction of the EU and Russia. 112 Therefore, the Kaliningrad Oblast should be endowed with a higher legal status – such as a republic – and assume an international legal personality on the basis of the Constitution of the Russian Federation. Attempts to examine the potential for Kaliningrad’s integration into the EU were made at different times within the discourse on the oblast’s status as a pilot region of EU-Russia integration. Although mentioned in official documents such as Russia’s Mid-term Strategy towards the European Union for the period 2000 – 2010, the concept of a pilot region appeared mostly in academic discussions on policy-making matters. 113 In particular, it was proposed in the framework of the research conducted by specialists at the East-West Institute, which placed the transformation of the oblast into a pilot region in the context of establishing a Common European Economic Space (CEES) between the EU and Russia and a (potential) special EU-Russia agreement on Kaliningrad. 114 111

See Anatolij Gorodilov et al., 2003, p. 206. Ibid., p. 237. 113 The “pilot” concept in application to the case of the Kaliningrad Oblast was defined as “meaning new approaches and principles in the region which can be duplicated in other Russian regions” and “the main testing ground for developing and growing economic, political and humanitarian cooperation between Russia and the EU”. Support to transforming the Kaliningrad Oblast into a Pilot Region of Russian-EU cooperation, East West Institute, Kaliningrad, 2003, p. 13. 112

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The authors provided a comprehensive package of recommendations for both the EU and Russia as regards the latter agreement, aiming at the establishment of a free trade zone between the EU and Kaliningrad, with Kaliningrad thus acting as a pilot region in the context of the creation of the CEES between all of Russia and the EU. Its legislation should be harmonized with EU requirements (standards, regulations, practice) at a more accelerated tempo compared to other regions of Russia. In the course of time, this perspective was further advanced and adapted to the new realities and developments in the EU-Russia dialogue specifically embodied by the establishment of the four EU-Russia Common Spaces. 115 This resulted in a policy study which proclaimed the suitability of Kaliningrad to be a pilot region first and foremost in the spheres of economy and freedom of movement and correspondingly within the Common Economic Space (CES) and the Common Space of Freedom, Security and Justice. 116 While in the former case the core focus would be the concept of a Kaliningrad Free Trade Area to precede an EU-Russia FTA, the latter case would signify a visa-free pilot zone between the EU and Russia. For the Kaliningrad Oblast to turn into an EU-Russia free trade area, so the argument goes, two approaches should be applied – horizontal and vertical – as in the general case of the CES. 117 The horizontal approach implies the creation of an EU-Russia free trade area in the Kaliningrad Oblast and therefore the implementation of the three freedoms of movement: goods, services and people. Legally, this could take a form of a bilateral EU-Russian agreement on Kaliningrad, either completely dedicated to the FTA or covering other issues, too. The key idea behind this is that the EU would open its markets for goods from Kaliningrad, subject to certain controls on the origin of the goods, and that Russia, in its turn, would keep the Kaliningrad market open while cancelling import quotas. The authors make it clear that whereas such a project on its own would be politically impossible, it could be implemented practically in the framework of the Common European Space since a free trade area between Russia and the EU could be established upon Russia’s joining the WTO. 118 Interestingly, the authors suggest, among other things, that Russia and the EU should 114

See Support to transforming the Kaliningrad Oblast into a Pilot Region of Russian-EU cooperation. 115 See Evgeny Vinokurov, Kaliningrad in the Framework of EU-Russia Relations: Moving Toward Common Spaces, KU Leuven, Chair Interbrew Baillet-Latour Working Paper No. 20, 2004. 116 Evgenij Vinokurov / Artur Usanov / Peter Lindholm / Aleksej Ignat’ev, Kaliningradskaja Oblast’ v kontekste sozdanija Obwego Jekonomicheskogo Prostranstva Rossija-ES, East-West Institute Policy Brief, 2005. 117 Ibid, pp. 3 – 26. 118 Ibid., p. 14.

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I. Introduction

jointly manage the project, with the EU’s participation proportional to the tasks it carries out. Furthermore, they outline a comprehensive list of measures for the functioning of an EU-Russia free trade area in Kaliningrad, including proposals on the facilitation of trade (customs, the creation of a centre of legislation and standards of the EU, export credits and promotion of export), the freedom of movement for services (the abolition of limitations for foreign investors in the Kaliningrad Oblast), and the freedom of movement of persons connected with certain steps and developments (on visa issues) within the Common Space of Freedom, Security and Justice. Meanwhile, the vertical approach envisages infrastructure projects and sectoral development. This, for instance, comprises the establishment of a joint (EU-Russian) investment programme for Kaliningrad; the creation of a Kaliningrad development fund aiming at adapting the Kaliningrad economy to the requirements of the European market; the extension of the mandate of the European Investment Bank to the Kaliningrad region; the tackling of economic questions of the complex management of borders and the development of transport infrastructure; the linking of the Kaliningrad energy system with the Baltic system; the improvement of standards of environmental protection; the establishment of a permanent high-level group on Kaliningrad, the creation of local SEZs in the oblast and finally the establishment of a centre of competition. The common feature of these study papers is their orientation towards proposing policy recommendations for possible ways of integrating the Kaliningrad Oblast into the EU. They proceed from an approximation of the existing patterns of the EU’s integration models with a particular focus on an association based on economic integration, including the establishment of a free trade area and freedom of movement, and a partial harmonization of Kaliningrad’s legislation with EU standards and regulations. On the one hand, the approaches differ in defining legal arrangements for the scenario of economic integration. While some stand for a special legal status in the Russian legal system (such as a republic) and subsequently the status of an EU associate (member), a less radical approach advocates a status of pilot regions in EU-Russia integration thus departing from the status quo of the oblast as a legal entity in the Russian federal system. On the other hand, the approaches converge in an assumption that a special EU-Russia agreement would be needed to allow the oblast to integrate with the EU. One has to accept that while the former approach advocating associate status remains perhaps somewhat overstated and marginal, if not invisible, in the general discussion over the future of the oblast, the latter approach still seems to be relevant since the status of pilot region is examined in a context that approximates the political realities. The endowment of the status of pilot region is expected to be in the framework of the realization of the four Common Spaces with particular emphasis on the Common European Space and the

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Common Space of Freedom, Security and Justice, essentially the current bases of the strategic partnership between the EU and Russia, and does not require extraordinary legal and political arrangements for either the EU or Russia. While these papers mostly revolve around policy recommendations and speculate on the future of Kaliningrad as regards its integration model, a recent anthology scrutinizes the factual adaptation of the oblast to European integration. 119 In particular, based on the analysis of selected policies in the Kaliningrad Oblast most affected by the EU (namely, economic policy, environmental policy, social policy, public health policy, higher education policy and integrated border management policy) and using the concept of Europeanization extensively as an analytical framework, this study provides an assessment of the degree of Kaliningrad’s “Europeanization” in the context of an enlarged EU and investigates the ways in which EU standards and norms influence the region, an integral part of the Russian Federation. The novelty of this approach lies in the fact that the intellectual exercise of studying the effects of the process of Europeanization is undertaken in relation to a sub-national entity of a “third country” rather than in relation to Russia as a third country in general. In this way it is believed that “singling out Kaliningrad as a test case will provide insights and explanations that may shape future research on Russia’s relations to and integration with Europe”. 120 The research conducted by the contributors to this volume reaches several conclusions. Firstly, the principal judgement is the modest degree of Europeanization of Kaliningrad: “Despite intensive cooperation, Kaliningrad’s Europeanization proceeds only within very narrow margins – the impact of ‘Europe’ is surprisingly modest”. 121 Secondly, the authors go as far as to modify the concept of Europeanization which is usually applied to states associated with the EU and come up with a notion of “Europeanization ‘à la carte’” as regards both Kaliningrad and Russia, which implies that “Kaliningrad and Russia are far from unilaterally embracing European standards and norms”, with their elites “seek[ing] to choose or facilitate processes of adaptation in areas where it serves their interests most”. 122 As a result, the authors identify a special form of ‘partial’ 119

See Stefan Gänzle / Guido Müntel / Evgeny Vinokurov (eds.), Adapting to European Integration? The Case of the Russian Exclave Kaliningrad, Manchester University Press, 2009. To this end, see also Guido Müntel, Closing the gap to Europe? An assessment of change and adaptation of environmental governance in the Russian exclave of Kaliningrad, in: Contemporary Politics, Vol. 12, No. 2, 2006. 120 Stefan Gänzle / Guido Müntel, Chapter 1. Introduction: Adapting to European Integration? Kaliningrad, Russia and the European Union, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), p. 15. 121 Stefan Gänzle / Guido Müntel, Summary: Kaliningrad and Europeanization “à la carte”, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), p. 250. 122 Ibid., p. 254.

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and ‘deliberative’ Europeanization from the side of Moscow, with the latter trying to “influence policy-making at the European level to ensure that its concerns are being taken into account”. 123 This differs considerably from the processes of Europeanization in the EU Member States and candidate countries. A phenomenon like “a new European Union policy for Kaliningrad” came under scrutiny by Sander Huisman in the early 2000s in his like-named working paper where he examined Kaliningrad’s situation in the context of EU Eastern enlargement, focusing on the specifics of both actors, the EU and Russia, that prevent them from finding a constructive and flexible decision on Kaliningrad. 124 Huisman pinpointed the EU’s wish to increase the security of its Eastern border at the expense of its neighbours and the collision of the internal security policy with the aims of an external policy encouraging cross-border cooperation. What is more important, he suggested that the EU should adopt a Common Strategy for Kaliningrad as a policy specific to this enclave, which “would allow a coherent cross-pillar, targeted approach”. 125 In addition, he advocated more flexibility within the EU as regards its approach towards Kaliningrad, the improvement of internal EU coordination of financial aid programmes (PHARE, TACIS and INTERREG), forums, institutions and policies and identified policy areas in which the EU should intensify its engagement, including infrastructure energy, transport and telecommunications; institution-building; education, information and training. While the literature focusing on the EU’s approach to the Kaliningrad Oblast remains somewhat scarce, the whole range of academic works on the topic of Kaliningrad is more extensive. Having a strong interdisciplinary character, it is studied from a variety of disciplinary perspectives ranging from history, geopolitics and law to economics and political science. Thus, since the end of the Cold War the enigma of Kaliningrad has consistently attracted the attention of scholars who deal with the history of the oblast, its regional identity and status 126 and its strategic military profile. 127 The upcoming enlargement of the EU gave substantial food for different thoughts on the issue of the border, both 123

Ibid. See Sander Huisman. 125 Ibid., p. 42. 126 See, for instance, Richard J. Krickus / Ramūnas Janušauskas / Romuald J. Misiunas, Rootless Russia: Kaliningrad-Status and Identity, in: Diplomacy and Statecraft, No. 15, 2004; Michael Rywkin, An Odd Entity: The Case of the Kaliningrad Enclave, in: American Foreign Policy Interests, No. 25, 2003; Avenir Ovsjanov, Transitstation Königsberg. Die Suche nach Kulturgütern in Kaliningrad, in: Osteuropa, 56, No. 1 –2, 2006, and others. 127 See Ingmar Oldberg, Kaliningrad in der Sicherheits- und Militärpolitik Rußlands, in: Osteuropa, 53, No. 2 – 3, 2003; Matthieu Chillaud / Frank Tetart, The Dimilitarization of Kaliningrad: A “Sysyphean Task”?, in: Baltic Security & Defence Review, Vol. 9, 2007. 124

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objective and material, including transit 128 and discursive topics. 129 The economic and social (under)development of the region, 130 its cross-border cooperation with its European neighbours (Lithuania and Poland) 131 and the place of the Kaliningrad Oblast in the federal system of the Russian Federation 132 are among the themes that have generated a considerable number of works. The other two most dominating interrelated topics associated with the problem of Kaliningrad are: 1. the Kaliningrad Oblast in the context of EU Eastern Enlargement, the impact of European integration on Kaliningrad and Kaliningrad’s implications for the EU 133 and 2. the Kaliningrad Oblast as a factor in EU-Russia relations. 134 128 See Lyndelle Fairlie / Olga Potemkina, Some Ramifications of Enlargement on the EU-Russia Relations and the Schengen Regime, in: European Journal of Migration and Law, No. 5, 2003; Evgeny Vinokurov, Transit is just a part of it: Kaliningrad and the free movement of people, Association of International Experts on the Development of the Kaliningrad Region, 2004; Evgeny Vinokurov, Kaliningrad transit and visa issues revisited, CEPS Commentary, July 2006, Centre for European Policy Studies, Brussels; Guido Müntel, Kaliningrads Weg aus der Isolation? Eine Analyse des Transitkompromisses zwischen der EU and Russland, in: Osteuropa, 53, No. 2 –3, 2003; Raimundas Lopata, The Transit of Russian Citizens from the Kaliningrad Oblast through Lithuania’s Territory, in: Bartosz Chichoki (ed.), Kaliningrad in Europe. A Study commissioned by the Council of Europe, Council of Europe, 2003. 129 The discourse on borders can be found in the following papers: Pertti Joenniemi / Andrey Makarychev and Christopher S. Browning, and others. 130 See for instance, Natalia Smorodinskaya, Kaliningrad’s Economic Growth Problem, in: Oksana Antonenko and Kathryn Pinnick (eds.), Russia and the European Union, London: Routledge, 2005; Evgeny Vinokurov, Integration of an enclave into the international economy; Evgeny Vinokurov, Ekonomicheskaja specialisacija Kalininigradskoj Oblasti, Kaliningrad, 2007; Alexey Ignatiev, Kaliningrad region: economy heading for the future, in: Baltijskij Klub, No. 1, Summer 2007; and others. 131 See Silke Schielberg, Kaliningrad in its neighbourhood-regional cooperation with Poland and Lithuania, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.). 132 See for instance, Leonid Karabeshkin, Clarifying the Status of the Kaliningrad Oblast’s in the Context of Russian Federation, in: Hanne-Margret Birckenbach / Christian Wellmann (eds.); and Rajmundas Lopata, Anatomija zalozhnika, St. Peterburg: Izdatel’stvo Aletejja, 2006; Oxana Vitvitskaya, Rechtsstatus des Kaliningrader Gebiets als Subjekt der Russischen Föderation, in: Dieter Blumenwitz, Gilbert H. Gornig and Dietrich Murswiek, Die Europäische Union als Wertegemeinschaft, Berlin: Duncker & Humblot, 2005; Leonid Karabeshkin, The Russian Domestic Debate on Kaliningrad Integrity, Identity and Economy, Münster: LIT Verlag, 2004. 133 To name some, James Baxendale / Stephen Dewar / David Gowan (eds.); Kaliningradskaja Oblast’ v Okruzhenii ES: Rol’ regiona v obweevropejskoj integracii. Materialy mezhdunarodnoj konferencii: “Evropa i Rossija: granicy, kotorye ob#edinjajut, Kaliningrad: KGU, 2003; Pertti Joenniemi et al. 134 See Timofei Bordachev, the Russian Federation and the European Union: Kaliningrad and Beyond, in: Bartosz Chichoki (ed.); Heinz Timmermann, Kaliningrad. Eine Pilotregion für die Gestaltung der Partnerschaft EU-Rußland, in: Osteuropa, No. 9, 2001; Paul Holtom / James Baxendale, EU-Russia Relations: Is 2001 a Turning Point for Kaliningrad?, in: European Foreign Affairs Review, No. 6, 2001; Yuri Borko, Russia and the EU: The Kaliningrad Dilemma, CEPS Policy Brief No. 15, March 2002; Alexey Ignatiev / Petr

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It has been rightly noticed that the bulk of academic contributions on the problem of Kaliningrad – concentrating on numerous aspects – bear an empirical character and often represent descriptive accounts of the region’s development. 135 This leads to many of them having an applied character and policy orientation concerning the treatment of the oblast in the context of the EU enlargement and future strategies for its development. 136 A number of pieces try their hands at different approaches, however, by embedding the case of Kaliningrad in various theoretical frameworks. Thus, for example, there has been an attempt to explain the problem of Kaliningrad through the prism of political science theories, wherein the Kaliningrad problem is explored through such methodological means as the analysis of international relations and foreign policy 137 as well as the premises of conflict resolution theory. 138 Furthermore, the Kaliningrad Oblast and specifically the factor of its enclave status have served as a case study for theorizing and categorizing enclaves 139 as well as the examination of exclaves in general and the Kaliningrad exclave in particular under the circumstances conditioned by globalization and regionalization processes. 140 With such a variety of disciplinary approaches to the study of different aspects of the problem of the Kaliningrad Oblast, this dissertation likewise favours a new interdisciplinary and Shopin / Pami Aalto, A European Geopolitical Subject in the making?; Arkady Moshes, Kaliningrad: Challenges Between Russia and Europe, in: Iris Kempe (ed.), Prospects and Risks Beyond EU Enlargement. Eastern Europe: Challenges of a Pan-European Policy, Leverkusen, 2003; Anatolij Gorodilov / Mihail Dudarev / Aleksej Kulikov, Problemy torgovyh otnoshenij Rossii i Evropejskogo Sojuza (na primere Kaliningradskoj oblasti), Kaliningrad: Jantarnyj skaz, 2008. 135 See Leonid Karabeshkin, Kaliningradskaja problematika v nezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope. Kvalifikacionnaja rabota na soiskanie nauchnoj stepeni k.p.n., Rossijskaja Akademija Nauk, Moskva, 2005, p. 7. 136 For example, Kaliningrad in Focus. Policy recommendations in the perspective of problem-solving, The Kiel International ad-hoc Group of Experts on Kaliningrad, SCHIFF-Texte, No. 67, October 2002 and Hanne-Margret Birckenbach / Christian Wellmann (eds.); Alexander Sergounin, The Future of Kaliningrad; Andrej Klemeshev / Gennadij Fedorov, Ot izolirovannogo jeksklava – k “koridoru razvitija”: Al’ternativy rossijskogo jeksklava na Baltike, Kaliningrad: KGU, 2004; Yuri Zverev, Kaliningrad: Problems and Paths of Development; Christer Pursianen / Sergei Medvedev (eds.), Towards the Kaliningrad Partnership in EU-Russia Relations: A Road Map into the Future, RussiaEuropean Centre for Economic Policy, Moscow 2005. 137 See Leonid Karabeshkin, Kaliningradskaja problematika v nezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope. 138 See Leonid Karabeshkin, Kaliningrad as a test-case for Russian-European Relations. 139 See Evgeny Vinokurov, Teorija Anklavov, Kaliningrad: Terra Baltika, 2007. 140 See Andrej Klemeshev, Rossijskij Jeksklav v uslovijah globalizacii, Kaliningrad: KGU, 2004; Andrej Klemeshev, Rossijskij Jeksklav. Preodolenie Konfliktogennosti, SanktPeterburg: Sankt-Peterburgskij Universitet, 2005; and Andrej Klemeshev, Problema jeksklavnosti v kontekste globalizacii, Sankt-Peterburg: Sankt-Peterburgskij Universitet, 2005.

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complex strategy and uses an innovative analytical concept, the so-called Wider Europe Matrix, which has not yet been applied to a particular case anywhere. To this end, the methodological framework of the analysis within which the original research questions can be tackled is as follows.

4. Methodology and analytical approach In order to answer the research questions posed it is first and foremost necessary to determine the principal research terms by deriving them from the foregoing. In this paper, the notions of inclusion in the EU and integration with the EU are interchangeable. The central frame of reference for the concept of inclusion is the notion of the EU’s boundaries and specifically their recent modifications. This analysis favours a closer examination of the policy of inclusion from the perspective of the institutional / legal boundary. 141 As Pertti Joenniemi puts it, the Kaliningrad Oblast represents an extraordinary EU-Russia border because, besides connecting two neighbours, it “not only stands as a transactional border, but also forms an institutional one”. 142 In general terms, the amplification of this type of boundary would mean the extension of the Union’s institutional and legal norms to neighbours through such forms of integration as association. This investigation focuses not so much on the identification of the effects of societal developments resulting from the process of Europeanization as on the description of the process of the formalization of the EU’s relationship with the Kaliningrad Oblast. The politics of inclusion rest upon the premises of access and privileges provided by the EU to a neighbour in economic, legal and political terms and also encompass regionalist involvement and intensified cross-border and interregional cooperation. Building on the determinants of integration formulated in Chapter I.3.c), it appears to be plausible to single out the following parameters for an analysis of the potential politics of inclusion and to test the hypothesis that, in EU policy practice, Kaliningrad is treated as an insider. The variables to be examined are: 1. the availability of a coherent and explicit policy, 2. the existence of a legal basis / document for this policy, 3. the correspondence to existing models of inclusion (varying from membership to its alternative forms such as an economic model and association), 4. the extent of the adapted acquis 141 However, it might be wise to streamline the rest of the list of the EU’s boundaries (namely, geopolitical, transactional and cultural) within the situation of Kaliningrad and this is done, albeit not systematically, in Chapter II.1. where Kaliningrad’s place in relation to the EU is examined and interpreted from historical, geopolitical and economic perspectives with the aim of providing a general background. See Section 5. on the review of Chapters. 142 Pertti Joennimi, Kaliningrad, Borders and the Figure of Europe, p. 166.

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or the intention to comply with it, 5. the level of ambition of the policy (conditionality and final objectives), 6. the density of the institutional framework, and, eventually, 7. the extent of participation in the EU’s financial programmes and EU policies and programs. By the EU’s policy towards the Kaliningrad Oblast are meant all the Union’s activities engaging with the Kaliningrad Oblast. The course of scrutinizing these parameters in the paper is described in Chapter I.5. which presents and summarizes the dissertation’s chapters. This paper has a strong legal emphasis which is evident in the analyses of the external legal capacity of the Kaliningrad Oblast as well as the legal basis of EU-Russia cooperation. Specifically, throughout the analysis of the external capacity of the Kaliningrad Oblast, this paper resorts to the terminology of international public law, constitutional law and the national legislation of the Russian Federation. Overall, however, the thesis adopts an interdisciplinary approach employing methods of both legal and political analyses. The inquiry makes extensive use of a variety of primary and secondary sources. In the first place, it addresses and interprets primary and secondary sources of law of both Russia and the EU. In the course of the inquiry, a consolidated body of information on the EU’s activities with respect to the Kaliningrad Oblast is drawn and illuminated. This relates to various EU legal acts of binding and non-binding character such as resolutions, decisions, regulations, communications, opinions and other internal documents (reports, questions, conclusions). The paper also turns extensively to EU policy documents, including national strategy papers and indicative papers for Russia, TACIS reports and other types of documentation, the Road Maps for the Common Spaces and information related to the Northern Dimension policy database as well as cross-border cooperation programmes and others, with the majority of them being available at the EU’s official site, the site of the Delegation of the European Commission to Moscow, the site of the Northern Dimension Policy and others. The selection of information is not time-restrictive and may also track back to the date by which the EU’s engagement with the oblast can be said to have taken place. Substantially, the thesis avails itself of both primary and secondary literature including newspapers, magazines, books, academic journals, research articles, and datasets which represent both printed media and Internet resources. In the meantime, the paper encompasses a wide range of the latest publications in the Russian, English and German languages, includes up-to-date information on legal and political developments, and turns to a distinctive bibliographical catalogue devoted to Kaliningrad developed by the Association of International Experts on the Development of the Kaliningrad Oblast (AIKE). 143

143

The official site of the AIKE is located at: http://kaliningradexpert.ru.

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The analytical approach undertaken in this thesis to assess the policy of the EU towards the Kaliningrad Oblast rests upon the concept of the Wider Europe Matrix (WEM) proposed by Michael Emerson in his book The Wider Europe Matrix. 144 This matrix – which has been advocated elsewhere 145 – has been chosen because in general it offers a well-conceived, structured and coherent way of systematizing the strategies of the enlarged European Union towards its neighbourhood in a single policy approach. Applied and approximated to the case of the Kaliningrad Oblast, the matrix allows assessing the EU’s approach to the oblast comprehensively and structurally because first and foremost it is well designed for examining EU activities in Kaliningrad in all policy areas, which are arranged in a well-organized and easily perceived scheme. Most importantly, the study of separate policy spaces enables evaluating the EU policy against one of the parameters of integration, namely, the parameter indicating the level and scope of participation in the EU’s policies and programmes. The major focus thus revolves around the enquiry into programmes and polices in which the Kaliningrad Oblast is enabled to participate. Issued after the publication by the European Commission of a paper on the Wider Europe Initiative in 2003 dedicated to the EU’s neighbourhood and deemed to become a major policy priority within the overall EU external policy, Emerson’s book represents an attempt to systematize the relationships between an enlarged Europe and its neighbourhood, the latter including the rest of Europe as well as Europe’s neighbouring Arab and Muslim states, by defining more substantive and structured EU strategies to its neighbours. At the outset, the author tries to conceptualize the notion of a Wider Europe, the debate on which has always been linked to discussions of the “final frontiers of Europe”. In doing this, Emerson distinguishes between the notions of a Wider Europe and the Neighbourhood. While the former coincides with Council of Europe membership, specifically, peoples that “have a degree of identifications with its [Europe’s] values, history and cultures”, 146 the latter (the Neighbourhood) includes the Greater Middle East and encompasses the Mediterranean states of the Maghreb and the Mashrek, the Middle Eastern states and the post-Soviet states of Central Asia. With regard to Wider Europe, Emerson draws up a WEM which reflects two dimensions, geographic and thematic. Geographically, Wider Europe is composed of: (1) EEA / EFTA & micro-states, (2) Accession candidates, (3) the Balkans (SAA states), (4a) Russia, (4b) Belarus / Ukraine / Moldova and 4c) the Caucasus. Thematically, the matrix falls into three common European policy dimensions and stretches across seven policy spaces. They are: A. The political and human 144 145 146

See Michael Emerson, The Wider Europe Matrix. See, for instance, Barbara Lippert, Beefing up the ENP, p. 193. Michael Emerson, The Wider Europe Matrix, p. 2.

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I. Introduction

dimension, classified into: (1) Democracy and human rights and (2) Education, culture and research; B. The economic dimension, including (3) An economic area (for external trade and internal market regulations), (4) A monetary and macroeconomic area (the euro and macroeconomic policy), (5) An economic infrastructure and network area (transport, telecommunications, energy and environment); and C. A security dimension consisting of (6) Justice and Home Affairs and (7) External and security policies. 147 In this way, the matrix describes EU strategies concerning all EU neighbours, although arranged in a differentiated but still coherent way. Michael Emerson believes that it “offer[s] a framework in which to reflect on how ENP might be given stronger substance, structure and credibility. Each of the seven policy areas offers possibilities for varying degrees of inclusion of the neighbours, or their association with the policies of the EU”. 148 In this scheme, the policy dimensions embrace the whole of the EU system of pillars and institutions, since Wider Europe policy may in some cases go as far as virtual membership of the EU, through association with many of its policies and at least some of its institutions. 149

This is essentially connected to the question of “how far the EU could or should go towards full membership in its policies of association of its neighbours”. 150 It is noteworthy that the policy vectors correspond to a considerable degree to the Common Spaces of the EU-Russia strategic partnership which are examined in Chapter III.3. The Wider Europe Matrix thus aims at achieving greater coherence in the whole system of the EU external relations. It is designed to help develop and strengthen the ENP and render it more credible in circumstances when the EU, on the one hand, is not eager / ready to offer membership to its European neighbours and when, on the other hand, the blurring of the frontiers between “in” and “out” the EU becomes more evident in EU policy practice. The major objective and key mechanism of a Wider Europe is “Europeanization”, implying the transfer of European governance into the neighbouring states. Regarding territorial coverage, the Wider Europe policy should precisely comprise “all the different categories of states and entities of Europe not already acceding to the EU or engaged in accession negotiations”. 151 The author admits that a Wider Europe might embrace different units which fall into several multi147 The three dimensions are derived from the OSCE dimensions (baskets) and the Stability Pact for South-East Europe strategies, and the policy spaces reflect several common policy spaces of the EU-Russia dialogue but are complemented by additional spaces. 148 Michael Emerson, European Neighbourhood Policy: Strategy or Placebo, p. 9. 149 Michael Emerson, The Wider Europe Matrix, p. 20. 150 Ibid. 151 Ibid., p.2.

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tier governance systems: sub-state, state, region, EU supranational or multilateral, “with a wider coalition of external powers and organizations”. 152 These systems also include (ethno-secessionist) conflict-prone or weak states. According to Michael Emerson, while the frontiers of the European Union are an institutional matter, the extent of the Europeanization process is a societal matter. The existing variety of alternative (in relation to formal EU membership) forms of inclusion in the EU may stimulate efforts to reconsider the meaning of being in or out of the EU, particularly since this dichotomy of in / out seems to be too far simplistic. The purpose of this thesis is not to measure the effect of “Europeanization” on the Kaliningrad Oblast, especially as this has been already done elsewhere. 153 Rather, it is suggested that the EU’s policy towards the Kaliningrad Oblast be examined in Kaliningrad’s role as the subnational entity of a third country on the basis of Emerson’s analytical concept of the Wider Europe matrix. In particular, the thesis reviews two of the above dimensions of Kaliningrad’s involvement in EU policies, programmes, strategies and initiatives: 1. the thematic (policy) dimension and 2. the institutional dimension. However, although similarly organized into three dimensions and seven policy spaces these spaces are adapted to the micro-level in the circumstance of a federative unit (the Kaliningrad Oblast) being subordinated to a federal centre (the Russian Federation) and essentially treated in the bilateral framework of EU-Russia relations, hence, within the EU’s overall policy toward Russia. In Emerson’s matrix, the domain of the political and human dimension originally presupposed a policy of Europeanization based on political norms and human rights obligations and commitments established by regional international organisations like the Council of Europe and the OSCE, in which the Russian Federation holds membership. The section of education, culture and research of the WEM concentrates on the EU’s education programmes including such establishments as the European Higher Education Area (the so-called Bologna Process) and the 6 th Research Framework Programme. For the purposes of this research, the political and human dimension (A) is broken down into the following policy cells: 1. democracy and human rights, 2. education and training, culture and research, and 3. public health and social policy. Although absent in both the matrix’s spaces and in the EU-Russia Common Spaces, the space of public health and social policy is incorporated into the present analysis as falling under the “human” dimension. The Economic dimension of Emerson’s scheme includes three aspects. The first, entitled “European Economic Area”, reflects the existing patterns of trade and market regimes such as a free trade area, a customs union and a single 152 153

Ibid., p. 8. See Stefan Gänzle / Guido Müntel / Evgeny Vinokurov (eds.).

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market among the EU and its neighbours, above all epitomised in the European Economic Area. Furthermore, the second aspect of “The euro and monetary regimes” revolves around the euro as one of the most potential unifying factors of Wider Europe. Although, as was mentioned above, there are propositions by experts and academicians suggesting moving in the direction of establishing an EU-Russia free trade area and departing from Kaliningrad as a pilot region, this has been never officially declared. Apart from this, while the EU-Russia Common Economic Space with supposedly a free trade area between the EU and Russia remains long in perspective, Russia’s joining the Euro-zone has never been at issue. Therefore, whereas these two aspects are not included in the analysis, the third aspect of economic infrastructure (in the WEM meaning the involvement of European neighbours into transport networks, the participation in the European Energy Charter Treaty and the Kyoto Protocol as well as the EU economic aid) will be examined in detail with, however, a different focus on the substance of the space. Thus, the economic dimension of this analysis (B) falls into the following sections: 4. an overview of EU assistance to the Economy sector of the Kaliningrad Oblast, 5. the Economic infrastructure (transport and energy), and 6. the Environment. The Security dimension in Emerson’s WEM embraces justice and home affairs and foreign and security policies. They in turn imply chiefly the EU’s visa policy towards its neighbours (visa facilitation and perspectives on the introduction of a visa-free regime) as well as cooperation in the fight against terrorism and cooperation based on the principles of the European Security Strategy, respectively. In this study, the Security aspect (C) consists exclusively of point 7). Justice and home affairs as aspects of foreign and security policy are dropped owing to the fact that this policy is carried out at the macrolevel of EU-Russia (high politics) bilateral relations. Aside from arranging the WEM in accordance with geographical and thematic dimensions, Emerson’s strategy for a Wider Europe envisages the issuance of a comprehensive series of Green or White Papers for Wider Europe, one each designed for the seven common European policy spaces, “with further papers on a) institutional issues including association arrangements, b) regional organizations and structures and c) economic aid and conditionality”. 154 Furthermore, the common European policy spaces should serve as a basis for the establishment of the Action plans for individual states of Wider Europe, which could also contain provisions on “institutional issues in the light of possible new categories of association agreements for states, countries and territories”. 155 In the present study, institutional matters concerning the treatment of the Kaliningrad Oblast within the bilateral relationship between the EU and Russia 154 155

Michael Emerson, The Wider Europe Matrix, p. 7. Ibid.

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(based on the PCA and the Four Common Spaces) are examined in Chapter 3 in full detail and the EU’s economic assistance is imbedded in the whole body of the analysis of the EU’s policy towards Kaliningrad (Chapter 4). Notably, although admitting the presence of the issue of Kaliningrad in the work of regional structures such as the Council of Baltic Sea States (CBSS), the Nordic Council (NC), the Nordic Council of Ministers (NCM), the Union of Baltic Cities or smaller cross-border structures such as Euroregions and the fact that a considerable part of EU policy towards Kaliningrad might be channelled through these organisations, this thesis does not go into details on this aspect, with the single exception of the Northern Dimension policy examined in Chapter IV. The filling of the policy cells identified is based on various sources enumerated earlier. Such a large number of projects has been carried out in the region under the auspices of the EU that they cannot be all taken into account in the analysis. It is appropriate to include only selected cases that are the clearest examples of the activities carried out in the thematic fields of the policy cells.

5. Summary and overview of Chapters This chapter (I.) briefly diagnoses the problem of the Kaliningrad Oblast – interchangeable with “Kaliningrad” throughout the whole paper – as well as clarifies the research interests and aims and sketches the theoretical, analytical and methodological approaches capable of serving the main goals of the thesis. Chapter II. seeks to provide general background information on the problem of the Kaliningrad Oblast in the context of the Eastern EU enlargement of 2004. In particular, the initial section of the Chapter (II.1.) examines three aspects, namely, historical, geopolitical and economic, and interprets the degree of Kaliningrad’s inclusion in the EU compared to the concepts of the Union’s geopolitical, historical (cultural) and transactional (economic) boundaries which are reflective of the most generally contested issues in the paradigm “Kaliningrad-EU enlargement”. This part of the thesis starts by offering insight into the history of the Kaliningrad Oblast and identifying the historical implications underpinning how the Kaliningrad problem came about. It then spotlights key security issues consonant with the region and the process of EU / NATO enlargement. In addition, the question of passengers’ transit through the territory of Lithuania and general cross-border traffic is briefly outlined. Further, based on empirical works carried out by economists, an analysis of the economic situation of the Kaliningrad region with a specific temporary focus on the regional economy ante and post the EU Eastern expansion is presented. This analysis embraces the examination of such economic indicators as regional industry, trade and internal investment and addresses the question of whether EU Eastern expansion has impacted the

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development and situation of the Kaliningrad Oblast in the short run as adversely as was anticipated on its very eve. Next, Chapter II.2. aims to study the external legal capacity of the Kaliningrad Oblast, with the orientation point of this analysis being the status quo of the oblast as a subject of the Russian Federation. Central to this chapter are two questions: Has the Kaliningrad Oblast – a region of the Russian Federation that occupies a unique and incomparable geographical position compared to other regions – also acquired peculiar legal and political facilities with regard to conducting its foreign relations? and, To what extent and in what areas is the Kaliningrad Oblast authorized to act internationally? This chapter is crucial for understanding the legal capacities of the oblast if it were to be positioned inside the EU as regards the Union’s institutional / legal boundaries. The external legal capacity is thus analyzed within the terminology of international public law, constitutional law and in the light of national legislation of the Russian Federation. In order to address this issue efficiently, a closer examination of the legal status of the Kaliningrad Oblast under the national law of Russia is required. This inevitably leads to the necessity of shedding light on characteristic features of Russian federalism and hence federal center-regions relations and their impact on the Kaliningrad Oblast’s external subjectivity; this is done from the outset. The paper subsequently encapsulates the legal sources of the external capacity of the Kaliningrad Oblast as provided in federal legislation, in such legal sources as the respective provisions of the Constitution of the Russian Federation and the relevant federal legal acts of the Russian Federation. Against this background, the thesis then records and consolidates the legal framework of the Kaliningrad Oblast’s external legal capacity and analyzes the oblast’s international competence. Additionally, the discussion on the (would-be) political status of Kaliningrad in academic and political discourse – as opposed to its status quo – is reviewed and the principal conclusions concerning limits and achievements of Kaliningrad Oblast as an international actor are presented. The concluding part of Chapter II. (II.3.) dwells on the status of the Kaliningrad Oblast in the context of the federal policy of Russia. The primary task of this section is to explore Kaliningrad’s legal, economic and political status as determined by the federal policy of Russia. While the legal status of the oblast under the national law of the Russian Federation, its external capacity and the existing political and academic speculations on a (potential) legal status are studied in full detail in the preceding chapter, this part of the thesis mainly centers on the status of the Kaliningrad Oblast as a special economic zone, which is done with support of empirical literature that has been elaborated to assess the economic aspects of the SEZ regime in the region. By adopting this focus, the investigation aims at examining whether the legal regime of the SEZ provides Kaliningrad with additional capacities enabling it to deal with the EU more extensively.

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Given that “developing an economy is not a non-political task”, 156 this subchapter also revolves around political circumstances that have accompanied the development of the SEZ region in the oblast. Thus, it first deals with the background of the creation of the zone by framing the three periods of the Kaliningrad Oblast – federal-center relations, within which the status of a SEZ was granted to the oblast and further developed. Furthermore, it indicates the main stages of the evolution of Russia’s federal policy towards the Kaliningrad Oblast. It then enlarges upon the contents of the Laws on the Special Economic Zone in the Kaliningrad Oblast of 1996 and 2006 and turns to some external analyses of their economic and legal aspects as well as practical outcomes. Against this background, the status of the Kaliningrad Oblast as a SEZ is further scrutinized. In addition, the section maps out the Kaliningrad regional strategy as designed immediately by the administration of the oblast. Finally, it explains the concept of the status of a “pilot region” as viewed within bilateral EU-Russia relations and as perceived as the feasible basis of an efficient strategy of the socioeconomic development of the Kaliningrad Oblast. Chapter III. attempts to place the issue of the Kaliningrad Oblast into the EU-Russia bilateral framework, both political and institutional / legal. Specifically, Chapter III.1. charts the main milestones in the mutual process of building a partnership between the European Union and Russia. This aims at offering a chronological record of the contractual and political cooperation of the European Union and Russia. Furthermore, this section discloses the principal controversies and disparities between the EU and Russia. The main rationale behind it is the presumption that Russia-EU relations in general serve as a partial indicator for explaining the possibility of the Kaliningrad Oblast’s integration with the EU and that the translation of the EU’s policy towards Kaliningrad may be strongly affected by the overall state of EU-Russia relations. In a nutshell, such a recital is devised firstly to reflect the dynamics of the relationship and to trace the evolution of the two sides’ policies towards each other and, secondly, to epitomize a political and legal context in which the Kaliningrad Oblast appears an object in EU-Russia relations. The bulk of Chapter III.2. concentrates mainly on the principal documents by the two key stakeholders and the political circumstances in which they were issued throughout the EU-Russia dialogue on Kaliningrad. 157 This focus helps to reveal the evolution of the policies of the European Union and Russia towards the Kaliningrad Oblast in the framework of their bilateral relations. It thus offers 156

Leonid Karabeshkin / Christian Wellmann, p. 57. Beside the central actors (the EU and Russia), the dialogue on the Kaliningrad problem involved Lithuania and Poland, which took part in its both formats: the EU-Russia dialogue and their bilateral dialogues with Russia. This paper lays emphasis on the EU-Russia interaction mainly. 157

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a context for Chapter IV., which aims to spell out the current EU policy towards the Kaliningrad Oblast in full detail. In the remainder of Chapter III. (III.3.), the process of the legal formalization of EU-Russia relations is described and analyzed. The section starts by mapping Russia’s place in the system of the EU’s external policies as well as by outlining the objectives and institutional structures as established by the PCA; then it proceeds with a critical assessment of the provisions of the PCA from the perspective of the current state of EU-Russia relations. This emphasis brings about the question of how the issue of Kaliningrad has fitted into the institutional and legal framework of an EU-Russia partnership. Furthermore, there are also brief comments on the essence of the EU-Russia Common Spaces and their Road Maps defined by the parties as a long-term perspective on their strategic partnership. In this respect, the problem of the location of the Kaliningrad Oblast within the latter documents also comes into focus. Finally, the chapter tackles the discussion of a new bilateral agreement still to be negotiated and adopted by the parties with special emphasis on a conceivable position of the Kaliningrad Oblast in this agreement. The main aim of the chapter is to further scrutinize the potential room to manoeuvre in the EU’s approach and policy to Kaliningrad and, eventually, to assess the extent of Kaliningrad’s integration with the EU compared to the first six inclusion parameters identified in the preceding chapter. Specifically, this chapter examines the prerequisites for the appearance of a coherent and explicit EU policy towards Kaliningrad inherent in the EU-Russia bilateral relationship which corresponds to the substance of parameter 1. Furthermore, it investigates the availability of a legal basis for launching such a policy (parameter 2) and studies the density and efficiency of the institutional framework within which the issue of Kaliningrad is dealt with (parameter 6). Additionally, the chapter goes into the question as to whether the acquis has been adopted at the macrolevel or whether there is an intention to do so at both federal and regional levels (parameter 4) and whether the model of EU-Russia and EU-Kaliningrad relations might correspond to existing patterns of inclusion in the EU (parameter 3). In this respect, it estimates the level of ambition of the policy concerning the conditionality aspect and final objectives (parameter 5). The principal part of the investigation is constituted by Chapter IV., which is devoted to the formulation and analysis of the EU’s policy towards the Kaliningrad Oblast and falls into two parts. To start with, Chapter IV.1. is designed to identify the general lines of the development of the Kaliningrad policy as reflected in activities of key EU institutions including the European Parliament, the Council of the European Union, the European Council, the European Commission, the Economic and Social Committee and, eventually, the Committee of the Region. The study of the construction of the political position of each institutional body towards the Kaliningrad Oblast begins with short remarks on

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its structure, composition and basic functions in the EU policy-making process as laid down in the Treaty of Lisbon. It then proceeds with the description and interpretation of official and internal documents of the institutions. The main focus is dedicated to the units / divisions of the EU institutions dealing with the topic of Kaliningrad; the type of the documents referring to Kaliningrad-related issues; the contexts and thematic discourses where the Russian exclave is mentioned. This chapter primarily aims at extracting the common political position voiced by EU bodies. The question to answer is whether the EU has come to lay down a single coherent and explicit EU strategy and approach towards the problem of the Kaliningrad Oblast (essentially parameter 1). Chapter IV.2. explores the concrete EU policy areas involving the Kaliningrad Oblast. Beginning with the review of the EU’s general policy framework, it embraces, firstly, the analysis of the major policy programming papers and, secondly, two particular components of the policy, namely cross-border cooperation as part of the European Neighbourhood Policy and the Northern Dimension policy. The principal inquiries relate to the aims and elements of the strategy of the EU in dealing with Kaliningrad and to the main policy documents. Grounded on the analytical concept of Emerson’s Wider Europe Matrix, modified in accordance with the case of the Kaliningrad Oblast as described earlier, the chapter further takes stock of the thematic dimensions of the policy split into three overall aspects (the political and human aspect; the economic dimension and the security dimension) and, in their turn, seven policy areas (democracy and human rights; education, training, culture and research; public health and social policy; the economy sector; economic infrastructure; the environment, and justice and home affairs). The investigation focuses on the policy instruments used by the EU in each of the policy areas and the manner in which the policy is realized. To this end, it elaborates on the ambition level of the policy concerning its final objectives (parameter 5) and examines the scope and extent of Kaliningrad’s participation in the EU’s financial programmes and EU policies and programmes (parameter 7). The final Chapter V. summarizes the findings and highlights the conclusions to which the research undertaken in the thesis has led.

II. The legal and political status of the Kaliningrad Oblast 1. The Kaliningrad Oblast in the context of EU Eastern enlargement: a historical, geopolitical and economic perspective a) The Kaliningrad Oblast and its historical background The history of the contemporary Kaliningrad Oblast follows the story of the foundation of East Prussia, its genealogy intertwines with histories of diverse peoples. At the end of the 12th and beginning of the 13th century, the eastern outskirts of the Polish Kingdom suffered from their neighbours – warlike Prussians, a Southern Baltic tribe. 1 The Polish Prince Konrad I granted some of his land to the Teutonic Order in 1226, hoping to solve this problem. The Northern Crusade of the Teutonic Knights, assisted by Western knights, resulted in German colonization of the area, Christianization of the local tribes and extermination of pagan Baltic culture. 2 Although the Prussians lost their original language and national existence, they lent their name to the German invaders. In 1255, King Otakar II of Bohemia, who also participated in the Prussian crusade, founded the city of Königsberg on the Pregel River. This city thereafter became a center of trade and commerce – a Hanseatic League city that was a bridge between Western Europe and Russia. It was the site of the University of Königsberg (Albertina University), which was founded in 1544 by Duke Albrecht, the Teutonic Order’s grand master, and later became a teaching seat for Immanuel Kant. The eastern expansion of the Germans was met with persistent resistance by the indigenous Lithuanian tribes, supported by the Poles. After being crushed in the Thirteen Years’ War, the Monastic State of the Teutonic Knights was extended by the Peace of Torún in 1466 to the area that was later Ducal Prussia and became subject to the Polish crown. 3 In 1525, the Polish king granted 1 See Vladimir Abramov / Vladimir Kuzin, K 750-letiju vechnogo anklava KaliningradKenigsberg na vesah evropejskoj istorii, Evropa, Pol’skij institut mezhdunarodnyh del,Tom 3, No. 6, 2003, p. 87. 2 See Richard Krickus, p. 17. 3 See Vladimir Abramov / Vladimir Kuzin, K 750-letiju vechnogo anklava, p. 89.

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permission to the grand master of the knights to establish the Duchy of Prussia under Polish domination; it remained physically isolated from Germany. With a daughter of Prussian Duke Albert Frederick having married Elector John Sigismund of Brandenburg, the Duchy of Prussia and Königsberg was governed by the Electors of Brandenburg. In a joint effort with Prussian Germans, the German forces from Brandenburg defeated the Polish army at the battle of Warsaw in 1656. In 1701, Prussia was elevated into an independent kingdom with Königsberg as its capital. 4 Prussia, which became a significant military power, was involved in the Seven Year War from 1756. Its eastern part, East Prussia including Königsberg, was occupied by the Russians in 1758, with Königsberg annexed to Russia. After the death of the Russian Czarina Elizabeth in 1762, a peace was concluded with Prussia and in 1772 Prussian King Frederick the Great also received West Prussia (including the port of Gdansk), an outcome of the first partition of Poland (and the outset for further partitions), which provided a land connection between Prussia and Brandenburg. Under Chancellor of Prussia Otto von Bismarck, Prussia expanded its control over territory with German-speaking population; Königsberg became the capital of the united province of Prussia (1824 –1878) after the merger of East and West Prussia, and in 1871 the Prussian-led German reunification occurred. However, the defeat of the Germans in the First World War, concluded by the Treaty of Versailles in 1919, allowed Poland to regain the territory of West Prussia. Gdansk became a free city and Poland got the so-called “Polish Corridor”, which, again, physically detached East Prussia and Königsberg from the main body of Germany and had grave economic repercussions. 5 Subsequently, on the eve of World War II, the territory of Poland as well as that of a number of other Eastern European countries was divided into German and Soviet spheres of influence by the secret protocol to the so-called MolotovRibbentrop Pact or the Treaty of Non-aggression between Germany and the Union of the Soviet Socialist Republics of August 23, 1939. In that, the western part of Poland was transferred to Germany. A month later, Hitler attacked on Poland – which marked the beginning of World War II – and he restored the land connection to East Prussia. During the war, East Prussia served as a strategic hub of the German “war machine”, 6 from where many military maneuvers were commanded. Soviet troops entered East Prussia at the end of 1944 and they took Königsberg on April 9, 1945. At the time, many civilian inhabitants fled from East Prussia (the population of 2,653,000 people during the war declined to 600,000 people by April 1945), 7 and only about 30,000 people stayed in 4 5 6

See Richard Krickus, p. 19. See Vladimir Abramov / Vladimir Kuzin, K 750-letiju vechnogo anklava, p. 89. Richard Krickus, p. 25.

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Königsberg. 8 The city of Königsberg, similarly to other cities of East Prussia, was devastated: almost 90 percent of its buildings were ruined. One of the attendant outcomes of the post-war Potsdam Conference, held on July 17-August 2, 1945, was the agreement made by Attlee, Truman, and Stalin on the division of East Prussia into two parts: the southern two-thirds of the territory was acquired by Poland; and Königsberg and its adjacent region (the northern one-third of East Prussia) passed to the sovereignty of the Soviet Union. 9 This decision was preceded by Stalin’s demand for the postwar annexation of Königsberg to the USSR, which he had pushed forward at the Tehran conference in November 1943, and partly explicated by the fact that the Soviet Union had been in need of an ice-free port and that this would be a retribution justly paid to the Soviet Union. 10 At the Potsdam conference it was also assumed that the final determination of territorial questions (including the case of Königsberg) would be resolved upon the peace settlement in Europe, culminating in the signing of a peace treaty by the victorious powers and Germany. However, due to the beginning of the Cold War this treaty was never concluded and the status of the Königsberg region was hence not fixed by any international legal act. In the course of time, this fact gave grounds for some US scholars and politicians to question Russia’s authority over the Kaliningrad Oblast and argue that the Soviet Union – and later Russia – had been enjoying administrative rather than de jure control over the territory. 11 In response to this sentiment, some representatives of Russian academia repudiated any attempts to revise the results of the Second World War and insisted upon the strict preservation of the status quo of the Kaliningrad Oblast. 12 Their claims referred to the actual Russian control of the Kaliningrad Oblast and a number of international agreements and acts such as the Potsdam agreement and the “Helsinki Accords” of 1975, the latter manifesting the inviolability of frontiers and territorial integrity of states. 13 Apart from this, it was repeatedly alleged that, along with the USSR, the USA, Great Britain and France, the BRD and GDR had signed the “Treaty on the Final Settlement with Respect to Germany” on September 2, 1990, which confirmed the current German borders and implied that East Prussia (including its former 7

Ibid., p. 37. Ibid., p. 38. 9 Das Potsdamer Abkommen vom 2. August 1945, in: Karl Bittel (Hg.), Das Potsdamer Abkommen und andere Dokumente, Kongress-Verlag Berlin, 1957, p. 81. 10 See Richard Krickus, p. 31. 11 Ibid., p 67. 12 See, for instance, Anatolij Luxemburg / Vladimir Simkin, O pravovom statuse Kaliningradskoj oblasti, in: Sovremennoe Pravo, No. 9, 2002, p. 41. 13 See Romuald J. Misiunas, p. 392. 8

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constituent, Königsberg) would not henceforth be claimed by the newly reunited Germany. 14 In 1946 the Soviet Union joined the Königsberger Oblast to the Russian Soviet Federative Socialist Republic (RSFSR), which was consolidated in the Decree of the Presidium of the Supreme Council on the establishment of the Königsberger Oblast within the RSFSR of April 7, 1946. The oblast was later renamed into the Kaliningrad Oblast on the basis of the “Decree of the Presidium of the Supreme Council on the renaming of city Königsberg and the Königsberger Oblast into Kaliningrad and the Kaliningrad Oblast” of July 4, 1946. The oblast was named after Mikhail Ivanovich Kalinin, the Chairman of the Presidium of the Supreme Soviet of the USSR, who had died shortly before the oblast was renamed. Over the period 1947 – 1992, the Kaliningrad Oblast represented an administrativeterritorial unit of the RSFSR. 15 In this quality, the oblast possessed neither legal personality nor right to develop its external relations and was essentially dependent on the center (RSFSR). In 1947 and 1948, the German population of Königsberg and its adjacent region was deported to the Soviet occupation zone of Germany. 16 In the early 1950s, the region was intensively re-settled by Soviet people from the RSFSR and Belarus (the then Belarus Soviet Socialist Republic), many of whom had lost their homes during the Great Patriotic War. They developed a strong Soviet identity, not least because most of them were directly or indirectly involved with the military sector for their livelihoods. 17 It has been estimated that, from the mid-1950s until the late 1980s, the principal source of population growth was the birth rate, whereas starting from the early 1990s onwards it was mainly immigration (made up by Russian-speaking minorities from Kazakhstan and other Central Asian former Soviet Socialist republics). 18 Over the period 1991 – 1999, the number of newcomers reached more than 100,000 people. Today, out of almost 940,000 residents in the Kaliningrad Oblast, only 43 percent were born there. 19 14

See Vladimir Popov / Sergei Poberezhnyj, Pravovye kriterii chlenstva v Evropejskom Sojuze i “kaliningradskaja granica” s rasshirjajuwejsja Evropoj, in: A. Klemeshev et al. (eds), Kaliningradskaja oblast’ v okruzhenii ES: rol’ regiona v obweevropejskoj integracii, Kaliningrad: KGU, 2003, p. 119. 15 See Stanislav Kargopolov / Aleksej Sidoruk, Pochemu Kaliningradskaja oblast’ ne mozhet nazyvat’sja oblast’ju v nastojawee vremja i s chego nado soglasovat’ pozicii o ee buduwem?, in: Gosudartvennaja vlast’ i samoupravlenie, 2002, No. 3, p. 7. 16 See Yuri Zverev, p. 9. 17 See Richard Krickus, pp. 41 – 42. 18 See Yuri Zverev, pp. 9 – 10. 19 See Andrej Klemeshev / Gennadij Fedorov, Region sotrudnichestva, in: Andrej Klemeshev (ed.) Kaliningradskii socium: po resultatam sotsiologicheskikh obsledovanii 2001 – 2004 gg, Kaliningrad: KGU, 2004, p. 4.

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A recent sociological survey of Kaliningrad specialists on the identity of the residents of the Kaliningrad Oblast reveals that the majority of the population (76.8 percent) identify themselves as Russians, whereas 20.6 percent see themselves as Europeans. 20 Also, the majority of the population, constituting almost three-quarters, supports the Kaliningrad Oblast as part of the Russian Federation, while the rest would accept other scenarios such as the separation of Kaliningrad from Russia, the joint sovereignty of the European Union and Russia over the oblast and others. Specialists assume that there are unlikely to be separatist tendencies based on ethnicity or religion since the most of the population (82 percent) is ethnic Russians; the Russian language is a native language for more than 86 percent of the Kaliningrad inhabitants and, likewise, the majority of them (more than 86 percent) are Russian Orthodox Christians. 21 At the same time, the proximity to Europe as well as the unique historical background of their homeland has caused Kaliningraders to rethink and strengthen their regional identity and sense of belonging to Europe. For instance, there is “a growing tendency among the locals who regard themselves to be intellectuals – especially among creative professionals – to demonstrate their solid knowledge of the region’s preSoviet history as a matter of courtesy”. 22 b) The Kaliningrad Oblast and its geopolitical significance in the context of the EU enlargement The Kaliningrad Oblast used to raise much concern among Western actors (Poland, the Baltic States, NATO and others) because of its previous excessive militarization and hence potential as a site for regional instability. 23 Annexed to the Soviet Union after World War II out of military and strategic goals, throughout the Cold War and the confrontation between the Soviet Union / Warsaw Treaty Organization and NATO, the oblast served as a base and headquarters for the Baltic Fleet of the Soviet Union and overall as its western military strategic outpost. It was a closed city for foreigners and non-resident Soviet citizens until 1991. After the end of the Cold War, the region was partly demilitarized: the number of troops shrank from 103,000 to 10, 500 people over the decade 1993 – 2003, the number of submarines was likewise severely reduced and the tactical nuclear weapons were withdrawn in the early 1990s. 24 The post-Soviet economic difficulties affected the military sector considerably: the closure of 20 See Raisa Minakova, Separatizma net ili on est’?, Association of International Experts on the Development of the Kaliningrad Region (AIKE), 10 nojabrja, 2006. 21 See Yuri Zverev, p. 11. 22 Vadim Smirnov, Where is the “Pilot Region” heading? 23 See Richard Krickus, p. 58. 24 See Ingmar Oldberg, p. 272.

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military industries, the low income and standard of living of military men and others. 25 With the Eastern NATO enlargement, the Kaliningrad Oblast similarly turned into a NATO enclave. Initially, Russia took a tough position towards potential membership of Poland and the Baltic States in NATO, claiming that the stationing of NATO troops at the Russian border in Kaliningrad posed a threat to Russia’s security. 26 However, this changed, not least by means of establishing a closer dialogue with NATO, such as the foundation of NATO-Russia Council in 2002. Until recently, the Russian Ministry of Defence did not view NATO as a real threat to Russia in general or to Kaliningrad in particular and did not plan to strengthen the military forces in the region. 27 Yet, it categorically disapproves of the development of NATO infrastructure in the Baltic States and Poland as well as US plans to install their missiles in countries of Central and Eastern Europe. The latter circumstance made the General Staff of the Ministry of Defence contemplate the possibilities of stationing military groupings in Kaliningrad as a response to US activities in Poland in 2008. 28 In any event, it is unlikely that Kaliningrad will be completely demilitarized any time soon if ever. This in turn disappoints the political elites of the neighbouring countries (chiefly Poland and Lithuania), who have made repeated efforts to demand complete demilitarization of Kaliningrad and who perceive the militarized oblast not as a military threat but rather as “a troublesome Cold War relic which serves as a bargaining chip for Russia vis-à-vis its Baltic and NATO / EU neighbours”. 29 On the one hand, Western experts believe that the military presence in the Kaliningrad Oblast does not pose a threat in terms of security. 30 On the other hand, though deprived of its past military potential, as the argument goes, the region has been a political tool of Russia in securing its sovereignty over the region and remains a strategic military outpost. 31 At the same time, one analyst points out that Russia has shifted its focus from armed forces in the region and its direct military value and character into its economic interests. 32 In so doing, he refers to the “Navy Doctrine of the Russian Federation until 2020”, approved in 2001. 33 Specifically, this document does identify such priorities in 25 26 27 28

2008. 29

Ibid., p. 271. See Richard Krickus, pp. 69 – 70. See Yuri Zverev, p. 22. Kaliningrad hotjat vooruzhit’?, in: Komsomol’skaja pravda, Kaliningrad, 4 fevralja,

Matthieu Chillaud / Frank Tetart, p. 171. See Chris Donelly, Kaliningrad from a Security Perspective, in: James Baxendale, Stephen Dewar and David Gowan (eds.), p. 217. 31 See Matthieu Chillaud / Frank Tetart, p. 180. 32 See Ingmar Oldberg, p. 273. 30

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the Baltic region as the maintenance of economic and military security of the Kaliningrad Oblast, the creation of conditions for stationing troops and usage of the constituents of the naval potential which secures the defence of sovereignty, sovereign and international rights of the Russian Federation in the Baltic region. On the other hand, the passage referring to the priorities in the Baltic region indeed starts with such issues such as the development of port infrastructure, the modernization of the commercial fleet, economic cooperation with the Baltic region states and the demarcation of sovereignty (associated with oil extraction activities). This presumably shows that the meaning of the Kaliningrad Oblast is a combination of Russia’s defensive and economic interests. Apart from this, Russia and NATO (as well as its individual members such as Lithuania and Poland) have come to develop confidence-building skills and practices. Until recently, in the framework of the “Treaty on Conventional Armed Forces in Europe” (CFE), 34 foreign experts inspected the Kaliningrad Oblast on a regular basis. 35 This also relates to the common participation of the Russian Baltic Fleet with NATO naval vessels in the annual BALTOPS (Baltic operations) manoeuvres, visits of foreign naval units to Baltiysk in the Kaliningrad Oblast (the base of the Russian Baltic Fleet) and the city of Kaliningrad, as well as other joint Russia-NATO military training exercises in the Kaliningrad Oblast. Apparently, one of the most relevant problems pertaining to military / security issues that arose as a result mainly of EU enlargement rather than that of NATO was military transit from / to Kaliningrad through the territory of Lithuania. This was, however, regulated on a bilateral level between the governments of Russia and Lithuania in the 1990s; first, the rules on military transit were consolidated in the “Agreement between the Government of the Republic of Lithuania and the Government of the Russian Federation on international road transport” of November 18, 1993. 36 Afterwards, they were prolonged by Moscow and Lithuania in January 1995 and they have been extended annually ever since without a formal agreement on military transit ever having been signed. Considerably reduced troop numbers were stationed in the region and Russia was developing its waterway transportation system, which tended to diminish the problem of the military transit in the context of NATO / EU enlargement. 37 However, the above33

Morskaja doktrina Rossijskoj Federacii na period do 2020 goda, 27 ijulja, 2001. In 2007, Russia imposed moratorium on its membership to the CFE for various reasons, one of them US missile defence plans in Europe. The moratorium came into effect on December 13, 2007. See Alija Samigullina, Vladimir Putin utverdil moratorij na uchastie Rossii v DOVSE, 30 nojabrja 2007. 35 See Yuri Zverev, p. 22. 36 See Alexander Sergounin, Transforming the “Hard Security” Dimension in the Baltic Sea Region, in: Hanne-Margret Birkenbach and Christian Wellmann (eds.), p. 265. 37 See Ingmar Oldberg, p. 285. 34

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mentioned speculations about Russia’s latest plans to strengthen the military base in Kaliningrad have already provoked negative reactions in the West: one Lithuanian expert has suggested that the Lithuanian response could be the cancellation of military transit through its territory. 38 To this end, the militarization of the Kaliningrad Oblast may still contain potential for conflict. As things stand, although diverse important problems have been identified with the Kaliningrad situation in the context of EU enlargement, including energy supplies, crime, environmental pollution and AIDS. The most acute problem that was judged to affect the Kaliningrad Oblast heavily as a result of the EU Eastern enlargement, which complicated EU-Russia dialogue on the eve of the enlargement, concerned the movement of people (and also the movement of goods) by land. It enshrined both transit of people to mainland Russia through Lithuania as well as border crossings with Lithuania and Poland, where the inhabitants of the oblast had developed close family, economic and cultural links. The overall transit / border-crossing problem stemmed from the introduction of visa regimes – implying a financial burden on personal budgets of Kaliningrad citizens as well as a general tightening of border controls – by Poland and Lithuania, which were making preparations for EU membership. The requirement for the national legislation of EU candidate countries to comply with the Schengen acquis made the simplified visa regime for Kaliningrad inhabitants previously practiced by Lithuania and Poland impossible. In the short term, this was solved at a bilateral Russia-Lithuania level when the two sides signed the “Agreement on the Travel of Both Countries’ Citizens” on December 30, 2002, 39 which came into effect on January 1, 2003. 40 According to this agreement, permanent residents of the Kaliningrad Oblast were granted the right to obtain free multipleentry national visas valid for one year to travel to Lithuania. Similarly, Polish visas were free of charge for Kaliningraders based on the Agreement between Poland and the Russian Federation of September 18, 2003. 41 These arrangements remained in operation until June 1, 2007, when the new “Agreement between the Russian Federation and the European Community on the facilitation of the issuance of visas to the citizens of the Russian Federation and the European 38

2008.

Kaliningrad hotjat vooruzhit’?, in: Komsomol’skaja pravda, Kaliningrad, fevral’ 4,

39 See Raimundas Lopata, The Transit of Russian Citizens to and from the Kaliningrad Oblast through Lithuania’s Territory, p. 105. 40 Soglashenie mezhdu Pravitel’stvom Rossijskoj Federacii i Pravitel’stvom Litovskoj Respubliki o vzaimnyh poezdkah grazhdan, dekabr’ 30, 2002, in: Bjulleten’ mezhdunarodnyh dogovorov, 2003, No. 3, pp. 230 – 235. 41 Soglashenie mezhdu Pravitel’stvom Rossijskoj Federacii i Pravitel’stvom Respubliki Pol’sha o vzaimnyh poezdkah grazhdan, sentjabr’ 18, 2003, in: Bjulleten’ mezhdunarodnyh dogovorov, 2003, No. 12, pp. 58 – 64.

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Union” of 2006 came into force. 42 Its crucial implication on visa procedures for the citizens of the Kaliningrad Oblast was that they lost their privilege of obtaining free-of-charge Lithuanian and Polish national visas. Instead, they were obliged, like other Russian citizens, to pay fees that amounted to 35 euros for processing visa applications (Article 6 of the Agreement). Since Lithuania and Poland joined the Schengen zone as of December 21, 2007, the consulates of Lithuania and Poland in Kaliningrad issue Schengen visas for Kaliningrad residents, likewise charging them 35 euros for visa processing. Meanwhile, national visas which were issued before December 21, 2007, remained in force until their validity expired. The question of passengers’ transit from Kaliningrad to mainland Russia through Lithuania became the centre of the attention of EU, Russia and Lithuania in 2002 – 2003. The process of the intense bilateral EU-Russia negotiation over passengers’ transit through the territory of Lithuania is described in full detail in Chapter III.2. In summary, the outcome of this process was the adoption of the “Joint Statement on Transit between the Kaliningrad Oblast and the rest of the Russian Federation” by the EU and Russia on November 11, 2002. 43 The Joint Statement arranges for two types of travel documents for Russian passengers travelling between Kaliningrad and mainland Russia through the territory of Lithuania: the FTD (Facilitated Transit Document) and the FRTD (Facilitated Railway Transit Document), which went into operation from July 1, 2003. The former is designed for multiple entry direct transit via all forms of transport by land, and the latter covers single trips by train crossing Lithuania. According to the latest estimations, the operation of FRTDs has proved to be satisfactory, whereas the FTDs have not enjoyed much popularity since Kaliningrad residents have taken mostly use of multi-entry Lithuanian visas, which are free of charge. 44 Admittedly, the accession of Lithuania and Poland into the European Union and into the Schengen zone has not led to significant technical impediments in border crossings to Lithuania and Poland by Kaliningrad residents. 45 Nor have serious problems in passengers’ transit through the territory of Lithuania appeared, since the FTDs and FRTDs continue to function smoothly. Concurrently, Russia is making an additional effort to secure connections between the oblast and mainland by developing waterway transport, including 42

The agreement was signed by the EU and Russia at the Sochi EU-Russia summit on May 25, 2006. Agreement between the Russian Federation and the European Community on the facilitation of the issuance of visas to citizens of the Russian Federation and the European Union, OJ L 129/27 (2007). 43 The Joint Statement on Transit between the Kaliningrad region and the Rest of Russia, November 11, 2002, Brussels. 44 See Evgeny Vinokurov, Kaliningrad transit and visa issues revisited, CEPS Thinking Ahead for Europe, Centre for European Policy Studies, July, 2006, p. 1. 45 COM (2006) 860 final.

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ferry lines, and reducing flight tariffs. 46 Also, the Russian Federation holds consultations with Lithuania and Poland on the problem of local border traffic; the possibilities of bilateral agreements on the liberalization of visa regimes for residents who live within the 30-kilometer border zones have been examined particularly, with a view to facilitating cross-border traffic and cooperation. 47 This aspect is examined in more detail in Chapter IV.2.b)cc). c) The Kaliningrad Oblast and its economy ante and post the EU enlargement In spite of the gloomy predictions and speculations on Kaliningrad’s (primarily economic) fate after EU enlargement, it has managed to survive hard times. Moreover, according to the then-Minister of Economic Development and Trade of the Russian Federation, German Gref, “compared to other regions in the North-Western Federal District of Russia, Kaliningrad is developing very fast, being among the three Russian regions with the highest rates of development”. 48 Indeed, economic indicators reveal good economic dynamics. Thus, as the recent estimations show, industrial production increased 68 percent in the Kaliningrad Oblast in 2006, while in early 2007 this number grew up to 75 percent. 49 These figures sound most impressive when one compares them with the economic indicators of the region in the 1990s, when Kaliningrad found itself in a deep crisis and its industrial production decreased by 70 percent. 50 A number of reasons accounted for this economic stagnation. First of all, the fall of the Soviet Union generally affected the Russian economy negatively, with the Kaliningrad Oblast, an indispensable part of the Soviet economy, no exception. 51 At the time, the oblast had a narrow economic specialization. It was significantly attached and subordinated to the needs of the military-industrial 46 Ezhegodnaja bol’shaja press-konferencija Prezidenta Rossijskoj Federacii Vladimira Putina, 14 fevralja 2008. However, these efforts can not be fully responsive to the demands posed by movement of people and goods. Thus, having predominantly political goals behind its foundation, the ferry line Kaliningrad-St. Petersburg has already proved unprofitable, since it is subsided by the state and land transit still remains cheaper. See Evgeny Vinokurov, How do enclaves adjust to changes in the external environment?, p. 54. 47 See Oleg Zvonkov, V Shengenskom kol’ce, in: Kaliningrad segodnja, 7 fevralja 2008. 48 German Gref, Russia’s role in the Baltic Region, in: Baltic Rim Economies, No. 2, April 30, 2007, p. 10. 49 Kaliningrad region, in: Baltic Rim Economies, No. 2, April 30, 2007, Pan-European Institute, p. 7. 50 See Evgeny Vinokurov, Integration of an enclave into the international economy, p. 33. 51 See Richard Krickus, p. 46.

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sector in the region (about 35 –40 percent of the economy). 52 This resulted in the region’s dependence on subsidies coming from Moscow. After the dissolution of the Soviet Union, Moscow could not provide the region with substantial subsidies and finance the military-industrial complex in the amounts it had done previously. Therefore, the region was condemned to rely mainly on its own local revenue, which remained objectively poor. Secondly, within the economic diversity that Kaliningrad still maintained, it developed extensive economic interconnections with the Baltic republics of the Soviet Union, also due to the formal division of the Soviet units into economic districts, whereby Kaliningrad and the Baltic republics of the Soviet Union belonged to the Baltic Economic Zone. These economic connections were extended to accumulated human and cultural relationships in the Baltic region. The collapse of the Soviet Union partly ruined these links because of the erection of borders and also because the Baltic States started to adjust their economies to Western patterns. The general situation was aggravated owing to the territorial detachment of the oblast; regional transportation (road, rail, and waterway) systems were drastically disintegrated from these of mainland Russia. As a result, the region had to find its own way towards a market economy, simultaneously keeping an eye on both the Russian market and external (Baltic regional) markets. 53 The regional economy went through two periods of economic transition: 1991 to 1998 and from 1999 onwards. 54 Both periods reflect the general trend of the Russian economy, the first period being marked by the survival of the economy after the shocks caused by the break-up of the Soviet Union; general industrial growth followed the 1998 economic crisis in Russia. In 1999, the Kaliningrad Gross Regional Product (GRP) 55 increased by 6.8 percent and in 2004 by 12.3 percent. 56 While goods constituted 42 percent of the GRP in 2003, the rest 52

Ibid., p. 47. See Malgorzata Pacuk / Tadeusz Palmowski, Changes and Perspectives for the Economic Development of the Kaliningrad District in the Light of Regional Baltic Co-Operation, in: Bjorne Lindstrom and Lars Hedegaard (eds.), The Yearbook of North European and Baltic Integration, Berlin: Springer Verlag, 1997, p. 270. 54 See Evgeny Vinokurov, Integration of an enclave into the international economy, p. 34. 55 Gross product for a state or region is conceptualized similarly to national estimates of gross domestic product: “it is value of all goods produced for final sale in an accounting period and originated from a particular geographic region such as metropolitan area, state or nation. Gross product is defined as the market value of all output minus the value of all intermediate production expenses. Alternatively, this measure can be computed as the sum of payments to labour, capital and other factors applied in the area of examination.” Gross Regional Product: Another View of Houston’s Economy, Federal Reserve Bank of Dallas, Houston Branch, April 1995, p. 2. In Russia, GRP is calculated by production method. See Alexander Granberg / Irina Masakova / Ioulia Zeitseva, Gross Regional Product: Indicator 53

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(58 percent) was made up by the services sector. Overall, the GRP structure is represented by industry (the largest weight in the GRP), construction and transportation, agriculture (with a low weight) and the service sector. Over time, the regional economy has undergone structural transformation. The industrial structure has remained undiversified, with only three industries still constituting the main industrial sectors and accounting for 83.7 percent of regional industrial output, but its nature has changed qualitatively. 57 Thus, the previous machine production, consisting of mainly mechanical engineering, has been to a significant extent replaced by household electronics (TV sets, vacuum cleaners and refrigerators that are assembled in the region). Food production has come to rely considerably on food imports rather than on domestic sources as formerly. Another change is that the amount of fisheries and fish processing has been reduced to a certain degree. Also, overall paper production specializes now on goods of higher quality, thus shifting from cellulose to paper and paperboard. Thus, most of the region’s industrial output (60 percent) represents new (in contrast to the previous traditional) types of products such as consumer items, some food products, and furniture pieces produced by the new furniture sector, which totally accounts for 5.7 percent of national production. 58 One of the hallmarks of the Kaliningrad economy is a high amount of shadow economy. 59 For instance, its share in the regional industry made up 28.5 percent in 2003. 60 Experts extrapolate the large extent of shadow economy by the diverse side effects of the region’s specific geographical location and the SEZ regime. 61 It includes three segments: a) small-scale cross-border traders smuggling goods between Poland, Lithuania and Russia, b) enterprises in the real sector of Kaliningrad’s economy, and c) the area of “virtual” shadow activities.

of Differentiation of the Region’s Social-Economy Development (Russia in Transition), ERSA Conference Papers, 1998, p. 3. 56 See Evgeny Vinokurov, Integration of an enclave into the international economy, p. 34. 57 Ibid., p. 37. 58 Ibid. 59 Described by experts as complicated, the concept of shadow economy in general refers to economic activity which is unrecorded within government accounting. This economic activity is always known as informal, hidden, black, underground, gray, clandestine, illegal and parallel. See Matthew H. Fleming / John Roman / Graham Farrel, The Shadow Economy, Journal of International Affairs, Spring 2000, 53, No. 2, pp. 387 –389. 60 See Evgeny Vinokurov, Integration of an enclave into the international economy, p. 38. 61 See Natalia Smorodinskaya, Analysing the Kaliningrad Situation: The Economic Growth Dimension, in: Hanne-Margret Birkenbach and Christian Wellmann (eds.), 2003, p. 184 – 186.

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Generally, the Kaliningrad regional industries fall into two groups based on the distribution orientation of their products, namely export-oriented and import-substitution industries. 62 The first group consists of the extraction of oil and wood, and the pulp and paper industry. Food-processing, machine-manufacture and the furniture industries make up the second group and are therefore principally oriented towards the Russian market, with only inconsiderable quantities entering local or EU markets. Importantly, while the import-substitution sector has bloomed fast, the pace of the export-oriented industry’s development has been much slower. This slow growth of the latter category of industries is due to little potential for growth since, among other reasons, these industries rely heavily on raw materials (wood, oil, amber) which tend to decrease irreversibly. 63 However, the latest estimations of foreign trade flows reveal that in 2006 export of goods went up to 35.8 percent – in comparison, this indicator in Russia reached only 25 percent – whereas imports, similarly to Russia’s figures, increased by 29 percent. 64 Crude oil and refined products account for the largest share (75 percent) of the total value of exports; the region is favoured by Russian oil companies as a transit point for exports. The largest target of these exports (370 million euros in 2006) is Latvia. The largest importer to Kaliningrad is Germany, followed by China, which sells components for cars, TVs and consumer electronics, to Kaliningrad. The total value of imports doubled in 2006. 65 Clearly, trade with mainland Russia remains an important part of the trade balance in the region. It constitutes more than 40 percent of overall trade figures, wherein Russia 1. is the major supplier of fuels, petrochemical products, metals, wood and other raw materials, and 2. the principal destination of goods produced by the import-substitution industries. 66 According to experts, the dynamic growth of regional trade flows results from the high degree of openness of the Kaliningrad economy and is mainly due to the Special Economic Zone regime in the Kaliningrad Oblast and the “intermediary trade orientation of the regional economy”, 67 the latter implying specialization in import-substitution industries. One analyst has made an attempt to calculate the degree of Kaliningrad’s overall trade openness and to compare it with small open economies of foreign countries. 68 He concluded that the trade openness of the Kaliningrad Oblast 62

p. 37. 63

See Evgeny Vinokurov, Integration of an enclave into the international economy,

Ibid., p. 38. Kaliningrad region, in: Baltic Rim Economies, No. 2, April 30, 2007, Pan-European Institute, Turku, p. 7. 65 Ibid. 66 See Evgeny Vinokurov, Integration of an enclave into the international economy, p. 36. 67 Ibid., p. 35. 64

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considerably outpaces the same indicators for Estonia, Latvia and Lithuania and, in a certain way, can be compared with these of Hong Kong. His final deduction is that, “although it might be justified to characterise Kaliningrad as a ‘double periphery’ in a political sense, it may not be justified to talk about the oblast as a periphery in trade terms, taking into consideration its high degree of trade openness to both the EU and mainland Russia”. 69 As previously mentioned, the advancement of the Kaliningrad economy is closely connected with the regime of the Special Economic Zone. Overall, the Kaliningrad Oblast has been enjoying a free (special) economic zone regime since as early as 1991, when a Free Economic Zone Yantar (“Amber”) was established by the Decree No. 497 of Council of Ministers of the Russian Soviet Federative Socialist Republic of September 25, 1991. 70 This document was further complemented by a number of federal (governmental and presidential) decrees that consistently shaped the legal development of the free economic zone. The process of the development of the zone was accompanied by a certain confrontation of federal and local governments and it was also complicated by an array of federal legal acts that collided or cancelled some provisions of the zone’s operation. Initially, the ideas behind the creation of the zone were the promotion of exports and compensation for the difficulties stemming from Kaliningrad’s exclave position. 71 The regime envisaged a free trade zone, the stimulation of investment, tax preferences, unrestricted outflow of capital, development of infrastructure and simplified entry procedures for foreigners. However, the actual functioning of the zone only started with the adoption of the federal law: “On the Special Economic Zone in the Kaliningrad Oblast” on January 22, 1996, wherein the zone was declared “special” and granted customs preferences. 72 This appears to have been the first federal law of the Russian Federation regulating the legal foundation of the establishment and operation of a Special Economic Zone in Russia. 73 This law was followed by the Federal Law No. 16 “On the Special Economic Zone in the Kaliningrad Oblast” of January 10, 2006. 74 It established a special economic zone based mostly on tax privileges and marked the beginning of a transformation of the existing economic model of the region. The outcomes 68

Ibid., pp. 35 – 36. Ibid., p. 36. 70 See Anatolij Gorodilov et al., XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz, p. 136. 71 See Evgeny Vinokurov, Integration of an enclave into the international economy, p. 39. 72 Federal’nyj zakon “Ob osoboj jekonomicheskoj zone v Kaliningradskoj oblasti” No. 13, 22 janvarja 1996, in: Rossijskaja gazeta, 30 janvarja 1996. 73 See Anatolij Gorodilov et al. XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz, p. 139. 69

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and assessment of these two laws and the regimes fixed by them will be sketched in Chapter II.3., below. Experts admit that foreign capital has not been crucial in shaping the regional economy because of the overall relatively low investment potential of the oblast. 75 Since 1999, the annual increase of foreign internal investment has been dynamic but rather inconsiderable; for instance, it grew to 60.7 million euros (only 7 percent) in 2006. 76 In 2005, the share of foreign capital in the total amount of regional fixed investment made up only 2.2 percent; the major investments in the regional economy originate from Russian business, with businesses of Moscow and St. Petersburg being the largest investors. Overall, foreign investments come from a variety of (mostly EU) countries: Cyprus (22.9 percent), the Netherlands (13.4), Germany (10.2), Lithuania (9.8) and Poland (9.7). 77 One of the characteristic features of foreign capital in the oblast is its unfavourable structure: a large among is off-shore capital; the share of Foreign Direct Investment (FDI) 78 – capable of producing extensive positive externalities such as new technologies, employment growth, growth of industrial production – remains insignificant (the FDI inflow in 2006 was only 16.9 million euros). 79 The FDI (2006) is mainly directed to manufacturing, the financial sector (leasing) and wholesale trade, whereby Lithuania and Poland act as the largest sources of FDI. 80 All in all, the regional economy is greatly influenced by the factors associated with the oblast’s enclave status. 81 This includes a) transactional costs – losses and additional expenses – including additional expenses in transit and transportation (for instance, higher prices of energy carriers). Growth of the economy has led to increases in these expenses due to the increase in economic transactions. The next feature (b) is economic vulnerability, implying greater exposition to 74 Federal’nyj Zakon “Ob Osoboj jekonomicheskoj zone v Kaliningradskoj oblasti i o vnesenii izmenenij v nekotorye zakonodatel’nye akty Rossojskoj Federacii”, No. 16, 10 janvarja 2006, in: Rossijskaja gazeta, 19 janvarja 2006. 75 See Yuri Zverev, p. 15, and Kari Liuhto, Chapter 4. The Economic Development, in: Christer Pursianen and Sergei Medvedev (eds.), p. 67. 76 Kaliningrad region, in: Baltic Rim Economies, p. 7. 77 See Yuri Zverev, p. 15. 78 Foreign Direct Investment is understood as “investment in the businesses of another country which often takes the form of the setting up of local production facilities or the purchase of existing businesses. It is to be contrasted with portfolio investment which is the acquisition of securities”. Donald Rutherford, Dictionary of Economics, London and New York: Routledge, 1992, p. 178. 79 See Evgeny Vinokurov, Ekonomicheskaja specialisacija Kalininigradskoj Oblasti, p. 85, and Kaliningrad region, in: Baltic Rim Economies, p. 7. 80 Kaliningrad region, in: Baltic Rim Economies, p. 7. 81 See Evgeny Vinokurov, Ekonomicheskaja specialisacija Kalininigradskoj Oblasti, p. 43.

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external shocks in comparison to other (mainland) regions. In the case of the oblast, such disturbing experiences have been the break-up of the Soviet Union, the EU enlargement of 2004 and the issue of Russia’s future WTO membership. The nature of the enclave is also characterized by c) the economy’s dependence on the preferential regime granted to the region in the framework of the SEZ and based on customs privileges, which will lead to the so-called “2016” problem, when the customs free zone of the 1996 version will be cancelled and the economy will have to adapt to new realities. Finally, the nature of the enclave reflects such issues as d) the problem of being a “double periphery”, which has already been touched upon, and last but not least and probably most important, e) dependence on the economic trends in both the EU and Russia and the overall standing of EU-Russia relations. Despite some speculations on the eve of the enlargement that the transportation links of the Kaliningrad Oblast would be adversely affected and remain underdeveloped, 82 the region has continued to increase its role as a major hub for the export-import flows which go through its seaports, rail and road links. 83 Experts estimate the cargo turnover in Kaliningrad ports at 3.6 times more than in the period 1999 –2005; about 60 percent of the export freight traffic is oil and petroleum products from Russia and Kazakhstan. 84 However, three-quarters of goods are transferred by rail, while seaports only account for one third. 85 Overall, the seaport and railway networks have a natural potential to become an important transportation corridor connecting European countries with Asian region. To exploit these possibilities fully, the problem of cargo transit through neighbouring territories (Lithuania, among others) should be tackled. The latest principal developments in the transport sector have been the opening of new auto ferries connecting Kaliningrad with St. Petersburg, Germany and Lithuania, bringing part of the Kaliningrad rail network into compliance with the European rail gauge, including some Kaliningrad roads in the Trans-European transport corridors (the Riga-Kaliningrad-Gdansk Highway and the Kyiv-Minsk-VilniusKaliningrad highway) and upgrading the facilities of the Khabarovo airport of the Kaliningrad Oblast. 86 According to experts’ estimations, the consequences of the EU Eastern enlargement have not brought forth tendencies to disintegration in the Kaliningrad Oblast’s economic cooperation with its immediate neighbours, Poland and Lithuania. 87 The negative effects concern mostly the complexity of the 82

See James Baxendale / Stephen Dewar, p. 14. See Yuri Zverev, p. 15. 84 Ibid. 85 See Sergio Vicchi, Kaliningrad, a Russian window on Europe, September 2006, pp. 19 and 26. 86 See Yuri Zverev, pp. 15 – 16. 83

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conditions of cross-border trade and cross-border population movement. Crossborder trade is clearly of much importance for the Kaliningrad economy. Of all Kaliningrad’s exports in 2005, 7.3 percent (accounting for 133 million dollars) were destined for Lithuania and Poland and 19 percent (775 million dollars) of the region’s imports arrived from these two countries. 88 However, as assessments indicate, EU enlargement has negatively affected this sector. 89 It primarily affected the movement of cargo across EU territory (most importantly Lithuania) when the EU norms for transit were introduced. These norms related to EU regulations with regard to phytosanitary veterinary control and additional formality issues such as insurance for Russian cargoes throughout Lithuanian territory. Thus, the economic losses associated with additional costs of transit formalities equalled almost 100 million dollars. 90 One expert refers to figures that indicate that the costs of cross-border trade increased 1.3 to 1.5 times after Lithuania entered the European Union in 2004. 91 This included for health and safety regulations, veterinary controls and other charges introduced by Lithuania. Some indicators also show that the number of people crossing the border decreased from 9.1 million in 2002 to 7.0 million people in 2004. 92 This has been interpreted as a result of the decline in activities connected with shuttle trade 93 (in 2001, the number of the Kaliningrad Oblast inhabitants involved in these activities constituted about 10 000 people) 94 because of the toughening of border controls in 2004 and the introduction of visa regimes with Lithuania and Poland in 2003. However, specialists maintain that this decrease in people’s crossing the border and engaging in shuttle trade activities could be estimated as partly positive since it also implies a decline in the smuggling of vodka and cigarettes and therefore benefited the regional budget. 95 By and large, the decline of shuttle trade in border regions did not lead to unemployment problems affecting the Kaliningrad economy owing to, 87 See Evgeny Vinokurov, Ekonomicheskaja specialisacija Kalininigradskoj Oblasti, p. 296. 88 See Yuri Zverev, p. 21. 89 See Evgeny Vinokurov, Ekonomicheskaja specialisacija Kalininigradskoj Oblasti, p. 203. 90 Ibid. 91 See Yuri Zverev, p. 21. 92 See Evgeny Vinokurov, Ekonomicheskaja specialisacija Kalininigradskoj Oblasti, p. 204. 93 Shuttle trade is described as “the activity in which individual entrepreneurs buy goods abroad and import them for resale in street markets or small shops”. Often the goods are imported without full declaration in order to avoid import duties. OECD Glossary of Statistical Terms, available at: http://stats.oecd.org/glossary/detail.asp?ID=2459. 94 See Yuri Zverev, p. 21. 95 See Evgeny Vinokurov, Ekonomicheskaja specialisacija Kalininigradskoj Oblasti, p. 205, and Kari Liuhto, pp. 87 – 88. On the other hand, the estimated negative effect of

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among other things, the growth of economic development and the increase of employment in other sectors of the economy. As things stand, the experts’ community agrees that the EU enlargement of 2004 has not led to damaging consequences for the economic development of the Kaliningrad Oblast in the short run. 96 The above mentioned growth of the regional economy has been chiefly due to the effects of the Special Economic Zone regime. The European Union has become the principal trade partner of the Kaliningrad Oblast, however, covering almost two thirds of the region’s foreign trade; Germany, Poland and Lithuania make up 37 percent of the region’s foreign trade. 97 Nor has EU enlargement influenced foreign investment inflows into the Kaliningrad economy and the export-import composition. The decisive factor for impacting foreign investment flows has not been the enlargement but the general development of the investment climate in both Kaliningrad and Russia. 98 The EU has turned into the major foreign investor into the Kaliningrad Oblast. Aside from that, previous assumptions that the need for adaptation to the rules of the EU single market would aggravate the economic situation in Kaliningrad do not reflect the reality. This is explained by the specialization of the regional economy: “more than 85 percent of SEZ production is shipped to the Russian market. The smaller EU share is dominated by raw materials”. 99 Overall, the role of the EU and its Members States in the regional economic policy has been mainly indirect and it has been expressed in technical assistance, economic research and training. 100 In a long-term perspective, however, EU enlargement might have more extensive (negative and positive) effects. On the one hand, it will contribute to the growing competitiveness of the countries of Central and Eastern Europe and hence lead to a weakening in the competitiveness of Kaliningrad producers in European and Russian markets. On the other hand, the enlargement will also stimulate the economic development of backward regions of Lithuania and Poland, which will positively spill over to the economic development of the Kaliningrad Oblast and will not leave it on the EU periphery. So far, the development of Polish and Lithuanian regions bordering the Kaliningrad Oblast lags this decrease has been the fact that it did affect social-economic situation of thousands of families living in the border regions and engaged in shuttle trade activities. 96 See, for example, Vinokurov, Ekonomicheskaja specialisacija Kalininigradskoj Oblasti, p. 206, and Kari Liuhto, p. 87. 97 See Kari Liuhto, p. 76. 98 Ibid., p. 88. 99 See Evgeny Vinokurov, Economic Policy, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), 2009, p. 178. 100 Ibid.

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behind other regions of these countries and a comparison of their economies with that of the Kaliningrad Oblast does not reveal a considerable gap among their living standards. 101 In spite of the fact that the enlargement has impacted the movement of people and goods, this has been smoothed over by the agreement reached by the EU, Russia and Lithuania. Although the metaphor of “Baltic Hong Kong” seems to have long faded away, it has been recently revived in mass media discourse because of the latest initiatives and developments in the Kaliningrad Oblast, such as the opening of a new modern airport terminal with the aim to create an international hub connecting Russian cities with Great Britain, Germany, Italy and Spain; the establishment of a casino zone in the Kaliningrad Oblast (which will be touched upon more fully in Chapter II.3.), efforts related to the development of tourism, the port and others. 102 As such, the Western mass media speak of Kaliningrad as be “Putin’s Hong Kong”, which booms thanks to state support. 103 d) Summary The central goal of this part of Chapter II. has been twofold. Firstly, it has provided a general background to the situation of the Kaliningrad Oblast in the context of the expansion of the EU to the East. Secondly, by offering an overview into historical, geopolitical and economic conditions capable of explaining the origin of the problem of the Russian exclave, the section is an attempt to assess the placement of Kaliningrad within the EU’s historical / cultural, geopolitical and economic / transactional boundaries. The problem of the Kaliningrad Oblast arose following the dissolution of the Soviet Union – when the oblast turned into Russia’s exclave – but it increased dramatically in the context of the prospective EU Eastern enlargement of 2004, penetrating into Russian and European academic and political discourses in the early 2000s. It is essential to understand the intricate legacy of the establishment of the Kaliningrad Oblast in order to understand the basis of the speculations by some European (German and Lithuanian) nationalist forces that the region’s historical roots would legally justify detaching the region from the Russian Federation. This in turn is partly responsible for Russia’s fears of separatist trends in the oblast and as a result its unwillingness to internationalize the issue of the Kaliningrad Oblast and engage with it more actively. 101

See Kari Liuhto, p. 71. See Toni Hjelpin, Kaliningrad budet putinskim Gonkongom, 20 dekabrja 2007. 103 Ibid, see also Stephen Castle, Kaliningrad from Russian Relic to Baltic Boom Town, in: The Independent, March 23, 2006. 102

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The geopolitical aspect is equally critical for comprehending the question of the Kaliningrad Oblast because it centres on such issues as the military significance of the Kaliningrad Oblast in Russian security and European security in the Baltic region and therefore it has represented a potential for conflict on the level of EU / NATO-Russia. Of more importance, however, has been the problem of the movement of people and goods into the territory of the EU (neighbouring Lithuania and Poland) and their transit from the Kaliningrad Oblast into mainland Russia through EU territory (namely, Lithuania). This appears to have been the most debated issue between the European Union and the Russian Federation as a direct consequence of the anticipated EU enlargement. The economic aspect has similarly been relevant, taking into account numerous expert opinions that the EU Eastern enlargement implied changes for the Kaliningrad Oblast. Often these anticipated changes were correlated with negative effects for socioeconomic situation of the Kaliningrad Oblast. Nonetheless, the brief analysis above allows to state that, in the short run, the EU Eastern enlargement has had a relatively modest impact on the situation of the Kaliningrad Oblast. Firstly, as sociological surveys in Kaliningrad show, it has not brought with it a separatist mood among the population of the oblast. Secondly, although tensions remain with regard to partial militarization and the military significance of the Kaliningrad Oblast for Russian national security, the gradual cooperation between Russia and the EU / NATO in the military area (such as joint exercises) after EU / NATO Eastern enlargement has outpaced the possible negative trends in this sphere. Russia’s aspirations to combine defensive and economic interests in the Kaliningrad Oblast are also of much relevance here. The problem of military transit through the territory of Lithuania has been solved on the bilateral Russia-Lithuania level. Similarly, the movement of people and goods has been smoothed by an agreement by the EU and Russia; for instance, a set of travel documents (FRTDs and FTDs) for passengers’ transit through the Republic of Lithuania is functioning efficiently. The regional economy has been flourishing after the post EU-enlargement, but for reasons other than EU enlargement, in essence owing to the regime of the Special Economic Zone. The EU expansion has had an immediate adverse impact on the cross-border trade sector, but it has not influenced foreign investment flows into the Kaliningrad economy. By and large, one of the chief outcomes of the EU enlargement for the paradigm “EU-Kaliningrad” is that the European Union has come to be the major economic partner of the Kaliningrad Oblast. Given its vulnerable economic fundamentals (limited natural resources, a relatively small domestic market, the absence of distinct comparative advantage, dependence on outside energy supplies, its sub-national nature and limited competences compared to those of a sovereign state), Kaliningrad’s economy is largely dependent on foreign trade. Kaliningrad’s major trade partner is the European Union, first and foremost its Member States, Germany, Lithuania and

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Poland, which make up 37 percent of the region’s foreign trade. The European Union is also the major investor in the Kaliningrad economy. Clearly, the EU and the Kaliningrad Oblast will continue to develop their economic connections and it seems that the impact of the EU on the regional economy and other aspects will grow, strengthening their interconnections further. The preliminary observation concerning the inclusion of the Kaliningrad Oblast in the European Union is that Kaliningrad may only be situated inside the EU to an inconsiderable degree. While it is explicitly of European origin its recent history has been objectively shaped by the Soviet and, later, Russian realities, thus influencing the identities of its residents, the vast majority of whom identify themselves as Russians rather than as Europeans. There is, however, a growing sense of belonging to Europe among Kaliningrad residents. The geopolitical realm at most reflects Kaliningrad’s being “outside” the EU; its position under the sovereignty of Russia is a military outpost surrounded by NATO states and a spot separated from the Schengen space by tough border controls and a restrictive visa regime. Besides, while Kaliningrad’s economy is intertwined with those of neighbouring Lithuania and Poland and while the EU is its major economic and trade partner, its economic development lately has been mainly due to the benefits resulting from the regime of the Special Economic Zone. The subsequent sections of Chapter II. will further elaborate on the background information necessary for understanding Kaliningrad’s place within the institutional / legal boundary of the Union. Specifically, Chapter II.2. will investigate in what areas and to what extent the Kaliningrad Oblast – as a subject of the Russian Federation – is empowered to act internationally.

2. The legal capacity of the Kaliningrad Oblast in international relations a) The Kaliningrad Oblast as a subject of the Russian Federation Over the period 1947 –1992 the Kaliningrad Oblast was an administrativeterritorial unit of the RSFSR with no independent legal capacity. In all branches of law, legal capacity means the “capacity to be the subject of legally relevant situations”, such as “rights or claims, duties or obligations, competences to act in an organized society”. 104 In a nutshell, legal capacity is “a status in law, which is, in a legal system, the reference point of conferring rights, obligations and competences”. 105 104 Hermann Mosler, Subjects of International Law, in: Rudolf Bernhardt (ed.), Encyclopedia of Public International Law, Vol. IV, Amsterdam: North-Holland, 1992, p. 712.

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It was not until the dissolution of the Soviet Union, the beginning of the development of democracy and federalism in Russia, and the passage of the Constitution of the Russian Federation in 1993 that the Kaliningrad Oblast was transformed into a subject of the Russian Federation (Articles 5 and 65 of the Constitution). 106 Since then it has acquired the status of a subject of constitutional law and hence legal capacity. It bears features of a state-like entity of a federative state: it has its own legislative and executive bodies of state power (Article 77), Charter (Ustav) and regional legislation (Article 5 para. 2), administrative bodies, property, municipal militia, and the judiciary. The executive body of state power is represented by the government of the oblast, which is headed by the governor of the oblast. 107 The legislative branch is embodied in the Kaliningrad Oblast’s Duma, which is led by a chairman and consists of a number of committees and commissions. 108 According to Article 73 of the Constitution of Russia, the Kaliningrad Oblast, like all the subjects of the Russian Federation, exerts “full state power” within its exclusive competences. These include competences that are outside the limits of the authority of the Russian Federation and powers on the issues under joint jurisdiction of the Russian Federation and the subjects of the Russian Federation, which are formulated in Articles 71 and 72, respectively. Within the scope of its exclusive responsibilities, the Kaliningrad Oblast adopts its own legislation; in the cases of areas of joint jurisdiction it is empowered to adopt legislative acts to be applied until an appropriate federal law is enacted. 109 As was indicated in the Introduction, the situation of the Kaliningrad Oblast is unique first and foremost for reasons of its geopolitical situation and its nature as an exclave. The literature on international law explains the notion of an international enclave as: an isolated part of a foreign State’s territory entirely surrounded by the territory of only one other State (the surrounding state) so that it has no communication with the territory of the State to which it belongs (the mother or main State). The same territory is an exclave from the point of view of the mother State. 110 105

Ibid. Konstitucija Rossijskoj Federacii, in: Rossijskaja gazeta, 25 dekabrja 1993. 107 See Alexey Ignatiev, Defining an Administration for a Pilot Region Kaliningrad, in: Hanne-Margret Brickenbach and Christian Wellmann (eds.), The Kaliningrad Challenge. Options and Recommendations, Münster: LIT Vertrag, 2003, pp. 117 –118. 108 Along the regional administrative bodies, there are offices of federal bodies of public administration (ministries and agencies) in the Kaliningrad Oblast, including these of the Ministry of Foreign Affairs, the Defence Ministry, the Federal Security Service, the States Customs Committee, the Ministry of Home Affairs, the Federal Border Service, the State Tax Police, Taxation Ministry, the Justice Ministry, the Finance Ministry and others. In most cases, their activities are subordinate to the federal centre. See Alexey Ignatiev, Defining an Administration for a Pilot Region Kaliningrad, p. 118. 109 See Oxana Vitvitskaya, p. 277. 106

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Under international law, an enclave’s legal status for the surrounding State is that of a foreign territory that is subject to the territorial sovereignty of the mother State. 111 Therefore, for the European Union, the Kaliningrad Oblast is a foreign territory, wherein the Russian Federation is exclusively empowered to establish legal order. The residents of an exclave have the same rights and obligations as the residents of the main land. Importantly, a mother State may adopt special laws under its national legislation which take into account special situations of the exclave. Aside from this, a mother State may conclude a treaty with a surrounding State, whereby the latter may include the enclave in its own customs territory and currency area. Yet, the most relevant issue for the legal relations of both sides related to the situation of an enclave / exclave concerns the issue of transit between the main territory and the exclave through the territory of the enclaving State. This aspect is usually legally regulated on the basis of a treaty determining conditions of transit. Hence, it becomes apparent and unquestionable that the legal status of the Kaliningrad Oblast should be examined within the premises of the national law of Russia. The same concerns the external competence of the oblast. Needless to say, the geographical proximity of the oblast to European countries preconditions its efforts to enter the international arena and undertake international activities intensely. In so doing, it acts as a subject of the Russian Federation within the limits established by national legislation. Overall, the international involvement of Russian regions, 112 among them the Kaliningrad Oblast, and their role in the foreign policy of the Russian Federation, has been widely examined within the framework of contemporary international relations studies. 113 In this respect, international action by regions represents a complex subject comprising political, international, legal and global aspects. It is important to note that, from a legal perspective, the examination of the external action of Russian regions (or subjects of Russia) encompasses the study of the distribution of competences between the federal centre and subjects of the Federation and the coordination of their positions in the sphere of foreign policy. Hence, in order to shed light on the legal aspect of the international activity of regions, the nature of Russian federalism and centre-regions relations should be analyzed. 110

Gerhard Hoffmann, Enclaves, in: Rudolf Bernhardt (ed.), Vol. II, p. 80. Ibid., p. 81. 112 In this paper, the term “region” is identical with that of “subject” of the Russian Federation. 113 See Oleg Aleksandrov, Regiony vo vneshnej politike Rossii. Rol’ Severo-Zapada, Moskva: Izdatel’stvo “MGIMO-Universitet”, 2005, p. 4. 111

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According to some Russian specialists there are certain domestic and external determinants that encourage the development of the international activities of Russian regions. 114 They are: a) geo-economic and socio-economic factors, and b) factors correlated with processes of regionalization and globalization. If one applies these factors specifically to the Kaliningrad Oblast with a view to explaining the development of its international activity, one should recall a number of particulars. The first group of these factors includes, among other things, the dissolution of the Soviet Union and the oblast becoming a Russian exclave, the weakening of centre-region relations in the 1990s, the domination of the Western orientation in foreign policy of the Russian Federation in the 1990s, the necessity for the Kaliningrad Oblast to survive in the new economic and political realities, the explicit support of the federal centre through the conferral of the status of a SEZ upon the oblast and greater liberalization of its economic connections, and the implicit state contribution through the adoption of federal legislation relating to international activities of the subjects of the Russian Federation. In addition, external factors proceeding from the processes of regionalization and globalization have generally impacted the acceleration of international economic cooperation. They offered new opportunities for integration and transborder cooperation and the spread of communications technology. 115 The development of European integration in general, and the EU Eastern enlargement in particular, have been critical to the proliferation of the Kaliningrad Oblast’s external activities. Also, the processes of globalization call for Russia to integrate into the international economy. Against this background, subnational units – like the Kaliningrad Oblast – gradually come to upgrade and intensify their involvement in external affairs; this relates first and foremost to the area of cross-border cooperation and attracting investments. A growing body of academic work studies the international capacity of subnational units (regions, regional or substate governments). 116 This external representation of federated units has been conceptualized as paradiplomacy. The phenomenon of paradiplomacy is explained as a result of globalization: “globalization and the rise of transnational regimes, especially trading areas, have eroded the distinction between domestic and foreign affairs and by the same token have transformed the division of responsibilities between state and subnational governments”. 117 While much research concentrates on the regional governments of Western federal states (European states, the USA, Australia and 114

Ibid., p. 16. Ibid., p. 25. 116 See, for instance, Francisco Aldecoa / Michael Keating (eds.), Paradiplomacy in Action. The Foreign Relations of Subnational Governments, London: Frank Cass Publishers, 1999, and Hans J. Michelmann / Panayotis Soldatos (eds.), Federalism and International Relations. The Role of Subnational Units, Oxford: Clarendon Press, 2001. 115

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Canada), this analytical concept has been relatively underexplored in relation to Russian regions’ the Kaliningrad Oblast is no exception. The external activity of the Kaliningrad Oblast is often examined in the framework of analyzing the external projection of the northwestern regions of Russia in particular – a group of regions that is developing international representation at a rapid pace 118 – and Russian regions in general. 119 b) The Kaliningrad Oblast in the system of Russian federalism The key to understanding Russian federalism lies in the nature of centre-region relations. 120 From a legal perspective, the relations between the Russian federal center and the Russian regions are currently based on the constitutional principle. 121 From the outset of federalism in Russia, contractual forms prevailed as they were favoured by President Boris Yeltsin, who initiated ad hoc arrangements that markedly signaled the establishment of Russian federalism. Thus, on March 31, 1992, the federal center and Russian regions (except for the republics of Chechnya and Tatarstan) signed the Federal Treaty establishing new rules and setting up the division of powers between them. 122 On December 12, 1993, the Constitution of the Russian Federation was adopted in a nationwide referendum and it introduced a constitutional basis to the center-region relations. In accordance with the Russian Constitution (Part II, Article 1), in cases when the provisions of the Federal Treaty do not conform to the provisions of the Constitution of the Russian Federation, the provisions of the Constitution shall apply. In the meantime, the federal center continued to conclude bilateral treaties with the subjects of the Russian Federation on the delimitation of responsibilities 117 Michael Keating, Regions and International Affairs: Motives, Opportunities and Strategies, in: Francisco Aldecoa and Michael Keating (eds.), p. 1. 118 See, for instance, Oleg Aleksandrov. 119 See, for example, Sergej Romanov, Paradiplomatija evropejskih granic i Rossija, Moskva: Nauchnaja Kniga, 2001; Igor’ Dudko, Uchastie subjektov RF v mezhregional’noj integracii v oblasti mezhdunarodnyh i vneshnejekonomicheskih svjazejin: S. Polenina and E. Skurko E. (eds), Pravovaja sistema Rossii v uslovijah globalizacii i regional’noj integracii, Moskva: Formula Prava, 2006, pp. 153 –189, and Alexander Zergunin, Russia’s Regions and Foreign Policy, in: Internationale Politik, Nr. 1, Fall, 2000. 120 See Natal’ja Lapina, Regional’noe razvitie i centralizacija vlasti v zerkale analitiki, in: Federalizm i rossijskie regiony, INION, Rossijskaja Akademija Nauk, Moskva, 2006, p. 11. 121 See Leonid Karabeshkin, Clarifying the Status of the Kaliningrad Oblast’ in the Context of Russian Federalism, in: Birckenbach H.-M., und Wellmann Ch. (eds.), p. 83. 122 See Alexander Zergunin.

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(the Treaties on the Division of Subjects of Jurisdiction and Powers between the Federal Bodies of State Power of the Russian Federation and the Bodies of Authority of the subjects of the Federation). This occurred as a result of pressure from regional elites, whereby these elites applied sufficient leverage to bargain and secure essential powers in exchange for their loyalty and efforts in keeping the territorial integrity of the Russian Federation. This epoch was marked by the intensive institutionalization and legislative development of Russian foreign relations and a growing role of the Russian regions both on the federal stage and in Russian foreign policy, with the federal center relatively weak. 123 By mid-1998, the federal government had concluded 46 bilateral treaties. 124 The preferences gained by the regions were not equal; the bargaining process was not least dependent on informal relations such as, for instance, the personal status of certain regional leaders. 125 Whereas there was an essential differentiation among Russian regions owing to different levels of economic and social development, the unequal advantages that the regions acquired formally in the bilateral treaties caused the start of asymmetric federalism in Russia. 126 This asymmetry also exists in the Constitution of the Russian Federation. On the one hand, the Constitution explicitly codifies the equality of the subjects of the Russian Federation. Indeed, Article 5 para. 1 of the Constitution provides that the six types of subjects, namely, republics, territories, regions, cities of federal importance, an autonomous region and autonomous areas, shall be equal. Complementarily, Article 5 para. 4 specifies that “in relations with federal bodies of state authority all the subjects of the Russian Federation shall be equal among themselves”. On the other hand, only one kind of Russian subject – a republic – is expressly denominated as a “state”. Unlike other entities of the Russian Federation that have the right only to their own charter, republics are empowered to have their own constitutions (Article 5 para. 2). Also, a republic has the right to establish its own national state language along with the Russ123 See Nikolai Petrov, The Implications of Center-Region Politics for Russia’s Northwest Border Regions, in: Antonenko, O. and Pinnick, K. (eds.), p. 135. 124 See Julia Kusznir, The New Russian-Tatar Treaty and Its Implications for Russian Federalism, in: Russian Analytical Digest, No. 16, March, 2007, p. 2. 125 See Leonid Karabeshkin, Clarifying the Status of the Kaliningrad Oblast’, p. 86. 126 Asymmetric federalism is a complex and sophisticated political concept. It comprises the notions of two kinds of asymmetries in federations: a) de jure asymmetries epitomized in constitutions and laws, and b) de facto asymmetries in the sphere of economic, social and political dynamics. While the legal asymmetry reveals itself in the different rights of federal units, including in a hierarchy of competences, the actual asymmetry results from, among other things, different sizes and economic strengths of member states and different configurations of (bilateral) intergovernmental (in the first place fiscal) relations between the regions and the federal government. See Klaus von Beyme, Asymmetric federalism between globalization and regionalization, in: Journal of European Public Policy, 12:3, June 2005, pp. 436 – 443.

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ian language (Article 68 para. 2) and therefore to introduce bilingualism in its institutions. Experts in the field have criticized this asymmetry for violating the fundamental human rights of Russian citizens and explained this state of affairs by difficulties in the process of building federative relationships in post-Soviet Russia, which still needs to be improved. 127 Again, however, it is noteworthy that in spite of the fact that republics of the Russian Federation are labeled as states in the Constitution and that the majority of them have formalized their sovereignty on the regional level in their own constitutions – as in Articles 5 and 62 of the Constitution of the Republic of Tatarstan – they do not enjoy state sovereignty. Moreover, such sovereignty of republics, as Kurskova claims, would in essence be “legal nonsense” 128 in terms of international public law. 129 Power sharing is one of the principles of Russian federalism (Article 5 para. 3 of the Constitution). This has been regulated by the Constitution (the provisions on powers reserved for the federal government, exclusive competences of the subjects of the Russian Federation and responsibilities under joint jurisdiction), the Federal Treaty and other bilateral treaties on the delimitation of the subjects of authority and powers (Article 11 para. 3 of the Constitution). The asymmetry mentioned above among the regions was manifested remarkably in the different foreign policy powers of the subjects of the Russian Federation which were initially laid down in the Federal Treaty of 1992 130 and, in due course, in bilateral treaties. On the one hand, the “Treaty on the Division of Subjects of Jurisdiction and Powers Between the Federal Bodies of the Russian Federation and the Bodies of 127 See Galina Kurskova, Politicheskij rezhim Rossii: pravovoj analiz, Moskva: Zakon i Pravo, 2007, p. 90. 128 Ibid., p. 98. 129 In international public law, sovereignty means “the basic international legal status of a State that is not subject, within its territorial jurisdiction, to the governmental, executive, legislative, or judicial jurisdiction of a foreign State or to foreign law other than public international law”. Helmut Steinberg, Sovereignty, in: Rudolf Bernhardt (ed.), Vol. IV, p. 511. As such, only States, as opposed to other subjects of international public law such as international organizations, possess sovereignty, whereby member states of federal States are not sovereign, even in cases when they are qualified as States in a particular constitutional law or are entitled to enter into (limited) international relations. Ibid., p. 512. In general, sovereignty implies the legal power (of the national authorities) to take fundamental political decisions pertaining to such spheres as foreign policy and treaty-making powers related to decisions on war and peace, recognition of foreign states and governments, diplomatic relations, military alliances, membership in international political organizations as well as fundamental economic, fiscal and budgetary policies. Ibid. 130 See Jurij Vetjutnev, Globalizacija i regional’naja integracija, in: S. Polenina and E. Skurko E. (eds), p. 154.

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Authority of the Republics within the Russian Federation” (Article III, 2) 131 envisaged that republics of the Russian Federation should participate independently in international and external economic relations and therefore it recognized the international legal subjectivity of republics. On the other hand, similar treaties on the division of powers between the federal center and the rest of the Russian federal entities declared the right of the latter to international and external economic ties at most. Furthermore, in the bilateral agreements (Treaties on the Division of Subjects of Jurisdiction and Powers) between the federal center and the subjects of the Russian Federation, some subjects – primarily republics – received the right to conduct relations with foreign states directly (and hence some sort of international legal personality), but the relations of others had to be predominantly mediated by ministries and agencies. 132 The widely used example of the former case is the Republic of Tatarstan, the agreement with the Republic having been signed on February 15, 1994. 133 According to Article 11 of the agreement, the powers of the Republic included the right to: engage in international relations, establish relations with foreign states and enter into agreements therewith such as are in compliance with the Constitution and international agreements of the Russian Federation, the Constitution of the Republic of Tatarstan and the present agreement, and to participate in the activity of appropriate international organizations. 134

In addition, Article 13 of the Agreement stated that the Republic was empowered to implement foreign economic activity on an independent basis and that the powers over the sphere of foreign economic activity were to be set forth in a separate treaty. This latter agreement in turn was concluded and it delegated the right to:

131 The Federal Treaty of 1992 is composed of three separate treaties that fix legal relations between the then earmarked three types of Russian regions: 1. republics, 2. autonomous areas and, finally, oblasts, territories, and cities of federal importance. 132 See Alexei Salmin, Rossiiskaya federatsiya i federatsiya v Rossii, in: Mirovaya ekonomika i mezhdunarodnye otnosheniya, No. 2, 2000, p. 51. 133 This treaty was a result of concessions from both sides. While President of Russia Boris Yeltsin informally assured non-interference of the federal center in the politics of the republic, President of Tatarstan Mintimir Shaimiev provided for total support for the federal center from the side of the regional government of Tatarstan. See Julia Kusznir, pp. 2, 5. A new agreement to replace the treaty of 1994 came into force in 2007. Contrary to the preceding treaty, the new agreement does not provide the republic with particular preferences in financial and internatonal spheres. Federal’nyj zakon Rossijskoj Federacii “Ob utverzhdenii Dogovora o razgranichenii predmetov vedenija i polnomochij mezhdu organami gosudarstvennoj vlasti Rossijskoj Federacii i organami gosudarstvennoj vlasti Respubliki Tatarstan”, No. 199, 24 ijulja 2007, in: Rossijskaja gazeta, 31 ijulja 2007. 134 As cited in Nikolai Petrov, pp. 149 – 150.

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Understandably, with the Republic of Tatarstan being the exception rather than the rule, the Kaliningrad Oblast, like the majority of Russian subjects, was incapable of securing such extensive competences. The legal status of the Kaliningrad Oblast is determined in two state legislative acts: the Constitution of the Russian Federation of 1993 and the Charter (Ustav) of the Kaliningrad Oblast which entered into force in 1996. 136 Representatives of the bodies of state authority of the Kaliningrad Oblast and of the Russian Federation signed the “Treaty on the Division of Subjects of Jurisdiction and Powers between the Federal Bodies of State Power of the Russian Federation and the Bodies of Authority of the Kaliningrad Oblast” on January 12, 1996. 137 Observed as bearing a declarative character in general, the agreement failed to confirm the international legal personality of the Kaliningrad Oblast as it had in the case with the Republic of Tatarstan. 138 This agreement was eventually terminated – as were the majority of the bilateral agreements of this kind due to their outdated character – by a concerted decision of both sides in 2002 and it was never renewed. 139 The Kaliningrad Oblast, similarly to all the subjects of the Russian Federation, exercises joint jurisdiction with the federal center over questions as follows (Article 72 para. 2): a) providing for the correspondence of the Ustav of the Kaliningrad Oblast and other normative legal acts of the oblast with the Constitution of the Russian Federation and the federal laws, b) protection of the rights and freedoms of man and citizen; protection of the rights of national minorities; ensuring the rule of law, law and order, public security, border zone regime, c) issues of possession, use and disposal of land, subsoil, water and other natural resources, d) delimitation of state property, e) the utilization of nature, protection of the environment and ensuring ecological safety; specially protected natural territories, protection of historical and cultural monuments, f) general issues of upbringing, education, science, culture, physical culture and sports, g) coordi135

Ibid., p. 150. Ustav (Osnovnoj Zakon) Kaliningradskoj Oblasti, prinjat Oblastnoj Dumoj 28 dekabrja 1995. 137 Dogovor o razgranichenii predmetov vedenija i polnomichij mezhdu organami gosudarstvennoj vlasti Rossijskoj Federacii i organami gosudarstvennoj vlasti Kaliningradskoj oblasti, in: Rossijskaja gazeta, 31 Janvarja 1996. See Anatolij Gorodilov et al,. XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz, p. 194. 138 Ibid., p. 297. 139 See Nikolai Petrov, p. 150. 136

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nating issues of health care; protection of the family, maternity, paternity and childhood; social protection, including social security; h) carrying out measures against catastrophes, natural calamities, epidemics, and the elimination of their aftermath, i) establishment of common principles of taxation and dues in the Russian Federation, j) administrative procedure, labour, family, housing, land, water and forest legislation, k) personnel of the judicial and law enforcement agencies, the Bar, notaryship, l) protection of traditional living habitat and of the traditional way of life of small ethnic communities, m) establishment of common principles of organization of the system of bodies of state authority and local self-government, and n) coordination of international and foreign economic relations of the Kaliningrad Oblast and fulfillment of international treaties and agreements of the Russian Federation. The exclusive responsibilities of the Kaliningrad Oblast are indicated in Article 9 of the Ustav of the Kaliningrad Oblast and they include: 1. adoption and amendments to the Ustav of the Kaliningrad Oblast, its regional laws and control over their fulfillment, 2. protection of the rights and legitimate interests of the Kaliningrad Oblast, 3. the administrative-territorial organization of the oblast, 4. the socioeconomic development of the oblast, 5. the regional budget, 6. the state property of the oblast, 7. establishing the system of the bodies of state power of the Kaliningrad Oblast and its formation, 8. awards and honors, 9. other issues that fall outside of the issues settled in the Constitution and federal laws, among them those that are under the joint jurisdiction and exclusive issues of the Kaliningrad Oblast. On the whole, as can be seen, compared to the catalogue of powers reserved to the federal center 140 and the powers of the shared competences of the center and the subjects of Russia – both broadly formulated – the list of exclusive competences of the Kaliningrad Oblast appears essentially insignificant to some analysts. 141 Aside from this, in the framework of the shared competences, the jurisdiction of the region to a considerable degree depends on the federal center and can be limited by one or another federal law which would ultimately have 140

The issues that fall under the exclusive responsibility of the Russian Federation include: adoption and amending of the Constitution of the Russian Federation; federal structure and the territory of the Russian Federation; regulation and protection of the rights and freedoms of Russian citizens; establishment of the system of federal bodies of legislative, executive and judicial authority; federal state property, establishment of the principles of federal policy and programs; financial, currency, credit and customs regulations, money policy; federal budget, taxes and dues; federal power systems and nuclear power-engineering; foreign policy and international relations of the Russian Federation, international treaties and agreements of the Russian Federation, issues of war and peace; foreign economic relations of the Russian Federation; defense and security; protection of state border; judicial system; federal law of conflict of laws; meteorological service; state awards and honourary titles of the Russian Federation, federal state service and others. 141 See Jurij Vetjutnev, p. 151.

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supremacy over the regional law. This circumstance likewise remains relevant for shared power pertaining to international and foreign economic relations of the region. c) Russian federal legislation on the external legal capacity of the subjects of the Russian Federation Public international law prescribes subjects of international public law the status of legal capacity in international relations. 142 It is important to note that the term “subject of international public law” is interchangeable with that of “international legal personality”, implying “a member of international legal order which has an active position in international relations, and takes part in the law-creating process”. 143 The literature on international public law stipulates that there are generally four groups of subjects of international law: 1. the states forming the core of international legal community, 2. the territorial entities entitled to act externally, including non-sovereign states and territories (protectorates), territories administrated under mandates or trusteeship agreements, Unions of States, subdivisions of federal states (member states, provinces and others), 3. international organizations and institutions, and 4. various organized groups such as the Order of Malta, belligerent parties, parties to international armed conflicts, and peoples. 144 Generally, subdivisions of federal states are not subjects of international public law. However, some federal states, as just mentioned, endow the federated entities with international capacity, and in this case, the international capacity of the subdivisions of federal states must be strictly based on the state’s constitution. As such, only the federal State is sovereign, the attribution of external functions to its subdivisions being a matter for its jurisdiction. Since foreign States must not, by virtue of a principle of general international law, interfere with the constitution, they must respect the fact that subdivisions act, in certain matters, as agents of the federal state. As a corollary, the federal government can be held responsible if a State dealing with a member state or other subdivisions that there has been a breach of an international obligation. 145

Provided that the federal constitution authorizes a federated state to enter into international relations with foreign states and that a foreign state enters into such

142 143 144 145

See Hermann Mosler, p. 710. Ibid., p. 711. Ibid. Ibid., p. 721.

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relations with the federated state, the “latter is, at least partially, recognized as a subject of international law”. 146 All in all, obligations and rights governed by international law can only be established for member states with the consent of the federation .... Recognition of the member state of a federation as an international treaty partner is a special case in which international law defers to the municipal laws of a State .... By its decision whether or not to consent, the government exercises preventive federal supervision in order to avoid a conflict between a member state’s treaty and federal interests. 147

Similarly, the term “foreign relations power” is utilized to describe “the constitutional authority of a government to conduct relations with other states and to address the implications and consequences of those relations”. 148 In practice, mainly the central authority is endowed with foreign relations power, while the constituent governmental units are denied it. Federal states, however, distribute the responsibilities of foreign relations power among the central and constituent authorities. For the purposes of this paper, a legal capacity to be the subject of legal international situations (of entering international relations) should be understood under the external legal capacity of the Kaliningrad Oblast. The Constitution of the Russian Federation is not explicit whether the subjects of the Russian Federation possess international legal personality. However, in 2000 the Constitutional Court of the Russian Federation clarified that the legal notions of “sovereignty” and “subject of international public law” are not applicable to the subjects of the Russian Federation. 149 Therefore, it is clear that the Kaliningrad Oblast is not the subject of international public law and is not part of international relations. The foreign policy capacity of the subjects of the Russian Federation in general is vaguely formulated in the Constitution in Articles 71 and 72. To start with, the provision of Article 71 of the Constitution ascribes, among other things, “foreign policy and international relations of the Russian Federation, international treaties of the Russian Federation, questions of war and peace, as well as foreign trade relations of the Russian Federation” to the realm of the Russian Federation’s exclusive mandate. In the meantime, as mentioned above, Article 72 refers to issues that fall under the joint purview of the Russian Federation and its subjects, and it points particularly to “coordination of the international and external economic relations of the subjects of the Russian Federation and compliance with the international treaties of the Russian Federation”. In this respect, some experts point out the unclear wording of this provision since the term “coordination” has not been modified and nor 146

Walter Rudolf, Federal States, in: Rudolf Bernhardt (ed.), Vol. II, p. 367. Ibid. 148 Louis Henkin, Foreign Relations Power, in: Rudolf Bernhardt (ed.), Vol. II, p. 446. 149 See Oleg Skvorcov, Osobennosti pravovogo statusa anklavnyh territorij na primere svobodnogo goroda Danciga 1918 – 1939 i Kaliningradskoy oblasti, 1991 –2003, in: Problemy pravovedenija, No. 1, Kaliningrad: KGU, 2004, p. 29. 147

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have other particularities in regard to the external capacity of the regions have not been prescribed. 150 Therefore, there has been critical consideration from the side of analysts that a special Federal Law is needed which would precisely define principles, forms and procedure for the Russian subjects to perform their international and external economic connections. 151 Since the Constitution of the Russian Federation enters into few details about the regions’ international activity, the federal government has made moves towards developing the relevant provisions of the Constitution and enacted a series of federal laws regulating the external relations of the regions with a view to refining their legal basis. 152 These documents include: a) the Federal Law “On International Agreements with the Russian Federation” (July 15, 1995), 153 b) the Federal Law “On the basis of State Regulation of Foreign Trade” (December 8, 2003), 154 c) presidential decree No. 375 “On coordinating the role of the Ministry of Foreign Affairs in conducting a single foreign-policy course” of March 12, 1996, 155 and d) the Federal Law “On the Coordination of International and Foreign Economic Relations of Subjects of the Russian Federation”, which came into force in January 1999, 156 and others. In addition, the regional factor and the importance of state support for the upgrading of the external action of Russian regions were complementarily indicated in some political documents such as Russia’s “Concept of National Security” of 2000, 157 Concept of Cross-Border Cooperation of 2001 158 and the “Russian 150

See Alexander Zergunin, p. 2. See Natal’ja Klimova, Prigranichnoe sotrudnichestvo: voprosy zakonodatel’nogo regulirovanija, in: Zhurnal rossijskogo prava, No. 11, 1997, as cited in: Ruslan Jagudaev, Vneshjekonomicheskaja dejatel’nost’ i prigranichnoe sotrudnichestvo subjektov Rossijskoj Federacii, Moskva: Nauchnaja Kniga, 2006, p. 31. 152 See Nikolai Petrov, p. 152. 153 Federal’nyj zakon “O mezhdunarodnyh dogovorah Rossijskoj Federacii” No. 101, 15 ijulja 1995, in: Sbornik Zakonov Rossijskoj Federacii, No. 29, 1995, St. 2757. 154 Federal’nyj zakon “Ob osnovah gosudarstvennogo regulirovanija vneshnetorgovoj dejatel’nosti” No. 164, 8 dekabrja 2003, in: Sbornik Zakonov Rossijskoj Federacii, No. 50, 2003, St. 4850. 155 Ukaz Prezidenta Rossijskoj Federacii No. 375 “O koordinirujuwej roli Ministerstva inostrannyh del Rossijskoj Federacii v provedenii edinoj vneshnejekonomicheskoj linii Rossijskoj Federacii”, in: Rossijskaja gazeta, No. 51, 1996. 156 Federal’nyj zakon “O koordinacii mezhdunarodnyh i vneshnejekonomicheskih svjazej subjektov Rossijskoj Federacii” No. 4, 4 janvarja 1999, in: Sbornik Zakonov Rossijskoj Federacii, No. 2, 1999, St. 231. 157 Koncepcija nacional’noj bezopasnosti Rossijskoj Federacii, in: Rossijskaja gazeta, 15 fevralja 2000. 158 Rasporjazhenie Pravitel’stva Rossijskoj Federacii ot 09. 02. 2001 № 196-r “Ob utverzhdenii koncepcii prigranichnogo sotrudnichestva v Rossijskoj Federacii”, in: Sobranie zakonodatel’stva Rossijskoj Federacii, No. 8, 2001, St. 764. 151

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Foreign Policy Concept” of 2000 159 and reiterated in the updated Foreign Policy Concept of 2008. 160 At the same time, their restrictive language is clear; the latter Concept, in particular, emphasizes that the Russian regions should promote their international ties in accordance with the principal federal legal acts and the Constitution of the Russian Federation and strictly respect the sovereignty and territorial integrity of the Russian Federation. 161 The latest foreign policy concept, of 2010, foresees an increase of effectiveness in the coordination mechanisms of the external relations of the Russian regions, including better coordination among the subjects of the Russian Federation and the Ministry of Foreign Affairs wherein Russian regions are expected to contribute to Russia’s long-term goals of modernization. 162 An array of federal legal acts and documents has laid the legal foundation of cross-border cooperation at the regional and local levels. 163 Given the fact that 45 out of the original 89 subjects of the Russian Federation 164 have been border regions, cross-border cooperation is regarded as of fundamental importance. These documents comprise: 1. “Russia’s Concept of Cross-Border Cooperation” of February 9, 2001, 2. the Federal Law of July 22, 2002 “On the ratification of the European Outline Convention on Transfrontier Cooperation between Territorial Communities or Authorities” (Madrid Convention of May 21, 1980), 165 3. the Federal Law “On the Coordination of International and Foreign Economic 159 Koncepcija vneshnej politiki Rossijskoj Federacii 2000, in: Diplomaticheskij Vestnik, Moskva, avgust 2000. 160 See Vasilij Lihachev, K Evrope regionov (politiko-pravovye aspekty), in: Leonid Gluharev, (ed.), Evropa Peremen: Koncepcii i Strategii Integracionnyh Processov, Moskva, 2006, p. 228. 161 Koncepcija vneshnej politiki Rossijskoj Federacii 2008, in: Rossijskaja gazeta, No. 133, 2008. 162 See Programma jeffektivnogo ispol’zovanija na sistemnoj osnove vneshpoliticheskih faktorov v celjah dolgosrochnogo razvitija Rossijskoj Federacii, maj 2010. 163 See Vladlena Eliseeva, Transfrontier Coopration in the North-West of Russia: 21 st Century, EastWest Institute, 2003, p. 12. 164 As a result of the merging of eight subjects in 2007 there are currently 85 subjects of the Russian Federation. Another merging is expected in the beginning of 2008. 165 The European Outline Convention on Transfrontier Cooperation between Territorial Communities or Authorities, Madrid, May 21, 1980, European Treaty Series No. 106. Complimentarily, there are two protocols to the European Outline Convention designed to strengthen the Outline Convention, provide additional legal arrangements to it and extend legal possibilities for cross-border cooperation of local authorities: a) Additional Protocol to the European Outline Convention between Territorial Communities or Authorities, Strasbourg, November 9, 1995, Council of Europe Treaty Series (CETS) No. 159, and 2. Protocol No. 2 to the European Outline Convention between Territorial Communities or Authorities concerning interterritorial cooperation, Strasbourg, May 5, 1998, CETS No. 169. The texts of the three legal acts are available at www.coe.int. The Russian Federation signed the above two Protocols to the European Outline Convention in 2006 and ratified them in 2009.

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Relations of Subjects of the Russian Federation” mentioned above and 4. the “Agreement on Cross-Border Cooperation in the Field of Research, Extraction and Procurement of Natural Reserves” of May 2001. 166 In addition, the “Survey of Russian Federation Foreign Policy” of 2007 pinpointed interregional and transfrontier cooperation as among Russia’s most important foreign policy instruments aiming at assisting “the economic development of Russia’s regions, the attraction of foreign investment and advanced technologies into their economy, a more even distribution of economic growth across the country and the creation of a favourable atmosphere for humanitarian exchanges”. 167 The survey also identified the priority partners in this sphere – the CIS neighbours, the European Union and China – and underlined the importance of the institutional mechanisms for the development of interregional and transfrontier cooperation. These included the Council of the Heads of Subjects of the Russian Federation – including its member Governor of the Kaliningrad Oblast Georgy Boos – and its working body, the Consultative Council of Subjects of the Russian Federation on International and Foreign Economic Ties established under auspices of the Ministry of Foreign Affairs; the territorial representations of the Ministry of Foreign Affairs in the regions; the Interagency Commission on Transfrontier Cooperation and the Working Group of the Federation Council, with the two latter formations essentially assisting in interaction between federal and regional bodies of authority. In a similar vein, this aspect was mentioned in the Foreign Policy Concept of 2008. 168 166 Overall, there are a number of types of cooperation across borders applied to the European regions. According to Association of European Border Regions, these types include cross-border cooperation, interregional cooperation and transnational cooperation. Cross-border cooperation presupposes “directly neighbourly cooperation of life between regional and local authorities along the border and involving all actors”; the concept of interregional cooperation refers to “cooperation (between regional and local authorities) mostly in single sectors (not in all areas of life) and with selected actors”; and finally transnational cooperation is fulfilled between countries regarding a particular subject such as regional development with regard to large, connected areas, whereby sometimes regions are also allowed to participate. See Practical Guide to Cross-Border Cooperation, European Commission, 3 rd edition, 2000, p. 15. Apparently, the concept of cross-border cooperation encompasses that of transfrontier cooperation, with the latter standing for “every concerted initiative or action between local or regional authorities separated from each other by the international boundary of their respective States aimed at strengthening their neighbourly relations by all available formal or informal, legally binding or nonbinding means of cooperation”. Ulrich Beyerlin, Transfrontier cooperation between local or regional authorities, in: Rudolf Bernhardt (ed.), Vol. IV, p. 904. As such, “local or regional authorities” mean “all entities on a lower level than that of State or component state governments exercising local or regional functions pursuant to the internal law of the respective State (e-g. local councils (communes), counties, inter-community units, regional associations)”. Ibid. 167 A Survey of Russian Federation Foreign Policy, Ministry of Foreign Affairs of the Russian Federation, 2006.

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In effect, the Concept of Cross-Border Cooperation aims to serve in securing the international potential of the Russian regions. 169 It states the aims, principles and priorities of cross-border activity at the federal, regional and local levels. It defines cross-border cooperation in the Russian Federation as concerted action by federal bodies of executive power, bodies of executive power of the subjects of the Russian Federation and local authorities directed towards strengthening cooperation between the Russian Federation and adjacent states on the issues of sustainable development in the border territories of the Russian Federation and the adjacent states, the improvement of their welfare as well as the promotion of friendship and good neighbourliness with the adjacent countries. The document underscores that the territory of cross-border cooperation is determined in international agreements of the Russian Federation and agreements concluded by the subjects of the Russian Federation with foreign partners in compliance with the procedure envisaged in the national legislation. The participants of cross-border cooperation may be federal and regional bodies of executive power and local authorities, which act within their competences, as well as legal and natural persons. Aside from this, the Concept sketches the principal competences of the participants in cross-border cooperation and in so doing it refers to the existing national legislation of the Russian Federation. Eventually, it pinpoints the fact that the Concept is based, among other things, on the principle of observing the European Outline Convention on Transfrontier Cooperation (the Madrid Convention). The European Outline Convention on Transfrontier Cooperation binds the signatory states to conclude agreements and treaties on cross-border cooperation in order to encourage trans-frontier cooperation on the level of territorial communities or authorities (Article 1 of the Convention). It envisages two basic forms of cross-border cooperation: a) concerted action and the exchange of information, and b) the conclusion of agreements and establishment of specific legal connections. Some Russian observers assess these documents favourably because they follow the main cross-border cooperation principles as laid down by the EU and other international organizations. 170 Other experts, nonetheless, point out that these documents are insufficient: first, the Concept of Cross Border Cooperation only frames the main directions for cross-border cooperation and uses the various provisions of the existing national legislation of Russia to back them up, second, the Madrid Convention and its two Protocols as well as other international agreements of Russia pertaining to this sphere mainly contain references back to domestic law. 171 In the meantime, the Russian legislation still lacks a single and coherent legal regulation (e.g., a consolidated federal law) 168 Koncepcija vneshnej politiki Rossijskoj Federacii 2008, in: Rossijskaja gazeta, No. 133, 2008. 169 See Vitalij Lihachev, p. 230. 170 See Vladlena Eliseeva, p. 12.

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on cross-border cooperation of the subjects of the Russian Federation. 172 This law could presumably describe a set of rights and obligations of the subjects of the Russian Federation – border territories – and stimulate the development of their external relations. In fact, such a federal law “On cross-border cooperation in the Russian Federation”, which lays down the legal basis for cross-border cooperation, has been elaborated and drafted but, not having been adopted yet, it has already come under criticism for its outdated logic. 173 The opportunities have not been yet examined for the regional and local authorities of the Kaliningrad Oblast that could arise from the new EU’s legal instrument of cross-border cooperation, the European grouping of territorial cooperation (EGTC), 174 which allows the EU’s regional and local authorities to establish cross-border groupings with legal personality. 175 Although this instrument constitutes part of EU legislation, it does not exclude entities from third countries from participating in an EGTC (point 16). However, such participation should be allowed by the legislation of this third country or agreements between a third country and Member States. After President Vladimir Putin took office in 2000 he instituted a number of consecutive unitarist measures with a view to reforming the federal system of the 171 Thus, the European Outline Convention on Transfrontier Cooperation underlines that transfrontier cooperation should take place “in the framework of territorial communities’ or authorities’ powers as defined in domestic law. The scope and nature of such powers shall not be altered by this Convention”, Article 2. para.1. According to legal specialists, such reservation clauses weaken the provisions of the Convention regarding legal binding obligations of the parties to the Convention, not least because “there is no provision in this Convention which could be interpreted as a clause enabling local authorities to carry out transfrontier cooperation”. Ulrich Beyerlin, p. 908. Yet, there are a number of model and outline agreements, statutes and contracts on transfrontier cooperation on the inter-state and the inter-local level appended to the Convention. Although they aim at “guidance only and have no treaty value” (Article 3 para. 1 of the Convention), they have a potential to serve as helpful patterns for future agreements pertaining to this sphere. Overall, in spite of particular reservations on its legal value, the main implication of the Convention, as the argument by Ulrich Beyerlin goes, consists in the fact that it is “designed to be of considerable political and psychological help in the continuous process of making local transfrontier cooperation easier”. Ibid. 172 See Aleksej Arhipov / Oleg Cherkovec, Vneshnejekonomicheskaja dejatel’nost’ rossijskih regionov, Moskva: Vysshee Obrazovanie, 2005, p. 106. 173 See Jurij Vetjutnev, p. 186. The law was worked out by the Federation Council, the upper house of the Russian Parliament, and ist first draft was sent to the State Duma in July 2004. However, it was not approved there and was returned for the Federation Council to improve it. See Senatory vstupilis’ za moloko, in: Vzgljad, 30 maja, 2008. 174 Regulation (EC) No. 1082/2006 of the European Parliament and of the Council of July 5, 2006 on a European grouping of territorial cooperation (EGTC), OJ (2006) L 210/19. 175 See Danuta Hübner, The Baltic Sea cooperation, in: Baltic Rim Economies, Issue No. 2, April 30, 2007, pp. 8 – 9.

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Russian Federation. These measures included: a) the administrative division of the Russian Federation into seven Federal Districts – with the Kaliningrad Oblast being included into the North-Western Federal District – and the introduction of the institution of presidential special envoys in 2000, b) a package of legislative initiatives aiming to strengthen federative relations, and c) the development of more uniform legislation and a categorical demand that the regional legislation be harmonized with the federal legislation in order to eliminate discrepancies between the federal and regional legislatures – with the latter placed above federal norms – and to avoid the competition between the center and the regions for competences. 176 Furthermore, one of the initiatives was the abolition of the direct elections of governors in 2004; the candidates were nominated by president and approved by the local parliaments. 177 Likewise, the heads of the subjects of the Russian Federation lost the right to have a seat in the Federation Council, the upper house of the Russian Parliament, and therefore they were not part of the national legislation procedure and unable to influence the political course of the federal centre. 178 On the one hand, these steps demonstrated President’s conscious effort to establish a vertical axis of power, making it possible to build a strong state, to contribute to national security and to improve the asymmetrical development of the Russian regions, the elites of which had proved unable to solve regional internal social and economic problems. The factor of federal relations in the state remains one of the constituents of Russia’s national security concept. 179 On the other hand, these undertakings resulted in restrictions of regional authority to the advantage of the federal center and, to a certain extent, demonstrated authoritarian tendencies, albeit they were obtained with full compliance with the Constitution of the Russian Federation. 180 The re-centralization of state power has had particularly significant implications for the external competence of the subjects of the Russian Federation. First, the special presidential envoys to the districts have been granted widerange authority; they have been charged with coordinating communication be176

See Galina Kurskova, p. 92. See Ivan Suhov, Rossijskij federalizm i jevoljucija samoopredelenij, in: Rossija v global’noj politike, N. 2, mart-aprel’ 2007, p. 2. 178 While before the political reforms the Federation Council was formed by the heads of the executive and the legislative bodies of power of the regions, it currently consists of persons appointed by these bodies of power. See Vladimir Gel’man, Centr i regiony Rossii: ot decentralizacii k recentralizacii, in: Natal’ja Lapina and Viktor Mohov (eds.), Federalizm i rossijskie regiony, Moskva, Inion, Rossijskaja Akademija Nauk, 2006, p. 101. 179 See Aleksandr Burkin / Anatolij Vozzhenikov / Nikolaj Sineok, Nacional’naja bezopasnost’ Rossii, Moskva, 2008, p. 199. 180 See Galina Kurskova, p. 153. 177

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tween the president and regional governors and have become responsible for foreign investment and the promotion of the regions in the international arena. They have come to head external economic connections of Russian regions and to coordinate different international initiatives of Russian regions and bring them in line with external political and economic needs of the Russian Federation. 181 Correspondingly, the role of the heads of the subjects of the Russian Federation has been downgraded. Second, a number of benefits of regions concerning economic, political issues and their relative independent actorness in foreign policy, which were previously granted by the federal center and formalized in ad hoc bilateral contractual arrangements, have been significantly curtailed. The control over the external relations of the regions has thus been tightened. While President Dmitry Medvedev has recently undertaken an array of political reforms which also partly concern the regions with a view to further developing Russian democracy and thus contributing to the state’s modernization goals, 182 the regions still need a greater degree of decentralization measures in order to be able to attract foreign investments. 183 In the sphere of foreign relations of the Russian subjects the re-centralization took place much earlier than the federal reform of 2004. In particular, it followed the adoption of the presidential decree: “On coordinating role of the Ministry of Foreign Affairs” and the Federal Law “On the Coordination of International and Foreign Economic Relations of Subjects of the Russian Federation” of 1999. 184 Specifically, the Federal Law on the Coordination of International and Foreign Economic Relations of Subjects of the Russian Federation – which includes 14 articles and is elaborated on the basis of Article 72 of the Constitution – somewhat empowers the regions but simultaneously specifies certain limitations, aiming at preventing the subjects of the Russian Federation from acting as independent foreign actors. To start with, this law frames the concept of the division of competences between the Russian Federation and the subjects of the Russian Federation and unifies the provisions which were previously codified in different legal acts. 185 According to Article 1 of the law, within the limits of their competences stated in the Constitution of the Russian Federation, federal legislation as well as treaties on the division of subjects of jurisdiction and powers between the federal bodies of state power of the Russian Federation and the bodies of state power of 181

See Oleg Aleksandrov, p. 129. See Eberhard Schneider, Medvedev – mid-term assessment of domestic policy, April 15, 2010, EU-Russia Centre, Brussels. 183 See Andrei Yakovlev, Wie kann eine Modernisierung in Russland “sozialverträglich gestaltet werden?, in: Russland-Analysen, Nr. 202, June 4, 2010. 184 See Alexei Salmin, p. 55. 185 See Jurij Vetjutnev, pp. 166 – 167. 182

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subjects of the Russian Federation, the subjects of the Russian Federation are empowered to fulfill international and external economic connections with subjects of foreign federative states, administrative-territorial units of foreign states and to participate in activities of international organizations in the framework of the organs especially established for this purpose. Additionally, the subjects of the Russian Federation may carry out such connections with organs of the state power of foreign states (such as legislative, executive and also judicial powers), but not with foreign states directly. Principally, the law foresees three spheres of activities in fulfilling international and external economic connections of the subjects of the Russian Federation these connections imply contacts in trade and economic, scientific and technical, ecological, humanitarian, cultural and other spheres with foreign partners (Article 1 para. 2 of the Law). The three spheres are a) making treaties in order to establish international and external economic connections, b) participation in activities of international organizations; and c) opening up offices of representation abroad. In that, the federal organs of state power assume a commitment to provide the regional authorities with (legal, expert, consultative) assistance in the organization and conduct of negotiations, as well as in the elaboration of agreements (Article 9 of the law). In the meantime, the law stipulates a rigorous order of legal procedures for the Russian Federation’s subjects’ to be able to establish international and external economic connections. Firstly, it expressly binds the regional authorities to give the Ministry of Foreign Affairs of the Russian Federation advance notice of the content of negotiations on agreements with foreign partners – subjects of private law and administrative territorial units of foreign states – and to submit their drafts for approval no less than one month prior to the signing (Articles 3 and 4 of the Law). As such, the Ministry of Foreign Affairs, exerting decisive leverage on the negotiation process, informs the organ of state power of the subject of Russian Federation of the results of the examination of the draft agreement no later than 20 days after the receipt of the draft agreement. Furthermore, the negotiation and signing of an agreement with bodies of the state authority of foreign states can only be possible after the government of the Russian Federation gives a corresponding instruction. In addition, the federal bodies of state power (namely, the Ministry of Foreign Affairs) are in charge of the coordination of the international and external economic relations of the Russian Federation and they are authorized to inquire into the information from the bodies of state power of the subjects of Russia concerning the arrangements to be undertaken to implement these connections (Article 11 of the law). Importantly, the documents signed by the subjects, irrespective of their form, denotation (such as an agreement, a treaty, a protocol and others) and contents, are not recognized as holding the status of international treaties (Article 7). Pursuant to the “Vienna Convention on the Law of Treaties” of May 23, 1969 – to

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which the Russian Federation is a party – an (international) treaty signifies “an international agreement between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular destination” (Article 2 (a). 186 Therefore, the agreements signed by the bodies of state power of the Russian Federation with subjects of private law, administrative-territorial units and (in some cases) with organs of the state power of foreign states may not be regarded as international treaties. This, as well as the fact that these agreements have not been defined in the Russian legislation among the sources of law so far, makes it complicated to formulate the status of the agreements. Theoretically, these agreements could be sorted out as sources of normative law, the contents of which should be based on the national legislation of the Russian Federation. 187 d) The external legal capacity of the Kaliningrad Oblast and its international activities The legal foundation for external action by the Kaliningrad Oblast is provided in the Constitution of the Russian Federation of 1993 – in its provisions that determine the foreign capacity of the subjects of the Russian Federation in general terms – and in the Ustav of the Kaliningrad Oblast. In addition, it is regulated by the federal legislation of the Russian Federation (including the federal Laws referred to earlier) and international agreements of the Russian Federation. The external capacity includes the ability of the Kaliningrad Oblast to develop its international and external economic relations independently as well as obliging it to act within the limits of its competences as set up in the Constitution and to coordinate the development of international and external economic relations together with the Russian Federation. Article 4, Part II para. 2 of the Ustav of the Kaliningrad Oblast specifically states that the Kaliningrad Oblast has the right to conduct international and external economic relations with subjects of foreign federative states and administrative territorial units of foreign states. The Kaliningrad Oblast is also obliged to secure the implementation of the international treaties of the Russian Federation when they fall under its competence. The Kaliningrad Oblast applies direct and indirect methods in its international activity. 188 Directly, the Kaliningrad Oblast may negotiate and conclude agreements with foreign legal persons, subjects of private law, administrative 186 Vienna Convention on the Law of Treaties, May 23, 1969. United Nations, Treaty Series, vol. 1155, p. 331. 187 See Vadim Varlamov / Kirill Gasnikov, O koordinacii mezhdunarodnyh i vneshnejekonomicheskih svjazej subjektov Rossijskoj Federacii, Moskva: Justicinform, 2007, p. 16.

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territorial units of foreign states, but not with subjects of international public law. In rare cases, within the special mission assigned or upon approval of the government of the Russian Federation, the oblast can make treaties with bodies of the state authority of foreign states (legislative, executive and judicial organs), but not with states themselves (Article 8 para. 1 of the Federal Law “On the basis of State Regulation of Foreign Trade”). It is strictly envisaged that the content of an agreement must not collide with the Constitution of the Russian Federation, the clauses of the federal legal acts adopted for coordination of international and external economic ties of the subjects of the Russian Federation and must be in overall compliance with federal legislation, general principles and norms of international public law and international treaties of the Russian Federation (Article 12 of the Federal Law “On the Coordination of International and Foreign Economic Relations of Subjects of the Russian Federation”). The mechanism of treaty-making requires that all treaties be concluded upon the prior consent of the representatives of the regional legislative body of state power (the Oblastnaja Duma) that is authorized to ratify an agreement or reject it. The Administration of the Kaliningrad Oblast takes part in the drafting and concluding of an agreement and in the conducting of negotiations on the agreement, with the Governor of the oblast representing the oblast in foreign relations. To sign a treaty with subjects of private law and administrative territorial units of foreign states the agreement of the federal centre is required; the Ministry of Foreign Affairs fulfils its coordinating role according to the procedure described above. Likewise, in order to sign a treaty with bodies of state authority of a foreign state, the prior consent of the Government of the Russian Federation is needed. Notably, the Kaliningrad Oblast bears full responsibility for the obligations it takes on in its relations with foreign partners (Article 8 of the Federal Law “On the Coordination of International and Foreign Economic Relations”). In the meantime, the federal bodies of state power are accountable for the agreements concluded by the Kaliningrad Oblast – as for all other subjects of the Russian Federation – with foreign states only in cases when these agreements are concluded with organs of state power of foreign states following the consent of the government of the Russian Federation and when there are official guarantees ensured by the government of the Russian Federation on a particular agreement.

188 Direct methods include regional legislation, treaty relations with foreign countries, representation offices abroad, attracting foreign investment, and cooperation with international organizations. Indirect methods imply influencing federal foreign policies through lobbying for legislation, participation in Federation delegations abroad, joining with neighbouring regions in peacekeeping and conflict prevention, “verbal diplomacy” as well as using international organizations to put pressure on the federal center. See Alexander Zergunin, p. 4.

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The majority of the agreements signed by the Kaliningrad Oblast pertain to the sphere of economic cooperation. Although some international agreements have been found to collide with the federal legislation – as was the case when the federal center annulled a trade treaty between the Kaliningrad Oblast and Lithuania in 1995 – its treaty-making activity admittedly enables the Kaliningrad Oblast to forge a sound international profile. Since 1991 the government of the Kaliningrad Oblast concluded agreements with a number of Polish voivodships, for instance, Olsztyn (1991), Gdansk and Elblag (1992), with the newly established voivodships of Warminsko-Mazurskie (2001), Pomorskie (2002), and Zapadno-Pomorskie (2004) as well as with some Lithuanian counties such as Klaipeda (1995), Panevėžys (1996), Marijampole (1997), and Taurage (1999). 189 Likewise, the Kaliningrad Oblast entered into agreements with three oblasts of Belarus: Grodno (1996), Minsk (1996) and Brest (2004). The main fields of this international cooperation are economy, trade, transport, ecology and environment protection, tourism, and development of cultural and scientific connections. Apart from this, the regional authorities signed (not legally binding) Memoranda or Protocols for Cooperation or Protocols of Intentions with Brandenburg and Schleswig-Holstein federal states of the BRD, and some provinces and regions of Sweden, Denmark, the Netherlands and China. 190 Also, the government and bodies of the municipal authority of the Kaliningrad Oblast can cooperate with certain regional intergovernmental organizations (such as the Council of Baltic Sea States, the Nordic Council of Ministers, and the Nordic Council and they also participate in different events organized under the auspices of commissions of the European Union in general and the European Parliament in particular. Furthermore, with the consent with the Ministry of Foreign Affairs, the Kaliningrad Oblast may open representative offices abroad with the aim of implementing its agreements pertaining to international and external economic relations. According to Article 10 of the Federal Law “On the Coordination of International and Foreign Economic Relations”, the missions of the subjects of the Russian Federation on the territory of foreign states, as well as foreign missions on the territory of a subject of the Russian Federation, do not hold the status of diplomatic missions. 191 They cannot be entrusted with consular or diplomatic functions and their personnel do not enjoy diplomatic privileges and immunities. In addition, as the Federal Law on State Regulation of Foreign 189 Information on International Affairs of the Kaliningrad Oblast Government is available at: http://id.gov39.ru/index.php/en/geo.html. 190 Ibid. 191 There are several foreign consulates functioning in Kaliningrad: consulates of Poland, Lithuania, Germany and Sweden, with the two latter issuing Schengen visas. Also, there is a filial branch of the Belarusian embassy in Russia and chancellery of the consular department of the embassy of Latvia, and the establishment of a Ukrainian honorary consulate is being negotiated. Aside from this, the region hosts honorary consuls of Armenia, Denmark, Norway, Greece, Croatia and Italy. See Yuri Zverev, p. 18.

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Trade (Article 8 para. 2. anticipates, these offices should be financed from the regional budget. The Kaliningrad Oblast has established missions in Lithuania (Vilnius), Poland (Olsztyn), and the Republic of Belarus (Minsk). They aim at contributing and developing diverse (trade, economic, scientific, technical and cultural) connections with the neighbours. It is noteworthy, however, that these missions are likely to be abolished, since, as the head of International Department of the Government of the Kaliningrad Oblast, Sylvia Gurova, has proclaimed, the relationships of the oblast with the adjacent regions of the neighbouring countries have reached a qualitatively different level which does not require mediators. 192 The Kaliningrad Oblast has launched a large number of cross-border projects with regions of the neighbouring countries (e.g., Lithuania and Poland), including those in the framework of a multilateral form of cooperation such as Euroregions at the regional and / or local authority level. 193 The Kaliningrad Oblast – and in particular its districts and municipalities – participates in five Euroregions: a) Nemunas (other participants: regions of Lithuania, Poland, Belarus), b) Baltic (regions of Lithuania, Denmark, Latvia, Poland, Sweden), c) Saule (regions of Lithuania, Latvia, Sweden), d) Šešupe (regions of Lithuania, Poland, Sweden), and d) Łyna-Ława (regions of Poland). 194 Indirectly, the subjects of the Russian Federation complement the foreign policy of the federal centre and contribute to bettering and strengthening relations between Russia and the neighbouring countries. Thus, along with the federal center, the Kaliningrad Oblast was actively engaged in the preparing, negotiating and signing of the bilateral (inter-state) “Agreement between the government of the Russian Federation and the government of Poland on cooperation between the Kaliningrad Oblast and Poland’s northeastern administrative units” of May 22, 1992. 195 A similar bilateral agreement was signed between the Russian Soviet Federative Socialist Republic (RSFSR) and Lithuania in 1991 and was renewed with the “Agreement between Lithuania and Russia on mutual 192 See Vadim Smirnov, Economnaja diplomatija, in: Vremja Novostej, 12 ijulja 2007. Although one of the principal ambitions behind the decision of closing the missions has been also an economy drive, this decision of the regional authorities has been interpreted by Vadim Smirnov as a final change of the vector in the politics of the Oblast: its attention is directed towards mainland Russia rather than the surrounding Europe. 193 Euroregion is defined by the Council of Europe as an association of local and regional authorities on both sides of the national border. It can be subject of either private or public law. In the former case, it takes shape of a non-profit association established in accordance with the respective national law in force. In the latter case, euroregion is based on an interstate agreement which also regulates the participation of territorial authorities. This information is available at: http:/www.coe.int. 194 See Raimundas Lopata, Euroregions: Making the Idea Work, in: H.-M. Birckenbach and Ch. Wellmann (eds.), p. 253. 195 See Alexander Zergunin, p. 6.

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cooperation between Lithuanian counties and the Kaliningrad Oblast” in June 1999. The establishment of such legal relationships has led substantially to the refining of bilateral relationships between the actors (Russia-Lithuania, RussiaPoland). The two aforementioned bilateral agreements between the national governments of Russia and Lithuania, and Poland and Russia, served as a basis for the creation of bilateral councils in 2001 aiming to intensify cooperation and to secure the implementation of the agreements: the Lithuanian-Russian Council for Long-Term Cooperation between Regional and Local Authorities of the Republic of Lithuania and the Kaliningrad Region and the Polish-Russian Council for Long-Term Cooperation between the Regions of Poland and the Kaliningrad Oblast. 196 The work of these councils and their permanent commissions is coordinated and supported by the International Department of the Kaliningrad regional government. Thanks to the close cooperation between the Kaliningrad Oblast and Lithuania, Poland and Germany, it became possible to avoid the rise of territorial claims of these latter countries and to ease their concern somewhat over what they viewed as the previous excessive militarization of the region. 197 Russia and Lithuania collaborated closely when preparing joint proposals on Kaliningrad (the Nida Initiative) for the EU conference on the “Northern Dimension” in 2000. 198 These proposals were envisaged to be financed by PHARE, TACIS and other EU assistance programmes and funds and pertained to the following spheres of cooperation: infrastructure and energy projects, environment protection, education, health care, trade and investments, fighting crime and strengthening border control and cross-border cooperation. 199 Furthermore, like some other Russian regions, in the 1990s the Kaliningrad Oblast appeared fairly efficient in bringing some international organizations and connections into service for its own benefit. Thus, it “skillfully exploited venues such as the CBSS and the EU Northern Dimension conference to get a more privileged status (a special economic zone, a visa-free regime with Lithuania and Poland, a liberal customs regime, etc.)”. 200 Remarkably, the oblast has been elevated to a popular venue for different international events organized by federal structures on the level of intergovernmental meetings, whereby the administration of the oblast (including its International Department) is responsible for the preparation and, importantly, its representatives participate in these events either as members of the Russian delegation or as external experts. The members of 196 197 198 199 200

See Vladlena Eliseeva, p. 23. See Alexander Zergunin, p. 6. See Sander Huisman, p. 31. Ibid., p. 32. Alexander Zergunin, p. 7.

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the regional government also play a role in elaborating Russian international positions and lobby for federal law projects, other legal acts or decisions and recommendations on particular issues. e) The political status of the Kaliningrad Oblast in academic and political discourse The political status of the Kaliningrad Oblast has repeatedly been the subject of academic and political discussions – bypassing its status quo as a subject of the Russian Federation – since the early 1990s. 201 Proponents of one of the radical approaches to modifying the status of the oblast have raised concepts suggesting the eventual juridical detachment of the oblast from the Russian Federation. These concepts envisaged: a) the re-settlement of Russian-Germans in the oblast and the subsequent transformation of the oblast into a Baltic German Republic within the Russian Federation, b) transferring the oblast to Poland and / or to Lithuania, c) transferring the oblast back to Germany, 202 d) the re-creation of a sovereign East Prussia on the Prussian territories which currently belong to Russia, Poland and Lithuania, e) the establishment of a condominium over the oblast involving different variants of stake-holders such as the European Union, Russia, Germany, Poland, Lithuania, and Sweden, 203 and f) the transformation of the oblast into the fourth independent Baltic state. 204 The extravagance of these ideas has been interpreted critically by some analysts, partly because the authors of these ideas have tended to politicize the problem of the Kaliningrad Oblast excessively, exaggerating deficits and difficulties of the oblast’s development and its potential for conflict. 205 In any event, these propositions were mainly characteristic of the early stage of the development of Russian federalism and currently they have ceased to be topical. 201 See, for instance, Raymond A. Smith, The Status of the Kaliningrad Oblast under International Law, Lithuanus, Lithuanian Quarterly Journal of Arts and Sciences, Vol. 38, No. 1, Spring 1992. 202 The Kaliningrad Oblast was claimed by some nationalists in Lithuania (such as adherents of Lithuania Minor movement) and Germany (the Association of East Prussians) but never by governments of these countries. See Christian Wellmann, Recognizing borders: Coping with Historically Contested Territory, in: H.-M. Birckenbach and Ch. Wellmann (eds.), pp. 273 – 296. 203 This was precisely a proposal made by Marion Grafin Dönhoff, a representative of the German newspaper Die Zeit, see Marion Grafin Dönhoff, Kaliningrad Region and Its Future, in: International Affairs, No. 8, 1993, pp. 46 – 49, as reported in: Richard Krickus, p. 67. 204 See Jurij Zverev / Aleksej Klemeshev / Gennadij Fedorov, Strategija razvitija Kaliningradskoj oblasti v uslovijah rasshirenija ES, in: O. Butorina and Ju. Borko (eds), Rasshirenie Evropejskogo Sojuza, Moskva: Delovaja Literatura, 2006, p. 343. 205 Ibid.

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The ideologists with a less drastic outlook have suggested that the Kaliningrad Oblast should be integrated into the European Union as an associated member and adapt to the European Union legislation while the Russian Federation should preserve its sovereignty over the oblast. 206 In order for this to happen, the European Union and the Russian Federation should conclude a treaty on delineating the sovereignty and jurisdiction over the Kaliningrad Oblast, whereby the oblast should eventually be placed under the joint jurisdiction of the EU and Russia. Therefore, the Kaliningrad Oblast should be endowed with a higher legal status – such as that of a republic – and get an international legal personality on the basis of the Constitution of the Russian Federation. 207 However, as practice shows, the status of a republic in the Russian Constitution does not automatically presuppose the status of a subject of international public law, not least, as pinpointed previously, because the legal notions of “sovereignty” and “subject of international public law” can not be applied to the subjects of the Russian Federation. Indeed, according to Article 66 (5), “the status of a subject of the Russian Federation may be changed upon mutual agreement of the Russian Federation and the subject of the Russian Federation and according to the federal constitutional law”, and the relevant amendments should be introduced in Article 65 of the Constitution on the basis of federal constitutional law (Article 137). Apparently, changing the status of the Kaliningrad Oblast to that of a republic could require a contractual procedure which would lead to the conclusion of a treaty between the Russian Federation and the Kaliningrad Oblast. 208 Recent federal reform, however, clearly indicates a shift from legislation based on ad hoc contractual arrangements to predominantly constitutional principles. This proposition is alternatively echoed in a recent assumption that a special Federal Constitutional Law should be adopted which would grant the Kaliningrad Oblast the status of a “foreign territory” 209 and hence wider privileges in conducting its own external economic and political relations. This necessity is reportedly based on the fact that, in the case of the Kaliningrad Oblast, certain constitutional guarantees with regard to the Russian single economic space are infringed and that this could only be improved by means of a constitutional legal act. The introduction of this new status was discussed at the meeting of 206

See Anatolij Gorodilov et al., XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz, p. 206; Vladimir Kuzin / Sergej Naumkin, Kaliningrad i associirovannoe chlenstvo v ES. Mif ili real’nosti?, Kaliningradskij fond “Resursnyj informacionno-analiticheskij centr”, Kaliningrad, 2001. 207 See A. Gorodilov et al., XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz, p. 237. 208 See Leonid Karabeshkin, Clarifying the Status of the Kaliningrad Oblast’, p. 86. 209 See Anatolij Gorodilov / Sergej Kozlov, Kaliningradskaja Oblast’ kak zagranichnaja territorija Rossii, 2006, p. 3.

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the expert council of the working group on the development of the Kaliningrad Oblast which took place on February 11, 2005, in Kaliningrad. 210 The council specifically examined the possibility of adopting a Federal Law, “On the status of the Kaliningrad Oblast as a foreign territory”, which could further serve as a basis for an EU-Russia framework agreement, the subsequent harmonization of regional legislation with EU law, primarily in the fields of economy and transit, and the joining of the Kaliningrad Oblast to the Euro zone. The concept of a foreign territory was designed first and foremost to avoid possible politicized analogies with other countries’ similar concepts of constitutional law such as “federal territory”, “territorial autonomy”, “national-territorial autonomy”, “overseas department” and others and therefore to adopt a particular position towards the Kaliningrad Oblast based on the experience of other countries especially in the areas of tax policy and rules for financial investments. The concept of the experts was supported by the regional authorities of the Kaliningrad Oblast, but was, however, ignored by the federal government. In addition, one of the proposed scenarios foresaw the merging of the Kaliningrad Oblast into an independent (eighth) federal district, which was discussed at a special session of the Russian Security Council in July 2001. 211 However, this initative was not approved and the principal result of the compromise achieved at the meeting was the introduction of the post of a Special Representative of the President of Russia in Kaliningrad. This post implied a higher official status than that of the ambassador who had been previously appointed to be in charge for the Kaliningrad Oblast by the Ministry of Foreign Affairs; this revealed the fact that the issue of Kaliningrad had been transferred from the standard (working) level within the Ministry of Foreign Affairs to the presidential level. 212 As things stand, the establishment of a special constitutional status for the oblast would be beneficial for the Kaliningrad Oblast in different ways: first, it would bring more autonomy to the regional authorities for conducting foreign economic and trade relations, cross-border cooperation and developing its role in the Baltic Sea Region; second, it could arguably contribute to diminishing the conflict potential of the relations between the federal center and the regional authorities and help protect the oblast from corrupt officials, criminals and a “grey economy”. 213 In general, this law could serve as an “umbrella” 214 for 210

See Kaliningrad v zone evro, in: Izvestija, February 15, 2005, p. 3. See Alexey Ignatiev, Defining an Administration for a Pilot Region Kaliningrad, in: H.-M. Birckenbach and Ch. Wellmann (eds.), p. 122. 212 The assignment of the President’s Representative was offered to Dmitrii Rogozin, the Head of the Russian Federation State Duma Committee for the international affairs, who stood out for his patriotic rhetoric and who essentially contributed to the negotiation process between the EU and Russia on the Kaliningrad transit in 2002. 213 See, for instance, Leonid Karabeshkin, Clarifying the Status of the Kaliningrad Oblast’, p. 94. 211

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both existing constituents of the federal policy (the federal law “On the Special Economic Zone” and the Federal Task Programme) (also discussed below in Chapter II.3.). Above all, it could enable the EU to launch a special policy towards the Kaliningrad Oblast. So far, with the status quo of the oblast, the European Commission has been cautious in taking into consideration any special treatment for the oblast. It has in particular underscored that “this would raise a number of political and legal issues apart from the fact that Russia is unlikely to grant the necessary degree of autonomy to Kaliningrad”. 215 Yet, the reasons for the federal center’s remaining decidedly reluctant to make any constitutional law with regard to Kaliningrad are also manifold: a) a fear of separatism in the region, b) a diminishing of the importance of the direct EU-Russia dialogue in a bilateral and multilateral format, c) insufficient administrative aptitudes of the regional authorities, and d) undermining the homogenization of legislation of the Russian Federation. 216 f) Summary The establishment of Russian federalism has resulted in the Kaliningrad Oblast’s acquiring the status of a subject of the Russian Federation. The Constitution of the Russian Federation lays down the division of competences between the federal centre and the subjects of Russia in the sphere of international relations, whereby the Russian subjects are assigned a role in the coordination of international and external economic relations jointly with the federal centre. The central government has enacted extensive federal legislation on the foreign policy action that can be carried out by the subjects of the Russian Federation. On the one hand, the federal legislation pertaining to Russian regions’ external activities – including those in cross-border cooperation – has been assessed as 1. being imperfect and lacking a consolidated form, and 2. leaving significant authority in the hands of the federal government. Consequently, the regions of Russia are short of legal, political and administrative resources to forge their international relations on their own and often “appear to be hostages of the foreign policy of the center rather than policymakers themselves”. 217 Importantly, while the Kaliningrad Oblast is vested with powers to fulfill its international economic relations, it does not enjoy an international legal personality and is not part of traditional foreign relations, since this power is an exclusive prerogative of the Russian Federation. As a result, the external activity of the oblast is situated outside the realm of public international law. 214 215 216 217

Vadim Smirnov, Where is the “Pilot Region” heading?, p. 2. COM (2001) 26, p. 3. See Leonid Karabeshkin, Clarifying the Status of the Kaliningrad Oblast’, p. 95. Nikolai Petrov, p. 147.

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On the other hand, external factors such as the demands of globalization and regionalization increasingly do require greater intensification of international action by federated units, including Russian regions in general and the Kaliningrad Oblast in particular. Admittedly, the subjects of the Russian Federation have already become competent and responsible partners in international cooperation – especially in cross-border cooperation – and they can therefore be instrumental in the further development of (economic) relations between Russia and foreign partners, including with the European Union, constructively complementing external political relations. Crucially, the Kaliningrad Oblast belongs to the group of the most active 20 to 25 subjects of the Russian Federation which account for the total volume of international relations and external trade turnover of Russia. 218 The oblast actively makes use of its foreign policy resources such as its geopolitical, geographical and strategic location, its historical and cultural connections with the border regions (Lithuania, Poland and Belarus), and its legal external capacity. The legal basis for the Kaliningrad Oblast’s external activity originates in Russian federalism and has been consolidated in the provisions of the Constitution, specifically concerning the division of powers, in the Ustav of the Kaliningrad Oblast, and in the relevant federal legislation (federal laws, presidential decrees, and other federal documents) as well as international agreements of the Russian Federation. The external capacity of the Kaliningrad Oblast includes the right to develop international and external economic relations by concluding agreements with subjects of private law, administrative-territorial units, and in certain cases, directly with bodies of state power of foreign states, as well as the right to participate in international and regional organizations and establish missions abroad. In fulfilling its external capacity the Kaliningrad Oblast is authorized to act in general on matters which lie within its own competences; in concluding agreements with foreign partners in particular it should ensure that these agreements are in line with Russian national legislation. As such, the external activities of the region remain under the control of the federal authorities, who retain the right to veto or approve them. One of the principal directions of the external relations of the Kaliningrad Oblast is cross-border cooperation with adjacent foreign regions. The legal framework applicable to cross-border cooperation is formed by a) bilateral (inter-state) agreements concluded between national governments, such as the two Agreements between the government of Russia and the governments of Lithuania and Poland, and b) multilateral international agreements, particularly the Madrid Convention, to which the Russian Federation is a party, with the Convention, however, being essentially limited. These international treaties are capable of 218

See Jurij Vetjutnev, p. 181.

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creating “mutual international obligations for the neighbouring States to foster and encourage all initiatives to be taken in the future by their respective local authorities in the field” 219 as well as legitimizing local transfrontier cooperation within the internal legal order to every state party when the obligations assumed by the parties are incorporated into national law. Apart from this, the regional and local authorities of the Kaliningrad Oblast cooperate directly with regional and local authorities of adjacent states within the limits of their external legal capacity (outlined above) subject to the order and procedures laid down by domestic law. Despite some speculation that it is the unique historical and legal foundations of the establishment of the Kaliningrad Oblast that constitute the basic peculiarity of the Kaliningrad Oblast, 220 it seems that the oblast can be described to a unique region more properly from a historical, geopolitical or geo-economic perspective. A closer analysis of its legal status as a subject of the Russian Federation, specifically its external capacity, reveals that, from a legal point of view, the Kaliningrad Oblast is a rather ordinary subject of the Russian Federation which enjoys only limited international subjectivity and is free of any particular privileges – compared to some other subjects of the Russian Federation – with regard to conducting international relations. The legal capacity of the Kaliningrad Oblast rules out direct communication with foreign states in general and the European Union in particular. Given that external economic relations of the Kaliningrad Oblast are principally regulated on the federal level, advancing the oblast’s international interests appears to be ultimately dependent on the federal center. Also, taking into account that the Kaliningrad Oblast is significantly exposed to influences from external states, chiefly these of the EU, Kaliningrad’s international stance will eventually respond to the overall state of EU-Russia relations. 221 Hence, the main conclusion of the study of the international legal capacity of the oblast is that Kaliningrad is essentially situated both de facto and de jura outside the European Union and that the possibility for the European Union to treat Kaliningrad as the object of a single comprehensive policy is not plausible. In the meantime, the analysis of the legal status and external capacities of the Kaliningrad Oblast would be incomplete without a closer examination of its status under Russia’s federal policy, since the oblast enjoys the status of the Special Economic Zone. What additional legal capacities are provided by this status will be investigated below. 219

Ulrich Beyerlin, p. 907. See Anatolij Gorodilov et al., XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz, p. 186. 221 See Jurij Zverev et al, p. 345. 220

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3. The status of the Kaliningrad Oblast in the framework of Russian federal policy a) On the status of the Kaliningrad Oblast Specialists who deal with the problem of the Kaliningrad Oblast have made repeated reference to the status of the region. The status of the oblast can arguably be examined from two perspectives, namely, from internal and external factors. 222 The internal factor first and foremost includes the legal status of the Kaliningrad Oblast as a subject of the Russian Federation and – inevitably in this respect – it refers to the oblast’s capacity for external action. Apart from this, observers speak of the “special status” of the Kaliningrad Oblast, meaning this in a purely economic sense, and, specifically, its status as a special economic zone. 223 Externally, the status of the region involves an international aspect; it conveys the current and potential (political) position of the region which has been created within the framework of the broader EU-Russia relations. 224 In this case, Kaliningrad is generally viewed either as “a very specific case, which needs not only an enhanced attention but also a specific status in the EU-Russia relations” 225 or as a region whose specific situation and needs – rather than any special status in the EU-Russia relations – should be given first priority. In practice, a specific status embodies the concept of a “region of cooperation” or a “pilot region”. The term “status” is extensively employed in the social sciences, wherein it is defined as a position in a certain societal hierarchical ordering. 226 From a legal perspective, a status implies the legal identity of a person or body (such as company or partnership), 227 or the position of a state entity in relation to a state. 228 In this paper, the status of the Kaliningrad Oblast is understood as its 222 See Christer Pursianen, Road Maps, in: Christer Pursianen and Sergei Medvedev (eds.), Towards the Kaliningrad Partnership in EU-Russia Relations: A Road map into the Future, RECEP, Moscow, 2005, p. 37. 223 See Oxana Vitvitskaya, p. 279. 224 See Christer Pursianen, Road Maps, p. 37. 225 Ibid. p. 39. 226 See, for instance, David Robertson, A Dictionary of Modern Politics, European Publications Limited, 1993, p. 446, and Manfred G. Schmidt, Wörterbuch zur Politik, Stuttgart: Alfred Kröner Verlag, 2004, p. 692. 227 See Peter Collin, Dictionary of Law, Teddington: Peter Collin Publishing, 1993, p. 230. 228 See Gerhard Köbler, Juristisches Wörterbuch, München: Verlag Vahlen 2007, p. 393. The exact citation is as following: “Status ... ist nach der zum Zweck der besseren Erklärung des Verhältnisses zwischen Staat und Einzelnen verfassten Statuslehre ... die Stellung des Einzelnen zum ... Staat”.

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legal and political position with regard to the Russian Federation and also in EU-Russia relations. Overall, as one group of experts maintains, the status of the Kaliningrad Oblast is relevant because it is a prerequisite for defining an effective long-term regional strategy for the Kaliningrad Oblast. 229 In particular, they single out four feasible approaches to the status of the Kaliningrad Oblast, deriving them from an array of interests involved: federal, regional and international. First, the oblast has the status of an ordinary subject of the Russian Federation requiring federal support and greater presence of the federal center in the territory of the oblast; this approach was typical for the late 1990s when the regional economy was in a deep crisis. Second, the oblast is a subject with a special regime of economic management, having the status of a special economic zone. This view regards the Kaliningrad Oblast as a far from ordinary region of the Russian Federation with problems to be solved through a special federal economic policy. This approach is currently used by the federal center. It seeks to strike a balance between regional and federal interests, whereas the international element is taken into account only following the occurrence of problems, such as the problem of cargo and passenger transit through Lithuania. Third, the discussion of a special political status reaches back to the speculations of the early 1990s that the support of the West, and most of all of the European Union, is needed to secure appropriate conditions for Kaliningrad’s development. Fourth, the most optimal, but difficult, variant is admittedly the status of a subject of the Russian Federation with a special regime of economic management and highly developed international ties. This approach aims at reconciling the three groups of interests: federal, regional and international. The latter interests include mainly these of the European Union and the neighbouring countries. b) The Russian federal policy towards the Kaliningrad Oblast Altogether, the federal policy towards the Kaliningrad Oblast is realized at both federal and regional levels in the context of: a) the general federal policies and strategies applicable to all Russian regions; b) the special federal policy in the Kaliningrad region, in particular the regime of the Special Economic Zone, and c) the Federal Target Programme, and d) supplements contributed by Kaliningrad’s regional development strategy. 230 There are three periods of center-regions relations in the case of the Kaliningrad Oblast. 231 The first period, from 1991 to 1996, was marked by regional 229 230 231

See Jurij Zverev et al, p. 340. See Evgeny Vinokurov, Economic Policy, p. 170. See Leonid Karabeshkin, Clarifying the Status of the Kaliningrad Oblast’, p. 83.

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activism in the economic sphere, the proliferation of external relations and extensive development of cross-border cooperation by the Kaliningrad Oblast. The federal center was generally responsive to the regional demands although it remained on the alert owing to the fear of separatist tendencies in the region. The Kaliningrad elites, like these in the majority of the subjects of the Russian Federation in this period, tried to obtain extensive privileges from the federal center and displayed sufficient leverage to lobby for the project of the Special Economic Zone for the Kaliningrad Oblast. As one expert spotlights, the SEZ was rather deemed to gain additional administrative and legal status, and consequently greater independence from the federal center, while its economic validity was of minor importance. 232 These efforts culminated in the adoption of the Federal Law “On the Special Economic Zone in the Kaliningrad Oblast” on January 22, 1996. 233 Fundamentally, the SEZ appeared to be a result of political compromise between the region and the federal center or between different federal ministries and business groups. 234 By and large, this period generated an active discussion over a special political status for the Kaliningrad Oblast on both internal and international – though not official – levels, which in the course of time faded away leaving the status of the Kaliningrad Oblast beyond question. Over the next period, from 1997 to 1999, the federal center went so far as to launch – along with a large number of regional development programs for other Russian regions – the (first) “Federal Target Programme for the Special Economic Zone Development in Kaliningrad region in 1998 – 2005”, signed in 1997 and coming into force in 1998. 235 This programme was deemed to supplement the existing legislation on the SEZ. Still, this time was described as an “interim” or “peripheralization” 236 period because of both internal (regional) and external (federal) factors. Primarily, the change in the regional administration – Governor Leonid Gorbenko succeeded Yuri Matochkin – resulted in a decrease in the previous political and economic regional initiative; a loss of the authority, influence and previous openness of the oblast. Simultaneously, a number of provisions of the Federal Law on the SEZ were deferred or the federal center suggested 232 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 49. 233 Federal’nyj zakon “Ob osoboj jekonomicheskoj zone v Kaliningradskoj oblasti” No. 13, 22 janvarja 1996. 234 See Natalia Smorodinskaya, The Kaliningrad’s Economic Growth Problem, in: Oksana Antonenko and Kathryn Pinnick, (eds.), p. 273. 235 Federal’naja celevaja programma razvitija Osoboj jekonomicheskoj zony v Kaliningradskoj oblasti na 1998 – 2005 gody, in: Sobranie Zakonodatel’stva Rossiiskoj Federacii, No. 41, 1997, st. 4707. In due time, this programme was not properly financed and implemented, having devolved its place to another programme. See Anatolij Gorodilov et al, XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz / XXI century, p. 166. 236 Leonid Karabeshkin, Clarifying the Status of the Kaliningrad Oblast’, p. 88.

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that they be cancelled, and the number of federal normative acts concerning the development of the oblast decreased. At the time, the outlook for approaching a Kaliningrad strategy on the basis of its status as an ordinary subject of the Russian Federation was widely circulated. 237 It was thus alleged that the oblast should be considered as an average subject of the Russian Federation that required, however, federal support and greater centralization of decision-making, specifically with regard to the SEZ; and that this would eventually prevent economic destabilization in the region and hence contribute to the economic security of the country. The Russian economic default of 1998 and the general political crisis led to the relegation of the Kaliningrad issue to the background. As a result, the federal center failed to launch a coherent development strategy for the Kaliningrad Oblast. Finally, the period starting from 1999 onwards has been indicative of growing prioritization of the Kaliningrad Oblast on the Russian political agenda, including that at the highest level. This was stimulated by the upcoming EU enlargement and the beginning of EU-Russia dialogue on the Kaliningrad Oblast manifested in Russia’s Mid-term Strategy toward the EU of 1999. 238 In particular, this initiation was explained by the following factors: a) the European vector of the overall Russian foreign policy, b) a better understanding of feasible detriments to the Kaliningrad Oblast in particular and the country in general caused by EU enlargement, and c) a recognition of the lack of internal resources to cope with the aftermath of the economic crisis in the Kaliningrad Oblast. 239 Again, however, a comprehensive and effective Kaliningrad development strategy was not suggested by the federal government. In any event, the current period of center-region relations has been based on the assumption and recognition that the Kaliningrad Oblast is a specific region of the Russian Federation and its problems should be solved by means of a special federal economic policy. 240 This policy currently encompasses 1. the Special Economic Zone, its legal basis being replaced by the Federal Law No. 16 “On the Special Economic Zone in the Kaliningrad Oblast” of January 10, 2006, 241 and 2. the (second) “Federal Target Development Programme for Socio-Economic Development of the Kaliningrad region in 2002 – 2010”. 242 The 237

See Jurij Zverev et al, p. 340. Russia’s Middle Term Strategy towards the EU (2000 –2010), in: Diplomaticheskij Vestnik, Moskva, nojabr’ 1999. 239 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 52. 240 See Jurij Zverev et al, p. 341. 241 Federal’nyj Zakon Ob Osoboj jekonomicheskoj zone v Kaliningradskoj oblasti i o vnesenii izmenenij v nekotorye zakonodatel’nye akty Rossojskoj Federacii, No. 16, 10 janvarja 2006, in: Rossijskaja gazeta, 19 janvarja, 2006. 238

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aim of the overall federal policy has been to strike a balance between regional and federal interests. A significant milestone in the federal liberal vision of Russia’s policy toward the Kaliningrad Oblast was reflected in the “Concept of Federal Social-Economic Policy toward Kaliningrad Oblast”, adopted by the Russian government on March 22, 2001. 243 According to the Concept, the main aim of ensuring the national interests of Russia and guaranteeing its safety in Kaliningrad Oblast is to create an economic, political, international and strategic and military situation in the oblast which would eliminate any chance of minimizing the significance of the oblast as an integral part of the Russian Federation. 244

Although the paper was mostly declarative rather than offering a distinct governmental policy, 245 it was depicted as “sensational”. 246 Primarily, it was substantially the first attempt by the federal government to solidify its policy toward the oblast, taking into account the regional considerations and therefore showing more openness to the regional initiative. Secondly, the federal center recognized that the oblast required special federal treatment; and, thirdly, the economic reforms suggested in the paper sounded exceptionally liberal. Most importantly, the document was constructively explicit that the status of the Kaliningrad Oblast should be expanded towards that of a pilot region, a region of cooperation between Russia and the EU in the 21 st century, or, more precisely, “a connecting link in the process of integration between Russia and the uniting Europe, promoting Russian goods in the EU, and modern modes of production to the new Russia”. 247 The paper hence signalled that the federal center understood the need to solve the Kaliningrad problem multilaterally. This Concept served as a point of departure for the (second) Federal Target Development Programme, which was formalized by the resolution of the Russian Government No. 866 of December 7, 2001, and its further reduction by resolution No. 388 of June 6, 2002. The principal goal of the programme is: 242 Federal’naja celevaja programma social’no-jekonomicheskogo razvitija Klainingradskoj oblasti na 2001 – 2010 gody, in: Sobranie zakonodatel’stva Rossijskoj Federacii, 2001, No. 52 (ch.2), st. 4974 i Sobranie zakonodatel’stva Rossijskoj Federacii, 2002, No. 23, st. 2187. 243 Koncepcija federal’noj social’no-jekonomicheskoj politiki v otnoshenii Kaliningradskoj oblasti, 2001. 244 As translated in: Yuri Zverev, p. 22. 245 See Alexander Sergounin, EU Enlargement and Klainingrad: The Russian Perspective, in: Lyndelle D. Fairlie and Alexander Sergounin, Are Borders Barriers? EU Enlargement and the Russian Region of Kaliningrad, The Finnish Institute of International Affairs and Institut für Europäische Politik, 2001, p. 175. 246 Elena Krom, Nachalo bol’shogo puti?, in: Jekspert Severo-Zapad, No. 7, 16 April 2001. 247 As translated in: Yuri Zverev, p. 22.

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the creation of conditions for the sustainable development of the Kaliningrad Oblast correlated to the level of development of the adjacent countries and the creation of the favourable investment climate in the region for the rapprochement between Russia and the European Community. 248

The document identifies three main tasks of the policy which reflect the federal interests in the development of the Kaliningrad Oblast. The primary task includes the securing of geostrategic interests of Russia in the Baltic region, the development of the Kaliningrad Oblast as a large transportation hub, the provision of a stable energy supply in the oblast, and the improvement of its ecological situation. Secondly, the program should contribute to the transformation of the economic structure of the region into an export-oriented economy; and, finally, the tasks of creating regional meaning (pertaining to the development of such fields as the agricultural complex, fish processing and the social sphere) should be fulfilled. To this effect, envisaging such sources of financing as the federal budget, federal budgetary loans, the regional budget, private financing, foreign loans and others, the document lists numerous (investment) projects to be implemented to meet the above tasks. In short, the paper goes, the federal interests comprise: 1. securing sovereignty over the Kaliningrad Oblast, 2. consolidating the military strategic dimension, and 3. defining the economic functions of the Kaliningrad Oblast which are not yet precisely delineated. The latter aspect, as interpreted in the programme, has specifically raised both critiques and appreciation from experts. Thus, on the one hand, it has been noted that the programme contains neither “any breakthrough projects nor new ideas that change the economic structure of the region, provide new impulse to its development, or identify long term specialisation”. 249 On the other hand, it does stress the positive results of a potential agreement between Russia and the EU that would guarantee the consistency of the SEZ legislation, the application of EU standards across the territory of the SEZ, and special simplified procedures for the movement of people. 250

Meanwhile, the whole federal policy towards the Kaliningrad Oblast has repeatedly come under criticism. It has been observed that the international aspect in the policy is taken into consideration only as a result of acute problems; this was the case when the problem of transit through Lithuania arose, associated with its upcoming accession to the European Union. 251 One of the criticisms centers on the fact that the development strategy has mainly dealt with economic aspects and that the federal center has failed to formulate and forge a coherent 248 Federal’naja celevaja programma social’no-jekonomicheskogo razvitija Kaliningradskoj oblasti na 2001 – 2010 gody. 249 See Evgeny Vinokurov, Economic Policy, p. 176. 250 Ibid. 251 See Jurij Zverev et al, p. 341.

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strategy towards the Kaliningrad Oblast which would also encompass social, demographic, and geopolitical aspects of regional development. 252 Besides scrutinizing the priorities of the Federal Target Programme reflected in the list of investment projects, Evgeny Vinokurov mentions the lack of their potential for substantial economic development of the oblast; the largest investment foresees the construction of a gas-run power station, predicted to lead to extremely high costs and an increase in dependence on this energy supply. 253 Some experts have critically pointed out the federal center’s prioritization of geopolitical interests, and hence issues of sovereignty, over economic development. 254 The persistent emphasis on the sovereignty issue is well illustrated by the fact that the Federal Law “On Special Economic Zone in the Kaliningrad Oblast” (Article 24) of 1996 explicitly contained a provision stating that international agreements of the Russian Federation which touch upon questions of the Kaliningrad Oblast should contain references to the Kaliningrad Oblast as an inseparable part of the Russian Federation. Overall, the fears of separatism in Kaliningrad were presumably and partly responsible for the so-called “development strategy dilemma”. Both the lack of a winning strategy within the federal policy towards the oblast and the intensive implementation of such a policy would allegedly pose risks of increasing separatist tendencies in the oblast and hence endanger Russian sovereignty. 255 c) The status of the Kaliningrad Oblast as a Special Economic Zone The legal status of a special economic zone is granted to a region (subject to constitutional law) under the national law of the country where the regime of this zone functions. Generally, the legal status of special economic zones in Russia is regulated by the unified Federal Law No. 116 “On Special Economic Zones in the Russian Federation” of July 22, 2005, amended by Federal Law No. 76 “On introducing of amendments to the Federal Law On Special Economic Zones” of June 3, 2006. 256 However, pursuant to Article 40 para. 2 of the Law On Special Economic Zones, its provisions do not apply to the special economic zones of the Kaliningrad Oblast and the Magadan Oblast of the Russian Federation. This can 252

Ibid., p. 342. See Evgeny Vinokurov, Economic Policy, p. 175. 254 See Leonid Karabeshkin, Clarifying the Status of the Kaliningrad Oblast’, p. 99. 255 Ibid. 256 Federal’nyj zakon “Ob osobyh jekonomicheskih zonah v Rossijskoj Federacii” No. 116, 22 ijulja 2005, in: Rossijskaja gazeta, No. 162, 2005; and Federal’nyj zakon “O vnesenii izmenenij v Federal’nyj zakon Ob osobyh jekonomicheskih zonah v Rossijskoj Federacii” No. 76, 3 ijunja 2006, Rossijskaja gazeta, No. 121, 2006. 253

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be explained by the specific (geographical, social and political) aspects of these two Russian regions. 257 Specifically, the regime of the SEZ in the Kaliningrad Oblast is governed by the Federal Law “On the Special Economic Zone in the Kaliningrad Oblast” of 2006, which replaced the previous Federal Law of 1996 and incorporated the legal developments made in the above Law “On Special Economic Zones”, primarily those relating to the legal control of the SEZ in Kaliningrad. 258 Although the status of a SEZ distinguishes the Kaliningrad region among other regions of the country and also among other SEZs in Russia, it does not influence or upgrade the constitutional and legal status of this region. It implies mainly specific provisions of the legal implementation of certain economic activities in the region. A free (special) economic zone is generally a geographically isolated territory, part of the national legal economic space where a certain system of preferences and incentives is applied, which are inapplicable to other parts of the country. 259 Their preferences and stimuli include: a) external trade benefits such as tax reduction or tax abolition and a simplified procedure for conducting export-import operations, b) fiscal benefits associated with tax stimulation of certain types of activities, c) financial benefits pertaining to different forms of direct and indirect subsidies, and d) administrative benefits of the simplified procedures of enterprise registration, entrance of foreigners, and transportation of goods. While a SEZ is separated from the country (and from its economy) by a customs border, 260 the legal regulation of a special economic zone remains under national jurisdiction. 261 In the meantime, a special economic zone presupposes simplified legal procedures in areas such as customs, tax and registration fields, and this makes it more attractive for foreign investment and more adjustable to the newest economic ideas and technologies, including those pertaining to international cooperation and integration.

257 See Xavier Barre, Analysis of the Draft Federal Law “On Special Economic Zones of the Russian Federation” (Version of March 15, 2005), Russian-European Centre for Economic Policy (RECEP), August 16, 2005. 258 See Rainer Wedde / Artyom Moyseenko, The Special Economic Zone in the Kaliningrad Region in view of the Law Dated December 25, 2005, Beiten Burkhardt, Moscow, 2006. 259 See Anatolij Gorodilov et al, XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz, p. 132. 260 The Kyoto Convention (Annex F. 1.) specifically defines “free zone” as a “part of the territory of a State where any goods introduced are generally regarded, insofar as import duties and duties are concerned, as being outside the Customs territory and are not subject to the usual Customs control”. The Kyoto Convention, Annex F. 1. Annex concerning free zones, April 1978. 261 See Vitalina Kushhenko, Osobye rezhimy vneshnejekonomichskoj dejatel’nosti: pravo i praktika, Moskva: Knizhnyj mir, 2004, p. 22.

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Before going into the principal aspects connected with the SEZ in the Kaliningrad Oblast it is necessary to underline that the legal status of a special economic zone was initially granted to the Kaliningrad Oblast with a view to compensating for the hardships connected with its exclave position and to contributing to the economic security of the region by providing stimuli for Russian and foreign investment. However, it essentially resulted from the initiative and lobbying of the regional authorities and it was shaped in the process of keen competition between the regional authorities and the federal center. The preparation period of the Federal Law “On Special Economic Zone in the Kaliningrad Oblast” of 1996 revealed this competition for the control over the administration of the zone. The “Treaty on the Division of Subjects of Jurisdiction and Powers between the Federal Bodies of State Power of the Russian Federation and the Bodies of Authority of the Kaliningrad Oblast” (Article 2) signed on January 12, 1996, 262 ascribed the function of regulating the work of the administration of the FEZ to the competence of the president of the Russian Federation, but the federal law on the FEZ (Article 3) of January 22, 1996, allotted this function to the administration of the Kaliningrad Oblast. 263 Notwithstanding this collision in the legislation, the regional administration managed in practice to retain control over the operational administration of the FEZ. This contest occurred again in the early 2000s, however, during the preparation of a Draft Law “On the Special Economic Zone in the Kaliningrad Oblast” to replace the Federal Law of 1996. At the time, the regional administration confronted the project of the law which delegated the task of administration in the Special Economic Zone to an authorized organ of federal body of executive power. The final version of the Federal Law “On the SEZ in the Kaliningrad Oblast” as of 2006 (Article 2 para. 2) clarifies that the management of the SEZ – that is, the activities aimed at supporting the special legal regime of the SEZ and ensuring its functioning – shall be carried out by both the authorized body and the administration of the SEZ. There and in accordance with the provisions of the Federal Law (Article 2 para. 3), the authorized body is defined as “the Federal executive body, authorized to perform the functions relations to the management of Special Economic Zones and ensuring the functioning of the special legal regime of the SEZ”. 264 It is charged with coordinating its actions with federal public authorities, the zone’s administration and federal executive bodies (Article 3 para. 1).The definition of its overall role is seen as “vague”. 265 262 Dogovor o razgranichenii predmetov vedenija i polnomichij mezhdu organami gosudarstvennoj vlasti Rossijskoj Federacii i organami gosudarstvennoj vlasti Kaliningradskoj oblasti, in: Rossijskaja gazeta, 31 janvarja 1996. 263 See Alexey Ignatiev, Defining an Administration for a Pilot Region Kaliningrad, p. 121. 264 Ibid. 265 Xavier Barre, p. 2.

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The administration of the SEZ is described as a “structural unit of the supreme executive public authority in the Kaliningrad region, ensuring the functioning of the SEZ” 266 (Article 2 para. 4), which is responsible for a set of practical administrative functions with regard to the zone and its inhabitants. (Article 3 para. 2). Importantly, the head of the administration is nominated by the top public authority (the governor) of the Kaliningrad Oblast in agreement with the authorized body (Article 3 para. 3 of the Law). Once again, the regional authorities seem to have retained the management of the SEZ, 267 although in a considerably curtailed manner. The Kaliningrad Oblast was endowed with the status of a Special Economic Zone by presidential decree in 1995, which was consolidated in Federal Law “On the Special Economic Zone in the Kaliningrad Oblast” in 1996. One of the specifics of the SEZ established in the Kaliningrad Oblast is that it covers practically the whole territory of the Kaliningrad Oblast and, unlike other SEZs in other subjects of the Russian Federation, coincides with the administrative borders of the Kaliningrad Oblast. 268 In spite of this, the law failed to define the geographic borders of the territory precisely, which provoked the criticism of some legal analysts. 269 They found the law to be contradictory overall and to contain legal errors. Besides the unclear geographic borders, the law failed to formulate the aims, tasks and the term of validity of the SEZ, and insufficiently elaborated the legal regime, administration organs of the zone and the mechanisms of their interaction with the regional and federal structures. The law also excessively replicated some legal provisions which were covered in other federal legal acts, such as the Federal Law “On Customs Tariff”. 270 Presumably, it was unlikely that the new Federal Law on the SEZ of 2006 would escape a considerable portion of similar reservations. The most crucial criticism, however, concerns the fact that the project of the SEZ was not incorporated into the whole Russian economic policy and that Moscow failed to construe a coherent Kaliningrad development strategy linking it to the SEZ regime. 271

266

Ibid. See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 64. 268 See Anatolij Gorodilov et al, XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz, p. 175. 269 See Vladimir Abramov / Vladimir Kuzin, V poiskah otveta na dvojnoj vyzov. Kaliningradskaja oblast’ v uslovijah rasshirenija ES, in: Pro et Contra, Vol. 8, No. 1, Winter 2003, p. 87. 270 See Anatolij Gorodilov et al, XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz, p. 178. 271 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 64. 267

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The law of 1996 created a customs regime operating within this SEZ, wherein foreign goods that were shipped and processed in the territory of the Kaliningrad Oblast (and later exported abroad or to the rest of Russia) were not subject to customs duties and VAT. On the one hand, the SEZ regime served as a “social shock absorber”, 272 beneficially influencing the socio-economic indications of the oblast; this was reflected in the low level of inflation, the development of external relations of regional enterprises and the inflow of foreign investment, growth in industrial production volumes and cargo handling as well as a reduction of the level of unemployment and other impacts. 273 It made the region “a gateway for import to wider Russian markets”, and “shaped the economic specialization of the region towards import-processing industry”. 274 Broadly speaking, the SEZ regime assisted in the process of the oblast’s soft transformation into a market economy and helped it overcome the negative effects of its geographical detachment from the main body of Russia. 275 At the same time, prolonged expansion of imports (at an annual level of $1.5 billion on the average) against the background of actually stagnant exports (at a level of $340 –370 million), converted a small-size negative trade balance of the region into a huge deficit (from of $180 million in 1994 to almost of $1.5 billion by 1997) and made distortions in the industrial structure much deeper than generally in Russia (tertiary industries grew disproportionably at the expense of manufacturing and agriculture). What is more, it encouraged an explosion of informal activities. 276

Apart from this, in spite of the fact that some enterprises benefited from the SEZ, one of the regime’s outcomes was discrimination against some local producers and their products as a result of cheaper imports. 277 These ambivalent effects of the SEZ led to understanding that the SEZ had failed to prove to be instrumental in improving the socio-economic development of the Kaliningrad Oblast and to suggesting a comprehensive approach to the Kaliningrad economic policy. In addition, and most importantly, the SEZ regime (granting extensive customs preferences) was later found to be incompatible with WTO requirements in general and this, among other things, motivated the federal center to modify the SEZ regime. 278 Overall, the upcoming accession of Russia to the WTO revealed a number of alarming signals to regional producers, especially those oriented to the 272 See Natalia Smorodinskaya, Kaliningrad Exclave: Prospects for Transformation into a Pilot Region, p. 5. 273 See Anatolij Gorodilov et al, XXI vek: integracija Kaliningradskogo subjekta Rossijskoj Federacii v Evropejskij Sojuz, p. 157. 274 See Christer Pursianen, Road Maps, p. 37. 275 See Leonid Karabeshkin / Christian Wellmann, p. 49. 276 Natalia Smorodinskaya, Kaliningrad Exclave: Prospects for Transformation into a Pilot Region, p. 5. 277 See Christer Pursianen, Road Maps, p. 37.

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Russian market. For example, for Kaliningrad’s import-substitution companies it meant that many of them would: lose their main competitive advantage in relations to similar companies from mainland Russia. Import duties on a wide range of imported raw materials and components will be considerably reduced which, in fact, will level the Kaliningrad advantage of a free customs zone. 279

The competitiveness of the regional producers would therefore decrease considerably. Consequently, a complex of these factors 280 led the federal center to another attempt to propose a new law on the SEZ, replacing the previous one, adjusting it to the WTO rules and in due course contributing to the re-profiling of the Kaliningrad economy. The new Federal Law “On the Special Economic Zone in the Kaliningrad Region” came into effect on April 1, 2006 to be operative for 25 years. It retains a free customs zone in the region and provides for a transition period of ten years of the parallel existence of the previous regime (as laid down in the Law of 1996) and the new regime. The main rationale of the new SEZ regime lies in its particular favour of strategic investors. The amount of capital investment in the region thus should not fall short of 150 million rubles in the period of three years and an investment project may not be directed towards such sectors as oil and gas production, alcohol production, wholesale and retail trading, repairs of household devices and personal usage objects and financial activity (Article 4 of the Law). When all the requirements are met enterprises obtain considerable concessions; along with enjoying the benefits of the customs regime of the free customs zone in the Kaliningrad Oblast they are exempt from paying profit taxes during the first six years and they pay taxes on only fifty per cent in the subsequent six years (Article 25 of the Law). To put it another way, the law aims at contributing to the transformation of the economic regime in the region, shifting its base from customs preferences to tax privileges, which is also in line with WTO rules. 281 However, though having raised high expectations among regional and federal authorities, the new law has already been exposed to criticism by economists. 282 278

p. 40. 279

See Evgeny Vinokurov, Integration of an enclave into the international economy,

Alexey Ignatiev, Kaliningrad region: economy heading for the future, p. 8. Apparently, there were more reasons to revise the SEZ regime: for instance, some experts point out that the economy based on preferential imports inflicts losses on a federal level: these are losses for the federal budget, certain sectors of economy in mainland Russia, and others. See Rajmundas Lopata / Laurinas Jonavichus / Vladas Sirutavichus i Ljudas Zdanavichus, Ocenka Programmy i Strategii dolgosrochnogo razvitija Klainingradskoj oblasti Rossijskoj Federacii (2007 – 2016), Vil’njusskij universitet, 2007, p. 75. 281 Ibid. 280

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Although there are many critical issues, some of them are raised more frequently. To start with, it has been admitted that, on the one hand, the law, almost entirely directed towards support of large industrial projects, is equally beneficial for export-import substitution and local market-oriented projects. 283 On the other hand, this approach fails to consider the complications associated with access to EU markets. For this reason it is estimated that the export vector of the Kaliningrad economy will remain underdeveloped and the orientation to import substitution will remain unchallenged. However, export production orientation and hence a shift from the contemporary one-sided concentration on the Russian internal market to foreign markets is the only viable long-term policy for the Kaliningrad Oblast that can substitute for the costly federal policy of state support and economic aid which have inevitably made the Kaliningrad Oblast dependent on the state. 284 Secondly, critical voices refer to the fact that small and medium-sized enterprises will be discriminated against because they will be unable to meet the investment limits set out in the law. At the same time, this line is inconsistent with Russia’s policy in general, which conversely seeks to foster small and medium-sized enterprises, “the main sources of economic flexibility and employment”. 285 Thirdly, the development of the services sector is not supported by the law since preference is given to large-scale industrial production. Nonetheless, the latter sector, with low labour costs, does not constitute the natural competitiveness of the Kaliningrad Oblast. This competitiveness lies, by contrast, in “sophisticated processes which are based on innovation, highly-qualified labour and proximity to the main European markets” 286 and to European culture, as well as in the climate, nature, infrastructure, tolerance of the local population in relation to migrants. 287 Hence, the recommendation of one European expert is that “instead of turning Kaliningrad into a new production and industrial center on the Baltic Sea shore, one should support the creation of various services which are based on wider trends in Europe, i.e., the ageing of the population (with a growing need for health-related services) and the increase of leisure time

282 See, for instance, Evgeny Vinokurov, Ekonomicheskaja specialisacija Kalininigradskoj Oblasti, pp. 306 –308, and Natalia Smorodinskaya, Kaliningrad’s Economic Growth Problem, p. 274. 283 See Evgeny Vinokurov, Integration of an enclave into the international economy, p. 42. 284 See Evgeny Vinokurov, Ekonomicheskaja specialisacija, pp. 308 and 310. 285 See Kari Liuhto, Chapter 4. The Economic development, in: Christer Pursianen and Sergei Medvedev (eds.), p. 83. 286 Ibid., p. 84. 287 See Alexey Ignatiev, Kaliningrad region: economy heading for the future, p. 9.

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(tourism)”. 288 This could transform the regional economy into a post-industrial, services-based economy. 289 Also, customs privileges and tax breaks are not the only and main prerequisites for foreign investments, rather this prerequisite is fair and predictable in the business climate of the region. Furthermore, it has been emphasized that, because during the transition period of ten years the previous SEZ (as of 1996) remains enacted, the simultaneous existence of two SEZ regimes may considerably hamper their administrative systems, add more bureaucracy and further spread corruption. 290 This particularity also calls for a clear division of roles between the federal and regional authorities and on the whole requires greater control over the SEZ. Natalia Smorodinskaya has portrayed the initiative of the federal center to revise the previous SEZ and the contents which the federal government added to the new law on the SEZ critically as, a “federal attempt to adjust Kaliningrad to the new economic reality” which is still “constrained by an old politicized logic”. 291 In particular, she states that the center sees its primary task not as bringing Kaliningrad closer to Europe, but instead preventing its possible breakaway from Russia in the event that the growing socio-economic disparity between Kaliningrad and its EU neighbours give rise to local separation. In this context, the proposed economic policies for the region represent little more than trivial compromise solutions; they might formally boost the level of development (in terms of per capita GRP) but they do not address fundamental issues concerning Kaliningrad’s economic modernization. 292

Indeed, the attribute “fundamental” in the preceding passage sounds more like a keyword because the SEZ can be viewed as only part of the overall strategy which still needs to be fundamentally formulated and launched in order to stimulate the fundamental sustainable economic growth of the Kaliningrad Oblast. All in all, the very relevance of the SEZ to the sustainable development of the Kaliningrad Oblast has been called into question. Thus, although the SEZ has been an important driving force for the economic development of the Kaliningrad region, it “creates an artificial competitiveness in Kaliningrad, which may, in the long run, distort the creation of natural, and hence sustainable, competitiveness in the region”. 293

288 289

p. 42. 290 291 292 293

Kari Liuhto, p. 84. See Evgeny Vinokurov, Integration of an enclave into the international economy, Ibid., p. 83. Natalia Smorodinskaya, Kaliningrad’s Economic Growth Problem, p. 274. Ibid. See Kari Liuhto, pp. 86 – 87.

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d) The Kaliningrad regional strategy It is of interest that the regional authorities have also acknowledged that the mechanism of the new SEZ is only transitional for the mid-term and that, in a long-term perspective, it will be unable to solve the questions of priorities and strategic principles of development in the context of the developing Baltic macroregion. To this effect, in the early 2000s the regional authorities and other actors in regional politics (such as the Kaliningrad Regional Duma, the Association of Municipal Formations, business associations, the Public Chamber and others) made a joint effort to elaborate a regional policy in the “Strategy of the Socio-Economic Development of Kaliningrad Oblast as a Region of Cooperation until 2010”, which was adopted in 2003. 294 This paper in particular formulated the regional interests of integrating the region into the economic, transportation and cultural system of the Baltic region and examined different strategic orientation points of the region’s development. The region should thus orient itself in the future towards evolving first of all as a stable developing region in Europe, with its natural resources, human and economic potential being secured and developed with respect to federal and regional interests. Secondly, Kaliningrad should turn into a contact (pilot) region of Russia and the European Union, where different mechanisms of EU-Russia cooperation and integration could be applied. Further, the oblast was viewed as a region of cooperation contributing to the formation of international economic, political and cultural ties of other regions, and, finally, as a region securing the military strategic interests of Russia. Lately, the Kaliningrad authorities have attempted to improve the above regional strategy, taking into account recent changes in circumstances: the estimated results of the EU Eastern enlargement, the change in Russia’s position and its weight in the world economy, the place of the Kaliningrad Oblast in EU-Russia relations and the change of the character of these relations. 295 It has been pointed out particularly that the oblast loses its key position in the process of building the partnership between the EU and Russia and therefore it has to refocus on its own resources (industrial, labour, natural and geographical) as sources for development. It has also been emphasized that the Kaliningrad Oblast belongs to one of the most actively developing spots in the Baltic Sea region, and consequently it should develop its capacity for making use of its advantages within the whole macroregion. In this respect, the regional authorities designed the “Kaliningrad Region Strategy for Socio-Economic Development for a mid294 Strategija socialino-jekonomicheskogo razvitija Kaliningradskoj oblasti kak regiona sotrudnichestva na period do 2010 goda, Kaliningrad, 2003. 295 Rossijskij jekslav: osnovnye scenarii social’no-jekonomicheskogo razvitija Klainingradskoj oblasti, Fragmenty materialov issledovanija, Centr Strategicheskih Razrabotok Severo-Zapad, Sankt-Peterburg, 2006.

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term and long-term perspective” which outlined its vision of regional modernization and reformation. 296 The strategy was approved by the federal authorities and consolidated in resolution No. 95 of the Government of the Kaliningrad Oblast on March 9, 2007. This strategy also served as a basis for the “Program of Socio-Economic Development of the Kaliningrad Region for 2007 – 2016” that was formalized by regional law No. 115 on December 28, 2006. 297 The main rationale behind this strategy lies in that it is not the special status of the Kaliningrad Oblast – and the preferences that the SEZ regime entails – but rather achieving competitiveness against neighbouring countries and territories and adapting to the macroeconomic processes in the Baltic region that should constitute its long-term strategy. In this way, the main idea of the change in the regional strategy would be a shift from exploiting its geopolitical exclusiveness to improving its economic competitiveness in the Baltic macroregion. This plan could help build a sustainable economy and diminish the socioeconomic disparities between the region and the neighbouring areas of the EU. To this effect, the paper outlines three goals: 1. providing productive integration of the Kaliningrad Oblast in the basic socio-economic processes of the Baltic region, 2. defining the role of the Kaliningrad Oblast in the pursuance of the strategic goals of the Russian Federation as a drive for restructuring the regional economy and increasing its competitiveness, and 3. determining of the basic scenario of the development of EU-Russia relations and the place of the Kaliningrad Oblast therein. 298 The Strategy presents four possible scenarios for the socio-economic development of the region: a) “Status Quo”, b) “Competition in the North-West of Russia”, c) “European Outsourcing”, and d) “Macroregional Lead”. 299 The first scenario envisages preserving and securing the current economic specializations of the Kaliningrad Oblast – such as tourism, transit transport and other sectors – and its orientation towards the Russian market. Meanwhile, the issue of the socio-economic development of Kaliningrad will be discussed within political and international premises rather than economic ones, whereby both Russia and the EU can introduce new projects and mechanisms for regional development, which will likewise be based on political rather than economic motivations. It is estimated that under this scenario, if the situation in the Baltic region remains stable, economic growth will reach 6 – 8 percent over the next 296 Strategija socialino-jekonomicheskogo razvitija Kaliningradskoj oblasti kak regiona sotrudnichestva na sredne- i dolgosrochnuju prespektivu. Prilozhenie k postanovleniju Pravitelistva Kaliningradskoj oblasti No. 95, 9 marta 2007. 297 Programma socialino-jekonomicheskogo razvitija Kaliningradskoj oblasti na 2006 – 2017 god. Zakon Kaliningradskoj oblasti No. 115, dekabr’ 28, 2006. 298 Strategija socialino-jekonomicheskogo razvitija Kaliningradskoj oblasti kak regiona sotrudnichestva na sredne- i dolgosrochnuju prespektivu, pp. 42 –46. 299 Ibid., pp. 65 – 76.

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three to five years. This scheme is likely to become a reality provided no other projects capable of changing the current socio-economic trends are offered. According to the second scenario, the Kaliningrad Oblast may compete with other regions of the Russian North-West in the internal markets. While the participation of the oblast in this competition will be limited within the region’s specialization – which it objectively formed in the 1990s – the perspectives for new production remain unclear. Hence, this scenario is found to be less probable. The third scenario, “European Outsourcing”, presumes that the Kaliningrad Oblast would be engaged in the European outsourcing which currently blooms extensively in Europe. The region would integrate its traditional and new products and services into European supply chains. This plan presupposes the adoption of a new strategy of competitiveness and the European Union and Russia formulating a new agenda for the Kaliningrad Oblast. The Kaliningrad economy would thus to be oriented towards the external market and the region would be integrated into the socio-economic processes determining the situation in the Baltic region and in the North-West of Russia. Under this scheme, the region would become the base location for production centers based on European standards in the sectors that are, for different reasons (pertaining to ecology, labour skills, customs and others), not developed in the EU. These sectors include energyconsuming production (certain types of metal processing, assembling, and, to a lesser degree, shipbuilding, as well as some types of agriculture). In the meantime, labour skills would advance to international levels and steady distribution channels would be established. This scenario is assessed as relatively realistic and moderately positive for the socio-economic development of the oblast. Of all the four scenarios, the scenario of “Macroregional Lead” – although accompanied by some elements of the previous “outsourcing” scheme – has been estimated by the regional authorities to be the most advantageous. 300 This scenario foresees a fairly aggressive expansion of the Kaliningrad economy into European markets. The choice of this scenario will come with the reexamination of the status of the Kaliningrad Oblast in the system of relations of the Baltic region. This change of status can take place only as a result of the establishment and implementation of a new complex of initiatives and projects that would be oriented toward the formation of a new “portfolio of resources”. The Kaliningrad Oblast would need a cluster policy in which the development of clusters occurs on the basis of the traditional production specializations of the oblast. This includes sea transport, certain segments of the food industry (fishing and fish processing), the production of some types of consumer goods (furniture, textiles), retail trade, tourism and the hospitality industry. Alternatively, the oblast may establish and implement large projects to be based on specific activities that are in demand in the macroregional context. On the whole, the most appealing scenario 300

See Alexey Ignatiev / Petr Shopin, p. 17.

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is the one that ensures the development of the Kaliningrad’s competitiveness in the Baltic space. e) The status of the Kaliningrad Oblast as a pilot region The Kaliningrad Oblast increasingly stands out in the whole federal landscape of the Russian Federation; it is a region of high priority and not only due to its SEZ status where large-scale projects are planned. For instance, with the adoption of the Federal Law “On the State Regulation of organization and fulfilling of gambling” No. 244 of December 29, 2006, the Kaliningrad Oblast – along other four Russian subjects – has acquired a status of a casino zone (Article 9 para. 2 of the Law). 301 This may endow the Kaliningrad Oblast with new momentum as a popular tourism destination and offer benefits by means of the creation of jobs, the increase in tax revenue, improved image, upgrades in infrastructure and others. 302 Also, the Kaliningrad Oblast has been nominated as a pilot region (together with other 11 regions) of the federal programme launched on the basis of the Presidential Decree No. 637 “On Voluntary Resettlement of Nationals Who are Abroad to the Russian Federation” which was signed by President Putin on June 22, 2006. 303 In coordination with this decree and other legal documents the government of the Kaliningrad Oblast has devised the “Programme of the Kaliningrad region on assistance in voluntary resettlement of nationals who are abroad”. 304 As can be seen, internally the Kaliningrad Oblast has been among the pilots in several federal programs, along with only a few other regions of the Russian Federation, and it has achieved specific legal statuses – as a SEZ and as a casino zone – under national law. As things stand, the pivotal role of a pilot region has been allotted to the Kaliningrad Oblast first and foremost in the EU-Russia partnership. This idea stems from the mutual consent of experts that the geographic position of the Kaliningrad Oblast and its proximity to foreign markets determines the need for creating an externally-oriented open economy in the region since an external 301 Federal’nyj zakon “O gosudarstvennom regulirovanii dejatel’nosti po organizacii i provedeniju azartnyh igr i o vnesenii izmenenij v nekotorye zakonodatel’nye akty Rossijskoj Federacii” No. 244, 29 dekabrja 2006. 302 See Kristian Nygaard, Kaliningrad and the benefits of gambling, in: Baltic Rim Economies, Issue No. 2, April 30, 2007, p. 21. 303 Ukaz Prezidenta Rossijskoj Federacii No. 637 “O merah po okazaniju sodejstvija dobrovol’nomu pereseleniju v Rossijskuju Federaciju sootechestvennikov, prozhivajuwih za rubezhom”, 22 ijunja 2006. 304 Programma Kaliningradskoj oblasti po okazaniju sodejstvija dobrovol’nomu pereseleniju v Rossijskuju Federaciju sootechestvennikov, prozhivajuwih za rubezhom, soglosovannaja rasporjazheniem Pravitel’stva Rossijskoj Federracii No. 580-p, 10 maja 2007.

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orientation will ensure the stable development of the region. 305 Moreover, the creation of a dynamic and open economy will be possible only under conditions of stable EU-Russia relations, which currently constitutes a major challenge and problem for Russia’s Kaliningrad policy. Specifically, the question of the economic specialization of the oblast should be examined mainly within the framework of the economic partnership between the European Union and Russia. To this end, deeper economic integration of the European Union and Russia would arguably create favourable conditions for the realization of the economic potential of the region and contribute to its economic security, although the current state of this integration still leaves much to be desired. Therefore, a development strategy for the region should be forged in the context of a constructive dialogue between the EU and Russia. In this respect, the expert community has persistently advocated a special agreement between the European Union and Russia to be concluded on conditions of sustainable development of the oblast. This agreement could harmonize the sides’ interests (regional, federal and, international, namely of the EU and countries the Baltic region) and suggest a complex regulation of a strategy for the Kaliningrad Oblast. The aforementioned “Kaliningrad Region Strategy for Socio-Economic Development for a mid-term and long-term perspective” calls for the actors involved, among other things, to determine a basic scenario for the development of relations between the EU and Russia and specify Kaliningrad’s role in this scenario. 306 The oblast has often been named as a potential “region of cooperation” or a “pilot region” (a model) for Russian and EU cooperation, 307 primarily in such fields as the elaboration of the concept of the Common European Economic Space (CEES), 308 energy dialogue, and dialogue in the sphere of transportation, telecommunication and engineering. 309 305

See Evgeny Vinokurov, Ekonomicheskaja specialisacija, p. 310. Strategija socialino-jekonomicheskogo razvitija Kaliningradskoj oblasti kak regiona sotrudnichestva na sredne- i dolgosrochnuju prespektivu, p. 46. 307 At a level of experts, there is no distinction made between the concepts “region of cooperation” and “pilot region”. See Support to transforming the Kaliningrad Oblast into a Pilot Region of Russian-EU cooperation, East West Institute, Kaliningrad, 2003, p. 26. 308 The concept paper of the Common European Economic Space was presented at the Rome EU-Russia Summit in November 2003. The CEES means “an open and integrated market between the EU and Russia, based on the implementation of common or compatible rules and regulations, including compatible administrative practices, as a basis for synergies and economies of scale associated with a higher degree of competition in bigger markets. It shall ultimately cover substantially all sectors of economy”. See Joint Statement, EU-Russia summit, Rome, November 6, 2003, Annex 1. In the course of time and with the adoption of the concept of four Common Spaces as a long-term framework of EU-Russia strategic partnership, the concept of the CEES was further developed into the concept of the Common Economic Space. 309 See Jurij Zverev et al, p. 361. 306

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A group of specialists framed a sophisticated concept of a pilot region whereby the term “pilot” is defined as “meaning new approaches and principles in the region which can be duplicated in other Russian regions”. 310 According to these authors, the Kaliningrad Oblast, due to its geographical position, has exceptional potential to be “the main testing ground for developing and growing economic, political and humanitarian cooperation between Russia and the EU”. 311 The project of transforming the region into a pilot region presupposes its development in accordance with the concepts of the Common European Economic Space and a (potential) special EU-Russia agreement on Kaliningrad. 312 The study contains a comprehensive catalogue of recommendations for the EU and Russia regarding this agreement, the main proposal being the establishment of a free trade zone between the EU and Kaliningrad and hence its acting as a pilot region in the context of the creation of the CEES between the whole of Russia and the EU. It would adapt to EU requirements (standards, regulations, practices) in an accelerated way compared with other Russian regions and Russia as a whole. It is also envisaged in this study that the agreement should include a number of regulations to contribute to faster implementation of the CEES in Kaliningrad. Despite repeated efforts to conceptualize the idea of a pilot region, this has not been yet translated into an official concept. Although a number of official Russian political documents – primarily “Russia’s Mid-Term Strategy towards the EU for the period 2000 –2010” – refer to the oblast as a pilot region, these references sound more like declarations. 313 Such reluctance of the federal government to push forward the idea of a “pilot region” is explained by the fact that this concept – although chiefly economically relevant – is political in nature. 314 It implies “not a ‘Russia alone’ solution” because: it explicitly allows the EU to play to some extent an active role in providing the Russian exclave a promising development perspective. This aspect, however, makes acute the worries of the political elite about losing control over Kaliningrad and putting at stake the territorial integrity of Russia. 315

In contrast to this, the idea of a “region of cooperation” is interpreted as less politically-loaded or as “a pilot region light” 316 version because, among 310

See Support to transforming the Kaliningrad Oblast into a Pilot Region of Russian-EU cooperation, p. 13. 311 Ibid. 312 There has been recently another attempt made by a group of experts who have studied the possibilities of implementing the idea “Kaliningrad – a pilot region” within the Common Economic Space. See Evgeny Vinokurov / Artur Usanov / Peter Lindholm / Alexey Ignatiev, Kaliningradskaja Oblast’ v kontekste sozdanija Obwego Jekonomicheskogo Prostranstva Rossija-ES, East-West Institute Policy Brief. 313 See Jurij Zverev et al, p. 350. 314 See Leonid Karabeshkin / Christian Wellmann, p. 63. 315 Ibid.

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other things, it foresees more a limited involvement of the EU and backs up the status quo advocated by the federal centre with regard to the Kaliningrad Oblast. However, the very idea of the Russian government putting forward the pilot region idea testifies to a significant step away from the traditional logic of territorial sovereignty to a thinking associated with decentralization. 317 As to the EU, it has not reacted to the idea of a pilot region of cooperation at all. 318 The status of a pilot region does not presume any change in the legal (administrative) or political status of the Kaliningrad Oblast in the context of EU-Russia partnership; it only serves to ensure the economic growth and overall modernization of the region. 319 Yet, in spite of the fact that the general recommendation of experts is explicit that the EU-Russia dialogue on Kaliningrad should concentrate more on economic issues rather than political ones, any change in the status of Kaliningrad (it being a pilot region) and any special agreement between the EU and Russia would unquestionably require political will on both sides. An alternative and similar concept, or model, has been put forward by a prominent Russian legal expert in EU-Russia relations, Mark Entin. 320 He proceeds from Kaliningrad’s status dilemma, discussed earlier. This dilemma arises when two possible approaches to the status of the Kaliningrad Oblast are identified; the first approach envisages the Kaliningrad Oblast as a special case and defines its status as an exception to the current legislation, therefore as grounds for the EU to grant the oblast certain preferences. In this model, firstly, the special legal regime (that of the SEZ) would be counterproductive in the long run because it is based on legal benefits secured by the federal authorities and as a result fails to contribute to the region achieving economic competitiveness. Secondly, the European Union is unlikely to modify its internal legislation and create any preferences for the Kaliningrad Oblast. The other approach examines the legal regime of the Kaliningrad Oblast not as an exception but rather as “a catalyst for achieving self-reliance and economic competitiveness as well as establishing the region’s civil society”. 321 Entin suggests that a legal model, “federal legislation plus”, be implemented to accelerate the social and economic development of the Kaliningrad Oblast. He refers particularly to the fact that the federal center has recently elaborated 316

Ibid, p. 60. See Christopher S. Browning, pp. 545 – 81. 318 See Ju. Zverev et al, p. 360. 319 See Natalia Smorodinskaya, Kaliningrad Exclave: Prospects for Transformation into a Pilot Region, p. 13. 320 See Mark Entin, Chapter III. Legal instruments, in: Christer Pursianen and Sergei Medvedev (eds.), pp. 47 – 64. 321 Ibid., p. 47. 317

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a sufficient number of legal instruments capable of improving the freedom of economic and business activities and stimulating the investment climate in the Russian legal space. These instruments include the recent legislation on concession agreements, anti-monopoly legislation, tax legislation, customs legislation, legal regulation of foreign trade, legislation on special economic zones, and others. According to the author, the regional authorities “should implement the latest national legislation on a pilot basis, adapting it creatively to the region’s specifics and taking advantage of all the opportunities they offer”. 322 Simultaneously, the federal center is called upon to begin improving this and other legislation and to transfer some powers and responsibilities to the regions, which will grant them more independence in handling local issues, allocating resources and enacting regional legislation responsive to regional needs but in compliance with the federal legislation. Simultaneously, as Entin emphasizes, the current regime of the SEZ should be preserved and consistently incorporated into the whole legal model. As the methodological basis of the model, he proposes two groups of methods; the first group is based on administrative law (including public law), the second is based on civil law. 323 Also, due to the specific location of the Kaliningrad Oblast, the proposed model would require prior political and / or international guarantees supporting this model. This guarantor could therefore be the European Union, which will not need to grant special preferences to the region but to confirm legal certainty regarding the Kaliningrad Oblast in an international document, signed jointly with Russia. In so doing the parties could launch a model of social and economic development of the region, identify the areas of Kaliningrad economy to be supported by both sides (for instance, hi-tech industries) and provide a programme of technical support to be translated into a cooperation programme for the Kaliningrad Oblast. Entin admits that this document could be shaped in any (binding and non-binding) legal form if agreed on by both sides: an exchange of letters, a political declaration on the level of ministers of foreign affairs or this of a EU-Russia summit, a report by a high-level group, or a protocol to the Partnership and Cooperation Agreement or a section of a new bilateral agreement. Also, the author proposes institutional frameworks for the implementation of this legal model by both sides; this could include, among other things, a special international investment bank for the Kaliningrad Oblast, with the two sides donating to the bank. Overall, the model aims at “establishing in the region a benign economic, legal and administrative environment conducive to attracting investment and doing business”. 324

322 323 324

Ibid., p. 50. Ibid., p. 51. Ibid.

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f) Summary The study carried out in this subchapter has dealt with the complex issue of the “status” of the Kaliningrad Oblast and makes it possible to draw the following conclusions. Firstly, seen from a domestic perspective, the Kaliningrad Oblast enjoys a special legal status, the status of a special economic zone, which is regulated under national legislation of Russia. Its legal basis is provided by the Federal Law On the Special Economic Zone in the Kaliningrad Oblast of 2006, which, importantly, falls outside of the scope of the provisions of the framework of Federal Law “On Special Economic Zones in the Russian Federation” of 2005. At the same time, while granting the region additional legal benefits for carrying out its economic activity and stimulating the external orientation of the Kaliningrad economy, this legal status does not complement or alter the constitutional status of the Kaliningrad Oblast. Secondly, the analysis of the circumstances that accompanied the granting of the SEZ regime status shows that this status is deeply rooted in the political considerations of the federal centre. Similarly, politics haves interfered in the process of designing an overall federal policy towards the Kaliningrad Oblast. Comprising the above Federal Law “On the Special Economic Zone in the Kaliningrad Oblast and the Federal Target Development Programme for Socio-Economic Development of the Kaliningrad region in 2001 –2010”, it fails to provide a coherent, sustainable and pervasive long-term socio-economic strategy for the Kaliningrad Oblast and is trapped in the conventional reasoning pertaining to issues of territorial sovereignty, security, and fears of separatism. However, doing justice to the question, it is important to note that the federal policy, precisely the Federal Target Programme, does recognize – at least declaratively – the necessity of dealing with the issue of Kaliningrad’s development multilaterally, specifically on the level of the EU-Russia partnership. Similar logic is inherent in the concept of the status of “a pilot region” applied to the Kaliningrad Oblast in EU-Russia relations, first officially voiced in Russia’s “Mid-Term Strategy towards the EU for the period 2000 –2010” in 1999. Thirdly, the status of a pilot region does not presuppose any modification of the legal (administrative) or political status of the Kaliningrad Oblast and mostly concerns aspects of economic development and modernization of the region. Yet, this is a politically loaded concept: “any development model has its political preconditions and political implications. Thus, deciding on an economic development model unavoidably implies political decision-making”. 325 This relates first and foremost to the political reservations of the Russian federal government, but also to the European Union; both have demonstrated a lack of political will to making this concept a reality in practice. 325

Leonid Karabeshkin / Christian Wellmann, p. 57.

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Fourthly, the recent developments displayed in this part of the inquiry, such as extensive criticism by experts of the SEZ regime alone, as well as of the core of the federal Kaliningrad policy. The newly adopted “Kaliningrad Region Strategy for Socio-economic Development for mid-term and long-term perspective” and the “federal legislation plus” legal model proposed by Mark Entin are indicative of a more or less similar trend. This trend claims that the special legal regime of the SEZ of the Kaliningrad Oblast, which is mainly based on legal preferences given by the federal government, prevents the oblast from acquiring its own long-term economic competitiveness. Thus, the Kaliningrad regional authorities aspire to re-examine and seek a special status in the Baltic macroregion, solely based on a stable competitive economic profile. Finally, it is commonly agreed that a substantial long-term socioeconomic strategy is needed for the Kaliningrad Oblast, free of any special legal protectionist treatment and of political populist speculations, but based on pragmatic goals. In the absence of a clear concept for the region’s development and a lack of a solid legal foundation determining Kaliningrad’s status, options like being a pilot region risk remain only “surrogate slogan names”. 326 Taking into account that the federal centre has not offered a substantial socio-economic strategy so far, it is hard to expect that the European Union will come up to forge a comprehensive Kaliningrad policy. Rather it is important that a clear strategy should be the product of joint EU-Russia effort, culminating in a special EU-Russia agreement. Again, as has been shown, this is heavily dependent on and may be affected by the overall level and stand of EU-Russia relations. Altogether, the main domains in which the Kaliningrad Oblast is empowered to fulfill its foreign economic policy are: a) the administration of the Special Economic Zone as envisaged in the relevant federal law and b) the conduct of cross-border cooperation and the competences within that domain. The above reflection requires a further thorough analysis of the current standings of the political, legal and institutional relationship between the EU and Russia with a view to mapping the place of Kaliningrad in it and explaining the implications of this relationship for the Kaliningrad Oblast. This will be done in Chapter 3.

326

Vadim Smirnov, Where is the “Pilot Region” heading?, p. 2.

III. Overview of EU-Russia relations and their implications for Kaliningrad 1. The dynamics of the development of EU-Russia relations a) The formation of EU-Russia cooperation The current legal foundation of European Union-Russia relations is a bilateral international agreement, the “Partnership and Cooperation Agreement”. 1 It was signed on July 24, 1994, in Corfu, Greece, and came into force on December 1, 1997. 2 The PCA regulates economic, commercial and cultural EU-Russia relations and establishes the institutional structure of their political cooperation. It is a framework agreement; its provisions are complemented by a number of sectoral agreements such as the “Agreement between the European Community and the Government of the Russian Federation on trade in certain steel products”, 3 the “Agreement between the European Community and the Russian Federation 1 The EU and the Russian Federation are also parties to multilateral international agreements, such as, for instance, the Agreement Establishing an International Science and Technology Center signed on November 27, 1992 in Moscow by the European Atomic Energy Community, European Economic Community, the United States of America, Japan and the Russian Federation. See Agreement Establishing an International Science and Technology Center, OJ L 409/3 (1992). 2 Council and Commission Decision on the conclusion of a Partnership and Cooperation Agreement between the EC and their Member States, of the one part, and the Russian Federation, of the other part, OJ L 327/1 (1997). 3 The first Steel Agreement was concluded by the European Coal and Steel Community and Russia (ECSC) on November 14, 1997, it was then renewed on July 9, 2002 and amended by Council Regulation 1386/2004. The last Steel Agreement was signed on November 3, 2005. After the ECSC expired on July 23, 2002 the EC took all its rights and obligations. Agreement between the European Coal and Steel Community and the Government of the Russian Federation on trade in certain steel products of November 14, 1997, OJ L 300/52 (1997); Agreement between the European Coal and Steel Community and the Government of the Russian Federation on trade in certain steel products of July 9, 2002, OJ L 195/55 (2002); Agreement between the European Coal and Steel Community and the Government of the Russian Federation in certain steel products amended by Council Regulation 1386/2004/EC of July 26, 2004 on administering certain restrictions on imports of certain steel products from the Russian Federation, OJ L 255/1 (2004); Agreement between the European Coal and Steel Community and the Russian Federation on trade in certain steel products, OJ 3003/39 (2005).

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on trade in textile products of 1998”, 4 and the “Agreement on Cooperation in Science and Technology between the European Community and the Government of the Russian Federation”. 5 The initial ten-year period of the PCA ended in 2007 and this created the so-called “2007 factor”. Since the PCA was agreed upon, both Russia and the EU have experienced different internal changes; their relationship has undergone a transformation into a strategic partnership. Whereas such a partnership has been found to be de facto beyond the framework of the PCA, a number of PCA provisions either went out of date or remain unused. Russian and EU scholars and policy-makers have proposed different variants for elaborating a new legal framework of the relationship. 6 Whilst Article 107 of the PCA envisages it being prolonged automatically on an annual basis, both sides have agreed to work on a new agreement for a strategic partnership to replace the PCA and they are currently negotiating it. The previous decade of active collaboration between the parties has not, however, automatically led to an easy negotiation process. It is paradoxical that in spite of growing interdependence and achievements within the PCA framework and beyond, according to a striking number of commentators the two parties are in a state of “tiredness if not mutual irritation”; 7 their relations suffer from “mutual distrust”, 8 “disappointment and discord” 9 and on the whole are recognized as “hardly satisfying” 10 and a “reason to be pessimistic”. 11 However, the negative tones of the academic discourse does not necessarily refute the fact 4 Agreement between the European Community and the Russian Federation on trade in textile products, OJ L 222/2 (1998). 5 The agreement was signed on November 16, 2000, and renewed in November 2003. See Agreement Establishing an International Science and Technology Center, OJ L 409/3 (1992), and Council Decision concerning the conclusion of an Agreement aimed at renewing the Agreement on cooperation in science and technology between the European Community and the Government of the Russian Federation, OJ L 299/20 (2003). 6 See, for instance, Michael Emerson (ed.), The Elephant and the Bear Try Again. Options for a New Agreement Between the EU and Russia, Center for European Policy Studies, Brussels, 2006; Koncepcija Modernizacii Soglashenija o Partnerstve i Sotrudnichestve mezhdu Rossiej i ES: iniciativy / Komitet “Rossija v ob#edinennoj Evrope”, 2005; Sabine Fischer, Die EU und Russland. Konflikte und Potentiale einer schwierigen Partnerschaft, SWP-Studie, Berlin, Dezember 2006. 7 Timofej Bordachjov, Na Puti k Strategicheskomu Sojuzu, in: Rossija v Global’noj Politike, №1, janvar’-fevral’ 2006, p. 1. 8 Fraser Cameron / Jarek M. Domansky, Russian Foreign Policy with Special Reference to its Western Neighbours, EPC Issue Paper, European Policy Center, No. 37, 13 July 2005, p. 16. 9 Katinka Barysch, The EU and Russia: From Principle to Pragmatism?, Policy Brief, Center for European Reform, London, November 2006, p. 1. 10 Vladislav Inozemcev / Ekaterina Kuznecova, Rossija: Pochemu Dorozhnye Karty ne Vedut v Evropu?, in: Sovremennaja Evropa, No. 4, 2005, p. 76.

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that the relationship of the EU and Russia has considerably evolved particularly as, in Katynka Barysch’s view, “EU-Russia relations are difficult because they are multi-faceted and complex” and as long as “there is so much at stake, there is much scope for disagreement”. 12 Much academic and political discussion on the EU-Russia relationship begins with a determination of the common interests which constitute the grounds for a strategic partnership. 13 Up to a point, the factors of growing interdependence and therefore of common interests are economic, geopolitical and political. First of all, Russia and the European Union are important trade partners. Russia is the EU’s third most important trading partner after the USA and China. Thus, from 2000 until 2008, the EU trade in goods with Russia increased significantly. 14 Exports rose from 22 billion euros to 105 billion euros and imports increased from 63 billion to 173 billion euros. Russia is a large market for EU goods and services. As such, the EU27 export of services amounted to 22 billion euros and its imports constituted 14 billion euros, which made a surplus of 8 billion euros in trade in services with Russia. While EU exports are dominated by manufactured goods, energy constitutes two-thirds of its imports. So far, Russia is a pivotal EU energy supplier. While it takes the lead among EU gas suppliers, it occupies second place in the list of EU oil providers. The EU, in turn, accounts for more than half of Russia’s external trade and 70% of foreign investment in the Russian economy. Thus, EU27 Foreign Direct Investment doubled in the period of 2006 to 2008. 15 Furthermore, Russia is the largest neighbour of the EU. The EU enlargement of 2004 extended the EU-Russia border, which is now 2200 kilometres. 16 The common border calls for efforts to build efficient transborder cooperation. Finally, the EU and Russia represent the two major powers in Europe with ambitions for global actorness and contributions to stability and security in Europe. Russia is a principal and influential actor in the UN Security Council, in the common European neighbourhood and Central Asia. The EU and Russia are allies in combating the new threats to security arising from terrorism, crime, pollution, illegal migration and trafficking. A catalogue of mutual interests and involvements such as historical and cultural interconnections would go far beyond these three factors; they nevertheless seem to be fundamental objective determinants of the relationship. 11

Dmitri Trenin, Russia, the EU and the Common Neighbourhood, Essay, Centre for European Reform, London, September 2005, p. 8. 12 Katinka Barysch, The EU and Russia. Strategic Partners or Squabbling Neighbours? Centre for European Reform, London, 2004, p. 4. 13 Ibid., p. 1. 14 The Delegation of the European Union. EU and Russia. Facts and figures. 15 Ibid. 16 See Thomas Frellesen, The European Neighbourhood Policy and EU-Russia Relations after Enlargement.

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It stands to reason that EU-Russia relations did not appear in an empty space. Political scientists begin the historical sequence of the narrative on the EU-Russia relationship with the contractual cooperation between the EC and the Soviet Union. Hence, the starting point of this story goes back to June 25, 1988, when a “Joint Declaration on the establishment of official relations between the European Economic Community and Council for Mutual Economic Assistance” was signed. 17 On December 18, 1989, the Soviet Union and the EEC and EAEC established a legal bilateral basis for a relationship by signing the “Agreement on Trade and Commercial and Economic Cooperation”, which came into force on April 1, 1990. 18 The treaty was made to adjust the economic bonds between the Soviet Union and the European Community, but its regulations were not fully implemented due to the dissolution of the Soviet Union in 1991. In July, 1991, the European Community launched the TACIS programme, which aimed to provide financial support to the Soviet Union; after its collapse the Union provided technical assistance to support reforms in the former Soviet socialist republics (except for the Baltic States) and Mongolia. 19 In 1991, Russia was recognized by the European Community and its Member States as a successor state to the Soviet Union, 20 but the two parties made a decision to draft a new agreement in compliance with their intentions to start a new quality relationship. One of the arguments here referred to Russia’s transformation from a state trading country into a “country with an economy in transition” progressing “towards a market economy”, as seen in the Preamble of the PCA, and the cooperation within the new agreement was supposed to contribute to this progress. 21 The negotiations started in 1992 and resulted in the conclusion of the Partnership and Cooperation Agreement in 1994. 17

Council Decision of June 22, 1988 on the conclusion of the Joint Declaration on the establishment of official relations between the European Community and the Council for Mutual Economic Assistance (88/345/EEC), OJ L 157/34 (1988). 18 Council Decision 90/116/EEC of February 26, 1990 on the conclusion of an Agreement between the EEC, Euratom, and the USSR, OJ L 68/1 (1990). 19 Council Regulation (EEC, Euratom) No. 2157/91 of July 15, 1991 concerning the provision of technical assistance to economic reform and recovery in the Union of Soviet Socialist Republics, OJ L 201/2 (1991). Until 2007, TACIS had been financing implementation of reforms in 12 countries of Eastern Europe and Central Asia. Since 2003 Mongolia had been covered by ALA programme. The last Council Regulation on the TACIS covered the period of 2000 – 2006. See Council Regulation (EC, Euratom) No. 99/2000 of December 29, 1999 concerning the provision of assistance to the partner States in eastern Europe and Central Asia, OJ L 12/1 (2000). The provisions on the assistance through the TACIS programme were likewise incorporated into the PCA (Articles 86 – 89). In 2007, TACIS merged into the European Neighbourhood and Partnership Instrument. See COM (2003) 393; COM (2004) 628; Regulation No. 1638/2006 of the European Parliament and of the Council laying down general provisions establishing a new European Neighbourhood and Partnership Instrument, OJ L 310/1 (2006). 20 Guidelines on the recognition of new States in Eastern Europe and the Soviet Union, Bull. EC 12 – 1991, Points 1.4.5 and 1.4.6.

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The PCA was deemed a logical continuation of the Agreement of 1989, which is reflected in the preamble and Article 112. 22 Thus, although the PCA covers three spheres of relationship, particularly political, economic and cultural, the economic dimension prevails as the majority of provisions are dedicated to trade and commercial mechanisms of collaboration. To this end, according to Article 1 of the PCA, one of the far-reaching objectives of the partnership is the generation of a free trade area between the Community and Russia. Meanwhile, both parties agreed and ambitiously envisaged in Article 55 that “an important condition for strengthening the economic links between Russia and the Community is the approximation of legislation”, and therefore Russia was “to endeavour to ensure that its legislation will be gradually made compatible with that of the Community”. The PCA is designed on the model of the EU’s Europe Agreements and is not typical for Russia. On the one hand, the PCA suited the EU as it could ensure that Russia would follow the Western model of democratization and marketization; on the other hand, it could become instrumental for Russia in winning access to Western European markets. Under the PCA (Article 5) Russia kept the status of Most Favoured Nation that had formerly been allocated to the Soviet Union, and hence got the right for the lowest available EU tariff on its goods. Also, as was mentioned above, the PCA establishes a framework for political dialogue between the EC and Russia and on the whole is considered to be unique because Russia does not have such a complex agreement with any other developed state, such as the USA or Japan. 23 According to Yuri Borko, the cooperation between the EU and Russia in the period from 1992 until August 1998 could be rendered graphically through an ascending line. 24 The time when the EU-Russia relations were initiated has been artistically defined by some researchers as “the story of shared affection” 25 or the “romantic period”. 26 At the same time that the EU held high expectations for 21 See Paul’ Kalinichenko / Sergej Kashkin, Sistema Soglashenij Mezhdu Rossiej i Evropejskim Sojuzom, in: Sergej Kashkin (ed.), Rossija i Evropejskij Sojuz: Dokumenty i Materialy, Moskva, 2003, p. 22. 22 Article 112 of the PCA particularly stipulates that the PCA is to replace the Agreement of the 1989. See also Kalinichenko / Kashkin, p. 22. 23 See Jurij Borko, Otnoshenija Rossii s Evropejskim Sojuzom: Tekuwie Problemy i Dal’nie Perspektivy, in: Jurij Borko and Ol’ga Butorina (eds.), Evropejskij Sojuz na Poroge XXI veka. Vybor Strategii Veka, Moskva, 2001, p. 366. 24 Ibid., p. 367. 25 Igor Leshoukov, Beyond satisfaction: Russia’s Perspectives on European Integration, ZEI Discussian Papers, C 26, 1998, p. 4. 26 Hiski Haukkala, The Ambiguous Partnership: The European Union and Russia in the Northern Dimension, Northern Research Forum, Iceland, 22. 01. 2001. In this account, Igor Leshoukov argues that Russia’s perception of the European integration reflects the stand of the country’s relations with the West. The improvements in the relations contributed to Russia’s undertaking of a more pragmatic assessment of European

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Russia’s democratic development, Russian politicians and mass media expressed a totally positive attitude towards European integration and EU politics. 27 In this respect Leshoukov, among others, mentions two facts that illustrate such phenomena in Russian society. Firstly, he emphasises that the State Duma, the Lower Chamber of the Russian Parliament, ratified the PCA remarkably easily, and, secondly, he refers to bold statements by President Yeltsin and then-Prime Minister Viktor Chernomyrdin that Russia might join the EU one day, which were expressed in the autumn of 1996 and in July 1997, respectively. 28 Apart from such rhetoric, the pace of trade development and the volume of European investments in the Russian economy proliferated considerably. The EU supported Russia’s accession into the Council of Europe in February 1996. On the whole Russia was assigned a significant role in the Eastern policy of the European Union. 29 Accordingly, the European Commission issued a Communication to the Council, “The European Union and Russia: The Future Relationship”, in which Russia and the EU were defined as the “two major European powers”. 30 Furthermore, the Council of the EU adopted the “European Union’s Strategy for Future EU-Russia Relations” on November 20, 1995, which was confirmed by the European Council in Madrid on December 15 – 16, 1995. The Council of the European Union subsequently adopted an action plan for Russia which was based on the aforementioned Strategy and contained measures for its implementation. 31 The aim of the overall EU strategy towards Russia was to foster stabilization in Russia, to help it to integrate with the EU and avoid creating dividing lines in Europe. The EU sought to assist Russia in implementing democratic and economic reforms, in strengthening respect for human rights and contributing to sustaining peace, stability and security in Europe. The dynamics in the relationship increased with the PCA coming into force and with the creation of the institutions of cooperation. The achievements of closer cooperation did not, however, prevent problems, contradictions and mutual disappointments. The EU expressed its concerns about integration which had been lacking in the period of ideological and political-military confrontation between the West and East. See Igor Leshoukov, p. 20. It was typical of the Soviet Union in this period to consider the EC as an economic organization under the US influence. See Graham Timmins, Coping with the New Neighbours: The Evolution of European Union Policy, in: Perspectives on European Politics and Society, Vol. 5, No. 2, 2004, p. 359. 27 It is remarkable that Russia differentiated its outlooks for relations with the European Union and NATO. While disapproving the NATO enlargement Russia was neutral if not positive about the EU and its perspectives for the Eastern enlargement. 28 See Igor Leshoukov, p. 4. 29 See Matthias Niedobitek, Die Europäische Union und Russland – zum Stand der Beziehungen, in: Europarecht, Heft 2, 1997, p. 109. 30 COM (95) 223, Point 1.4. 31 European Union action plan for Russia, Bull. EU 5 –1996, Point 2.3.1.

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political instability in Russia that could presumably hinder economic reforms and undermine its democratic institutions. 32 A number of different circumstances led to open crises. The political partnership was threatened by a number of events. The EU protested against Russia beginning military actions in Chechnya in the spring of 1995 and in the first half of 2000. 33 While the political dialogue of the EU and Russia was believed to dwell upon basic values and principles governing the internal and external policies of the two parties, the crisis caused by the operation in Chechnya revealed a gap in them. 34 In particular, the EU criticized Russia for the incompatibility of the methods applied in its struggle against terrorism with the principles of democracy, the rule of law and human rights. Although the NATO enlargement in 1997, bombardments of Yugoslavia in 1999 and Kosovo crisis aroused Russia’s heavy criticism of mainly the NATO and the USA without explicit reference to the EU, these proceedings highlighted general controversies over the problems of European security between Russia and Western Europe. The crisis in the economic relations of the EU and Russia dates back to 1998 and covers trade, investment and financial sectors. The trade turnover and volume of European investments decreased considerably, and the financial sector suffered after the Russian government defaulted on internal and external debts, which led to the devaluation of the ruble and inflation. Such negative economic outcomes were accounted for mainly by structural factors such as economic deformations and disproportions, the incomplete process of forming the basis for a market economy in Russia, a large-scale shadow economy, corruption, crime, social and political instability and others. 35 b) The EU and Russia in the context of the EU Eastern enlargement The Eastern EU enlargement prospect provided an impulse that refreshed the relationship between the EU and Russia. In spite of the place that the EU had assigned Russia in its Eastern policy, in the 1990s, as Dov Lynch asserts, the EU still “remained distant from Russia, both in policy and geographical terms”. 36 In 32

European Parliament Resolution on economic and trade relations between the European Union and Russia, November 30, 1995, OJ C 339/45, B (1995). 33 It is mainly in this context that the ratification of the PCA was delayed until late 1997. See Jurij Borko, Otnoshenija Rossii s Evropejskim Sojuzom, p. 366. The EU reacted to the events in Chechnya with a number of documents. For instance, the European Council adopted a Declaration on Chechnya on 10 December 1999 in Helsinki, in which it condemned the military actions of Russia and called for efforts to review the relations with Russia and to put financial restrictions within the TACIS program. See Helsinki European Council, Bull. EU 12 – 1999, Point I.18.55. 34 See Jurij Borko, Otnoshenija Rossii s Evropejskim Sojuzom, p. 369. 35 Ibid., p. 371.

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the meantime, Russia was likewise thought to underestimate the potential aftermath of the future EU enlargement eastwards. 37 In the course of these years the EU, as well as Russia, underwent certain internal transformations. 38 The Treaty on European Union took effect on November 1, 1993, and the EU was established, adding a foreign policy dimension to European integration. 39 The TEU instituted the completion of the Economic and Monetary Union envisaging introduction of a single European currency (Title VII, Art. 98 – 124 EC Treaty). EU external policy was mostly dedicated to pre-accession preparations of the Central and Eastern European countries, the membership accession criteria of which were confirmed at the European Council summit in Copenhagen in June 1993, which also required internal reforms in the EU institutional framework and decision-making processes. The Russian government, in due course, was preoccupied with the implementation of internal economic and political reforms and with endeavours to redefine its national identity and national interests. As a corollary, EU-Russia relations did not constitute top priority on their agendas until the prospective enlargement of 2004 placed them on each other’s “doorstep”. 40 In 1999, both Russia and the EU issued unilateral strategies for the development of their relations. The EU adopted a “Common Strategy of the European Union on Russia” at the Cologne European Council on June 4, 1999. 41 It was followed by “Russia’s Mid-term Strategy towards the EU for the period of 2000 – 2010”, which was presented by then-Prime Minister Putin at the Helsinki Summit on October 22, 1999, one of the aims of which was to “reflect the main orientation and objectives” of the EU Common Strategy. The adoption of these strategies was assessed as a sign that both sides recognized and comprehended the urgency and significance of meeting the challenge of the enlargement. 42 The EU and Russia formulated their vision of the relationship as a “strategic part36 Dov Lynch, From “Frontier” Politics to “Border” Policies between the EU and Russia, in: Oksana Antonenko and Kathryn Pinnick, (eds.), p. 18. 37 See Dmitri Trenin, Russia, the EU and the Common Neighbourhood, p. 1. 38 See Graham Timmins, pp. 358 – 359. 39 See Treaty on European Union, OJ L C 191/1 (1992), consolidated text OJ C 321E (2006). 40 Dov Lynch, p. 18. 41 Common Strategy 1999/414/CFSP of the European Union of June 4, 1999 on Russia, OJ L 157/1 (1999). 42 The Common Strategy of the EU was initiated by the German government due to its geopolitical and economic interests in Eastern Europe and concerns about the stand of EU-Russia relations and it represents a first “common strategy” of the EU as a CFSP instrument introduced by the Amsterdam Treaty, Title V (provisions on adoption of common strategies are located in Art. 12 TEU). Therefore, it was suggestive of recognition of the importance ascribed to relations with Russia, and a need to upgrade the EU-Russia relations as well as to increase the efficiency of the EU foreign policy. See Graham Timmins, p. 363. Russia’s Middle-Term Strategy in its turn appeared to be the first attempt to formulate its policy towards the EU. See Jackie Gower, EU-Russian

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nership” and sketched out the scope of policy areas within which it would be essential to minimise the risks and seize the chances arising from the enlargement. The strategies were to be implemented within the framework of the PCA and through the main policy instrument, the TACIS programme. The principle objectives of the EU’s Strategy comprised democratic development of Russia consisting in “consolidation of democracy, the rule of law and public institutions”, Russia’s integration into common European and economic and social space, and collaboration in strengthening stability and security in Europe. The Strategy was issued for an initial period of four years; it was extended until June 2004 by the European Council in June 2003, 43 and when the time ran out it was neither prolonged nor replaced. 44 Russia’s Middle Term Strategy defined the primary objective of Russia as: insuring national interests and enhancing the role and image of Russia in Europe and the world through establishing the reliable pan-European system of collective security, and at mobilizing the economic potential and managerial experience of the European Union to promote the development of a socially-oriented market economy of Russia based on the fair competition principles and further construction of a democratic rule-of-law State.

Russia also sought to develop and strengthen a strategic partnership of the EU and Russia in European and international affairs and through joint efforts to prevent and settle “local conflicts in Europe with an emphasis on the supremacy of international law and non-use of force”. Moreover, the Strategy “provides for the construction of a united Europe without dividing lines and the interrelated and balanced strengthening of the positions of Russia and the EU within the international community of the 21 st century”. The Mid-term Strategy was the first document to explicitly manifest the no-accession aspirations of Russia. 45 Instead, Russia underlined its status as a EuroAsian country and the largest CIS state, its independence in shaping its internal and external policies and keeping its positions at international organizations. Summing up, the two dimensions of the strategic partnership as seen by Russia Relations and the Eastern Enlargement: Integration or Isolation?, in: Perspectives on European Politics and Society, 1:1, 2001, p. 87. 43 Common Strategy 2003/471/CFSP of the European Council of June 20, 2003 amending Common Strategy 1999/414/CFSP on Russia in order to extend the period of its application, OJ L 157/68 (2003). 44 Meanwhile, the European Union launched the Northern Dimension Initiative, COM (1998) 589, within its external and cross-border policies. The objective of the NDI is defined as promotion of political, economic, environmental and social cooperation in the North of Europe between the EU, Norway, Iceland and Russia. However, the simultaneous issuance of the Common Strategy and the NDI was found to reveal a lack of cohesion on foreign policy of the EU. See, for instance, Graham Timmins, p. 364. 45 See Graham Timmins, p. 365.

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included creating a pan-European security system, and intensifying economic relations with the EU while at the same time safeguarding Russia’s legitimate interests. In addition, the Strategy included an extensive list of political and economic measures to implement the partnership. It is noteworthy that one of the items of the programme related to the upcoming EU enlargement, and hence to the Russian interests to be secured in the expanded EU, was the interests of the Kaliningrad Oblast as a subject of the Russian Federation. The unilateral strategies were heavily criticized for turning into another set of bureaucratic documents: they contained unrealistic expectations by both sides of the extent to which the other side could change its demands and preconditions and hence in time the strategies were found unsuccessful. 46 Nonetheless, their common nature was embedded in the fact that both sides recognized the importance of upgrading their relationship and applying a new status to it and finding a mode in which Russia could be part of the process of European integration. Russia’s Mid-term Strategy indicated that it did not object to EU enlargement in general, but it reiterated Russia’s insistence, as the title of section five claims, on “securing the Russian interests in an expanded European Union”. The list of the main concerns of Russia in terms of possible negative effects of the enlargement referred mostly to the economic sector. 47 The document also touched on the issues of “the rights of the Russian-speaking population in the Baltic states”, visa and border regimes, and “the interests of the Kaliningrad region as an entity of the Russian Federation and of the territorial integrity of Russia”. On the whole, the implications for Russia of the EU Eastern expansion were often placed in the context of Russia-Baltic relations when the three Baltic states joined the EU in 2004. The main problem concerned Russian-speaking minorities, which had complicated bilateral relations considerably. 48 In light of this, Russia worried that the tense relations with the Baltic states as well as with some other new EU members such as Poland could worsen overall EU-Russia relations. The other issue concerned borders in general and the Schengen regime 46 See, for instance, Oksana Antonenko / Kathryn Pinnick, The Enlarged EU and Russia: From Converging Interests to a Common Agenda, in: Oksana Antonenko and Kathryn Pinnick (eds.), p. 5; Timofei Bordachev, Russia’s European Problem: Eastward Enlargement of the EU and Moscow’s Policy, 1993 – 2003, in: Oksana Antonenko / Kathryn Pinnick, (eds.), p. 55. 47 The so called “list of Russian Concerns” over enlargement transmitted to the President of the European Commission Romano Prodi on August 25, 1999 comprised 13 points dedicated to economic relations, and 2 points connected with questions of external policy and security including the issue of the Kaliningrad Oblast. See Uniting Europe, Brussels, 1999, No. 66, p. 3. 48 See Timofei Bordachev, Europe’s Russia Problem: Immediate Concerns and LongTerm Prerequisites, in: Iris Kempe (ed.), Prospects and Risks beyond EU-EnlargementEastern Europe: Challenges of a Pan-European Policy, Leske und Budrich: Opladen, 2003, p. 97.

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in particular. The border with more developed neighbouring countries benefiting from the EU pre-accession structural assistance entailed wider socio-economic disparities and complicated cross-border trade for the North-Western regions of Russia. The introduction of border and visa regimes was closely linked to the fact that the Treaty of Amsterdam integrated the Schengen aquis into the Union’s legal system and this obliged all the EU applicant countries to tighten their border controls. 49 Jackie Gower found it paradoxical that while the new EU members had to become geographically (“physically”) closer to Russia, the innovation resulting from the Amsterdam Treaty tended to “psychologically increase Russia’s sense of being apart from the rest of Europe”. 50 In addition, both sides obtained common neighbours stretching to Ukraine, Belarus, Moldova, and the South Caucasus, some of them burdened with political and economic instability that called for seeking common effective ways to deal with it. 51 In the meantime, controversies over Belarus or frozen conflicts were likely to impact EU-Russia relations negatively. For the EU it meant that it should switch to fresh thinking on a new policy towards the states on its periphery. Besides, one of the impacts of the enlargement for the EU were new interests and priorities brought with by the new members in a zone that was traditionally regarded as a zone of Russian national interests and hence the enlargement implied a certain EU-Russia competition in the area. Yet, while the pre-enlargement policy raised certain concerns, demands and fears for both sides, an optimistic estimation of the enlargement consequences also had a right to exist. Thus, in Bordachev’s opinion, reinforcement of crossborder cooperation with the Baltic States could help to improve bilateral relationships. The problems of the asymmetrical development of border regions signalled that this issue should be addressed by both sides, and on the whole, the imperatives of the enlargement were seen as potentially inspiring Russia to further internal developments. 52 What is more, the EU could positively influence the situation by providing better protection for the Russian-speaking minority in the Baltic states. Jackie Gower pointed out that the enlargement implied advantages for Russia seen from the angle of its foreign policy goals such as formation of a multi-polar world order. 53 The supporting argument here was that the enlargement would endow the EU with greater political weight and would enable it to deliver a counter-balance to US hegemony. The approaching EU Eastern expansion, the growing role of the EU as a political and global power, as well as, to a certain degree, the worsening of Russian49 Protocol integrating the Schengen aquis into the framework of the European Union of Treaty of Amsterdam. OJ C 340 (1997). 50 Jackie Gower, p. 83. 51 See Dmitri Trenin, Russia, the EU and the Common Neighbourhood, p. 2. 52 See Timofei Bordachev, Europe’s Russia Problem, p. 97. 53 See Jackie Gower, p. 78.

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American relations caused by the NATO intervention into Kosovo and Russia’s temporary suspension of its commitments in the NATO-Russia Permanent Joint Council at the threshold of the twenty-first century encouraged Russia to keep up a more open dialogue with the European Union and offered new momentum in EU-Russia cooperation after May 2000. This occurrence accompanied another significant event, President Vladimir Putin’s coming to power in March 2000 and a transformation in Russia’s foreign policy, which was revealed in the introduction of the new “Foreign Policy Concept of the Russian Federation” confirmed by President Putin on June 28, 2000. 54 Unlike the “Russia’s Foreign Policy Concept” of 1993, which placed the EU in the fifth position in its priority catalogue, 55 the Concept of 2000 ranked the European Union second after the CIS countries in its list of regional priorities. It particularly highlighted “the key importance” of the relations with the EU and defined the EU “as one of political and economic partners” with whom it would “strive to develop an intensive, stable and long-term cooperation devoid of expediency fluctuations”. Similarly, this prioritization was confirmed by the “Survey of the Russian Federation Foreign Policy” of 2007. 56 Subsequently, the Concept of Foreign Policy was modernized and presented in July 2008. 57 In that, the European Union was defined as a major trade, economic and foreign-policy partner with whom Russia strives to develop mutually beneficial relationships based on equality and strengthen the interaction mechanisms, with one of them being the establishment of the EU-Russia four Common Spaces. This is also laid down in the “Strategy for National Security of the Russian Federation until 2020” of 2009. 58 The latest programme paper on Russia’s foreign policy, drafted by the Ministry of Foreign Affairs as a response to Dmitry Medvedev’s call for the country’s overall modernization, defines the EU as the major modernization partner. 59 The EU-Russia summit in Moscow in May 2000 logically sensed, as Timmins notes, “the new climate of a ‘constructive’ dialogue in EU-Russia relations”. 60 The Joint statement emphatically spoke of “reinforced political dialogue”, welcomed “the intensification” of the cooperation and recognized the importance and 54 Koncepcija vneshnej politiki Rossijskoj Federacii 2000, in: Diplomaticheskij Vestnik, Moskva, avgust 2000. 55 Koncepcija vneshnej politiki Rossijskoj Federacii 1993, in: Diplomaticheskij Vestnik, Moskva, janvar’-fevral’ 1993. 56 A Survey of Russian Federation Foreign Policy, Ministry of Foreign Affairs of the Russian Federation, 2006. 57 Koncepcija vneshnej politiki Rossijskoj Federacii 2008, in: Rossijskaja gazeta, No. 133, 2008. 58 Strategija nacional’noj bezopasnosti Rossijskoj Federacii do 2020, in: Rossijskaja gazeta, 10 maja 2009. 59 Programma jeffektivnogo ispol’zovanija na sistemnoj osnove vneshpoliticheskih faktorov v celjah dolgosrochnogo razvitija Rossijskoj Federacii, maj 2010. 60 Graham Timmins, p. 366.

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potential for cooperation between the EU and Russia on the basis of the PCA and the two Strategies. 61 At the same time, Russia underlined its volition to: remain a constructive, reliable and responsible partner in working towards a new mulipolar system of international relations, based on strict implementation of the international law.

The Moscow summit was followed by a number of other summits that launched new initiatives. To name some, at the EU Russia Summit on October 30, 2000 in Paris the two sides agreed to establish an energy dialogue on a regular basis, aiming at defining a EU-Russia partnership, which was to: provide an opportunity to raise all the questions of common interest relating to the sector, including the introduction of cooperation on energy saving, rationalisation of production and transport infrastructures, European investment possibilities, and relations between producer and consumer countries. 62

The next summit took place in May 2001 in Moscow and its outcomes were a proposal to establish a joint high level group on the basis of Article 93 of the PCA in order to “elaborate the concept of a common economic space” and recognition of the importance of implementing the “Joint Action Plan on Combating Organized Crime”. 63 In addition to the fact that the participants of the EU-Russia summit in Brussels in October 2001 reiterated their intention to further develop the concept of a Common European Economic Area, which had never appeared before either in the PCA or in the unilateral Strategies, and to further pursue the energy dialogue, they demonstrated a cooperative spirit in a joint condemnation of the terrorist attack in New York in September 2001 and called for enhancing the political and security dialogue. 64 The latter launched a new mechanism for dealing with issues related to security, a monthly meeting of the EU Political and Security Committee Troika with the Russian 61

Joint Statement, EU-Russia Summit, Moscow, May 29, 2000. Joint Statement, EU-Russia Summit, Paris, October 30, 2000. 63 The Joint Action Plan on Combating Organized Crime was endorsed at the Third Meeting of the Cooperation Council between the EU and Russia on 10 April 2000 in Luxembourg. See the Joint Action Plan on Combating Organized Crime, PRES/00/102. Joint Statement, EU-Russia Summit, Moscow, May 17, 2001. The European Council adopted the EU Action Plan on common action for Russia on combating organized crime in April 2000. It aims at developing cooperation between the EU and its Member States and Russia in the fight against organized crime. See European Union Action Plan on Common Action for the Russian Federation on Combating Organized Crime, OJ C 106/5 (2000). 64 Respectively, Annex 2, EU-Russia High-Level Group charged with elaborating the concept of a Common European Economic Area; Annex 3, Future direction of the energy dialogue between the European Union and the Russian Federation; Annex 1, Statement on international terrorism; and Annex 4, Joint Declaration on stepping up dialogue and cooperation on political and security matters. Joint Statement, EU-Russia Summit, Brussels, October 3, 2001. 62

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Ambassador to the EU, that was presupposed to elaborate a tool “for possible Russian participation in civilian and military crisis-management operations ... as progress [is] made in European Security and Defence Policy”. In November 2002, the EU granted Russia the status of market economy, from which Russian exporters were expected to benefit in terms of anti-dumping proceedings. 65 One of the important milestones in the EU-Russian cooperation and “the high point in the optimistic rhetoric” 66 was the Russian government’s proposal, made at the Summit in St. Petersburg in May 2003, to establish four “Common Spaces” to reinforce cooperation. 67 The four Common Spaces included a common economic space, a common space of freedom, security and justice, a common space on external security and a common space on research, education and culture. The concept of a common European economic space was formulated and presented at the next EU-Russia Summit in Rome on November 6, 2003. 68 On the one hand, the concept of the four Common Spaces was designed as a long-term concept within the PCA framework to give a more strategic impetus to the relationship. On the other hand, for the Russian Federation it appeared to be an alternative to its participation in the European Neighbourhood Policy that was established by the European Union as an external policy towards its neighbouring countries that have no accession prospects. 69 Initially Russia was included on the list of participating countries and although it was accorded a recognized special role in the European neighbourhood, it strived, analysts claim, to stress its special status as a strategic partner rather than be treated along with North African and Middle Eastern states. 70 Sergei Chernyshev assessed Russia’s agreement to a package of road maps for implementing the four Common Spaces as a “diplomatic dénouement” of the whole neighbourhood issue. 71 The EU neighbourhood policy towards Russia was eventually formulated as further developing a strategic partnership with Russia “through the creation of four common spaces, as defined at the St. Petersburg summit in May 2003”. 72 The 65

EU-Russia Summit Brussels, November 11, 200, Press Release. Graham Timmins, p. 366. 67 Joint Statement, EU-Russia Summit, St. Petersburg, May 31, 2003. 68 The Common Economic European Space-Concept Paper. Joint Statement, Annex 1, EU-Russia Summit, Rome, November 6, 2003. 69 The principal documents on which the ENP is based are: COM (2003) 104; COM (2004) 373; COM (2006) 726; COM (2007) 774 and COM (2008) 823. 70 See, for instance, Timofei Bordachev, Russia’s European Problem, p. 51, Anne de Tinguy, Konkurrenten statt Partner: Die russische Sicht auf die EU und die Nachbarschaftspolitik, in: Martin Koopmann / Christian Lequesne, (eds.), Partner oder Beitrittskandidaten? Die Nachbarschaftspolitik der Europäischen Union auf dem Prüfstand, Nomos: Baden-Baden, 2006, p. 85. 71 Sergej Chernyshev, Evropejskaja Integracija i Torgovo-politicheskij vybor Rossii, in: Leonid Gluharev, (ed.), Evropa Peremen: Koncepcii i Strategii Integracionnyh Processov, Moskva, 2006, p. 291. 66

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“European Security Strategy” approved by the European Council on December 12, 2003 formulated the principal objectives of the EU’s international security strategy whereby Russia was declared one of the EU’s strategic partners and a “major factor in [our] security and prosperity”. 73 Yet, as Graham Timmins remarks, whatever ambitious tasks the two parties proclaimed in their joint statements at summits, such declarations tended to fail to bring proper outcomes in practical cooperation. 74 Unlike at the highest level of EU-Russia cooperation, the practical cooperation was loaded with tensions and collisions of positions of both sides on certain issues. These included negotiations on Russia’s accession to the WTO, on Russia’s signing the Kyoto Protocol on climate change and readmission agreement, energy dialogue, and the EU Eastern enlargement, wherein both sides posed demands to each other. 75 One of Russia’s demands in the context of the then forthcoming enlargement was that the EU should compensate its economic losses. In January 2004, Russia presented a list of 16 points in which it described its demands for financial compensation of its economic losses, whereas the European Commission stuck to the point of denying possible disadvantages for Russian trade after the enlargement. 76 In 2004, Russia threatened not to expand the PCA of the new members, which was met by the EU’s counter-threat to set up economic sanctions against Russia. In the course of time many problems were resolved, but relations remained tense and unsatisfying for both sides. On April 27, 2004 Russia and the EU agreed to extend the PCA to the new ten Member States of the EU which were to join in May 2004, 77 and the sides achieved a compromise on certain contentious issues on the eve of the enlargement, 78 on May 21, 2004, bilateral negotiations for Russia’s entry to the WTO were concluded, 79 and the Kyoto Protocol came into force in February 2005 upon Russia’s ratification on November 18, 2004. 80 At its 72

COM (2004) 373 final, p. 4. A Secure Europe in a Better World. European Security Strategy, Brussels, December 12, 2003. 74 See Graham Timmins, p. 367. 75 See Eberhardt Schneider, Die Europäische Union und Russland im 21. Jahrhundert. Interessen beider Seiten, Diskussionspapier, FG 5 2005/01 Mai 2005, Stiftung Wissenschaft und Politik. 76 Ibid., p. 12. 77 Protocol to the PCA to take into account of enlargement of the EU, Brussels, 27/04/04. 78 Joint Statement on EU Enlargement and EU-Russia Relations, Brussels, April 27, 2004. 79 Russia-WTO: EU-Russia deal brings Russia closer to WTO membership, Brussels, May 21, 2004. 80 After Russia ratified the Kyoto protocol, the clause on “55 percent of 1990 carbon dioxide emissions of the Parties included in Annex I” was satisfied. See Kyoto Protocol to the United Nations Framework Convention on Climate Change. 73

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Brussels summit in December 2003, the European Council invited the European Commission to prepare a report assessing relations with Russia. 81 In February 2004, the European Commission adopted a Communication “On relations with Russia”. 82 Importantly, this communiqué appears to have been the first analytical document of the EU published on EU-Russia relations since the Common Strategy of 1999. 83 The determinants of the significance of Russia for the European Union as “an important partner, with which there is considerable interest to engage and build a genuine strategic partnership on the basis of positive interdependence” were formulated as follows: 1) Russia is the largest neighbour, 2) Russia is a key actor at a global level and in the UN Security Council, 3) Russia is a major supplier of energy products to the EU currently and in the future, 4) Russia is a large market for EU goods and services, and 5) Russia exerts significant influence in the NIS. Therefore, Russia undergoing its reforms and modernizing its economy is in the EU’s interest. It is noteworthy that this was the first time that the EU officially touched upon the question of the EU’s and Russia’s policies towards the NIS countries in the context of EU-Russia relations. 84 The EU deals with the NIS countries in the framework of its European Neighbourhood Policy based on its strategic objectives, meanwhile it seeks cooperation with Russia “whenever possible to resolve frozen conflicts, tackle political instability and promote economic growth”. 85 This aspect of EU-Russia cooperation will be examined below. Generally, the relations between the EU and Russia were evaluated as coming “under increasing strain” 86 due to certain divergences in political positions of the two sides (including Russia’s “more assertive stance towards a number of acceding countries and the NIS”, 87 as well as other diverging positions indicated above. The communication under review articulated the EU’s disapproval of the political situation in Russia by questioning Russia’s “commitment and ability to uphold core universal and European values and pursue democratic reforms” 88 and drew up a list of suggestions to improve the EU (coherent and realistic) policy towards Russia. 89 In spite of a number of ambitious political declarations made by both sides (such as the “common spaces”, the Energy Dialogue and 81

2003. 82

Presidency Conclusions, 5381/04, Brussels European Council, December 12 –13,

COM (2004) 106. See Jurij Borko, Rossija-Evropejskij Sojuz: scenarii vzaimootnoshenij, in: O. Butorina and Ju. Borko (eds), Rasshirenie Evropejskogo Sojuza, Moskva: Delovaja Literatura, 2006, p. 413. 84 Ibid., p. 415. 85 COM (2004) 106, p. 4. 86 Ibid., p. 3. 87 Ibid. 88 Ibid. 83

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others), the EU emphasized the “insufficient overall progress on substance” 90 of these initiatives. Ultimately, the EU reiterated its interest in “an open and democratic Russia, acting as a strategic partner which can uphold European values, continue reforms, implement commitments and, in cooperation with the EU, play a constructive role in the NIS”, 91 with the strategic objective of the partnership being to establish the four common spaces. The recommendation of the EU was therefore to prepare and propose to Russia a draft joint Action Plan to implement the common spaces. c) The building of the EU-Russia strategic partnership It took the two sides two years after the St. Petersburg summit in 2003 to agree on a package of road maps for the four Common Spaces. Such a venture failed at the Hague Summit in November 2004 owing to divergences in understanding a number of points to be located in the road maps such as “freedom” and “frozen conflicts” and, to the same degree, due to the controversies over the events in Ukraine during the presidential elections in November 2004. 92 Heinz Timmerman defined the summit as “an absolutely low point in the EU-Russia relations”. 93 In contrast, the members of the Moscow summit in May 2005 demonstrated greater interest in improving the situation and adopted a set of road maps designed as short and medium-term instruments to implement the creation of the four Common Spaces. 94 In October 2005 negotiations over a visa facilitation agreement and a readmission agreement were concluded. Both agreements were signed at the Sochi EU-Russia summit on May 25, 2006. 95 On April 21, 2005, at the meeting between the President of the European Commission José Manuel Barroso and President Putin in Moscow, it was agreed to begin preparing a new agreement for strategic partnership between the European 89 Prominent Russian political analyst Sergei Karaganov criticized the paper as well as a similar document of the European Parliament (European Parliament Recommendation to the Council on EU-Russia relations, OJ C 98 E/182 (2004) for their “provocative” and “arrogant tone”. Sergey Karaganov, The Perils of Pressuring Russia. Brussels vs. Moscow, in: The International Herald Tribune, February 25, 2004. 90 COM (2004) 106, p. 4. 91 Ibid. 92 See Heinz Timmerman, Der Moskauer EU-Russland-Gipfel. Hintergründe, Ergebnisse und Perspektiven, in: Russland Analysen, No. 66, 20. 05. 2005. 93 Ibid., p. 5. 94 Conclusions-Four “Common Spaces”, EU-Russia Summit, Moscow, May 10, 2005. 95 Agreement between the Russian Federation and the European Community on the facilitation of the issuance of visas to citizens of the Russian Federation and the European Union, OJ L 129/27 (2007); Agreement between the Russian Federation and the European Community on readmission, OJ L 129/40 (2007).

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Union and Russia. At the London EU-Russia Summit in October 2005 President Putin called for a renewal of the legal basis of the EU-Russia cooperation taking into account considerable changes in the relations since the PCA took effect in 1997. 96 The next Sochi EU-Russia summit, on May 25, 2006, set the key task of preparing a new agreement for the strategic partnership. 97 On July 3, 2006 the European Commission agreed to draft negotiating directives for a new EU-Russia agreement, which it views as a more ambitious agreement both in terms of the whole scope of EU-Russia cooperation and the particular emphasis on evolving trade and energy relations based on common values such as democracy, human rights and the rule of law. 98 However, at the 18 th EU-Russia summit in Helsinki on November 24, 2006, the two parties could not to reach agreement on commencing negotiations for a new agreement between the European Union and Russia since the EU did not get a mandate to start negotiations after Poland imposed its veto. The Polish government in particular put forward demands that Russia should lift its embargo on Polish meat, which Russia had imposed in October 2005. 99 It was only in June 2008 that both sides launched the negotiations for a new agreement. 100 As consented by both sides, the PCA remains in force to avoid a legal vacuum in relations until the new agreement is concluded and replaces the PCA. On the eve of the Helsinki EU-Russia summit in November 2006, the Financial Times published then-President Putin’s article: “Europe has nothing to fear from Russia”, wherein he defined the nature of the EU-Russia relations as “equal, strategic cooperation based on common objectives and values”. 101 While suggesting that the EU and Russia should “decide what we want from each other over the next several decades” Putin formulated the main Russian objectives, which are: firstly, the creation of a common economic space and secondly, the freedom of movement of people. These remain the priorities of President Dmitri Medvedev, who was elected in 2008. Russian Deputy Minister of Foreign Affairs Minister Alexander Grushko elaborated Putin’s statements, 96 Joint Press Conference with British Prime Minister Anthony Blair, President of the European Commission Jose Manuel Barroso and European Union High representative for the Common Foreign and Security Policy Javier Solana Following the Russian-EU Summit, London, October 4, 2005. 97 Joint Press Conference following Russia-EU Summit, Sochi, May 25, 2006. 98 European Commission approves terms for negotiating new EU-Russia agreement, Press releases Rapid, IP/06/910, Brussels, July 3, 2006. 99 See Peter W. Schulze, Zweiter Teil: Russische Föderation, in: Winfred SchneiderDeters, Peter W. Schulze and Heinz Timmermann (eds.), Die Europäische Union, Russland und Eurasien. Die Rückkehr der Geopolitik, Berliner Wissenschafts-Verlag, 2008, pp. 151 – 152. 100 Joint Statement of the EU-Russia summit on the launch of negotiations for a new EU-Russia agreement, Khanty-Mansiysk EU-Russia summit, June 27, 2008. 101 Vladimir Putin, Europe has nothing to fear from Russia, in: Financial Times, 21 November, 2006.

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underlining that the abolition of the visa regime could become a “visualization of the partnership relations of the two sides”. 102 While, according to him, the new cooperation agreement should be a strategic document free from excessive technical details, the strategic objective of abolishing the visa regime should be incorporated into the new agreement and supported by a concrete plan or by a road map for its achievement. 103 In his manifesto “Go Russia”, published in September 2009, 104 and in his Address to the Federal Assembly a month later, 105 President of Russia Dmitry Medvedev announced Russia’s overall modernization as the country’s major strategic long-term goal. According to the president’s vision, modernization should cover all spheres of the country’s life; it should lead to the diversification of Russia’s economy from dependence on natural resources to an economy based on innovations. Furthermore, modernization presupposes a fight against corruption, development and support of civil society, elimination of Soviet-type attitudes among the population and hence promotion of public consciousness. It is expected that continuous growth will proceed from innovations rather than from state-directed economic policy, with intellectual resources such as an intelligent economy, the creation of unique knowledge and the export of new technologies and innovative products at the core of Russia’s modernization. Russia seeks a modernization partnership with the West in order to accelerate the transition from a raw material country to a high-tech state. In the abovementioned message the necessity of “harmonising [our] relations with western democracies” is explained as: We need money and technology from Europe, America and Asia. In turn, these countries need the opportunities Russia offers. We are very interested in the rapprochement and interpenetration of our cultures and economies. And if we need to change something ourselves in order to do so, abandon previous prejudices and illusions, then we should do so. 106

One of the first international reactions to Medvedev’s appeals for modernization came from the EU: in February 2010 the European Commission presented a programme “Partnership for Modernization” with a view to supporting Russia’s drive for modernization. 107 Generally, since the early 1990s the European 102

Evrosojuz Stanovitsja Blizhe, in: Vzgljad, 8 dekabrja 2006. See Tat’jana Parhalina, O bezvizovom rezhime v otnoshenijah mezhdu Rossiej i Evropejskim Sojuzom: vozmozhnosti i perspektivy, in Leonid Gluharev, (ed.), pp. 301 – 323, for an academic contribution to this issue. 104 Dmitry Medvedev, Go Russia!, September 10, 2009. 105 Presidential Address to the Federal Assembly of the Russian Federation, November 12, 2009. 106 Ibid. 107 Vladimir Solov’ev, Zakonnost’, vpered!, in: Kommersant, 11 fevralja 2010. 103

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Union has been regarded an important external resource for implementing Russia’s modernization. 108 The Commission put forward a number of economic and technological initiatives. However, the main focus remained on the necessity of improving democracy in Russia, curbing corruption and, in particular, strengthening the rule of law as a prerequisite for the effectiveness of these initiatives. The message was clear: modernization would be impossible without democratization. Moscow’s reply was predictable. While approving the Commission’s initiatives and welcoming the economic and technological aspects of the modernization plan, Russia rejected its dominating discourse on democratic values, notwithstanding the fact that the topic of democracy and the rule of law already occupied a considerable portion of Medevedev’s letter. The preferred focus is exclusively the economic and technological formats: technological exchanges, joint innovative projects with the EU, cooperation in the scientific sphere, technological and economic standards first in industry and the agricultural sector and the application of the principle of co-financing. At the 25 th summit, on May 31-June 1, 2010, the EU and Russia launched a Partnership for Modernization which should help the two sides in their commitment, “working together to address common challenges with a balanced and result-oriented approach, based on democracy and the rule of law, both at the national and international level”. 109 The spheres of mutual interest include bilateral trade and investment as well as trade collaboration at a global level including in the framework of the WTO. The Partnership is to be complemented by the whole range of available legal and political instruments. These include the new agreement still to be concluded, which will provide the basis for reaching the goals of the Partnership, the achievements in the framework of the four Common Spaces, the bilateral partnerships between the Member States and Russia and the sectoral agreements which will be “a key implementation instrument for the Partnership for Modernization”. While focusing on the economic issues such as trade, investment, innovation, technical regulations and standards and intellectual property rights, the Partnership should also stretch to such areas of cooperation as energy efficiency and climate change, innovation, research, development and space, regional cooperation and promotion of people-to-people contacts as well as the fight against corruption, the search for efficiency of the judiciary and civil society. Whether the new initiative will contribute to the development and improvement of the bilateral relationship or will turn out to be merely an effort at “re-branding” 110 the strategic partnership remains to be seen. 108

See Dmitrij Trenin, Identichnost’ i integracija: Rossija i Zapad, p. 12. Joint Statement on the Partnership for Modernisation, Rostov-on-Don EU-Russia summit, June 1, 2010. 110 Katinka Barysch, Can and should the EU and Russia reset their relationship?, Centre for European Policy Brief, February 2010, Centre for European Reform, London, p. 3. 109

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d) Disparities and controversies between the EU and Russia Regardless of the fact that EU and Russian policies toward each other have evolved considerably since the outset of their official relationship, their political relations have consistently been in a mounting crisis for various reasons. Thus, an atmosphere of distrust and misunderstanding often results from negative perceptions in the existing stereotypes of Russia and among Western elites, the inability of the two sides to formulate common strategic goals for their cooperation, the objective differences of their political natures and international actorness. 111 The list of controversies is extensive. It includes, among other things, the problem of the EU’s energy security, in particular the issue of gas correlated, inter alia, with the Energy Charter treaty, the resurgence of Russia as a global energy power using its energy leverage for political purposes, and the EU’s efforts in response to diversify its energy supplies. 112 Furthermore, the tensions are accounted for by the competition of Russia, the EU and NATO in the post-Soviet space. Western concerns specifically address Russia’s actions directed toward destabilizing Georgia and supporting the separatist tendencies in Moldova and Transnistria, while Russia has been preoccupied with the (potential) EU enlargement and the (potential) expansion of NATO to Georgia and Ukraine. The EU enlargement of 2004 had a crucial implication for the EU and Russia: the two sides have come to share a vast common neighbourhood which stretches to Ukraine, Belarus, Moldova, and the South Caucasus republics, namely Georgia, Azerbaijan and Armenia. This circumstance implies a certain competitiveness in the European Neighbourhood Policy – a new framework for the EU’s policy towards the Western CIS countries – for Russia and the European Union, with both sides having their strategic interests in this neighbourhood. 113 Russia explicitly defines strategic partnerships and good relations with the CIS countries as the core regional priority of its foreign policy in its “Foreign Policy Concepts” of 2000 and 2008. The latest foreign policy doctrine “Program for Effective Utilization of Foreign Political Factors on a Systematic Basis for Purposes of Long-Term Development of the Russian Federation” of 2010 similarly indicates Russia’s intention to integrate the economies of the CIS countries. 114

111 See Nadezhda Arbatova, Rossija-ES: territorija 4-h prostranstv, RIA Novosti, 26 ijunja 2007. 112 See Margot Light, Russian political engagement with the European Union, in: Roy Allison, Margot Light and Stephen White (eds.), Putin’s Russia and the Enlarged Europe, London: Chatham House, 2006, p. 65. 113 See Dmitri Trenin, Russia, the EU and the Common Neighbourhood, p. 2, and Arkady Mošes, Priorität gesucht. Die EU, Russland und ihre Nachbarn, in: Osteuropa, 2/3, 2007, pp. 21 – 35.

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The EU in turn has been developing and enhancing its ENP towards adjacent countries, with a particular focus on the East. Both Russia and the EU describe the neighbours as an important factor in maintaining Russian national security and EU security and offer them different integrationist scenarios. 115 Both compete while acting as models for modernization, and Russia, unlike the EU, has been less attractive so far because countries like Ukraine and Moldova have already expressed their aspirations for EU membership. The EU has been evolving as a foreign and security policy actor thanks to its Eastern enlargement and precisely to the ENP. By committing itself to build a long-term strategy towards its neighbours it aims to sustain more active political involvement in the region. 116 In light of this, the ENP is perceived by Russia as marginalizing its role in this region. 117 For its part, Russia recently attempted to reassert its place as a global great power owing to its rising economic strength before the economic crisis, one of the objectives of the restoring its dominant position in the CIS. One can trace a remarkable change in Russia’s approach to the EU; Russia underscores the key significance of forging its bilateral relations with the leading states of Europe who pursue pragmatic policies towards Russia and are its most important economic partners. 118 There is a fundamental structural difference in foreign policies of the two actors; while Russia follows traditional realist geopolitical 114 See Programma jeffektivnogo ispol’zovanija na sistemnoj osnove vneshpoliticheskih faktorov v celjah dolgosrochnogo razvitija Rossijskoj Federacii, maj 2010. 115 While the EU suggests integration within the ENP, Russia’s integrationist scenario within the CIS is the Eurasian Economic Community (EurAsEC), its goal the establishment of a customs union leading to the creation of a single economic space within the EurAsEC (a higher-level integration stage). It is assumed that the integration process could be strengthened by the creation of the Single Economic Space (SES), wherein the four economically most developed countries of the CIS, Russia, Ukraine, Kazakhstan and Belarus which account for about 90 percent of the GDP of the CIS would integrate their economies in a step-by-step manner. See Evgeny Vinokurov, Russian Approaches to Integration in the Post-Soviet Space in the 2000s, in: Katlijn Malfliet, Lien Verpoest and Evgeny Vinokurov, The CIS, the EU and Russia. The Challenges of Integration, Palgrave Macmillan, 2007, pp. 22 – 46. 116 The EU has been consistently developing and improving the ENP. Thus, the European Commission has lately published a Communication “A Strong European Neighbourhood Policy” with a view to proposing further actions for developing the relationship with the ENP states effectively to be taken in 2008 by the EU. See COM (2007) 774. It has subsequently issued a communication titled “Eastern Partnership” to strengthen the policy’s eastern dimension and promote regional cooperation among the Eastern neighbours. See COM (2008) 823. 117 See Susan Stewart, Russland und die Östliche Partnerschft. Harsche Kritik, punktuelles Kooperationsinteresse, SWP-Aktuell 21, April 2009, Stiftung Wisenschaft und Poolitik, Berlin. 118 See Sabine Fischer, Samara-Gipfel des Scheiterns?, in: Russlandanalysen, 137, 4, 2007, p. 4.

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zero-sum game perceptions of international relations and strict adherence to terms of sovereignty, the EU performs the role of a post-modern idealist soft power, in which its member states voluntarily cede sovereignty in favour of the EU. 119 Russia’s adherence to the elements of traditional statehood in its foreign affairs and longing for superpower status are reflected, as Lilia Shevtsova has put it, in its use of “militarist thinking”. 120 In this, Russia is allegedly engaged in conscious attempts to search for both external and internal enemies (to date, the West, Ukraine, Georgia, the Baltic states, NGOs, liberals and oligarchs), in the promotion of suspicions toward the outside world and in the use of militarist symbols and actions “to keep the mobilizational paradigm alive”, 121 such as, inter alia, withdrawing from the “Treaty on the Conventional Armed Forces in Europe” (CFE) and others. 122 In the same vein, the West unanimously condemned Russia for its “disaproportional reaction” in the armed conflict between Georgia and the Russian Federation in August 2008. The ineffective use of hard power and the degradation of its soft power inherited from the Soviet Union lead to failures in Russian foreign policy. Russia persistently fails to respond to anti-Russian biased discourses, to participate in different international conferences and forums and to explain its position to world society. In this respect, while “Russia has won a military campaign while complying with its peacekeeping responsibility to the South Ossetia people, but it has lost the information campaign”. 123 Despite this state of affairs, which essentially prevents Russia from holding a constructive dialogue with the West on international affairs, Russian foreign policy remains nonetheless balanced between the choices of 1. confrontation with the West and 2. fears of marginalization on the international arena; in response, it is sticking to practical cooperation and partnership. In other words, this relationship between Russia and the West / the EU includes features of partnership, 119 See Marius Vahl, A Privileged Partnership? EU – Russian Relations in a Comparative Perspective, Danish Institute for International studies (DIIS), DIIS Working paper, No. 3, 2006, p. 22. 120 Lilia Shevtsova, Post-communist Russia: a historic opportunity missed, in: International Affairs, 83:5, 2007, p. 907. 121 Ibid. 122 This is done, as Shevtsova’s argument goes on, in order to legitimize authoritarianism and state expansion, exemplified, above all, by recentralization of the state. As such, Russian foreign policy objectively results from the internal situation. By and large, Russia’s assertiveness in its going international has been raised by the following factors: 1. high oil prices and the global dependence on hydrocarbons, 2. the stabilization of the internal situation in Russia, 3. the US’s failures in Iraq and the increase in the world’s disapproval of American hegemony, 3. the crisis of the “colour revolutions” disturbing the Russian elites, and 4. the inability of the West to construct a new world order. See Lilia Shevtsova, pp. 900, 907. 123 Nadia Alexandrova-Arbatova, Russia after the Presidential Elections: Foreign Policy Orientations, in: Russian Foreign Policy, The EU-Russia Centre Review, Issue 8, October 2008, p. 17.

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cooperation as well as disagreement. Recently, as a result of the world economic crisis which severely struck the Russian economy and Russia’s latest modernization intentions, Russia’s foreign policy under President Medvedev has tended to be more flexible and oriented towards pragmatic and constructive relations with its Western partners. 124 Finally, there is chronic anxiety on the side of the EU about the declining internal political development of Russia. This latter discourse particularly includes continuing criticisms over human rights abuses in Chechnya, restrictions on democracy in Russia or its de-democratization, misuse of administrative resources by the state elite and their manipulations of elections, the absence of pluralist party politics, the erosion of media and NGO freedoms, and the centralization of power; 125 all of these factors clearly constitute a profound value gap between the two actors. 126 As such, one of the debated issues in the EU-Russia partnership is “der ewige Streit” 127 between values and interests. Unquestionably, values lie “at the heart of the EU’s identity” 128 and their significance is laid down first and foremost in the EU’s legal basis: the “Treaty on European Union” and, subsequently, in the “Lisbon Reform Treaty”. 129 The latter in particular stipulates that external actions of the EU in relations with third countries: shall be guided by the principles which have inspired its own creation, development and enlargement, and which it seeks to advance in the wider world: democracy, the rule of law, the universality and indivisibility of human rights and fundamental freedoms, respect for human dignity, the principles of equality and solidarity, and respect for the principles of the United Nations Charter and international law (Article 21 of the Treaty on European Union).

124 Ibid., and Fyodor Lykyanov, Going from Putin’s Frown to Medvedev’s Smile, in: Moscow Times, May 19, 2010. 125 See Peter W. Schultze, p. 154. 126 Understandably, this often provokes a counter-reaction on the Russian side and specifically makes the Russian authorities go into the offensive, with the Minister of Foreign Affairs of Russia Sergei Lavrov, for example, pointedly alleging that the negative image of Russia is being deliberately constructed aiming to formulate a negative EU’s Russia policy which inevitably leads to the political and psychological division within the continent. See Rossija ne pojdjot na principialynye ustupki v otnoshenijah s ES, RIA Novosti, 3 ijulja 2007. 127 Peter W. Schulze, p. 150. 128 Stephen White, ‘Russia in Europe’ or ‘Russia and Europe’?, in: Roy Allison, Margot Light and Stephen White (eds.), p. 167. 129 See Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community of December 13, 2007, OJ C 306 (2007), and the Treaty on European Union and the Treaty on Functioning of the European Union, consolidated versions, OJ C 115 (2008).

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The EU’s expectations for Russia’s commitment to these values is also indicated in the PCA and further reiterated in the EU’s Common Strategy on Russia. Since then, it has constantly reproached Russia for its failure to move toward values promoted by the EU. 130 At the same time, the EU has interests that should be pursued by means of cooperation with Russia. 131 Although the two sides have different perceptions of their common interests and overall substance of the strategic partnership, including such as common strategic aims and political objections, 132 the disproportion between economic and political interests is manifest. 133 This generates confusion within the EU on how to approach Russia. Overall, diverging interests exist among EU states, with new Member States of Central Europe favouring a wider focus on developing an agenda for East European countries under the ENP rather than this focus on Russia. As a result, one can hardly speak of a common and united EU vision of its Russia strategy. Yet, despite the fact that there is no common point of view on the level of EU Member States on the degree of pragmatism and emphasis on the normativity the EU should apply to its Russia policy, they do agree that “the EU’s relationship with Russia cannot be value-free and purely strategic”. 134 Thus, it has lately been a trend among analysts to make the case that the EU’s Russia policy could step away from EU apprehensions on such issues as Russia’s internal development, erosion of democracy and values gap towards more pragmatic and practical cooperation in areas of convergence. 135 In other words, the two parties are expected to continue their “selective and pragmatic partnership in areas of mutual interest” 136 by “focusing on practical, issue-ori130

Yet, as some analysts argue, in the practical reality the EU’s pursuit of its policy vis-à-vis Russia has on numerous occasions deviated from its normative goals and objectives in favour of achieving more pragmatic and realpolitik-like goals such as ones concerning energy security and the access to Russian markets. See Sandra Fernandes, EU Policies towards Russia, 1999 – 2007: Realpolitik Intended, in: Nathalie Tocci (ed.), The European Union as a Normative Foreign Policy Actor, CEPS Working Document, No. 281, January 2008, Centre for Euroepan Policy Studies, Brussels, p. 9. 131 Thus, the Common Strategy on Russia contains clauses on both common values and common interests or common objectives, and, as it has been noticed, the duality is displayed in the following passage of the Strategy: EU should “spur Russia towards the very principles that guided the EU or western democracies and to cooperate with Russia in meeting common challenges from the outside would”. See Stephen White, p. 168. 132 See Lilia Shevtsova, p. 904, and Stephen White, p. 172. 133 The Commission’s Communication of 2004 recommended that the Council should “move away from grand political declarations and establish an issues-based strategy and agenda”. See Stephen White, p. 168. 134 Stephen White, ‘Russia in Europe’ or ‘Russia and Europe’?, p. 168, 135 See, for instance, Sabine Fischer, Die EU und Russland, p. 6 and Sergej Lancov / Valerij Achkasov (eds.), Mirovaja politika i mezhdunarodnye otnoshenija, Sankt-Peterburg: Piter, 2007, p. 342.

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ented and lower-level forms of cooperation in specific sectors based on mutual interest rather than on grand programmatic goals”. 137 One of the proposals has been the launching and development of an EU-Russia mutual strategy based on a low politics approach. 138 This is foreseen as a partnership resting on the successful small practical projects that have taken place with clearly identifiable stakeholders on both sides, rather than on grand strategic designs, such as Common Spaces, which are de facto substitutes for real commitments. Convergence should comprise small, measurable goals, focused on the short and medium terms, rather than on the long term, and hence, by definition, vague, declarations of intent. 139

Some European top-politicians are, in a similar vein, inclined to the idea of the EU’s taking a more realist approach towards its Russia policy; Foreign Minister of France Bernard Kouchner admits that since the Russian elites are irresponsive to a commitment to liberal political values, the EU should be oriented to interests rather than values in its partnership with Russia. 140 These interests should arguably include energy, Russia’s integration into the global financial system and, eventually, the common neighbourhood. 141 However, it is questionable whether the EU as a body could ease down the normative rhetoric since it “presents itself as an essentially post-sovereign international institution that promotes one-sided transformation, harmonization and gradual integration with its own norms and values, but not with its institutions”. 142 On the other hand, Russian leadership “defers to realism rather than institutionalism in (their) approach to European institutions and processes; they give pride of place of interests rather than norms of cooperation, let alone values”. 143 Developing their foreign policies (also toward each other), the EU and Russia pursue different directions, based on different principles. Both the EU and Russia are undergoing transformations in their foreign policies. The EU is evolving as a foreign and security policy actor thanks to its recent enlargement rounds and the ENP, the core of its external policy. Its Eastern enlargement carries a particular 136

Stephen White, ‘Russia in Europe’ or ‘Russia and Europe’?, p. 172. Ibid., p. 173. 138 See Oksana Antonenko / Kathryn Pinnick, The Enlarged EU and Russia, p. 6. 139 Ibid., pp. 6 – 7. 140 See Charles Grant, A new deal with Russia? It’s in the interests of both the west and Russia to seek a grand bargain on the issues that divide them, in: Prospect 140, 2007. 141 It was the UK presidency that in essence put forward a pragmatic policy towards Russia in 2005: “interests were considered to be at the heart of the relationship and values were represented as one of the interests in dealing with Russia”. Stephen White, ‘Russia in Europe’ or ‘Russia and Europe’?, pp. 168 – 169. The mutual interests included energy, counter-terrorism, business and economic affairs, Iran, the G-8 presidency, counterproliferation and counter-narcotics. 142 Ibid, p. 173. 143 Ibid, p. 180. 137

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implication for its Russia policy; this is objectively being coined by the historical identities of its new Eastern members. 144 While there are political positions that converge, such as global climate change, disarmament strategies, policies toward the Near East and Afghanistan, the Israeli-Palestinian conflict, North Korea and the fight against terrorism, other issues remain controversial (Chechnya, Kosovo, ENP and former Soviet republics Georgia and Ukraine as well the independence of the Republics of South Ossetia and Abkhazia and the frozen conflicts in the former Soviet republics). 145 A significant fact is that the EU and Russia are international actors with different natures, which concerns first and foremost their political identities and different modes of governance. While Russia takes a functionalist realpolitik approach in its foreign policy concept and pursues the strategy of the zerosum game formula, the EU adopts a positive-sum game approach based on ideas of mutual interests and shared sovereignty. 146 In its foreign policy, Russia follows such principles as equality and reciprocity in interstate relations, national sovereignty and state consolidation, and the EU is governed by norms and values, thus admittedly acting as a civilian, soft or normative power in international relations. 147 While the EU has often been unable to adopt a common position towards Russia on either political or other questions (such as energy) due to different stances on Russia among the Member States as well as incoherency between its two major foreign policy actors, the Commission and the Council, Russia prefers taking a bilateral approach and is criticized for utilizing the internal EU differences to its own advantage. 148 Russia is a sovereign state with a consolidated political, economic and military system in which foreign policy is essentially forged by the president. 149 In particular, in accordance with Article 80 of the Constitution of the Russian Federation, the president “shall determine the guidelines of the internal and foreign policies of the State”. Besides, pursuant the same provision, the president represents the state within the country and international relations. Some of the president’s competences are: a) controlling foreign policy, b) conducting negotiations and signing international treaties, c) signing ratification instruments, and d) receiving the credentials and letters of recall of diplomatic representatives 144

See Sabine Fischer, Die EU und Russland. See Holger Moroff, Russia, the CIS and the EU: Secondary Integration by association?, in: Katlijn Malfliet, Lien Verpoest and Evgeny Vinokurov (eds.), pp. 112 –113. 146 Ibid., p. 106. 147 See Nathalie Tocci, Introduction, in: Nathalie Tocci (ed.), p. 1. 148 See Katinka Barysch,The EU and Russia. Strategic Partners or Squabbling neighbours?, p. 53. 149 See Stephen White, The domestic management of Russia’s foreign and security policy, in: Roy Allison, Margot Light and Stephen White (eds.), p. 30. 145

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accredited to him. Whereas the president defines foreign policy, the executive body, the Ministry of Foreign Affairs, implements it. 150 The EU manifests itself as a body with divided competences and institutions, whereby “the different ways of handling EC and EU issues” 151 – foreign economic policy and political dialogue – hinder “a coherent foreign policy dialogue”. 152 As such, EU foreign policy set up is essentially formed by two principal institutions, the European Commission and the Council of the European Union in accordance with the powers ascribed to them in the treaties. Thus, European analysts and practitioners have long proposed the establishment of a special commissioner for EU-Russia relations. 153 Until recently, the European Commission fulfilled its external policy through four different DGs: a DG for External Relations and the European Neighbourhood Policy (DG RELEX), a DG for Development Aid, a DG for Enlargement and a DG for Trade. As regards Russia, apart from a DG on External Relations diverse DGs have forged their own policies to it, particularly the DGs on trade, energy, the environment and human rights. In addition, the European Commission has more than 120 European Commission Delegations in approximately 150 countries. 154 Among the EU Council (General Affairs and External Relations Council) a number of diverse institutional structures have also acted in the foreign policy domain, including the High Representative for the CFSP and Secretary-General of the Council, Policy Planning and Early Warning Unit, the Political and Security Committee and others. Apart from this, the EU still possesses limited external capacity, and, until the Treaty of Lisbon came into power, it did not enjoy international legal personality. The Lisbon Reform Treaty was designed to make the EU’s external policy more coherent and effective as well as to strengthen its hand in dealing with the world’s biggest powers by introducing new foreign policy instruments as follows: a) the post of a permanent European Council President, to be at office for twoand-a-half years, a renewable term instead of a six-month rotation (Article 15 of Treaty on European Union), b) a single post of High Representative of the 150

Ibid., p. 31. Apart from this, there are other actors capable of influencing the conduct of foreign policy in the Russian Federation: they are, inter alia, the Security Council, the Ministry of Defence, the foreign policy directorate of the presidential administration, the respective committees of both houses of the Russian Parliament the Federal Assembly, the State Duma and the Federation Council. 151 Holger Moroff, p. 112. 152 Ibid. 153 See Katinka Barysch, The EU and Russia. Strategic Partners or Squabbling neighbours?, p. 56. 154 See Foreign Policy: Many Opportunities and a Few Unknows, in: The Treaty of Lisbon: Implementing the Institutional Innovations, Joint Study CEPS, EGMONT and EPC, November 2007, p. 124.

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Union for Foreign Affairs and Security Policy to replace previous two positions of the EU High Representative for Foreign Affairs and European Commissioner for External Relations and Neighbourhood Policy (Articles 18 and 27), c) a European External Action Service to cooperate with the diplomatic services of the member states (Article 27 [3]). 155 The Delegations of the European Commission have been converted into the Union Delegations and their coordination is regulated in a separate provision (Article 221 of the Treaty on the Functioning of the European Union). In addition to these instruments, the treaty endows the EU with a single (international) legal personality (Article 47 of the Treaty on European Union) as well as representing an essential simplification of the EU’s structure. 156 On the one hand, the institutional amendments regarding the external relations of the EU are expected to be advantageous for EU representation in relations with Russia. 157 On the other hand, doubts remain as regards the impact of the institutional innovations on the coherence of European external relations and hence on the efficacy of the EU’s foreign policy. This includes questions on the division of competences in international affairs between the High Representative of the Union for Foreign Affairs and Security Policy, the President of the European Council and the President of the European Commission as well as the effects of double loyalty and possible conflict of interests inherited in the post of the High Representative of the Union for Foreign Affairs and Security Policy, who has to act on matters related to the spheres of both the Commission and the Member States. 158 In spite of the fact that the Lisbon Treaty endowed the EU with a single legal personality, the competences concerning the foreign policy dialogue have not been extended much because the matter of the CFSP remains mainly in the domain of the Member States. The EU might seem hardly able to act as an efficient partner with Russia due to the overall complexity of its negotiating processes. The structural differ155 The Treaty also contains a clause on the consistency of external action in the EU which should contribute to greater coherence: “the Union shall ensure consistency between the different areas of its external action and between these and its other policies. The Council and the Commission, assisted by the High Representative of the Union for Foreign Affairs and Security Policy, shall ensure that consistency and shall cooperate to that effect” (Article 21 (3). 156 See Kateryna Koehler, European Foreign Policy after Lisbon: Strengthening the EU as an International Actor, in: Caucasian Review of International Affairs, Vol. 4 (1) – Winter 2010, p. 57. 157 See Rory Watson, Lisbon Treaty opens new era in EU / Russia relations, EU-Russia Centre, Brussels, February 19, 2010. 158 Ibid. and Foreign Policy: Many opportunities and a few unknowns, in: The Treaty of Lisbon: Implementing the institutional innovations, Joint Study, European Policy Centre, Egmont-The Royal Institution for International Relations, Centre for European Studies, November 2007, p. 128.

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ences between the EU and Russia as international actors are also reflected in the incompatibility of their administrative structures in practical collaboration: “whereas on the EU side many questions are tackled and decided on at the expert level, the Russian experts’ mandate seems rather limited and contingent upon constant approval of superior administrative layers, which makes even technical collaboration difficult”. 159 Arguably, the new bilateral agreement between the EU and Russia will both explicitly identify common interests and contain a clause on normative commitments. So far, the then-Commissioner for External Relations and European Neighbourhood Policy Benita Ferrero-Waldner voiced the areas of partnership to be covered by the new treaty as favoured by the European Union. 160 They are: 1) energy, whereby the EU seeks to “develop an energy relationship with Russia that is based on transparency, reciprocity, and non-discrimination”, 161 2) economy and research and development, aiming at helping Russia in its economic diversification since “a strong Russia is positive for the European Union. If we are to tackle problems such as uncontrolled migration, climate change, drugs trafficking and cross-border crime, we need to do so with a prosperous and stable Russia”; 162 the possibility of a free trade area agreement upon Russia’s accession to WTO based on WTO rules; 3) the common neighbourhood; 4) cooperation on justice, liberty and security revolving around issues of fighting crime, terrorism and drug trafficking; 5) the possibility of a visa-free regime in the long-term perspective. She also touched upon the EU’s intention to make mention of democratic values and human rights in the new treaty, 163 in which the EU would refer to the values to which the EU and Russia are committed at an international level, for instance, through membership in the Council of Europe. It is a common exercise for political and academic observers to contemplate the role and place Russia occupies in Europe (currently and in a long-term perspective). This discussion addresses questions of Russia’s belonging to European civilization, Russia’s (conceivable) membership in the EU, different ways of integrating Russia into European economic, political and security structures either through membership or association, 164 discussion of the (feasible) degree 159

Holger Moroff, p. 106. See Benita Ferrero-Waldner, Russia and the EU need for each other, Speech at the European Club, State Duma, Moscow, June 4, 2008. 161 Ibid. 162 Ibid. 163 Ibid. 164 Thus, one European expert has suggested that Russia should be invited to a dialogue over the perspective of its NATO membership. See Michael Emerson, Time to think of a strategic bargain with Russia, CEPS Policy Brief, No. 160, May 2008, Centre for European Policy Studies, Brussels, p. 1. Russian specialists have put forward an idea of “a special association between the EU and Russia” aiming at consistent democratization of Russia 160

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of Russia’s Europeanization (including in terms of political and societal norms), the degree of inclusion / exclusion of Russia in EU’s policies. According to one expert, oscillating between inclusion and exclusion, the EU appears in its policy towards Russia as an actor granting partial participation rights. This kind of inclusion and ‘circumclusion’ might contribute to defusing potential conflicts. The density of consultations between the EU and Russia is a first indicator for a process of inclusion through intensified dialogue. Moreover, the concept of the ‘four common spaces’ provides additional forms of inclusion. However, the EU’s insistence on the strict Schengen-regime constitutes a clear tendency of exclusion. 165

There are several scenarios for the development of EU-Russia relations, some of them rather hypothetical. 166 These scenarios envisage: 1. Russia’s full accession to the EU, 2. the formation of a common market and harmonization of legislation, 3. strategic partnership in several strategically valuable spheres, 4. the preservation of the status quo in the relationship or “muddling through”, 167 and 5. cold peace. The suggested schemes (would) clearly have particular implications for the Kaliningrad Oblast. While the first two scenarios (1 and 2) presuppose deeper integration of the Kaliningrad Oblast with the European Union, the second scenario implies that the economic, legal and social integration – albeit without the establishment of joint institutions of power – could be established locally in the Kaliningrad Oblast. Thus, the Kaliningrad Oblast would assume the role of a pilot region and this would mean the oblast’s greater orientation toward the economic system of its neighbours, Poland and the Baltic states rather than Russia. In the event that one of the other scenarios (3, 4 or 5) were followed, the Kaliningrad Oblast would remain oriented towards Russia, thereby facing the risk of being transferred to the periphery of EU-Russia relations as a problematic region which requires special treatment.

through gradual integration with the European Union. See Nadezhda Arbatova / Vladimir Ryzhkov, Rossija i ES: sblizhenie na fone razryva?, in: Rossija v global’noj politike, No. 1, Janvar’-Fevral’ 2005. When speaking about Russia’s integration with the West, Dmitri Trenin regards integration as not a physical accession into Western institutions but the creation of contemporary competitive internal institutions. See Dmitrij Trenin, Integracija i identichnost’: Rossija kak “novyj Zapad, Mosk. Centr Karnegi, Moskva: Izd-vo «Evropa», 2006, p. 11. 165 Holger Moroff, p. 113. 166 See Sergey Medvedev, Chapter 1. Scenarios, in: Chirster Pursianen and Sergey Medvedev (eds.), p. 21; and Strategija socialino-jekonomicheskogo razvitija Kaliningradskoj oblasti kak regiona sotrudnichestva na sredne- i dolgosrochnuju prespektivu. Prilozhenie k postanovleniju Pravitelistva Kaliningradskoj oblasti No. 95, 9 marta 2007, p. 46. 167 Sergey Medvedev, p. 21.

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Although the first scenario (1) sounds rather hypothetical in itself, variant 2, the formation of a common market and harmonization of the legislation, and scenario 3, strategic partnership, are seen as the most productive and suitable for the Kaliningrad Oblast – again, in conditions when it plays the role of pilot region and model for practical cooperation between the EU and Russia – because they would allow Kaliningrad to be integrated with the EU member states in the Baltic region and simultaneously maintain Russia’s sovereignty over the oblast. 168 As such, the strategic partnership would connote “the development of the EU-Russia dialogue beyond the current partnership level and the generic neighborhood policy. Essentially, it will entail the long-term goal of establishing a free-trade between Russia and the EU, and eventually a single market” 169 as well as Russia’s partial legal harmonization with the EU and the full exploitation of the concept of the four Common Spaces. In terms of economic policy, the EU would contribute to Russia’s modernization by means of establishing favourable institutional conditions and opening its markets to Russia; for foreign policy, this scenario would imply relations based on a model of cooperative security and, finally, the outcome of internal security would be a visa-free regime between the EU and Russia and the evolution of cultural and people-to-people contacts. Scenario 4, preserving the status quo, would mean stagnation for the oblast and “the preservation of its addiction to trade preferences granted to Kaliningrad under the present status of the Special Economic Zone”. 170 The worst scenario for EU-Russia relations would be cold peace (scenario 5), reflected in the two sides’ isolationism, hostility and increasing security awareness, with Kaliningrad being condemned therein to its geopolitical role of a military outpost on the Baltic Sea. 171 e) Summary A growing number of political documents adopted by the European Union and Russia since the genesis of their official relations evoke the profound interest that they have in each other and reflect the degree to which their relationship has evolved. Both sides have been gradually broadening their policies with regard to each other and this testifies to a qualitative shift of the relationship from mere cooperation to a partnership. More precisely, as Kashkin argues, the category of partnership is distinguished by a higher degree of intensity and mutual benefits than that of cooperation, as the accent is relocated from 168 Strategija socialino-jekonomicheskogo razvitija Kaliningradskoj oblasti kak regiona sotrudnichestva na sredne- i dolgosrochnuju prespektivu, pp. 46 –48. 169 Sergey Medvedev, p. 22. 170 Ibid. 171 Ibid.

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political to economic goals, and a partnership requires a greater degree of trust and mutual agreement to pursue fundamental steps towards achieving mutual goals and commitments. 172 To this end, strategic partnership is explained as “the relations of partnership, which the Parties consider prior, synchronizing common actions”. 173 The modalities of the EU-Russia strategic partnership involve the creation of a CEEA, energy dialogue and partnership and closer cooperation in the field of regional security and defence policy, whereby the practical objective of the strategic partnership is the implementation of the four Common Spaces between the EU and Russia as well as meeting the goals in the framework of the recently launched “Partnership for Modernization”. The EU and Russia have applied a variety of policies to each other: a) bilateral policies (the PCA and the Common Spaces with the Road Maps for them as well as the Partnership for Modernization), b) unilateral policies such as the EU’s Common Strategy to Russia and Russia’s Mid-term Strategy to the EU as well as c) multilateral strategies such as the Northern Dimension and cooperation in the framework of participation in international organizations. 174 While many of these policies have aimed at intensifying and improving the relationship, the legal basis and core for all of them has been the PCA. The European Union’s policy towards Russia has gone through several stages. 175 The first stage includes the PCA of 1994 and the Common Strategy on Russia of 1999. The second stage comprises the EU’s new approach towards Russia in the framework of its European Neighbourhood Policy, which has taken the shape of the four Common Spaces since 2003, and an attempt to review and achieve higher coherency in its policy to Russia in 2004. In the meantime, the PCA has remained the legal basis of the overall policy. The current EU medium-term strategy towards Russia is reflected in its Country Strategy Paper 2007 – 2013, which allocates EU financial assistance to Russia in the framework of the European Neighbourhood and Partnership Instrument, and the associated National Indicative Programme 2007 – 2010 for Russia, which sets up the priority sectors for funding. 176 One of the principal objectives of the EU foreign policy as formulated in the European Security Strategy is to develop relations with Russia as one of its six strategic partners (the other five are the US, Canada, India, China, Japan). 177 While the 172

See Sergej Kashkin, Predislovie, in: Sergej Kashkin (ed.), p. 15. Paul Kalinichenko, Problems and Perspectives of Modernizing the Legal Backgrounds for the EU-Russia Strategic Partnership, Max Weber Programme for Post-doctoral Studies, European University Institute, Law Department Conference “Integration without EU membership in Europe”, May 2008, p. 2. 174 See Aaron Matta, The Future of the EU-Russia Partnership Agreement, EU-Russia Centre, Brussels, 2007. 175 See Dov Lynch, p. 18. 176 Country Strategy Paper 2007 – 2013, Russian Federation, and National Indicative Programme, Russian Federation, 2007 – 2010. 173

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EU’s strategic economic interests lie in continuing reliable energy supplies from Russia, its main strategic goal could be formulated as fostering the development of a democratic Russia and thereby maintaining security and stability in Europe. Likewise, the foreign policy of the Russian Federation with respect to the EU has progressed considerably. To start with, the PCA was an absolutely new type of agreement signed with a leading Western power. The pro-Western orientation at the beginning of the 1990s and a favourable attitude towards the EU has been replaced by a more “assertive” policy in which national interests serve as a guide in its relations with the West. 178 The Mid-term Strategy of 1999 appears to have been the first attempt to particularize its policy towards the European Union. It declared no intention of joining the EU and set out Russia’s interest in a strategic partnership with the EU. The Russian Foreign Policy Concept – like the subsequent Survey of the Russian Federation Foreign Policy of 2007 – placed the European Union second in the catalogue of its regional priorities. Russia’s choice to step out of the European Neighbourhood Policy which initially included Russia resulted in the creation of an ambitious concept of four Common Spaces within the PCA framework. Russia’s foreign policy is pragmatic, subordinated to the idea of maintaining its national interests and the strategic goals of Russia in the strategic partnership with the EU. These goals comprise advancing the trade regime and achieving a visa-free regime with the European Union. The president has proclaimed that Russia’s main goal in general today is modernization, which the European Union acts as an important external resource for implementing. To this end, the strategic partnership between the EU and Russia is particularized in the framework of the EU-Russia Partnership for modernization. However, against this broad background of the marked development of EU and Russian mutual policies, one should not discount the controversies and disparities between the two sides which are prone to obstruct the partnership profoundly and have implications for the further development of EU-Russia relations in general and the Kaliningrad Oblast in particular. The brief analysis provided in this chapter has identified a number of disparities. Even with economic ties proliferating, the political relations between the EU and Russia are still complicated. While there is convergence in the political positions of both on such issues as the Near East, Afghanistan, the IsraeliPalestinian conflict, North Korea, and the fight against terrorism, other political matters constitute major controversies between them. These are: a) energy, b) common neighbourhood and NATO expansion to the East, c) Russia’s internal political situation, its growing assertiveness on the international arena and the 177

The Common Spaces and the European Security Strategy are defined in the Common Startegy Paper as “mutually-reinforcing” and as constituting “a robust and coherent approach to Russia”. Country Strategy Paper 2007 – 2013, Russian Federation, p. 3. 178 Hiski Haukkala, The Ambiguous Partnership, p. 4.

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state of human rights and the rule of law, all related to the EU’s criticisms over the values gap between the EU and Russia. These principal controversies are correlated with the objective and subjective disparities between the EU and Russia as international actors. These disparities in turn result from divergent political identities and modes of governance. Objectively, whereas Russia is a sovereign state following the principles of a functionalist realpolitik concept of foreign policy as well as equality, national sovereignty and the supremacy of national interests and adherence to a bilateral approach to EU member states, the EU manifests itself as a post-sovereign supranational institution with divided powers, applying the approach of a civilian, soft or normative power in its relations to third countries. Additionally, the two actors differ significantly over the modes of foreign policy-making, which also muddles processes of negotiation. Still, not only institutional-structural differences contribute to a poor state of relations in the partnership, but also certain subjective factors such as fundamental and conceptual differences in perceptions of each other and the partnership as such as well as multiple stereotypes, deeply inherent in the past. To this effect, it becomes clear that disagreements and dissimilarities tend to adversely affect the course of building a strategic partnership. This accompanies questions of the possibility and likely degree of Russia’s integration into the European Union’s structures and its Europeanization (in terms of political and societal norms). While Russia’s membership in the EU is overruled at least in a mid-term perspective, the question of the possibilities of its integration into EU structures – be it through association, more reinforced dialogues or by other means of participation – remains open. More importantly, however, in the context of this paper the vexing question that arises is what implications the current and potential conflicts and tensions between the EU and Russia carry for the Kaliningrad Oblast. So far the significant political complications hardly suggest a possibility of maintaining a coherent and explicit policy on Kaliningrad. Kaliningrad’s future development is heavily dependent on the overall state of EU-Russia relations and part of the answer to the above question lies in the scenario that both sides will choose for furthering their relationship. To date, within the situation when the two partners face difficulties in formulating the common interests, values and goals of their strategic partnership and when, as a result, numerous complications over fundamental political issues appear, the problem of the Kaliningrad Oblast runs the risk of being rather a weak factor in EU-Russia relations and falling to a secondary place on the common agenda. 179 Doubtless, the most favourable scenario of EU-Russia relations for the Kaliningrad Oblast 179 To date, a number of experts admit that the most acute phase of the Kaliningrad Oblast is in the past and that, pretending that they found a constructive solution to the

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would be that of the formation of a common market and harmonization of legislation and / or a strategic partnership in several strategically valuable spheres, where Kaliningrad could assume the role of a pilot region. Broadly speaking, these are the scenarios that – as contrasted to the schemes of the preservation of the status quo in relations and cold peace – presuppose a greater degree of Russia’s integration with the EU. While a new phase in the policies of each side in particular and the stand of their relations in general might begin with designing a new agreement for a strategic partnership, it again calls onto question what place the Kaliningrad Oblast has been accorded thus far in: a) the political partnership between the European Union and Russia and in b) their contractual relationship (so far). With these premises in the background, the subsequent sections (2. and 3.) of Chapter III. will deal with a particular case study of the Kaliningrad Oblast in the framework of EU-Russia relations.

2. The Kaliningrad Oblast in EU-Russia relations a) The outset of the EU-Russia dialogue on Kaliningrad The EU–Russia dialogue on the Kaliningrad visa and transit issues in the light of the EU enlargement of 2004 reached its peak in 2001 – 2002. This process generated a remarkable amount of academic discourse. Political scientists have applied different theoretical approaches to describe the strategies of both the European Union and Russia towards these issues. 180 They evaluated the foreign policy capacities of these two actors and offered a critical assessment of the overall stand of EU-Russia relations through the prism of the Kaliningrad Oblast. The problem of Kaliningrad has thus already been recognised as a factor influencing the EU-Russia relationship. 181

problem in the shape of the transit scheme, the EU and Russia will stay satisfied with it. In the meantime, according to the prognosis, the Kaliningrad Oblast will be a “sore tooth” in EU-Russia relations: although having a continuous character it will still not undermine the partnership. See Otnoshenija Rossii i Evropejskogo Sojuza: Sovremennaja situacija i perspektivy, Situacionnyj analiz pod rukovodstvom S.A. Karaganova, Prilozhenie I, Podrobnoe izlozhenie hoda situacionnogo analiza, Moskva, 2005, p. 17. 180 See, for instance, Paul Holtom / Pami Aalto, A European Geopolitical Subject in the Making? Andre Härtel, Die Kaliningradsfrage im Kontext der Beziehungen zwischen der EU und Russland, KAS-AI, 11/2004; Heinz Timmermann, Kaliningrad: Eine Pilotregion für die Gestaltung der Partnerschaft EU – Russland?; Arkady Moshes, Kaliningrad: Challenges Between Russia and Europe, in: Iris Kempe (ed.), Prospects and Risks Beyond EU Enlargement. Eastern Europe: Challenges of a Pan – European Policy, Leverkusen, 2003, and others.

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The Kaliningrad Oblast emerged as an issue on the common EU-Russia agenda as a result of the forthcoming EU Eastern enlargement of 2004; the Oblast was to become an EU enclave. Prior to this, both Russia and the European Union had only mentioned Kaliningrad in passing in their unilateral documents. In its “Common Strategy on Russia”, the EU touched upon the oblast while suggesting that the EU should improve its work with Russia “by enhancing cross-border cooperation with neighbouring Russian regions (including Kaliningrad), especially in view of EU enlargement, including in the framework of the Northern Dimension”. This latter external policy of the EU was launched to contribute to political, social, economic and environmental cooperation in Europe’s North (including Russia), and its first Action Plan adopted in June 2000 by the Feira European Council for the period 2000 –03 identified the Kaliningrad Oblast among its priorities. 182 Russia included the problem of the Kaliningrad Oblast, and particularly its transit and visa regime, in the “list of Russian Concerns” over enlargement which was passed on to the then President of the European Commission Romano Prodi in August 1999. 183 This was the principal step in Russia initiating a political dialogue with the European Union on the subject of Kaliningrad. 184 In addition, Russia’s Mid-term Strategy towards the EU (2000 – 2010), presented at the EU-Russia Helsinki Summit in October 1999, underlined the importance of maintaining interest in the Kaliningrad Oblast as an entity of the Russian Federation and preserving the territorial integrity of Russia in an expanded European Union. The Strategy (Chapter eight, Item three) also articulated the idea of transforming “the Kaliningrad Oblast into a Russia’s pilot region within the framework of the Euro-Russian cooperation in the 21 st century”. Although welcomed by both sides, the concept of a pilot region was criticised for not being properly deliberated and defined. 185 Yet, as Leonid Karabeshkin claims, this concept determined a strategic direction for the Russian policy; it promoted 181 See, Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 92. 182 Action Plan for Northern Dimension with External and Cross-Border Policies of the European Union 2000 – 2003, Council of the European Union 9401/00, Brussels, June 14, 2000. 183 Uniting Europe, Brussels, 1999, No. 66, p. 3. 184 See Igor’ Leshukov, Rossija i Evropejskij Sojuz: strategija vzaimootnoshenij, in: Dmitrij Trenin (ed.), Rossija i osnovnye instituty bezopasnosti v Evrope: vstupaja v XXI vek, MCK, Moskva, 2000, p. 41. 185 See, for instance, Pertti Joenniemi, Responding to Russia’s Kaliningrad Offensive, in: Hanne-Margaret Birckenbach and Christian Wellmann (eds.), p. 55. At a level of experts, the concept of a pilot region was understood as the endowing of a region with pilot functions in relation to other regions: first, “it must be possible to test certain strategies, mechanisms, and rules on it”; second, “an experimental region / area must be compatible with other regions / areas, so that it makes sense to draw conclusions on whether the experiences made in a pilot area can be carried on the whole territory or

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political dialogue over Kaliningrad in particular and conveyed a “European vector” to this policy in general. 186 At the same time, despite the fact that Russia displayed “unexpected openness” 187 to discussing Kaliningrad with the EU in its Mid-term Strategy, towards the end of 1999 and the beginning of 2000 it remained reluctant to internationalize the Kaliningrad issue. It was only the first half of 2001 that a turning point was reached in the EU-Russia dialogue on Kaliningrad. This period “marked the end of Kaliningrad as an academic subject for discussion in seminars and conferences, and the beginning of genuine engagement by the EU”, thanks to the efforts of the Swedish presidency. 188 The first outcome of these efforts was the Communication to the Council “The EU and Kaliningrad”, which the European Commission published in line with its “Enlargement Strategy Paper” of November 2000 189 on January 18, 2001. 190 Experts have assessed the communiqué as progressive in principle; the EU’s position has gradually evolved from remaining passive to according explicit recognition to the EU’s partial responsibility for the Kaliningrad Oblast in view of its enlargement. 191 Earlier, the EU had refrained from engaging with Kaliningrad’s problems proactively; first, the responsibility for Kaliningrad lay with Russia and the region itself, second, deeper involvement with the oblast – an inseparable part of Russia – could have had exposed it to the danger of being accused of interfering in Russia’s internal affairs. This tendency was similarly inherent in a general assumption that EU enlargement would be a positive and beneficial development for Russia, too, as it would create new opportunities for Kaliningrad. Thus, the EU policy towards Kaliningrad was initially shaped mainly by its policy framework for enlargement, wherein the candidate countries, Poland and Lithuania, were required to adopt the EU acquis in full. 192 Trade, visa and transit policies were the pivotal constituents of the acquis that would affect the Kaliningrad Oblast. 193 In the above Communicanot”. Evgeny Vinokurov, Kaliningrad in the Framework of EU-Russia Relations: Moving Toward Common Spaces, KU Leuven, Chair Interbrew Baillet-Latour-Working Paper No. 20, 2004, p. 25. 186 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 104. 187 James Baxendale, EU-Russia Relations. Is 2001 a Turning Point for Kaliningrad?, in: European Foreign Affairs Review, 6, 2001, p. 438. 188 Ibid., p. 441. 189 COM (2000) 700. 190 COM (2001) 26. 191 See, Pertti Joennimi, Responding to Russia’s Kaliningrad Offensive, p. 52. 192 See Christopher Preston, Russia and the EU or the EU and Russia? Approaches to Kaliningrad, in: Julie Smith / Charles Jenkins (eds.), Through the Paper Curtain. Insiders and Outsiders in the New Europe, Blackwell Publishing, 2003, p. 149. 193 Of the three policies, trade policy was estimated to lead to only limited consequences for the Kaliningrad Oblast. First, exports from Lithuania to Kaliningrad would

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tion, the EU did eventually concede that the impact of EU enlargement would be specific for Kaliningrad, and it expressed interest in “helping to ensure that the changes required by accession are made smoothly and in fostering cooperation with Kaliningrad on a number of regional issues”. 194 The Communication aimed at sketching out ideas and options for “a debate which the EU should launch with Russia (including Kaliningrad), and with the two neighbouring future Member States, Poland and Lithuania, on issues which will affect (our) common future”. 195 It first offered an analysis of the internal situation of the Kaliningrad Oblast covering economic development, governance, democracy and the rule of law, the fight against crime, the environment and health. The external problems of the Kaliningrad Oblast pinpointed by the paper included movement of goods (tariffs / technical standards, the transit of goods between Kaliningrad and the main land area of Russia, and border crossings), movement of people, supply of energy and fisheries. The Commission underscored that, upon their accession to the EU, Poland and Lithuania would have to introduce strict border controls, that this would carry implications for Kaliningrad, in particular for the movement of goods, people, and the energy supply. The key message of the communication to Russia was that visa-free transit – which Kaliningrad residents and certain categories of Russian citizens had been enjoying while transiting Lithuania – would be neither possible nor negotiable. 196 Additionally, Russian citizens would be required to have valid international passports for travelling because their internal identity documents would henceforth not be accepted. Nevertheless, the new requirenot affect the trade between Kaliningrad and Lithuania because Russia had been already enjoying Most Favoured Nation status under the PCA. Second, Lithuanian imports from Kaliningrad constituted only 0.75 per cent of its total imports. Due to the potentially small negative effects the issue of trade did not receive as much attention in the EU-Russia dialogue on Kaliningrad as the visa and transit issues did. See Christopher Preston, pp. 155 – 156. 194 COM (2001) 26, p. 2. 195 Ibid. 196 The transit regime of Russian citizens through Lithuania was regulated by the “Provisional Agreement between Lithuania and Russia on the Travel of Both Countries’ citizens” of February 25, 1995 until January 1, 2003. Introducing a visa regime between the two countries, it envisaged two categories of Russian citizens who were exempt from visas: permanent residents of the Kaliningrad Oblast and Russian citizen travelling by regular direct trains through Lithuania. This Provision had to be cancelled due to Lithuania’s commitments undertaken in the course of EU membership negotiations. Instead, a new “Agreement on the Travel of Both Countries’ Citizens” was signed on December 30, 2002, and came into force on January 1, 2003. Although the exceptions for the two categories of Russian citizens were abolished, the Agreement provided inhabitants of the Kaliningrad Oblast with a privilege of obtaining free multiple-entry visas valid for one year to travel to Lithuania. See Raimundas Lopata, The Transit of Russian Citizens to and from the Kaliningrad Oblast through Lithuania’s Territory, p. 105.

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ments, as the paper stressed, would not entail impediments to the movement of people since “the acquis provides for the issuance of transit visas, short-term visas and long-term national visas allowing for smooth border crossing and the possibility of multiple entries”. 197 Apart from this, the communication enumerated suggestions for improving border crossing procedures and presented issues of mutual interest with regard to the Kaliningrad Oblast which were not directly related to enlargement. The communication met with a positive reaction from the Russian government; Minister for Foreign Affairs Igor Ivanov, for instance, appraised it for “being sustained in a constructive spirit” and for containing useful ideas in the fields of energy, transportation, cross-border cooperation, ecology and fisheries. 198 Furthermore, the Commission’s initiative stimulated the Russian authorities to issue three documents in response, which henceforward served as cornerstones of the dialogue. To start with, the 40-page decision “On measures for ensuring social and economic development and vitality of Kaliningrad Oblast” listed actions to be taken by Russia internally to solve economic problems in the region which were not directly linked to EU enlargement. 199 Although the paper covered a wide range of sectors to be addressed (the economic situation, the Special Economic Zone, movement of goods and people, energy, telecommunications, the environment, fisheries, the amber industry, tourism, agriculture, social and health problems, and the military presence in the oblast), it attracted much criticism from Russian experts. Yuri Borko, for instance, commented on the document’s failure to sketch a real programme for action, to define Kaliningrad’s status and to redistribute competence between Moscow and the regional administration. 200 Natalia Smorodinskaya, while acknowledging the paper’s liberal tone in the policy towards the Kaliningrad issue, however, disapprovingly stressed the vagueness of its ultimate objectives, the lack of a clear scenario for the region’s development in the short run and the improbability of implementing the outlined projects due to insufficient funding. 201 Two other Russian documents put forward propositions for Russia, the EU and the Kaliningrad Oblast’s neighbouring countries, Lithuania and Poland, to tackle jointly the external problems of Kaliningrad caused by EU enlargement. In particular, on March 6, 2001, the Russian side turned over its “Possible so197

COM (2001) 26, p. 5. Vystuplenie Ministra inostrannyh del Rossijskoj Federacii I. S. Ivanova na vstreche s rukovodstvom Kaliningradskoj oblasti 8 marta 2001 goda, in: Informacionnyj Bjulleten’ MID RF, 11 marta 2001. 199 See James Baxendale, p. 444. 200 See Yuri Borko, Russia and the EU: The Kaliningrad Dilemma, CEPS Policy Brief No. 15, March 2002, Centre for European Policy Studies, Brussels, p. 5. 201 See Natalia Smorodinskaya, Kaliningrad Exclave: Prospects for Transformation into a Pilot Region, pp. 10 – 11. 198

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lutions to the specific problems of Kaliningrad region in connection with the EU enlargement”, drafted by the Ministry of Economic Development and Trade of Russia, to the European Commission during the meeting of the PCA subcommittee on trade and investment in Moscow. 202 Finally, the “In-depth evaluation of the Commission Communication” was produced by the same Ministry and sent to the Commission on March 19, 2001. 203 While the former paper, despite addressing similar problems to those reported in the foregoing Commission Communication, represented an entirely internal analysis of the enlargement consequences for Kaliningrad, the latter was explicit feedback on the Commission Communication. The “Possible Solutions Paper” identified Russia’s official position towards the problem of the Kaliningrad Oblast. Minister for Foreign Affairs Igor Ivanov also voiced this position at a meeting with the administration of the Kaliningrad Oblast in March 2001. 204 In brief, first, Russia was anxious to maintain: unimpeded transit between the Kaliningrad Oblast and the main area Russia for all kinds of transportation; the right to lay oil and gas pipelines and electricity lines in Lithuania, Poland and Latvia; and the unconstrained use of the telecommunications structure of these countries as well as the ability to lay new telecommunications cables. Second, Russia called for the creation of a facilitated regime for trans-border cooperation in the light of Poland’s and Lithuania’s transition to Schengen visa regulations. To this end, Russia suggested a visa-free regime for people travelling from Russia to Kaliningrad by fixed train or bus routes, and a special permit system for those who travelled by car along agreed routes with maximum time limits for staying in the transit states. 205 Also, it suggested that Kaliningrad’s permanent residents should be granted free early Schengen visas for trips to Lithuania, Poland and Latvia. Third, the Russian side advocated maintaining the interests of fishermen from Kaliningrad when including the fishing quotas for Poland and the Baltic states in overall EU quotas. Fourth, the Russian authorities came up with a motion that the EU should expand its development programmes in the oblast (including its structural funds). Fifth, Russia supported the idea of contract immunity wherein all financial arrangements concluded between Kaliningrad companies with EU or candidate country firms before enlargement should remain valid. Finally, it recommended that the authorities of Poland, Lithuania and Latvia should preserve their national powers and hence remain “empowered to conclude agreements with the region on the problems remaining within their national competence, even after enlargement”. 206 202

Uniting Europe, Brussels, No. 136, March 19, 2001, p. 7. Uniting Europe, Brussels, No. 138, April, 2, 2001, pp. 6 –7. 204 Vystuplenie Ministra inostrannyh del Rossijskoj Federacii I. S. Ivanova na vstreche s rukovodstvom Kaliningradskoj oblasti 8 marta 2001 goda. 205 See James Baxendale, pp. 455 – 456. 203

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The In-depth Evaluation Paper pronounced Russia’s positive reaction to most of the Communication’s suggestions (ten of the thirteen). 207 Both Russia and the EU displayed a readiness to commit themselves to maximising the potential of the enlargement process and reducing its negative consequences. Nevertheless, it became clear that the two sides took different approaches towards the Kaliningrad issue. To quote Olga Potemkina, “the main task of the EU was to place Kaliningrad in an environment that would not impede the functioning of the EU single internal market and the European area of freedom, security and justice”. 208 Rather in contrast, Russia’s priority lay in bringing to the fore the economic and social development of the oblast. The issue of the Kaliningrad Oblast meanwhile demonstrated a steady presence on the high political level of EU-Russia cooperation, consistently coming to dominate the common agenda. The oblast appeared in the programme of EU-Russia summits as early as May 2000, when Russia and the EU “reaffirmed [our] readiness to discuss, within the agreed format and framework of existing PCA bodies, the impact of future EU enlargement on Russia’s trade and economic interests and the special issues existing in the Kaliningrad region”. 209 Similarly, this item remained present in joint statements produced by the leaders of subsequent EU-Russia summits. In the course of time, the EU-Russia dialogue was narrowed down to the Kaliningrad visa and transit affairs. This discussion also disclosed divergences in the starting positions of the two sides. 210 On the one hand, Russia pushed the EU to examine the possibility of making an exception in the Schengen acquis and keeping visa-free transit for Russian citizens travelling from the Kaliningrad Oblast to Russia through Lithuania. On the other hand, the EU, although ready to consider the facilitation of the visa procedure, exhibited an uncompromising stance on introducing the visa regime. 211 The other disparities concerned the level of the political legitimacy of the Kaliningrad issue: the mechanisms of bilateral negotiations and the mode by 206

Ibid., p. 457. The three Commission’s suggestions which remained questionable for Russia concerned the examination of the trade impact of enlargement on Kaliningrad in the PCA trade and industry sub-committee; the examination in the wider context of Community policies on visas and on external borders, of the cost of passports and visas; and a quick conclusion of a readmission agreement between the EU and Russia. 208 See Olga Potemkina, Some Ramifications of Enlargement on the EU-Russia Relations and the Schengen Regime, in: European Journal of Migration and Law, 5, 2003, p. 237. 209 Joint Statement, EU-Russia Summit, May 29, 2000. 210 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 108. 211 See Olga Potemkina, p. 236. 207

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which the outcomes of these negotiations should be formalized. 212 As to the latter, Russia’s urgent proposition was that a separate legally binding agreement be concluded on Kaliningrad or a special Protocol to the PCA. 213 In contrast, the EU pointed out the sufficiency of the already existing mechanisms within the PCA framework for dealing with Russia’s concerns. In terms of the mechanisms of the negotiation process, Russia insisted on establishing a Special Joint Working Group within the framework of the EU-Russia Cooperation Council because the work of its different sectoral subcommittees, meeting on an infrequent basis, could hinder taking a complex and coherent approach to the problem during the negotiations. 214 For its part, the EU disagreed with such an initiative, similarly declaring that the available Cooperation Council subcommittees were adequate for discussing the issue. Clearly, a significant gap between the two sides’ approaches manifested itself in the degree to which the EU and Russia were willing to politicize the Kaliningrad problem. In its In-depth Evaluation Paper, the Russian government asserted that “[f]or this (community policies on visas and on external borders) we rather need the principal political decision, while technicalities may be settled later on”. 215 In contrast, the EU preferred examining the visa and transit issues of the Kaliningrad Oblast in technical rather than political terms, searching for practical decisions and avoiding the creation of additional mechanisms and instruments to handle these issues. The new mechanisms and instruments would indeed involve additional efforts and resources from the EU; for instance, reaching a consensus in the Union on the necessity of a separate agreement on Kaliningrad and its subsequent ratification would be required and would be unlikely to prove easy. On top of this, the EU had already been criticized for its excessive bureaucratic procedures. In this case, Russia held unrealistic expectations that the EU, like a “normal state”, “would take speedy decisions where required, creating new political instruments as new problems present themselves”. 216 When trying to give plausible reasons for the EU’s approach, 212 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 109. 213 Russia’s Middle Term Strategy towards the European Union of 1999 (Chapter 8, Item 3) contained a suggestion that a special agreement on Kaliningrad should be concluded. 214 At the joint conference of the leaders of the EU – Russia summit on October 3, 2001, President Putin declared that the two sides had agreed to the launching of a special working group to be put in charge for the visa issues and the problems of sustenance of the Kaliningrad Oblast in the light of EU enlargement. This however was not consolidated in the joint statement upon the summit. Nor was this working goup ever established. See Joint Press-Conference, Statements and Answers to Questions following the Russia-EU Summit, Brussels, October 3, 2001; and Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 111. 215 As cited in: Olga Potemkina, p. 237.

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(Russian) experts alleged first and foremost that the EU was reluctant to set a precedent by creating privileged conditions for one of its (Eastern) neighbouring regions. 217 b) The EU-Russia negotiations on Kaliningrad transit in 2002 Toward the end of 2001 and the beginning of 2002, the EU-Russia negotiations over the Kaliningrad Oblast seemed to have fallen into stagnation, with the EU and Russia rigidly adhering to their clashing positions and revealing no intention of compromising on them. Thus, the Common Line “Kaliningrad: Movement and Transit of People” was approved by the EU General Affairs Council on May 13, 2002. 218 This document started by underlining that although the EU considered the Kaliningrad situation a high priority, it laid the main responsibility for the oblast on Russia. The paper shed light on the basic positions of the Schengen acquis and their consequences for Kaliningrad and provided technical information for the candidate countries on their visa regime with Russia in the time period between their accession to the EU and the lifting of internal borders upon the implementation of the Schengen legislation. Above all, it proceeded from the fact that Russia was on the list (Annex 1 of Regulation 539/2001, as amended by Regulation 2414/2001) of third countries whose citizens were required to be in possession of visas to be able to cross the external border of EU Member States. Consequently, a visa would be required for Russian citizens’ transit and short stay up to three months. Furthermore, the EU pointed out that the new Member States would issue national visas in accordance with their national legislation, following the appropriate principles of the Schengen rules. It also presented a list with the main possibilities within the acquis. These possibilities included a) multiple entry visas for certain categories of professionals (for instance, lorry drivers) issued on a case-by-case basis, b) flexibility with the visa fees until the lifting of internal border controls, and c) visa exemptions for certain categories of persons. In addition, the EU promoted joint efforts to improve the economic situation of Kaliningrad and offered additional support for the development of the border infrastructure and intensification of cooperation in the fight against organized crime and corruption. 216 Alexander Songal, Developing an Institutional Fundament for the EU and Russia, p. 107. 217 See, for instance, Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 109, and Olga Potemkina, p. 246. 218 Draft EU Common Line for Russia “Kaliningrad: Movement and Transit of People”, Council of the European Union, DOC 8304/03, Brussels, April, 24, 2002. It was later incorporated into Communication from the Commission to the Council “Kaliningrad: Transit”, COM (2002) 510, Annex III.

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The sixth meeting of the EU–Russia Cooperation Committee, held on May 15, 2002 in Svetlogorsk of the Kaliningrad Oblast, was specifically dedicated to addressing the questions concerning the oblast in the light of EU enlargement and to complete the preparations for the upcoming EU-Russia summit. However, the two sides proved unable to reach an agreement. Following the provisions of a memorandum on the movement of people submitted by the then-Russian Prime Minister Mikhail Kasyanov to the European Commission a month earlier, the head of the Russian delegation, Deputy Minister for Economic Development and Trade Maxim Medvedkov, presented the Russian position and suggestions. 219 These comprised the creation of an opportunity, firstly, for visafree transit through Lithuanian territory in sealed railway wagons, stopping only at frontier stations and possibly accompanied by a police escort. Secondly, visafree transit by cars and buses was proposed along two fixed routes (“corridors”), with the right for a limited stay of 12 hours in Lithuania. Needless to say, the EU’s delegation, led by Catherine Day, Deputy Director-General of the External Relations DG of the European Commission, rejected these suggestions, finding the “corridors” inadmissible for the EU and the candidate countries. Under these circumstances, the Moscow EU-Russia summit on May 29, 2002 turned into another fruitless bilateral political event and essentially marked a “dramatic stage” in the dialogue. 220 Delivering his speech at the summit, President Putin criticized the stance of the dialogue on the Kaliningrad matter and explicitly made the development of overall EU-Russia relations dependent on the two sides’ ability to resolve the questions of Kaliningrad’s future economic development and vitality. He also stressed that this ability would serve as a criterion of the quality of EU-Russia cooperation, as its “litmus test”. 221 As a result of the lack of progress in negotiations, Russia went as far as to harden its position, which first became perceptible in the Russian official discourse; President Putin more than once drew an analogy between the Kaliningrad transit regime advocated by the EU and the one that had been imposed on West Berlin in the Cold War era. 222 By the same token, Putin appealed to a human rights discourse, claiming that the European Union was infringing on Russian sovereignty and the constitutional right of Russian citizens to free movement from one part of the country to another. 223 219

See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 111. 220 Olga Potemkina, p. 239. 221 Vystuplenie na vstreche Rossija – Evropejskij sojuz na vysshem urovne, 29 maja 2002. 222 See, for instance, Paul Holtom, p. 39. For example, the West Berlin analogy was used by President Putin at one of his press conferences. See President Putin’s press conference on June 24, 2002, Excerpts from a Transcript from the News Conference for Russian and Foreign Journalists.

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The other evidence of the change in the Russian position was the establishment of the post of a Special Representative of President of Russia on Kaliningrad. 224 This post implied a higher official status than this of the ambassador who had previously been appointed to be in charge of the Kaliningrad Oblast by the Ministry of Foreign Affairs. In this way the Kaliningrad issue was transferred to the presidential level as a result of an insufficiency of “the normal Russian machinery”, 225 which consisted of mechanisms on the level of the Ministry for Foreign Affairs. The assignment of President’s Representative was offered to Dmitrii Rogozin, the Head of the Russian Federation State Duma Committee for International Affairs, who was well-known for his patriotic rhetoric. His priority consisted of seeking solutions primarily for maintaining Russia’s political interests but also for the economic development of the Kaliningrad Oblast. Furthermore, President Putin changed his tactic from unsuccessful dealings with the European Commission, troika and PCA forums to lobbying for Russia’s interests and position in direct talks with leaders of key EU Member States. The mechanisms of this traditional diplomatic approach were well-developed and helped essentially “bypass Brussels”. 226 An illustration of the results of President Putin’s appeals to European leaders – an example extensively used by political analysts – was French President Jacques Chirac’s open support for the right of Russian citizens to move freely from one part of the country to another. 227 Admittedly, by hardening its position and diversifying its negotiating tools Russia made some headway. 228 This was specifically linked to the Seville European Council’s conclusions in June 2002. The European Council invited the Commission to: submit, in time for its Brussels meeting, an additional study on the possibilities for an effective and flexible solution to the question of the transit of persons and goods to and from the Kaliningrad Oblast, in compliance with the acquis and in agreement with the candidate countries concerned. 229

Some experts argued that this signified that the Kaliningrad issue had increased in importance in the EU since it was promoted from a (bureaucratic) 223

2002. 224

Vystuplenie na vstreche Rossija – Evropejskij sojuz na vysshem urovne, 29 maja

See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 113. 225 Pertti Joenniemi, Responding to Russia’s Kaliningrad Offensive, p. 55. 226 Paul Holtom, p. 41. 227 See, for instance, Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 114, and Paul Holtom, p. 42. 228 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 114. 229 Presidency Conclusions. Seville European Council, June 21 –22, 2002.

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level of the European Commission to a (political) level of the heads of states. 230 On July 12, 2002, the European Commission presented its memo “EU-Russia partnership on Kaliningrad”. 231 Although the EU re-affirmed its firm position on the infeasibility of transit corridors across its future Member States and exceptions from the Schengen rules, some positive changes were still epitomised in a number of its offers. 232 Among other things, these included an offer to help in facilitating visa procedures; the EU expressed its readiness to finance the provision of international passports to all Russian citizens residing in Kaliningrad. Also, the EU was willing to contribute to the development of Kaliningrad by providing 25 million euro under the TACIS programme, “which could be used to promote economic development through investment in enterprise development and in small scale infrastructure”. 233 Finally, the EU suggested that a new Kaliningrad Fund should be established based on a contribution from the European Commission, with EU Member States and other interested parties being able to contribute. In his letter to the president of the European Commission and the heads of states of EU Member States of August 27, 2002, on problems concerning support for the Kaliningrad Oblast in the light of EU enlargement, President Putin made a bold and ambitious proposal that Russia and the EU should abolish the visa regime between them. 234 This aimed at facilitating the settlement of the dispute on Kaliningrad in particular and fostering a strategic partnership between the EU and Russia in general. It was believed that this partnership would help turn Europe into a continent without dividing lines through fully integrating Russia into the common European economic, legal and humanitarian space. Putin also expressed his hope that a mutually acceptable agreement on the Kaliningrad problems would be reached by the two parties before the EU-Russia summit in November 2002. As can be seen, the Russian position gradually shifted away from the idea of a pilot region (with a focus on economic and social development of the oblast) to an emphasis on maintaining the links between the oblast and the main area of Russia rather than between the oblast and its neighbouring countries. Russia’s major goal was thus to keep its sovereignty and territorial integrity. 235 This was 230

See, for instance, Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 115. 231 EU-Russia partnership on Kaliningrad. MEMO/02/169, Moscow, July 12, 2002. 232 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 115. 233 EU – Russia partnership on Kaliningrad, p. 3. 234 On Russian President Vladimir Putin’s Messages to the President of the Commission of the European Communities and Heads of the Member States of the European Union, Daily News Bulletin, August, 28, 2002, Ministry of Foreign Affairs of the Russian Federation.

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also the reason that Russia insisted that visa-free transit should be kept for all Russian citizens and not only for Kaliningrad residents, since a different status and regime for only some Russian citizens would undermine this goal. 236 The proposal for establishing visa-free “transit corridors” signified Russia’s “step backwards in advocating technical solutions as a substitute to a debate on the underlying, more conceptual issues”, one of the issues being the idea of a pilot region. 237 On the other hand, President Putin’s proposal for the abolition of a visa regime between Russia and the EU was “far more promising in its promotion of far-reaching openness” because this idea would not impact only the management of borders but also apply to a broader set of issues, including an “allEuropean space”. 238 Again, this proposal favoured Russia as it helped improve its image. Russia presented itself objectively as an open country which supported integration, advocated removing barriers, was free of dogmatic thinking and which was not absorbed in questions of its sovereignty and territorial integrity. However, while being overall stimulating and constructive in the negotiation process on Kaliningrad transit, the scenario of a visa free regime between the EU and Russia could hardly be transformed into reality in the short- and middle term run. First of all, the Russian proposal lacked sufficient clarity in explaining its main aspects. Most crucially, Russia would have then been obliged to sign a readmission agreement with the EU and close its borders with other CIS countries, both measures which would require huge financial expenditures. c) The Kaliningrad compromise Russia put in a great deal of effort to working out further possible technical solutions on the Kaliningrad transit issue. One of its initiatives was outlined in a draft “memo of intent” which was presented to the European Commission by Dmitrii Rogozin in September 2002. 239 The paper aimed at making a plan ensuring transit between Kaliningrad and the main body of Russia with a minimum of bureaucratic obstacles as an interim solution, until a visa-free travel regime was introduced. The plan was based on the assumption that there was no specific acquis on the transit of persons through EU territory from a third 235 In this respect, Raimundas Lopata argued that the Kaliningrad Oblast turned into a geopolitical hostage in Russia’s strategic game of sustaining control of the Oblast and meanwhile influencing the process of European integration with the help of the Oblast. Rajmundas Lopata, Anatomija Zalozhnika, p. 53. 236 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 117. 237 See Pertti Joennimi, Responding to Russia’s Kaliningrad Offensive, p. 56. 238 Ibid. 239 COM (2002) 510, pp. 1 – 2.

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country to the same third country. The simplified procedure for the transit of Russian citizens travelling to and from Kaliningrad proposed by the Russian authorities firstly included segregated (“non-stop”) high-speed trains and non-stop busses which would transit Lithuania in accordance with approved schedules and routes. Secondly, it was envisaged in this paper that bus and train tickets would be sold to Russian citizens who carried international and internal passports. While passengers possessing international passports would not require additional documentation and have their passports stamped, holders of internal passports would be issued with a Lithuanian transit permit. Meanwhile, Russian citizens who had committed offences in Lithuania, whose names would be recorded in agreed-upon lists, would be denied the opportunity to buy train and bus tickets. Thirdly, Russia would provide the passenger lists to the Lithuanian authorities. Fourthly, the Russian authorities proposed that Lithuanian officials would travel on the trains and buses and that controls en route could be carried out. In regard to car passengers, the procedure foresaw them being issued with transit visas at the border. Finally, Russia confirmed its intention to sign a readmission agreement with Lithuania. The Commission Communication to the Council “Kaliningrad: Transit” laid out the responses of the European Union and its future Member States, Poland and Lithuania, to the abovementioned proposals. 240 Their common reaction was that, although interested in finding flexible arrangements within the EU legislation and in pursuing cooperation with Russia, the three actors did not consider either non-stop buses / trains or transit corridors feasible in the short run nor relaxation of the acquis. The Commission did admit, however, that a number of the Russian proposals would “merit serious consideration”. 241 Both the very act of producing this paper and a certain flexibility reflected in the Commission’s proposals were assessed by academic circles as an attempt by the side of the EU to reduce the increasing tension between Russia and the EU, since the apprehension was growing that the Russian side would boycott the November EU-Russia summit. 242 Proceeding from the provisions of the Common Line of May 13, 2002, the communiqué presented a package of measures to be taken to facilitate transit to and from Kaliningrad. First it came forward with the idea of a “Facilitated Transit Document”. This document would be designed on a model of a multiple-entry transit visa to be issued by the consulates of the candidate countries concerned at low cost or free of charge and to be available to Russian citizens who were bona-fide persons and travelled between Kaliningrad and the main area of Russia frequently and directly by both road and rail. It was expected that Russian authorities would provide lists of these travellers in advance. Until 240

Ibid., p. 2. Ibid., p. 7. 242 See, for instance, Olga Potemkina, pp. 240 – 241, and Guido Müntel, Kaliningrads Weg aus der Isolation?, p. 254. 241

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the end of 2004 the FTD would be issued to Russian citizens on the basis of their internal passports, from 2005 onwards a valid international passport would be required. The EU furthermore agreed to examine the Russian proposal concerning the introduction of non-stop trains to allow visa-exempt travel through the territory of Lithuania. However, it underscored that the assessment of the legal and technical feasibility of such trains would be undertaken only after EU enlargement. In this manner, the EU assured Lithuania that its admission to the Schengen area would not be impeded by visa-free transit by train and hence the political conditions for Accession Treaty ratification in Lithuania and EU Member States would not be disturbed. Also, the EU expressed its interest in opening discussions within the PCA institutions on “defining the conditions necessary for the eventual establishment of a visa-free travel regime”. 243 At the same time, the EU made it clear that this discussion should be held along with the talks on “the measures which Russia is putting in place to strengthen the rule of law, to intensify the fight against organized crime, to ensure border security and that travel documents are secure and accurate”. 244 In Karabeshkin’s view, this statement represented the correct way for the EU to imply that it considered the possibility of a visa-free regime only in the long perspective. 245 Indeed, the General Affairs Council of September 30, 2002 advised that discussions on a visa-free regime were deemed a long term issue and that these discussions should be separate from the discussions on Kaliningrad. 246 Finally, the Communication indicated that the existing international conventions, namely, the Transports Internationaux Routiers (TIR), and the Convention concerning International Carriage by Rail (COTIF), could enable the transit of goods with relatively little bureaucracy and that the parties to the Conventions could also adapt simplified procedures for transit by rail, for example, by accepting existing Russian documentation, such as the Soglashenije o Meshdunarodnom Shelesnodoroshnom Grusowom Soobstschenii (SMGS). The Commission Communication on Kaliningrad was endorsed by the General Affairs Council of September 30, 2002. 247 Russian feedback on the paper was negative; the FTD was called “a visa in disguise”, the terms of the feasibil243

COM (2002) 510, p. 7. Kaliningrad: European Commission proposes set of measures to ease transit after enlargement. Press Release, Brussels, September 18, 2002. 245 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 119. 246 Russia – Kaliningrad. Council Conclusions, General Affairs and External Relations, Brussels, September 30, 2002, Doc. 12134/02. 247 Ibid. 244

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ity study of non-stop trains were found unsatisfactory; and doubts arose among the Kaliningrad authorities over the probability of providing all Kaliningrad residents with valid international passports by 2005. 248 Yet, it became obvious that the communiqué offered a way out of the deadlock and opened ground for the upcoming EU–Russia summit. The Conclusions of the General Affairs Council on October 22, 2002, further to the Council’s Conclusions of September 30, revealed that the EU’s proposals were modified to take into account the Russian concerns, with all the parties involved accepting them as a compromise. 249 On the one hand, the Council left the provisions concerning the visa regime and the application of a facilitated procedure of issuing visas unaltered. It affirmed that Lithuania would implement national regulations for border control from January 1, 2003 and that – in so doing – it should act in a flexible manner to avoid impeding the traditional flow of transit passengers by train. Also, Lithuania would be entitled to carrying out necessary controls and refuse entry into its territory. The EU and Lithuania committed themselves to retain a simple and nonbureaucratic operation of the FTD system, with the FTD being available for all forms of direct transit between Kaliningrad and the rest of Russia from July 1, 2003. On the other hand, the Council announced – to the advantage of the Russian side – that the initiation of the feasibility study of non-stop trains would be speeded up. Lithuania expressed its agreement to join the discussions on Terms of Reference because the Council assured Lithuania that its Accession Treaty would include certain EU binding guarantees. The EU in particular guaranteed that a) Lithuania would receive assistance for the additional costs of implementing the measures in a Kaliningrad “package”, and b) that a decision on the nonstop trains option would be made only after Lithuania’s accession to the EU. These Conclusions were approved by the Brussels European Council of October 24 – 25, 2002. 250 A month later, the EU and Russia met at their tenth summit in Brussels to “come to a more concrete compromise” on Kaliningrad transit. 251 The outcome of the meeting was the “Joint Statement on Transit between the Kaliningrad Region and the Rest of the Russian Federation”. 252 In the Statement (Section one), the two sides acknowledged “the unique situation” of Kaliningrad and expressed their agreement “to make a special effort to accommodate the concerns on both 248

See Olga Potemkina, p. 242. Ibid., p. 243. Kaliningrad – EU General Affairs and External Relations Council Conclusions, October 22, 2002. 250 Presidency Conclusions, European Council, Brussels, October 24 –25, 2002, p. 7. 251 Olga Potemkina, p. 243. 252 The Joint Statement on Transit between the Kaliningrad region and the Rest of Russia, November 11, 2002, Brussels. 249

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sides related to the future transit of person and goods”, and “to intensify their cooperation to promote the social and economic development of the region as a whole”. In the Statement, an FTD scheme was established on the basis of the necessary legislation to be introduced by the EU. The FTD scheme was to be valid for direct transit by land within a limited period of time, and to be issued free of charge or at very low cost. The scheme envisaged two types of FTD to be issued to Russian citizens. The first type was for multiple entry direct transit via all forms of transport by land and it could be applied for and obtained at a Lithuanian consulate. The other type, the Facilitated Rail Travel Document (FRTD), was to cover single trips by train transiting Lithuania. It could be obtained on the basis of personal data which a passenger submitted at the time of ticket purchase that was to be transmitted to the Lithuanian authorities. Provided the latter had no objections, a train ticket would be sold to the passenger, who in turn would receive a FRTD at or before the Lithuanian border after the appropriate checks had been carried out by the Lithuanian side. Also, the Statement reaffirmed the previously stated intentions of the two sides: the EU was to initiate the feasibility study of nonstop trains after the meeting of the European Council in Copenhagen 253 and Russia was to complete negotiations on a readmission agreement with Lithuania no later than June 30, 2003. 254 The FTD scheme was consolidated by Protocol 5 of the 2003 Act of Accession. 255 Article 2 of the Protocol stipulated that the EU would “assist Lithuania in implementing the rules and arrangements for the transit of persons” and “bear any additional costs incurred by implementing the specific provisions of the acquis provided for such transit”. 256 Article 3 underlined that “any further 253

The feasibility study on high-speed non-stop trains was submitted in September 2004. However, the idea of such trains was dropped because of the estimated very high costs. See Evgeny Vinokurov, Kaliningrad transit and visa issues revisited, CEPS, 2006, p. 1. 254 In May 2003, the readmission agreement was signed by Lithuania and Russia and ratified by the Russian State Duma. It became effective on August, 21, 2003. Also, in May 2003 the State Duma ratified two bilateral treaties signed in 1997: the Treaty on State Border and the Treaty on the Delimitation of the Exclusive Economic Zone and Continental Shelf in the Baltic Sea, with both treaties coming into force in August 2003. See Lithuania and Russia: A Decade of Relations, in: Lithuania in the World, No. 5, 2003. 255 See Christophe Hillion, Russian Federation (Including Kaliningrad), in: Steven Blockmans and Adam Łazowski (eds.), p. 491. Protocol No. 5 on the transit of persons by land between the region of Kaliningrad and other parts of the Russian Federation, Accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia (2003), OJ L 236 (2003). 256 On February 28, 2003, the EU and Lithuania signed a Financing Memorandum, allocating 12 million Euros to Lithuania to implement the new system of facilitated transit procedures. As an exception to the usual PHARE rules, the EU expressed its readiness

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decision concerning the transit of persons” would be “only adopted after the accession of Lithuania by the Council acting unanimously on a proposal from the Commission”. As a result of trilateral (EU–Lithuania–Russia) negotiations based on the achievements of the Brussels EU-Russia summit of 2002, a package of decisions was adopted for the implementation of the FTD schemes. 257 The FTD came into operation on July 1, 2003, and it has reportedly functioned smoothly ever since. 258 Although the FTD scheme was deemed to be a temporary measure until Lithuania’s entry into the Schengen area it will be preserved thereafter since the current transit scheme already represents a part of the acquis in any event. 259 On April 27, 2004, a “Joint Statement on EU enlargement and EU-Russia relations” was adopted. 260 Apart from recalling and taking note of the implementation of the previous Joint Statement on Transit of 2002, the two sides specifically dedicated a number of passages to the transit of goods to and from Kaliningrad and mentioned their intention to support the social and economic development of Kaliningrad region in the context of the creation of the EU-Russia Common Spaces. Currently, Kaliningrad maintains its presence on the agenda of EU-Russia cooperation. Thus, technical meetings and consultations between the European Commission and Russian authorities on the transit issues take place regularly (for instance, in October 2004, November 2005, January 2006). 261 On February 28, 2006, Commissioner for External Relations and European Neighbourhood Policy Benita Ferrero-Waldner visited Kaliningrad, where she also met Presidential Aide Sergei Yastrezhembsky and Governor of the Kaliningrad Oblast Georgy Boos and discussed Kaliningrad’s prospects, transit issues and future support for the region. 262 In the autumn of 2006, a delegation of the EU to finance 100 % of the project. See Signature of EUR 12m financing memorandum for Kaliningrad transit, IP/03/301, Brussels, February 28, 2003. 257 See Evgeny Vinokurov, Transit is just a part of it, p. 2. 258 COM (2006) 860. 259 See Evgeny Vinokurov, Transit is just a part of it, p. 2. See Council Regulation (EC) No. 693/2003, of April 14, 2003 establishing a specific Facilitated Transit Document (FTD), a Facilitated Rail Transit Document (FRTD) and amending the Common Consular Instructions and the Common Manual, OJ L 99/8 (2003); and Council Regulation (EC) No. 694/2003 of April 14, 2003 on uniform formats for Facilitated Transit Documents (FTD) and Facilitated Rail Transit Documents (FRTD) provided for in Regulation (EC) No. 693/2003, OJ L 99/15 (2003). 260 Joint Statement on EU Enlargement and EU-Russia Relations, Brussels, April, 27, 2004. 261 EU Support to Kaliningrad, available at: http://www.ec.europa.eu/comm/external _relations/north_dim/kalin/index.htm. 262 Commissioner Ferrero-Waldner to visit Kaliningrad 28 th February 2006, IP/06/233, Brussels, February 27, 2006.

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working group on Eastern Europe and Central Asia paid a visit to the Kaliningrad Oblast where it met with the regional authorities and EU Member States representatives. 263 The EU continues with engagement in technical assistance to the Kaliningrad region, which will be specifically examined and analysed in more detail in Chapter 4. d) Summary The divergence between the EU’s and Russia’s positions on the Kaliningrad problem was inherent in their concerns or interests. 264 To Russia, the major concern was passenger and cargo transit from Kaliningrad, particularly the maintenance of links between the oblast and the main area of Russia. The other concern was the economic development of the Kaliningrad Oblast, in particular its weaker economy that affected its asymmetrical development compared to the development of the neighbouring countries. Both the physical (geographical) detachment of the oblast from the main body of Russia and its economic backwardness could potentially cause secessionist tendencies in the region and therefore have negative consequences for Russia’s internal development. Meanwhile, the European Union confronted soft security threats; its priorities were to prevent these threats from spilling over from the oblast into the EU and to ensure a smooth extension of an area of freedom, security and justice to the new Member States in EU enlargement eastwards. These conflicting interests influenced the two sides’ policies towards Kaliningrad and their approaches to each other during the negotiation process; the collision was epitomised in their unilateral documents. On the one hand, Russia pursued a rather inconsistent line. In its Middle Term Strategy, it proposed the idea of the Kaliningrad Oblast as a pilot region and issued ad-hoc policies on economic and transit questions. However, in time its emphasis shifted away from prioritizing the economic development of the oblast to concentrating its efforts on preserving visa-free transit and hence guaranteeing of Russia’s sovereignty and territorial integrity. In doing so, Russia tended to take a politicised approach. On the other hand, the fact that Russia conceptually recognized Kaliningrad as “a connecting chain in the framework of EU-Russian dialogue” was a remarkable achievement per se. 265 Put another way, Russia resigned an isolationist scenario for the Kaliningrad Oblast, proved its general positive orientation towards the EU and demonstrated the intention to further develop bilateral ties. 266 Equally impor263 Kaliningrad – an example of EU-Russia partnership and co-operation, the European Commission’s Delegation to Russia. 264 See Evgeny Vinokurov, Kaliningrad in the Framework of EU-Russia Relations, p. 14. 265 Ibid., p. 18.

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tant, the whole interaction on this particular problem made Russian authorities more knowledgeable on the European Union’s structure and functioning. 267 The EU’s policy towards Kaliningrad evolved incrementally. It was first streamlined within the policy framework for enlargement, when Lithuania and Poland were preparing to join the EU. Initially, the EU tended to “neglect” Kaliningrad, underestimating the consequences of EU enlargement for the oblast and rather considering the enlargement as purely beneficial for the region. 268 Apart from this, the EU believed that the responsibility for Kaliningrad lay solely with Russia. Subsequently, however, within two consecutive years (2001 – 2002), the EU produced two Communications specifically pertaining to Kaliningrad. These documents revealed the evolution of the EU’s policy and showed the EU’s cooperative behaviour in dealing with Russia. The Kaliningrad Oblast was distinguished from other regions of Russia due to its unique standing in light of EU enlargement and thus was granted a higher priority; the EU’s interest in contributing to the region’s development was also expressed. However, the overall approach of the EU remained oriented towards a technical solution of the problem. The Brussels compromise of 2002 led to the creation of two poles among specialists in the field. Some of them found that the overall EU-Russia dialogue on the Kaliningrad issue was indicative of a slow rapprochement of both sides; regardless of the difficulties and tensions during the consultations the EU and Russia reached a compromise agreement in fairly sensitive areas. 269 This compromise was described as political because, firstly, the Kaliningrad transit question was eventually promoted from the technical level to the political level of EU-Russia cooperation. 270 Secondly, visa regulation was softened to the advantage of Russian citizens as a result of concessions by the EU, which for the first time went as far as making legislative improvements in the Schengen acquis, thus ensuring the legal usage of the FTD scheme in (theoretically possible) similar situations. 271 Following this logic, it could be argued that the dialogue on Kaliningrad proved a successful test for EU-Russia relations.

266

See Christopher Preston, p. 166. See Timofei Bordachev, The Russian Federation and the European Union: Kaliningrad and Beyond, p. 82. 268 See Sander Huisman, p. 20. 269 See, for instance, Evgeny Vinokurov, Kaliningrad in the Framework of EU-Russia Relations, p. 19. 270 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 122. 271 See Guido Müntel, Kaliningrads Weg aus der Isolation?, p. 256. 267

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Others nonetheless declared that this compromise was technical rather than political, since visa-free transit was not sustained. 272 Moreover, with Russia being obliged to sign a costly readmission agreement with Lithuania, the Brussels compromise re-established the inequality and asymmetry of EU-Russia relations. Concentrating merely on the transit aspect of the Kaliningrad problem, the two sides lacked political will and greater flexibility to take responsibility for the economic and social development of the Kaliningrad Oblast and thus to create innovative instruments to contribute to this development. The EU and Russia failed to respond jointly and adequately to the major challenge posed by EU enlargement: to help Kaliningrad overcome its inability to compete economically in European markets and to close the development gap between the oblast and the neighbouring countries. 273 The dialogue on Kaliningrad transit was held within the framework of both sides’ external policies towards each other, and the tense negotiation process on Kaliningrad transit seemed to be suggestive of the overall complicated nature of EU-Russia relations. It is precisely for this reason that it is not clear yet whether development of the Kaliningrad Oblast will receive new momentum in a run-up agreement between the European Union and Russia, particularly since these two actors still need to find more productive modes for political cooperation. By switching from the political perspective of the proceeding two parts of Chapter 3 to a legal / institutional one below, this paper will explore how the issue of Kaliningrad is treated within the legal formalized EU-Russia partnership.

3. The political and legal foundation of EU-Russia relations a) Russia in the system of the EU’s external policies The European Union has been applying various approaches in its policy towards Russia, ranging from unilateral (such as its Common Strategy on Russia) and bilateral (including the PCA and the Four Common Spaces) to multilateral (exemplified by the Northern Dimension Initiative). Among these, however the PCA has been the legal basis and core of all the other approaches. In the meantime, the Partnership and Cooperation Agreement (with the CIS countries) itself is one kind of the diverse policies that the EU has been pursuing toward its neighbouring countries since the 1990s, others being the European Economic Area with the EFTA states, Europe Agreements with the states of Central and 272 273

See, for instance, Olga Potemkina, p. 246, and Paul Holtom, p. 44. See Natalia Smorodynskaya, Kaliningrad’s Economic Growth Problem, p. 263.

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Eastern Europe, the Euro-Mediterranean Agreements with the participant countries to the Barcelona Process, and the Stabilization and Association Agreements with the Western Balkans, FYROM and Croatia 274 which were touched upon in Chapter 1. Fundamentally, these policies differ in the EU’s approach based on two levels of cooperation: firstly, integration or accession to the EU and, secondly, stabilization, regional cooperation and partnerships. 275 Central to the first approach is the principle of rigid conditionality applied to the countries aspiring to EU membership. The Partnership and Cooperation Agreements represent the second approach; they operate in relation to the countries of the former Soviet Union with no perspectives for EU membership and aim at instituting qualitative changes in economic and political cooperation based on the principles of market economy and respect for democratic values. 276 Unlike the EU policy towards the countries of Central Eastern Europe and South Eastern Europe resting on these countries’ preparations to access the EU, the policy with regard to Russia and the CIS states has been, until recently, of lower priority for the EU. 277 Within this latter group, nonetheless, the EU has employed a “Russia first” strategy and developed its relations with Russia substantially and quickly, while, until the launching of its European Neighbourhood Policy, its relationship to other former Soviet republics was diagnosed as “a function of policy towards Russia” 278 rather than an autonomous factor. This is illustrated by the fact that the first PCA was negotiated, concluded and entered in force with Russia, then followed by PCAs with Ukraine, Moldova, and countries of the South Caucasus and Central Asia. 279

274 See Steven Blockmans / Adam Łazowski, Chapter 1, The European Union and its Neighbours: Questioning Identity and Relationships, in: Steven Blockmans and Adam Łazowski (eds.), pp. 13 – 14. 275 See Antonio Missirolli, The EU and its Changing Neighbourhood: Stabilization, Integration and Partnership, in: Roland Dannreuther (ed.), European Foreign and Security Policy: Towards a Neighbourhood Strategy, 2004, p. 12. 276 To date, with the European Neighbourhood Policy (ENP) having been launched in 2003 – 2004, the three strategies that now constitute EU neighbourhood policy – that are based on the above two modified approaches – are the enlargement process, the ENP and the four Common Spaces with Russia. See Marius Vahl, A Privileged Partnership? p. 12. 277 Ibid., p. 7. 278 Ibid., p. 9. 279 Similarly, the first EU’s Common Strategy, which was introduced by the Treaty of Amsterdam as a CFSP instrument, was directed towards Russia. Also, Russia was the first CIS country to be granted a market economy status by the EU in November 2002 and to enter into agreement with Europol, to join the Bologna process on higher education in 2003, to sign agreements on visa facilitation and readmission in May 2006.

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The Partnership and Cooperation Agreement between the EU and Russia was original for both sides. For post-communist Russia, it was an unprecedented case; Russia had never concluded such a complex treaty with any other developed state (essentially its adversaries in the Cold War confrontation) such as the USA or Japan. 280 For the European Union, the treaty “represented an original formula of EU external relations at the beginning of the 1990s”. 281 Apart from covering issues of economic cooperation, the agreement addresses such areas as political dialogue 282 and cooperation related to issues of home and justice affairs, particularly the provisions of Title VIII “Cooperation on prevention of illegal activities” and Article 82 (“Drugs”) of the PCA. These two latter domains correspond to the matters placed under two relatively recent EU’s pillars, the Common Foreign and Security Policy and Justice and Home Affairs. As a result, they fell out of the competence of the European Community and this accounts for the fact that the PCA is a mixed agreement by nature. The Member States, along with the European Community, concluded the agreement with Russia, thus revealing “the presence of the Union in the EU-Russia partnership” 283 in the conditions of the EU’s limited capacities for external actorness in the mid1990s. On the one hand, as observed by Christophe Hillion, “the language used by the PCA is prudent and largely non-committal”, 284 on the other hand, the wide scope of issues addressed by the PCA is “noteworthy as it includes provisions related to the three sub-orders of the Union”. 285 Regardless of the fact that these PCAs are not generally based on the integration / accession approach they are not free of political conditionality. This is the case of the PCA between the EU and the Russian Federation, which stipulates that respect for democratic principles and human rights as defined in particular in the ‘Helsinki Final Act’ and the ‘Charter of Paris for a New Europe,’ underpins the internal and external policies of the Parties and constitutes an essential element of partnership and of this Agreement (Article 2). 286 280 See Jurij Borko, Otnoshenija Rossii s Evropejskim Sojuzom: Tekuwie Problemy i Dal’nie Perspektivy, p. 366. 281 Christophe Hillion, Chapter 14. Russian Federation (Including Kaliningrad), p. 484. 282 It has been noticed that the prominent position of the provision on political dialogue (Title II) in the PCA – which follows Title I (General principles) and precedes Title III on trade in goods – is indicative of the significance of political dialogue in EU-Russian partnership. See Christophe Hillion, p 480. The two sides have gradually evolved the political dialogue by establishing different new forms of cooperation in such fields as political and security matters in Europe, energy, justice and home affairs including fight against terrorism. Ibid. 283 Ibid., p. 484. 284 Ibid., p. 476. 285 Ibid., p. 484.

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According to the Joint declaration in relation to Article 107 (b) appended to the PCA, the “violation of the essential element of the Agreement set out in Article 2” – alongside the “repudiation of the Agreement not sanctioned by the general rules of international law” (a) – constitutes a material breach. In its turn, pursuant to the same Joint declaration, the material breach stands for the term “cases of emergency” in the whole dispute settlement mechanism as laid down in Article 107: if either Party considers that the other Party has failed to fulfill an obligation under the Agreement, it may take appropriate measures. Before so doing, except in cases of special urgency, it shall supply the Cooperation Council with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties.

As such, the party affected is allowed to suspend unilaterally the implementation of the PCA. 287 Overall, as Christophe Hillion states, the human rights’ dimension of the PCA is indicative of: the embryonic competence of the Community in the field of human rights protection. Straddling the pillars, it also relates to the CFSP provisions, such as Article 11 TEU, and more globally to the general provisions of the EU Treaty, notably its Article 6. The cross-pillar character of the PCA provisions on human rights is typified by the regular human rights consultations held between Russia and the European Union Troika. 288

Although the clause on human rights and respect for democratic principles is formulated in the PCA for both sides in general terms, this obligation is clearly meant to be imposed mainly on the Russian Federation. 289 As can be seen, having been operational over the period 1997 until the present, the PCA has not only been the centerpiece and the hub of the EU-Russia partnership but also an innovative policy opportunity for the EU to reveal itself as an external actor. b) The Partnership and Cooperation Agreement: Objectives and an institutional set-up The PCA is the legal foundation of the partnership between the EU and the Russian Federation; it was signed by the European Communities and their 286

Ibid., p. 482. As Christophe Hillion claims, this clause is referred to as the “Bulgarian clause” since it first emerged in the Europe Agreement with Bulgaria (Articles 6 and 118 (2) EA Bulgaria, OJ 1994 L 358/3 (1994). See Christophe Hillion, p. 482. 288 Ibid., p. 483. 289 See Matthias Niedobitek, Die Europäische Union und Russland – zum Stand der Beziehungen, p 121. 287

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Member States and the Russian Federation in 1994 and came into force in 1997. The objectives of the Partnership are manifold and ambitiously formulated in Article 1 of the PCA. In accordance with these objectives, the Parties seek: a) to provide an appropriate framework for the political dialogue between the parties allowing the development of close relations between them in the field; b) promote trade and investment and harmonious economic relations between the Parties on the principles of market economy and so to foster sustainable development in the Parties; c) to strengthen political and economic freedoms; d) to support Russia’s efforts to consolidate its democracy and develop its economy and complete the transition to a market economy; e) to provide a basis for economic, social, financial and cultural cooperation founded on the principles of mutual advantage, mutual responsibility and mutual support; f) to promote activities of joint interest; g) to provide an appropriate framework for the gradual integration between Russia and a wider area of cooperation in Europe, and h) to create the necessary conditions for the future establishment of a free trade area between the Community and Russia covering substantially all trade in goods between them, as well as conditions for bringing about the freedom to establish companies, cross-border trade in services and capital movement. Scrutinizing these objectives as well as the Preamble to the Agreement, one legal expert has compared the PCA with the Association Agreements (Europe Agreements) and determined that their chief difference lies in the ultimate objective of membership in the EU. 290 While the Preamble to the above PCA speaks of “a gradual rapprochement” and Article 1 of the PCA sets the aim of “a gradual integration between Russia and a wider area of cooperation in Europe”, the Europe Agreements – as was the case with Romania’s agreement (Article 1) – are typically explicit that the association aims at providing “an appropriate framework for (its) gradual integration into the Community”. 291 In short, the PCA between the EU and Russia, unlike the Europe Agreements, does not envisage potential EU membership for the Russian Federation. This is also reflected in the different types of legal bases of these two kinds of agreements. Until recently, the legal basis of the Europe Agreements and the Stabilization and Association Agreements was Article 310 of the Treaty on European Community, whereas the PCA was based on Articles 133 and 300 of the ECT, essentially trade and cooperation agreements. Another expert pinpoints that the cardinal difference between the PCA and association agreements in general is that the former does 290 See Christophe Hillion, pp. 468 – 469. Largely, the comparison of the PCA with Europe Agreements is a usual exercise for experts, with some of them claiming that “the PCA started as an experimental derivative of the Europe Agreement model”. Michael Emerson / Fabrizio Tassinari / Marius Vahl, A New Agreement between the EU and Russia: Why, what and when?, in: Michael Emerson (ed.), p. 14. 291 Europe Agreement establishing an association between the European Economic Communities and their Member States, on the one part, and Romania, of the other part, OJ L 357/2 (1994).

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not include provisions on the liberalization of the four freedoms of movement (goods, persons, services and capital) while the idea behind any association is the establishment of a free trade area. 292 Although a free trade area is mentioned as an ultimate goal of the PCA, the trade relationship between the EU and Russia is nonetheless based on the principle of most-favoured nation treatment. Originally, the PCA consists of 112 articles, ten appendices, two protocols and several joint declarations which represent legally binding commitments for the EU and Russia. It frames a wide scope of areas of EU-Russia cooperation including trade, commercial and economic relations and institutional arrangements for high level political dialogue in particular, as well as for cooperation in general. To start with, the Agreement encompasses terms on trade in goods (Title III) including trade in nuclear materials; provisions regarding business and investment (Title IV) regulating labour conditions, coordination of social security, conditions for the establishment and operation of companies as well as the cross-border supply of services. Furthermore, it oversees such issues as payments and capital (Title V); competition, intellectual, industrial and commercial property protection, and legislative cooperation (Title VII). The provisions concerning trade in goods generally make reference to the rules and principles established by the GATT, thus indicating Russia’s feasible accession to the GATT / WTO and also the PCA’s contribution to Russia’s preparations for joining the WTO. 293 Primarily this concerns Article 10 of the PCA, which envisages the mutual adoption of most-favoured-nation treatment in accordance with Article 1 para. 1 of the GATT. This clause is, however, not valid in several cases including, among others, firstly, preferences granted to neighbouring countries with a view to facilitating frontier traffic and, secondly, preferences given by the sides upon the establishment of a customs union or a free-trade area (Article 10 para. 2), which also projects certain regulations of the GATT. Aside from this, explicit reference to the GATT is extended to the passage of the PCA referring to the treatment of imported products as exempt from internal taxes (Article 11) and the freedom of the transit of goods (Article 12). Although the perspective of the creation of a free trade area between the EU and Russia is mentioned in Article 3 of the PCA, this is presented as a longterm objective subject to bilateral negotiations. Overall, the feasibility of the establishment of a free-trade area is made conditional upon Russia’s accession to the WTO. 294

292

p. 46.

See Nadezhda Arbatova, The Russia-EU Quandary, in: Michael Emerson (ed.),

293 See Matthias Niedobitek, Die Europäische Union und Russland – zum Stand der Beziehungen, p 126. 294 See Christophe Hillion, p. 471.

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Also, the Agreement extensively dwells upon economic cooperation between the EU and Russia (Title VII). It covers such diverse areas as industrial cooperation, investment promotion and protection, public procurement, standards and conformity assessment, consumer protection, mining and raw materials, science and technology, education and training. It also includes agriculture and the agro-industrial sector, energy, nuclear sector, space, construction, environment, transport, postal services and telecommunications, financial services, regional development, social cooperation, tourism, small and medium-sized enterprises, communication, informatics and information infrastructure, customs, statistical cooperation, money laundering, drugs, cooperation in the field of regulation of capital movements and payments in Russia. Other policy areas of bilateral cooperation include measures for preventing illegal activities (Title VIII) and matters of cultural collaboration (Title IX), with the latter meant to help the two sides reinforce “the existing links between their peoples and to encourage the mutual knowledge of their respective languages and cultures while respecting creative freedom and reciprocal access to cultural values” (Article 85). In addition, the PCA stipulates financial cooperation (Title X) and envisages the EU providing financial technical assistance for Russia by means of grants in the framework of the TACIS programme. This assistance is deemed to contribute to reaching the objectives set up in the Agreement, especially those concerning legislative and economic cooperation (Article 86). According to Article 88 of the PCA, the particular objectives and areas of the financial assistance should be highlighted in an indicative programme of the country “reflecting established priorities to be agreed between the Parties taking into account Russia’s needs, sectoral absorption capacities and progress with reform”. 295 Financial assistance should thus be formed by contributions of the EU and individual donations of EU Member States as well as be channelled from the resources of international organizations such as the International Bank for Reconstruction and Development and the European Bank for Reconstruction and Development (Article 89). One of the principal fields of cooperation is political dialogue (Title II). Its objectives are a) strengthening the links between Russia and the European Union, particularly as “the economic convergence achieved through this Agreement will lead to more intense political relations”, b) reaching “an increasing convergence of positions on international issues of mutual concern thus increasing security and stability”, and c) observing “the principles of democracy and human rights”, 295

The last Indicative National Programme for Russia is designed for the time period 2007 – 2010 to “guide the planning and identification of financial cooperation with Russia according to a number of Priority Areas”. These priorities are determined on the basis of the four Common Spaces. See National Indicative Programme, Russian Federation, 2007 – 2010, p. 3.

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which presupposes holding consultations on matters concerning the implementation of these principles (Article 6). Importantly, the PCA contains a clause regarding the legislative cooperation of the two sides. In particular, this cooperation foresees the “approximation of legislation” with a view to reinforcing economic links between the two sides, whereby “Russia shall endeavour to ensure that its legislation will be gradually made compatible with that of the Community” (Article 55). Aside from this, the provision on legislative cooperation lists the areas where the approximation of legislation is desirable: company law, banking law, company accounts and taxes, protection of workers at the workplace, financial services, rules on competition, public procurement, protection of health and life of humans, animals and plants, the environment, consumer protection, indirect taxation, customs law, technical rules and standards, nuclear laws and regulations, transport. The PCA sets up the institutional framework of EU-Russia cooperation (Articles 7 – 9 and Title XI), which has a multilevel structure since it includes the institutional structures of the high (political) level, the level of ministers, senior officials and experts and the parliamentary level. The political dialogue of the high level is met in the framework of the EU-Russia summits which take place twice a year and are composed of the president of the Council of the European Union, the president of the Commission, on one side, and president of the Russian Federation on the other (Article 7). Aside from this, at summits the EU side is also represented by the High Representative for the CFSP. 296 The Cooperation Council is established by the PCA (Article 90). It aims to monitor the implementation of the objectives of the Agreement by examining issues pertaining to the framework of the Agreement as well as bilateral or international issues of mutual interest; it is held at the ministerial level once a year and when required. The Cooperation Council produces recommendations which are not legally binding, and, as a result, “any improvement in the PCA legal regime is in principle subject to a new agreement between the parties, with the intricate ratification process that it entails”. 297 This also reflects a divergence between the PCA and the Europe Agreements or Stabilization and Association Agreements, with the latter two containing mechanisms for the Councils established therein to adopt binding decisions. 298 Pursuant to the PCA (Article 7 para. 2), the Cooperation Council is also to be involved in political dialogue on certain occasions and by mutual agreement with the European Union Troika (Foreign Ministers Troika). 299 The Council consists of the members of 296 The High Representative is not mentioned in Article 7 of the PCA because this post was established after the PCA had been signed and specifically by Treaty of Amsterdam which was concluded on October 2, 1997. See Christophe Hillion, p. 477. 297 Ibid., p. 479. 298 Ibid.

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the Council of the European Union and members of the Commission, on the one side, and the members of the Government of Russia, on the other side, (Article 91 para. 1), and it has its own rules of procedure (Article 91 para. 2). In the course of time the Cooperation Council was transformed into the Permanent Partnership Council (PPC) by the two sides at the St. Petersburg EU-Russia summit in May 2003. This decision was caused by the mutual apprehension of the over-bureaucratic structure and ineffective performance of the Cooperation Council. Therefore, the two sides expressed hope for it to enhance “the efficiency of EU-Russia cooperation” because they believed that “strong and efficient bodies dealing with all areas of co-operation are essential”. 300 Thus, it was anticipated that the new Permanent Partnership Council would “act as a clearing house for all issues” of cooperation and that it would “meet more frequently and in different formats, backed up by thorough preparation and policy co-ordination on both sides”. 301 The PPC is a forum for facilitating decision-making and it can be called by either side. Although the Russian side offered a new institutional scheme “25+1”, under which the Russian minister would communicate with all the EU counterparts supposedly more productively, the Permanent Partnership Council is still formed – in accordance with the format determined by the PCA – by the Russian minister and the EU Troika. While Russia favoured the creation of more flexible institutional arrangement, the EU was reluctant to agree on the “25+1” design. This was apparently due to the inappropriateness of allowing Russia – a third country – to be a party to the decision-making process in the EU, where 299 Political dialogue (on issues pertaining to foreign and security policy) is also held on level of senior officials of the European Union Troika, on the one side, and officials of Russia, on the other side, biannually (Article 8); on the basis of diplomatic channels (including monthly meetings of the Russian mission in Brussels with the Troika of the Political and Security Committee); and on the level of experts (including experts from 15 particular Council working groups and Russian experts-counterparts) who meet with the view of contributing to consolidating and developing the political dialogue twice a year. The latter experts working groups deal with the following areas of common concern: a) regional (Eastern Europe and Central Asia, Western Balkans, Asia, North Africa / Middle East / Mediterranean, Latin America and the EU candidate countries), and b) thematical / sectoral (OSCE and Council of Europe, UN, Terrorism, Disarmament and Nonproliferation). See The European Union and Russia: Close Neighbours, Global Players, Strategic Partners, European Commission, Directorate-General for External Relations, Brussels, 2007, p. 4. 300 Joint Statement, St. Petersburg EU-Russia Summit, May 31, 2003. 301 Ibid. The first meeting of the Permanent Partnership Council took place on April 27, 2004 in Luxembourg in the regular format of Foreign Affairs Ministers but it was underlined at the meeting that other formats (such as these of Ministers of Justice and Home Affairs and Environment or Ministers responsible for other areas) were welcomed. Overall, this inauguration demonstrated “a further intensification of positive relations between the European Union and Russia”. EU Council Press Release, 8663/04, Luxembourg, April 27, 2004.

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it might make use of internal contradictions between EU Member States and between Member States and the Commission to its benefit. This reluctance was also due to the fear that the extensive format would hinder the negotiation process and compromise making. 302 The current format, on the contrary, contributes to the coordination of positions among the EU Member States and the formulation of a common position to be further voiced by the Troika. 303 There are diverse PPCs such as those on foreign affairs, energy, transport, environment, justice and home affairs and culture. 304 Capable of meeting in different formations, the PPC is the first of its kind in EU external relations and, in its mode of operation it is similar to the EU’s Council of Ministers. 305 The other institutional level of the partnership is that of senior civil servants and experts. Under the PCA, it is represented by the Cooperation Committee assisting the Cooperation Council, including in the preparation for meetings of the Cooperation Council (Article 92 para. 1). According to Article 92 para. 2, the Council may also grant it any of the Council’s powers to “ensure continuity between meetings of the Cooperation Council”. The latter, in turn, is empowered to “set up any other special committee or body that can assist it in carrying out its duties”, to build up the composition of this committee / body and formulate their functions (Article 93). Until recently, the Cooperation Committee had nine sub-committees handling different policy areas of EU-Russia cooperation – including trade and industry, energy, environment, science and technology, human resources, transport, telecommunications and space, mineral industries, the protection of intellectual 302 See Katinka Barysch, The EU and Russia. Strategic partners or squabbling neighbours?, pp. 52 – 53. 303 See Holger Moroff, Russia, the CIS and the EU: Secondary Integration by Association?, p. 112. 304 According to the European Commission’s progress report on the implementation of the Common Spaces, in 2007 no meeting of PPCs at ministerial level took place on trade and economic matters but the dialogue was directly held at the high level meetings between European Commissioners and their Russian counterparts. See EU-Russia Common Spaces. Progress Report 2007, European Commission March 2008, p. 4. Complementarily, in 2007, the two sides agreed on the establishment of a Dialogue on Regional Policy in accordance with the relevant provisions of the PCA. The institutional design of the Dialogue envisages the PPC on regional policy (at a political level), the Joint Working Group in the Directorate General for Regional Policy of the European Commission and the Ministry of Regional Development, as well as working groups “to work together on specific issues and to facilitate discussions at expert level”. See Memorandum of understanding for establishing a dialogue on regional policy between the Ministry of Regional Development of the Russian Federation and the European Commission, Moscow, May 23, 2007. Apart from this, the first PPC on culture took place on October 25, 2007 in Lisbon. See EU-Russia Common Spaces. Progress Report 2007, p. 38. 305 See Marius Vahl, EU-Russia Relations in EU Neighbourhood Policies, in: Katlijn Malfliet, Lien Verpoest and Evgeny Vinokurov (eds.), p. 126.

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property, customs and cross-border cooperation, agriculture and the protection of rights of consumers, investment relations – which met twice a year at the working expert level. However, pursuant to the Commission’s progress report, no sub-committees met in practice in 2007, the only exception being a sub-committee on Customs and Cross-Border Cooperation. 306 Instead, the cooperation is carried out within formalized sector dialogues – established on the basis of corresponding Terms of Reference and in the framework of the Common Economic Space – in 16 areas: transport, industrial and enterprise policy, regulatory dialogue on industrial products, space, information society, agriculture, macroeconomic policy, financial services, energy, procurement, environment, trade facilitation, intellectual rights property (IRP), investment, interregional cooperation, statistics. 307 Two more dialogues on health and employment are foreseen to be initiated. Finally, the Parliamentary Cooperation Committee is instituted with accordance to Article 95 of the PCA. The Committee determines its meeting points (Article 95), establishes it rules of procedure (Article 96 para. 2); it is composed of members of the European Parliament and members of the Federal Assembly of the Russian Federation (Article 96 para. 1). This Committee is entitled to request relevant information on the implementation of the Agreement from the Cooperation Council (to date, the PPC) and should provide information to the Cooperation Council if requested (Article 97). While it receives information on the recommendations produced by the Cooperation Council, it may also address its recommendations to the Cooperation Council (Article 97). The parliamentarians engaged in the Parliamentarian Committee may be also involved in political dialogue (Article 9). As can be seen, the institutional dialogues of the EU-Russia partnership pertain to the following general areas of cooperation: a) trade and economic relations, b) foreign policy cooperation and external security, c) freedom, security and justice and c) parliamentarian cooperation. The first three areas reflect 306 See EU-Russia Common Spaces. Progress Report 2007, p. 5. This happened as a result of a refusal by Russia in 2003 to hold more subcommittees meetings except for the one on customs matters. Similarly, due to Russia’s objections no Cooperation Committee has taken place since 2004. See EU-Russia Relations. Overview. 307 For instance, the Terms of Reference for the regulatory dialogue on industrial products was signed on December 7, 2005 by Vice President of the European Commission Günter Verheugen and Minister of Industry and Energy of the Russian Federation Victor Khristenko and thereby the Regulatory Dialogue Working Group and six sub-groups were established. See Progress report, p. 5. The energy dialogue also consists of a number of joint thematic groups (initially four and currently three groups on energy strategies, forecasts and scenarios; market developments and energy efficiency) co-chaired by the European Commission (Directorate General of Energy and Transport) and the Ministry of Industry and Energy of the Russian Federation. See European Union-Russia Energy Dialogue, p. 15.

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the previous three-pillar structure of the European Union. In the area of economic relations a regular institutional procedure of cooperation (including sector dialogues) is applied. The collaboration within the domains of foreign and security policy and home and justice affairs is correspondingly situated under the intergovernmental second and third pillars of the EU. In the former case, the cooperation is carried out by the institutions of political dialogue as described earlier. In the latter case, the dialogue is carried out on the level of the PPC of Justice and Home Affairs, wherein the EU is similarly represented by the Council of the European Union and specifically by the Ministers of the Interior and Justice of the incumbent Presidency and the Vice President of the European Commission. While the European Commission in general takes the role of observer, it retains the responsibility for matters of asylum, visa and immigration (belonging to the first pillar of the EU). 308 Thus, within the Joint Monitoring Commissions established in the framework of the EC-Russia Visa Facilitation and Readmission agreements to monitor the implementation and interpretation of the Agreements at a regular basis, 309 the Commission takes a lead in the dialogue. The cooperation in this field is also takes place through informal dialogue and on the level of expert meetings. c) The Partnership and Cooperation Agreement: A critical assessment The contents and efficiency of the PCA to date have been repeatedly assessed by Russian and European experts. 310 The principal common criticism refers to the fact that the PCA has become obsolete. Having being signed in 1994 after only the three-year existence of the Russian Federation, it does not currently respond to a) the contemporary state of affairs in Russia, b) the present-day stage of the development of the European Union, c) the current state of EU-Russia relations, and d) the latest international situation. 311 However, doing justice to the question, it should be noted that the Agreement has had both positive and negative outcomes. First, the PCA has established the political and legal framework of the EU-Russia relationship. Secondly, it has brought into being a set of joint institutions to meet the goals of the partnership and it has started to accumulate experience in bilateral cooperation in the economic as well as in the political sphere. Thirdly, it has contributed to a transition from the stage 308

See Holger Moroff, p. 110. See EU-Russia Common Spaces. Progress Report 2007, p. 29. 310 See, for instance, Jurij Borko, Evropejskomu Sojuzu i Rossii neobhodimo Soglashenie o strategicheskom partnerstve, Komitet “Rossija v ob#edinennoj Evrope”, Moskva, 2004. 311 Ibid., p. 6. 309

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of bilateral political declarations to one of everyday working cooperation. The role of the PCA in the development of EU-Russia relations should not be overestimated, however, since other factors have also variously influenced the development of EU-Russia relations. Inter alia, they are the reforms in Russia, the proliferation of economic, political and cultural contacts on the level of bilateral relations between Russia and the EU Member States, and the political crises between the two sides that have adversely affected the dynamics of the partnership. In any event, the entire constructive potential of the PCA has admittedly not been used fully and this leaves both partners feeling far from satisfied. 312 Primarily, of the three spheres of partnership (economic, political and cultural) identified in the PCA, the latter two received less space and attention in the document since most of the provisions are dedicated to economic cooperation. Excluding the last Title XI on institutional, general and final provisions, seven and a half titles out of the remaining ten titles of the PCA (83 articles out of 89 in total) are dedicated to economic relations. 313 Yet this does not correspond to the evolved state of the political cooperation and dynamism of the development of the cultural cooperation between the EU and Russia. Furthermore, the whole economic programme of the partnership is formulated ambitiously and maximally, and so far it has not been fully implemented; in some areas of cooperation (such as transport and the social sphere) actual cooperation has not hitherto started properly. 314 Whereas considerable progress has been made on many economic issues, these are rather secondary because the most prominent long-term objective – the creation a free trade area – has not yet been reached. 315 Additionally, there are important areas of the partnership which, for various reasons, were not indicated in the PCA, but have a role to play in the future development of EU-Russia relations. They include cross-border cooperation (relevant due to the Eastern enlargement of the EU and also the unique position of the Kaliningrad Oblast), the development of public relations (on the level of civil society), the energy dialogue, developments in the common neighbourhood, the establishment of the Common European Economic Space and, overall, the four Common Spaces. Notably, EU-Russia cooperation has already advanced in the sphere of the movement of people, which can be illustrated by the agreements on visa facilitation and readmission, and these are objectives that were never indicated in the PCA. Furthermore, the provisions of the Preamble have become outdated and need to be substantially revised. 316 This relates first and foremost to the passage on 312 313 314 315

Ibid., p. 8. Ibid., p. 18. Ibid., pp. 33 – 35. See Marius Vahl, EU-Russia Relations in EU Neighbourhood Policies, p. 123.

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the wish of the two sides to “establish partnership and cooperation”, whereas this has now been done and currently the two sides formulate their goal the reinforcing their strategic partnership. 317 Apart from this, the clause defining Russia as a country with a transitional economy and the section stipulating the commitment of the EU to provide technical assistance for the implementation of economic reform in Russia as well as several other provisions of the Preamble have been criticized for the reasons as follows. First, the Russian Federation is a market economy and the EU recognized this in 2002 and, second, the strategic partnership that the two sides proclaim to have been building presupposes a partnership of two equal partners in both bilateral relations and overall in jointly tackling international problems and this should be manifest in the (new) bilateral agreement. The indications of a donor / recipient relationship go beyond the manifestation of equality. Another comment to be made is that the Preamble of the PCA contains only a loose reference to the “process of regional cooperation in the areas covered by [this] Agreement between the countries of the former USSR in order to promote the prosperity and stability of the region”. In the meantime, new developments such as the EU Eastern enlargement in general and the new EU European Neighbourhood Policy towards the CIS countries in particular, as well as the parties’ own strategic interests in the region, require greater and more careful consideration of this area of cooperation in the new agreement. Insight into the assumptions of experts and analysts on the legal form of a new agreement will be offered below. d) The Kaliningrad Oblast in the institutional and legal framework of EU-Russia relations One critical remark can be also levelled at the PCA because of its inability to deal with the issue of the Kaliningrad Oblast consistently and effectively. This concerns primarily the efficiency of its institutions. In spite of the Russian government’s proposal to establish a Special Joint Working Group of the EU and Russia to address the issue of Kaliningrad specifically and to conclude a separate EU-Russia agreement on the Kaliningrad Oblast, the dialogue on the Kaliningrad region has been carried out within the existing mechanisms of the PCA. 318 This has been a three-level procedure starting with the work of various sub-committees, then continued on the level of the Cooperation Committee, and finalized at EU-Russia summits. This was especially the case at the meeting 316 See Jurij Borko, Evropejskomu Sojuzu i Rossii neobhodimo Soglashenie o strategicheskom partnerstve, pp. 41 – 43. 317 Joint statement, EU-Russia Summit, Rome, November 06, 2003. 318 See Alexander Songal, Developing an Institutional Fundament for the EU and Russia, p. 106.

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of the Cooperation Committee in Svetlogorsk on May 15, 2002 – dedicated exclusively to the problem of Kaliningrad transit – and the following EU-Russia summit on May 22, 2002, with both failing to make an arrangement with regard to the transit issue. The contract on Kaliningrad transit, according to Alexander Songal, was a “last-minute compromise at the Russia-EU summit on 11 November 2002 ... achieved mostly outside the PCA arrangements”. 319 As Christophe Hillion has observed, the question of the transit of people and goods by land between Kaliningrad and the main body of Russia – like other general questions pertaining to the EU Eastern enlargement – was solved within the framework of EU-Russia political dialogue. 320 By and large, specialists have criticized the existing PCA scheme of handling the general problems of the Kaliningrad Oblast for several reasons; firstly, although important, the matter of Kaliningrad is relatively small and it tends to be invisible on the overall wide EU-Russia agenda. 321 In addition, the PCA was not designed and has not been empowered to single out a particular entity (subject) of Russia in its cooperation agenda. Rather “the document treats Russia as an undifferentiated space” 322 and coupled with the Common Strategy on Russia it provides “only very weak linkages in its dealing with Kaliningrad”. 323 Furthermore, in its entirety, the problem of Kaliningrad is an interconnected whole while the fragmented examination of its specific aspects by different institutional formations, be they (nine) sub-committees or sector dialogues, fails to achieve continuity and efficacy in finding a complex solution. Meanwhile, the abovementioned three groups of the areas of general EU-Russia cooperation were adopted following the internal structure of the EU, which falls into three pillars, already presupposing different institutional mechanisms for treating them on the level of the EU. Besides, meeting only twice a year, sub-committees have had to cope with extensive agendas and therefore there has been no single committee or sector dialogue to hold the entire responsibility for Kaliningrad. 324 A separate sub-committee for exclusive dealings with Kaliningrad has not been established, with the EU having rejected this idea of the Russian government. The PCA on its own is 319

Ibid., p. 110. See Christophe Hillion, p. 480. 321 See, for instance, Alexander Songal, Developing an Institutional Fundament for the EU and Russia, p. 110 and Guido Müntel, Assessing institutions and policies in the EU-Russian relations: The case of Kaliningrad, Paper to the 2 nd Pan-European Conference on EU Politics, Bologna, June 22 – 26, 2004, pp. 15 – 16. 322 Pertti Joenniemi et al., The Kaliningrad Puzzle: a Russian Region within the European Union, p. 22. 323 Sander Huisman, p. 3. 324 See Stephen Dewar, “What Is to be Done”, in: James Baxendale, Stephen Dewar and David Gowan (eds.), p. 246. 320

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complicated and heavily bureaucratic due to its multilevel institutional structure; its joint institutions have often proved to be ineffective. 325 The statement of former deputy ambassador to Moscow, David Gowan, is particularly illustrative of this: “Problems are often passed up and down the chain of this structure without being resolved”. 326 Another comment is that the uniqueness and sensitivity of the Kaliningrad case calls for communication and decisions on a high political level even at early stages, but the level of senior officials (working level) is comparatively rather low. 327 This critical observation prompts the dilemma of the legal formalization of Kaliningrad transit; while the Russian authorities insisted upon treating the problem as a political issue, the EU regarded this only as a technical matter. Some (European) observers have claimed that the issue of Kaliningrad transit “could have been resolved at the technical and senior and official level” 328 without high politics having been involved. Other (Russian) experts are certain that the Kaliningrad question is political and should not be locked into technical details. 329 Eventually, the major constraints arise from the peculiarities of Russia and the EU as external actors, impacted by the intricacies of their decision-making institutions and their impact on EU-Russia joint institutions and negotiations processes. First, the EU has had limited external capacities and, second, it was hard for Russia to understand a complicated mechanism of EU foreign policymaking. Nor did the EU, until recently, seem adjusted to flexibility in foreign relations, with the rotating presidency failing to contribute to coherence in bilateral interactions. 330 The EU’s vital institutional feature is that it acts predominantly within the technical domain as it “proffers a system of diffuse powers sharing a consensual diplomatic, rather than a confrontational, politically charged discourse, which it cannot handle or sustain since it has no such strong political mandates”. 331 The responsibilities for the negotiations between the EU and Russia on Kaliningrad transit in the summer 2002 were dispersed among representatives of different Commissioners (Enlargement, Transport, and External Affairs), 332 which made the EU particularly slow, especially if one takes into account that the Russian side was represented by the main negotiator acting on 325

See David Gowan, How the EU help Russia, CER, January 2001, p. 9. Ibid., pp. 9 – 10. 327 See Alexander Songal, Developing an Institutional Fundament for the EU and Russia, p. 110. 328 See Holger Moroff, p. 122. 329 See Andrej Klemeshev, Rossijskij jeksklav v uslovijah globalizacii, Kaliningrad: KGU, 2004, p. 197. 330 See Holger Moroff, p. 111. 331 Ibid., p. 99. 332 By and large, however, the EU has been approaching Kaliningrad through the DG for External Relations, whereas, as one specialist puts it, the DGs for Enlargement and 326

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behalf of the president of Russia. 333 As a result, the European Commission as the principal actor on the EU side in the process of the negotiations experienced limited bargaining power due to the institutional structure of the EU. At the same time, strong centralization and hierarchical political leadership in Russia in general, in the area of external relations in particular, in which the president determines the direction of foreign affairs, entangles the activities of Russian officials, particularly as the position of the president on the Kaliningrad problem remains dominant and politically sensitive. Officials lack a proper negotiating mandate, often having to consult their ministers to be able to make a decision during bilateral negotiations. 334 While Russia tends to politicize its external affairs and to focus on issues of high politics (including the security area) in cooperation, the EU applies a low politics approach. It rather tends to depoliticize external relations and concentrate on introducing its regulatory regimes to neighbouring countries to allow internal market access for these countries and overall security for society. 335 Clearly, the deeper inconsistencies between the EU and Russia are rooted in different historical, geopolitical and conceptual perceptions of each other and as a result substantially hamper progress in tackling the Kaliningrad issue jointly. This aspect has been examined in Chapter III.1. in more detail. Policy-makers and experts have come up with diverse proposals for how to improve bilateral institutional communication on the Kaliningrad Oblast. 336 These suggestions concern both the EU and Russia. Of interest are the following concrete propositions directed to the EU: for instance, the EU should define a concrete structure or a person to be in charge for the issue of the Kaliningrad Oblast, appoint a high-ranking EU Special Representative on Kaliningrad, to establish a Multilateral Commission (launching a permanent dialogue and guiding joint projects on Kaliningrad) based in Kaliningrad, create a Kaliningrad task force within the PCA to include officials from the EU, Russia, Lithuania and Poland that would offer advice to PCA subcommittees, open a Common EU consulate in Kaliningrad, even launch a Common Strategy for Kaliningrad. 337 It is also recommended that, provided the EU and Russia give political and legal substance to the idea of the Kaliningrad Oblast as a pilot region and create for Regional Policy should have been involved too due to the particular exposition of the Oblast to the EU’s internal affairs. See Sander Huisman, p. 21. 333 See Maximilian Spinner, The EU in Bilateral Bargaining: The Agreement with Russia on Transit to Kaliningrad, Verlag Grin, 2007, pp. 11 –12. 334 See Katinka Barysch, The EU and Russia. Strategic partners or squabbling neighbours?, p. 52. 335 See Holger Moroff, p. 99. 336 See, for instance, Alexander Songal, Developing an Institutional Fundament for the EU and Russia, pp. 111 – 112, and Sander Huisman, pp. 40 –45. 337 Ibid.

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a sort of “Russia-EU Partnership Programme for the Kaliningrad Oblast as a pilot region”, 338 the two sides could establish a joint administrative system including a Joint Russia-EU Steering Commission on the level of officials from the European Commission and the Federal Steering Commission for Support and Development of the Kaliningrad Oblast (to be established by the Russian Federation). Despite the fact that the PCA does not differentiate the Russian space and views it as undifferentiated, EU-Russia cooperation in general attaches importance to the regional factor at the national, regional and local levels and this is reflected in a number of bilateral and unilateral documents. This aspect is relevant because, as was demonstrated in Chapter II.2., cross-border and regional cooperation appear to be the prevailing form of international capacity for Russian regions in general and the Kaliningrad Oblast in particular. Regional cooperation between the EU and Russia is based on general principles and positions of the partnership as formulated in the PCA (the Preamble and Articles 1 and 2). 339 Hence, in their regional cooperation, the parties should be guided by their international commitments (including those in the Conference of Security and Cooperation in Europe, their adherence to the respect for human rights, particularly those of minorities, the rule of law, democracy and market economy). The overall aims of the partnership as indicated in Article 1 of the PCA should be achieved, among other things, through successful regional collaboration. The Preamble specifically refers to the importance of transnational cooperation across borders. Thus, the Parties encourage “the process of regional cooperation in the areas covered by this Agreement between the countries of the former USSR in order to promote the prosperity and stability of the regions”. This clause is advanced in Article 56 para. 4: 340 the Parties consider it essential that, alongside with establishing a relationship of partnership and cooperation with each other, they maintain and develop cooperation with other European States and with the other countries of the former USSR with a view to a harmonious development of the region and shall make every effort to encourage this process.

Furthermore, the “promotion of the regional cooperation with the aim of its harmonious and sustainable development” should constitute – alongside such areas as the development of industries and transport, exploration of new sources of supply and new markets, encouragement of technological and scientific progress, encouragement of stable social and human resources development and local employment development – one of the areas of EU-Russia economic cooperation 338

Alexey Ignatiev, Defining an Administration for a Pilot Region Kaliningrad, p. 128. See Vasilij Lihachev, K Evrope regionov (politiko-pravovye aspekty), pp. 239 –240. 340 See Matthias Niedobietek, Die Europäische Union und Russland – zum Stand der Beziehungen, p 127. 339

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as envisaged in Article 56 para. 3 of the PCA. According to Article 56 para. 5, this type of cooperation is supported by the EU’s financial instruments based on the relevant Council regulations on technical assistance to the countries of the former USSR, chiefly TACIS. More importantly, on the level of lex specialis, 341 the PCA refers to the issue of regional development in Article 73 “Regional development”, which stipulates that the two sides should “encourage exchange of information by national, regional and local authorities on regional and land-use planning policy and on methods of formulation of regional policies with special emphasis on the development of disadvantages areas” (Article 73). In addition to this, the parties pledge to “encourage direct contacts between the respective regions and public organizations for regional development planning with the aim, inter alia, to exchange methods and ways of fostering regional development”. In its unilateral Common Strategy on Russia, the EU emphasizes that it aspires to work with Russia at the federal, regional and local levels with a view to supporting political and economic transformation in Russia. Highlighting its principal objective of promoting the consolidation of democracy, the rule of law and public institutions in Russia, the EU stresses its intention to “attach particular importance to regional and local administrations, within their powers” because it believes that “relations between central, regional and local authorities are an essential factor in the future of the Federation” (Part I, item 1). Furthermore, within one of the identified areas of action “strengthening society”, the EU seeks to develop “contacts between politicians of Russia and the EU, at federal, regional and local levels including with assemblies at all levels” (Part II, item 1(b). Ultimately, the EU Strategy identifies regional and cross-border cooperation among areas of joint EU-Russia action (Part II, item g). It recommends that the EU should work “more effectively with Russia in the various fora for regional cooperation (CBSS, BSEC, Barents Euro-Arctic Council)”, and enhance “crossborder cooperation with neighbouring Russian regions (including Kaliningrad), especially in view of the EU’s enlargement and including in the framework of the Northern Dimension”; strengthen “cooperation and technical assistance in the areas of border management and customs”; and explore “the scope for working towards linking the Russian transportation systems (road and rail) with the Transeuropean corridors and by seeking mutually satisfactory ways to address transport issues”. In its turn, “Russia’s Mid-term Strategy” towards the EU suggests “raising the level of transboundary interregional cooperation and regional development of both parties up to the standards established within the so-called Euroregions”; extending “to such activities the supranational and national incentives schemes operational within the EU, including visa and border regimes”; encouraging: 341

See Vasilij Lihachev, K Evrope regionov (politiko-pravovye aspekty), p. 240.

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contacts among Russian and EU regions, in particular, by using the resources of the EU Committee of the Regions, with a view to fostering the humanitarian and economic ties and sharing of experience of local self-government and business administration (Section 8 “Transboundary co-operation”, item 8.1).

Furthermore, Russia calls on the EU to give substance to the Northern Dimension Initiative (NDI) by putting in effort jointly; recruiting the financial support of the EU and attracting investments from outside Europe, and, importantly, working towards the integrated development of Northern and NorthWestern Russia throughout the implementation of the NDI as opposed to further exploiting and promoting the raw materials sector in this region (item 8.2). The Mid-term Strategy is explicit about the necessity for both sides to cooperate on the problem of the Kaliningrad Oblast due to its special and economic situation (item 8.3). It specifically emphasizes the importance of creating and ensuring “the necessary external conditions for its functioning and development as an integral part of the Russian Federation and an active participant in the transboundary and interregional co-operation”. The Strategy justly underscores the need “to determine the prospects of the optimal economic, energy and transportation specialization of the region in order to ensure its efficient functioning in the new environment” and “to establish the sound transportation links with the Russian mainland”. Ultimately, the proposal of the Russian government voiced herein is that a special EU-Russia agreement on Kaliningrad be concluded and the Kaliningrad Oblast be transformed into a pilot region in EU-Russian cooperation in the 21 st century. 342 Prominent expert in EU-Russia relations and ex-Ambassador of Russia to the European Communities Vasilij Lichachev is convinced of the cardinal importance of regional cooperation for EU-Russia cooperation, which should be based on the experiences of European regionalism, capable of contributing to the social progress in Europe. 343 He backs up the idea of actively involving of Russian regions in EU-Russia partnerships in general, as well as in the law initiative process and monitoring of legal practice, interests and needs of both sides in particular. 344 He has stated the idea of concluding the agreements that pertain to this aspect as an Agreement on promotion of economic, technical and cultural cooperation between regions of the Russian Federation and the European Union and an Agreement on transboundary cooperation between the European Union and Russia.

342 The regional factor is also reinforced in the four Common Spaces and this aspect will be examined below. 343 See Vasilij Lihachev, K Evrope regionov (politiko-pravovye aspekty), pp. 222 –248. 344 See Vasilij Lihachev, Znat’ teoriju, osvoit’ praktiku, in: Rossija v global’noj politike, No. 2, Mart-Aprel’ 2004, p. 1.

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e) The four Common Spaces in the long-term perspective of the EU-Russia strategic partnership The concept of the four Common Spaces (a common economic space, a common space of freedom, security and justice, a common space of external security and a common space on research and education) was adopted by the St. Petersburg EU-Russia Summit in 2003 with a view to reinforcing the strategic partnership in the framework of the Partnership and Cooperation Agreement in the long term. Subsequently, at the Moscow summit in 2005, the parties agreed on the package of Road Maps to serve as short-term and medium-term instruments to give substance to the Common Spaces. Essentially, the Road Maps forge an agenda for EU-Russia cooperation. They are designed on the model of the Action Plans employed in the European Neighbourhood Policy. In particular, they have a similar structure to the Action Plans because they also include a catalogue of actions and objectives to be taken to implement the four Common Spaces. The two types of documents cover all components of the previous EU three-pillar structure, which indicates their cross-pillar nature. Both are political and not legal documents to be developed in the framework of the respective PCAs which aim to help strengthen and supplement these PCAs. To this end, the Common Spaces reflect the extent to which the relationship has evolved beyond the areas of cooperation envisaged in the PCA. Two of the Common Spaces are dedicated to external and internal security issues respectively, corresponding to the common foreign and security policy and justice and home affairs in the EU. 345

To start with, the Road Map for the Common Economic Space specifically anticipates “building blocks for sustained economic growth”. Its subject matter mimics a typical agenda of EU negotiations with its accession candidates and other neighbours and association partners involved in the ENP. It refers to a plethora of issues such as industrial standards, public procurement, competition, investment, intellectual rights, enterprise policy and economic dialogue, crossborder cooperation, financial services, energy, space, environment and others. Still, analysts find this Road Map marked by “ambiguity”. 346 Thus, although achieving this Road Map’s objective should contribute to the creation of the common economic space, there is no literal mention of a free trade area between the parties – an objective that has been notably formulated in Article 1 of the PCA between the EU and Russia as well as in the ENP Action Plans – even as long-term goal. 347 345

Michael Emerson et al., A New Agreement between the EU and Russia, p. 73. Christer Pursianen, The Ambiguity of the Common European Economic Space: a Strength or a Weakness?, Russian-European Centre for Economic Policy (RECEP), July 2004. 347 Ibid., pp. 2 – 3. 346

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The Common Economic Space 348 is defined as: an open and integrated market between the EU and Russia, based on the implementation of common compatible rules and regulations, including compatible administrative practices, as a basis for synergies and economies of scale associated with a higher degree of competition in bigger markets. It shall ultimately cover substantially all sectors of economy. 349

The four main areas of economic activities within the CES are a) cross-border trade of goods, b) cross-border trade in services, c) establishment and operation of companies, and d) related aspects of the movement of people concerning the relevant fields of economic activity (para. 18 of the CEES Concept paper). The Concept Paper also identifies the necessary instruments for establishing the CEES, which include opening markets, regulatory convergence and trade facilitation (para. 19). 350 The concept of the Common Economic Space largely foresees economic integration based on the combination of two approaches, horizontal and vertical. 351 While the former approach presupposes wide economic integration based on the principle of the four freedoms (in this case, the freedom of the movement of goods, services and capital but not labour), the latter approach entails the preparation of separate sectoral agreements. Notably, the lexicon of the Road Map for the Common Economic Space is rich in terms relating to the concept of legislative approximation. The paper refers broadly to “gradual approximation of relevant legislation and practices”, “harmonization” and “alignment of standards” which are to take place within the general context of “regulatory dialogue”. 352 At the same time, the language of the paper “carefully refrains from making any connection between approximation and EU standards, thereby avoiding the impression that the Union is imposing its 348

Overall, similarly to the PCA, the economic cooperation and specifically the concept of the Common Economic Space is arguably the most elaborated space compared to the others. See Chrostophe Hillion, p. 492. The Common Economic Space is regarded by analysts to be the key element of EU-Russian integration, also because it is inseparably connected to most of the other Common Spaces. See Evgeny Vinokurov et al., Kaliningradskaja Oblast’ v kontekste sozdanija Obwego Jekonomicheskogo Prostranstva Rossija-ES, p. 5. 349 The Common European Economic Space. Concept Paper, para. 12. Joint Statement. EU – Russia Summit, Annex I, November 6, 2003. The Concept Paper aims at working out a model of economic integration of the EU and Russia. 350 Market opening envisages measures for the gradual removal of obstacles to trade and investment to be taken in accordance with WTO principles; regulatory convergence refers to legal approximation in such matters as standards, technical regulations and conformity assessments and others; trade facilitation implies the simplification, standardisation and automation of trade procedures concerning the import, export and transit requirements as well as procedures used by customs and other agencies. 351 See Evgeny Vinokurov et al., Kaliningradskaja Oblast’ v kontekste sozdanija Obwego Jekonomicheskogo Prostranstva Rossija-ES, p. 4. 352 See Christophe Hillion, pp. 493 – 494.

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norms on Russia”. 353 It is clear, however, that it would be Russia that would need to adapt to EU legislation and not vice versa. This circumstance is connected with Russia’s insistence on being seen and treated as an equal partner of the European Union and therefore not having any connections to EU law imposed. 354 As a result, the paper fails to provide a catalogue of technical standards and norms which are, in contrast, precisely listed in the Action Plans of Moldova and Ukraine, for instance. The latter papers also explicitly touch upon convergence towards EU rules and standards. The Road Map for the Common Space of Freedom, Security and Justice starts off with the Preamble, which defines the objective of the Space as “building a new Europe without dividing lines, thus facilitating travel between all Europeans”. To this end, the document envisages the examination of the conditions for a visa-free regime as a long-term perspective. Importantly, the Preamble makes a brief mention of common values such as democracy, the rule of law, and respect for the principle of non-discrimination including countering any form of tolerance and racism, through respect of rights of individuals in the EU Member States and Russia, including immigrants and persons belonging to minorities, and respect of fundamental rights and freedoms.

In accordance with the Preamble, adherence to common values constitutes one of the principles for cooperation in this area in the short and medium term. Although the reference to common values is present in this Road Map as well as in the Road Map for the Common Space of External Security, the Road Maps in general are free of political conditionality. This contrasts with the Action Plans of the ENP countries, which contain extensive references to democracy, the rule of law and human rights and provide an in-depth catalogue of actions to be taken in this field. 355 This Road Map consists of a number of sections, each setting certain objectives. The first section on “freedom” foresees the facilitation of “human contacts and travel between the EU and Russia”, the guarantee of “smooth legal border crossings and lawful stays on their territories”, and cooperation in handling “illegal migration and illegal cross-border activities”. In other words, this dimension is essentially about “the control of movement and efficacy of borders”. 356 The objectives of the subsequent pieces on “security” and “justice” are identified as: a) improving cooperation in combating terrorism and all forms of organized crime (such as human and drug trafficking), and b) increasing “the efficiency of 353

Ibid., p. 491. See Michael Emerson, EU–Russia Four Common Spaces and the Proliferation of the Fuzzy, CEPS Policy Brief, No. 71, May 2005, Centre for European Policy Studies, Brussels, p. 2. 355 See Ibid., p. 2. 356 Christophe Hillion, p. 496. 354

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the judicial system in EU Member States and Russia”, “the independence of the judiciary” and “the development of judicial cooperation”, correspondingly. The common measures for the implementation of these objectives offer avenues for cooperation between Russian security bodies and EU agencies such as Europol, Eurojust and the anti-terrorism special representative. The Road Map for the Common Space of External Security displays an innovative focus since this dimension of cooperation has never been explicitly mentioned in the PCA. From the outset, the parties emphasize their “responsibility for an international order based on effective multilateralism”. It is therefore agreed to promote and strengthen the role of international organizations such as the UN, the OSCE and the Council of Europe, capable of contributing to “a more just and secure world”. The Road Map reiterates the parties’ commitment to common values as indicated in the bilateral and multilateral international treaties such as the Helsinki Final Act, the PCA and other documents. The scope of this dimension of cooperation stretches to the areas as follows: a) strengthening dialogue and cooperation in the international arena, b) fighting against terrorism, c) seeking non-proliferation of weapons of mass destruction and strengthening of export control regimes and disarmament; d) cooperating in crisis management and e) cooperating in the field of civil protection. In a nutshell, the parties are committed to securing international stability, “including in the regions adjacent to the EU and Russian borders”, with the latter essentially meaning the common neighbourhood. The institutional setting for this area of cooperation is met “within existing formats at the meetings of the PSC Troika at Ambassadors’ level and at Political Directors’ consultations”, whereby the report on the implementation of the map is submitted to the PPC Ministerial meetings and / or Ministerial EU / Troika-Russia meetings. Finally, an extensive agenda for practical cooperation in the sphere of culture, education, research, science and technology is formulated in the Road Map for the Common Space of Research and Education, including Cultural Aspects. This Road Map sets up the objective of intensifying people-to-people contacts, promoting common values and assisting in the increase of the competitiveness of the EU and Russian economies. This should be achieved, among other things, through developing links and exchanges in the fields of education, youth and culture – and particularly by including Russian students in diverse EU programmes as well as the promotion of “the identification and adoption of best practices”, the latter standing for Russia’s adapting to European norms of educational standards. According to the Commission’s progress report, there is much scope for cooperation in the field of research and technological development, significantly assisted by the various bilateral cooperation programmes and activities of Russia and the EU Member States. 357 357

See EU-Russia Common Spaces. Progress Report 2007, p. 35.

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The four Common Spaces complemented by their Road Maps have come under a barrage of criticism, but the positive feedback they have attracted refers rather to the very fact of their adoption. This event signified an incomparable bilateral initiative to give a fresh impulse to a stagnating partnership. 358 Another comment to be made is on the scope of the documents; they comprise almost all areas of multifaceted EU-Russia cooperation, and, as such, they carefully and extensively broach subjects of possible practical cooperation between the EU and Russia. 359 In a way, as one expert pinpoints, the establishment of the four Common Spaces and the attendant instruments (the Road Maps) have appeared as “a ‘tidying-up’ and ‘repackaging’ exercise, at a time when the partners feel that there is a need for new momentum in their relationship”. 360 However, the unfavourable observations seem to dominate, primarily relating to the contents of the documents. Although similar to the Action Plans of the ENP, according to a number of critical assessments, the Road Maps appear to be “less ambitious and less easily translated into concrete action” 361 than the Action Plans, thus representing what has been artistically conceptualized as “a manifestation of the ‘proliferation of the fuzzy’.” 362 On the one hand, the European Neighbourhood Policy alone is “a weak and fuzzy derivative of the EU’s enlargement”, 363 since this policy makes extensive use of the instruments of the pre-enlargement strategy, such as Action Plans, regular Country Reports and negotiations in addition to the application of the principles of differentiation and conditionality. The Action Plans, although not legal documents, mirror the traditional association agreements that were employed in the initial stages of past accessions. They are instead political papers that indicate political agreement between the EU and the partner country concerning the agenda, objectives and benchmarks and sketching out the reform priorities to be addressed in a medium-term perspective (ranging from three to five years). 364 In contrast, the four Common Spaces and the Road Maps in their turn are hallmarked as even weaker and fuzzier derivatives of the ENP and its Action Plans, respectively. Besides having unclear and loose wording of the objectives, the Road Maps fail to define such important issues as the concrete point of destination of each 358

See Vladislav Inozemcev / Ekaterina Kuznecova, Rossija: Pochemu Dorozhnye Karty ne Vedut v Evropu?, in: Sovremennaja Evropa, No. 4, 2005, p. 64. 359 See Katynka Barysch, Russia, realism and EU unity, CER policy brief, July 2007, p. 4. 360 Christophe Hillion, p. 497. 361 Marius Vahl, A Privileged Partnership?, p. 22. 362 Michael Emerson, EU–Russia Four Common Spaces and the Proliferation of the Fuzzy, p. 3. 363 Ibid. 364 The Action Plans of the ENP substitute the previous EU common strategies towards the participating countries and serve as the main policy documents for the bilateral relationships between the EU and neighbouring partners.

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road, to set time frames for the implementation of the actions and to identify the obligations of the parties. 365 Such a situation has been pointedly described as “an example of a plan of the transition ‘from nowhere to nowhere’.” 366 Upon the adoption of the Road Maps many different voices have been heard as regards their outcomes and effects. Some of them have been rather pessimistic and extremely distrustful; 367 others have been more neutral, suggesting that “time will tell whether this new initiative brings added value to the relationship”. 368 Meanwhile, the European Commission issued a progress report (mentioned above) on the implementation of the Common Spaces – excluding the Common Space of External Security – in March 2007. 369 The paper recorded the concrete achievements which had been made in 2007 throughout the Common Spaces and previously reviewed at the two EU-Russia summits and four meetings of the PPC. It also offered a list of subsequent steps and actions to be further adopted. Although recognizing that “there were no major breakthroughs” 370 in general, the Commission nonetheless stated positively that “day to day business was conducted efficiently under all common spaces” 371 and that there was still much work to be done. The progress report presented a comprehensive catalogue of various topics of cooperation and enumerates the institutional structures which deal with the topics within each Common Space. f) The place of the Kaliningrad Oblast in the four Common Spaces The Kaliningrad Oblast has never been explicitly mentioned in the text of the Road Maps for the four Common Spaces. However, as the progress report of the European Commission shows, the oblast profits from the various joint tailormade programmes implemented within the Road Maps, and, unlike most other regions of Russia, this has been explicitly indicated; it will be reviewed below. In addition, the Common Spaces and their Road Maps contain provisions on crossborder and regional cooperation between the EU and Russia, where presumably the oblast can be particularly engaged. Compared with the relevant provisions of the PCA mentioned above, the terms of the Road Maps appear to be more elaborated. 365

See Vladislav Inozemcev / Ekaterina Kuznecova, pp. 68 –69. Ibid., p. 70. 367 Ibid. 368 Christophe Hillion, p. 497. 369 The subsequent progress reports were published in 2008 and 2009. They are not examined in this paper. 370 EU-Russia Common Spaces. Progress Report 2007, p. 2. 371 Ibid. 366

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Overall, cross-border cooperation is one of the priorities set out in the Common Spaces, more precisely in the Road Map for the Common Economic Space and the Road Map for the Common Space of Freedom, Security and Justice. 372 As to the former Road Map, it envisages deepening and diversifying interregional and cross-border cooperation (section 1.7 “Interregional and cross-border cooperation”). For this purpose, the two sides are committed to taking joint actions towards: a) increasing the importance of regional development and cross-border cooperation by means of supporting cross-border initiatives and programmes, b) promoting the involvement of regional authorities and civil society in all aspects of cross-border cooperation, c) deepening cooperation and facilitating investments in the fields of cross-border infrastructure and border issues, and d) encouraging the establishment of economic and people-to-people ties between regions of Russia and the EU. Importantly, the Commission’s report describes the results of the cooperation in this area extensively. First of all, it concerns new institutional arrangements such as the establishment of the Regional Policy Dialogue in 2007 and annual meetings of a Round Table between the Committee of the Regions and Russia. 373 This aims at fostering the development of regional policy-making in Russia and sharing the wide experience of the EU in such spheres as territorial cohesion and spatial planning, design of regional development strategies and implementation programmes, information exchange on fund-raising activities directed to EU regions bordering Russia in the framework of structural funds, classification and definition of regions and multi-level governance, and the involvement of sub-regional representation and civil society. In addition, the Commission outlines the results of the Cross Border Cooperation programmes, which has come to be one of the three types of programme covered by the ENPI with the merger of the TACIS programme and other financial instruments of the EU into the coherent and single European Neighbourhood and Partnership Instrument. 374 The programme is directed towards regions of the EU Member States and regions of partner countries sharing common (sea or 372 See Velentina Tschaplinskaja, EU – Projekte in Russlands Nordwesten, in: Russlandsanalysen, 126/2007, p. 15. 373 The European Commission came up with a proposal that the EU and Russia should intensify the cooperation in regional policy and exchange experiences in this field: in order to tackle regional problems across both borders the EU and Russia, as the argument goes, should draw the regions closer by enlarging cooperation between them. Importantly, as Commissioner for the EU’s Regional Policy Danuta Hübner states, the EU is interested in setting interaction with the regional authorities and introducing a multi-level cooperation in the area of regional policy”. ES i RF budut delit’sja opytom v regional’noj politike, in: Vzgljad, 3 ijunja 2008, available at: http://www.vz.ru/news/2008/6/3/173726.html. This relates to one of the previous criticisms of the European Union for its concentration on the political dialogue with Russia and “poor knowledge of problems and actors in Russia’s border regions”. Oxana Antonenko and Kathryn Pinnick, The Enlarged EU and Russia: From Converging Interests to a Common Agenda, in: Oksana Antonenko / Kathryn Pinnick, (eds.), p. 10.

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land) borders. Of a total of 15 geographical programmes indicated by the CBC Strategy Paper of 2007 for the period 2007 –2013, allocated 1.1. billion euros, Russia is entitled to participate in seven programmes, with a contribution from the Commission constituting 307,488 million euros. 375 Simultaneously, Russia’s contribution to the development and implementation of projects related to the CBC is to equal 122 million euros, as was announced at the Mafra EU-Russia summit in 2007. 376 It is believed that the fact that programmes are co-financed by both the EU and Russia contributes to Russia’s positioning as an equal partner rather than as a recipient of technical assistance and therefore to a greater sense of ownership on the Russian side. 377 Besides, the novelty of the ENPI consists in its decentralized nature, which means that these programmes are not managed from Brussels but on a regional level, namely, on the level of regions of EU Member States and Russian regions that share a common border. In addition, the projects concerning crossborder cooperation are implemented in the framework of the Neighbourhood Programmes, 378 with a total of 227 projects having been carried out in late 2007. 379 Importantly, one of the steps that has been identified for fostering interregional and cross-border cooperation is the intention of the Commission to produce “a concept paper on multi-annual programmes of regional cooperation with Russia to establish a more comprehensive approach to planning and funding [our] cooperation in this area”. 380 As noted above, the report on the progress within the Common Economic Space mentions the Kaliningrad Oblast on several occasions. To start with, under the cooperation in the Information Society Dialogue, and specifically in the 374

On the whole, there are following types of programmes as stipulated in Title II of the Regulation establishing a new ENPI: country / multicountry programs, thematic programs and cross-border cooperation programs. See Regulation No. 1638/2006 of the EP and of the Council laying down general provisions establishing a new European Neighbourhood and Partnership Instrument, OJ L 310/1 (2006). 375 The principal objectives of the CBC are listed in the Cross-border Cooperation Strategy Paper and they include: a) economic and social development of the bordering regions, b) coping with the common challenges pertaining to such matters as the environment, health, energy and others, c) securing the efficiency and security of the borders, and d) encouraging people-to-people contacts. See EU-Russia Common Spaces. Progress Report 2007, p. 25. 376 Zajavlenie dlja pressy i otvety na voprosy po itogam XX cammita Rossija-Evrosojuz, 26 oktjabrja 2007 goda. 377 Ot tehnicheskogo sodejstvija – k dialogu ravnyh, in: Vestnik Predstavitel’stva Evropejskoj Komissii v Rossijskoj Federacii, No. 2, p. 10. 378 For an exhaustive exposition of the EU Neighbourhood Programmes, see Chapter IV.2. 379 See EU-Russia Common Spaces. Progress Report 2007, p. 25. 380 Ibid., pp. 27 – 28.

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framework of the EU-Russia Cooperation programme, 381 the Kaliningrad Oblast received totally 7 million euros for administrative-capacity building; a portion of this sum was channelled to the development of e-government within the Kaliningrad regional and municipal administrations. 382 This project is further mentioned in the section dedicated to the EU-Russia Investment Dialogue. It is explicitly stated that the Investment Dialogue is also complemented by cooperation between the EU and Russian authorities through projects, including the above-mentioned project “Administrative capacity building in the Kaliningrad region”. The project started in December 2006 for a duration of three years, aimed at attracting investment into the region. This undertaking was also designed to promote the establishment of an independent Investment Promotion Agency (IPA) to fulfil the goal noted above. The progress report indicates that, the position of the incumbent Minister of Economy (of the Russian Federation) in the region is currently critical towards an independent IPA, nevertheless the project will further proactively seek opportunities to raise the issue. Additional attention to Kaliningrad region as an investment location will be drawn by a large international investors’ conference that the project plans to organise jointly with the Regional Government in autumn 2008. 383

The other reference to the Kaliningrad Oblast is made in the part of the Commission’s report dedicated to an EU-Russia Customs Dialogue and particularly to the cooperation on upgrading customs and connecting transport infrastructure. 384 In particular it announced that the EU funding is channelled to improving border-crossing infrastructure at the Lithuania-Russia border (specifically the Chernyshevskoye border-crossing point of the Kaliningrad Oblast). 385 This is equally relevant to the points at Mamonovo on the Polish-Russian border and at Sovetsk on the Lithuanian-Russian border. 386 As can be seen, the joint EU-Russia projects appear to be substantial additions to the formalized dialogues within the Common Economic Space. Another project in the Kaliningrad Oblast in the framework of this Common Space is the EU-funded project on energy 381

The general framework of the EU’s Russia policy is described in Chapter IV.2. See EU-Russia Common Spaces. Progress Report 2007, p. 10. 383 Ibid., p. 11. 384 Ibid., p. 13. 385 Pursuant to the report, the project of the Chernyshevskoye border crossing point which was financed through TACIS AP 2001 and totally received eight million euro is to be officially opened in March 2008. See EU-Russia Common Spaces. Progress Report 2007, p. 13. 386 The construction of the point at Mamonovo is being carried out with the total funding of 13.3 million euros by TACIS AP 2004. In its turn, ten million euros have been allocated for the building of the crossing point at Sovetsk. However the major obstacle for the beginning of construction has been the absence of an agreement between Lithuania and Russia on the funding of the construction of a new bridge over the Neman River. See EU-Russia Common Spaces. Progress Report 2007, p. 13. 382

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efficiency in several Russian regions, including Kaliningrad. The project had a total budget of 2.8 million euros; it was implemented with support of the Ministry of Industry and Energy of the Russian Federation in the time period from September 2006 to December 2007. Furthermore, the European Commission co-finances with the Kaliningrad regional authorities a joint project in the sphere of the environment, particularly a project on the construction of a waste treatment plant in Gusev in the oblast, with a total cost of 6.5 million euros. 387 This fact is indicated under the rubrics of the EU-Russia Environment Dialogue on the Common Economic Space. The Road Map for the Common Space of Freedom, Security and Justice emphasizes, inter alia, the role of cooperation on border issues in general. All in all, the most significant achievement of the cooperation in this sphere has been the agreements on readmission and visa facilitation coming into force on June 1, 2007. The two sides have also taken steps towards the examination of the feasibility of a visa-free regime between the EU and Russia in the long-term perspective and continued their dialogue on border management and control issues. 388 Thus, the issue of the Kaliningrad Oblast is raised in the section of the Commission’s report which describes the progress made within the Common Space on Freedom, Security and Justice and particularly the dimension of “freedom”. Specifically, the paper touches upon the TACIS project (amounting to four million euros) in the field of the security of external borders. According to the report, the anticipated start of the project on Integrated Border Management in the Kaliningrad Oblast was 2008. This project also foresaw “bilateral cooperation on individual spheres”, 389 and hence the Member States have been also called on to participate. There has also been intellectual effort by experts and analysts to integrate the issue of the Kaliningrad Oblast into EU-Russia dialogue on the four Common Spaces. 390 According to some of them, upon the adoption of the EU-Russia Road Maps for the Common Spaces “the ‘Kaliningrad factor’ in EU-Russia relations acquired a new dimension”. 391 They are certain that “the Kaliningrad region can and should play a key role in establishing these spaces, although it may hamper these processes if its own problems are politicized”. 392 The idea that the case of the Kaliningrad Oblast could assist in fostering the building of the Common 387

See EU-Russia Common Spaces. Progress Report 2007, p. 17. Ibid., p. 30. 389 Ibid., p. 31. 390 See, for instance, Evgeny Vinokurov et al., Kaliningradskaja Oblast’ v kontekste sozdanija Obwego Jekonomicheskogo Prostranstva Rossija-ES. 391 Alexey Ignatiev / Petr Shopin, Kaliningrad in the Context of EU-Russia Relations, p. 15. 392 Ibid., pp. 15 – 16. 388

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Spaces is linked to the concept of the oblast as a pilot region of EU-Russia integration which has been highlighted earlier in Chapter II.3. 393 According to the authors, Kaliningrad could fit into the overall process of EU-Russia cooperation as a pilot project, especially in the spheres related to matters of the economy and the freedom of movement, therefore within the Common Economic Space and the Common Space of Freedom, Security and Justice. In the former case, the core focus is the concept of a Kaliningrad Free Trade Area, an alleged predecessor of an EU-Russia FTA. As to the latter, the Kaliningrad Oblast could be a pilot for a zone of visa-free regime between the European Union and Russia. The case of Kaliningrad could be particularly central in the cooperation within the area of freedom, security and justice. 394 Since this Common Space revolves mainly around the idea of a visa-free regime and this seems to be rather a longterm objective, the visa-free regime could be introduced between the EU and the Kaliningrad Oblast first. Put another way, “reciprocal opening of Kaliningrad and the EU could be a solution”. 395 Despite the recognition that this is a politically sensitive question for both the EU and Russia, with the traditional questions of sovereignty, secessionism, on one side, and soft security threats, on the other side, Evgeny Vinokurov still insists on the feasibility of the case of Kaliningrad as a pilot region in the Justice and Home Affairs field. He suggests that Russia step away from the principle of reciprocity and introduce a visa-free entrance to Kaliningrad for EU citizens unilaterally based on a special law. 396 In this way, Kaliningrad would be critical for testing the new mechanisms and procedures of a visa-free regime in general. The benefits of opening Kaliningrad for foreigners are clear to the author: the facilitation of doing business in Kaliningrad, the evolution of tourism and hospitality business, the attraction of foreign investors, and greater involvement of the Kaliningrad Oblast in interregional cooperation activities. The EU, from its side, could demonstrate partial reciprocity, meaning that it could simplify the procedures of obtaining visas considerably for Kaliningrad residents. Importantly, as the author points out, the EU acquis allows for this to be done; the EU Common Line of May 13, 2002 outlines certain flexibilities such as multiple-entry visas for a substantial period of time, flexibility 393 Evgeny Vinokurov et al., Kaliningradskaja Oblast’ v kontekste sozdanija Obwego Jekonomicheskogo Prostranstva Rossija-ES, pp. 3 – 26. 394 See Evgeny Vinokurov, Kaliningrad in the Framework of EU-Russia Relations, p. 29. 395 Ibid., p. 30. 396 In fact, the author supports the proposal of a visa-free regime for EU citizens to Kaliningrad made by V. Ezhikov, a member of Kaliningrad Regional Duma in 2003. A draft law was prepared on this issue and approved by Kaliningrad Regional Duma but it was nonetheless turned off by the Ministry of Foreign Affairs. This was explained by the adherence to the principle of reciprocity and fears of possible secessionist moods in the Oblast. See Evgeny Vinokurov, Kaliningrad in the Framework of EU-Russia Relations, p. 31.

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with visa fees, visa exemptions for certain categories of persons. 397 Specifically, Vinokurov proposes that residents of Kaliningrad be endowed with multi-entry pluriannual visas and that a consulate of one Member State should issue visas on behalf of other Member States “on the basis of respective agreements”, 398 with these agreements being one of the mechanisms thus far regulated by “Common Consular Instruction”. 399 All in all, it is believed that “it would be far-sighted of the EU and Russia to make Kaliningrad an integral part of the dialogue on Common Spaces so that the Oblast would become one of the connecting knots of European-Russian cooperation”. 400 Of interest is the effort of a group of European and Russian experts at the Russian-European Centre for Economic Policy (RECEP) to forge a “road map” of the Kaliningrad Partnership in EU-Russia relations. 401 According to them, the logic of the concept of the Kaliningrad Partnership consists in that, granted the political will on both sides, it can be realized not only in the EU-Russia Partnership scenario, but also under other, less favourable, contingencies, like the Administrative Modernization or, to some extent, Bureaucratic Capitalism, in Russia, or Network Europe scenario in the EU. It is only under the most extreme cases of isolationism and confrontation that the Kaliningrad Partnership will not work. 402

In other words, this Partnership should develop its own dynamics instead of remaining dependent on the complications embedded in EU-Russia relations. Again, although not explicit, the idea of Kaliningrad as a pilot region is put forward: the Kaliningrad Oblast could be a pilot in the implementation of the concept of the Common European Economic Space, whereby Russia could adapt a part of the EU acquis, introduce European certification for its products and apply it in the territory of the Kaliningrad Oblast. Besides mentioning that the idea of the Kaliningrad Partnership should be integrated into all four Common spaces, the authors call for Russia to adopt a federal law which would include 397 The Common Line was agreed by the General Affairs Council on May 13, 2002 and it describes the basic positions of the Schengen acquis and provides for certain flexibilities therein. 398 EvgenyVinokurov, Kaliningrad in the Framework of EU-Russia Relations, p. 33. 399 Common Consular Instructions on visas for the diplomatic missions and consular posts are a part of the EU acquis and they regulate, among other things, the mechanism of empowering a consulate of one Member State to issue visas on behalf of another Member State. See Common Consular Instructions on visas for the diplomatic missions and consular posts, OJ C 313/1 (2002). Ibid., p. 33. 400 Evgeny Vinokurov, Kaliningrad in the Framework of EU-Russia Relations, p. 35. 401 See Christer Pursiainen / Sergei Medvedev (eds.). This project was fulfilled upon request of the Administration of the President of the Russian Federation, the State Duma of the Federal Assembly of Russia, Committee on Economic Policy, Entrepreneurship and Tourism and it has been funded by the EU. 402 Sergey Medvedev, Chapter 1. Scenarios, in: Christer Pursiainen / Sergei Medvedev (eds.), p. 26.

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the following guidelines for its federal policy to Kaliningrad: a) integration into the European economic space, b) establishment of an institutional base of cooperation, c) modification of the Special Economic Zone regime, d) improvement of federal and regional governance, e) improvement of the business climate and lowering of administrative barriers, the development of infrastructure, export incentives and support of small and medium-sized businesses. 403 In this respect, the specialists of RECEP put forward the idea of a “road map” of EU-Russia partnership until 2020, whereby its main rationale is the establishment of an EU-Russia free-trade area and the full participation of Russia in the EU’s Common Market and this, in accordance with the plan, should be explicitly stated as the eventual objective of the Common Economic Space. 404 It is believed that “by using effectively the existing support and cooperation instruments and institutions of the EU-Russia cooperation a specific agenda for the Kaliningrad region could be materialized into projects”. 405 Thus, over the period 2005 – 2010 the schedule of the road map foresees, among other things, such actions as Russia’s membership in WTO, negotiations on the new PCA, and starting negotiations on an EU-Russia free trade area. The timeframe from 2010 until 2015 presupposes the start of negotiations on a visa-free regime as well as the finalizing and ratification of the free trade agreement. Parallel to this, the sides should discuss the preconditions of a single market and adapt Russia’s legislation to the existing single-market-related legislation of the EU. Eventually, by 2020, both partners should finalize the single market agreement; it is expected that in 2020 the single market agreement would come into force. The authors also present a road map for the Kaliningrad partnership up to 2010 in which they define the main steps. 406 They specifically propose that a list of joint EU-Russia policy priorities for the Kaliningrad region should be drawn up at a higher political level. In so doing, the two sides should employ the already existing EU instrument, the Northern Dimension Initiative, and formulate the partnership in the form of an ND Kaliningrad partnership. This could be done either as an ND Action Plan or a political declaration framing the priorities of the ND. Furthermore, it is suggested that regional organizations such as the Council of Baltic Sea States, the Nordic Council of Ministers and others be involved in the process of preparing the partnership priorities. In addition, pursuant to the road map, regional and local governments as well as civil society (NGOs and businesses) should actively participate at the stage of developing the policy priorities into concrete projects. In the meantime, the coordinated funding instruments are to include EU instruments (the ENPI and INTERREG), bilateral 403 404 405 406

Ibid. See Christer Pursiainen, Chapter 2. Road Maps, pp. 28 –46. Ibid., p. 40. Ibid., pp. 44 – 46.

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programmes between EU Member States and Russia, International Financial Institutions, regional organizations, and funding from the business community, NGOs and other sources. g) Perspectives on a new bilateral agreement and Kaliningrad’s place in it On the eve of the expiration date of the PCA, European and Russian experts discussed further possible ways of formalizing the legal and political relations between the European Union and Russia. 407 Principally, they identified several variants; these scenarios basically reflect two trends in the views among Russian and European analysts and practitioners: conservatives and progressives. 408 The first group advocated the automatic prolongation of the PCA on an annual basis in accordance with Article 106 of the PCA. Although this approach was eventually taken by both sides, which allowed them to gain time to start negotiating and preparing a new document, it was nonetheless clear that there was a need for a new agreement to adequately replace the current PCA. The main reason for this was wide-spread criticism (described above) that the quality of the current developed EU-Russia relations had stepped far from the agreement of the early 1990s. Therefore there was a need for a proper formalization of the relationship, and, more importantly, sticking to the outdated agreement would essentially testify to a lack of interest and strategic vision among the partners. Furthermore, there were speculations on the termination of the PCA without it being replaced if one of the parties denounced it after the expiration of the agreement. 409 This would have led to a legal gap in relations, complicating the implementation of sectoral agreements (such as those on textiles and steel), overall trade relations, and the four Common Spaces. An interim agreement was required until a new comprehensive agreement was negotiated and concluded; thus, this state of affairs was not recommended. Implying a greater degree of effort and also political will from both the EU and Russia, the other two scenarios included, first, the possibility of renewing the PCA following certain qualitative changes and, second, concluding a completely new political and legal document. Both variants entailed in-depth discussions among the progressives – in Russia represented by democratic fractions and people from the ruling establishment – as to what legal form the revised / new 407 See, for instance, Michael Emerson (ed.), Jurij Borko, Evropejskomu Sojuzu i Rossii neobhodimo Soglashenie o strategicheskom partnerstve; and Po puti k Dogovoru o strategicheskom partnerstve mezhdu Rossiej i Evropejskim Sojuzom, Sankt-Peterburg, 2007. 408 See Nadezhda Arbatova, The Russia-EU Quandary, p. 42. 409 See Aaron Matta, p. 3.

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agreement would take. To start with, modernizing the PCA could be accompanied by attaching either a (non-legally binding) Introduction of Joint Political statement to the PCA or an Introduction of amendments to the existing PCA subject to the established ratification procedures. 410 These would essentially consist of reiterating the strategic goals as formulated in the four Common Spaces and their Road Maps and in the EU-Russia Energy Dialogue, thus formally incorporating them into the legal foundation of the EU-Russia partnership. 411 Both purely political declarations (repeating the already existing political goals of the non-binding Common Spaces) as well as the “agglomeration of old and new regulations” 412 (in the case of PCA’s amendments) were criticized for the lack of potential for improving the relationship substantially. Timofei Bordachev contemplated that the revision of the PCA could also be materialized by adding new provisions which would reflect the new basis for institutional cooperation over a period of 10 –15 years. 413 He assumed that this could be formalized on the models of the EU’s policies toward third countries (neighbouring states or colonies of European states in Africa) such as an association or a free trade area. To this effect, an Advanced Partnership / Association Agreement was the title of the agreement proposed by prominent Russian analyst Nadezhda Arbatova. 414 She particularly proposed the establishment of an association between the EU and Russia, based on the rationale that it would bring a full liberalization of trade in goods and therefore the establishment of a free trade zone between the EU and Russia. The strategic goal of a modernised PCA should be the creation of four Common Spaces. 415 She thus offered concrete practical recommendations for modifying the current PCA: besides an improved Preamble, General Principles and Objectives as well as a section on political dialogue, the PCA should include four chapters, each dedicated to a corresponding Common Space. Aside from this, the special provisions of the Common Spaces could be formulated either in special protocols or separate agreements. Special mention should also be made in the Agreement on a gradual harmonization of legislation. 410 One of the titles proposed has been a “Political Declaration on Strategic Partnership” on the model of EU-India agreement of 2003 accompanied by an Action Plan. In that, the reference to “strategic partnership” would signify a new level of the relationship and the perception and recognition of each other as equal partners. See Aaron Matta, p. 4. 411 In this event, the partnership could also draw upon the multilateral agreements such as WTO, the Energy Charter Treaty, the Kyoto protocol on global warning. See Michael Emerson et al., A new Agreement between the EU and Russia, p. 79. 412 Aaron Matta, p. 4. 413 See Timofei Bordachev, Russia and the European Union after 2007, in: Michael Emerson (ed.), p. 4. 414 See Nadezhda Arbatova, The Russia-EU Quandary, p. 47. 415 Although this type of an agreement is viewed by Nadezhda Arbatova as a modernised PCA, a group of European experts admits that this would be a new Treaty. See Michael Emerson et al., A new Agreement between the EU and Russia, p. 81.

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According to another expert, the approach of the extension of the PCA by adding new provisions and clauses would be more favourable for the European Commission. It would “retain the role of leader in relations with Russia, while reducing the influence of individual EU member countries that are more interested in the development of contacts with Russia”. 416 Moreover, this could help Brussels avoid elaborating a clear-cut strategy towards Russia and direct its efforts to dealing with its internal matters. On the one hand, this option could be beneficial for Russia since this would similarly not require additional effort in building a negotiation team (especially in the situation of a lack of qualified experts and complicated internal institutional procedures). On the other hand, this would also signify that Russia accepts the status of a “junior partner” 417 by adapting to a traditional foreign policy tool of the European Commission, which is essentially the case of the PCA. To date, the most realistic variant has turned out to be the negotiation and conclusion of a wholly new agreement to replace the existing PCA. Nonetheless, there is similarly a range of speculations on the legal and political shape of the new agreement. One option is an agreement in the form of a simple framework agreement with several specific agreements. 418 On the one hand, this would signify the conclusion of both a general framework agreement and more extensive and specific agreements pertaining to sectoral cooperation, and, as a result, a less complicated and politically loaded ratification procedure. On the other hand, the weakness of this approach, seen from the perspective of the European Union, would be the fact that although the framework agreement would (arguably) include the provision on common values, this might appear: somewhat toothless with respect to other areas of cooperation since the sectoral agreements would have a different timeframe and framework than the general agreement. This would create the loss of any linkage to conditionality among the agreements if not the common values at all. 419

This variant echoes Timofei Bordachev’s proposition to construct a threelevel framework for the further development of the EU-Russia partnership. 420 The first level would include the establishment of a strategic framework for bilateral relations based on a political Declaration for a Strategic Union Treaty defining the common goals, strategic interests and principles. 421 The next level would comprise the adoption of strategic agenda identifying the specific areas 416

Timifei Bordachev, Russia and the European Union after 2007, p. 54. Ibid., p. 54. 418 See Aaron Matta, p. 4. 419 Ibid., p. 5. 420 See Timofei Bordachev, Russia and the European Union after 2007, p. 57. 421 As proposed by a number of experts, the Strategic Union should be designed on the model of French-German bilateral treaty (the Elysee Treaty) meaning that it would include “a partnership of equals, a determination to replace old enmities with a totally 417

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of cooperation (international and regional security, trade, freedom of movement of people, cultural and humanitarian cooperation and civil society) as well as initiatives to fulfill the agenda. According to the author, the final level would consist of a plethora of sectoral agreements, the only documents to be ratified by the parties. 422 Importantly, the author favours an emphasis on the principle of equality to cement the new agreement. By and large, there is a tendency among (European) experts to disapprove the idea of a comprehensive multi-sectoral bilateral treaty, 423 especially if it is based on the model of EU treaties with its neighbours. 424 The reasons for this are: a) Russia does not aspire to EU membership, b) the ratification procedure of such an agreement would be complicated and c) such a form of agreement leads to inflexibly and runs the risk of becoming outdated before it comes into force. Rather, they suggest that the parties concentrate on multiple sector-specific agreements (consistent with the EU-Swiss model of multiple agreements) while taking into consideration the creation of four Common Spaces. In the mid-term, a “Political Declaration on Strategic partnership” could be signed and updated after Russia joins the WTO. Subsequently, a Treaty of Strategic Union could be concluded as a long-term agreement, specifically “when there is a greater convergence and mutual trust on matters of political values”. 425 So far, it is clear that the new agreement should provide: a comprehensive framework for EU / Russia relations for the foreseeable future and a strengthened legal basis and legally binding commitments covering all main areas of the relationship, as included in the four EU / Russia common spaces and their road maps. 426

new paradigm of common purpose, the building of total trust on fundamental matters, and search for total agreement in as many domains of common interest as possible”. Michael Emerson et al., A new Agreement between the EU and Russia, p. 82. 422 Notably, the overall scenario of the creation of a completely new bilateral agreement used to be assessed as unrealistic due to the extremely complicated and (politically loaded) procedure of its subsequent ratification, in which diverse interests of EU Member States are involved. See Nadezhda Arbatova, The Russia-EU Quandary, p. 44. 423 However, the then European Commissioner for External Relations and European Neighbourhood Policy Benita Ferrero-Waldner sketched the shape of a New Agreement and made it explicit that it would be “a comprehensive and substantive agreement, but not an encyclopaedia” because “anything too short would also be of little use. The slimline document some are talking of would make the notion’ legally binding’ rather empty”. In that, the four Common Spaces would be incorporated in a new institutional and legal framework. See Benita Ferrero-Waldner, Russia and the EU’s need for each other. 424 See Michael Emerson et al., A new Agreement between the EU and Russia, p. 62. 425 Ibid. 426 Joint Statement of the EU-Russia summit on the launch of negotiations for a new EU-Russia agreement, Khanty-Mansiysk EU-Russia summit, June 27, 2008.

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Until recently, the following options of the legal base of a new agreement were available: a) European Community agreements based on Articles 133 (trade and tariff agreements) and 310 (association agreements, and b) the European Union agreement resting on Article 24 of the Treaty on European Union. 427 The latter clause envisaged the conclusion of agreements between the EU and third countries within the areas of the Common Foreign and Security Policy and judicial cooperation in criminal matters. Most of the agreements concluded by the EU with third countries were mixed agreements which presupposed the competence of both the Community and Member States; they were negotiated under the Community method and ratified by national parliaments of the Member States. 428 With the Lisbon Treaty, the association agreements previously codified in Article 310 of the ECT were moved to Article 217 of the TFEU and the provision on trade and tariff agreements envisaged by Article 133 of the ECT moved to Article 207 of the TFEU. The conclusion of international agreements regulated by Article 24 of TEU is codified in Article 37 of the reformed TEU. One of the advantages that came out of the Reform Treaty is the fixed procedure for the conclusion of international agreements, prescribed in a separate section “International Agreements” (Articles 216 –219 of the TFEU). While the general procedure foresees the conclusion of international agreements based on qualified majority, the procedure for concluding international agreements in the CFSP rests on unanimity. If the EU and Russia choose to negotiate a comprehensive agreement, this would be a framework agreement, also based on Article 37 of the TEU, and the chief disadvantage of this legal form of the agreement would be the ratification procedure, with the risk of any national parliament blocking the process. There has been common assent among the experts quoted above about the inclusion of the issue of the Kaliningrad Oblast into a new EU-Russia bilateral agreement between the European Union and Russia. 429 In particular, Nadezhda Arbatova and Paul Kalinichenko propose a separate protocol or declaration to be annexed to the modernized PCA / new agreement, which would describe the matters related to the EU-Russia cooperation on Kaliningrad. 430 In accordance 427

Ibid., p. 70. With the Lisbon Treaty, there will be no mixed agreements in trade since external trade policy is European Union competence and hence agreements will be ratified by the EU (Art. 3 (1e) and 206 – 207 TFEU). See Stephen Woolcock, The potential impact of the Lisbon Treaty on European Union External Trade Policy, European Policy Analysis, June, Issue 8, 2008, Swedish Institute for European Policy Studies. 429 See, for instance, Nadezhda Arbatova, The Russia-EU Quandary, p. 50, Timofei Bordachev, Russia and the European Union after 2007, p. 58 and Paul Kalinichenko, Problems and perspectives of Modernizing the Legal backgrounds for the EU-Russia Strategic Partnership, p. 11. 428

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with Timofei Bordachev’s suggestion, the issue of the simplification of Kaliningrad transit should be mentioned in the section of the EU-Russia strategic agenda dedicated to cooperation in ensuring people’s freedom of movement and unimpeded transit. 431 Another prominent European expert in EU-Russia relations, Alexander Rahr, also admits that the question of Kaliningrad might be incorporated into a new EU-Russia agreement. 432 However, his arguments runs that this would be likely to revolve around technical (such as cross-border) matters rather than political issues since this remains to be a politically sensitive area (primarily for Russia). In contrast, Governor of the Kaliningrad Oblast Georgy Boos has recently expressed his assumption that within the overall framework of the new EU-Russia agreement the parties could elaborate a separate road map on the Kaliningrad Oblast and assign it the role of a pilot region for EU-Russia cooperation. 433 h) Summary This part of the thesis has examined the legal, political and institutional framework of the EU-Russian partnership, purposely highlighting the place of the Kaliningrad Oblast in this formalized bilateral relationship. The major points covered in this section can be summarized as follows. Firstly, the legal and political foundation of the EU-Russia partnership has rested on the EU’s policy approaches (concepts) toward third (neighbouring) countries. More precisely, the PCA is essentially a derivative of the EU’s Europe Agreements, and the Road Maps for the EU-Russia Common Spaces are similarly modelled on the Actions Plans of the EU’s European Neighbourhood Policy. Having said this, the institutional framework to date has taken on new and innovative forms that transcend traditional institutional designs of both the EU’s and Russia’s external relations. This is exemplified by a growing number of Permanent Partnership Councils which are capable of meeting in diverse formats. The present-day significant level of the development of the bilateral strategic partnership requires a new formalization of the relationship. It is not clear, however, whether this formalization could be built upon the EU’s approaches to the neighbourhood, especially when Russia seeks equality in the relationship more assertively. 430 See Nadezhda Arbatova, The Russia-EU Quandary, p. 50, and Paul Kalinichenko, Problems and perspectives of Modernizing the Legal backgrounds for the EU-Russia Strategic Partnership, p. 11. 431 See Timofei Bordachev, Russia and the European Union after 2007, p. 58. 432 “Moskva ne hochet riskovat’ Kaliningradom v sblizhenii s ES”: nemeckij politolog, in: IA Regnum, 21 maja 2008. 433 Kaliningradskaja oblast’ i ES mogut razrabotat’ dlja regiona otdel’nuju “dorozhnuju kartu”, schitaet gubernator Boos, in: Interfax Severo-Zapad, 21 maja 2008.

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Secondly, while there is a considerable range of criticisms of the PCA for its complicated and bureaucratic nature and, more importantly, for its obsolete stand, in the context of this paper the most noteworthy criticism is that the PCA has proved to fall short of dealing with the whole issue of the Kaliningrad Oblast properly and effectively. The PCA has turned out to be unable to cope with the complex problem of the oblast, dispersing the topic of the oblast through different PCA institutional bodies and across various areas of cooperation. In their turn, the four Common Spaces and their Road Maps – having been devised with a view to reinforcing the strategic partnership on the basis of the PCA and having also come under criticism – do not explicitly integrate the problem of Kaliningrad. However, the (long-term) objectives of at least two Common Spaces appear to be especially and directly relevant to Kaliningrad: 1. the Common Economic Space and its ultimate objective of establishing an “integrated market” between the EU and Russia, and 2. the Common Space of Freedom, Security and Justice and the eventual goal of the setting up of a visa-free regime between the EU and Russia. Apart from the fact that Kaliningrad could benefit significantly from meeting the above objectives, it could be instrumental throughout the whole process of establishing the Spaces, provided it attains the status of a pilot region in the EU-Russia strategic partnership. For this to be done the political will of the parties will be critical. Furthermore, the Common Spaces and their Road Maps offer an increased focus on cross-border and regional cooperation, in which the Kaliningrad Oblast can have every chance to participate fully. The importance of cross-border cooperation for the strategic partnership is well illustrated by the facts that: 1. the only sub-committee which remains functioning is on customs and cross-border cooperation and 2. an EU-Russia institutionalized Dialogue on Regional Policy has recently been established, in which the EU promotes deeper involvement by Russian regional authorities in EU-Russia regional cooperation. In general, the analysis of the institutional and legal foundation of EU-Russia relations shows that, first, there is no legal basis (document) which would enable the EU to forge a separate policy towards the Kaliningrad Oblast. In addition, there are no plans so far on the side of Russia and no possibility for the Kaliningrad oblast to adopt the acquis. While the bilateral institutional framework is extensive, it is not sufficient to discuss issues concerning the oblast. Nor is there a direct institutional dialogue between the EU and Kaliningrad. The pattern of dealing with Kaliningrad within the bilateral relationship does not fit into any of the existing models of inclusion in the EU. Therefore, it is possible to observe that the degree of Kaliningrad’s presence is insignificant not only in the political bilateral EU-Russia agenda but also in legal and institutional terms. Therefore, the application of parameters 2, 3, 4 and 5, which can display the level of integration, testify to only a very low level of Kaliningrad’s hypothetical inclusion into the Union.

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Thirdly, while a new phase in the EU-Russia partnership may begin with the conclusion of a new bilateral agreement, it remains questionable whether this will also signify a new momentum for the Kaliningrad Oblast within the bilateral partnership. It is anticipated that the new agreement will consolidate provisions in all the current areas of the partnership; it will modernize the institutional structure and incorporate the four Common Spaces. In spite of the manifold suggestions and assumptions made by the experts’ community on the legal form of the new agreement, it has been officially announced that legally the new agreement will be a comprehensive (international) treaty as contrasted to a political declaration or a short framework agreement, repeatedly proposed by some experts and practitioners. However, it is not yet certain whether this agreement will include the issue of the Kaliningrad Oblast either in one of its provisions or as a separate declaration or attachment. Taking into account such principal and, more importantly, contested issues to be included in the agreement, such as economic integration, energy, and common neighbourhood, security, one may presume that the problem of the Kaliningrad Oblast runs the risk of fading into the background of the joint agenda. The new agreement, however, could be designed with enough flexibility to allow the parties to arrange a separate dialogue or a task force on Kaliningrad, particularly as a separate EU-Russia agreement on Kaliningrad still seems far beyond the horizon. This chapter has examined the place of the Kaliningrad Oblast in the EU-Russia formalized (legal and institutional) relations. The next chapter will be exclusively dedicated to an analysis of the actual (practical) treatment of the Kaliningrad Oblast in the framework of the European Union’s policy.

IV. The involvement of the Kaliningrad Oblast in EU policies 1. The political position of the EU towards the Kaliningrad Oblast a) The European Parliament aa) General remarks on the European Parliament The European Parliament is the only institution of the European Union, the members of which are elected by direct universal suffrage in the 27 EU Member States. After the elections of 2009 it is composed of 736 Members of the European Parliament (MEP) elected for a five-year period according to the principle of proportional representation. With the amendments of the Treaty of Lisbon, the composition of the Parliament foresees an overall limit of 750 seats whereby the minimum and maximum numbers of MEPs constitute 6 and 96 respectively. 1 The seats are distributed among the EU Member States on the basis of population, which results in uneven representation: citizens of smaller Member States are better represented than citizens of larger Member States. MEPs represent their national political parties; this means that there are no European political parties in the European Parliament. The MEPs, however, are organized into (seven) European political groupings, with the two largest being the Group of the European People’s Party and European Democrats (EPP-ED), and the Socialist Group (PSE). 2 These political groups are crucial for the organization of the Parliament because, first, they affect voting behaviour, “with MEPs within groupings acting reasonably cohesively” 3 and, second, they exercise particular 1 Upon the decision of the European Council in October 2007, the number was raised to 751 parliamentarians. See The European Parliament: Reassessing the Institutional Balance, in: The Treaty of Lisbon: Implementing the institutional innovations, Joint Study, European Policy Centre, Egmont-The Royal Institution for International Relations, Centre for European Studies, November 2007, p. 14. 2 More on the organization of the European Parliament, see Rules of Procedure of the European Parliament, 16 th edition, May 2008, available at: http://www.europarl.europa.eu. 3 See Damian Chalmers / Adam Tomkins, European Public Law. Text and Materials, Cambridge University Press, 2007, p. 112.

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influence on the determination of the composition of the European Parliament Committees, and specifically they secure membership for their representatives in the most influential committees and negotiate on the committees’ Chairs. The MEPs are divided into (20) permanent parliamentary committees which in principle reflect the ideological and territorial composition of the whole Parliament. Their specific task is to conduct the preparatory work for Parliament’s plenary sittings. In the context of this paper it seems reasonable to shed particular light on the Committee on Foreign Affairs. Its responsibilities cover a variety of areas including the CFSP and ESDP / CSDP; relations with international organizations and third countries (especially neighbouring countries) through cooperation and assistance programmes or international agreements; the opening, monitoring and concluding of negotiations with regard to accession to the EU; and matters of human rights and democracy promotion in third countries. The European Parliament exerts a number of powers: a) legislative power, b) supervisory power, and c) financial power. The first power is inherent in the legislative procedure; it was significantly increased by the Lisbon Treaty and, in a way, its prerogatives have been “put on an equal footing with those of the Council of Ministers”. 4 The participation of the European Parliament in the process of European law-making occurs mainly through the co-decision procedure and the consultation procedure. The application of the co-decision procedure, essentially the ordinary legislative procedure for the adoption of legislative acts, was extended by the Treaty of Lisbon to the field of action of the Union, where the Council votes by qualified majority. The European Parliament acts jointly with the Council of the European Union (Article 294 TFEU), it is consulted on a Commission proposal, it may introduce amendments to it and, in certain cases, it retains the right to reject a proposal. Under the Treaty of Lisbon, the prerogatives of the Parliament in the conclusion of international agreements, especially related to the sphere of external trade, are increased considerably; first, the Commission should report to the Parliament on the progress of negotiations (Article 207 (3) TFEU) and second, the conclusion of an international agreement requires the Parliament’s consent in fields which are subject internally to the ordinary legislative procedure (Article 218 TFEU). In addition, the European Parliament retains the right of political initiative; it is enabled to turn to the Commission with a request to present a legislative proposal if it believes that this will further the implementation of the EU’s objectives (Article 225 TFEU). This right allows the European Parliament both to initiate debate and to control the legislative agenda by taking a pro-active strategy and generating ideas. 5 4 5

The European Parliament: Reassessing the Institutional Balance, p. 7. Ibid., p. 115.

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The supervisory power means that the Parliament has the right to appoint and dismiss the members of two institutions: a) it is exclusively responsible for the appointment or dismissal of the European Ombudsman (Article 228 TFEU) and b) it has the right to elect the President of the Commission and subsequently to approve the College of Commissioners (Article 17 (7) TEU) as well as to dismiss the Commission as a body (Articles 17 (8) TEU and 234 TFEU). Furthermore, the European Parliament enjoys powers of inquiry (Articles 226 and 227 TFEU) and power to hold most of the Union’s institutions to account: the Commission (Articles 233 and 230 TFEU), the European Council (Article 15 (6) TEU), the Council of Ministers (230 TFEU) and the European Central Bank (Article 284 TFEU). Furthermore, the Parliament’s power of litigation signifies that it has the power of recourse before the Court of Justice by challenging the acts of other EU institutions (Articles 263 and 265 TFEU). Finally, due to its financial power the Parliament has the legal capacity to reject the draft budget of the EU and amend and adopt the budget, exercising various powers in cases of compulsory and non-compulsory expenditures (Article 314 TFEU). Within its legislative-power domain, the principal forms of legal acts adopted by the European Parliament are resolutions, which in turn basically fall into two types. 6 First, these are resolutions that are passed in response to a legislative proposal from the European Commission as part of the co-decision or consultation process, called “legislative resolutions” (Rule 51 [2] of the Rules of Procedure of the European Parliament). This is preceded by and based on the findings made in the report by the parliamentary committee to which the legislative proposal has been sent (Rule 42 of the Rules of Procedure of the European Parliament). The other type of legal act by the European Parliament is “initiative resolutions”, 7 which are produced and introduced at the Parliament’s own initiative. This formula requires a committee to prepare an “Own Initiative” report and submit a motion for a resolution to Parliament on an issue falling under the committee’s responsibility (Rule 45 of the Rules of Procedure of the European Parliament). Subsequently, the Parliament votes in its plenary session and if there is assent it adopts a Resolution requesting from the Commission to legislate on the subject under examination. bb) The European Parliament on the Kaliningrad Oblast The European Parliament seems to have been the first EU institution to pay attention to the problem of the Kaliningrad Oblast: in 1994, on its own initiative, it adopted a resolution specifically on the Kaliningrad Oblast. 8 This was preceded 6 See Matthias Niedobitek, The Cultural Dimension in EC Law, London: Kluwer Law International, 1997, p. 277. 7 Matthias Niedobitek, The Cultural Dimension in EC Law, p. 277.

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by a visit to the oblast by a European Parliament delegation headed by Magdalene Hoff, a German Member of the European Parliament and chairwoman of its Delegation for the Commonwealth of Independent States, in March 1993. 9 The one-week “fact-finding mission” 10 aimed at exploring the situation around the region and ways for the EU to deal with it; outcomes and analysis of the visit were presented in a report produced in cooperation with Heinz Timmermann, who accompanied Magdalene Hoff. 11 Their argument was that the best variant for the Russian government to encourage the development of the Kaliningrad Oblast’s would not be by limiting the oblast’s mission to being the location of a large number of Russian troops and providing the region with substantial subsidies. Instead, what they felt was needed was integrating the oblast’s economy with the economies of its neighbours. According to them, the West’s contribution could be assistance in integrating Kaliningrad into the Baltic-area economy through regional cooperation with Russia. In general, this initiative resolution was prepared by the Committee on Foreign Affairs, addressed to the Council of the European Union, the European Commission, the EU Member States’ parliaments and the Russian Parliament. On the one hand, the resolution contained provisions that predestined and gave a basis for the essence of the subsequent (and current) discussions on the Kaliningrad Oblast; on the other hand, it raised several rather contentious issues. 12 Thus, this document was the first EU official position paper to state that the future of the Kaliningrad Oblast was a matter of direct and urgent importance for Russia, the adjacent countries and the European Union, for whom the oblast could become a bridge of cooperation. 13 It recommended that West European practices and experiences should serve as models for the organization of cross-border cooperation between Kaliningrad, Lithuania and Poland and that the Kaliningrad Oblast should be integrated into the European transport and communications system. Importantly, the European Parliament urged the Commission and the Council, which at the time were engaged in negotiations with Russia over the Partnership and Cooperation Agreement, to insert a special clause on trade and cooperation in the Kaliningrad Oblast into the PCA and to 8

European Parliament Resolution on Kaliningrad (Königsberg), a Russian exclave in the Baltic region: situation and outlook from a European viewpoint, OJ C 061/74 (1994). 9 See Richard J. Krickus, p. 111. 10 Heinz Timmermann, Kaliningrad: Eine Pilotregion für die Gestaltung der Partnerschaft EU-Russland?, SWP-Studie, p. 12. 11 See Magdalene Hoff / Heinz Timmermann, Kaliningrad: Russia’s Future Gateway to Europe?, in: RFE / RL Magazine 2, No. 36, September 10, 1993. 12 See Leonid Karabeshkin, Kaliningradskaja problematika v mezhdunarodnyh otnoshenijah v postbipoljarnoj Evrope, p. 98. 13 Heinz Timmermann, Kaliningrad: Eine Pilotregion für die Gestaltung der Partnerschaft EU-Russland?, SWP-Studie, p. 12.

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complement it with a special protocol which would indicate the modalities of this cooperation. The resolution also examined the question of a feasible special international status for the Kaliningrad Oblast. The parliamentarians in particular recommended to Russia that it should, first, “scale down its military presence” (point 5), and second, that it should endow the oblast with “wide-ranging rights” and “a status that would empower it to negotiate independently” with International Financial Institutions and with the European Commission (point 13). The fact that the Parliament referred to Kaliningrad using its former German name Königsberg in the title of the resolution was later called “insensitive”. 14 Subsequent references to the Kaliningrad Oblast were made by the European Parliament in 1995 and 1997 in the context of the building of the EU policy in the Baltic Sea Region. In 1995, in an (own initiative) Resolution on the Commission communication to the Council, “Orientations for a Union approach towards the Baltic Sea Region”, the Committee on Foreign Affairs of the Parliament supported the Commission’s plan to launch an EU Baltic Sea policy with the intention of promoting “stability, democratic, economic, social and environmental development and the rule of law in the region” (point 1). The parliamentarians underscored the EU interest in contributing to a favourable and stable political, economic and social development in the regions of the Baltic Sea including the Kaliningrad and St. Petersburg regions of North-West Russia (point A). 15 However, the main focus was chiefly on common security issues; it was specifically emphasized that the reduction of the military presence in the Kaliningrad Oblast would be sufficient input into the regional stability that would lead to Kaliningrad engaging in regional cooperation (point 21). In addition, the document identified several regions of North-West Russia, including Kaliningrad which should be incorporated into EU aid and cooperation programmes since certain “comprehensive problems of military conversion and nuclear safety” would pose “a particular challenge for balanced socio-economic development” (point. 21). The other European Parliament document was a resolution contemplating the future of the EU’s common security policy dating back to 1997. 16 In that resolution, the Members of the European Parliament formulated the goal of the EU common security policy as contributing to “world peace and stable world order, primarily in the areas located on its land and sea borders” (point 9). In this respect, mention of the Kaliningrad Oblast was made in the context of the 14

Leonid Karabeshkin / Christian Wellmann, p. 16. European Parliament Resolution on the “Commission Communication to the Council ‘Orientations for a Union approach towards the Baltic Sea Region”, OJ C 249/215 (1995). 16 European Parliament Resolution on the “formulation of perspectives for the common security policy of the European Union”, OJ C 167/99 (1997). 15

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regional aspects of common security, particularly the upcoming EU enlargement and correlated security issues in the Baltic Sea region. The parliamentarians thus underlined the necessity of turning the Baltic Sea “into an area of cooperation between all the states bordering on it, including Russia and its Kaliningrad exclave” because, as a result of the enlargement, the Baltic Sea would become essentially an EU “internal” sea (point 23). The European Parliament specifically addressed the issue of Kaliningrad, responding on its own initiative to the Commission Communication on the EU and Kaliningrad of 2001, with the reporter again Magdalena Hoff. 17 Apart from the Council and the Commission, the document was destined for the Member States’ and candidate countries’ parliaments, the authorities of Russia and Kaliningrad and the Russian Duma. The paper handled the situation of the Kaliningrad Oblast exclusively in the context of the EU eastward enlargement to come and named Kaliningrad as a “major project” for cooperation between North-West Russia and the EU (point G). The resolution stressed the EU’s perception of the Kaliningrad Oblast as an inseparable part of the Russian Federation and insistence that the major responsibility for it lay with Russia. The most important message to the Russian Government was that, in order to successfully integrate Kaliningrad into the (feasible) establishment of the Common European Economic Space between the EU and Russia in the framework of the PCA, Moscow should launch a stable and coherent strategy for Kaliningrad. This in turn would send “a clear signal regarding the nature and extent of its [Kaliningrad’s] future involvement in the area from a political, economic and regulatory point of view” (point 10). In addition, the parliamentarians assumed that Russia could “apply a different economic, social and legal system in Kaliningrad, and that Kaliningrad could be a pilot region, which goes ahead of the other parts of Russia” (point 13). As to the conditions that were critical for the success of EU-Russia cooperation on Kaliningrad, they were expressed in an analogy with requirements made principally for EU candidate countries (point. 14). 18 Specifically they included “good governance” embodied by efficient administration, properly functioning institutions and the tangible enforcement of law. This circumstance was regarded as crucial for developing fair and robust internal and external economic relations, including the proper attraction of Russian and foreign capital to the region (point 15). They further suggested structural 17 European Parliament Resolution on the Commission Communication to the Council on the “EU and Kaliningrad (COM (2001)”, OJ C 180 E/380 (2003). 18 To this effect, Alexander Songal stated that the EU followed the alike logic of enlargement when dealing with Kaliningrad: it sketched its vision of Kaliningrad’s development path (that of a pilot region) and this was correlated with certain requirements similar to those put for future EU members. Clearly, however, the eventual incentives such as EU membership did not come into question. See Alexander Songal, Developing an Institutional Fundament for the EU and Russia, p. 107.

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reforms of the spheres of legal certainty, a stable tax legislation environment and acquisition of land, and eventually measures for economic and social development of the oblast. The European Parliament consistently put to the fore the importance of the development of the Kaliningrad Oblast for the prosperity of the Baltic Sea region in general and called for the parties involved (Russia and others) “to promote the social and economic development of the region through its openness and economic integrity” (point 14). 19 The parliamentarians also touched upon more specific issues pertaining to Kaliningrad in different contexts. In the framework of promoting human rights outside the EU, they spoke of the problem of smuggling from the Kaliningrad Oblast to Lithuania and Poland and, in light of this, they appealed to Russia to take measures to combat with this circumstance by building sufficient anti-corruption programmes for customs, border guards and tax services as well as police (point 13). 20 Furthermore, the Parliament’s resolution with regard to the EU’s arms export control policy contains a reference to Kaliningrad due to its role as a transit point for shipments of military equipment and arms for illegal users from other parts of Russia (point 23). 21 Hence, Russia, as a neighbouring country of the enlarged EU, was asked to observe the Union’s Code of Conduct on Arms Exports, and in the meanwhile, the Council and Commission were called “to prioritise in their cooperation with the Russian Federation measures to combat illicit trafficking, including regular exchange on export and transit controls and licences”. 22 The MEPs identified the Kaliningrad Oblast as one of the target points of common cooperation between the EU and Russia (alongside such issues as Four Common Spaces, the Baltic states, Chechnya, the fight against terrorism, the environment and nuclear safety) and conveyed their position on Kaliningrad more closely in their resolution on EU-Russia relations of 2004. 23 They reiterated the urging for Russia’s efforts and the EU’s support for the stimulation of social and economic development in the oblast which could serve as a model for future relations. The most important issues to be tackled were: a) health issues (including the spread of HIV / AIDS), 24 b) the fight against corruption and criminality, 19

European Parliament resolution on the “EU-Russia Summit held in The Hague on 25 November 2004”, OJ E 226/224 (2005). 20 European Parliament resolution on the “Annual Report on Human Rights in the World 2004 and the EU’s policy on the matter”, OJ C 45 E/107 (2006). 21 European Parliament resolution on the “Council’s Fifth Annual Report according to Operative Provision 8 of the European Union Code of Conduct on Arms Exports”, OJ E 201/71 (2005). 22 Ibid. 23 European Parliament resolution on “EU-Russia relations”, OJ C 117 E/235 (2006). 24 This was reiterated in the EP’s subsequent resolution, in which the parliamentarians noticed the potential of the Northern Dimension Partnership in Public and Social

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and c) the full implementation of the freedom of navigation in the Baltic Sea (including the Vistula Lagoon and Kaliningradszkij Zaliv and free passage through the Pilava Strait / Baltijskij Proliv (point. 38). 25 The document also emphasized that the EU should attach greater emphasis to regional cooperation between the EU’s northern regions and north-western regions of Russia in the framework of the Northern Dimension (point 6). Overall, according to the European Parliament, the Northern Dimension is the key policy framework for EU-Russia cooperation, with the Baltic Sea Region being the core and the chief priority area of the policy. 26 Aiming at elucidating the concept of a Baltic Sea Region strategy – prepared by MEP Alexander Stubb on the European Parliament’s own initiative – and strengthening the regional cooperation in the region in light of the EU enlargement and the development of the Northern Dimension, the members of the Committee on Foreign Affairs invited the Commission to prepare a proposal for launching an EU Baltic Sea Strategy “to reinforce the internal pillar of the Northern Dimension” and “cover horizontally different aspects of regional cooperation” (point 2). The principal reasons for the establishment of a Baltic Sea Strategy were that 1. after the EU Eastern expansion, eight of nine (the ninth being Russia) countries having access to the Baltic Sea were members of the EU and this made a Baltic Sea Strategy essentially a European issue; 2. although there had been a steady growth of the GDPs in the Baltic region, the recently accessed Member States still showed low levels of growth and competition; 3. with the evolution of the Northern Dimension, Russia, and specifically the Kaliningrad Oblast, often remained on the rim of the cooperation, and 4. the region needed more attention owing to its poor ecological (correlated with pollution) and organized crime situation. 27 As a result, the initiative proposed to cover a variety of issues within such domains as the environment, economics, culture and education and security. Wellbeing for involving both the EU and Russia into the promotion of health and social activities in the region (point 21). See European Parliament resolution on a “Baltic Sea Region Strategy for the Northern Dimension”, OJ C 314 E/330 (2006). 25 Ibid. 26 Ibid. Overall, in the European Parliament’s documentation the “Kaliningrad enclave” (as part of Russia) appeared to be belonging to the “Baltic ring” as regards the context of trans-European energy (electricity) networks as early as 1996. See Legislative resolution embodying Parliament’s opinion on the proposal for a European Parliament and Council Decision laying down a series of guidelines on trans-European energy networks”, OJ C 151/228 (1995). The newly adopted Guidelines for trans-European energy networks do not explicitly mention Kaliningrad (rather Russia in general) as part of the Baltic ring. See Decision No. 1364/2006/EC of the European Parliament and of the Council of September 6, 2006 laying down guidelines for trans-European energy networks and repealing Decision 96/391/EC and Decision No. 1229/2003/EC, OJ L 262/1 (2006). 27 See The Baltic Strategy for the Northern Dimension, Expert Meeting in the European Office of the Konrad Adenauer Stiftung, Brussels, February 14, 2007.

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To this effect, in view of the parliamentarians, the Strategy should comprise measures to be implemented by the EU and its Member States as well as measures to be taken in cooperation with the Russian Federation (point 4 of the resolution). On the whole, it was believed that the Strategy could contribute to the improvement of EU-Russia relations. In that regard, the MEPs called attention to the Kaliningrad Oblast and advocated close cooperation among the regional authorities, the central authorities of Russia and the EU with a view to assisting in the development of the oblast “into a more open and less militarised pilot region with improved access to the internal market” (point 20). In the meantime, in accordance with the parliamentarians’ views, the major current problems of the Kaliningrad Oblast were “many social, economic and ecological problems, such as the significant ecological risk posed by the presence of the military bases and weapons in the region, the substantial health risk and the high levels of organised crime and drug addiction” (point 22). Apart from the common initiative resolutions which to a greater or lesser degree broached matters in respect with the Kaliningrad Oblast, a number of Members of the European Parliament sent personal inquiries – so-called written questions – to the European Commission on certain issues related to the region as part of the supervisory power of the European Parliament (Article 197 ECT), which were answered by the representatives of the Commission. These issues chiefly revolved around questions of the problem of Kaliningrad transit on EU expansion to the East. In particular, they included: 1. concerns over the freedom of movement of Kaliningrad residents to neighbouring Poland and Lithuania and the possibility of the Kaliningrad Oblast joining the Schengen area; 28 2. retaining of the transport (air) links from the Kaliningrad region to the European Union following the enlargement; 29 3. preserving the transportation links between the region and the main area of Russia; the feasibility of non-stop sealed trains across Lithuania (EU); the improvement by the EU of port facilities on Kaliningrad’s Baltic coast and consequently of the maritime links between Kaliningrad and the ports of Russia; and, importantly, the possibility for EU subsidies for these modes of transport; 30 4. details of the Kaliningrad transit scheme adopted by the EU-Russia summit in November 2002 and the specific (financial) burden of the scheme for certain categories of Russian citizens (relatives of Kaliningrad residents, pensioners and unemployed persons). 31

28 Written Question by Jonas Sjöstedt (GUE / NGL) to the Commission. Exemption from passport requirement for Russian citizens in the Kaliningrad enclave, OJ E 174/209 (2001). 29 Written Question by Wilhelm Piecyk (PSE) to the Commission. EU / Kaliningrad transport links following enlargement to the east, OJ E 172/77 (2002). 30 Written Question by Charles Tannock (PPE-DE) to the Commission. Access to Kaliningrad, OJ E 011/33 (2004).

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Despite the fact that most of the questions by the MEPs concerned the rights and situation of Russian citizens, including Kaliningrad inhabitants, a question arose as to what risks the Kaliningrad Oblast bore for the financial interests of the European Union. 32 In its response, the Commission identified possible financial, economic, environmental and security risks, and sketched the ways to prevent these risks, which comprised, first, financial assistance to the oblast in the areas of border management and combating environmental pollution and tackling HIV and AIDs and, second, cooperating with the Russian Federation in the field of Justice and Home Affairs and, specifically, joint efforts in preventing trans-border crime, smuggling and illegal migration. 33 cc) Summary The first manifestation of the EU political position on the Kaliningrad Oblast may be regarded as having occurred with the adoption by the European Parliament of an initiative resolution on Kaliningrad as early as 1994. In the course of time, the MEPs returned to the problem of the Kaliningrad Oblast on various occasions. A closer examination of the acts brought by the European Parliament reveals that the issue of the Kaliningrad region appeared predominantly in the Parliament’s own initiative resolutions, with the major actor being the Committee on Foreign Affairs. Apart from this, the parliamentarians expressed their opinion on this subject by reacting to Commission Communications, and several representatives of European political groups addressed the issue in written inquiries to the Commission. While at the initial stage the European Parliament partly referred, inter alia, to certain sensitive issues with respect to Kaliningrad, such as the international status of the oblast and granting wider autonomies for the oblast by the Russian central authorities, it principally pushed forward and prefigured major EU discourses in which the topic of Kaliningrad appears. These discourses can be classified into three groups, all of them, however, revolving around the consequences and outcomes of the Eastern enlargement of the European Union of 2004. First and foremost, the Kaliningrad Oblast was placed within security discourse; this relates to various military matters and the significance of the social, democratic and economic development of the oblast for the soft security of the EU. Furthermore, the parliamentarians seemed to be united in their belief in the 31 Written Question by Erik Mejjer (GUE / NGL) to the Commission. Financial barriers to visits by relatives and elderly tourists from Russia travelling via future EU territory to Kaliningrad, OJ E 280/25 (2003). 32 Written Question by Jan Mulder (ELDR) to the Commission. Kaliningrad and the protection of the Union’s financial interests, OJ E 192/75 (2003). 33 Ibid.

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necessity of the involvement of the Kaliningrad Oblast in regional cooperation in the wider framework of the EU Baltic Sea policy as well as the Northern Dimension. In that, they went as far as to a) name Kaliningrad as a pilot region of EU-Russia cooperation, b) urge Russia to apply a separate economic, social and legal system in the Kaliningrad Oblast and c) indicate principal conditions seen as crucial for EU-Russia cooperation on Kaliningrad which essentially resembled the EU entrance requirements for candidate countries. And, finally, the MEPs articulated certain concerns over Kaliningrad transit from the oblast to the main area of Russia as well as the situation of Russian citizens, including Kaliningrad residents, in this context. All in all, although the extent of direct influence of the Parliament’s proactive strategy of advancing the issue of Kaliningrad up the EU agenda is hard to assess, it can be seen that in this case the Parliament was clear in pronouncing its own policy concerns to the Commission through resolutions and reports. b) The Council of the European Union aa) General remarks on the Council of the European Union Composed of incumbent Ministers from each Member State who are in charge of the matter in the government of this state (Article 16 (2) TEU), the Council of the European Union sits in ten configurations based on issues in which the members of the Council are authorized to legislate: General Affairs; External relations (until the Treaty of Lisbon, General Affairs and External relations); Economic and Financial Affairs; Justice and Home Affairs; Employment, Social Policy, Health and Consumer Affairs; Competitiveness; Transport, Telecommunications and Energy; Agriculture and Fisheries; Environment; and Education, Youth and Culture. Until recently, the meetings of the Council were chaired by the Council Presidency, which rotated among the EU Member States every six months. The Presidency set the agenda, arranged and managed the Council meetings. One of the major innovations of the Treaty of Lisbon is the change in the Presidency in the Council: in all Council configurations except for the Foreign Affairs Council, the Presidency “shall be held by Member State representatives in the Council on the basis of equal rotation” (Article 16 (9) TEU). The Foreign Affairs Council is, in its turn, permanently chaired by the High Representative of the Union for Foreign Affairs and Security Policy. Basically, the Council holds five powers, most important of which is the power of final decision or approval in passing legislation in most areas of EU policy, wherein the Council acts jointly with the European Parliament (Articles 16 (1) TEU and 290 –291 TFEU). 34 Furthermore, the Council acts as a forum 34

See Damian Chalmers / Adam Tomkins, p. 101.

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for the representatives (Ministers) of Member States to consult each other and develop a common position in the areas of the exclusive responsibilities of the Member States, including in general economic policy, foreign and security policy, justice and home affairs. In addition, the Council has the right to sue other EU institutions in the Court of Justice provided it considers that this institution has acted either in controversy (Article 263 TFEU) or in failure (Article 265 TFEU) with European Union Law. Similarly to the European Parliament, the Council is empowered to invite the Commission to complete studies or submit (legislative) proposals (Articles 241 and 135 TFEU). Finally, the Council must delegate legislative powers to the Commission (Articles 290 – 291 TFEU). The system of decision-making by the Council includes several forms of voting: 1) simple majority voting, b) voting by unanimity and c) qualified majority voting. The first type of voting is applied only in a few (procedural) areas since it does not allow for guarding national interests fully and, moreover, it equips smaller states with better opportunities to look after their national interests (at the expense of larger states). On the contrary, the principle of unanimity presupposes the right of any Member State to veto legislation and is employed in the most politically sensitive policy areas of the European Union. The system of the qualified majority implies weighted voting, whereby each Member State is allotted a number of votes based on its population size. The voting procedure requires a certain number of votes and Member States for legislation to be passed. Since 2014, a piece of proposed legislation will be passed if at least 55 percent of the members of the Council representing at least 65 percent of the EU’s population support it (Article 238 (3) TFEU). The Council’s legislation takes the form of various legal acts having different amounts of legal (binding) force. Whereas such acts as regulations, directives, and decisions are binding, other legal instruments belong to the realm of so-called soft law, which are the non-binding forms of action and include recommendations, opinions, declarations and resolutions (Article 288 TFEU). The point of departure for the Council’s legislation is a draft proposal from the side of the European Commission which the Council may amend and adopt (in many cases jointly with the European Parliament). One type of legal act made by the Council are decisions that have binding force for the addressee of the decision, mainly Member States, but also private parties in some cases. There are, however, decisions (Beschlüsse) which, although do not contain a particular addressee still appear to be binding for the Union as an organization and hence for its Member States as part of that organization. The Council legislation is adopted under the three types of legislative procedures: Council legislation without the consultation of the European Parliament, the consultation procedure and the co-decision procedure.

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bb) The Council of the European Union on the Kaliningrad Oblast The earliest explicit mention of the Kaliningrad Oblast made by the Council, hence the first sign of singling it out as an entity, appears in the document entitled the “Common Strategy of the European Union on Russia” of June 4, 1999. 35 This Common Strategy was the first legal act of the type prepared by the Council of the European Union and adopted by the European Council, its legal basis being Article 13 of the preceding Treaty on European Union. 36 The document started with determining the wider political objectives of the common strategy on Russia pertaining to such matters as consolidation of democracy, the rule of law and public institutions in Russia (point I, 1); the integration of Russia into a common European economic and social space (point I, 2); cooperation to strengthen stability and security in Europe and beyond (point I, 3) and common EU-Russia challenges on the European continent. It then identified certain areas of action for implementing each of the goals of the Common Strategy. Thus, presenting a catalogue of areas of cooperation that could link the EU and Russia and hence help to achieve these objectives, the Strategy enumerated the following items: energy and nuclear safety (point II, 4 (a); the environment and health (point II, 4 (b); the fight against organized crime, money laundering and illegal traffic in human beings and drugs as well as judicial cooperation (point II, 4 (c), and, importantly, regional and crossborder cooperation (point II, 4 (d). This latter sphere was of great importance, above all in light of the upcoming EU Eastern enlargement. Thus, while the EU was called to cooperate with Russia in general, using different available formats of regional cooperation (CBSS, BSEC and Barents Euro-Arctic Council), it was also emphasized that the EU should enhance cross-border cooperation, in particular with the Russian regions which neighboured the EU and, in this respect, special explicit mention was made of the Kaliningrad Oblast, which will be dealt with, inter alia, in the framework of the Northern Dimension. The paper also recommended developing cooperation and increasing technical assistance in the field of border management and customs, examining possibilities for joint efforts in “linking the Russian transportation systems (road and rail) with the trans-European corridors” (point II, 4 (d) and addressing issues surrounding transport. Clearly, while the Strategy of the Council represented an 35 Common Strategy 1999/414/CFSP of the European Union of June 4, 1999 on Russia. 36 Article 13 (3) of TEU specifically stipulated that “the Council shall recommend common strategies to the European Council and shall implement them, in particular by adopting joint actions and common positions”. The European Council in turn decides on common strategies “to be implemented by the Union in areas where the Member States have important interests in common” (Article 13 (2).

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attempt to fulfil one of its functions, specifically, to develop a common position toward a third country (Russia), this position does not hint at the existence of an explicit Council approach and political position toward Kaliningrad. Overall, the Northern Dimension, EU enlargement and the correlated accession negotiations of Lithuania and Poland for EU membership were the background contexts within which the issue of the Kaliningrad Oblast was touched upon by the Council of the European Union to a greater or lesser extent. Indeed, in 1999 experts directly linked the fact that the EU seemed “willing to approach Kaliningrad from a different and a more flexible perspective” 37 with the development of the Northern Dimension. Thus, aside from the previously mentioned Common Strategy on Russia, on November 6, 2001, the External Relations Council, for instance, adopted a decision giving the Commission a guarantee from the European Investment Bank against losses in the area of environmental projects under the Northern Dimension. 38 The document highlighted the geographical specification of the implementation of environmental projects and this concerned the Baltic Sea basin of the Russian Federation, and particularly the Kaliningrad (and the St. Petersburg) regions. As articulated in the paper, “the EIB has indicated its ability and willingness to extend loans from its own resource in North West Russia in accordance with its Statute”. As to the enlargement factor, in a decision by the External Affairs Council on the fundamentals of the Accession Partnership (as an instrument of pre-accession strategy) with the then-EU candidate state Lithuania one of the objectives of the Partnership in the area of cooperation on justice and home affairs was indicated as the completion of border demarcation with Russia, implying the border with the Kaliningrad Oblast as well as the strengthening of border control and management in general. 39 Transit between the Kaliningrad Oblast and the main body of Russia through Russian territory upon Lithuania’s future accession to the EU was one of the topics of intensive discussion by the External Relations and General Affairs Council in the autumn of 2002, on the eve of the EU-Russia summit in November. 40 This was preceded by an unprecedented increase of commitment to the topic by the Council of the European Union, which was connected with the 37

Sander Huisman, p. 3. Council Decision of November 6, 2001 granting a Community guarantee to the European Investment Bank against losses under a special lending action for selected environmental projects in the Baltic Sea basin of Russia under the Northern Dimension, OJ L 292/41 (2001). 39 Council Decision of January 28, 2002 on the principles, priorities, intermediate objectives and conditions contained in the Accession Partnership with Lithuania, OJ L 44/54 (2002). 40 Following the agreement on Kaliningrad transit made at the EU-Russia Brussels summit in November 2002, the Working Party on Eastern Europe and Central Asia on 38

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Presidency period of Sweden and hence the priorities of Sweden’s individual agenda in the first half of 2001. 41 This is reflected in a number of internal documents reporting on the meetings of the General Affairs Council, 42 in the fact that in January 2001 the European Commission presented a Communication on EU and Kaliningrad to the Council as well as in the visit of Chris Patten, Javier Solana and Anna Lindth, Minister for Foreign Affairs of Sweden, to the Kaliningrad Oblast, which aimed at learning the realities of the Kaliningrad situation, meeting officials and introducing the Commission’s communication. 43 That communication was welcomed by the General Affairs Council of February 2001 which instructed Working Parties on Eastern Europe and Central Asia 44 of the Council “to assume the overall responsibility in preparing the EU positions on Kaliningrad” 45 and “to examine the relevant parts of the communication, in particular with a view to identifying possibilities for further co-operation with Poland and Lithuania”. 46 Overall, the Swedish Presidency performed proactively in stimulating the development of further EU positions on Kaliningrad at the level of the Council and discussions with Russia on the situation of Kaliningrad within the framework of the PCA. Furthermore, the General Affairs Council of June 2001 was later called “the first occasion on which the fifteen ministers of the EU member states agreed upon a constructive approach to Kaliningrad”. 47 At this meeting, the Council in particular positively assessed the dialogues on Kaliningrad with a) Russia, b) with the associated countries (Lithuania and Poland) in the framework of the Europe Agreements, since the issue of the movement of people “could only be addressed in the context of the enlargement process”, 48 c) within the framework the side of the Council of the European Union elaborated a detailed plan of measures connected with the implementation of the transit scheme to be undertaken by the Coreper and Council. These steps included, among other things, the adoption of the legislation on the Facilitated Transit Scheme by the Council and the European Parliament, the signature of a bilateral Readmission agreement between Russia and Lithuania as well as the permission by Russia for EU Member States to open their consulates in the Kaliningrad Oblast. See Working Party on Eastern Europe and Central Asia on Kaliningrad: follow-up of the EU-Russia Summit to Coreper / Council, 15652/02, Brussels, December 13, 2002. 41 See Sander Huisman, p. 4. 42 See, for instance, General Affairs Council Meeting, 5279/01, Brussels, January 22 –23, 2001; General Affairs Council Meeting, 6506/01, Brussels, February 26 –27, 2001; General Affairs Council Meeting, 9398/01, Luxembourg, June 11 –12, 2001. 43 See Sander Huisman, p. 22. 44 Meetings of ministers are prepared by working parties (groups) of the Council and by national officials in the committees (including Coreper, the Committee of Permanent Representatives). See Helen Wallace / William Wallace, Policy-making in the European Union, Oxford: Oxford University Press, 2000, p. 17. 45 General Affairs Council Meeting, February 26 – 27, 2001, p. IV. 46 Ibid. 47 Sander Huisman, pp. 23 – 24.

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of the Northern Dimension whereby the Council called for the establishment of ad hoc meetings at the expert level if necessary to address technical issues brought forth by the Commission. In addition, the Council expressed satisfaction when it underscored the channelling of technical assistance to the oblast through PHARE and TACIS as well as bilateral contributions of Member States intended to “address issues such as economic development, transport and energy, good governance, democracy and the rule of law, justice and home affairs, environment, health as well as cross-border cooperation”, 49 and the opening of a TACIS office in Kaliningrad. Eventually, the Council went as far as to urge the appropriate Council bodies to continue examining the implications of the enlargement for the oblast, calling for the formulation of “practical measures to facilitate small border traffic and transit for Kaliningrad and the possibility to take advantage of any special arrangements permitted by the acquis”, 50 and inviting the Commission to prepare a comprehensive report which would be based on its communication of 2001 as well as on the outcomes of the cooperation between the EU, Russia and the neighbouring countries on Kaliningrad. On May 13, 2002, the General Affairs Council agreed on an informal document entitled by the EU Common Line as “Kaliningrad: Movement and Transit of People”, 51 wherein it examined the EU acquis and its consequences for Kaliningrad in the period between EU accession and the lifting of internal border control as regarded the new Member States. This document in particular identified the main possibilities within the acquis which could be applied to facilitate transit from and to the Kaliningrad Oblast as well as sketching out further bilateral EU-Russia efforts to be undertaken in the framework of the PCA in order to improve Kaliningrad’s situation. In its conclusions of September 30, 2002, the Council expressed its understanding of the sensitive situation of the Kaliningrad Oblast connected with transit to the main areas of Russia and the necessity for the EU “to apply the Schengen regime with flexibility”, 52 while simultaneously the EU committed itself to supporting:

48

General Affairs Council Meeting, June 11 – 12, 2001, p. VI. Ibid. 50 Ibid. 51 Draft EU Common Line for Russia “Kaliningrad: Movement and Transit of People”, Council of the European Union, DOC 8304/03, Brussels, April, 24, 2002. It was later incorporated into Communication from the Commission to the Council “Kaliningrad: Transit”, COM (2002) 510 final, Brussels, September 18, 2002, Annex III. 52 Draft Conclusions on Kaliningrad, Annex II, Council of the European Union, Report on Kaliningrad, 12432/02, Brussels, September 27, 2002, p. 6. 49

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Russian efforts to promote the economic development of the Kaliningrad Oblast and to strengthen cross-border co-operation along the borders of Russia, including measures to improve border management and border infrastructure in order to facilitate the passage of borders for legal purpose. 53

Furthermore, in that document, and in its subsequent conclusions of October 22, 2002 as well, the Council endorsed and confirmed the validity of the Facilitated Transit Scheme elaborated by the European Commission as a solution to the problem of Kaliningrad transit and ensured Lithuania in its timely lifting of internal borders as well as its full participation in the Schengen area and financial support (“a Kaliningrad ‘package’”) 54 for implementing this scheme. Subsequently, in the field of justice and home affairs, Kaliningrad served more as a rubric for a resource intended to cover expenses correlated with the transit of people by land between the Kaliningrad Oblast and the main area of Russia through the territory of Lithuania rather than as a factor on it own. The “Kaliningrad Facility” (the above package) was initially instituted by the Council and Commission Action Plan implementing the Hague Programme on strengthening freedom, security and justice in the European Union under the subject of visa policy (point 2.9 (k)). 55 As envisaged in this document, it was planned that the Kaliningrad Facility would be replaced by provisions in the forthcoming External Border Fund for the period 2007 to 2013 as part of the framework programme “Solidarity and management migration” (with the last allocation of resources for the final payments in the framework of the Facility being in 2008). This programme was adopted by the Council decision on May 23, 2007. 56 While indicating that the Fund “should bear any additional cost incurred in implementing the specific provisions of the acquis” covering Kaliningrad transit, the document referred to Protocol No. 5 of the 2003 Act of Accession 57 on the transit of persons by land between the region of Kaliningrad and other parts of the Russian Federation (point 10). Principally, the expenses that were envisaged to be covered by the Kaliningrad Facility related to the implementation of the so-called Facilitated Transit Scheme which was adopted by the Council regulations of April 14, 2003. 58 53

Ibid. Draft Council Conclusions, Kaliningrad, Annex II, Council of the European Union, Report on Kaliningrad, p. 8. 55 Council and Commission Action Plan implementing the Hague Programme on strengthening freedom, security and justice in the European Union, OJ C 198/1 (2005). 56 Decision No. 574/2007/EC of the European Parliament and the Council of May 23, 2007 establishing the External Borders Fund for the period 2007 to 2013 as part of the General programme “Solidarity and management of Migration Flows”, OJ L 144/22 (2007). 57 Protocol No. 5 on the transit of persons by land between the region of Kaliningrad and other parts of the Russian Federation. 54

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The expenditures for the Kaliningrad Facility appeared in the financial plan of the Commission as early as 2005. 59 There, it was indicated that while the payments in 2004 were 6.5 million euros, in the subsequent year the sum was raised to 13 million euros (Chapter 18 02 02). It was emphasized that the payments were intended “to cover expenditure connected with the additional costs entailed by the creation of a facilitated document for the usage between mainland Russia and Kaliningrad”. 60 As such, the Commission was directly granted powers to implement the Facilitated Transit Scheme in the Accession Treaty (“Protocol 5 on the transit of persons between the Kaliningrad and other parts of Russia”), whereby it was also expected to “present annually, six months after the end of the financial year, a report to the budgetary authority on the use of the appropriations”. 61 For the year 2008, the resources deemed necessary for the completion of Kaliningrad Facility were placed under the Commission’s budget in the policy area of Solidarity, external borders, visa policy and free movement of people in the field of freedom, security and justice and were fixed at a total of 4.7 million euros (and in particular to cover earlier commitments), in 2007 this sum constituted 7 million euros, and, in 2006, 16 million euros were paid for this purpose (Chapter 18 02 02). 62 Meanwhile, the External Borders Fund in general was allocated 98.5 million euros for the year 2008 and 95 million euros for the financial year 2007. 63 It was highlighted in the financial plans for the years 2007 and 2008 that: in the framework of the Kaliningrad Transit Scheme, this appropriation is intended to cover foregone fees from transit visas and additional costs (investment in infrastructures, training of border guards and rail staff, additional operational cost) incurred in implementing the Facilitated Transit Document and facilitated Rail Transit Document scheme 64

in accordance with the relevant Council legislation. 58 Specifically, Council regulation (EC) No. 693/2003; and Council Regulation (EC) No. 694/2003. Although establishing the Facilitated Transit Scheme as a direct result of the situation related to the Kaliningrad transit, both regulations do not explicitly mention the Kaliningrad Oblast, thus indicating the universal character of the legal action which was deemed to develop provisions of the Schengen acquis. 59 Final Adoption of the general budget of the European Union for the financial year 2005, European Parliament, OJ L 060 (2005). 60 Ibid. 61 Ibid. 62 Final Adoption of the general budget of the European Union for the financial year 2008, European Parliament, OJ L 071 (2008). 63 For the year 2009 it is expected that the commitments will constitute 185,5 million euros and payments are estimated at 116 million euros. See Draft general budget of the European communities for the financial year 2009 established by the Council on July 17, 2008, Council of the European Union, 11950/08 ADD 1, Budget 23, Brussels, July 29, 2008.

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Having said earlier in this chapter that when it concerns the Kaliningrad Facility, Kaliningrad demonstrates its presence mostly in the title of the resource, it is however important to notice that citizens of Russia who travel to the Kaliningrad Oblast from the other parts of the Russian Federation have been profiting from the free-of-charge transit documents and hence the Kaliningrad Facility directly affects the situation around the Kaliningrad Oblast, in particular, Kaliningrad transit. In 2005 and 2006, in the field of Common Foreign and Security Policy, the Council produced annual reports which examined the implementation measures adopted by Member States in the years 2003 and 2005 as regards the Council “Joint Action on the EU’s contribution to combating the destabilizing accumulation and spread of small arms and light weapons”. 65 The issue of Kaliningrad emerged in connection to the measures of several EU Member States in the field; thus, in 2003 Lithuania and Estonia took part in the design of the report “Arms Transit Trade in the Baltic Regions”, in which they made a contribution to assessing “transit control systems and efforts to combat illicit trafficking in Estonia, Latvia, Lithuania, Poland and the Russian region of Kaliningrad”. 66 Two years later, again under the domain of cooperation, coordination and exchange of information between administrative and law enforcement agencies, France “financed an evaluation mission on the storage and destruction of conventional ammunition in the Kaliningrad enclave”. 67 Other than that, the general position of the Council of the European Union towards the Kaliningrad Oblast is reflected in its internal working documents of a non-binding nature. The situation of the Kaliningrad Oblast appeared to be one of the outstanding issues within the whole range of themes in EU-Russia relations. In 2003, in a document produced by the Working party on Eastern Europe and Central Asia of the Council entitled “Relations with Russia – Key outstanding issues for the EU in its relations with Russia”, it was advocated 64 Final Adoption of amending budget No. 7 of the European Union for the financial year 2007, OJ L 21/96 (2008) and Final Adoption of the general budget of the European Union for the financial year 2008, European Parliament, OJ L 071 II/694 (2008), Chapter 18 02 06. 65 Fourth Annual Report on the implementation of the EU Joint Action of 12 July 2002 on the European Union’s contribution to combating the destabilising accumulation and spread of small arms and light weapons (2002/589 / CFSP), OJ C 109/1 (2005), and Fifth Annual Report on the implementation of the Council Joint Action of 12 July 2002 on the European Union’s contribution to combating the destabilising accumulation and spread of small arms and light weapons (2002/589 / CFSP) OJ C 171/1 (2006). 66 Fourth Annual Report on the implementation of the EU Joint Action of 12 July 2002, Points 114 and 124. 67 Fifth Annual Report on the implementation of the Council Joint Action of 12 July 2002, Point 1.A.

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that the focus should be shifted from questions of transit of passengers and goods to the overall socio-economic development of the Kaliningrad Oblast, whereby the EU’s major objective was formulated as the promotion of “the socio-economic development of the Kaliningrad region by inter alia putting in place the conditions to stimulate private investment, facilitating trade, addressing environmental problems and tackling health and cross-border issues”. 68 In addition, the working group highlighted two issues of importance for both sides (the EU and Russia): Kaliningrad transit (which was perceived to be of more interest for the Russian side) and the Northern Dimension, including the enhanced dialogue to secure Russia’s commitment to this policy. For the EU’s objective to be achieved, the EU’s mode of operation should consist of structured and comprehensive work with federal, regional and local authorities as well as discussion of the Kaliningrad issue within the EU-Russia dialogue on the Common Spaces, its support through the TACIS programme. 69 In addition, the Council proposed the establishment of an EU-Russia sub-committee on regional cooperation to discuss the issue as regards the development of the oblast and it rejected the Russian government’s idea to institute a High-level Group for that purpose. 70 cc) Summary The earliest date by which the Council of the European Union made explicit mention of Kaliningrad in its legal acts was the year 1999 with the adoption of the Common Strategy on Russia. In this document, the Kaliningrad Oblast was identified as a target group for regional and cross-border cooperation between the EU and Russia in the framework of the Northern Dimension, with particular areas of cooperation border management and customs, the environment and health, energy and nuclear safety as well as transportation links between European countries and the Kaliningrad Oblast. Precisely the development of the Northern Dimension served as a starting point for shaping of the Council’s / the EU’s approach towards Kaliningrad and this is mostly reflected in the internal working documents reporting on discussions within the General Affairs Council. Likewise, the activities of the Swedish Presidency in the first half of the year 2001 stimulated a vivid discussion of the specific situation of the Kaliningrad 68 Working Party on Eastern Europe and Central Asia, Relations with Russia-Key outstanding issues fort he EU in its relations with Russia, Council of the European Union, 7248/05, Brussels, March 14, 2005, p. 4. 69 Relations with Russia, Council Report on the implementation of the Common Strategy of the European Union on Russia, Council of the European Union, 10554/03, Brussels, June 16/2003, p. 12. 70 Ibid.

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Oblast, which was again outlined in several internal documents. At the time, the Council warmly welcomed the dialogues on Kaliningrad between Russia and the EU within the PCA format as well as with the candidate countries concerned, Lithuania and Poland, and dialogue in the framework of the Northern Dimension. It also encouraged the appropriate Council sections and the Commission to further the examination of the implications of the EU Eastern enlargement for the Kaliningrad region. In its legal action, the Council further turned to issues related to Kaliningrad: a) in the context of EU environmental projects implemented in the region in the framework of the Northern Dimension, and b) within the discourse on Common Foreign and Security Policy when the Council reported on the individual activities of the EU Member States (Lithuania, Estonia and France), which contributed to the assessments of the systems controlling the arms transit and the situation of illegal trafficking in the region as well as the storage and destruction of the conventional ammunition in the region. Other than that, however, the Kaliningrad Oblast did not explicitly appear in legal acts by the Council, rather it served as a marker or reference point for a number of the Council’s decisions with regard to the establishment of the Facilitated Transit Scheme and its incorporation into EU acquis as part of Lithuania’s EU accession procedure as well as the financial resource entitled “Kaliningrad Facility” intended to assist Lithuania in covering expenses connected with the implementation of the Facilitated Transit Scheme, which essentially concerned passenger transit from the Kaliningrad Oblast to the main areas of Russia through the Republic of Lithuania. It is important to note that the Council still formed its political position to the issue of Kaliningrad transit through a number of its meetings during the second half of the year 2002 on the eve of the Brussels EU-Russia summit in November of that year. At the time, the Council recognized the sensitivity of the transit problem and the necessity of applying the Schengen regime flexibly. It fully approved the Facilitated Transit Scheme proposed by the Commission, expressed its commitment to Russian efforts to advance economic development of the oblast, strengthen cross-border cooperation and contribute to the improvement of border management. Importantly, the Council turned to Kaliningrad-related matters after the transit problem was solved at the bilateral summit in 2003, when the Council propagated a shift of focus from Kaliningrad transit to the overall socio-economic development of the oblast and advancing the topic in the framework of the Northern Dimension. In that, it was recommended that the EU should work with federal, regional and local authorities, discuss the issues within the EU-Russia dialogue on the Common Spaces and provide support through the TACIS programme. Currently, in comparison to the heated bilateral debates and intense internal Council discussions of the second half of 2002, and in spite of the fact that the Kaliningrad Oblast remains a “sensitive area”, 71 the Kaliningrad problem has become the subject of the working routine of the EU-Russia cooperation.

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Thus, within the sphere of justice and home affairs, the EU and Russia continue discussing the possibilities of negotiations between Russia and its neighbouring countries on bilateral local border traffic and the improvement of border infrastructure and management. 72 In the internal documentation of the Council, without a mention of its legal action, the Kaliningrad Oblast does not reveal a frequent presence. Clearly, the Council of the European Union forged an approach and position towards Kaliningrad and this is mostly reflected in its internal documentation (reports and conclusions of the General Affairs and External Relations Council) rather than in its legal action. The peak of its attention to the oblast took place in the contexts of the formation of the Northern Dimension, the EU Eastern enlargement and the bilateral critical situation over Kaliningrad transit in the autumn of 2002. Positive as it is, it is, however, notable that, firstly, the commitment of the Council to this topic has been heavily dependent on the individual agendas of the rotating Presidency in the Council. Secondly, the fact that the Council was reluctant to launch the EU-Russia High-level Group for Kaliningrad proposed by the Russian side, and rather was eager to stay within the institutional format provided by the PCA, shows that, in spite of some rather ambitious rhetorical initiatives by the Council (e.g., attaching greater focus to the socio-economic development of the oblast), it has remained inflexible on this issue. Apparently, resorting to the terminology of EU law (precisely the earlier cited Article 13 [2]), whereas Russia in general seems to be the area where the Member States’ interests do converge and where they may make an effort to adopt a common position to Russia (although without success so far), the Kaliningrad Oblast in particular does not appear to be an area “where the Member States have important interests in common”. 73 c) The European Council aa) General remarks on the European Council The European Council represents a summit consisting of the Heads of State or Government of the Member States of the European Union and the President of the Commission. According to Article 15 of Treaty on European Union, the meetings of the European Council shall take place twice a year; 74 until the Treaty of Lisbon, they were presided over by the Head of State or Government 71 Outcome of the meeting of the eighth EU-Russia Permanent Partnership Council (Justice and Home Affairs) in St Petersburg on April 24 –25, 2008, Council of the European Union, 8638/08, Brussels, May 5, 2008, p. 3. 72 Ibid. 73 Emphasis is added.

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of the Member State fulfilling the functions of the Presidency of the Council of the European Union. The Lisbon Treaty introduced the permanent position of European Council President, who should chair the meetings of the European Council, thus facilitate cohesion and consensus within the European Council, as well as representing the Union in external relations on issues related to the CFSP. The President is elected by the European Council by a qualified majority for a two-and-a-half year renewable term. Generally, the principal task of the European Council is formulated as providing “the Union with the necessary impetus for its development” and defining “general political directions and priorities” (Article 15 TEU). The European Council exerts a direct impact on the political course of the EU in general and the Member States in particular and fulfils political coordination in the EU without exercising legislative functions. More precisely, it is possible to identify the following duties of the European Council. 75 Firstly, the European Council adopts decisions concerning the future institutional shape and tasks of the European Union; it may discuss and define the necessity of treaty reform or the possibility of enlargement. Secondly, the European Council contributes to the development of EU policies: “Heads of Government have the domestic authority to resolve issues which have reached an impasse within the Council of Ministers. This role is not merely a problem-solving, but also an agenda-setting one”. 76 Whereas the European Council sketches the general framework for policy-making, the Commission decides on the particulars (contents and timing) of the policy. Thirdly, the European Council is especially active in the sphere of the external relations of the European Union; this concerns first and foremost its role within the Common Foreign and Security Policy (defining the Union’s strategic interests, the objectives and general guidelines pursuant to Article 26 TEU). Finally, dedicating one of its sessions (specifically, the spring session) to the “Lisbon process”, 77 the European Council lays down guidelines for the EU commitments connected with that process. The results of the European Council’s sessions are published in the form of (Presidency) conclusions, political documents which do not have legally binding power since the European Council is essentially a political body which has no formal executive or legislative powers. 78 The conclusions contain the European 74 Meanwhile, from 2002 the European Council meets at least four times a year and it can call for an extraordinary session if it necessary. See Damian Chalmers / Adam Tomkins, p. 108. 75 Ibid., p. 109. 76 Ibid. 77 The Lisbon process is correlated with the commitments of the European Union made in 2000 in Lisbon to turn into “the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion”. Presidency Conclusions, Lisbon European Council, March 23/24, 2000.

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Council’s assessment of the situation in different spheres of social life, including that outside the EU, and recommendations to institutional bodies of the European Union and Member States. The European Council may also adopt resolutions and declarations. The only exception to the European Council issuing (legally binding) normative acts are common strategies in the area of the Common Foreign and Security Policy, which however, still has chiefly a political character. Because the European Council does not have its own structure or apparatus, the responsibility for preparing for its sessions lies with the Council of the European Union (particularly its Presidency and the General Secretariat). bb) The European Council on the Kaliningrad Oblast For the first time, the European Council explicitly turned to the issue of Kaliningrad in the already mentioned Common Strategy of the EU on Russia. It was prepared by the Council of the European Union and adopted by the European Council at the Cologne meeting on June 3 –4, 1999. 79 In the second half of the 1990s the Council consistently touched upon the importance of regional cooperation in the Baltic Sea region, including the North-West of Russia, in the framework of the new policy framework called Northern Dimension. 80 As in the case with the Council of the European Union, the Northern Dimension was a context in which the issue of Kaliningrad was addressed by the European Council. In June 2000, in particular, it approved the Action plan for the Northern Dimension with external and cross-border policies of the EU for the time period 2000 – 2003; it called for the Commission to take a leading role in implementing the Action Plan and “to present appropriate follow-up proposals, including on the environment and nuclear safety, the fight against international crime and Kaliningrad”. 81 This invitation was connected with an overview of the Kaliningrad situation in light of the upcoming EU enlargement. In response to the European Council’s motion, the European Commission published a Communication on EU and Kaliningrad which was endorsed and evaluated as “a very useful basis for consultations on the subject” 82 by the Stockholm European Council in March 2001, when Sweden held the EU Presidency. At its next session in Göteborg, the European Council provided a list of positive developments in EU-Russia relations; among other things, it positively evaluated “the initiation 78

See Sergej Kashkin (ed.), Pravo Evropejskogo Sojuza, Moskva: Jurist, 2003, p. 354. Presidency Conclusions, Cologne European Council, June 3 –4, 1999. 80 See, for instance, Presidency Conclusions, Florence European Council, June 21 –22, 1996, and Presidency Conclusions, Vienna European Council, December 11 –12, 1998. 81 Presidency Conclusions, Santa Maria Da Feira European Council, June 19 –20, 2000. 82 Presidency Conclusions, Stockholm European Council, March 23 –24, 2001. 79

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of a dialogue on Kaliningrad”. 83 However, the major discourse in the field of EU-Russia relations remained the human rights’ situation in Chechnya and the status of mass media in Russia. Towards the end of the year 2001, referring to the results of the EU-Russia summit in Brussels on October 3, 2001, the members of the European Council underscored the importance of the guidelines on different matters of the strategic partnership established at the summit. 84 Among other things, the European Council stated that it looked forward to substantial progress in the EU-Russia dialogue on the specific situation of Kaliningrad, specifically the questions pertaining to the movement and transit of persons. Precisely this topic stimulated the European Council to identify Kaliningrad as a separate item on the external relations agenda at its Seville session in June 2002, when it invited the Commission: to submit, in time for its Brussels meeting, an additional study on the possibilities for an effective and flexible solution to the question of the transit of persons and goods to and from Kaliningrad oblast, in compliance with the acquis and in agreement with the candidate countries concerned. 85

The most detailed vision of the political position of the European Council can seen in the conclusions of the European Council in October 2002. 86 In that document, again presenting the issue of Kaliningrad as a separate item, the European Council recognized “the unique situation of Kaliningrad Region as part of the Russian Federation” 87 and expressed its agreement “to make a special effort to accommodate the concerns of all parties involved concerning the future transit of parsons between Kaliningrad Region and other parts of Russia” 88 as part of the building of the strategic partnership with Russia. The European Council, however, emphasized the sovereign right of any state (in this context the right of the Republic of Lithuania) “to safeguard the security of its citizens by controlling its borders and the movement of people and goods into, on and through its territory” as well as the right “to introduce visas, including for transit”. 89

83 84

2001. 85 86 87 88 89

Presidency Conclusions, Göteborg European Council, June 15 –16, 2001. Presidency Conclusions, European Council Meeting in Laeken, December 14 –15, Presidency Conclusions, Seville European Council, June 21 –22, 2002. Presidency Conclusions, Brussels European Council, October 24 –25, 2002. Ibid. Ibid. Ibid.

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cc) Summary Although the issue of the Kaliningrad Oblast became visible in political documents of the European Council as early as the launching of the Northern Dimension in 1999, it may be noted that the European Council’s position on the Kaliningrad Oblast was formulated at its two subsequent meetings in the second half of 2002, linked to the situation of Kaliningrad transit, a highly debatable political topic in EU-Russia bilateral relations at the time. The European Council fulfilled one of its inherent duties when it decided on the Common Strategy of the European Union towards Russia pursuant to Article 13 (2) of the preceding TEU. Another duty was performed when the European Council set guidelines for the European Commission’s agenda to outline a possible solution of the problem of transit of passengers from the Kaliningrad Oblast to mainland Russia through the territory of Lithuania, which resulted in the publication of a Commission communication on Kaliningrad transit. Owing to the fact that the agenda of the European Council’s meetings is essentially influenced by the Council of the European Union and specifically by the presidency, it is clear that the topic of the Kaliningrad Oblast is dependent on the interests of individual Member States’ governments. Being drafted by the units and structures of the Council of the European Union, the conclusions of the European Council meetings that dealt with this problem do not differ substantially from the papers of the Council of the European Union which were referred to in the previous subchapter. d) The European Commission aa) General remarks on the European Commission The European Commission is one of the Union’s institutions and the legal foundation of the Commission rests upon Articles 17 TEU and 244 – 250 TFEU. The Commission is currently composed of Commissioners who come from each Member State of the European Union (responsible for a particular policy area of the Commission), a President and a High Representative of the Union for Foreign Affairs and Security Policy (Article 17 (4) TEU). Under the Treaty of Lisbon, after 2014 the College of Commissioners 90 will be reduced and include twothirds of the Member States; a rotation principle will determine which country 90 Although the European Commission is a single body of the EU it falls into three organizational tiers: 1. the College of the Commissioners which includes all the Commissioners, 2. the Directorates-General which perform as administrative units of the Commission, with the current number of the Directorates being 27, and 3. the Cabinets

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sends a commissioner for a certain term. According to Article 245 TFEU, the members of the Commission act in the general interest of the Union, they “refrain from any action incompatible with their duties” and are independent from Member States, who shall respect this independence and not exert pressure on the Commission. It is headed by a president (Article 17 (6) TEU) who is elected by the European Parliament on a proposal from the European Council, who votes by qualified majority (Article 17 (7) TFEU). The European Commission exerts a variety of powers which include: a) legislative and quasi-legislative power, b) agenda-setting power, c) executive and d) supervisory power. 91 While the area in which the Commission is directly authorized to legislate is significantly limited, its powers in the field of delegated legislation – in cases when the Council delegates certain quasi-legislative powers to the Commission pursuant Article 290 TFEU – are more extensive and widespread. Beside the responsibility to decide on the legislative programme for each year, the agenda-setting power essentially implies, first and foremost, the Commission’s monopoly of the legislative initiative on certain policy areas, thanks to which the Commission is often labelled as “Motor der Gemeinschaftspolitik”. 92 Furthermore, this power comprises the Commission’s right to make proposals (along with the Member States) in the areas of the Common Foreign and Security Policy and the power of financial initiative, in accordance with which the Commission presents a draft budget to the Parliament and Council and thus starts the budgetary process. Finally, the European Commission is in charge of “stimulating policy debate more generally”. 93 Notably, however, although the Commission issues legislative proposals, it hardly does so on its own initiative. Rather, it has a “gate-keeper role, where different interests – national governments, industry, NGOs – come to it with legislative suggestions”. 94 In addition, the executive power of the Commission presupposes an array of tasks such as ensuring the efficient raising of the EU’s revenues by national authorities; watching over a large number of the Union’s expenditures, the administering external assistance; representing the European Union in external trade relations and international organizations; initial monitoring of applications for EU membership, and others. Finally, the supervisory power includes the Commission’s entitlement to bring a Member State or an EU institution before the Court of Justice as well as to oversee Member States complying with judgements of the Court of Justice, and other duties. (office) which are made up of staff of each Commissioner. See Damian Chalmers / Adam Tomkins, p. 87. 91 Ibid., pp. 93 – 101. 92 Klaus-Dieter Borchardt, Die rechtlichen Grundlagen der Europäischen Union, Heidelberg: C.F. Müller Verlag, 2006, p. 128. 93 Damian Chalmers / Adam Tomkins, p. 96. 94 Ibid.

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The principal legal acts adopted by the European Commission are communications which, however, can hardly be called “a single form of act” 95 due to their multiplicity. For instance, there are communications which are principally notifications of the decisions made by the Commission; other communications are produced during the preparation phase leading to the adoption of decisions and, in this event, they are closely linked to administrative activities and called “information communications”. 96 While there is also a group of the so-called “guideline communications” 97 among Commission communications which “set forth, from the Commission’s point of view, the case-law of the Court of Justice in specific fields and the approach which it is proposing to adopt in the future, particularly in dealing with Treaty infringements by the Member States”, 98 the other group is formed by the Commission’s “programme communications”. 99 The latter documents reveal “plans – of a more or less concrete nature – for future action by the Commission in a specific field” 100 to be worked out and presented for discussion to other EU institutions (mostly the European Parliament and the Council of the European Union). In general, the most distinctive feature of Commission programme communications is that, as was noted earlier as regards the agenda-setting power of the Commission, any proposal in the form of a programme communication from the side of the Commission does not reflect its initiative per se, rather it embodies the final stage of the Commission’s work initiated by the Council and the Parliament. In short, this is a tool by means of which the Commission carries out its tasks and, principally, although still capable of having an indirect legal effect, these communications do not exert direct legal effects. 101 bb) The European Commission on the Kaliningrad Oblast Although the 2001 Commission Communication on EU and Kaliningrad is regarded as the starting point for the formal indication of not only the Commission’s but also the EU’s political position towards the Kaliningrad Oblast, the Commission had addressed the issue of Kaliningrad even earlier. This was mainly several references to the importance of the problem of the Kaliningrad Oblast in the framework of the Northern Dimension initiative, specifically, from the outset, the Commission Communication on “A Northern Dimension for the 95

Matthias Niedobitek, The Cultural Dimension in EC Law, p. 272. Ibid., p. 273. 97 Ibid. 98 Ibid. 99 Ibid. 100 Ibid. 101 Ibid., p. 274. 96

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Policies and the Union” of 1998 102 and the two subsequent Action plans of that policy, which explicitly prioritized cooperation on the Kaliningrad Oblast. 103 In the second action programme for the period 2004 to 2006, it was suggested that the Kaliningrad Oblast should be treated “as cross-cutting issue(s) mainstreamed within each key priority of the Action Plan”. 104 Although the Commission maintained that the responsibility for the oblast lay with the Russian Federation, it recognized the importance of intensifying dialogue and cooperation on Kaliningrad, owing its exceptional geographic position, in the framework of the Northern Dimension. In order for Kaliningrad to take advantage of the benefits correlated with the EU enlargement, the Commission proposed involving the oblast in all five priority fields of the Action Plan: economic, human resource, the environment, cross-border and Justice, and Home Affairs. 105 The Commission also underlined its efforts in these areas, which were also undertaken, inter alia, in the light of the TACIS Indicative Programme for Russia for 2004 – 2006. This comprised a special package for Kaliningrad estimated at 25 million euros in such sectors as administrative reform and business development, public health, education and cross-border cooperation. The major documents of the European Commission on Kaliningrad were its communications published in two subsequent years, 2001 and 2002, at the invitation issued by the European Council. 106 The attendant circumstances pertaining to the EU-Russia interaction on Kaliningrad, in which the position of the European Commission to the Kaliningrad Oblast was construed, were described in Chapter III.2. Here, it seems reasonable to concentrate on the key issues of that paper in more detail. The Communication on the EU and Kaliningrad of 2001 consisted of three sections which covered the following items: 1. issues related to the enlargement process (movement of goods and energy supplies, movement of people and fisheries), 2. matters of mutual interest that were not linked with the enlargement (including economic development, governance, democracy and the rule of law, the environment, health) and 3. the Commission’s suggestions for the dialogue on Kaliningrad. Its major objective was to contribute to the discussion on cooperation in Kaliningrad among the different partners involved (the EU, Russia [including Kaliningrad] as well as Lithuania and Poland) by outlining ideas and options for this debate. The Commission expressed its belief that the upcoming enlargement 102

COM (1998) 589, p. 6. See Northern Dimension-Action plan for the Northern Dimension with external and cross-border policies of the European Union 2002 – 2003, Council of the European Union, 9401/00, Brussels, June 14, 2000, p. 13, and COM (2003) 343 which was endorsed by the Brussels European Council in October 2003. 104 COM (2003) 343, p. 13. 105 Ibid. 106 COM (2001) 26 and COM (2002) 510. 103

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chiefly entailed benefits and advantages for Russia in general and Kaliningrad in particular. Yet, it recognized that the EU’s expansion eastwards, specifically the adoption of the acquis by Poland and Lithuania, would imply specific consequences for Kaliningrad in the movement of people, goods and the supply of energy. To this effect, although claiming that the main responsibility for the oblast lay with Russia and the region itself, the Commission stated that the EU and the future Member States had “an interest in helping to ensure that the changes required by accession are made smoothly and in fostering co-operation with Kaliningrad on a number of regional issues”. 107 The Commission came up with a number of proposals and variants rather than a “formal Commission proposal for decision”, 108 yet with these proposals having a chance to become “the basis for decisions by appropriate authorities” 109 provided they proved valuable. Regarding the movement of goods, the communiqué identified that the enlargement would benefit Kaliningrad’s trade particularly since its industrial goods would enjoy lower tariffs in general (EU-Russia): 4.1 per cent against Poland’s previous tariff of 15.8 per cent and Lithuania’s 5.3 per cent. In view of Kaliningrad’s proximity to European markets, the paper contemplated the possibility that the Kaliningrad Oblast might adopt EU technical norms and standards which would allow the oblast to take full advantage of improved market access. In respect to a few proposals to arrange a special trade regime for Kaliningrad, such as free trade or a customs union, the Commission defined two major obstacles to (virtual) development. Firstly, this special treatment would essentially imply the appearance of certain sensitive political and legal issues including the (improbable) granting of a greater degree of autonomy to the region by the Russian Federation, and, secondly, the favourable trade conditions to be created by the enlargement would make this special treatment redundant. In the field of energy supplies, the Commission suggested that the Kaliningrad Oblast should either maintain its link with the Russian electricity grid or switch to the Central European grid, which is connected to the main EU electricity grid. Understandably, the largest part of the document was dedicated to the issue of the movement of people, whereby the Commission argued that the stricter border controls that would result from the adoption of the acquis by Poland and Lithuania would have particular implications for travelling to and from Kaliningrad. The key message of the Commission was that no visa-free transit would be possible, but that there would be few impediments to the movement of people since the acquis contained certain options for facilitating this kind of movement. For the Commission, the most important aspect in this situation was 107 108 109

COM (2001) 26, p. 2. Ibid. Ibid.

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the efficient operation of border crossings and hence matters of border control, border infrastructure and border management. In the succeeding section of the communication, the Commission called for the Russian authorities to stimulate economic development in the oblast through improving and contributing to the legal and institutional environment, good corporate governance, fair and efficient enforcement of legislation and the strengthening of market institutions. While the EU also had some instruments at its disposal capable of contributing to this sphere, including the TACIS programme and bilateral Member States programmes, Russian and local Kaliningrad authorities were invited to identify priority areas for that support. Complementarily, the paper suggested the clarifying the benefits and status of the SEZ in the oblast in the new circumstances and determining efficient ways for developing an Information Society in the Kaliningrad Oblast; encouraging Kaliningrad to participate in EU projects for public administration and judicial reform; involving the oblast in federal efforts to monitor the environment and harmonizing standards pertaining to the environment; adopting preventive action in the region as regards problems of the spread of communicable diseases in the oblast. The mode of operation for dealing with the cooperation on Kaliningrad, which was clarified in the third section dedicated to the Commission’s main suggestions, consisted of a dialogue between the EU and Russia in the PCA format, specifically within the corresponding PCA sub-committees and working groups, at the highest level of EU-Russia summits; discussion between the EU and candidate countries in the framework of the Europe Agreements and during special meetings to be organized by all parties involved in cases where it was deemed necessary. It was also envisaged that TACIS studies on energy would be undertaken; the suitability of Community rules on small-scale border traffic and transit for the case of Kaliningrad could be assessed; the costs of visas could be examined; possibilities for the EU Member States to open consulates in Kaliningrad should be considered; the EU and Russia should conclude a readmission agreement and other issues with respect to fisheries relations, border controls and environmental concerns should be discussed at a EU-Russia bilateral level. The following communication on Kaliningrad transit was published a year later; it appeared to be a response to the invitation by the Seville European Council of June 2002 to prepare a study on possible solutions of problems of the transit of persons and goods to and from the Kaliningrad Oblast in compliance with the EU acquis. In this paper, the Commission delivered its opinion that, on the one hand, it did not regard the acquis to be “so inflexible that it cannot cater for special circumstances” 110 since it was “continually under development”. 111 On the other hand, in spite of a certain flexibility of the acquis, the following 110 111

COM (2002) 510, p. 2. Ibid.

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main principles should be preserved: 1. the EU (current and future) Member States should retain their sovereignty over the control of their borders and the movement of people and goods on their territory; 2. the enlargement process should not be hindered and the integrity of the acquis should be safeguarded; 3. Russian concerns should be addressed within the context of the enlargement process and the EU-Russia strategic partnership. The Commission also relied on the opinions of Lithuania and Poland, which had rejected the idea of non-stop trains and busses or the establishment of transit corridors through the territory of Lithuania as proposed by the Russian government, although the Commission admitted the possibility of examining these propositions after EU enlargement. In short, the main message of the paper was the need to protect the acquis and hence to assure the timely accession of Lithuania and Poland to the EU, still taking into consideration opportunities for some flexibility. To this end, the Commission came up with a few proposals on the design of a package of measures entitled “Facilitated Transit Document” scheme, which was described in detail earlier in this thesis (Chapter III.2.). Eventually, the Commission indicated the feasibility of discussing an EU-Russia visa-free regime in the long-term perspective. In addition to these communiqués, the year 2002 saw another effort by the Commission to intensify discussion on Kaliningrad, which was embodied in a document entitled “EU-Russia Co-operation on Kaliningrad: 2002 and beyond”. 112 This paper was appended to a letter which the President of the Commission Romano Prodi sent to the President of the Russian Federation Vladimir Putin on the eve of the forthcoming EU-Russia summit. In that document, the Commission presented its analysis of the principal issues pertaining to various areas of EU-Russia cooperation on Kaliningrad and made concrete practical proposals that could possibly “make a substantial contribution to the development of the Kaliningrad Oblast”, but required “firm commitment and sufficient resources from Russia and the EU over the next few years”. 113 This study displays a sector approach whereby it is structured into the following sections: a) matters concerning border and customs cooperation, including the movement of people, border crossings, border control, border demarcation, and customs cooperation; b) common regional challenges correlated with issues of security, the environment and health; c) regional economic development, energy supplies, and transport including infrastructure and d) other elements comprising education, training and information on the EU and the impact of enlargement. In the Commission documents that came after the above two communications, if the Commission referred to the issue of the Kaliningrad Oblast at all, it did so mainly while evaluating the very fact of the achieving the compromise on 112 EU-Russia Co-operation on Kaliningrad: 2002 and beyond, The TACIS Information and Communications Programme, July 2002. 113 Ibid., p. 16.

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Kaliningrad transit in 2002. When it assessed the main policy results achieved by the Commission’s services in 2002, the Commission emphasized that the Kaliningrad compromise (embodied in solving the Kaliningrad transit problem and establishing the FTD) was “an important step forward towards increased security and stability” 114 and that this compromise per se was a vital undertaking in the framework of the EU’s external relations in Eastern Europe. 115 Specifically, the EU’s approach in the negotiations with Russia on Kaliningrad transit, which was characterized by “realistic common position(s)” 116 in the area of common EU-Russia interest where the EU tried “to avoid the politicisation of economic and technical issues” 117 was recognized as effective. Also, the implementation of the established regime of facilitated transit documents as regards Kaliningrad became part of the policy priorities set out by the Commission in respect to the accession states in 2003. 118 The evaluation remarks on the functioning of the FTD in 2003 emerged in some of the Commission’s documents 119 as early as 2003 and, in 2006 the Commission published a detailed Report on the functioning of the facilitated transit for persons between the Kaliningrad region and the rest of the Russian Federation. 120 The analysis was based on replies from Russia and Lithuania to a questionnaire prepared and circulated by the Commission in March 2006 and on the results of two field trips undertaken by the Commission experts in June 2004 and March 2006. In the conclusions of this paper, the Commission expressed its satisfaction with the smooth running of the facilitated transit system three years after its entry into force, also taking into account the fact that the Schengen requirements were fulfilled and no illegal immigration under the scheme was observable. As a consequence, although there proved to be a few issues connected to the functioning of the FTD scheme which still needed to be clarified, but which did not affect the efficiency of the system, the Commission stated that there were no reasons to introduce changes into this scheme.

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COM (2003) 391, p. 6. COM (2003) 527, p. 127. 116 COM (2004) 106, p. 5. 117 Ibid. 118 COM (2003) 83, p. 7. 119 In its Communication “Biannual update of the scoreboard to review progress on the creation of an area of ‘freedom, security and justice’ in the European Union” for the second half of 2003, the Commission in particular referred to the EU-Russia summit in November 2003 in which one of the matters of discussion was the progress “made in 2003 in relation to transit of persons through the enclave of Kaliningrad”. COM (2003) 812, p. 13. 120 COM (2006) 860. This report was envisaged by the Council Regulation (EC) No. 693/2003. 115

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cc) Summary Taken individually, the documents produced by the European Commission as regards the Kaliningrad Oblast demonstrate that the Commission so far has been the most exhaustive in formulating the EU’s position toward the Kaliningrad Oblast. This relates to its two programme communications on Kaliningrad of 2001 and 2002, unprecedentedly voluminous and comprehensive papers on Kaliningrad in overall EU documentation. That said, it is, however, necessary to note that these communiqués did not arise from the Commission’s own initiative, but rather they appear in the final stage of its work, which was initiated by other European Union bodies, specifically the European Council. The principal feature of the Commission’s position on Kaliningrad is the extent of its attachment to a purely technical approach and the avoidance of politicizing the Kaliningrad problem. This is spelt out in a number of its repeated statements such as: 1. the main responsibility for the oblast lies with the Russian Federation; 2. the EU acquis and integrity should be sustained; 3. if a certain flexibility as regards Kaliningrad transit were possible it could only be found in the (Schengen) acquis; 4. the major aspects of EU-Russia cooperation in Kaliningrad pertained to the areas of border controls and the environment, which essentially showed the EU’s concerns predominantly over soft security risks which allegedly originated from the Kaliningrad Oblast; and 5. the modus vivendi which was applied to the cooperation on Kaliningrad implied the handling of the Kaliningrad issues exclusively in the framework of the PCA and, more precisely, in the format of the existing PCA institutional structures as well as within the Community TACIS programme in Russia. The major contexts in which the Kaliningrad issue emerged in the Commission’s documentation included the Northern Dimension initiative, the EU Eastern enlargement and the (political and technical) evaluation of the establishment and implementation of the FTD scheme. The other noteworthy observation is the infrequency of Kaliningrad’s presence, the Commission’s action upon (and apart from) solving the Kaliningrad transit problems. Chapter IV.2. will focus on the policies of the Commission in which the Kaliningrad Oblast may be involved more extensively in practice. e) Other institutions aa) The Economic and Social Committee on the Kaliningrad Oblast The Economic and Social Committee is an institutional body of the European Union which has an advisory status and serves as an intermediary between civil society and the structures dealing with decision-making in the EU. Its legal

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basis is formed by Articles 300 (2) and 301 –304 TFEU, according to which it is envisaged that: a) the members of the Committee are appointed by the Member States for a five-year renewable term and its list is approved by the Council of the European Union and b) the Committee’s members represent different (economic and social) sections of civil society 121 and act independently, fulfilling its duties and guarding the general interests of the Union. The principal task of the Economic and Social Committee is the elaboration of opinions on legislative initiatives, although consultation with the Committee is not equally compulsory in all fields of EU policy-making. In addition, the Committee is empowered to produce opinions on its own initiative on any issue it regards as important. It is noteworthy that the mandate of the Economic and Social Committee has recently been extended and this allows the Committee to take a more proactive position on many occasions. 122 The Economic and Social Committee addressed the issue of the Kaliningrad Oblast as early as 1999 and this was directly connected with the formation of the Northern Dimension in the EU. Since then, it has referred to the region in its opinions on several occasions, emphasizing the importance of both the EU’s Northern Dimension and EU-Russia relations. As a result, cooperation in the Baltic Sea region has been strengthened. Already in 1999, in its opinion, the Committee recognized and emphasized the fact that the upcoming EU Eastern enlargement would result in the Kaliningrad Oblast turning into a Russian exclave within what was essentially the EU internal Baltic Sea. 123 The Committee produced a list of general recommendations for the development of the cooperation in this part of Europe which made reference to the actions pertaining, first, to economic growth and stability of markets such as the increase in domestic and foreign investment in Russia and the EU-associated countries in the region, the promotion of trade and production cooperation, assistance in Russia’s preparations for WTO accession, and, second, to the improvement of cross-border and border regional cooperation between the EU, its associated countries and the regions of North-West Russia, including the Kaliningrad Oblast. It was also suggested that this cooperation should involve the local and regional authorities which were “responsible for implementing legislation as well as monitoring compliance with it” and which had “a key role to play in promoting responsible 121 There are three Groups in the Committee: 1. the Group which consists of employers, 2. the Group which is composed of employees and trade unions, and 3. the Group which is made up by various segments of civil society including small businesses, farmers, non-profit organizations, associations representing the family, women, persons with disability, the academic community, the crafts, the professions and others. See Damian Chalmers / Adam Tomkins, p. 128. 122 Ibid., p. 129. 123 Opinion of the Economic and Social Committee on “The EU’s Northern dimension including relations with Russia”, OJ C 368/39 (1999).

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entrepreneurship and favourable conditions, as well as crime prevention”. 124 In addition, the Committee underscored that for a market economy to succeed a dialogue between socio-economic organizations and public authorities was needed which could be achieved through the EU establishing an action programme for Northern Europe to be financed through the EU support programmes (TACIS, PHARE, INTERREG and others). It also recommended that civil society organisations should “participate in development work”. 125 The Economic and Social Committee returned to the topic of the Northern Dimension in 2001 when, in its own initiative opinion, it commented on the “Action plan for the Northern Dimension in external and cross-border policies of the European Union 2000 –2003”, adopted by the Feira European Council on June 19 – 20, 2000. 126 Its major criticism concerned the fact that the Action plan concentrated mostly on the spheres of environmental and nuclear safety, the fight against organized crime and the Kaliningrad situation. Meanwhile, as was pointed out in the Committee’s paper, social issues and the involvement of the civil society sector appeared to have been pushed into the background in the Action plan and, on top of that, the initial priority of the Committee to reduce the political, social and economic divergences between the societies of the region had been neglected. In its assessment, the Committee dealt specifically with the issue of Kaliningrad (point 4.3.8). In particular, it welcomed the fact that the oblast had been given priority in the Action plan, it also expressed certainty that the opening of the TACIS office in Kaliningrad at the end of 2000, mentioned in the action Plan, would encourage the participation of civil society in joint programmes with EU organizations. The document reiterated the necessity of efforts “to facilitate economic cooperation and reduce the economic, social and environmental disparities between the Kaliningrad region and surrounding areas in Lithuania and Poland” (point 4.3.8.2). In the course of time and, specifically, with the development of the Northern Dimension, particularly with the establishment of the Northern Dimension Second Action Plan, the Committee again addressed the issue of the Kaliningrad Oblast, speaking of its (the Committee’s) efforts to increase the awareness of the civil society organizations in the oblast of the projects and overall profile of the Northern Dimension as well as of possible partners, such as the European Investment Bank and other financial resources, in implementing Northern Dimension projects. 127 Of interest here, however, is the outcome of the questionnaire circulated by the Committee among the civil society organizations in the 124

Ibid. Ibid. 126 Opinion of the Economic and Social Committee on the “Northern Dimension: Action plan for the Northern Dimension in the external and cross-border policies of the European Union 2000 – 2003”, OJ C 139/42 (2001). 125

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overall Northern Dimension region in 2004, which showed that besides crossborder cooperation and regional development the majority of these organizations viewed the areas of economy, business, infrastructure, the environment, nuclear safety and natural resources cross-border as the most important fields of the Second Action Plan. At the same time, such issues as justice and home affairs, Kaliningrad and Arctic cooperation appeared to be of less importance to them (point 5.4). In addition, the Committee referred to the issue of the Kaliningrad Oblast in the context of EU Eastern enlargement and its impact on EU-Russia relations, emphasising the need for both sides to solve the problem of the movement of persons and goods in a timely fashion. 128 This recommendation was restated in a document which was produced by the Committee on its own initiative which contemplated Latvia’s and Lithuania’s “road to accession”. 129 In a separate section of the document dedicated exclusively to Kaliningrad, the members of the Committee in particular underscored that “the aim must be to find flexible technical solutions which do not compromise Schengen Agreement rules” and also that “special efforts should be made to facilitate economic cooperation and narrow the economic, social and environmental gaps between the Kaliningrad region and the surrounding areas in Lithuania and Poland” (point A, 1.4). Representing civil society in the European Union, the European and Social Committee also advocated the contribution of organized civil society to strengthening EU-Russia relations in general because it was believed that “the efforts of civil society in the EU are aimed at achieving improved cooperation between the EU and Russia and at supporting the process of building civil society structures and democracy in Russia” (point 2.1). 130 The Committee also called for intensifying cooperation between civil society in the EU and Russia and invited the EU Member States to search for “ways of establishing contacts with all parts of Russia, including Kaliningrad” (point 3.5.4). In so doing the Committee committed itself to an array of actions (organization of joint workshops and other support) moving in that direction.

127 Opinion of the European Economic and Social Committee on “The Northern Dimension and its Action Plan”, OJ C 24/34 (2006). 128 Opinion of the Economic and Social Committee on “EU / Russia strategic partnership: What are the next Steps?”, OJ C 125/39 (2002). 129 Opinion of the Economic and Social Committee on “Latvia and Lithuania on the road to accession”, OJ C 61/80 (2003). 130 Opinion of the European Economic and Social Committee on the contribution of civil society to EU-Russia relations, OJ C 294/33 (2005).

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bb) The Committee of the Regions on the Kaliningrad Oblast Similarly to the European and Social Committee, the Committee of the Regions (Articles 300 (3) and 305 –307 TFEU) holds an advisory status according to which it can be consulted by the Council of the European Union and the European Commission (and also by the European Parliament) in cases when these bodies consider it necessary, especially in cases of cross-border cooperation. The Committee’s members are, in a similar vein, proposed by the Member States and appointed by the Council of the European Union, again for a five-year renewable term, and they represent “regional and local bodies who either hold a regional or local authority electoral mandate or are politically accountable to an elected assembly” (Article 300 (3) TFEU). The Committee of the Regions may submit an opinion at the request of the Council or the Commission or it may produce an opinion on its own initiative when it considers that specific regional interests are involved which is then forwarded to the Council and the Commission. 131 As in the case with the Economic and Social Committee, the first context in which the Committee of the Regions mentioned the issue of the Kaliningrad Oblast was the development of the Northern Dimension of the European Union. Thus, in 1996, upon the 1995 enlargement of the EU and the accession of Austria, Finland and Sweden, the Committee spoke of a new Northern Dimension in the European Union and the importance of the regional cooperation in the Barents and Baltic Sea regions, with the external border with Russia essentially a part of that Dimension. 132 Thus, it was emphasized that the common border entailed “attendant challenges, risks and opportunities” which signified a “change in relation to the past” (point 3.10). It was also explicitly stated that within the Baltic Sea region Russia had an enclave of Kaliningrad and that the NorthWestern regions of Russia in general had serious environmental problems and problems correlated with nuclear safety. Therefore, the Committee came up with ideas for supporting the development of Russia, including in the framework of TACIS, and it also suggested that the Commission should outline an action programme for the new Northern Dimension of the European Union, taking into consideration issues of environmental, regional and structural policies as well as policies of cross-border cooperation. The Committee of the Regions in its Opinion on the Commission Communication made identical mentions of the 131 According to some speculations, the Council of the Regions has proved to be “relatively unsuccessful as an institution” because its opinions carry limited weight with other institutions” and “the most powerful regions of the Union prefer to deal with the other institutions directly, rather than act through the Committee”. Damian Chalmers / Adam Tomkins, p. 129. 132 Opinion of the Committee of the Regions on “The Northern Dimension of the European Union and Cross-Border Cooperation on the Border between the European Union and the Russian Federation and in the Barents Region”, OJ C 337/7 (1996).

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Kaliningrad Oblast and the need for the regional cooperation in the Baltic Sea area while outlining a Northern Dimension for EU policies in 1999. 133 However, a greater focus on the need for prioritizing the Kaliningrad Oblast can be found in a document adopted by the Committee of the Regions in response to the “Second Northern Dimension Action Plan” prepared by the European Commission. 134 In this paper, while it gave certain recommendations regarding the improvement of the Action Plan, the Committee emphasized: the importance of paying special attention to the region of Kaliningrad in the Northern Dimension due to its geographical inclusion in the new enlarged EU for example by creating special programmes and financial solutions for projects within Kaliningrad and cross-border cooperation between Kaliningrad and its neighbours (point 2.18). 135

In addition, the Committee emphasized “the experience that cooperation projects between local and regional authorities already take place and seem easier to facilitate that the ones at national level” (point 2.19). Following its thematic profile, the Committee of the Regions issued an opinion on the cooperation between regional and local authorities in Russia and the European Union. 136 It in particular stressed that the EU should back the development of good governance in Russia not only at national but also regional and local levels. This was explained by the facts that, firstly, efficient governance at these levels constituted essential contribution to the democratic development of the country, and, secondly, regional and local authorities had capacity to impact the areas that were “important for sections of society close to people’s everyday concerns”. 137 As such, the EU should pay particular attention to the regions of Russia that directly bordered the EU and this meant the regions of the NorthWest of Russia covered by the Northern Dimension, with Kaliningrad being explicitly singled out. Specifically, the Committee pinpointed the significance of the Northern Dimension because it allowed its stakeholders to participate in 133 Opinion of the Committee of the Regions on the “Communication from the Commission on A northern dimension fort he policies of the Union”, OJ C 374/1 (1999). 134 Opinion of the Committee of the Regions on the “Northern Dimension-Second Action Plan 2004 – 2006”, OJ C 23/27 (2004). 135 Likewise, on the eve of the EU Eastern enlargement the Committee of the Regions underlined its understanding new conditions at the EU’s external borders that would arise as a result of the enlargement and in this respect the Committee welcomed the EU’s efforts as regards EU-Russia cooperation on Kaliningrad and in the framework of the Northern Dimension. See Opinion of the Committee of the Regions on “Supporting the development of institutional structures at local and regional level in the applicant countries”, OJ C 107/32 (2002). 136 Opinion of the Committee of the Regions on Local and regional government in Russia and the development of cooperation between the EU and Russia, OJ C 71/11 (2005). 137 Ibid., p. 12.

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practical projects, cooperative undertakings and exchanges and also because it had the potential to assist in the region’s development both socially and economically, which would benefit the EU. In respect of the Kaliningrad Oblast, the members of the Committee accentuated the status of the Kaliningrad region as a special economic zone and called attention to “the scope for crossborder cooperation with the countries directly bordering Kaliningrad and which therefore share the challenges and opportunities of the region” (point 2.3.3). The Committee also expressed interest in seeing “due account taken of projects between Kaliningrad and the EU in the funding arrangements for the Northern Dimension Action Plan so that a basis can be created for cross-border technical cooperation at local and regional level” (point 2.3.4). When it came to assessing the European Commission’s new initiative, the European Neighbourhood Policy, the Committee of the Regions generally approved this undertaking, which had resulted from the EU enlargement of 2004. 138 However, despite the fact that when it reflected on the geographical coverage of the Policy, the Committee recognized that the issue of the Kaliningrad Oblast was “adequately addressed in other documents and work of the Commission”, it nevertheless criticized the Commission’s Strategy Paper on the European Neighbourhood Policy because no direct mention was made of “the ongoing problems in regard to Kaliningrad” (point 1.3.3). cc) Summary Given the specific profile, interests and backgrounds of the Economic and Social Committee and the Committee of the Regions, it can be seen that in the formation of their positions on the Kaliningrad Oblast, both Committees have shaped a thematic approach. While the Economic and Social Committee advocated the intensification of cooperation between the civil society organizations of the EU Member States, the EU candidate states and the Kaliningrad Oblast as well as other regions of the North-West of Russia, the Committee of the Regions propagated the idea of promoting collaboration between the regional and local authorities of the same actors. The substantial commonality of their positions consists in the fact that these have been crystallized within two major discourses: the formation of the Northern Dimension of the European Union and the EU Eastern enlargement of 2004, and, as a result of both processes, the need for regional and cross-border cooperation in Northern Europe. In the first case, the two Committees supported the idea of the Commission elaborating a special action programme to implement the Northern Dimension concept. Subsequently, with the establishment of the 138 Opinion of the Committee of the Regions on the Communication from the Commission – European Neighbourhood Policy – Strategy Paper, OJ C 231/58 (2005).

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Northern Dimension Action Plans, the Committees approved the prioritization of the Kaliningrad Oblast indicated in these Plans. Whereas the Economic and Social Committee saw the ultimate objective of the Northern Dimension initiative as narrowing the economic, social and environmental gap between the societies in the whole region, the Committee of the Regions believed that the involvement of regional and local authorities in regional and cross-border cooperation in the Baltic Sea area would contribute to the democratic development of Russia. In the other principal context of the EU expansion eastwards – which should still be examined in its interdependence with the previous discourse – the Economic and Social Committee brought to the fore the necessity for both the EU and Russia to solve the problems of the movement of persons and goods from and to the Kaliningrad Oblast, and the Committee of the Regions underlined soft security risks that the Kaliningrad Oblast entailed for the whole region. It would be appropriate to speak of the two Committees having converging positions on the Kaliningrad Oblast, with both of them essentially supporting the idea of encouraging regional and cross-border cooperation among the EU Member States, its candidate countries and the regions of the North-West Russia (particularly the Kaliningrad Oblast) in their opinions, mostly adopted on their own initiative. The latest reference of the Committee of the Regions is remarkable, however, in regretting that the new European Neighbourhood Policy failed to prioritize the Kaliningrad Oblast properly. f) Summary In summarizing the political position of the European Union to the Kaliningrad Oblast in general, several conclusions can be drawn. First of all, this position has been collectively construed by the major EU institutional bodies; the process of its formulation has been in part a reflection of the division of labour and policy-making responsibilities between these bodies and the EU’s overall established political process and procedural rules. Thus, the European Parliament was the first to pronounce its policy concerns towards Kaliningrad and take a pro-active strategy of advancing Kaliningrad-related issues up the EU agenda through the issue of its own policy resolutions and reports as early as 1994, with some success. While the Council of the European Union (and, importantly, the Presidency of the Council of the EU) held the responsibility for spotlighting Kaliningrad in the over-crowded agenda of the EU, and the European Council provided a political direction and inspired the European Commission to devise particularities as regards the definition of EU policy line towards Kaliningrad, the Commission produced a set of comprehensive programmatic documents which were later endorsed by the European Council and the Council of the European Union. In a similar vein, the Economic and Social Committee and the Committee of the Regions articulated their vision

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of EU policy towards Kaliningrad in the light of their thematic profiles and specific interests. The political attitude of the European Union to Kaliningrad can be delineated as follows. On the one hand, the European Union argues that the responsibility for the oblast lies with the Russian Federation; on the other hand, it recognizes the potential impacts of the region’s unique geographical position. In the view of the European Union, the possible options for the solving the challenges correlated with the oblast rest upon an EU technical approach within the existing EU policy tools (inter alia, the TACIS programme) and a bilateral EU-Russia collaboration in the framework of the PCA and, as a result, within the existing institutional structures rather than through the establishment of new ones such as the High-level Group for Kaliningrad proposed by the Russian government. Simultaneously, a characteristic feature of the EU position is the avoidance of any politicization of the topic, despite the initial efforts of the European Parliament to touch certain sensitive issues such as the international status of the oblast and wider autonomy for the region to be granted by the Russian Federation. Another observation is that the Kaliningrad case has chiefly been dealt with by external policy units of the EU, for instance, the Committee on Foreign Affairs of the European Parliament and the General Affairs and External Relations Council of the European Union. Importantly, the intensity of the EU internal discussion on Kaliningrad has been rooted in a to-do list of the rotating Presidency of the European Union and hence in the national interests of individual Member States (this was the case in particular with the Presidency of Sweden in 2001). Mainly political and non-binding legal papers regarding Kaliningrad have been produced by these EU institutions, including resolutions on their own initiative by the European Parliament, internal documents (reports and conclusions) by the Council of the European Union, conclusions by the European Council, programme communications by the European Commission and its own initiative opinions by the Economic and Social Committee and the Committee of the Regions. Although the problem of Kaliningrad transit resulted in the EU modifying its acquis and, specifically, in the Council of the European Union adopting a (legally-binding) decision on a Facilitated Transit Document, the transit regime does not relate directly to the Kaliningrad Oblast because it has become an integral part of the Schengen acquis and is hence valid for regulating an identical (and possible) transit situation within the EU. Whereas the peak of the activities of the bodies examined here has been the time period 2001 – 2002, since then, Kaliningrad-related issues do not seem to attract the same degree of EU documentation and action. The major contexts in which the problem of the Kaliningrad Oblast has been addressed are, firstly, development of the Northern Dimension Initiative of the European Union and regional cooperation in the Baltic Sea region in the late 1990s, and, secondly, the upcoming EU Eastern enlargement. The key thematic

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discourses are represented by a) the (soft and hard) security discourse including issues of arms control in the oblast, the level of the socio-economic situation of the oblast and the associated problems of the environment, crime and border matters; b) a discourse on regional and cross-border cooperation and, above all, c) transit to and from the Kaliningrad Oblast through the territory of Lithuania and the subsequent implementation of the Facilitated Transit Document scheme, achieved as a result of a bilateral compromise between the EU and Russia on Kaliningrad transit. Things standing as they are, it is inappropriate yet to speak of the existence of either a single EU policy towards the Kaliningrad Oblast or a coherent EU strategy to this region. If one applies here the concept of the three-stage process of policy development in the EU, 139 one could argue that the development of EU policy to Kaliningrad has been stopped at stage two, wherein this policy has not yet been shaped. Voices have been heard inside the EU on the need to bridge the economic and social gap between the Kaliningrad Oblast and its neighbours (EU Member States), and to shift the focus of EU-Russia cooperation from the Kaliningrad transit to the overall socio-economic development of the oblast. The failure of the European Neighbourhood Policy to accord priority to the problem of the Kaliningrad Oblast has also been identified, but there is still no comprehensive EU document that would define the key elements of the EU strategy to the oblast. Such a strategy can hardly take a feasible shape any time soon given the political realities (described in Chapter III.1.) in which the EU lacks a coherent common strategy towards Russia in general. The study of the positions of the EU’s institutions shows that there are no propositions to launch a single policy for Kaliningrad and forge a consistent Kaliningrad strategy. The next section aims at shedding more light on the concrete policy areas of the EU oriented to and involving the Kaliningrad Oblast in entirely practical terms.

139 This process consists of the following stages: 1. the emergence of an idea as well as a political discourse and response to that idea; 2. the Commission’s reaction to the invitation to formulate particularities and give initial shape to that policy, whereby this is a process affected by the different interests and attitudes of the Member States and the institutions which are prone to “limit the scope of these proposals to little more than gestures and wishful thinking”; and 3. the adoption of the proposal. See Michael Emerson, European Neighbourhood Policy: Strategy or Placebo?, p. 6.

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2. The EU’s policy towards the Kaliningrad Oblast a) The general framework of the EU’s Kaliningrad policy aa) The European Commission’s country programmes Until recently, the European Commission declared the aims of its Kaliningrad policy as follows: 1. ensuring that Kaliningrad benefits from and contributes to the sustainable development of the Baltic Sea region; 2. promoting the socioeconomic development of Kaliningrad; and 3. guaranteeing the smooth and efficient functioning of the transit of goods and persons between Kaliningrad and the rest of Russia. 140 The order of these aims suggests that the priority of the EU has been firmly linked to the Union’s soft security concerns regarding the Kaliningrad Oblast and its potential (adverse) impact on the whole Baltic Sea region, essentially an EU internal area. As Holger Moroff remarks, the EU’s approach to Kaliningrad which aims at “societal stabilisation in order to prevent risks from spilling over into the surrounding area, i.e., into the EU” 141 mirrors “development policies towards a partner with very different standards and outlook”, 142 especially if compared with the EU’s policy to its other neighbour state, Switzerland, which is basically a trade policy. Overall, Moroff labels the EU’s policy towards Kaliningrad as a policy of “soft securitisation”, generally meaning “a process of putting a third country’s essentially domestic soft security threats with a potential cross-border impact onto one’s external policy agenda” 143 and thus representing an EU foreign policy tool. In the updated version of the policy aims, presented in 2009, the first aim is reformulated into promoting Kaliningrad’s sustainable development “as an integral part of both Russia and the Baltic Sea region”. 144 Furthermore, while the third aim concerning the functioning of Kaliningrad transit is retained, it is complemented by a phrase declaring the EU’s aspiration to “solve practical problems that may arise as a result of the region’s enclave position in the EU”. 145 Although the policy item expressing the EU’s readiness to promote Kaliningrad’s socio-economic development has been dropped, two more items have been added. The EU seeks, firstly, “to help protect the environment in Kaliningrad and the 140

Kaliningrad, European Commission, External Relations, version as of September 9, 2008. 141 Holger Moroff, EU-Russia-Kaliningrad relations – a case of soft securitisation, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), p. 68. 142 Ibid. 143 Ibid., p. 70. 144 Kaliningrad, European Commission, External Relations, version as of September 18, 2009. 145 Ibid.

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Baltic Sea region”, and secondly, “to make Kaliningrad a positive example of cooperation between the EU and Russia”. 146 The formulation of these aims is accompanied by some general remarks on Kaliningrad’s situation, including the fact that due to Kaliningrad’s recent economic growth the EU’s previous worry that the region would turn into “a pocket of poverty inside the EU with sharp economic disparities towards the neighbouring Polish and Lithuanian regions” 147 has decreased to some extent. The EU’s revised policy aims as regards the Kaliningrad Oblast lead to the following observations: firstly, while previously the EU clearly prioritized sustainable development in the Baltic Sea region and Kaliningrad’s primary role as contributing to it, the new focus is placed on facilitation of and assistance to sustainable development in the oblast itself within the wider Baltic Sea region. Although the term “sustainable development” applied to Kaliningrad has not been clarified, presumably, it implies “socio-economic development”, especially as this latter item has been omitted in the modified list of the policy aims. Secondly, the EU explicitly emphasizes its engagement in the environment sector of Kaliningrad. Although slightly reformulated, the stress still remains on soft security issues, which is indicated in phrases like “sustainable development” and protection of the environment. Thirdly, and in general, the update demonstrates an increase in the EU’s perception and recognition of the significance of its partnership with Russia. This can be seen in the explicit mention of Kaliningrad as an integral part of Russia, in the extension of the EU’s engagement – as compared to the past – to solving additional practical problems connected with Kaliningrad’s exceptional state as an enclave. Most importantly, for the first time Kaliningrad has been named as a possible example of positive cooperation between the EU and Russia, which seems to be in line with Russia’s vision of Kaliningrad as a pilot region. In spite of the update of the policy aims, a modified version of the correlated strategy has not yet been presented. In the following, the strategy based on the previous aims is examined. The strategy includes references to, inter alia, steps towards improving the efficiency of border crossings and the socio-economic development of the oblast with particular respect to transit between Kaliningrad and the main area of Russia. 148 These steps cover common efforts by the customs authorities of Russia and Lithuania as well as by the European Commission – by means of technical meetings and consultations – to address effectively matters pertaining to transit arrangements (of both goods and people). Regarding the facilitation of the cross-border movement of Kaliningrad residents to the neigh146

Ibid. Ibid. 148 Kaliningrad, European Commission, External Relations, version as of September 9, 2008. 147

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bouring countries, the EU strategy presupposes the implementation of projects oriented towards upgrading the border infrastructure. As can be seen, the items of the strategy are not explicitly linked to the policy aims, which shows a lack of coherence. Overall, the EU’s support for Kaliningrad has been shaped by technical assistance which offers funding for implementing certain projects; over the period from 2001 until 2006 this assistance amounted to 100 million euros, and for the period from 2007 to 2013 the funding of the projects is expected to total 50 million euros. 149 This decrease by half in the volume of the assistance in the framework of the overall national allocation – also agreed by the Russian federal authorities – has been explained by the EU as a result of the Kaliningrad Oblast’s recent economic growth and the general improvement of its economic indicators. 150 By and large, the EU policy towards Kaliningrad has been verbalized in the framework of its broader Russia policy programming papers. For the first time, the Kaliningrad Oblast was selected as a priority region in the TACIS programme in 1994 and a specific Action programme was launched. 151 In the “Country Strategy Paper for Russia 2002 –2006”, mention was made of Kaliningrad in the context of the upcoming EU enlargement and the growing importance of the Kaliningrad-related problems under the PCA and in reference to the Commission’s Communication on Kaliningrad of 2001, in which the EU expressed its interest in assisting the region in such issues as the movement of goods and people, energy supplies, fisheries, economic development, combatting crime, the environment and health. 152 However, within the related National Indicative Programme (NIP) for 2002 –2003, which aimed to particularize EU action in its assistance to Russia, the Kaliningrad Oblast did not receive a particular focus among the Programme’s priorities. 153 This dramatically changed in the course of time with the European Commission’s adoption in 2003 of the “National Indicative Programme for the Russian Federation” for the time period 2004 –2006, whereby the Kaliningrad Oblast 149 Within the time period 1991 – 2000, the Kaliningrad Oblast was the beneficiary of more than 30 million euros of TACIS assistance, with the year 1991seeing the first activities of TACIS in the region. See COM (2001) 26, Annex II, p. 17. 150 National Indicative Programme, Russian Federation, 2007 –2010, p. 8. 151 COM (2001) 26, Annex II, p. 17. 152 Country Strategy Paper 2002 – 2006, National Indicative programme 2002 –2003, Russian Federation, p. 3. 153 However, this does not mean that no projects on Kaliningrad were foreseen in this time period: for instance, in the TACIS National Action Programme for Russian Federation 2003 (Part II), Kaliningrad was mentioned as a beneficiary of the project “Strengthening and Developing Business and Administrative Education in the Kaliningrad Oblast” under the area of institutional, legal and administrative reform of the overall programme, with the other area being the social consequences of transition. See TACIS National Action Programme for Russian Federation 2003 (Part II).

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was explicitly prioritized: a “Special Programme for the Kaliningrad Oblast” was launched as part of this National Indicative Programme. 154 Out of the total NIP budget of 329 million euros, the Special Programme was allocated 25 million euros to support economic and social development in the oblast. In this Special Programme, the Commission rightly emphasized that notwithstanding the domination of the transit problem in the EU-Kaliningrad political agenda the principal challenge for the region was “to reverse its economic decline and to reduce, instead of widening, the welfare gap with its neighbours”. 155 The Commission offered an analysis of the structure of Kaliningrad’s economy and presented an array of proposals to improve it, which included reforming the economic governance and bettering the business climate; developing human capital and improving the health of Kaliningrad residents, upgrading existing infrastructures for cross-border transport by air and land and the infrastructure of the water and wastewater sector, strengthening the competitiveness of regional businesses, promoting cross-border cooperation, and assisting in combatting organized crime jointly with the surrounding countries. The Special Programme for the Kaliningrad Oblast was envisaged to strengthen and complement the already existing EU instruments relevant for the region (mostly TACIS components such as Cross-Border Cooperation, Cooperation in the Baltic Sea Regional Programme and Northern Dimension Environment Programme). 156 Also, it sought to support the “Russian Federal Task Programme for the Kaliningrad Oblast” and “to develop in synergy with the programmes of other donors, in particular International Financial Organisations”. 157 The Commission’s Special Programme identified a number of key objectives and actions for the implementation of these objectives. In general, the Programme revolved around the following issues: a) the development of the administrative capacity of the region with a special focus on improving the conditions for business development; b) the improvement of the quality of primary and preventive health care services; c) the promotion of the intellectual potential of the region and, specifically, the education of labour market forces and d) the contribution to a positive culture of cross-border cooperation, which presupposed actions towards promoting cross-border cooperation at both regional and local levels and on the 154

National Indicative Programme, Russian Federation, 2004 –2006. In that NIP, it was emphasized that “the EU will continue to support technically and financially Russian efforts to promote the economic development of the Kaliningrad Region and to strengthen cross-border co-operation along the borders of the enlarged EU with Russia, including measures to improve border management and border infrastructure” and that “the development of the Kaliningrad Region is important for the overall development of the Baltic Sea area”, p. 1. 155 Ibid., p. 31. 156 That said, it is important to note that the resources of the whole NIP were made available for the Kaliningrad Oblast. Ibid., p. 32. 157 Ibid., p. 32.

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level of civil society, joint ventures by the business community and NGOs across the border. Indeed, the year 2003 saw an unprecedented handling by the EU of the Kaliningrad Oblast; apart from the fact that an uncommonly individual programme was exclusively dedicated to the oblast, the EU recognized the primacy of the focus on the social and economic development of the region rather than that on merely transit, moreover, it enhanced a large (if not the largest ever) variety of areas to be tackled. However, regardless of the multiplicity of the objectives the actions offered by the EU to achieve them mainly boiled down to the EU providing expertise and advice. Although the NIP that followed does not offer a special scheme for the oblast for the time period 2007 –2010, Kaliningrad again appears to be among its two priority areas. The first area comprises support for the implementation of the EU-Russia Common Spaces, but the second is exclusively directed to the Kaliningrad Oblast (under the domain of “support to selected regions”). 158 Since the amount of assistance to Kaliningrad, as mentioned above, has been considerably reduced, the funding is to be limited, at the apparent expense of support for business, to such matters as a reduction in corruption and organized crime, improved governance for Kaliningrad, improvement of the environment and health issues. The expected results of the assistance to Kaliningrad include an increase in EU and Russian investment and trade in Kaliningrad, improved indicators of environmental management and environmental indicators in general, and the movement of economic and socio-economic indicators “in the right direction”. 159 To this end, the activities envisaged by the Programme should consist of policy advice and institutional / capacity-building support for a) anti-corruption measures and the fight against organized crime; b) good governance, c) environmental problems and d) health policy. The anticipated indicators should show Kaliningrad’s 158 National Indicative Programme, Russian Federation, 2007 –2010. The Programme, the main financial instrument of which is the ENPI and which amounts totally to 120 million euros, is administered by DG RELEX E1. The National Indicative Programme is designed for the period of four years and it results from the Country Strategy Paper which is part of the EU-Russia Cooperation Programme (TACIS / ENPI). See EU-Russia Cooperation Programme (TACIS / ENPI), and Country Strategy Paper 2007 –2013, Russian Federation. The Country Strategy Paper contains the priority directions of the Cooperation Programme. It is elaborated on a political level, wherein the European Commission and representatives of the Russian federal authorities jointly carry out an analysis of the situation, examine perspectives and determine priorities of the Programme. This Country Strategy Paper serves as a basis for the European Commission and the Russian government to decide on the total amount of financial support to solve the prioritised goals. The next step is the launching of the NIP within which the European Commission in turn establishes yearly Action programmes which describe concrete projects. Out of the total sum of 120 million Euros for the realization of the priorities of the Cooperation Programme in the framework of the NIP, 10 – 20 per cent (which equals to 25 million euros) is to be channelled to the Kaliningrad Oblast. The prioritization of the Kaliningrad Oblast also met with the acknowledgement of the Russian federal centre. 159 National Indicative Programme, Russian Federation, 2007 –2010, p. 10.

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lower standing in the Russian ranking of internal corruption, a reduction in the size of the black economy, a drop in criminality rates, and improved water quality and health outcomes in the region. Additionally, it is foreseen that support could be extended to civil society organizations in Kaliningrad as well as to regional authorities. Of importance here is the mention of the possibility of launching a sector-wide programme for Kaliningrad, which has yet to be examined. The EU “Strategy Paper 2007 –2013 for the Russian Federation” expresses, inter alia, the EU’s particular interest in the Kaliningrad Oblast, with its main objective being to ensure the fulfilment of the socio-economic potential of the oblast. 160 On the one hand, the EU recognizes that in the light of the present statistics such indicators as employment, GDP per capita, income, wages and investment “are starting to converge” 161 between the Kaliningrad Oblast and the neighbouring EU Member States and that the oblast enjoys economic growth and an increase in trade with and through Kaliningrad, also due to its status of a Special Economic Zone. On the other hand, the EU underscores that there are still difficulties in doing business in the oblast because of centralization and bureaucracy and that the social indicators and standards of living in Kaliningrad and the surrounding EU Member States, Poland and Lithuania, might diverge again owing to these latter countries’ implementing substantial EU structural funds in 2007. This in turn, according to the prognosis, could further lead to the spread of corruption and organized crime, thus incurring risks of threatening EU investors and regional stability. The EU has brought to the fore potential hazards stemming from the oblast such as the environmental situation (especially water pollution) and possible catastrophic oil spills in the Baltic Sea. All in all, the oblast is still viewed by the EU as a threat to the development of the Baltic region, and, in that respect, a question arises as to whether the decrease in technical assistance to the oblast can really be justified, taking into account the EU’s anticipation of a possible divergence in the socio-economic indicators and hence levels of living standards. bb) The cross-border cooperation component of the EU’s Kaliningrad policy Cross-border cooperation between the North-Western regions of Russia and the bordering states (inter alia with the then EU applicants) was supported by the EU through the TACIS programme since 1996. From 1996 till 2003 diverse projects in the field of cross-border cooperation were implemented through a specialized tool, the TACIS CBC Small Project Facility (SPF), which was established – on a similar model of the PHARE CBC programmes – with 160 161

Country Strategy Paper 2007 – 2013, Russian Federation, p. 3. Ibid., p. 8.

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annual allocations for Russia, 162 Belarus and Ukraine. 163 That Facility offered opportunities for regional and local authorities of the above countries to directly participate in cross-border cooperation and submit their project proposals (with budgets ranging from 50,000 to 200,000 euros) to the EuropeAid of the European Commission with a view to promoting integration and economic development. In 2004, the Commission introduced a new larger mechanism, the “Neighbourhood Project Facility”, 164 which consisted of the Neighbourhood Programmes and signified a new approach to cross-border cooperation with the Neighbourhood Programmes replacing the CBC SPF. 165 The EU designed the Neighbourhood Programmes for partnerships at the national, regional and local levels of the bordering countries of the enlarged EU and its neighbours for the period 2004 –2006 in the framework of the evolving European Neighbourhood Policy. These Programmes were classified into two groups: INTERREG A programmes were meant for bi / trilateral cross-border cooperation projects and INTERREG B programmes were directed towards wider sub-regional and transnational cooperation. The Kaliningrad Oblast was involved in both types of programme, the INTERREG III A (Lithuania-PolandRussia / Kaliningrad) programme, which also included northeastern Poland and southwestern Lithuania, and the INTERREG III B, the Baltic Sea Region Programme, which supported transnational projects within eleven countries situated on the Baltic Sea. 166 Specifically, the former Programme aimed at promoting the creation and development of new border infrastructure and facilitating the existing cooperation across the border, reducing the peripheral character of cross-border areas, increasing living standards as well as overcoming specific development problems, 162 At the time, the national allocation was prescribed for Russia as a whole, whereby the Kaliningrad Oblast did not receive a special allocation. 163 The legal bases of the TACIS CBC programme were the Council Regulation (Euratom, EC) No. 1279/96 of June 25, 1996 concerning the provision of assistance to economic reform and recovery in the New Independent States and Mongolia, OJ L 165/1 (1996) and Council Regulation (EC, Euratom) No. 99/2000 of December 29, 1999 concerning the provision of assistance to the partner States in Eastern Europe and Central Asia, OJ L 12/1 (2000). According to the latter legal act, the objectives of the cross-border cooperation are a) assisting border regions in overcoming their specific developmental problems, b) encouraging the linking of networks on both sides of the border; c) contributing to the transformation process through cooperation with border regions of the MSs and applicant states, and d) preventing transboundary environmental risks and pollution (Article 2). 164 TACIS Cross-Border Cooperation: Strategy Paper and Indicative Programme 2004 – 2006, the European Commission, November 21, 2003, p. 18. 165 COM (2003) 393, p. 8. 166 The databases for both Programmes are available at: http://www.interreg3a.org/ and http://www.bsrinterreg.net, respectively.

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and strengthening socio-economic (including environmental) cohesion of border region. 167 In this respect, the INTERREG III A Programme has two priorities: 1. increasing competitiveness and the growth of productivity by means of investment in cross-border security and physical infrastructure and supporting economic and scientific / technological cooperation; and 2. strengthening regional and local-level cross-border initiatives, contacts and networks in people-to-people activities (sports, culture, tourism), the labour market and training sectors, cultural heritage and science and research in order to ensure sustainability of the development in general. 168 The inclusion of the Kaliningrad Oblast into the INTERREG III A programme was a step towards the EU’s recognition of the particularity of the case of the Kaliningrad Oblast, which required special treatment. 169 This is especially manifest if one recalls that the Special Programme on Kaliningrad of the NIP was likewise launched precisely for the same period of time. The approach of the Neighbourhood Programmes consisted of the formation of joint single projects operating on both sides of the border on the level of regional and local authorities and NGOs, with a single application and selection process, whereby the projects contained both internal and external elements. This effectively signified that the EU made use of different financial instruments in designing a single Neighbourhood Programme. While the activities that were envisaged by the projects selected for implementation within the Member States were financed in the framework of the EU Structural Funds, notably through the INTERREG, which is the EU Structural Funds facility for financing cross-border cooperation (for all the Neighbourhood Programmes 700 million euros in total) and PHARE (90 million euros), the activities within the neighbouring countries were financed through external funds. Notably, the external element was backed by the TACIS CBC programme 2004 –2006, with a total amount of 35 million euros for the Neighbourhood Programmes involving Russian regions 170 complemented by an additional 5 million euros for Kaliningrad from the Special Programme on Kaliningrad of the Russian NIP. 171 As such, whilst the legal basis for the internal element remained the INTERREG regulations, the external 167 Lithuania, Poland and Kaliningrad Region of Russian Federation Neighbourhood Programme, September 2006, p. 16. 168 Ibid., p. 17. 169 See Silke Schielberg, Kaliningrad in its neighbourhood – regional cooperation with Poland and Lithuania, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), p. 142. 170 For the execution of joint projects in the Kaliningrad Oblast, 8 million euros were allotted in the framework of the Lithuania-Poland-Kaliningrad Programme. By the end of 2006, 35 projects were approved (with a budget of 4.8 million euros) and seven started to be implemented. Under the Baltic Sea region, six projects involving Kaliningrad were financed. See Kaliningrad – an example of EU-Russia partnership and co-operation. The European Commission’s Delegation to Russia.

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element was formally grounded on the TACIS’ regulation and implemented by means of the relevant “TACIS CBC Strategy Paper” and “TACIS CBC Indicative Programme 2004 –2006” as well as the related annual Action programmes determining yearly amounts, all of them adopted by the Commission. 172 The primary reason for the complexity of the funding sources was that the Community Structural Funds could not be used outside the EU and the external instruments could not be used internally. Consequently, while on the one hand the Neighbourhood programmes presupposed a single (concurrent) application process for each of the programmes, on the other hand, the entanglement of the EU’s Neighbourhood Programmes lay in the fact that the differentiation of financial sources for the external and internal components of these Programmes resulted in different financing procedures of the application regulations of the funding programmes (PHARE, INTERREG, TACIS). Moreover, bilateral and trilateral projects within the SPF of TACIS and PHARE were not related to the large INTERREG projects, 173 which failed to provide coherence and continuity. Nonetheless, the very fact of introducing the Neighbourhood Programmes reflected a new approach by the EU to cross-border cooperation and appeared to be “an important initial step towards the fully integrated CBC approach foreseen under ENPI”. 174 Although the ENPI Cross-Border Cooperation Programmes have essentially retained the substance of the preceding Neighbourhood Programmes as regards their format and objectives, the fact that the ENPI in general represents an approximation of EU policies and instruments which function identically across borders (externally and internally) suggests a more coherent approach and a better coordination of the programmes. As one of the priorities of both the ENP and the EU-Russia strategic partnership, cross-border cooperation constitutes the substance of one of the two chief types of programmes under the ENPI, the other type being country or multicountry programmes. 175 The Cross-border Cooperation element of the ENPI is fully described in the provisions of the European Parliament and the Council Regulation of October 24, 2006. 176 In that Regulation (Title III), it is foreseen that cross-border cooperation should be implemented “in the framework of multi171

TACIS Cross-Border Cooperation: Strategy Paper and Indicative Programme 2004 – 2006, p. 20. 172 COM (2003) 393, p. 10. 173 See Silke Schielberg, p. 736. 174 European Neighbourhood and Partnership Instrument Cross-Border Cooperation, Strategy Paper 2007 – 2013, Indicative Programme 2007 –2010, p. 12. 175 As such, in case of Russia, the ENPI includes both a national allocation for Russia and regional and cross-border components. 176 Regulation No. 1638/2006 of the European Parliament and of the Council laying down general provisions establishing a new European Neighbourhood and Partnership Instrument, OJ L 310/1 (2006).

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annual programmes covering cooperation for a border or a group of borders and comprising multi-annual measures which pursue a consistent set of priorities and which may be implemented with the support of Community assistance” (Article 9, point 1), specifically through joint operational programmes ideally based on strategy papers. This aspect is highlighted in full detail in Article 7 (3) of the Regulation, according to which the list of joint operational programmes should be based on strategy papers to be adopted in compliance with the principles and procedures established in the Regulations for the time period 2007 – 2013 and the annual allocations among the territorial units eligible to participate in the programmes. To this end, the EU adopted both the “ENPI Cross-Border Cooperation Strategy Paper 2007 –2013”, which sketches the principles and objectives of the EU action in the field, and the “Indicative Programme 2007 – 2010”, which defines the individual CBC programmes and identifies their expected results, indicators and possible risks. 177 The ENPI Strategy Paper formulates the chief objectives of cross-border cooperation as follows: a) promoting economic and social development in regions on both sides of common borders, b) joint responses to common challenges in such areas as the environment, public health and the prevention of and fight against organized crime, c) ensuring efficient and secure borders and d) encouraging people-to-people contacts. 178 All together there are fifteen ENPI-CBC programmes, including land-border, sea crossings and sea basin programmes established for the time period 2007 –2010 with an overall allocation amounting to 583.28 million euros. While the Russian Federation in general takes part in five of the land-border programmes (mostly involving the North-Western regions of Russia), 179 the Kaliningrad Oblast is part of two CBC programmes: the “Lithuania-Poland-Russia / Kaliningrad Programme” and “the Baltic Sea region Programme”, which clearly represent a logical continuation of the EU’s Neighbourhood Programmes. 180 The “Lithuania-Poland-Russia” programme encompasses several regions of Lithuania, and Poland and the Kaliningrad Oblast represents the only region of Russia in this scheme: the additional title of the programme is “the Kaliningrad programme”. 181 The budget of the programme until 2010 constitutes 176.13 million euros. 182 The Programme aims at developing “a zone of shared stability, security and prosperity, involving a significant degree of economic social and 177 European Neighbourhood and Partnership Instrument Cross-Border Cooperation, Strategy Paper 2007 – 2013, Indicative Programme 2007 –2010. 178 Ibid., p. 5. 179 While the European Commission’s allocation to the seven programs under ENPICBC 2007 – 2013 amounts to 307,488 million euros, Russia’s co-financing share constitutes 122 million euros in 2008 – 2013. See Joint Statement of the EU-Russia Summit on cross-border cooperation, Khanty-Mansiysk EU-Russia summit, June 27, 2008. 180 Cross-border Cooperation Programmes, 2007 – 2013.

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political cooperation”. 183 It should be implemented by means of joint projects / efforts which should engage local and regional authorities, SME associations, NGOs and the general public. The Programme intends to “contribute to building mutual trust and progressive regional economic integration in line with principles of subsidiary and sustainability”, and “evolve into a cross-border region of mutual understanding between the neighbours working together to develop and maintain the most important development assets of the area, such as natural and cultural heritage and human capital (in particular entrepreneurship)”. 184 In accordance with the general objectives of the CBC described above, the joint projects in the framework of the Programme should help: a) pursue social, economic and spatial development, b) tackle common problems and challenges and c) contribute to people-to-people cooperation. Specifically, the first objective foresees measures in the fields of tourism development; the development of human potential by improving social conditions, governance and educational opportunities; the advance of competitiveness of SMEs and development of the labour market as well as the joint spatial and socio-economic planning. Meanwhile, the second objective presupposes steps oriented towards a sustainable use of the environment and improving accessibility, consisting of proceedings on the betterment of border-crossing points and local transport infrastructure. The Programme on the Baltic Sea region belongs to the group of sea-basin programmes and includes such EU Member States as Denmark, Estonia, Finland, several northern States (Bundesländer) of Germany including Berlin, Brandenburg, Bremen, Hamburg, Mecklenburg-Vorpommern, Schleswig-Holstein and Niedersachsen, as well as Latvia, Lithuania, Poland and Sweden, Belarus and a number of subjects of the Russian Federation including the Kaliningrad Oblast. Although the objectives of the Programme sound particularly specific and more strategic since they exclusively revolve around the Baltic Sea region, these objectives are similar to those identified by the previous Programme and the ENPI Strategy Paper in general. Notably, under the heading of tackling common challenges and problems there are the following priorities: external and internal accessibility of the Baltic Sea Region (promotion of transport and ICT measures) and the management of the Baltic Sea as a “common resource”, 185 which includes questions of water management, sustainable use of marine resources and others. In addition, the Programme prioritizes such actions as advancing 181 The operational programme for this scheme was adopted in September 2008. See Lithuania-Poland-Russia Cross-Border Co-operation Programme 2007 –2013. Operational Programme, September 26, 2008. 182 European Neighbourhood Policy in action: launch of cross-border co-operation programmes with Russia, Brussels, November 18, 2009. 183 Ibid., p. 5. 184 Ibid. 185 Ibid., p. 6.

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innovations within the region and support to regional and city development with a particular focus on strengthening the attractiveness of metropolitan regions, cities and urban areas “as engines of economic development”. 186 cc) The Northern Dimension policy Established on the initiative of the Finnish Presidency, 187 the Northern Dimension policy marked the EU turning its face closer to the Kaliningrad problem as having particular importance for cross-border relations with the EU’s Northern regions. While the ND policy ranks among EU’s external policies, besides the EU its major stakeholders are Iceland, Norway and Russia. Overall, its goal was formulated as political, social, economic and environmental cooperation in Northern Europe, a region of special importance for the Union owing to its great natural resources, human and economic potential, and sensitive ecological situation. Direct geographical proximity to Russia has increased after EU Eastern enlargement. 188 The rationale behind the concept of the Northern Dimension was to strengthen the Union’s foreign policy domain and to build up a form of positive interdependence between the EU, its direct neighbour Russia, and other states in the Baltic region that would contribute to regional security and stability. 189 This, it was believed, could be attained through achieving “synergies and coherence” 190 in the existing EU policies and actions in the region. From the outset, the policy was implemented through the contractual arrangements that existed between the EU and the states involved – through the PCA in case of Russia, Europe Agreements with the Baltic States of the former Soviet Union, the then-EU can186

Ibid. The Northern Dimension initiative was given an impetus by Finnish Prime Minister Paavo Lipponen in September 1997. As an important topic for EU policy, the ND was first recognized at the Luxembourg European Council in December 1997. A year later a Commission Communication “A Northern Dimension for the Policies of the Union” was approved at the Vienna European Council (December 1998). COM (1998) 589. The Finnish Presidency held a Ministerial Conference on the Northern Dimension in November 1999. Subsequently the Helsinki European Council in December 1999 suggested that the Commission prepare a ND Action Plan, which was adopted a year later. A Second ND Action Plan covered the time period 2004 –06. In November 2006 in Hesinki, the first ND Summit took place, which revised the ND policy and adopted the new ND Political Declaration and ND Policy Framework Document. 188 In geographical terms, the Northern Dimension covers an area spinning from the Arctic and Sub-Arctic to the southern shores of the Baltic Sea and from North-West Russia in the east to Iceland and Greenland in the west, with North-West Russia being the largest territory covered by the policy. 189 COM (1998) 589, p. 2. 190 Ibid. 187

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didates, and EEA agreements with Norway and Iceland – and financed through the EU’s structural assistance instruments, chiefly the PHARE and the TACIS programmes. 191 Complementarily, several regional organizations participate actively in the process of implementing the Northern Dimension policy: the Council of the Baltic Sea States, the Barents Euro Arctic Council, the Arctic Council and the Nordic Council of Ministers. The list of participants active in support of and contribution to the operation of the policy projects also includes international financial institutions such as the European Bank for Reconstruction and Development, the European Development Bank and the Nordic Investment Bank, European Union institutions and the European Commission as well as various regional and sub-regional organisations in the Baltic and Barents regions, regional and local authorities, NGOs and other civil society organizations, universities and research centres. All of these actors may also provide funding for the ND projects. The prominence of the (recently updated) Northern Dimension policy lies in the fact that although it is essentially an EU external policy, the other three principal actors have an equal say alongside the European Commission in the process of decision-making as well as in implementing the policy and they share the principle of co-financing, which arguably reflects principles of equality, plurality and flexibility. 192 In this way, the policy shows potential for providing the EU with a qualitatively innovative model of managing and conducting its external relations, thus turning into a policy of inclusion rather than exclusion. 193 In addition, the Northern Dimension represents a horizontal, multipillar concept, which does not differentiate between the EU’s external and internal policies, 194 with the chief priority cooperation sectors currently being: 1. economic cooperation; 2. freedom, security and justice; 3. external security (civilian crisis management), 4. research, education and culture; 5. the envi191 The Northern Dimension policy was considerably revised and updated in light of several important events such as the EU enlargement of 2004 and the adoption of the road maps for the EU-Russia Common Spaces. The changes made went into operation from the beginning of 2007. See Guidelines for the development of a political declaration and a policy framework document for the Northern Dimension from 2007 adopted at the Ministerial Meeting in Brussels, November 21, 2005. Apart from this, a relevant innovation was the fact that the establishment of the ENPI which came into effect from January 2007 turned into a central source of EU financing of the ND activities with a particular focus on cross-border cooperation. 192 See Mikhail Nikolaev, New Northern Dimension, in: International Affairs: A Russian Journal of World Politics, Diplomacy and International Relations, 2007, Vol. 53, Issue 3, p. 83. 193 See Sander Huisman, p. 18. 194 For instance, there is a Northern Dimension of European Energy Policy. See COM (1999) 548.

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ronment, nuclear safety and natural resources and eventually 6. social welfare and health. Cross-border cooperation has been suggested as a further “crosscutting theme producing added value at the sub-regional and trans-national level, enhancing regional development, the involvement of civil society and people-to-people contacts”. 195 Importantly, in case of Russia the ND policy is thought of as a “regional expression” 196 of the EU-Russia Common Spaces whereby both EU and Russia seek to “make the Northern Dimension a crosscutting topic and a tool where appropriate for the implementation of the road maps for the Common Spaces with full participation of Iceland and Norway in matters relevant to Northern Dimension”. 197 Notably, the sector division of the ND substantially corresponds to the cooperation areas envisaged by EU-Russia Common Spaces. The other noteworthy feature of the policy rests on the fact that projects launched under the ND policy should be closely correlated with and responsive to existing national development programs. On the whole, the policy is essentially designed for serving as a framework or an umbrella for policy dialogue and diverse concrete (result-oriented) projects. The most favoured models of the implementation of the Northern Dimension policy are these of partnerships. To date, there are four partnerships within the ND framework: the Northern Dimension Environmental Partnership (NDEP), the Northern Dimension Partnership in Health and Social Wellbeing (NDPHS), the Northern Dimension Partnership on Culture (NDPC) and the Northern Dimension Partnership on Transport and Logistics (NDPTL). 198 In addition, an information tool has been created within the ND, the Northern Dimension Information System, which is available at the European Commission’s “Relex” website and accumulates information provided by ND partners on projects implemented within the policy areas identified by the ND policy. 199 Importantly, the information provided within this system specifically on Kaliningrad-related projects (2005 and 2006 editions) is classified according to priority areas, thus showing a sector-based approach. 200 In the subsequent edition of 2007, the facts on projects concerning the Kaliningrad Oblast can be found within priority areas under the headings of the ND partners who present these projects (including the Commission, Finland, Lithuania, 195

Northern Dimension Policy Framework Document, p. 4. Ibid., p. 3. 197 Ibid., pp. 3 – 4. 198 The NDPC and NDPTL are new initiatives which were either established or started to work in late 2009. 199 The information should be collected exclusively on projects done in the NorthWest of Russia by ND partners since projects that are executed within the EU, Norway, Iceland and Greenland are not covered by the Northern Dimension Information System. 200 This information is available at: http://ec.europa.eu/external_relations/north_dim /nis/2005/kaliningrad/index_action.htm. 196

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Poland and Russia), apparently indicating a particular emphasis on the individual involvement of all the ND partners. In spite of the ND’s broad geographical coverage, its priority areas are the Baltic Sea, the Kaliningrad Oblast “with its opportunities for development given its particular geographic situation”, 201 and Arctic and Sub-arctic areas, including the Barents Region. The Kaliningrad Oblast has been given particular importance in the framework of the ND and has long benefited from projects executed under the ND-umbrella. Although the first ND Action Plan held Kaliningrad as one of the subjects of cooperation, 202 its tone remained rather “cautious”. 203 Specifically, the document underscored that the Kaliningrad Oblast embodied “a challenge for enhanced regional cooperation and development” and that: Kaliningrad’s capacity to take advantage of the opportunities presented by enlargement would require significant internal adjustment e.g. in the field of customs and border controls, fight against organised crime and corruption, structural reform, public administration and human resources. 204

However, the paper failed to propose concrete action for the conduct of cooperation on Kaliningrad, merely suggesting that an EU study on that aspect could be considered. A plausible explanation for this reservation may be the general political circumstances around the issue of Kaliningrad in which this Action Plan was developed. 205 On the one hand, caution was principally attributed to the Commission’s line, which desired to avoid politicization of the Kaliningrad matter and refrain from closer engagement with Russia due to the recent EU-Russia crisis over the war in Chechnya. On top of that, the final stage of the preparation of the Action Plan – as well its overall implementation – took place within the Commission and the role of Russia remained marginalized in the whole Northern Dimension policy. On the other hand, a certain degree of uncertainty about Russian politics was caused by the administrative reforms started by President Putin in Russia. In contrast, the subsequent (Second) ND Action Plan 2004 – 2006 appeared to be more emphatic with respect to the Kaliningrad Oblast, and, as was noted above, this happened together along the lines of overall prioritization of the Kaliningrad theme by the EU; this concerned the launching of the Special 201

Northern Dimension Policy Framework Document, p. 1. Action Plan for the Northern Dimension with external and cross-border policies of the European Union 2000 – 2003, Council of the European Union, Brussels, June 14, 2000. 203 Pertti Joenniemi / Alexander Sergounin, Russia and the European Union’s Northern Dimension. Encounter or clash of civilisations? Nizhny Novgorod Linguistic University Press, 2003, p. 90. 204 Action Plan for the Northern Dimension with external and cross-border policies of the European Union 2000 – 2003, p. 38. 205 See Pertti Joenniemi / Alexander Sergounin, p. 90. 202

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Programme on Kaliningrad as part of the Russian National Indicative Plan 2004 – 2006 and the direct involvement of the Kaliningrad Oblast into several EU Neighbourhood Programmes 2004 –2006. 206 While the ND Action Plan at issue indicated five broad priority sectors such as economy, business and infrastructure, human resources, education, scientific research and health, the environment, nuclear safety and natural resources, cross-border cooperation and regional development as well as justice and home affairs, the Kaliningrad Oblast and the Arctic region – essentially specific regions with specific needs – were identified as “cross-cutting issues” 207 that required to be “mainstreamed within each key priority of the Action Plan”. 208 In this way, in comparison with the previous Action Plan it became clear that Kaliningrad grew in importance once having been endowed with opportunities to benefit from all five priority sectors that have particular importance for the oblast. Specifically for Kaliningrad, the activities in the economy sector presupposed a special focus on setting up a framework for trade and investment, assisting in administrative support, encouraging business-to-business links and SME development, and ensuring smooth border management, as well as ensuring security of the energy supply and the development of regional transport networks. In the area of human resource development, steps on vocational and business education, education exchanges and overall joint projects within the field of education, research, culture and youth and cooperation on combating threats to public health were foreseen. Furthermore, environmental cooperation in the oblast was to consist of measures contributing to the sustainable development of the region and tackling such environmental problems in the oblast as water and soil pollution, urban waste and chemicals. It was believed that cross-border cooperation involving Kaliningrad and the neighbouring EU Member States would carry “particular importance in the economic, social and environmental fields, as well as in promoting people-to-people contacts at the local level”. 209 Eventually, in the area of justice and home affairs, cooperation on Kaliningrad was to entail joint efforts to combat organized crime, smuggling, illegal migration and trafficking in human beings which would benefit all parties involved by contributing to mutual security and respect for the law. Aside from highlighting the key priority areas of the ND for 2004 to 2006 and objectives for each of them, the Action Plan also outlined concrete activities in each of the priority fields (including those in cooperation on Kaliningrad). From the very outset of its formation the Northern Dimension policy constantly came under criticism. 210 It was generally accepted that the policy had the 206 207 208 209

COM (2003) 343. Ibid., p. 13. Ibid. Ibid., p. 14.

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potential to shape a new form of EU external relations (especially in the field of EU-Russia relations) and to reinforce cooperation in the region, but many aspects were still criticized. First, being a cross-pillar policy the ND policy encountered problems of internal coherence and coordination, including the task of combining the TACIS and INTERREG programmes since the ND was not allocated its own budget. 211 Besides, the ND involved a variety of actors such as regional organizations (CBSS, NCM, BEAC, NC and others) which were also active in the region, and this signified diverse problems concerning overlaps and gaps in coordination, duplication of structures, an unclear division of labour and tasks and others. 212 Overall, the role of partner countries and sub-regional actors proved to be complicated; the ND’s successful implementation required a multi-level approach in which external actors could also play a role but, for instance, the role of Russia in decision-making long remained marginal and the decision-making in general lacked a coherent approach to the ND. 213 As some commentators noted, the initial innovation of involving outsiders and giving them a voice in the shaping of an EU policy was effectively sidelined by the European Commission, thus turning the ND into a policy of “managing and reinscribing borders, not transcending them through creating new regional spaces”. 214 As regards Kaliningrad, the ND in general was recognized as ill-equipped because it failed to provide “a concept and means of implementation of sustainable development and structural reform” 215 in the oblast. The emphasis on border issues isolated the problem of a continuous economic and social landscape in the Kaliningrad Oblast. On the one hand, the European Commission has made moves to improve the policy through closer involvement of the ND stakeholders – also through co-financing mechanisms – and in general it makes efforts to enhance coherence and inter-operability of its financing instruments as well as to avoid duplication and overlap through the established information system instrument. Voices are increasingly heard (from the Russian side at least) that the ND should be elevated 210 The list of criticisms concerning the concept of the ND policy as well as its initial poor results brought by subjective and objective factors (such as the complexities of EU-Russia relations, internal politics of Russia and the correlated Russian regions’ lack of external action capacity and others) can hardly be exhaustive and it will not be highlighted in this paper in full detail. 211 See Hiski Haukkala, The Northern Dimension of EU Foreign Policy, in: Oksana Antonenko and Kathryn Pinnick, (eds.), p. 38. 212 See Tobias Etzold, Regional organizations in the Northern Dimension area and Kaliningrad, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), p. 147. 213 See Hiski Haukkala, The Northern Dimension of EU Foreign Policy, pp. 38 –39. 214 Christopher S. Browning, p. 562. 215 Igor Leshukov, Can the Northern Dimension Break the Vicious Circle of Russia-EU Relations, in: Hanna Ojanen (ed.), The Northern Dimension: Fuel for the EU? Band 12, Helsinki / Berlin, 2001, p. 130.

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to a policy with “its own job, separate projects and its own sources of finance, or its own niche in the system of international relations” 216 and, what’s more, to “move over from separate projects and declarations to developing and implementing a joint strategy of developing Europe’s north as a single whole”. 217 On the other hand, although the Kaliningrad Oblast remains to be prioritized and, importantly, it acts as a cross-cutting area, no comprehensive concept of its overall social and economic development has yet been drawn up in the framework of the Northern Dimension Policy. dd) Summary The EU formulates its policy to the Kaliningrad Oblast within its broader policy towards Russia as part of its external relations and this is reflected in its programming documents on Russia: the Country Strategy Papers and the National Indicative programmes. In several occasions, the region acquired a particular focus and treatment, related to the establishment of the Special Programme on Kaliningrad as part of the National Indicative Programme 2004 – 2006 and the prioritization of Kaliningrad in the subsequent National Indicative Programme 2007 – 2010. Aside from this, the Kaliningrad Oblast has been an actor of cross-border cooperation between the EU and Russia in the framework of the European Neighbourhood Policy. Firstly, it was entitled to participate in various projects of two of the EU’s Neighbourhood Programmes financed through the TACIS CBC programme 2004 –2006 and the Russian national programme (an allocation from the Special Programme on Kaliningrad), Lithuania-Poland-Kaliningrad Programme / Intereg III A and the Baltic Sea region Programme / INTEREG III B, both complementing general EU-Russia bilateral relations with a particular focus on cooperation across the border. Likewise, with the ENPI having being in operation from 2007, the Kaliningrad Oblast is enabled to participate in the consecutive ENPI Cross-border Cooperation Programmes 2007 – 2013, the Lithuania-Poland-Russia (Kaliningrad Programme) and the Baltic Sea Region Programme, which generally focus on education and culture, environment, business and SMEs. Before the introduction of the ENPI, the coordination between different EU instruments (TACIS CBC, TACIS Russian national programme, INTERREG, PHARE) was critical, but the ENPI brought more coherence since it covers both a national allocation for Russia and cross-border components. Eventually, the EU began to approach the Kaliningrad Oblast in the framework of its foreign policy with a specific regional focus, the Northern Dimension 216 217

Mikhail Nikolaev, p. 86. Ibid., p. 89.

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policy, within which Kaliningrad has been continuously prioritized. The ND policy essentially serves as an umbrella for various projects designed and carried out by the European Commission in cooperation with the other stakeholders of the policy as well as diverse regional organizations and regional actors such as regional and local authorities, civil society actors and others. Projects are executed within the specified policy sectors, currently ranging from the economic cooperation, justice and home affairs, external security, research, education and cultures, environmental issues to social welfare and health, with cross-border cooperation relevant in these areas. Yet, giving Kaliningrad a top geographical priority the policy fails to offer a comprehensive concept for the oblast’s social and economic development. b) Policy dimensions aa) The political and human dimension (1) Democracy and human rights Supporting civil society and contributing to the reinforcement of democracy and human rights have not ranked explicitly among the priority sectors of the EU policy towards Kaliningrad in the programming documents as reviewed earlier. However, these issues have been raised in that policy in different ways. To start with, in its Communication “The EU and Kaliningrad” of 2001, the European Commission indicated the need for strengthening the rule of law as well as the implementation of principles of good governance – both important for the overall development and reform of the Kaliningrad Oblast and its efficient involvement in the Baltic Sea region – by means of the promotion of institution building and civil society development in the oblast. 218 The principal method of EU assistance to this area, as the document emphasizes, consisted of the EU “encouraging Kaliningrad’s participation in EU projects for public administration and judicial reform, and participation of local civil servants in training programmes”. 219 In addition, the Commission made mention of potential aid to regional and local budget management and the management of municipal services. The public local awareness of EU assistance opportunities was to be fostered through the informational activities of the TACIS Local Support Office which was established in Kaliningrad in December 2000. This concerned the possibilities for various civil society actors, including training institutions, NGOs, trade unions, media, professional organizations, enterprises, municipalities and courts of Kaliningrad to build up partnerships with analogous EU organizations operating in the same field, apply for partnership projects and implement people-to-people activities. 218 219

COM (2001) 26, p. 7. Ibid.

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However, given the sensitivity of the issues of democracy and human rights in the Russian context one could hardly assume and expect that the EU would behave particularly actively here. Returning to the previous discussion on the general political and legal frameworks of EU-Russia relations, one should remember the reluctance of the Russian government to include the normative issues of democracy and human rights in the basic bilateral documents (especially in the EU-Russia Common Spaces) as a result of the desire to avoid the correlated references to conditionality in EU-Russia relations. Although the Communication on Kaliningrad touched upon certain components of the problem of democracy, this was rather generally in line with the EU’s (unilateral) Strategy on Russia of 1999, which identified the strengthening of civil society and fostering democracy in Russia among its key objectives. What is more, the problem of civil society alone and the internal regulation of the related foreign assistance and activities of foreign foundations and NGOs in Russia in this sector – aimed at promoting democracy and civil society in Russia – have been particularly politically sensitive in Russia lately, also due to the involvement of some of these foundations in the coloured revolutions in the post-Soviet space. This can be paired with the centralization measures undertaken by the Russian government and specific centre-region relations. If one takes into account the extraordinary geographical situation of Kaliningrad, its physical detachment from the main part of Russia and particular exposure to external influences, one can sense the possible fears from the side of Russia that the financial assistance to the Kaliningrad Oblast’s civil society sector from abroad may encourage Westernizing separatist tendencies in the region or suggest, to a certain extent, interference in internal politics, which would displease Russia and hence complicate EU-Russia relations. Arguably, this point explains the particularly careful and weighted position of the EU towards engagement on this issue. That said, it should be also kept in mind that post-Soviet Russia has long been characterized by relatively weak traditions of civil society initiatives. 220 In Kaliningrad, civil society groups remain partly under control of regional public authorities, and they are still underdeveloped and financially dependent. 221 All this notwithstanding, within the general framework of EU-Russia relations, a bilateral dialogue on human rights has taken on a remarkably formalized character since November 2004, when the two sides inaugurated regular (every six months) consultations on human rights, whereby the EU’s engagement with 220 See Gregorz Gromadski, Encouraging Civil Society and Higher Education Development in the Kaliningrad Obalst’, in: Hanne-Margret Birckenbach and Christian Wellmann (eds.), pp. 223 – 227. 221 See Vyacheslav Dykhanov, European principles in a Russian context: the transformation of social policy?, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), p. 187.

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the support of human rights in Russia has evolved through the participation of its observation missions at certain trials, the organization of conferences and seminars and funding various projects by human rights organizations. In view of this, it would be inappropriate to speak about the EU’s estrangement from this topic. A noticeably intricate period of EU-Russia negotiations on Kaliningrad transit in the early 2000s best illustrates the EU’s reserved posture. Presenting an overview of the developments of EU assistance to a number of fields of “considerable importance” 222 in Kaliningrad, an EU report of 2002 fell short of referring to the actual support of democracy and civil society in the oblast or any suggestions in that direction among the important fields. While the Special Programme on Kaliningrad for 2004 –2006 set, inter alia, such priorities as the development of the administrative capacity of the region and the promotion of cross-border cooperation (in which a strong civil society would play an active role in the public life of the oblast), it similarly did not refer explicitly to EU action in the sphere of human rights and democracy. Further, in the recent National Indicative Programme for Russia 2007 – 2010, in the section dedicated to the Kaliningrad Oblast as a priority area of the NIP, although support for civil society in general was not incorporated into the principal objectives of the national allocation, it was mentioned that “support could be extended to civil society actors active in Kaliningrad”. 223 In the meantime, several of the priorities identified in this NIP comprised activities pertaining to the fight against organized crime and corruption and aimed at improving the governance of Kaliningrad through policy advice and institutional / capacity building support for anti-corruption measures and good governance. This focus of the EU policy towards the Kaliningrad Oblast derived from the EU’s belief that illegal activities in the Kaliningrad Oblast threatened to affect neighbouring EU Member States. 224 The EU stressed that for the Kaliningrad Oblast to be able to tackle these problems efforts the federal authorities needed to take actions such as enacting and enforcing related legislation and international conventions. It was also suggested that the Task Force on Organised Crime in the Baltic Sea Region (TF-OC) could contribute to the matter and that the cooperation on the local level could be developed in the area of fighting car crime and other problems. In the Commission’s opinion, such cooperation could also concern improving the independence of the local judiciary and thus take in such forms of cooperation as training and twinning programmes targeting 222 EU-Russia Co-operation on Kaliningrad: 2002 and beyond, The TACIS Information and Communications Programme, July 2002, p. 3. 223 National Indicative Programme, Russian Federation, 2007 –2010, p. 11. 224 COM (2001) 26, p. 7.

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magistrates. The anti-crime agenda was also linked to efforts to develop effective border / customs control measures. Small projects pertaining to the development of civil society in Kaliningrad have been supported and financed through such EU grant programmes as the TACIS / ENPI Institutional Building and Partnership Programme (IBPP) 225 and the European Initiative for Democracy and Human Rights (EIDHR). 226 The IBPP provides support to civil society and local initiatives and aims at strengthening the capacity of NGOs as well as local and regional authorities which are engaged in the social sector and in sectors related to civil society and business partnership. Overall, the European Commission has been providing assistance through the IBPP in Russia since 2001. Projects under the IBPP are selected following a call for proposals by the Delegation of the European Commission to Russia provided they are based on a joint international partnership between an organization in Russia and an organization from an EU country working in the same field of activity. In 2007, in the framework of this Programme in Russia, projects related to the problems of youth, women and children were prioritized. Thus, the Kaliningrad Oblast became a target group for a project titled “Kaliningrad Alliance for Women’s Empowerment”, which had a total budget of almost 300,000 euros and aimed at: spreading a culture of gender equality by providing local civil society with a cultural framework able to detect and understand evident and hidden gender discrimination, and with operational tools for implementing equal opportunities for women and men in all domain of the society. 227

The project foresaw actions that would enlarge opportunities and rights of women in the oblast, including the right to live a life free from violence socioeconomic marginality, to professional success and participation in the public life of the community. The EIDHR in its turn – launched in 1994 at the initiative of the European Parliament – has been the principal EU tool for assistance in the mainstreaming of democracy, human rights and civil society in third countries, including Russia. The legal basis of this self-standing financing instrument for the promotion of democracy and human rights worldwide is the European Parliament’s and Council’s Regulation of December 20, 2006, 228 which in turn served as a basis 225 With the establishment of the ENPI, the Institution Building Partnership Programme has remained to be part of the ENPI. 226 Kaliningrad – an example of EU-Russia partnership and co-operation. 227 The Civil Society Grants Facility of the EU-Russia Cooperation Programme, The Institution Building Partnership Programme: Civil Society and Local Initiatives, Project Summaries, Call for proposals 2007, Russian Federation, Delegation of the European Commission to Russia, p. 8.

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for the adoption of a EIDHR Strategy Paper for the time period 2007 to 2010. 229 The funding for this instrument covers activities related to issues of promoting human rights and democratization, reinforcing the role of civil society and contributing to conflict prevention and peace reconciliation of group interests, which are handled on the level of partnerships with NGOs and international organizations. 230 The funding is envisaged directly for projects and not for organizations. 231 Notably, the Kaliningrad Oblast was one of the target regions of Russia that participated in such projects supported by the EIDHR in the framework of its micro-projects in Russia in 2007: a) “Organization of public educational campaigns to increase citizens’ involvement in ‘participatory democracy;’” b) “From ignorance to influence: citizens’ jury campaign in support of the freedom of association”, and c) “Human rights teaching project”. 232 In addition, concrete projects are supported in the framework of the EU-Russia Cooperation Programme / ENPI. Thus, in the period of February 2006 to October 2007 a project called “Strengthening of civil society as a key for women’s empowerment: Integrated project to fight domestic violence and promote women’s self employment in Kaliningrad” was implemented, with a total budget of 160,000 euros. 233 This project intended to provide assistance to women who have suffered from domestic violence and in this way it sought “to replace the often paternalistic approach to the provision of social assistance with a concept of participation and empowerment”. 234 In particular, in order to be able to overcome personal crises women were offered opportunities to engage in self-employment and establish their own businesses. As mentioned above, the Kaliningrad Oblast has been involved in several EU Neighbourhood Programmes over the period from 2004 to 2006 and, cur228 Regulation No. 1889/2006 of the European Parliament and of the Council of December 20, 2006 on establishing a financing instrument for the promotion of democracy and human rights worldwide. OJ L 386/1 (2006). The objective of this instrument is the providing by the EU of “assistance, within the framework of the Community’s policy on development cooperation, and economic, financial and technical cooperation with third countries, consistent with the European Union’s foreign policy as a whole, contributing to the development and consolidation of democracy and the rule of law, and of respect for all human rights and fundamental freedoms”. Title 1, Article 1. 229 EIDHR Strategy Paper 2007 – 2010, DG RELEX / B/1 JVK 70618. 230 The principal forms of financial support in the framework of EIDHR comprise projects and programmes, grants to projects set up by international and regional intergovernmental organizations, and others. 231 For more information on the functioning of the EIDHP programme in Russia in general, see The EU and Human Rights in Russia. 232 See European Initiative for Democracy and Human Rights, Micro-projects 2007, the European Commission’s Delegation. 233 Kaliningrad – an example of EU-Russia partnership and co-operation. 234 Ibid.

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rently, in ENPI Cross-Border Cooperation programmes 2007 – 2013, which aim at supporting and strengthening cross-border cooperation. It is noteworthy that cross-border cooperation per se effectively contributes to the development of civil society when it is carried out from the bottom-up level of regional and local authorities and various civil society groups (associations, federations, business groups and other non-governmental organizations). Thus, the majority of the projects supported in the framework of the Lithuania-Poland-Russia / Kaliningrad Oblast Neighbourhood Programme were executed at this level with a view to enhancing and stimulating cooperation among the civil societies of these neighbours by means of financial assistance to local societies’ joint initiatives in different areas, including education, culture, tourism and others (priority 2, measure 1.1). On the whole, examining the EU strategy of including Russian regions in general and the Kaliningrad Oblast in particular in small-scale cooperation based on the implementation of joint projects through these instruments and programmes it is possible to summarize that this strategy goes beyond merely the provision of financial means for the development of civil society in the oblast. Rather, it promotes cooperation among civil society and local authorities in the Kaliningrad Oblast and those in the EU Member States neighbouring the oblast because it presupposes the building of partnerships which are grounded on the exchange of experience, know-how and expertise through the training and workshops envisaged by the projects. To sum up, it proves to be difficult to draw a line between the subject fields of the analysis of the EU policy towards the Kaliningrad Oblast because they seem to have rather a “cross-pillar” character. When focussing on EU support to foster democracy and respect for human rights in the region, in particular the EU’s activities in the areas of combating crime and corruption, supporting judicial reform and good governance, respect for democracy and the rule of law, as well as reinforcing the management capacities of organizations working in civil society sectors, one should keep in mind the following fact. While these issues have been examined in this paper under the topic of the political and human aspect, these issues make up a list of the activities intended for the implementation of the EU-Russia Common Spaces under the heading of “Common Space of Freedom, Security and Justice” 235 in the EU wider programming policy papers on Russia. Notably, projects to be financed through the EIDHR have been explicitly selected for having relevance to the Common Space of Freedom, Security and Justice, one of the objectives of which is the promotion of democracy and human rights in Russia. 236 Hence, this aspect is not only related to the political and human dimension, but also to that of justice and home affairs, which will be scrutinized below. In addition, such issues as training the unemployed, vocational training and other types of training that are touched upon in the next chapter on educa235 236

National Indicative Programme, Russian Federation, 2007 –2010, p. 15. Country Strategy Paper 2007 – 2013, Russian Federation, p. 28.

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tion, training, culture and research could be also likewise treated as support for civil society. Regarding the support of the fostering of democracy and human rights in the Kaliningrad Oblast, the EU has been rather cautious in its policy programming documents. This is explained by the sensitivity of these issues in the federal context in general and in the case of the Kaliningrad Oblast – essentially a detached territory of the Russian Federation – in particular. Yet, it is also inappropriate to speak of an estrangement of the EU in this sector, particularly as the EU’s involvement in support of democracy and human rights in the broader Russian context has been evolving. The EU supports civil society and the development of democracy in the region through a number of the Commission’s instruments and programmes: 1) the separate thematic instrument European Initiative for Democracy and Human Rights and 2) the TACIS / ENPI in general and, notably, the TACIS / ENPI Institutional Building and Partnership Programme, the EU’s Neighbourhood Programmes and the ENPI Cross-Border Cooperation programmes in particular. Importantly, the recently established ENPI has proved to be a useful mechanism for encouraging cross-border cooperation and cooperation between local and regional actors and civil society. The EU’s support for this sector is provided on the basis of small projects based on joint partnerships between NGOs and local authorities across the borders and in the shape of policy advice and institutional / capacity building (training) with a view to supporting anti-corruption measures and improving good governance in the region. This support is not limited to merely financial aid, but rather aims at equipping Kaliningrad actors with knowledge and expertise of the EU in general and the region’s counterparts among the EU Member States in particular. (2) Education and training, culture and research During the initial phase (1994 –1999) of TACIS activities in the Kaliningrad Oblast, human resources development, institution building and enterprise restructuring were the foci. As a result of these activities, a Business Management department was established at the Economics Faculty of Kaliningrad State University. 237 In 2002, the EU referred to matters of education and training only under the label of “other elements” of EU-Russia cooperation on Kaliningrad, whereas such issues as border and customs cooperation, common regional challenges / security, the environment and health as well as the regional economic development including such issues as energy supplies and transport and infrastructure were enumerated in separate items of that cooperation. 238 In contrast, the Special Programme for the Kaliningrad Region as part of the National Indicative Pro237

COM (2001) 26, Annex II, p. 17.

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gramme for the Russian Federation for the period 2004 to 2006 identified the issue of training as one of its priorities. As was noted above, one of the objectives of the Special Programme was promoting the intellectual potential of the region. In accordance with this objective, the Programme cited the following actions to be taken: a) establishing “a regional mechanism for the assessment of labour market needs and to develop active labour market policies” 239 and, in this respect, b) launching training and re-training programmes targeted at nonacademic staff from public and private institutions who had the potential to be principal players in the transition process. In addition, one of the objectives of the Special Programme foresaw the development of the administrative capacity of the region. Out of the total allocation of 25 million euros to this Special Programme, 9 million euros were earmarked for projects pertaining to the sphere of education and training. Thus, it was planned that two large three-year projects in the area of vocational training and labour resources 240 and on administrative capacity building would be started in 2006, which were allotted 2 and 7 million euros, respectively. 241 While the first project was aimed at addressing the “mismatch between supply and demand of skilled labour, through regular analysis of the labour market, development of career guidance for young people and establishment of centre of excellence to provide vocational training”, 242 the second project was intended: to strengthen the administrative capacity of local and regional authorities, including assistance of the implementation of ongoing budget, municipal and administrative reforms, as well as implementation of measures to enhance the competitiveness and investment attractiveness of the region. 243

One of the major components of the administrative capacity building project was the development of e-government within the oblast’s regional and municipal administrations. Complementarily, over the period of July 2005 to July 2007, 2 million euros were channelled to a project to strengthen and develop business and administration education in Kaliningrad in order to elaborate and test a modular curriculum of modern, high quality training courses in business and public administration studies. 244 A number of small programmes in Kaliningrad, including those on 238

EU-Russia Co-operation on Kaliningrad: 2002 and beyond. National Indicative Programme, Russian Federation, 2004 –2006, p. 34. 240 The support to vocational training of adults in the Oblast was linked to the belief that “regional development in the longer-term is likely to be based on a knowledge-based economy”. See EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 15. 241 Kaliningrad – an example of EU-Russia partnership and co-operation. 242 Ibid. 243 Ibid. 239

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education and training, were financed and implemented through the TACIS Institutional Building and Partnership Programme, which focused on support to civil society and local initiatives and in particular on areas of adult education, culture, health, female entrepreneurship and domestic violence. One of the initiatives of bilateral assistance to the Kaliningrad educational sector 245 by some of the EU Member States in the Council of Baltic Sea States was the establishment of a EuroFaculty at Kaliningrad State University. 246 Specifically, the EuroFaculty was launched by the CBSS, with the chief financial contributors being almost all the CBSS member states: Denmark, 247 Germany, Lithuania, Norway, Poland, Sweden as well as the European Commission. 248 The EuroFaculty programme was implemented in the form of two parallel subprojects at two faculties of Kaliningrad State University, the faculty of Economics and the Faculty of Law over the time period 2000 to 2007. 249 Aimed to support the updating of core curricula in compliance with international standards and the introduction of new modern teaching and learning methods, the 244

Ibid. There are eighteen institutions of higher education in the Kaliningrad Oblast, including two state universities: a classic university Kaliningrad State University which is called the Immanuel Kant University of Russia from 2005 and a multi-profile Kaliningrad State Technical University as well as various branches of Moscow and St. Petersburg universities. 246 EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 15. 247 The Lead Country for the programme was Denmark. Specifically, its Ministry of Science, Technology and Innovation chaired an International Expert Group which included the representatives of the programme’s donors. The EuroFaculty programme at Kaliningrad State University was implemented by two consortia of universities: the economics consortium was headed by Roskilde University (Denmark) and the law consortium was headed by Georg-August University of Göttingen (Germany). See EuroFaculty in Kaliningrad (2000 – 2007), the Council of the Baltic Sea States. 248 On the whole, the EuroFaculty is a project of the Council of Baltic Sea States that was adopted at its 2 nd Ministerial Session in Helsinki in March 1993 with a view to modernizing academic curricular of universities of the newly independent Baltic States in the fields of economics, law and public administration. See Gustav Kristinsen (ed.), The EuroFaculty Report 1993 – 2005. Two years later, a Strategy Paper for the EuroFaculty was approved by the CBSS’s Steering Committee which defined the main goals of the EuroFaculty and in 2000 the Revised EuroFaculty Statues were espoused by the 9 th Ministerial Session of the CBSS. According to the latter Statues, the chief goals of the EuroFaculty included 1. “introduction and transformation of core curricular in each field up to and including the level of Master’s degree to internationally accepted academic standards”, 2. “retraining and training of local academic staff and new professionals to ensure that the host universities have the means to sustain the new curriculum”, and 3. “development of libraries and computer networks in support of teaching and research at the host universities”. Ibid., pp. 7 – 8. The first participating universities were universities of Latvia, Lithuania and Estonia while a minor pilot programme of the EuroFaculty was held at Kaliningrad State University over the time period of 1994 –1997 and fully extended to Kaliningrad State University in 2000. 245

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programme comprised lectures by visiting professors, (English and German) language training of staff and students, re-training of the academic staff, improvement of library services and information collection systems through the use of ICT and projects contributing to student mobility. These projects sought to assist in the modernization of strategic planning and management of the university generally. Eventually, in spite of various obstacles arising from the rigid curricular and education standards of the Russian Ministry of Education, the EuroFaculty programme resulted, among other things, in the curricula of Economics and Law studies being completely renewed and a new Bachelor’s / Master’s programme being established at the Faculty of Economics, which led to the statement that: “EuroFaculty has become a good example of Russian implementation of the Bologna process to create a European Higher Education Area”. 250 The EU also supported the establishment of an information office, “EU Information Relay”, at Kaliningrad State University 251 in June 2001 – part of the network of thirteen European Documentation Centres and Info-relays instituted in Russia since 2001 252 – with a view to providing free direct access to EU background publications such as EU Treaties, documents on EU policies, TACIS, Tempus and other EU programmes as well as material on overall EU-Russia relations and to organizing various events (seminars and conferences) on matters of European integration and EU-Russia relations. 253 Besides the provisions and consultation on the information concerning the European Union as well as the conduct and publication of research on EU-Russia relations in general, the Centre serves to inspire contacts between institutions of higher education and NGOs of EU Member States and the Kaliningrad Oblast, inter alia, through the organization of conferences, seminars and presentations. 249

See Final Report on the Council of Baltic Sea States EuroFaculty – Kaliningrad Project 2000 – 2007, complied by the Chairman of the International Expert Group, Copenhagen, April 2008. 250 Ibid., p. 6. See also Stefan Gänzle / Stefan Meister / Conrad King, Higher Education in Kaliningrad, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), pp. 230 – 231. 251 The official site of the Kaliningrad European Documentation Centre can be found at: http://www.edc.albertina.ru/?nitem=50&artnum=6&lang=en. 252 European Documentation Centres represent a network of information centres established by the EU in 1961 in order to equip university students and researchers with information and knowledge on such a range of subjects as European law, European integration, European policies and institutions and stimulate them to be part of the debate on Europe. These Centres are situated at universities in EU Member States as well as in a number of third countries and are managed by the European Commission. InfoRelays is one of the instruments of the European Commission provide information and communication services not only in the Member States but also externally. 253 See New EU Info Relay opens in Kaliningrad, Press Release June 15, 2001.

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Along with other subjects of the Russian Federation, the Kaliningrad Oblast is empowered to participate in general EU activities that are undertaken in the framework of the implementation of the EU-Russia Common Space on research and education including cultural aspects; its principal objective is deepening science and technology cooperation and the developing education cooperation according to the principles of the Bologna process. To date, these are such EU programmes in the field of higher education as the Erasmus Mundus programme, 254 Manager Training Programme and others. 255 In addition, the Kaliningrad Oblast is explicitly present in several particular initiatives in this sphere. Thus, alongside several other Russian universities, the Kaliningrad Oblast’s universities participate in the EU Tempus programme launched for the promotion of cooperation, exchange and networking among universities of the EU and Central and Eastern Europe. 256 The Tempus (Trans-European Mobility Scheme for University Studies) programme was established by the European Commission in 1990; it strives to support the modernization of higher education in countries neighbouring the EU. In general, the Programme is administered by the European Commission’s DGs for education and culture, enlargement and aid, financed through Commission’s external assistance instruments such as: a) the Instrument for PreAccession Assistance (Western Balkans), b) the European Neighbourhood and Partnership Instrument (for countries covered by the ENP and Russia), and c) the Development and Cooperation Instrument (Central Asia). Currently, the Programme covers 27 counties in the Western Balkans, Eastern Europe and Central Asia as well as North Africa and the Middle East. The Programme functions by means of two types of action: joint (European) projects and structural measures. In joint projects, actions revolve around multilateral partnerships between higher education institutions in both EU and partner countries; the partnerships may also include businesses, ministries, NGOs and other organizations which deal with higher education. In this cooperation, projects held by the parties are designed to contribute to the development and modernization of new curricula, teaching methods and materials, the management and governance of education institutions and the encouragement of a quality assurance culture. The method of structural measures presupposes reforming higher education institutions and systems in EU partner countries with a view to improving their quality and relevance and bringing them into compliance with EU standards. 254 To date, none of the universities of the region participates in the new Erasmus Mundus Cooperation Programme. 255 See Cooperation programmes with Russia in higher education, the Delegation of the European Commission to Russia. 256 In 2005, the number of Russian universities which took part in the Tempus programme, constituted 250. See Brief Summary of Tempus impact study in Russia.

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Joint projects between Russian and EU universities have been financed through TACIS until recently and the ENPI currently. Like other Russian universities, Kaliningrad universities have been involved in joint projects under the Tempus programme; from the outset of the functioning of Tempus in Russia, this involvement started with a project labelled “International initiative to modernize and restructure English language teaching training at Kaliningrad State University” which was launched between the latter university and NENE College of Northampton (Great Britain) and lasted three years with a total budget of 886,000 Euros in 1994. 257 Subsequent initiatives included three-year projects on: a) restructuring environmental education at Kaliningrad State University, which began in 1997, 258 b) the development of a curriculum for environmental studies at the Kaliningrad State Technical University, which started in 2001, 259 c) introducing a European Dimension into the curriculum of Kaliningrad State University; this project began in 2002 and envisaged establishing a cross-faculty Centre for European Studies at the university. 260 Things being as they are, the degree of involvement of Kaliningrad universities was minimal in joint projects under the Tempus programme (five projects involving universities from Kaliningrad out of the 259 projects involving Russian universities), notwithstanding the fact that the Kaliningrad Oblast is the closest region to the EU in geographical terms. The extent of its participation in the Tempus framework is less than that of other Russian regions. 261 To this end, the main criticism of experts is the fact that “the EU has not singled out Kaliningrad as a specific area of cooperation in the field of higher education, instead regarding the Bologna Process 262 as a bridge to all Russian universities”. 263 As a result, Kaliningrad higher education issues are dealt with “rather comprehensively within the context of EU-Russia relations”, whereby Kaliningrad appears “a cooperative test region often by default rather than by design”. 264 Again, 257 Project ID: T_JEP-08528 – 1994 (RU)-TACIS. See Joint European projects, Selected projects involving Russian Federation, All Selection Rounds, TEMPUS, DG Education and Culture. 258 Project ID: T_JEP-10332 – 1997 (RU)-TACIS, in: Joint European projects, Selected projects involving Russian Federation. 259 Project ID: CD_JEP-22199 – 2001 (RU)-TACIS, in: Joint European projects, Selected projects involving Russian Federation. 260 Project ID: CD_JEP-23047 – 2002 (RU)-TACIS, in: Joint European projects, Selected projects involving Russian Federation. 261 See Gregorz Gromadski, p. 232, and Stefan Gänzle / Stefan Meister / Conrad King, p. 223. 262 Russia signed the Declaration, establishing the Bologna Process and aiming to create a European Higher Education Area, in 2003, and it initiated the reform of its higher education system with a view to fulfilling its modernization in compliance with requirements of the Bologna Process. 263 Stefan Gänzle / Stefan Meister / Conrad King, p. 224.

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while Kaliningrad State University is among twenty-five Russian universities selected by the federal centre for the introduction of the ECTS system and other fundamentals of the Bologna Process, it has been yet not accorded priority. 265 Clearly, the sector of education, training and culture is essentially covered by EU activities on cross-border cooperation in the Kaliningrad Oblast. This relates first and foremost to the small-scale cooperation under the TACIS CBC Small Project Facility as well as projects under the subsequent EU’s Neighbourhood Programmes. Thus, for instance, the Lithuania-Poland-Kaliningrad Neighbourhood Programme 2004 –2006 (which financed 46 projects in total involving participants from the region) 266 entailed different projects in this field. Under one of its priorities, (1) of achieving competitiveness and growth in productivity, the indicated measures (1.1) included the stimulation of economic and scientific and technological cooperation. In this respect, the projects that were implemented within this measure often presupposed joint efforts between different educational institutions across the border, such as the working out joint methodologies of teaching, 267 strengthening scientific and research cooperation 268 and others. Furthermore, the other priority, of contributing to cooperation between populations foreseen in different actions by local societies, was also in the sphere of education including children and youth exchange programmes; 269 it is exemplified by a project titled “Environmental education of citizens – Polish-Russian experience exchange”. 270 The main objective was to raise awareness of local ecological problems among citizens across the border and instruct them in the field of activating local socio-ecological initiatives. The activities foreseen in the framework of the project included: Polish-Russian training and experience exchange undertakings for teachers, local leaders and officials; the implementation of mirror programmes of ecological education in certain localities in Poland and the Kaliningrad Oblast. Small educational projects have been also financed by the EU through the European Initiative for Democratization and Human Rights programme, which 264 265 266

tion.

267

Ibid., 231. Ibid., p. 229. See EU-Russia Cooperation Programme (TACIS / ENPI), Cross-border Coopera-

For instance, Project 2006/255 “Cooperation between Kaliningrad and Klaipeda in successful education through health improvement”. See Triple Jump. Projects of Lithuania, Poland Kaliningrad Region of the Russian Federation Neighbourhood Programme, p. 26. 268 Project 2006/288 “Establishment of Bipolar Area of Science and Research between Klaipeda and Kaliningrad”, in: Triple Jump, p. 31. 269 See, for example, Project 2005/142 “Baltic confrontations of children and youth as programme of strengthening Russian leaders”, in: Triple Jump, p. 120. 270 The database of this project is available at: http://www.ecodefense.ru/eec-pree/en/.

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can be illustrated by the project called “School – the territory of law”. 271 This project was executed by local NGOs in several regions of Russia including Kaliningrad and it aspired to promote civic and human rights’ education for pupils and teachers in secondary educational institutions of the selected regions by means of awareness programmes. These programmes were envisaged to be held by children themselves and to teach children how to protect their rights in practice. The Northern Dimension policy has also served as an umbrella for projects done within its policy areas in Kaliningrad by an ND partner. Provided in the ND Information System, the relevant collected data outline projects carried out in Kaliningrad without indicating a time limitation. This also concerns projects in the sector of research, education and culture (in the editions of 2005 and 2006, under the common heading of “human resources, education, scientific research, culture and public health”, and in 2007, under the heading “research, education and culture”), which corresponds to the division of policy areas in the ND Action Plan 2004 – 2006 and the ND Policy Framework Document. According to the catalogue of 2005, Germany devised and implemented several projects, in particular by the University of Kiel in cooperation with Kaliningrad universities; for example, projects entitled “University Partnership Kiel – Kaliningrad”, which aimed at establishing exchanges of students and scientists of University of Kiel and Kaliningrad State University as well as joint projects and publications (since 1994 and not limited), “Agricultural education in Kaliningrad region focusing on integrated production methods”, which was directed towards Kaliningrad State Technical University and St. Petersburg University, with a view to assisting, inter alia, in establishing praxis-oriented agricultural education (2003 – 2006). 272 Besides German universities, some German regional authorities have also been active in executing projects in Kaliningrad; the Schleswig-Holstein Land Government (Ministry of Agriculture, Environment and Rural Areas) carried out a project with Kaliningrad State University intended to enhance Kaliningrad specialists’ knowledge on agriculture practice, production and market economics. 273 As reflected in all available editions (2005 –2007) of the ND Information System, besides Germany and Russia, partners from Norway, Sweden, Finland, Lithuania, and Poland as well as the Nordic Council of Ministers carried out projects in the Kaliningrad Oblast on different aspects of the area of education and research. For information per se, it is doubtless a worthwhile idea for the European Commission to launch such a system, which collects data on projects related to 271

See Cooperation programmes with Russia in higher education. Northern Dimension Information System 2005, Projects relevant for Kaliningrad, Human resources, education, scientific research, culture and public health, pp. 51 –52. 273 Ibid., p. 54. 272

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the North-West of Russia with a particular focus on Kaliningrad; this effectively helps ND partners avoid overlaps in designing projects in the oblast. However, although the data provides references to the overall volume of the budget for each project as well as the partner presenting the projects, it remains unclear whether ND partners accountable for the project applied for funding from the EU structural policy (TACIS or other financial instruments) or whether they donated the projects themselves. The fact alone that these projects could be implemented in the framework of the Northern Dimension does not tell much, since the Northern Dimension has been long a loose concept without its own budget. This puzzle could be clarified, however, by data on the projects where the European Commission is indicated as a partner. In the meantime, such projects could be implemented by various actors. For example, the project “Innovative strategies for local development: capacity building for cultural institutions in the Kaliningrad Oblast” was presented by the European Commission and executed by several public organizations from the Netherlands and Kaliningrad (the European Cultural Foundation, Amsterdam, and the Netherlands Professional Association of Cultural Managers), Kaliningrad NGO “Transit” and the Moscow Department of Culture of the Kaliningrad regional administration. 274 In this case, the implementing bodies clearly applied for funds from the European Commission, although without hinting at what EU financing mechanisms were utilized. The projects catalogue for 2007 shows this more clearly, where several projects in the field of education, research and culture are indicated as being conducted in the framework of the EU’s INTERREG III A Neighbourhood Programme; with Russia acting as an initiator of the projects, the implementing body is a joint technical secretariat of the Lithuania, Poland, and Kaliningrad region Neighbourhood programme. 275 The projects of the EU’s Neighbourhood Programme similarly concerned the sphere of cultural cooperation between the Kaliningrad Oblast and the neighbouring countries. This is demonstrated by a variety of local initiatives done under the domain of support for socio-cultural integration (priority 2) such as “Theatre of Three Cultures: Klaipeda, Kaliningrad and Olsztyn”, “BRIDGES–European meetings of artistic talented youth”, “Poetry – Arts without limits, Goods without duty” and others. 276 In some of these projects the Ministry of Culture of the Government of the Kaliningrad Oblast acted as a (TACIS) partner of the project. Beyond that, the Kaliningrad Oblast participates in projects that are financed through the IBPP Support to EU-Russia Cultural Cooperation Initiatives 274 Northern Dimension Information System 2006, Projects relevant for Kaliningrad, Human resources, education, scientific research, culture and public health, p. 143. 275 Northern Dimension Information System 2007, Research, Education and Culture, Russia, pp. 277 – 280. 276 See Projects 2005/161, 2005/174 and 2005/171 in: Triple Jump, pp. 122, 124 and 123, respectively.

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since 2007. 277 Thus, in 2007, the oblast became a principal target group in a project “developing new creative management capacities for regional cultural cooperation between the Kaliningrad Oblast and the Baltic Sea States” 278 to be implemented in 2008 –2010. Notably the Kaliningrad network of cultural managers of various cultural institutions and art initiatives received the opportunity to develop links with professional counterparts in the EU Member States around the Baltic Sea and, through these connections, to develop the methodology of cultural administration, get consolidated locally and internationalize their activity. 279 On September 15 –30, 2006, Kaliningrad became an avenue for one of the joint EU-Russia cultural initiatives, the second EU Film Festival. 21 Member States presented 27 films 280 and young Russian professionals attended master classes that were organized to build connections between EU and Russian professionals. To summarize, the sphere of education and training has evolved to one of the priority areas of EU policy toward Kaliningrad in the Special Programme for Kaliningrad of the EU National Indicative Programme for Russia 2004 – 2006. The field of education, research and culture constitutes one of the areas of the Northern Dimension policy, with the Kaliningrad Oblast being a priority region. The major fields in the EU action on education and training in the oblast have comprised: a) the development of vocational training and administrative capacitybuilding which aim at contributing to overall regional development based on a knowledge-based economy and b) EU action in the sphere of academic higher education. The Kaliningrad Oblast is empowered to generally participate in EU activities that are undertaken in the framework of the building of the EU-Russia Common Space on research and education including cultural aspects. Speaking more specifically, the EU has been applying the following instruments to foster the improvement of education and training in the Kaliningrad Oblast: the TACIS EU-Russia Cooperation Programme and the Special Pro277

Similarly to the IBPP which is directed towards support of civil society and local initiatives, the IBPP provides assistance in the implementation of EU-Russia grass root projects in the sphere of culture. 278 See Institution Building Partnership Programme: Support to EU-Russia Cultural Co-operation Initiatives (IBPP-Culture), Project Summaries, Call for Proposals 2007, Russian Federation, the Delegation of the European Commission to Russia, p. 8. 279 Additionally, Kaliningrad is one of the five Russian cities that take part in a joint Russian-German project “Art on Site” which aims at cultural exchange, networking and cooperation of young artists from Russia and Germany who can produce art for public space by engaging the population and local media in the process. See Institution Building Partnership Programme: Support to EU-Russia Cultural Co-operation Initiatives (IBPPCulture), p. 6. 280 Kaliningrad – an example of EU-Russia partnership and co-operation.

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gramme in Kaliningrad as part of the Indicative National Programme for Russia in 2004 – 2006; the TACIS / ENPI Institutional Building and Partnership Programme, the European Initiative for Democracy and Human Rights programme, the EU Tempus Programme and the TACIS CBC Small project Facility, the EU Neighbourhood Programmes 2004 –2006 and the subsequent ENPI Cross-Border Cooperation programmes. Complementarily, individual EU Member States have launched bilateral initiatives, as was the case of establishing the EuroFaculty at Kaliningrad State University in the framework of the Council of Baltic Sea States and the projects indicated in the Northern Dimension Information System (2005 – 2007), which is effectively managed by the European Commission. All these instruments have been utilized for implementing different projects that allow the EU in general and Member States in particular to share their methodology, expertise and experience in education, training and culture with various actors in Kaliningrad. In the field of culture, such instruments have been used in the Kaliningrad Oblast as IBPP Support to EU-Russia Cultural Cooperation Initiatives, EU Neighbourhood Programmes, notably Lithuania-Poland-Russia Neighbourhood Programme 2004 – 2006, and, again, the ENPI Cross-border Cooperation Programmes. Additionally, various cultural events have taken place following the involvement of EU action in the oblast, such as the organization of the 2 nd EU Film Festival in Kaliningrad. (3) Public health and social policy Although the EU’s concerns about the Kaliningrad Oblast have been impacted by issues related to soft security risks stemming from the Kaliningrad Oblast and affecting countries in the Baltic Sea region, health matters comprise one of the cornerstones of its policy priorities. This focus has been caused, first and foremost, by the EU’s awareness of the extent of the spread of communicable diseases (in particular, HIV / AIDS and tuberculosis) in the Kaliningrad region. 281 This is reflected in most of the EU policy papers touching upon EU policy priority areas in the oblast. Listed among the fields in which the EU intended to provide assistance, health matters were specifically among those of first concern in the Special programme on Kaliningrad 2004 –2006, which planned to contribute to the improvement of the state of health in the oblast through enhancing the quality of primary and preventive health care services dealing with TB, HIV / AIDS and children’s health. In order to achieve this, actions were suggested like the provision of specific medical equipment and treatment purposes as well as assistance in the introduction of General Practitioner (GB)-based medicine and the restructuring of local preventive health care services capable of preventing 281

COM (2001) 26, p. 8.

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the spread of drug addiction and communicable diseases. Subsequently, in the Russian National Indicative Programme 2007 –2010, this focus retained its significance even against the overall background of a reduction in the volume of EU funding to Kaliningrad and in the spectrum of policy areas where Kaliningrad figured. Owing to the fact that one of the aims of the EU’s Neighbourhood programmes and the ENPI Cross-Border Cooperation programmes was indicated as the joint response to common challenges (including the environment, public health and the fight against crime), one can assume that projects that have been generated and accomplished in the framework of these programmes also relate to the field of health. The other EU umbrella policy for projects, the Northern Dimension, and in particular its 1 st and 2 nd Action Plans as well as the current “Policy Framework Document”, recognize public health among the key areas. While the two Action Plans link health together with education, research and culture, the latter framework paper puts health and social welfare into a separate policy item. In addition, as has been noted above, one of the two ND partnerships is the “Northern Dimension Partnership in Health and Social Wellbeing”. This Partnership, based on the Oslo Declaration of October 27, 2003, serves as a mechanism for promoting strategies and principles of health and social policies in the region to intensify and complement bilateral cooperation between the EU Member States and the partner countries. 282 Its priorities include, firstly, the reduction of the spread of communicable diseases and the prevention of lifestyles related to these diseases and, secondly, the improvement of levels of social wellbeing and the encouragement of socially rewarding lifestyles. 283 The parties to the Partnership coordinate their activities in the framework of the NDPHS Database and the NDPHS Project Pipeline, with the latter functioning as a multiagency on-line project-funding coordination tool. 284 The EU position to its assistance in Kaliningrad’s health sector proceeds from the assumption that while the principal measures for coping with the problems of communicable diseases and other health-related issues should be adopted at the federal level, EU actions can have a preventive character, presupposing the raising of awareness and close collaboration with civil society. 285 EU activities were long shaped by TACIS financial support to initiatives at the local level 282

Declaration concerning the establishment of a Northern Dimension Partnership in Public Health and Social Wellbeing, October 27, 2003. 283 NDPHS Work Plan for 2008, p. 2. 284 The NDPHS Database and Project Pipeline can be found at: http://www.ndphs.org /?database and http://www.ndphs.org/?pipeline, respectively. 285 This aspect of preventive action is characterized for EU strategy on combating HIV / AIDS in general. See COM (2005) 654, pp. 11 – 12. In a broader context of EU Russia policy, combating AIDS is a topic pertaining to the EU-Russia Common Space on Research, Education and Culture.

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and in the non-governmental sector with a view to contributing to the reform of health care delivery systems and dealing with HIV. To date, the Kaliningrad Oblast has been one of pilot regions of EU-Russia cooperation in the field of combating HIV / AIDS where the EU has executed several projects establishing working relations with principal Russian health organizations such as the Federal Ministry of Health and Social Development, the Federal AIDS centre, and local health authorities. Over the period 2001 –2003, in the framework of the TACIS programme, a large project named “North West Health Replication” was carried out by the European Commission in collaboration with the Russian Ministry of Health aiming at supporting health care reform in three targeted regions, with Kaliningrad being one of them. Other examples of TACIS projects launched by the European Commission in Russian regions (including Kaliningrad) were: a) “Rehabilitation system services for the disabled (Developing social services for vulnerable groups III)”, executed in 2005 –2007 in cooperation with the Ministry of Health and Social Development; b) a project on the prevention of communicable diseases in prisons and penitentiary institutions in Northwest Russia in partnership with the Russian Ministry of Justice. 286 Additionally, one of the projects in a related field was launched and implemented by a partnership between cities of Kaliningrad and Malmo (Sweden) 2001 – 2002 within confines of the TACIS Cross-Border Cooperation programme. 287 The project titled “Kaliningrad / Malmo cross-border cooperation on Mother-to Child HIV prevention” aimed at developing health and social policies oriented towards HIV-infected pregnant women and providing additional postnatal services. Also, in the field of combating HIV / AIDS, small projects were funded by the TACIS Lien programme 288 (support to promoting access to information and materials on AIDS prevention and the establishment of an advisory centre for the public fund “Stop AIDS and drugs”) and the TACIS CBC Small Project Facility (aid to the Kaliningrad anti-AIDS centre). 289 Between 1994 and 1999, the oblast also benefited from projects on health issues (alongside those on business and export promotion and pollution control) financed by the TACIS facility Bistro. 290 286 See List of EU-Russia Cooperation Projects Related to the Fight against HIV / AIDS, the European Commission’s Delegation to Russia, and EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 9. 287 List of EU-Russia Cooperation Projects Related to the Fight against HIV / AIDS. 288 The TACIS Lien (Link Inter European NGOs) Programme was launched by the European Commission with a view to strengthening the capacities of civil society organizations working in the social sector with a focus on disadvantaged groups of population through the forming of partnerships between non-governmental organizations in NIS countries and EU Members States. 289 Project examples, the Northern Dimension.

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Apart from the above specific projects on combating HIV / AIDS, the European Commission designed several projects related to the improvement of health and social problems in the oblast under the national allocation (TACIS / ENPI), including a project on “Improving Health Status of Kaliningrad Region” (2006 – 2009) with total budget of 3 million euros. 291 It was envisaged that it would contribute to public awareness activities on healthy life styles and provide aid to polyclinics and other primary health facilities, including mothers’ and children’s health care services and improve coordination mechanisms between civilian and penitentiary system facilities in HIV and TB control. Importantly, this project should complement and be in compliance with the national project on health care implemented at the federal level. Several projects were launched to provide health and social assistance to elderly people, for instance, a project called “Support to the municipal authorities in improving life of elderly and disabled people in Gusev, Kaliningrad Region” (2005 – 2006, budget of 56,000 euros) and “Developing a consecutive chain of psychogeriatric services in Kaliningrad” (2006 – 2008, allocation of 165,000 euros). 292 Projects on the cooperation in the health sector have been also executed within the EU’s Neighbourhood Programmes and the ENPI Cross-Border Cooperation programmes relevant for the Kaliningrad Oblast since, as mentioned above, to address common challenges jointly was one of the aims of the Programmes and public health was listed among these challenges. A local initiative was undertaken, for example, in the framework of a project named “Cooperation between Kaliningrad and Klaipeda in successful education through health improvement” which aimed at working out a joint methodology on the improvement of the health of school pupils. 293 However, a brief examination of the projects done within the EU Neighbourhood Programme for Lithuania-Poland-Kaliningrad reveals that the close cooperation between local health entities was developed mostly between Lithuanian and Polish regions rather than between Kaliningrad and its neighbouring administrative units of Lithuania and Poland and that, in general, this regional cooperation between Kaliningrad and its neighbours remains at a low level. 294 Yet, experts point out the need to intensify cooperation in the form of joint projects at the sub-regional level between the health structures of Kaliningrad and those of its neighbours. 295 According to the experts, 290

COM (2001) 26, Annex II, p. 17. The TACIS Bistro facility was designed for supporting small-scale projects (budget of up to 100,000 euros) throughout Russia and Ukraine. Social protection was listed among priority areas, with others being enterprise support and financial services, human resources, agriculture, energy and others. 291 Kaliningrad – an example of EU-Russia partnership and co-operation. 292 Ibid. 293 Project 2006/255, Cooperation between Kaliningrad and Klaipeda in successful education through health improvement, in: Triple Jump, p. 26. 294 See Alexander Berlin / Greg Mestdag, Public health policy: does Kaliningrad adapt to the EU?, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), p. 217.

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this could be modelled on the experience of the South-Eastern Stability PactHealth Network and include areas of cooperation such as infectious disease monitoring, managing the availability and safety of blood, emergency services, food safety control, public health issues and health empowerment issues concerning commercial sex work. Admittedly, however, involvement into such a spectrum of activities would necessitate greater financial autonomy for Kaliningrad health structures to enable them to participate effectively and systematically in this cooperation. Eventually, numerous small projects in the health sector were implemented in the Kaliningrad Oblast through bilateral donor programmes of the EU Member States and also in the framework of the Northern Dimension policy. This is illustrated by a project called “Bilateral health cooperation Norway-Russia under the Barents Co-operation and the Northern Dimension Partnership in public health and social wellbeing” (2004 –2007), which sought to strengthen health and social conditions in the region through improved bilateral cooperation and better use of available resources. 296 Regardless of the fact that one of the items of the EU strategy towards the Kaliningrad Oblast has been socio-economic development of the region, social policy per se has never appeared explicitly among EU policy priorities in Kaliningrad. Presumably this can be explained by the EU’s persistent motto “The chief responsibility lies with Russia”, which is characteristic of the EU overall approach to the oblast. Indeed, in Russia, social issues are the total responsibility of the federal, regional and municipal authorities and the primacy of social developments in the regions is reflected in the “Federal Target Development Programme for Socio-Economic Development of the Kaliningrad region in 2001 – 2010” and in the “Kaliningrad Regional Strategy for Socio-Economic Development for a mid-term and long-term perspective” of 2007 (described in Chapter II.3., above). 297 The latter programming document identifies one of the aims of the updated regional strategy as diminishing the socio-economic disparities between the region and the neighbouring areas. The oblast has benefited from a number of projects related to social issues that have been executed thanks to TACIS facilities. These concerned, for instance, several projects (1994 –1999) targeted at Kaliningrad’s NGOs supporting the social re-integration of former military staff and their families under the TACIS Lien programme and projects of DG REGIO’s ECOS-Ouverture programme, 298 295 296

p. 61. 297

Ibid., p. 218. Northern Dimension Information System 2005, Projects relevant for Kaliningrad,

See Vyacheslav Dykhanov, pp. 183 – 185. The ECOS-Ouverture programme was a a part of the structural assistance to the EU candidate countries and it promoted interregional cooperation between local authorities 298

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such as a project “Tros” which provided training for retired officers. 299 Another large project, implemented under TACIS in 2005 –2007 with a total budget of 2 million euros on “Vocational training and labour resources in Kaliningrad”, had the goal of addressing the “mismatch between supply and demand of skilled labour, through regular analyses of the labour market, development of career guidance for young people and establishment of centres of excellence to provide vocational training”. 300 Another small project financed by the European Commission concerned the modernization of Kaliningrad adult evening schools. 301 As can be seen, these projects are quite narrowly oriented. They are practical and deal with specific social problems rather than reflecting a comprehensive approach to social issues by the EU or providing comprehensive input into the construction and development of a regional social policy. 302 Such an attempt was made in the framework of the project “Development of a State Social Policy in the Kaliningrad Region” (2005 –2006), funded by TACIS. 303 The project involved the Finnish National Research and Development Centre for Welfare and Health, on the one hand, and the Kaliningrad Regional Duma, the regional government, the Federal Service for Employment, the Federal Migration Service and the Kaliningrad City Hall, on the other hand. The project resulted in the drafting of four regional laws in social policy, with one of these legislative projects, “On Family Policy in Kaliningrad Oblast”, being adopted in June 2006. By introducing principles of European social policy (including the related notions of “social inclusion”, a “welfare mix model”, “social partnership”, “subsidiarity” and “prevention”) – an endeavour that is not easy in the overall Russian context – the project sought to improve the regional social policy. The indirect impact of the project was that its success provided an impetus for the regional public authorities “to develop ideas and a potential agenda for future cooperation”, 304 including the development of a family day-care system, the formation of a vocational training centre, the encouragement of gender education and other areas. It is also noteworthy that individual EU Member States funded and executed various projects in the field of social policy in cooperation with their Kaliningrad partners. For example, Finland (notably, the Finnish National University in the European Union and Central and Eastern Europe 1997 –2003 and was managed by both DG Regional Policy and DG Enlargement. 299 COM (2001) 26, Annex II, pp. 17 – 18. 300 Kaliningrad – an example of EU-Russia partnership and co-operation. 301 Northern Dimension Information System 2006, Projects relevant for Kaliningrad, p. 144. 302 See Dykhanov Vyacheslav, p. 14. 303 Northern Dimension Information System 2005, Projects related to Kaliningrad, p. 41. 304 See Dykhanov Vyacheslav, p. 191.

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Network for Social Work), initiated a project on “Social work and civil society in neighbouring areas in Russia: Theory, Practice, Training, Networking” (with a provisional budget ranging from 150,000 to 500,000 euros) which also covered the Kaliningrad Oblast with a view to assisting civil society organizations dealing with matters pertaining to children, youth and family by providing them with practical training in social work education. 305 In summary, while issues pertaining to social policy have not been prioritized in EU policy papers on Kaliningrad so far, the problem of healthcare in the region has continuously constituted a part of EU action in Kaliningrad, which is connected with high rates of the spread of communicable diseases in the region. Health issues are listed among the common challenges to be tackled in the EU’s Neighbourhood Programmes and the subsequent ENPI Cross-border Cooperation programmes. In both Action Plans of the Northern Dimension policy, health issues are grouped together with issues of education and research, and, in the late Framework Document they are coupled with social welfare matters and elevated to a single policy priority. The ND policy is also implemented through a Partnership in Health and Social Wellbeing. The EU has channelled most of the assistance to the health sector in the Kaliningrad Oblast through the TACIS programme under the national allocation for Russia and the different TACIS facilities, such as the TACIS CBC programme, Lien, CBS SFP, and Bistro. Additionally, projects on health issues have been implemented in the framework of the EU’s Neighbourhood programmes and the ENPI CBC programmes as well as by means of bilateral donor programmes by individual EU Member States, also in the framework of the ND policy. Regarding cross-border cooperation in the health sector, it is noteworthy that closer and more intensified cooperation between health care structures across the border has been recommended. Overall, in both the fields of healthcare and social policy in Kaliningrad, the starting point for the EU has been the fact that, on the one hand, these fields are completely under the responsibility of the federal authorities, and, that on the other hand, the EU could engage in preventive action. Accordingly, EU action in the field of public health embraces activities directed to raising of awareness of the spread of communicable diseases (TB, HIV / AIDS). It provides expertise on reforming healthcare delivery systems and dealing with communicable diseases as well as children’s health due to the general assumption that for these types of diseases to overcome “changes in societal and personal attitudes rather than the improvement of health care delivery” are needed. 306 The European Commission has also executed projects related to health and social assistance to elderly people. 305 Northern Dimension Information System 2006 edition, Projects relevant for Kaliningrad, p. 149. 306 Alexander Berlin / Greg Mestdag, p. 210.

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In its activities, the Commission has provided financial support to initiatives at both the federal and local levels including local regional authorities and the civil society sector. In the former case, it has carried out several large projects in the field in partnership with the Russian federal authorities (specifically, the Ministry of Health and Social Development, the Federal AIDS centre), with the Kaliningrad Oblast being among pilot regions. In comparison to the above, projects on social issues are less numerous and implemented mainly in such areas as support to Kaliningrad former military staff, improving the situation of labour resources through vocational training and assistance to adult evening schools. Projects like these have been financed by the TACIS programme under the national allocation as well as, inter alia, its facility LIEN and by bilateral donor programmes of EU Member States. Importantly, the EU provided funding to a project aiming at modernizing and conceptualizing a regional social policy involving principles of European social policy. Overall, however, the projects done in the social sphere are fragmented rather than coherent. Interestingly, the project “Tros” on assistance to training retired officers in Kaliningrad was backed by the programme of the DG Regional Policy and the DG Enlargement, which in principle was launched to promote interregional cooperation between the EU and its applicant countries in Central and Eastern Europe. bb) Economic dimension (1) Economy sector In an array of policy documents referring to Kaliningrad produced by the EU, the economic aspect (economy and business) seems to be one of the most dominating policy areas. Summarizing EU activities in the field of economics, a recent policy analysis has revealed three general mechanisms: a) financing projects on economic research; b) technical assistance in the areas of administration, environmental management, and economic development (air transportation, port developments and others); and c) training officials (of the regional administration) through a range of vocational training programs. 307 In the Commission Communication of 2001, the EU emphasized the importance for the central and local authorities of stimulating the economic development of the Kaliningrad Oblast. 308 This was seen to require strengthening market institutions (including in the financial sector and the tax system) as well as enterprise restructuring and the further development of SMEs, all of this needing 307 See Evgeny Vinokurov, Economic Policy, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), pp. 177 – 178. 308 COM (2001) 26, p. 6.

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a secure legal and institutional environment (good governance, fair and efficient enforcement of legislation). The paper also identified the ways in which the EU should contribute to the oblast’s economic development, first and foremost through providing advice, sharing experience and offering funding through the TACIS programme – implemented regionally – and bilateral Member States programmes. In particular, it was suggested that the EU could offer: 1) TACIS-funded training programmes for officials and companies of Kaliningrad with a view to assisting in the development of market institutions (banks, insurance and local tax services). Additionally, it was envisaged that local managers could participate directly in the training programs of EU companies. Furthermore, and 2) the EU expressed readiness to render assistance in areas like the harmonization of standards and conformity assessment procedures in order to help Kaliningrad develop its export potential and markets in neighbouring countries. A special role in promoting trade and investment in the oblast was foreseen for the Kaliningrad Regional Development Agency (RDA), which was established in December 1999 at the initiative of the federal and regional authorities and supported by the EU through TACIS. 309 Regarding the SEZ in the Kaliningrad Oblast, the EU underscored that although “the idea of promoting economic activity and investment through a Special Economic Zone is interesting”, it “may have trade distorting effects through subsidies incompatible with the PCA and WTO rules”. 310 Thus, it was proposed that the EU should clarify the status of the SEZ with the federal centre which, in case of necessity, should be brought in compliance with Russia’s international obligations. Eventually, the EU addressed the aspect of an information society and its potential to lead to prosperity and sustainable development in the region and, in this connection, it pointed out the possibility of examining Kaliningrad’s potential participation in regional cooperation actions on the Information Society. In the Special Programme for Kaliningrad 2004 – 2006, the EU reiterated its opinion of Kaliningrad’s economic concept, which was characterized by importoriented industry specialization and subsidised energy prices and thus failed to offer a “sound basis for long-term sustainable and stable growth”, instead, 309 The aim of the RDA was to draw a strategy for regional development and promote Kaliningrad as a region for investment as well as augment links between the business community and business support agencies. Its function was also the preparation of different reports, surveys and projects on the economic situation in Kaliningrad. By 2002, the RDA was allocated 1 million euros over 18 months and 3 million euros were earmarked for the Agency to submit a project on regional economic development. See EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 10. The official site of the Kaliningrad RDA can be found at: http://www.kaliningrad-rda.org. The list of the projects executed by the Agency can be found at: http://kaliningrad-rda.org/en/about/projects.php. 310 COM (2001) 26, p. 7.

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encouraging “tax evasion and grey economy activities”. 311 As stressed in the document, this resulted in “fundamental faults in the investment potential of the region”. 312 What is more, taking into account that Russia’s accession to WTO would imperil the sustainability of the SEZ system and require systemic changes towards export-oriented industry, the EU suggested several measures that could be taken. They included: a) reforming economic governance and improving the business climate with a view to raising the region’s investment attractiveness, b) upgrading the existing infrastructures for cross-border transport by air and land to facilitate the communication of Kaliningrad with the EU and the main area of Russia, and c) assisting in strengthening the competitiveness of regional enterprises. Other than that, steps like developing human capital in the region by enhancing intellectual potential and improving the state of health of the local population, promoting cross-border cooperation and accelerating the joint fight against organized crime were also deemed critical. Notably, one of the central objectives of this Programme was developing the administrative capacity of the region specifically focused on improving general conditions for business development. This implied in particular: • policy, legal, and training support for the regional authorities to improve the institutional and legislative framework of the economic activity in the region, thus leading to lowered administrative barriers for entrepreneurial activity, e.g., simplified registration and permission procedures, better regulation of bankruptcy, a fiscal framework, and others; • support for the reform of the regional financial system to improve regional budget transparency and help to develop the concept of the relations between the regional and central budgets. This reform, already supported through an IBRD loan, is a major priority for Russia’s government; • support for the creation or improvement of business support services to companies and their access to information about opportunities in the enlarged European market; • support for developing local competence in Information technology and the development of databases and associated software systems to facilitate crossborder and transit movements of people and goods. Special attention would be given to customs documentation and processes, electronic logistical systems, integration of multi-modal transport systems and documentation, traffic monitoring and others. 313 As mentioned above, due to the improved economic indicators shown by the Kaliningrad economy, the funding for Kaliningrad envisaged in the national allocation 2007 – 2010 was significantly curtailed. In the economic sphere, the 311 312 313

National Indicative Programme, Russian Federation, 2004 –2006, p. 31. Ibid. Ibid., p. 33.

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identified objectives were limited to undertaking anti-corruption measures and measures against organized crime as well as the improving good governance in order to enhance the investment profile of the region for potential investors from the EU and Russia. This concentration can be explained – as indicated earlier – by the EU’s understanding of the existing difficulties in doing business in the oblast because of such factors as centralisation, bureaucracy and related corruption. The regional economy has been a focus for EU assistance under the TACIS progrmme since 1991, when a project on Food and Agriculture as part of TACIS activities was introduced in the oblast. Since then, the oblast has participated along with several other Russian regions in two TACIS Russian projects (1993) which sought to establish a network of SME Development Agencies in Russia. 314 The year 1994 saw the intensification of TACIS activities in the oblast due to increased attention to the oblast by the EU, specifically the European Parliament, as was indicated in the previous Chapter. Over the time period 1994 – 2000, the TACIS action concerned the following spheres of Kaliningrad economy: a) institution building (support for the development of the FEZ / SEZ amounting to a total of 10 million euros by 2002); b) enterprise restructuring (the launching of an Enterprise Support Centre and the strengthening of the local SMEs Development Agency, with both having been earmarked for a total of 3 million euros by 2002) and c) human resources development (the establishment of a Department of Business Management at the Faculty of Economics of Kaliningrad State University with an allocation of 1.3 million euros by 2002). 315 In the early 2000s, the oblast was part of a TACIS project on the Promotion of innovative SMEs in the Baltic region / Russia, which aimed at improving the infrastructure of innovative SMEs through enhancing their capacity to provide training, marketing services and general business advice (the total allocation for the project covering the North-West of Russia constituted 1.8 million euros). 316 This was complemented by the project “Technical Assistance Contract for Promoting Trade and Investment in Kaliningrad Oblast” (2002 – 2003, with an allocation of 1 million euros) placing emphasis on the socio-economic stabilization of the region by means of contributing to the evolution of the Regional Development Agency, including such activities as institutional building, provision of self-sustainability, training and others and further promoting the trade and in314

COM (2001) 26, Annex II, p. 17. Ibid., and EU-Russia partnership on Kaliningrad. 316 See EU-Russia partnership on Kaliningrad. In 2005, the European Commission financed a project implemented by the Russian North-West Centre for SME “E-skills for Russian SMEs” with the aim of “enhancing the Russian SMEs’ competitiveness and facilitating their business cooperation with EU SMEs, by bridging the ICT gap between Russian and EU SMEs”. Northern Dimension Information System 2005, Projects relevant for Kaliningrad, Economy, Business, Infrastructure, p. 24. 315

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vestment attractiveness of the oblast. 317 Although it has already been mentioned in this chapter that the EU allocated 7 million euros for a three-year project on “Administrative Capacity Building in the Kaliningrad Oblast” (started in 2006) under the heading of “education, training and culture”, it is important to note that this project was also deemed relevant for, among other things, strengthening the capacity of local and regional authorities through assistance in implementing measures to enhance the competitiveness and investment attractiveness of the region. This was also stipulated in the Commission’s Progress report on the implementation of EU-Russia Common Spaces and in particular under the domain of trade-related issues of the Common Economic Space (already mentioned in Chapter III.3.). 318 In addition to this objective, the project aimed at promoting the establishment of an independent dedicated Investment Promotion Agency to execute activities related to investment promotion issues. Another contribution to the elevation of the oblast as an investment location was a large international investors’ conference organized jointly by the EU and the regional government in autumn 2008. In general, this project was considered to be one of the tools – along with the Dialogue on Investment – through which EU-Russia cooperation on investment issues could be carried out. 319 Apart from the TACIS assistance under the national allocation for Russia, the oblast benefited from projects financed by other TACIS facilities, including the PIP (Productivity Initiative Programme), which enabled internship opportunities for Kaliningrad managers in EU companies; the ESSN (European Senior Service Network), which specifically assisted SMEs specializing in wood-processing, and Bistro, which included projects on business and export promotion in the oblast. 320 Economic cooperation has also been one of the cornerstones of cross-border cooperation in the framework of the EU’s Neighbourhood Programmes and the ENPI CBC Programmes; the stimulation of economic cooperation has been identified among the principal objectives of cross-border cooperation, highlighted earlier in this chapter. Thus, one of the projects of the Lithuania-Poland-Kaliningrad Neighbourhood Programme was a project called “Support for international business cooperation in Kaliningrad” (2006 – 2007, total cost of 300,000 euros) which resulted in the establishment of an international trade promotion department at the Kaliningrad RDA based on the experience of its Klaipeda counterpart (Klaipeda Regional Development Agency), which aimed at encour317 COM (2001) 26, Annex II, pp. 17 – 18, and European Commission, Ongoing TACIS Projects in Kaliningrad Region (February 2002). 318 See EU-Russia Common Spaces. Progress Report 2007, European Commission, March 2008 p. 11. 319 Ibid. 320 COM (2001) 26, Annex II, p. 17.

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aging partnership between Lithuanian and Russian business people. 321 For the improvement of the business investment potential of the Kaliningrad Oblast, a study on the business infrastructure of 12 municipalities of the Kaliningrad region and business opportunities was undertaken in the framework of the project “Elaboration of Package of Measures for Development of Infrastructure of Municipalities in Kaliningrad Region to Ensure Inflow of Investments”. 322 Similarly, the economic sector is a priority area in the discourse of the Northern Dimension policy under the rubric of economy, business and infrastructure throughout both ND Action Plans and the current ND Framework Document. As in the case of other policy areas that have already been outlined in this paper, the issues of economics and business have been handled extensively by bilateral programmes of EU Member States. This can be exemplified by a project supported by the Ministry of Foreign Affairs of Denmark (donor) “Economic development support programme in Kaliningrad and Pskov oblasts” aimed at increasing economic growth and employment in both regions by improving conditions for SMEs and by helping the oblast integrate into the larger Russian market and the enlarged EU. 323 The project was envisaged for the time period 2006 – 2010 and allocated 1,5 million euros. In brief, this description reveals the following: although the aspect of economics is one of the foci of the EU policy towards Kaliningrad, the policy approach has been limited to providing policy advice and sharing expertise and funding through the TACIS programme. The EU has been engaged in various areas of the Kaliningrad economy. First of all, the EU has sought to contribute to institution building of the economic sector in the region; this is exemplified by its support for the development of the SEZ and its assistance to the Kaliningrad Regional Development Agency, a structure which plays a key role in the elaboration of research on various factors of Kaliningrad’s economy. Thus, the main EU approach has been funding projects on economic research and contributing to the promotion of trade and investment in the oblast. Secondly, EU action has revolved around enterprise restructuring in the oblast, in particular, providing expertise for SMEs in the oblast and sharing experience aiming to strengthen the competitiveness of regional SMEs. Thirdly, one of the areas of EU assistance is human resources development, illustrated by assistance in the establishment of the Department of Business Administration at the Faculty of Economics of Kaliningrad State University and the training of Kaliningrad officials through various vocational training programmes, policy and legal support. In this area, the EU meets its policy objective of helping the oblast improve 321

Project 2005/197, in: Triple Jump, p. 22. Project 2006/389, in: Triple Jump, p. 42. 323 Northern Dimension Information System 2006, Projects relevant for Kaliningrad, Economy, Business, Infrastructure, p. 57. 322

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its investment attractiveness since one of the major obstacles to the inflow of investment into the region is seen to be a high level of bureaucratization and corruption in the oblast. Besides support in the area of administration, the EU has provided technical assistance in areas like environmental management and economic infrastructure (air transportation, port development, energy and others), which will be examined below. The main instrument of EU assistance to the economy sector in Kaliningrad has been the TACIS programme under the national allocation as well as TACIS facilities such as the PIP, the ESSN, Bistro and others. In addition, the stimulation of economic cooperation between the Kaliningrad Oblast and its neighbours has been one of the principal priorities of the EU’s Neighbourhood Programmes and the ENPI Cross-border Cooperation programmes. Likewise, the Northern Dimension policy, in particular both its Action Plans as well as the current Framework Document, have identified the economy, business and infrastructure as a policy priority area. In the ND framework, several EU Member States (Finland, for instance) have implemented projects concerning the economic sector in the Kaliningrad Oblast. (2) Economic infrastructure (transport and energy) Effective infrastructure is one of the prerequisites for successful economic modernization of the Kaliningrad Oblast. Specifically, transport infrastructure is critical for cross-border cooperation and trade / transit facilitation, particularly as regards the geographical situation of the Kaliningrad Oblast. Therefore investments are needed in the physical infrastructure and processing, including upgraded information systems. In the Special Programme on Kaliningrad as part of the NIP for Russia 2004 –2006, the European Commission emphasized, among other measures for the reorientation of the Kaliningrad economy, the upgrading of the existing infrastructures for cross-border transport by air and land, aiming at facilitating communication with mainland Russia and neighbouring countries, and the upgrading of the existing infrastructure in the water and wastewater sector. 324 Although these measures were not included in the objectives of that Programme they were covered in the general provisions of the NIP. 325 Thus, in chapter 2.4 of the NIP, it was envisaged that in the area of development of transport infrastructures the EU could provide access to expertise and offer advice on policy, legal and regulatory aspects of the effective planning of infrastructural development programmes. In the passage of chapter 2.3 dedicated to transport sector, addressing transport problems in border regions was foreseen after EU enlargement and specifically in Kaliningrad. In addition, 324 325

National Indicative Programme, Russian Federation, 2004 –2006, p. 32. Ibid.

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the importance of the issue of the further development of the Pan-European Transport Corridors promoted by the EU as an extension of the Trans-European Networks was stressed. This chapter as well as chapter 3.4, pertaining to support for planning and designing municipal infrastructural development programmes, stipulated questions of energy use and energy efficiency. Although it can be stated that the general provisions of the subsequent National Indicative Programme 2007 – 2010 on infrastructure issues might likewise be relevant for the Kaliningrad Oblast, no mention of this matter was made in the section dedicated to the objectives of the NIP in connection with the Kaliningrad Oblast. The particular focus of the EU on transport infrastructure in the Kaliningrad Oblast can be accounted for by the fact that the oblast lies within two combined road and rail Pan-European Transport Corridors that pass through the territory of Russia, in particular Corridor I (Tallinn – Riga – Sovetsk – Kaliningrad – Mamonovo – Gdansk) and Corridor IX (Helsinki – Buslovskaya – Saint Petersburg – Moscow – Suzemka), including the section Nesterov – Chernyakhovsk – Kaliningrad which forms part of the branch line Kiev-Minsk-Nesterov-Chernyakhovsk-Kaliningrad / Klaipeda. 326 Yet, while improvements to transport corridors in the EU Member States were financed through contributions to the Trans European Transport Network and, in the Member States, the expenses for these improvements were covered by the ISPA programme, the development of transport infrastructure on the territory of Russia fell under the responsibility of the Russian Federation and no EU funds were available for that. 327 The EU believed that the Russian commitments in this sector could be complemented by efforts by the EBRD – already active in this area in the region – as well as international financial institutions. 328 The other observation by the EU was that the development of inter-modal rail terminals (road-rail, and rail-rail between different gauge widths) should be made “in conjunction with the development of the ports”, which would elevate Kaliningrad into a transport hub. 329 On the whole, the sectors of transport and energy belonged to the dominant sectors in which large projects have been implemented under the TACIS programme since 1991. 330 Thus, under the TACIS CBC Programmes in 1999 and 2000, two border crossing points located on the Pan-European Transport Network received priority: Chernyshevskoe / Kybartai-Nesterov (road / rail, a major transit point on the border with Lithuania, 8 million euros of the TACIS assistance) and Bagrationovsk / Bezledy (road, the main point for cargo transit on the border with Poland, opened in March 2008 with a TACIS contribution of 326 327 328 329 330

See Russia-Europe, Pan European International Transport Corridors in Russia. See EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 13. See EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 15. Ibid. p. 14. COM (2001) 26, Annex II, p. 17.

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2 million euros completed in 2003). 331 It was expected that the development of infrastructure, the modernization of border procedures, and the training of enforcement agencies’ staff would contribute to the facilitation of trade and the movement of goods and persons. 332 Several studies were also financed under the TACIS programme: the “MultiModal Transport Action Plan for Kaliningrad” (1997) and the “Kaliningrad Port Development study” (2001). 333 The project under the TACIS programme “Kaliningrad Sea Channel and Port Development” was allocated almost one million euros and its main objective was the strengthening of competitiveness of Kaliningrad Ports / Screening of Port Development Options (PDO) for the Kaliningrad Oblast in order to submit 2 –3 Investment Studies to potential investors (public and private / domestic and international) during an Investors Conference. 334

The PDO also aimed at evaluating opportunities for rehabilitating the Kaliningrad Sea Channel which connects the city’s ports to the Baltic Sea or, alternatively, for new investments in other ports. In the framework of the project “Kaliningrad Trade Seaport Controls” (2001, allocation of 90,000 euros), again under the TACIS Programme, the EU provided assistance to customs officers at Kaliningrad Port in order to help them improve customs control procedures for freight and passengers. 335 As to air transport, the EU’s suggestion was that “measures aimed at improving air links and airport infrastructure in Kaliningrad should be part of increased EU-Russia co-operation on aviation and be coordinated with the EBRD’s envisaged ‘Russian Aviation Modernisation Fund”. 336 The Kaliningrad regional administration also benefitted from one of the INTERREG II C projects implemented in the Baltic Sea region, namely, the Seabird “Sustainable and Efficient Air Transport in the Baltic Sea Region – Integrated Analyses and Recommendations for Development Perspectives” which was foreseen for developing efficient air transport. 337 In the area of energy, taking into consideration the dependence of the Kaliningrad Oblast on imports of energy supplies from the main area of Russia via the territory of Lithuania, the Commission Communication of 2001 emphasised 331 332 333 334

2002). 335 336 337

See EU-Russia partnership on Kaliningrad. COM (2001) 26, Annex II, p. 18. See EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 14. European Commission, Ongoing TACIS Projects in Kaliningrad Region (February Ibid. See EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 14. COM (2002) 26, p. 18.

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the need to undertake a preliminary study to identify energy needs, the potential for energy efficiency in the oblast and possible scenarios for the oblast’s connections to either Russian or the Central European electricity grids. 338 The TACIS Kaliningrad Energy Study was conducted in January 2002 in cooperation with the Kaliningrad Regional Development Agency. 339 As a solution for energy efficiency, the construction of a modular gas-fired power plant as well as the refurbishing of existing small hydro-power generation plants were proposed. Another two-year project (2000), likewise under the TACIS programme, provided 1,7 million euros to support the efficiency of the regional energy company Yantarenergo (the title of the project: “Support to Regional Energy Organisations”) by reinforcing efficiency and commercial capacity in heat and power distribution. 340 The EU also moved towards sharing expertise with the Kaliningrad staff in the municipal building management through training programmes on energy saving and measures to decrease energy losses (the TACIS project; “New methods and technologies in management of public buildings under the scope of energy saving”, 2000, 200,000 euros). 341 Generally, energy issues are discussed through the EU-Russia Energy Dialogue. Apart from consultations in different areas of common interest (energy trade, investment, energy infrastructure and energy efficiency) practical cooperation is carried out through various assistance projects. Thus, one of the projects under the EU-Russia Cooperation Programme was directed towards the Kaliningrad Oblast, namely, the project on “Energy efficiency in Arkhangelsk, Astrakhan and Kaliningrad regions”, which was allocated 3 million euros in total. 342 The problem of energy efficiency in the oblast also became the focus of a project, “Energy Saving at Public Premises – ESAPP,” (2005 – 2007, allocation of 148,000 euros) which sought to “raise awareness of the potential for saving energy, including potential cost savings, by improving the energy efficiency of three secondary schools in the region and installing measuring devices”. 343 Energy-related projects were also envisaged by the EU’s Neighbourhood Programmes, particularly the INTERREG III A programme under priority 1, according to which “competitiveness and productivity growth of the cooperation area” were to be achieved through development of cross-border infrastructure and bor338 COM (2002) 26, p. 4. Currently, in the framework of EU-Russia Energy Dialogue, EU and Russian experts examine the feasibility of the interconnection of EU and Russia electricity grids. 339 See EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 12. 340 Ibid., and European Commission, Ongoing TACIS Projects in Kaliningrad Region (February 2002). 341 European Commission, Ongoing TACIS Projects in Kaliningrad Region (February 2002). 342 Energy, the European Commission’s Delegation to Russia. 343 Kaliningrad – an example of EU-Russia partnership and co-operation.

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der security as well as through economic and scientific cooperation. This could be exemplified by the project “Perspectives of Offshore Wind Energy Development in Marine Areas of Lithuania, Poland and Russia”. 344 As was mentioned earlier, infrastructure, energy and transport were included into the priority area of economic cooperation in the Northern Dimension policy. In the framework of this policy, individual Member States implement projects that are designed for the Kaliningrad Oblast within these areas of cooperation. For example, Germany (in particular the Berlin Government and Senate Department for Urban development) executed a project aimed at contributing to the achievement of energy efficiency in residential buildings in the Baltic Sea Region, also involving the Kaliningrad Oblast. 345 Summarizing the principal findings, it is noteworthy that economic infrastructure, a prerequisite for successful economic modernization of the oblast, has also been a focus of the EU’s policy to Kaliningrad, first and foremost matters of transport and energy. The upgrading of transport infrastructure has been indicated as important for effective functioning of cross-border communication and in particular for trade and transit facilitation. Occupying an exceptional geographic location, Kaliningrad is connected to the Pan European Transport Network and lies across Pan European Transport corridors (I and IX). On the one hand, the EU’s position is explicit that improvements to transport corridors in the Russian territory should be made by Russia with attendant support from the EBRD and IFIs. On the other hand, the EU’s priority has been assistance in improvements of the infrastructure of two border crossings located on the PanEuropean Transport Network bordering Poland and Lithuania. Starting from an assumption that the development of land transport infrastructure should be stimulated in parallel with the development of ports, the EU financed a number of studies, including one on the development of Kaliningrad ports, in order to help identify how its competitiveness could be raised. The general aim was to contribute to the modernization of port facilities and management and to sustainable economic development in the oblast and its integration into the Baltic region. To a lesser degree, the EU has touched upon the problem of air transport development. In the field of energy, issues like energy supplies and energy efficiency have been addressed. The main approach of the EU has been funding studies and projects allowing Kaliningrad actors to be instructed in the methodology of energy saving through training programmes and expertise sharing. The main instruments have been the TACIS programme under the national allocation as well as the TACIS CBC Programme, the general framework of EU-Russia Energy Dialogue and the EU’s Neighbourhood 344

Project 2005/214, in: Triple Jump, p. 71. Project BEEN-Baltic Energy Efficiency Network for the Building Stock, Northern Dimension Information System 2006, Projects related to Kaliningrad, p. 62. 345

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Programmes (including the INTERREG II C programme) and the Northern Dimension policy. (3) The environment Environmental threats originating in the Kaliningrad Oblast have long been a source of concern to the EU, which is reflected in a number of policy documents. To start with, in its Communication on Kaliningrad of 2001, the European Commission emphasized the need to pay attention to the environment, specifically to activities to reduce water pollution, believing that “a cleaner Baltic Sea would benefit all Baltic Sea regions and should be a priority objective for region co-operation”. 346 Besides water pollution, the EU identified such environmental threats as nuclear waste owing to the past military presence in the region and problems arising from stockpiles of chemical weapons left since World War II. Pinpointing the necessity for Kaliningrad to “be actively involved in federal efforts to monitor the environment, harmonise standards, etc”, 347 the EU provided extensive financial assistance to activities in the field of environmental protection. While the Special Programme on Kaliningrad of the NIP 2002 – 2004 did not identify the improvement of the environment among its objectives, this was indicated in the National Indicative Programme 2007 – 2010 as a specific objective and hence environmental protection was included on the list of activities under the programme. Importantly, protection of the environment has been explicitly indicated among the updated aims of the EU’s overall policy towards Kaliningrad, which shows increasing attention to this area. Overall, issues pertaining to the environment have been a dominating focus for projects implemented in Russia and financed by the EU. As to the Kaliningrad Oblast in particular, according to some estimations, the allocation of 12 million euros to environmental projects in the Kaliningrad Oblast made up approximately 25 % of the total TACIS assistance to the region. 348 These projects can be divided into three groups: 1. projects dealing with technical problems, aiming at improving environmental management in the region in such areas as monitoring facilities and the treatment of water and sewage; these projects are the most numerous; 2. projects concentrating on the development of environmental attitudes and behaviour at various educational levels (at schools and universities); they are fewer and they get less financial support, and 3. projects seeking the modernization and harmonization of environmental legislation, norms and standards; these get the least in the array of environmental projects in Kaliningrad. 349 346

COM (2001) 26, p. 8. Ibid. 348 See Guido Müntel, Environmental governance in Kaliningrad: lost opportunities, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), p. 202. 347

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Under the “TACIS Special Action for the Baltic Region 1999 and 2000”, several projects were targeted at the Kaliningrad Oblast; one of them was entitled “Waste management in the Kaliningrad Oblast” (3 million euros), aimed at helping to establish an efficient and safe waste management system in the region and thus alleviate the impact of waste generation on both public health and the environment. 350 Another project, “Water environmental monitoring and management in Kaliningrad Region” (2000, 2 million euros), financed under the TACIS programme, was designed for the Kaliningrad Regional Administration and sought to contribute to the development of [a] sustainable and accepted monitoring network, providing an expertise on water resources management, harmonisation of system with neighbouring countries, enabling Kaliningrad authorities to meet HELCOM and EU requirements via improved system, implementation of pilot projects. 351

The TACIS project that started a year later was in general foreseen within the sector of legislation as it was directed to Kaliningrad Regional Duma and aimed at developing a legal framework for the cooperation of institutions acting in the sphere of natural resource usage and nature protection as well as at strengthening local authorities’ efforts to elaborate and implement a regional environmental policy. 352 More recently, a TACIS project on “Kaliningrad Waste Water Treatment” consisting of two phases was implemented; the first phase (TACIS allocation amounting to 1 million euros) envisaged the development of a waste-water investment plan for the region, and the second phase (3 million euros) foresaw the building of a modern waste-water treatment plant in the town of Gusev of the Kaliningrad Oblast to be in compliance with EU treatment standards, co-financed by the regional government and the EU, and to be completed by late 2008. 353 By and large, the problems of the environment and the improvement of the environmental situation in the Kaliningrad Oblast were considered by the EU, the Baltic States and Russia to be a priority area for regional cooperation. Apart from bilateral initiatives by EU Member States in this area, 354 the Kaliningrad Oblast 349 See Guido Müntel, Closing the gap to Europe? An assessment of change and adaptation of environmental governance in the Russian exclave of Kaliningrad, in: Contemporary Politics, Volume 12, Number 2, June 2006, p. 149. 350 COM (2001) 26, Annex II, p. 18. 351 European Commission, Ongoing TACIS Projects in Kaliningrad Region (February 2002). 352 Ibid. 353 Kaliningrad – an example of EU-Russia partnership and co-operation. 354 For instance, the Kaliningrad Oblast was one of the beneficiaries of a German project “Bernet-Catch (Integrated Management of Catchments)” in the field of water management. See Northern Dimension Information System 2006, Projects relevant for Kaliningrad, p. 91.

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has been a target region for support from the Northern Dimension 355 Environmental Partnership, which was launched in 2001 by the European Commission, several EU Member States, Russia, Norway and the IFIs acting in the region (the EBRD, the Nordic Investment Bank, the World Bank, and subsequently, the EIB) 356 with a view to coordinating “international efforts to bring solutions to the legacy of environmental damage in the Northern Dimension Area”. 357 A year later, the NDEP Support Fund was established to “pool grant contributions for NDEP projects and to ensure a harmonised and effective delivery of international support” and, thus, to act as: the mechanism for attracting resources from the European Commission and a wide group of contributing countries, including the Russian Federation, and to channel such funds into those environmental projects being prioritised by the NDEP Steering Group and approved by the Contributors to the Fund. 358

Overall, the NDEP is regarded as the principal framework for environmental investments in Kaliningrad. 359 The main environmental concerns of the ND Area are threats to the Baltic and Barents Seas, to the quality of drinking water, and, to certain degree, air pollution. To this end, the NDEP is characterized by a special focus on Kaliningrad and on nuclear waste in the North-West of Russia, active involvement and ownership of Russia in the Partnership, and in general by an extensive institutional framework (IFIs resources are managed by a Steering Group consisting of the European Commission, Russia and relevant IFIs), an integrated and long-term approach involving investments and mobilization of resources to grant co-financing of the key instruments through the NDEP Support Fund. 360 355 The Northern Dimension Policy documents identify the issues of environment, nuclear safety and natural resources as one of the priority sectors. 356 Under the special EIB lending action a project on prevention of marine pollution was launched in 2001. Overall, the EIB provided up to 100 million euros for financing operations on the environment in the Baltic Sea Basin of Russia in the framework of the Northern Dimension. In addition, the EBRD also financed several environmental projects including the Kaliningrad Water and Environmental Service Project. See EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 8. 357 The Northern Dimension Environmental partnership. 358 Rules of the Northern Dimension Environmental Partnership Support Fund, January 2002. 359 National Indicative Programme, Russian Federation, 2002 –2004, p. 32. 360 In 2008, the total volume of donor contributions to the Support Fund amounted to 273,8 million euros, with contributions of 2008 from Russia, the European Commission and Norway having been 20 million, 10 million and 0,5 million euros, respectively. See Progress Report for the First Ministerial meeting of the Revised Northern Dimension Policy, October 2008, p. 5. The Support Fund is managed by the EBRD under the supervision of the Assembly of Contributors. See Northern Dimension Environmental Partnership Support Fund Replenishment, Information Memorandum, February 2005.

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Environmental protection has been a focal point of cross-border cooperation under the EU’s Neighbourhood Programmes and the ENPI Cross-border Cooperation programmes. In the former case, measure 1.3 of the Lithuania-PolandKaliningrad Oblast Neighbourhood programme presupposed “environmental protection and growth of energy efficiency and promoting renewable energy sources”, 361 and, similarly, in the latter case, and, namely, in Lithuania-PolandRussia (the Kaliningrad Programme), measure 1.1 envisaged sustainable use of the environment, and specifically, it identified such indicative actions as sustainable cross-border waste water and waste management solutions, air and water monitoring, and the establishment of cross-border systems for exchange of environmental data. Apart from this, a number of environmental projects in the Kaliningrad Oblast were implemented under the DG’s ENV’s LIFE fund, 362 specifically in the fields of urban traffic and ecotourism. 363 In addition, the DG ENV provided funding to launch an Environmental Centre for Administration and Technology (ECAT) in Kaliningrad which was subsequently signed over to the responsibility of the municipal authorities. In 2005, Kaliningrad, and specifically the ECAT, was the only Russian beneficiary of a project in the framework of the LIFE (Third Countries) programme. The EU’s co-financing constituted almost 500,000 euros for this project, which aimed at promoting and facilitating the improvement of the environmental and safety performance of the industrial sector in Kaliningrad. 364 Under INTERREG II C programme, a project “Waterfront Urban Development – A Network of Cities in the Baltic Sea Region” was launched involving partners from Kaliningrad (the cities of Baltijsk and Kaliningrad) and concerned urban environmental management. 365 In general, protection of the environment has been one of the focal points of the EU policy towards Kaliningrad and this can be explained by the EU’s strong soft security concerns brought forth by the environmental threats arising in the oblast. This is clearly indicated first in the Commission Communication 361 For example, the project “Preparation of Investment into Water Quality Improvement in Goldap-Gusev Cross-border Region” was executed between the towns of Goldap (Poland) and Gusev of the Kaliningrad Oblast aiming at sharing experiences in waste management. See Project 2006/274, in: Triple Jump, p. 64. 362 LIFE is the EU’s financial instrument for the environment which was introduced in 1992 and which has been supporting (through co-financing) environmental and nature conservation projects in the EU as well as in the candidate and neighbouring (third) countries. Official information on this instrument is available at: http://ec.europa.eu/environment/life /index.htm. 363 COM (2001) 26, Annex II, p. 18. 364 LIFE Third Countries 2005: Commission funds environment projects in third countries with more than €6 million, IP 05/1156, September 19, 2005. 365 EU INTERREG II C, List of approved INTERREG II C projects with partners in Kaliningrad Oblast.

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on Kaliningrad of 2001 and this perspective was sustained in the recent National Indicative Programme for Russia 2007 –2010. Acquiring a quarter of the total EU assistance to the region, environmental projects have had three foci: 1. technical problems and environmental management, 2. educational initiatives and 3. regional environmental legislation. The first group of projects is dominant, which is also reflected in the headings of the large projects financed by the EU and specified in this Chapter. The main instruments used by the EU have been the TACIS programme, including the TACIS under the national allocation for Russia, DG’s ENV LIFE programme, the INTERREG II C programme, the EU’s Neighbourhood Programmes and the ENPI Cross-border Cooperation programmes. The EU has considered problems of the environment and improving the environmental situation in Kaliningrad a key area of regional cooperation in the Baltic Sea region. The EU has treated this issue extensively in the framework of the Northern Dimension Environment Partnership, wherein, although the European Commission plays a significant role as a leader and donor (total allocation of 70 million euros), 366 it still shares leadership with other partners, namely, Russia, Norway and the IFIs. In principle, the NDEP has become the main framework for environmental investments in Kaliningrad through its Support Fund. cc) The security dimension (1) Justice and home affairs The EU policy towards Kaliningrad in the area of justice and home affairs comprises the following foci: a) development of border management (borders and customs), b) the visa policy (including transit to and from the oblast), c) the fight against organized crime, d) good governance and judicial cooperation and e) facilitation of people-to-people contacts. The EU Eastern enlargement of 2004 essentially exposed Kaliningrad to EU policies, in particular the EU’s Schengen policy. The requirement that the then-EU candidate countries, Lithuania and Poland, adopt the Schengen acquis signified not only the abolition of a visa-free regime for the residents of the oblast, but also the intensification of efforts by the EU to secure the efficient operation of border crossings through “upgrading of facilities and procedures and exchange of best practice”. 367 As experts have noted, there are two dimensions of border management in the EU’s border policies and practices: firstly, border 366 367

See EU-Russia Common Spaces Progress Report 2007, March 2008, p. 17. COM (2001) 26, p. 5.

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controls and, secondly, border infrastructure, with both having been affected as a result of the enlargement. 368 In practice, the EU’s key contribution in this area consisted of its assistance to “the development of infrastructure of the border crossings, modernization of procedures and training to facilitate the movement of persons and goods across the future external border”. 369 It was believed that measures like this “facilitate border crossings, while combating organised crime and other illegal activities”. 370 Modern and efficient border control facilities and customs’ procedures are critical for smooth border-crossings by both goods and persons going to and from the Kaliningrad Oblast. Thus, one of the priorities of EU assistance to the region has been the improvement of the infrastructure of the border crossings in Kaliningrad. Although there are 23 crossing points in total between Kaliningrad, Poland and Lithuania, only four road border crossings were identified as being of particular importance in the region as a result of feasibility studies: Bagrationovsk, Chernyshevsky, Mamontovo I / II and Sovetsk. Located on the important transport networks of Europe, they received special attention from the EU and considerable allocations under the TACIS programme. In the meantime, Russia co-financed the projects related to the modernization of these border posts and Lithuania and Poland acquired funding from the EU PHARE programme for the relevant construction on their sides of the border and from the ISPA for the support of road works. The projects to improve the infrastructure of the two first points (Bagrationosvk and Chernyshevsky), situated on the borders with Poland and Lithuania, were mentioned in the section dedicated to the economic infrastructure of the EU policy toward Kaliningrad. In a similar vein, the EU supported the construction of the border post at Mamonovo II – the main border crossing point on the Polish border located on transport corridor IA – through an investment of 13 million euros under the TACIS programme. 371 Another project to upgrade the infrastructure of the border crossing point in Sovetsk, the main border post on the Lithuanian-Russian border, received EU funding under the TACIS programme of 10 million euros. 372 In the meanwhile, it was envisaged that, unlike the case with the border crossing points, work on the improvement of the road 368

See Lyndelle Fairlie, p. 30. COM (2001) 26, p.5. 370 Ibid. 371 Kaliningrad – an example of EU-Russia partnership and co-operation. 372 EU-Russia Co-operation on Kaliningrad: 2002 and beyond, pp. 6 –7. The beginning of the construction of this border checkpoint was hampered by the absence of an agreement between Lithuania and Russia on the funding of the construction of a new bridge over the Neman River. See EU-Russia Common Spaces. Progress Report 2007, p. 13. 369

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infrastructure on the territory of the oblast would be covered by the Russian side. Additionally, EU activities directed at upgrading border-control procedures included providing assistance in training customs officials and border guards; aid in the demarcation works at the Lithuanian border and efforts to strengthen customs cooperation in customs procedures and control. Within the latter activities, two projects were implemented and financed under the TACIS customs programme; the first project, “Kaliningrad Trade Seaport Controls” (2001), was allocated 90,750 euros and helped train the Kaliningrad seaport customs’ officers in methods of customs control that comply with the operation of customs controls in an EU seaport and broaden their skills in customs and border control in general. 373 The other TACIS project, entitled “Kaliningrad Customs Laboratory Equipment” (2001), was financed by the EU with 569,160 euros and aimed at establishing and equipping a customs’ laboratory in Kaliningrad and training its staff on its use. 374 Cooperation at the external border of the EU and Russia in general and Lithuania / Poland and the Kaliningrad Oblast in particular has been complicated first and foremost by the incompatibility of legislation and hence of practices concerning border management principles on both sides. 375 While the adoption by Poland and Lithuania of the Schengen acquis has entailed their implementation of the EU Integrated Border Management (IBM), Russia practices border procedures that differ from European border management principles. In general, the concept of the IBM at the level of the EU implies: a) “comprehensive tackling of the interrelated problems of trade, transport, insecurity, criminal smuggling and, where necessary, the development problems of the border regions themselves”; b) “strict requirements for the numerous authorities and agencies (especially border control and customs, but also transport, health, veterinary services etc.) to cooperate on common problems, rather than working separately and often at cross purposes”; and c) “strong encouragement for neighbouring countries to cooperate in managing shared borders”. 376 Having been discussed since the Laeken European Council of December 2001, the IBM rules at the level of the EU have not been consolidated under a single framework, 373

2002). 374

European Commission, Ongoing TACIS Projects in Kaliningrad Region (February

Ibid. See Alvydas Medalinskas, Challenges to the efficient EU border with Russia at the Kaliningrad enclave: A view from Lithuania, in: Baltic Rim Economies, Issue No. 2, April 30, 2007, and Alexey Ignatiev / Konstantin Shopin / Pyotr Shopin, Integrated management of the EU-Russia common border: the Kaliningrad perspective, in: Stefan Gänzle, Guido Müntel and Evgeny Vinokurov (eds.), p. 237. 376 Peter Hobbing, Integrated Border Management at the EU level, CEPS Working Document, No. 227, August 2005, Centre for European Policy Studies, p. 7. 375

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instead they can be found in an array of legal and administrative instruments including the founding Treaties, the Schengen instruments of 1985 – 1999 and various informal arrangements such as the Common Manual on external borders approved by the Schengen Executive Committee and the Catalogue of Best Practices sketched by the Working Party on the Schengen Evaluation. 377 As a result of the debate on the necessity of improvement and the achievement of a coherent IBM, the “Hague Programme” was adopted in 2004 and the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union (Frontex) was launched in 2005. The EU and Russia have developed contacts of cooperation in the area of border management at the level of the Frontex, on the one hand, and the Federal Border Service of the Federal Security Service of the Russian Federation, on the other hand. In accordance with the joint cooperation plan for 2007 – 2010 and in the broader framework of the Common Space of Freedom, Security and Justice, it was agreed that the Russian Federation – which in accordance with the Constitution of Russia is exclusively responsible for border management – could implement the principles of the EU IBM strategy locally on a pilot basis in the Kaliningrad Oblast. 378 In the Russian context, adopting the principles of the EU’s IBM signifies, inter alia, the introduction of EU-similar rules, tactics, policies and procedures concerning border security and control at border checkpoints, the introduction of new legislation in compliance with the EU acquis related to border management, and other recommendations pertaining to political and technical spheres. While this process will admittedly be long-lasting, will require considerable effort, and can be realized only in a long-term perspective within the overall Russian context, Kaliningrad is to play a test role owing to its unique geographical position. To this end, a TACIS project on Integrated Border Management in Kaliningrad (4 million euros of EU funding) was envisaged to start in 2008 to address the issues of the fight against organized crime, namely, the strengthening of cross-border law enforcement cooperation between Kaliningrad, Poland and Lithuania, the training of law enforcement officers, the improvement of border control measures and surveillance of the land and sea borders. 379 Cross-border infrastructure-related projects were also envisaged by the EU’s Neighbourhood Programmes, particularly the INTERREG III A programme under priority 1, according to which “competitiveness and productivity growth of the cooperation area” were to be achieved through the development of cross-border infrastructure and border security as well as through economic and scientific 377

Ibid., p. 14. Justice, Freedom and Security, The European Commission’s Delegation to Russia. 379 Kaliningrad – an example of EU-Russia partnership and co-operation; and EU-Russia Common Spaces. Progress Report 2007, p. 31. 378

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cooperation. However, regarding cross-border infrastructure, unlike the Lithuanian-Polish border territory where numerous projects related to this area were executed, no such projects involved the Kaliningrad Oblast. A single project on “Projecting Rebuilding of Roads in Ketrzynski County Connected with Security of National Border” foresaw the development of the border territory of this Polish county bordering the Kaliningrad Oblast through improving transport and safety conditions in the territory. 380 Although the list of eligible institutions for projects under these Programmes was more extensive in general (including NGOs), the projects under this priority (especially concerning cross-border infrastructure) were mainly limited to public bodies because of questions of the financial management and control aspects. 381 Presumably, the absence of such projects for the Kaliningrad Oblast can be explained by the fact that it is not an entity of an EU Member State and that the principal work to upgrade the border infrastructure have to be undertaken under national rather than crossborder programmes. Within the issue of border controls, visa policy plays a key role. In this respect, the EU has been treating the matter of visas for Kaliningrad residents in the framework of its general EU-Russia cooperation on the movement of people. Thus, in May 2005 in Sochi the two sides signed Agreements on Readmission and Visa Facilitation, both to come into force on July 1, 2007. While the former agreement had no specific direct impact for the Kaliningrad Oblast and had implications for EU-Russia cooperation in the prevention of illegal migration, the Agreement on facilitating the issuance of visas for the citizens of the Russian Federation and the European Union essentially implied, as was indicated in Chapter II.1., that Kaliningrad inhabitants lost their privilege of obtaining free-of-charge Lithuanian and Polish national visas and hence were obliged, like other Russian citizens, to pay a fee of 35 euros for processing visa applications when Lithuania and Poland entered the Schengen area. While the dialogue on the facilitation of a visa regime for Kaliningrad residents is being carried out within the relevant institutional structures of the EU-Russia partnership, the two sides’ approaches still diverge considerably. Thus, Russia’s Ministry of Foreign Affairs has recently put forward a document containing seven variants to facilitate a visa regime for the region’s inhabitants, including one variant which envisages the issuance of multiple and free-of-charge Schengen visas for Kaliningraders. 382 The principal counter-argument of the EU holds that the decision on this issue should in no way bypass the rules inherent in the Schengen acquis. The priority of the Russian side is the abolition of visa regime between Russia 380

Project 2005/209, in: Triple Jump, p. 58. Lithuania, Poland and Kaliningrad Region of Russian Federation Neighbourhood Programme, p. 20. 382 Vadim Smirnov, Postpred RF pri Evropejskih Soobwestvah rasskazal nashej gazete, kak reshaetsja vizovyj vopros kaliningradcev, 27 janvarja 2009. 381

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and the EU, which would automatically resolve the visa complications typical for the Kaliningrad region’s residents. On the eve of the EU Eastern enlargement the EU pointed out the possibility of examining the costs of passports and visas for Kaliningraders, highlighting, however, that these costs were the responsibilities of Russia and EU Member States. 383 In addition, it was noted that new and current Member States “could consider opening consulates 384 (or sharing facilities to reduce costs) in Kaliningrad to facilitate visa issuance and manage migration flows efficiently”. 385 Importantly, in the context of the Kaliningrad Oblast, the EU turned to the examination of the possibility of the “development of further rules on the smaller border traffic (traffic within areas adjacent to the external border) in order to avoid disrupting local socio-economic ties”. 386 The regime of local border traffic has long been a focus for the European Commission, with the “local border traffic” meaning the regular and frequent crossing of the external land border of a Member State by border residents (thirdcountry nationals) in order to stay in the border areas of that Member State for a limited period of time. 387 The main idea behind is the issuance of a so-called special “L” visa – with “L” standing for “local” – for border residents as a way of softening the Schengen acquis. It was envisaged that the visa would represent “a multiple-entry visa issued for at least one year and for maximum five years, entitling the holder to stay in the border area 388 of the issuing Member State for 7 consecutive days maximum and without exceeding, in any case, three months within any half-year period”. 389 The implementation of this regime would be delegated to the Member State concerned, which in turn would negotiate and conclude a specific bilateral agreement with the neighbouring country and the provisions on the visa issuance would be based on the principle of reciprocity. Such an agreement, however, has not been concluded yet, either between Russia and Lithuania or Russia and Poland.

383

COM (2001) 26, p. 5. To date, there are consulates of Poland, Lithuania, Germany and Sweden in the Kaliningrad Oblast. 385 COM (2001) 26, p. 5. 386 Ibid. 387 See COM (2005) 56, p. 2, 14. In 2006, the Council and the European Parliament adopted Regulation (EC) No. 1931/2006 of the European Parliament of December 20, 2006 laying down rules on local traffic at the external land borders of the Member States and amending the provision of the Schengen Convention, OJ (2006) L 405/1. 388 The coverage of the border area is limited to the territory not extending more than 30 –35 kilometers from the frontier. COM (2005) 56, p. 14. 389 Ibid., p. 4. 384

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Regarding transit to / from the Kaliningrad Oblast through the territory of the Republic of Lithuania, EU policy is based on the transit arrangements achieved by the EU and Russia in November 2002, wherein both sides agreed on the establishment of a “Facilitated Transit Document scheme”. Following this agreement, the EU adopted the relevant legislation: two Council Regulations were enacted introducing certain amendments to the Common Consular Instructions and the Common Annual. 390 As was already mentioned in Chapter IV.1., although incorporated into the EU acquis, the Facilitated Transit Scheme as provided in these regulations does not explicitly refer to the Kaliningrad Oblast, but rather these legal acts are universal and constitute part of the Schengen acquis to be applied in case any similar situation arises. EU actions in the fight against illegal activities in the Kaliningrad Oblast (first and foremost, illegal immigration, trafficking in human beings, drugs’ trafficking, smuggling and stolen cars) are mainly carried out in the general framework of EU-Russia cooperation in this field. This relates to cooperation between Russia and EU Member States’ police and customs authorities, cooperation in the framework of the agreement between Russia and Europol, the EU-Russia readmission agreement, cooperation between the European Monitoring centre on Drugs and Drugs Addiction, the Russian Federal Drugs Control Service, and others. The reduction in corruption and organized crime as well as the improvement of governance in Kaliningrad were among the specific objectives of the National Indicative Programme for Russia for 2007 –2010 in the section dedicated to Kaliningrad as a priority area of the Programme. In this respect, the activities envisaged included policy advice and institutional / capacity-building support for anti-corruption measures and the fight against organized crime. The field of justice and home affairs is also a priority area of the Northern Dimension policy under the same heading in the two Action plans under the title “Freedom, Security and Justice” in the Northern Dimension Policy Framework Document. The EU worked on a project “Combating organized crime in Kaliningrad” (in conjunction with the Russian Ministry of Interior) with a view to examining opportunities for technical assistance to support the training of law enforcement officers and border guards. 391 It was also envisaged that the EU would explore the possibilities for increasing the frequency and scope of joint Baltic Sea law enforcement operations involving Kaliningrad. 392 Thus, it was believed that the Task Force on Organized Crime in the Baltic Sea Region 393 – with Russia having been an active member from the very outset – could contribute to combating 390

2003. 391 392

Council Regulation (EC) No. 693/2003; and Council Regulation (EC) No. 694/ EU-Russia Co-operation on Kaliningrad: 2002 and beyond, p. 8. Ibid.

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illegal activities. 394 In effect, the Task Force, which acted through its Operative Committee and had at its disposal a communications system allowing for the intensive exchange of information (BALTCOM), involved Kaliningrad in several of its operations against stolen vehicles, drugs and illegal immigration between 1998 and 2000, which was welcomed by the Baltic participants and reportedly played a role in confidence-building and improving soft security in the Baltic Sea region. 395 For the EU, cooperation in matters of justice, freedom and security is based “on respect for human rights and the promotion of the rule of law” 396 and hence it should complement the EU’s efforts to reinforce democracy in Russia. Apart from such issues as the efficiency of the judicial system and judicial cooperation in criminal and civil matters, this area of cooperation includes the issue of good governance. As has been already mentioned in the section devoted to the human dimension of EU policy toward Kaliningrad, the Commission Communication on Kaliningrad of 2001 indicated that efforts directed at improving the independence of the local judiciary through training and twinning programmes needed to be taken. 397 Thus, the EU sought to assist the oblast by promoting the participation of relevant Kaliningrad actors in EU projects for judicial reform and public administration and involving local civil servants in training and twinning programmes targeted at magistrates and aimed at, among other things, improving the independence of the local judiciary. Projects in the area of justice and home affairs have also been executed by several individual Member States in the framework of the Northern Dimension. This concerns matters of: a) customs cooperation, exemplified by the project “Customs Cooperation with the Russian Federation; Training and Technical Assistance” executed by the Ministry of Finance of Finland and targeted, inter alia, at the North-Western Administration of the Customs Committee and customs’ administration in the North-West of Russia; 398 b) police cooperation, 393 The Task Force on Organized Crime in the Baltic Sea Region was launched on the basis of a decision of the Heads of Government of the Council of Baltic Sea States Member States in 1996, with its mandate having been extended until the end of 2008. Aiming at improving capacities of its member states to prevent and combat organized crime by means of contributing to close cooperation among their law enforcement agencies, the TF-OC covers such activities as the promoting of exchange of information, the performing of joint actions, the encouraging of judicial cooperation and the undertaking of special surveys, training and other cooperation. Its institutional framework includes: a) special representatives of the Heads of Government of CBSS Member States, the Presidency of the EU and the European Commission, b) an Operative Committee, and c) several ad-hoc expert groups. The official site of the TF-OC is located at: www.balticseataskforce.ee. 394 COM (2001) 26, p. 7. 395 COM (2001) 26, Annex I, p. 15. 396 COM (2008) 740, p. 4. 397 COM (2001) 26 final, p. 8.

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including the project “Long-term support to development of democratic police forces in the Baltic States and in Kaliningrad Region (Russia)” which was implemented at the initiative of the Ministry of the Interior of Schleswig-Holstein / Germany for police administrations and academies in the Baltic States and Kaliningrad; 399 c) trafficking, in such projects by the Ministry of Foreign Affairs of Finland as “The Trafficking Assessment and Counter-Trafficking Capacity Building Project for the Kaliningrad Oblast” (2005 – 2007) and “IOM / PIAVKO Prevention and Improved assistance to Victims of Trafficking in the Kaliningrad Oblast” (2008 – 2010). 400 People-to-people contacts also constitute part of the area of justice, security and home affairs. Fostering a culture positive co-operation of across borders was one of the objectives of the Special Programme on Kaliningrad of the NIP 2004 – 2006. It was foreseen to undertake activities directed at promoting “integration at the regional and local levels through the TACIS CBC SPF, in synergy with the PHARE CBC and INTERREG programmes in Poland and Lithuania”. 401 It was expected that the programme’s major outcome would be joint ventures across the border which would engage regional and local authorities as well as the business community and enhance non-governmental cooperation. All in all, EU actions towards the Kaliningrad Oblast as regards justice and home affairs stretch from such areas of cooperation as development of border management (borders and customs), visa policy (including transit to / from the oblast) to the matters of the fight against organized crime, good governance and judicial cooperation as well as the facilitation of people-to-people contacts or, put another way, cross-border cooperation. In brief, in the area of EU assistance to border management, there are two foci: border infrastructure and border controls. EU aid includes: a) providing funding for upgrading the four main road border-crossing points located on the territory of the Kaliningrad Oblast, and b) assisting in the training of customs officials and border guards and improving their skills. Owing to the difficulties arising from the incompatibility of legislation and border practices surrounding border management in the EU and Russia, a decision was made by both sides that the Kaliningrad Oblast would serve as a pilot region where the rules of EU Integrated Border Management would be introduced and tested.

398 Northern Dimension Information System 2006, Projects related to Kaliningrad, p. 198. 399 Ibid., p. 199. 400 Northern Dimension Information System 2007, pp. 354 and 355, respectively. 401 National Indicative Programme, Russian Federation, 2004 –2006, p. 34.

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The EU’s visa policy is carried out in the broader EU-Russia framework. As a result of the conclusion of the EU-Russia agreement on the facilitation of visa issuance, the residents of the Kaliningrad Oblast found themselves in a situation that, on the one hand, made them equal with the rest of Russian citizens and, on the other hand, disadvantaged them due to their exceptional geographic location. Facilitated Transit arrangements are applied to transit to / from the Kaliningrad Oblast through the territory of Lithuania. Importantly, having been agreed upon by the EU and Russia in November 2002, these arrangements were incorporated into the EU acquis. Although the EU legislation contains provisions on the local border traffic regime that have the capacity to facilitate the border crossing by Kaliningrad residents to border areas of Lithuania and Poland, they have not yet been fully examined or implemented. Accompanying issues pertaining to the area of justice and home affairs such as promoting the rule of law, good governance, judicial cooperation and facilitating people-to-people contacts, the EU has been active in the area of combatting organized crime, in particular illegal immigration, trafficking in human beings, smuggling and stolen cars. Cooperation in this field is carried out in the framework of EU-Russia cooperation in the Common Space of Justice, Freedom and Security. The Kaliningrad Oblast has also been involved in activities undertaken by the Task Force on Organised Crime in the Baltic Sea Region, a unit established in the Council of Baltic Sea States. In addition, the EU, as well as its individual Member States in the context of the Northern Dimension policy, provides policy advice and institutional / capacity-building support for anticorruption measures and the fight against organized crime through a variety of projects. The main EU instruments have been the TACIS programme, the Northern Dimension policy and arrangements made at the bilateral EU-Russia level and multilaterally (e.g., TF-OC). dd) Summary The EU policy towards the Kaliningrad Oblast of the Russian Federation has many facets. The declared aims of this policy include, firstly, ensuring that Kaliningrad benefits from and contributes to the sustainable development of the Baltic Sea region; secondly, promoting socio-economic development of the oblast and, thirdly, guaranteeing the smooth and efficient functioning of the transit of goods and persons between the Kaliningrad region and the main area of Russia. Consequently, the policy strategy – although not formally drawn up and presented in a coherent plan to meet the above aims – entails activities to improve the efficiency of border crossings and the socio-economic development of the oblast. The most comprehensive policy documents are two consecutive Commission communiqués of 2001 (“The EU and Kaliningrad”) and 2002 (“Kaliningrad: Transit”). In addition, other papers indicate the priority areas for the cooperation

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on the Kaliningrad Oblast more particularly: the “Special programme for the Kaliningrad Oblast” as part of the “National Indicative Programme for Russia 2004 – 2006”, the “EU Strategy Paper for Russia 2007 – 2013”, and the subsequent “National Indicative Programme for Russia 2007 – 2010”. An analysis of the EU’s policy approach towards the Kaliningrad Oblast allows making a number of observations. On the one hand, in spite of the complexity of the EU’s aims in assisting the oblast, there is no single coherent policy on Kaliningrad which has been outlined in a programme document. The policy is rather fragmented, it has a low level of ambition and determines declarative final aims. This can be explained by the fact that, as a subject of the Russian Federation, the Kaliningrad Oblast, is not an independent political unit and hence the EU has to organize its policy toward Kaliningrad in the framework of its overall Russia policy which is laid down in general policy strategic documents. Additionally, the EU targets the oblast in its thematic and regional policies and programmes (such as the cross-border cooperation policy and the Northern Dimension) as part of the Russian Federation. A considerable portion of EU policy towards Kaliningrad is channelled through regional organizations and bilateral assistance of individual EU Member States. The EU approaches the Kaliningrad Oblast through its external policy towards Russia and coordinates its Kaliningrad policy within the general framework of EU-Russia relations, built by the PCA and EU-Russia Common Spaces. On the other hand, examination of the EU’s tactics as regards its Kaliningrad policy reveals that it resembles a cross-pillar policy approach, with the policy fields stretching across three thematic dimensions: the political and human dimension; the economic dimension and the security dimension. In this way, it reflects a traditional EU line adopted in the neighbourhood policy. Thus, the ENP’s major instruments, Action Plans, comprise chapters on similar policy areas: economic and social cooperation and development; cooperation in justice and home affairs, sectoral issues such as transport, energy, the information society, the environment; and the human dimension including people-to-people contacts, civil society, education and public health. In comparison, the EU is also active in a considerable number of policy dimensions regarding the Kaliningrad Oblast; covering such fields as democracy and human rights, education and training, culture and research as well as public health and social policy (political and human dimension); economic areas and economic infrastructure including transport and energy and the environment (the economic aspect), justice and home affairs (security aspect). In case of the ENP, the method of organizing all these components into the policy dimensions is derived from the previous three-pillar structure of the EU. At the same time, although not a clear-cut explicit policy, the EU’s Kaliningrad policy contains a considerable number of the components of the three-pillar structure of the EU, with exceptions being political dialogue and

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external security issues, since they only apply when the EU deals with an independent political entity. Therefore, these matters are handled exclusively in the framework of EU-Russia relations. Still, engagement in activities covering a broad array of policy areas suggests a more comprehensive and inclusive approach to Kaliningrad than it would typically and formally be expected from the side of the EU owing to the fact that the Kaliningrad Oblast is a part of the Russian Federation and not an entity like the state recipients of the EU’s Neighbourhood Policy. The EU policy towards the Kaliningrad Oblast is shaped by a spectrum of policies and instruments: a) the EU’s Russia country policy, which is formed by the PCA and the Four Common Spaces and is periodically particularized in Country Strategy Papers and the National Indicative programmes; b) the EU’s cross-border instrument, including the Neighbourhood Programmes and the ENPI Cross-border Cooperation Programmes as part of the European Neighbourhood Policy, c) the Northern Dimension policy, and d) various thematic programmes. As can be seen, the EU approaches Kaliningrad predominantly in the framework of its foreign policy towards Russia and has a strong focus on cross-border cooperation issues. In general, the study of the parameter of integration pertaining to the level of participation in EU programs and policies (7) reveals that in Kaliningrad’s case this degree of inclusion is low. The analysis of the EU policy shows that, in spite of the complexity of issues covered by the policy, the EU deploys similar instruments and policies through the whole range of these issues. Specifically, in all three dimensions examined the main instrument has been the TACIS programme and its various attendant facilities and, recently, the ENPI that has replaced TACIS since 2007. To a certain degree, the design of the TACIS programme alone could explain the wide coverage of policy areas. The legal foundation of the TACIS programme, particularly, envisaged seven areas of cooperation: 1. support for institutional, legal and administrative reform, 2. support for the private sector and assistance for economic development, 3. support in addressing the social consequences of transition, 4. development of infrastructure networks, 5. promotion of environmental protection and management of natural resources, 6. development of the rural economy and 7. support for nuclear safety. 402 The thematic programmes that have been utilized by the EU have been the European Initiative for Democracy and Human Rights and the EU Tempus programme (the political and human dimension) as well as the LIFE programme of DG ENV (the field of the environment of the economic aspect). The Kaliningrad Oblast has also participated in a small number of regional programmes conducted by the DG Regional Policy and DG Enlargement in such areas as social policy and the environment. The other instruments that encompass activ402

Council Regulation No. 99 / 2000, Annex II.

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ities crossing the three policy aspects are the EU Neighbourhood Programmes and the ENPI Cross-border Cooperation Programmes as well as the Northern Dimension policy. In the case of the Neighbourhood Programmes, the oblast has been part of two INTERREG programmes: INTERREG III A (Lithuania-PolandRussia / Kaliningrad) and INTERREG III B (the Baltic Sea Region Programme). Although having been part of the regional policy of the EU, the funding of projects in the Kaliningrad Oblast in the framework of INTERREG programmes was carried out not with EU structural funds, but with external ones, namely, through the TACIS programme facilities, which proved to lack coherency in coordinating the programmes. This was expected to change as a result of the establishment of the ENPI, which presupposed the approximation of EU policies and instruments as regards cross-border cooperation between units of the European Union and external regions. As to the Northern Dimension policy, the degree of prioritization and involvement of Kaliningrad in it is not necessarily proportional to the degree of Kaliningrad’s integration with EU’s policies. The Northern Dimension has long been a framework or an umbrella for the execution of projects related to Kaliningrad by the European Commission, individual EU Member States, and regional organizations rather than a policy offering a strategy for the development of Northern Europe in general or a concept of the sustainable development of the Kaliningrad region in particular. The ND policy has had no financial instrument it its disposal. Recent developments demonstrate a greater degree of ownership of the ND policy by other stakeholders (Iceland, Norway and Russia). Importantly, with Kaliningrad being a priority area, the Northern Dimension policy represents a horizontal, multi-pillar concept which encompasses such areas of cooperation as economy, freedom, security and justice, external security, research, education and culture, the environment, nuclear safety and natural resources and ultimately social welfare and health. Therefore, projects in most of these fields are implemented in the Kaliningrad Oblast. In addition to these policies and instruments, the EU carries out its policy towards the Kaliningrad Oblast in the general framework of EU-Russia cooperation. This chiefly relates to the area of justice and home affairs and thus to cooperation in the Common Space of Justice, Freedom and Security. Thus, the transit of persons between the oblast and mainland Russia is regulated by the Facilitated Transit arrangements adopted by the two sides in 2002. On the basis of a bilateral decision, the Kaliningrad Oblast will play the role of a pilot region where the rules of the EU’s Integrated Border Management are to be introduced and tested. The policy of the EU towards the Kaliningrad Oblast is predominantly met by means of projects in which partnerships between actors from the EU Member States and actors from the Kaliningrad Oblast are built up. The other form of EU assistance is the provision of expertise and training as well as methodology by the European Union.

V. Conclusion The research focus of this thesis is an attempt to inject some sophistication into discussions surrounding the actions of the EU. It has been fostered by several factors including the phenomenon of the Kaliningrad Oblast of the Russian Federation, physically situated inside the European Union, some post-modernist assumptions about “inside” and “outside” the EU, the growing flexibility of models of inclusion into the Union and already existing attempts to examine the fashion and effects of the transfer of European modes of governance into this Russian exclave. By seeking to challenge conventional notions about the inclusion of third units into the EU, grounded in the comprehension of the growing fuzziness of the EU’s boundaries and proceeding from the existing multiplicity of models of inclusion in the EU, this inquiry has attempted to map the place of the Kaliningrad Oblast inside the European Union from a legal and institutional rather than geopolitical perspective, proceeding from the Oblast’s status quo under both international and constitutional law. It has specifically sought to check the credibility of the assumption that the EU pursues a policy of inclusion in relation to the Kaliningrad Oblast and that the Russian exclave may be seen as situated inside the European Union apart from being so geographically. Taken together, the findings of this dissertation reveal that it is not credible to identify the Kaliningrad Oblast as de facto situated inside the EU. Furthermore, the analysis of the EU policy directed towards Kaliningrad does not allow calling it a clear policy of inclusion. Hence, the provocative hypothesis that the Kaliningrad Oblast is situated inside the EU can not be confirmed. When it comes to this EU enclave, the Union’s boundaries lose their fuzziness and return to their long-established hard and clear shape, with Kaliningrad being treated as an external element. Nonetheless, the EU’s policy activities with regard to the Russian region are organized in a manner similar to how its policy models to third countries are built; this is a cross-pillar policy-areas approach which still suggests the embryonic state of the Union’s potential explicit policy to Kaliningrad. The point of departure of this inquiry has been the notion of the EU’s boundaries: geopolitical, institutional / legal, transactional and cultural. Among these, the institutional / legal boundary of the EU with respect to Kaliningrad has been the principal focus. Measuring the degree of Kaliningrad’s presence inside the EU has been conducted against seven parameters which have been discerned in the study of the integration patterns of third states with the Union. The more

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determinants of integration that can be verified, the higher degree of inclusion is observable. While from a legal perspective the template of the inclusion of neighbours into the EU may vary from full integration leading to membership to association and partnership characterized by different levels of intensity of the relationship, there is hardly a model at hand capable of explaining the ways the EU engages with a federated unit (or broadly speaking, a constitutive part) of a third country. Clearly, the substantial portion of the analysis has been based on an exhaustive scrutiny of the bilateral EU-Russia relationship since the Kaliningrad Oblast is an integral part of Russia’s legal space and its capacity to be an insider within the external environment depends heavily on the stance of the dialogue between Russia and that environment. This exploration of the EU’s Kaliningrad policy has brought the following points to the foreground: 1. Seen purely from a legal perspective, the intricate supposition that the Kaliningrad Oblast may be situated inside the EU faces a point-blank negation which is first and foremost shadowed in the oblast’s legal status and its significantly limited international capacity. First of all, the Kaliningrad region is not a subject of public international law and it is in no way empowered to communicate directly with the EU. It is an ordinary – in terms of privileges and competencies – subject of the Russian Federation and, in its foreign activities it is entirely dependent on the federal centre. Therefore and at this point, it appears to be clearly both de jure and de facto outside the EU. What is more, these constraints in its legal capacity rule out the plausibility of the European Union treating Kaliningrad as the object of a single coherent policy. At the same time, the exploration of Kaliningrad’s external activities reveals that the region is hardly sealed within its geographical borders since it possesses limited international subjectivity originating in the Constitution and federal legislation. It capitalizes on available foreign policy resources and the principal direction of its external relations is cross-border cooperation and, to date it has developed close legal links with regional authorities of some EU states. Also notable in this context is that the external activity of the oblast remains responsive to overall EU-Russia relations. The status of Special Economic Zone, implying a special legal regime, falls short of providing additional legal capacities to the oblast which could enable it to communicate with the external world directly and independently. In its federal policy towards the exclave, on the one hand, Russia accepts the need to deal with the issue of Kaliningrad’s development multilaterally, including on the level of the EU-Russia partnership, and it has even put forward – albeit rhetorically – the idea of a pilot region, which presupposes a special political status for the oblast without, however, enlarging its legal and administrative capacities. On the other hand, the Russian government has failed to offer a comprehensive socio-economic strategy for the oblast and the SEZ legal regime prevents the Kaliningrad Oblast from acquiring its own long-term economic competitiveness in the Baltic

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Sea region, which is, according to regional authorities, an essential prerequisite for the oblast’s sustainable development. Given this, it is clear that a substantial long-term socio-economic strategy is needed for the Kaliningrad Oblast based on pragmatic goals and this should be a product of a joint EU-Russia effort which, again, is conditional upon the state of EU-Russia relations. 2. Tracing the development of the EU-Russia bilateral political relationship and the germination of the issue of the Kaliningrad Oblast as an item on the bilateral agenda has resulted in the discovery of an entire chain of significant political complications between the two sides, often pertaining to the sphere of high politics besides their diverging interests as regards Kaliningrad. These complications support the argument that, under such circumstances, the maintaining a coherent and explicit policy on Kaliningrad in the framework of EU-Russia relations and a broader EU’s Russia policy is largely unattainable. Hence, the determinant of the EU’s (would-be) policy of inclusion in a well-organized and documented policy (parameter 1) proves unsustainable. The EU maintains its policy towards Russia in the framework of the Partnership and Cooperation Agreement, the EU-Russia Four Common Spaces and the European Security Policy, wherein the Russian Federation is listed among the EU’s six strategic partners. The practical objective of the EU-Russia partnership is implementing the Four Common Spaces. With their policies to each other having evolved considerably since 1994, the EU’s and Russia’s various controversies and disparities tend to obstruct the EU-Russia partnership in general. Most importantly, the tensions over the energy issues, the common neighbourhood and NATO expansion to the East, Russia’s internal political development and other disagreements on global matters tend to complicate or even hamper the dialogue on the Kaliningrad Oblast. The Kaliningrad region came to the fore of discussions as a controversial issue in EU-Russia relations first and foremost due to the diverging positions of the two sides rooted in their concerns and interests. While Russia was preoccupied with the matters of Kaliningrad transit, the oblast’s economic development and potential secessionist tendencies among Kaliningrad residents, the EU’s concern was mainly possible soft security threats stemming from the oblast. This was complemented by different approaches to the Kaliningrad transit problem; whereas the EU examined this problem as mainly technical, Russia tended to see the issue as political. Nevertheless, the principal achievements of the dialogue on the Kaliningrad Oblast over the time period 2001 –2002 were that: firstly, Russia resigned an isolationist scenario for the Kaliningrad Oblast and, secondly, the EU demonstrated cooperative behaviour, issuing two consecutive Commission Communications on Kaliningrad and attaching a higher priority to the oblast by distinguishing it from other Russian regions. The Kaliningrad compromise led to resolving

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the problem of Kaliningrad transit from / to the main body of Russia through the establishment of the FTD system. Firstly, this was a technical rather than a political decision, since the former visa-free transit was not sustained; secondly, the two sides concentrated merely on the transit aspect and not on the economic and social development of the oblast. The dialogue over transit illustrates the overall complicated nature of EU-Russia relations. Whilst on the eve of the EU Eastern enlargement, specifically in the time period 2001 – 2002, the Kaliningrad Oblast was an important factor in EU-Russia relations, at present it is rather a weak item therein. Over the course of time it has been pushed to the back of the overcrowded bilateral agenda, which has prioritized such issues as creating a Common Economic Space, an energy dialogue, concerns over regional security and defense policy, a visa-free regime, and, overall, the development of the Partnership for Modernization. Some of the issues, however, such as the Common Economic Space and a visa-free regime, still remain of basic importance for Kaliningrad. 3. Inspection of the institutional bilateral relationship between the EU and Russia has revealed that: Firstly, there is no legal basis (document) which would potentially allow the EU to launch a separate policy towards the Kaliningrad Oblast. Secondly, there is no agreement between the sides on the (potential) adoption of the acquis either by Russia in general or Kaliningrad in particular. Thirdly, while there is no direct institutional dialogue between the EU and Kaliningrad, the EU-Russia institutional framework within which issues concerning Kaliningrad are resolved is neither extensive nor efficient. Fourthly, and in broader terms, the model for the treatment of the Kaliningrad Oblast in the bilateral relationship can not be assessed as corresponding to any of the existing patterns of inclusion into the Union. Nor does Russia itself, which advocates building a strategic partnership with the EU and avoids any conditionality terms in its relationship with the EU, seek integration by fitting into any of these models. Thus, it seems appropriate to conclude preliminarily that Kaliningrad is only partially and insignificantly inside in both the political bilateral EU-Russia agenda and in institutional terms and, with the bilateral problems that are still pending, the (prospective) institutionalization of the Kaliningrad question might be less a matter of mid-term than of long-term perspective. In light of this, the application of parameters 2, 3, 4 and 5, capable of indicating the level of integration, displays only a very low level of Kaliningrad’s hypothetical inclusion into the Union. The Kaliningrad issue is approached by the EU within the general bilateral (EU-Russia) institutional framework represented by the PCA and the EU-Russia four Common Spaces, which are admittedly poorly designed for treating the Kaliningrad problem properly and effectively. The PCA alone has proved to fall short of capacities and the Common Spaces lack a mention of explicitly integrating the problem of the Kaliningrad Oblast. Although it is not yet certain whether

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the new EU-Russia bilateral agreement will include a reference to Kaliningrad either in one of its provisions or in a separate declaration or attachment, it could be designed to contain enough flexibility to allow the parties to arrange a separate dialogue or a task force on Kaliningrad. The controversies in EU-Russia relations seem to be exacerbated by the specificity of external relations of the EU that EU law is closely intertwined with politics: “legal developments are usually based on complex and sophisticated compromises balancing the varying interests of the Member States and the interests of the European Union”. 1 While EU policy-makers have the potential capacity to assemble an extensive toolkit of instruments in its external relations with its neighbours, the main question is whether they have political will to do so. The absence of a coherent Kaliningrad policy may be symptomatic of the absence of this will. The most favourable scenario for the development of EU-Russia relations for Kaliningrad growth rest upon the mutual political will of both sides, which would permit and facilitate a deeper integration of Russia into EU structures through association, more reinforced dialogues or other means of participation. This is a question which seems, for many reasons, likely to remain open. In particular, the formation of a common market is essential and at least partial harmonization of legislation and / or a strategic partnership in several spheres where Kaliningrad could assume the role of a pilot region even in an incomplete manner. Thus, the most relevant areas of its “pilotness” fall under the realms of the Common Economic Space and the Common Space of Freedom, Security and Justice with an increased focus on cross-border cooperation and regional cooperation. The EU’s aspiration to make Kaliningrad a positive example of EU-Russia cooperation highlighted in the updated list of its Kaliningrad policy aims may prove to be a first step in this direction. 4. In the principal part of this inquiry (Chapter 4), Michael Emerson’s analytical concept of the Wider Europe Matrix has been employed. This scheme has proved to be expedient because it has allowed scrutinizing the EU’s engagement with Kaliningrad on an exhaustive basis, which means in all individual policy areas. The policy that the EU pursues with respect to the Kaliningrad Oblast is fragmented and not coherently shaped and explicitly presented. Besides and overall, the policy has a low level of ambition as it sets rather vague and declarative final aims. Most significantly, the examination of the chief parameter of integration (7) concerning the level of participation in EU programs and policies shows that the degree of Kaliningrad’s inclusion is low in EU financial programs and EU policies and programs and dismissive of material signs of its integration / association with EU policies. 1 Steven Blockmans / Adam Łazowski, Chapter 19. Conclusions: Squaring the Ring of Friends, in: Steven Blockmans and Adam Łazowski (eds.), p. 615.

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At the same time, the EU policy approach has a cross-pillar character, whereby the three dimensions of the human (and political) sphere, economic and social cooperation and cooperation in justice and home affairs are partially observable. This resembles the principle of the organization of policy spaces into a set of pillars that was characteristic for the previous structure of the EU and overall mirrors the whole string of the Union’s policies towards its immediate neighbourhood. This penetration of the EU’s activities into a wide range of policy areas in Kaliningrad seems to hint slightly that the Kaliningrad Oblast is treated in a manner that would exceed the status of an apparent outsider. While there is no comprehensive EU policy formalized in a single policy document, this thesis has further referred to the EU policy toward this Russian exclave. By this is meant the mix of approaches and instruments that the EU employs in its engagement with the oblast in practical terms. At this policy level, the EU defines its aims with regard to the Kaliningrad Oblast as contributing to the sustainable development of the region; insuring the efficient functioning of Kaliningrad transit to and from the main body of Russia, assisting in solving practical problems connected with Kaliningrad’s geographical situation, and engaging in protecting the environment in the oblast as well as turning the region into a positive example of the EU-Russia partnership. The most detailed policy documents are two consecutive Commission’s communications (“The EU and Kaliningrad” and “Kaliningrad: Transit”) and the priorities regarding Kaliningrad are concretized in the regular country policy papers such as the Strategy Papers and National Indicative Programmes for Russia. The latest documents with a clear prioritization for Kaliningrad have been the Special Programme for Kaliningrad Oblast as part of the National Indicative Programme for the Russian Federation 2004 –2006; the Strategy Paper for Russia 2007 – 2013 and the relevant National Indicative Programme for Russia 2007 – 2010. Generally speaking, the policy towards the Kaliningrad Oblast is executed in the framework of the EU’s external policy to Russia. There, the EU makes use of a spectrum of policies and instruments: the EU’s Russia country policy, the EU’s cross-border instruments (as part of the European Neighbourhood Policy) represented by the Neighbourhood Programmes and the subsequent ENPI Cross-Border Cooperation programmes; the Northern Dimension Policy; and various thematic programmes including the EIDHR, Tempus, LIFE and other small instruments. Throughout the policy, in the areas belonging to the three dimensions examined, the same instruments and policies (TACIS / ENPI and the Northern Dimension Policy) are employed and the major focus is put on crossborder cooperation issues. The policy is implemented by means of projects, the provision of experts and training, and a considerable part of the policy related to border-crossings matters is implemented in the general framework of EU-Russia relations (visa policy, transit, Integrated Border Management). The institutional structures that deal with Kaliningrad-related matters are the Commission’s units

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involved in the PCA structures and the unit accountable for the implementation of the Northern Dimension. In principle, Kaliningrad is eligible for the same programmes which apply to Russia as a whole. At the Union’s internal political level, the peak period of activities related to the problem of Kaliningrad was 2001 –2002; the oblast has not received the same degree of attention in the recent EU action although it remains on the EU agenda. The political position on Kaliningrad on the EU side was construed collectively by EU major policy-making institutions. In doing so, their external affairs departments dealt with the Kaliningrad issue: for example, the Committee on Foreign Affairs of the European Parliament and the General Affairs and External Relations Council of the European Union. Importantly, the intensity of the internal discussion depended upon the rotating presidency of the European Union. The majority documents that revolved around Kaliningrad or mentioned it randomly are political non-binding papers: own initiative resolutions of the European Parliament, internal documents (reports and conclusions) of the Council of the European Union, conclusions of the European Council, programming communications of the European Commission and own initiative opinions of the European Social Committee and the Committee of Regions. The internal stance on the Russian exclave is distinguished by a technical approach in which the EU opts for seeking solutions within the existing EU policy tools and exclusively within the framework of the EU-Russia collaboration based on the PCA rather than establishing a separate Group for Kaliningrad. Trying to avoid politicization of the issue, the EU actors claim that the responsibility of the oblast lies with Russia, but they recognize the specificity of the region. The major contexts in which the issue has been raised internally are the development of the Northern Dimension policy and the then-upcoming EU enlargement. The main thematic discourses are: a) (soft and hard) security issues, b) regional and cross border cooperation, c) transit to and from the Kaliningrad Oblast to / from the main part of Russia and the subsequent implementation of the FTD scheme. The single legally binding document, the adoption of which was caused by the situation of the Kaliningrad Oblast, entails the modification of the acquis by formalizing the FTD scheme and integrating it into the Schengen legislation. On the whole, there is no evidence that any of the actors would advocate a single policy for the Kaliningrad Oblast and articulate key elements of the EU’s consistent strategy with respect to the oblast. Thus, in their approach, precisely in the case of the Russian exclave, EU institutions operate within the modalities of the modernist discourse and “status quo” school, understanding the problem of Kaliningrad in terms of territorial sovereignty. The best option for contributing to Kaliningrad’s development would be to negotiate and draw up a separate detailed cross-pillar policy for the region as was done in cases of the ENP, Common Spaces and the Northern Dimension, especially since what one would call an EU policy towards the Russian exclave

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has already assumed similar contours. This could be formalized by means of a regional Action Plan or a road map. To deal effectively with the Kaliningrad situation the EU should further transcend the modernist frames of reference in its external relations and reinstall the region as deserving particular attention; innovative thinking has to be applied. Taking a purely technical approach may not be the most efficient modus operandi for the EU as regards the integration of the oblast. Experience proves that political will and a certain degree of flexibility may be decisive when it comes to formulating a coherent policy to an outsider and this also relevant for Russia. Although there appear to be few if any feasible options in view of the political realities, the option of a road map for Kaliningrad should not necessarily be dismissed. Clearly, such a policy should comply with a well-defined federal policy line on the socio-economic development of the oblast that has yet to be elaborated. While mapping the place of the Kaliningrad Oblast in the EU’s institutional boundary has been in the foreground of this thesis, it has also gone – although in passing – into exposing the position of the European enclave within the EU’s historical, geopolitical and economic boundaries to provide necessary background information. The overview of the historical / cultural background of the region shows that the oblast shares its European past closely with some EU states. While the Soviet past and belonging to the Russian Federation have influenced its own way of developing, detaching the oblast from Europe, it has developed close links to the neighbouring European states, Lithuania and Poland. Moreover, according to some surveys, the majority of Kaliningrad residents identify themselves as Russians rather than Europeans. Overall, it seems complicated to judge the placement of Kaliningrad in the framework of the “inside / outside” paradigm as regards the historical / cultural boundary of the EU as in this case it does not seem to be particularly indicative. Unlike with the vagueness of the border line between “in” and “out” as regards the historical / cultural boundary, the oblast is objectively inside the EU in geographical terms: it is surrounded by the EU’s Member States Poland and Lithuania and simultaneously materially cut off from the main body of Russia. However, from a geopolitical perspective, the Kaliningrad Oblast is situated under the sovereignty of the Russian Federation, which pursues its own geopolitical aims in the region: the preservation of territorial integrity and the attachment of military significance to the oblast as the westernmost region of Russia, under the circumstances of NATO’s potential further enlargement to the East and US plans to deploy a missile system in Eastern Europe. Furthermore, the Schengen area and Lithuania’s and Poland’s entrance into it clearly disclose that the region is “out” of the EU since the other side of its borders is governed by the Schengen acquis and this essentially implies obstacles in movement specifically related to visa-based travels to the neighbouring EU states and transit to the main part of Russia.

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In economic terms, the Kaliningrad Oblast is markedly interconnected with other Baltic Sea regional economies, with the European Union states (Germany, Lithuania and Poland) being the largest and major economic and trade partners as well as foreign investors in the oblast. That said, it is noteworthy that although the enlargement has had a relatively modest impact (bringing neither damaging nor positively decisive consequences) and that the recent advancement of Kaliningrad’s economy is closely linked to the functioning of the regime of the Special Economic Zone installed by the Russian Federation, in the long-term perspective the oblast’s economy will remain dependent on foreign trade with the EU partners and its economy based on the advantages of the SEZ may not only prove unsustainable but also fail to bring competitiveness to the oblast. The novelty of the present research consists first and foremost in that it has attempted to record the policy of the European Union towards, first, a federated unit of a third country, and, second, towards a region which is unique and still attracts attention among the academic community. Attaining this objective has faced some challenges not the least due to the fact that there is no EU programming document on Kaliningrad and the update information is scattered. The novel perspective offered in the thesis includes applying the category of inclusion / integration which regularly and predominantly manifests itself in relation to independent states or units. This study has also relied upon the analytical concept of the Wider Europe Matrix and by filling the policy cells of the matrix with the operational content this thesis has sought to make a contribution to the whole body of literature on the Union’s engagement with Kaliningrad. The major limitation of this inquiry is that although it recognizes that the EU delivers a considerable portion of its policy towards Kaliningrad through regional substructures which are active in the Baltic Sea region, the focus on the use of multilateral organizations in the region as well as, in general, on the EU’s Baltic Sea policy is not among the highlights of the paper; this is certainly worth deepening and exploring further. The main potential of this thesis is that it provides a wide framework in which to reflect upon which programmes the EU could open for Kaliningrad and in what policy spaces provided there is a will to do so and seek the most efficient ways of organizing policy spaces into a single policy. Broadly speaking, the thesis opens an avenue for academic efforts to suggest to policy-makers ways of strengthening the EU’s conceptual and operational approach to the region.

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Index accession 16, 23, 29, 31, 33, 35 – 37, 52, 68, 116, 121, 140, 142 – 143, 145, 148 – 149, 164 – 165, 173, 178, 185, 187, 191 – 192, 195, 210, 232, 244, 246, 251, 260, 262 – 263, 265, 267 – 268, 317, 376, 379, 385 acquis 29 – 30, 32, 35, 37, 40, 49, 58, 67, 172, 174, 176, 178, 180, 182 – 183, 186 – 187, 189, 220 – 221, 229, 246 – 248, 251, 255, 260 – 261, 264, 272, 330, 332 – 336, 339, 346, 349 – 350 Action Plans 37, 210, 212, 214, 271, 309, 314, 320 – 321, 340 Arctic region 289 association 20, 22 –24, 29 – 33, 37 – 38, 40 – 42, 44, 49, 52, 54, 103, 161, 164, 169, 194, 210, 214, 224, 227, 296, 344, 347, 366, 379 association agreement 42

border management 45, 208, 219, 240, 243, 247, 250 –251, 261, 277, 289, 330, 332 – 333, 338

Baltic region 16, 66, 70, 79, 116, 125 – 127, 129, 166, 234, 238, 279, 285, 318, 325, 380 Baltic Sea 12, 14, 16, 18, 25, 27, 41, 55, 66, 96, 102, 107, 123, 125, 166, 186, 222, 235 – 238, 241, 244, 254, 265, 268, 271 – 272, 274 – 275, 277, 279 – 281, 283 – 286, 288, 291 – 292, 294, 300 – 301, 307 – 308, 323, 325 – 326, 328 – 330, 336 – 337, 339, 342, 344, 351, 360, 367, 370, 378, 380, 382, 390 Baltic Sea policy 235, 351 Baltic states 24, 28, 144, 157, 175 Barents Euro-Arctic Council 12, 208, 243 Belarus 15, 51, 63, 102 – 103, 109, 145, 155 – 156, 280, 284

Cold War 21, 23, 46, 62, 64 –65, 179, 192

border regions 76 –77, 93, 109, 145, 216, 280, 321, 332 boundaries 19 –24, 28, 49, 55 –56, 78, 343, 350 BSEC 12, 208, 243 CBSS 12, 55, 104, 208, 243, 290, 300, 337 Central and Eastern Europe 29, 65, 77, 190, 302, 313, 315 CIS 12, 94, 143, 146, 155 –156, 161, 182, 190 – 191, 199, 203, 366, 372 –373 civil society 22, 131, 153 –154, 202, 216, 222, 226, 264 –267, 270, 278 –279, 286 – 287, 292 –298, 300, 307, 309 – 310, 314 –315, 340, 385 Committee of the Regions 268 – 272, 385

209, 216,

Common European Economic Space 12, 42, 129 –130, 202, 210 –211, 221, 236, 369, 377 Common Foreign and Security Policy 12, 29, 38, 152, 227, 249, 251, 253 –254, 257, 390 Common Security and Defence Policy 12, 29, 38 Common Spaces 43 –44, 50, 52, 55, 129, 146, 148, 151, 154, 160, 166 – 168, 172, 190 –191, 196, 199, 202, 209 – 212, 214 –216, 219, 221, 223 –

394

Index

224, 226, 229 – 230, 237, 250 – 251, 287, 341, 345 – 346, 349, 356, 373, 377 Common Strategy on Russia 25, 159, 167, 171, 190, 204, 208, 244, 250 communicable diseases 17, 261, 308 – 310, 314 Constitution of the Russian Federation 42, 56, 81, 84 – 85, 88 – 89, 91 – 93, 97 – 98, 100 – 101, 106, 108, 161 constitutional law 50, 56, 81, 86, 106 – 108, 117, 343 Cooperation Council 147, 177, 193, 197 – 200, 383 Copenhagen criteria 29 – 30, 32 corruption 124, 141, 153 – 154, 178, 237, 278 – 279, 288, 294, 297 – 298, 318, 321, 336, 339 Council of Baltic Sea 337, 339 Council of Europe 47, 51, 53, 93, 103, 140, 164, 198, 213, 354, 365, 380 Council of the European Union 140, 171, 198, 201, 243, 250, 253 – 254, 256, 259, 265, 268, 271 – 272, 288, 349, 375, 384, 387 cross-border cooperation 18, 25, 37, 46 – 47, 50, 59, 83, 93 – 96, 104, 107 – 109, 113, 134, 145, 171, 174, 200, 202, 208, 210, 216 – 217, 229, 234, 243, 246, 250 – 251, 259, 267 – 271, 273, 277, 279 – 283, 286, 289, 291 – 292, 294, 297 – 298, 304, 310, 314, 317, 319, 321, 329, 338, 340 – 342, 344, 347 – 348 cross-border trade 76, 79, 145, 194, 211 decentralization 98, 131 democratization 35, 139, 154, 158, 164, 296 Denmark 26, 28, 102 – 103, 284, 300, 320 development strategy 112, 114, 116 – 117, 120, 129 Dialogue on Regional Policy 199, 229

double periphery 16, 73, 75 East Prussia 60 –62, 105 East-West Institute 42 –43, 130, 371, 373 Eastern enlargement 16, 33, 36, 46, 67, 75, 78 – 79, 83, 125, 140 –141, 149, 156, 160, 171, 202 –204, 240, 243, 251 –252, 264 – 265, 267, 269 –270, 272, 285, 330, 335, 346 Economic and Social Committee 58, 264 – 268, 270 –272, 385 economic cooperation 31, 66, 75, 83, 102, 192, 196, 202, 207, 211, 266 –267, 286, 292, 319, 321, 325 economic development 17, 77, 80, 94, 117, 124, 126, 131 –133, 173 –174, 179 – 181, 186 –188, 237, 240, 246 – 247, 250 –251, 259, 261 –262, 276 – 278, 280, 285, 291 –292, 298, 315 –316, 325, 339, 341, 345 economic specialization 69, 121, 129 economic transition 70 EIDHR 12, 37, 295 –297, 348, 379 enclave 16 –17, 46 –48, 65, 69 –74, 81 – 82, 122 –124, 171, 238 –239, 249, 263, 268, 274 –275, 332, 343, 350, 366, 373, 389 energy 16, 39, 44, 46, 52, 54, 67, 74, 79, 104, 116 –117, 127, 129, 137, 147, 149, 152, 154 –155, 159 –162, 164, 167 – 168, 173 –174, 192, 196, 199 –200, 202, 209 – 210, 217 –218, 230, 238, 243, 246, 250, 259 –262, 276, 289, 298, 311, 316, 321 – 325, 329, 340, 345 –346, 378, 384, 390 enlargement 17, 22, 31, 34, 36, 38 – 40, 46, 48, 55, 64 –67, 69, 75 –77, 79, 114, 137, 140 –142, 144 –145, 149, 155, 158, 160, 170 –172, 174 –177, 179, 181, 184, 187 –191, 208, 214, 236, 238 – 239, 244 –245, 253 –254, 259 – 260, 262, 268 –270, 276, 286, 288, 302,

Index 321, 331, 349 – 351, 355, 379, 387, 389, 391 ENP 12, 22, 29, 36 – 40, 51 – 52, 148, 156, 159 – 160, 191, 210, 212, 214, 282, 302, 340, 349, 365 ENPI 12, 37, 216 – 217, 222, 278, 282 – 284, 286, 291, 295 – 298, 303 – 304, 308 – 309, 311, 314, 319, 321, 329 – 330, 341 – 342, 348, 380 – 381 environment 17, 21, 23, 30, 42, 52, 59, 69, 88, 102, 104, 132, 162, 173 – 174, 176, 196 – 197, 199, 209 – 210, 217, 219, 237 – 238, 243, 246, 250, 254, 259, 261 – 262, 264, 267, 273 – 276, 278, 283 – 284, 286, 289, 291, 298, 309, 316, 326 – 330, 340 – 342, 344, 348, 391 Erasmus Mundus 302 EU Information Relay 301 EU institutions 27, 34, 42, 58, 233, 242, 258, 272, 349 EU law 29, 31, 107, 212, 252, 347 EU-Russia Common Spaces 43, 53, 58, 187, 199 – 201, 213, 215, 217 – 219, 228, 278, 286 – 287, 293, 297, 319, 330 – 331, 333, 340, 380 EU-Russia cooperation 18 – 19, 25, 50, 125, 135, 146, 149, 152, 176, 179, 187, 189, 195, 197 – 199, 202, 204, 207, 209 – 210, 214, 220, 222, 227, 236, 238, 241, 251, 262, 264, 269, 273, 298, 310, 319, 334, 336, 339, 342, 347 EU-Russia relations 17 – 18, 47, 53, 57 – 58, 75, 110 – 112, 125 – 126, 129, 131, 133 – 135, 137 – 139, 142, 144, 146, 150 – 152, 162, 165 – 166, 168 – 170, 179, 187, 189 – 190, 201 – 203, 209, 219, 221, 223, 228 – 229, 237, 239, 249, 254, 265, 267, 290, 293, 301, 303, 340 – 341, 344 – 348, 360, 377, 380, 385 EuroFaculty 300 – 301, 308, 363, 382, 390 Europe Agreement 29, 193 – 194, 379

395

EuropeAid 280 European Commission 30, 36 –37, 40, 50 – 51, 58, 94, 108, 140, 144, 149, 151 – 153, 156, 162 –163, 171 –172, 175, 179 –182, 184, 187 –188, 198 – 201, 206 –207, 215 –216, 219, 225, 233 – 235, 239, 242, 245, 247, 254, 256 – 259, 264, 268 –272, 274 –276, 278, 280 –281, 283, 286 –287, 290, 292, 295 –296, 300 –302, 305, 307 – 308, 310 –311, 313 –314, 318 –319, 321, 323 –324, 326 –328, 330, 332 – 333, 335, 337, 342, 349, 368, 376 –377, 379 – 380, 383 –384, 386, 388 –391 European Council 33, 58, 140 –143, 147, 149 – 150, 162 –163, 171, 180, 185 – 186, 231, 233, 243, 252 –257, 259, 261, 264, 266, 271 –272, 285, 332, 349, 377, 383, 386 European Economic Area 12, 29 –30, 34 – 35, 53, 147, 190, 375 European Environment Agency 33 European Higher Education Area 53, 301, 303 European Initiative for Democracy and Human Rights 12, 37, 295 –296, 298, 308, 341, 379 European integration 19, 21, 24, 27 –29, 41, 45, 47, 83, 139 –140, 142, 144, 182, 301 European Investment Bank 12, 44, 244, 266 European Monetary Union 28 –29, 34 European Neighbourhood and Partnership Instrument 12, 33, 37, 138, 167, 216 – 217, 282 –283, 302, 376, 379, 387 European Neighbourhood Policy 12, 22, 24, 29, 34, 36, 52, 59, 137, 148, 150, 155 – 156, 162, 164, 167 –168, 187, 191, 203, 210, 214, 226, 228, 270 –271, 273, 280, 284, 291, 341, 348, 356, 358, 365 – 367, 376 –377, 385, 390

396

Index 163, 166 –170, 200, 205, 225, 274, 285, 291, 296, 341, 344, 372

European Parliament 13, 37, 39, 58, 96, 102, 138, 141, 151, 200, 231 – 242, 245, 247 – 249, 257 – 258, 268, 271 – 272, 282, 295 – 296, 318, 335, 349, 355, 376 – 378, 380, 382, 384, 387

foreign territory 82, 106 –107

European Security Strategy 167 – 168, 387

FRTD 13, 68, 186 –187, 378

54, 149,

Europeanization 358 Euroregions 25, 55, 103, 208, 365 exclave 16, 21, 45, 48, 59, 73, 78, 81 – 83, 119, 130, 234, 236, 265, 327, 343 – 344, 348 – 349, 367, 380 exclusion 21, 23 – 25, 165, 286 exclusive responsibilities 81, 89, 242 external relations 27, 52, 63, 92 – 93, 96, 98, 109, 113, 121, 163, 192, 199, 206, 228, 253, 255, 263, 286, 290 – 291, 344, 347, 350 Facilitated Railway Transit Document 13, 68 Facilitated Transit Document 13, 68, 183, 187, 248, 262, 272 – 273, 336, 378 Facilitated Transit Scheme 245, 247 – 248, 251, 336 FDI 13, 74 federal-center relations 57 federal policy 56 – 57, 89, 108, 110 – 112, 115 – 117, 123, 133, 222, 344, 350

Free Trade Agreement 29 free trade zone 43, 73, 130, 224 FTD 13, 68, 184 –187, 189, 263 –264, 346, 349, 378 GATT 13, 195 geopolitics 27, 46 Germany 28, 34, 36, 61 –63, 72, 74 –75, 77 – 79, 102, 104 –105, 284, 300, 305, 307, 325, 335, 338, 351, 368 globalization 18, 22 –23, 48, 83, 85, 109, 354 Great Patriotic War 63 health 45, 53, 59, 76, 89, 104, 123, 173 – 174, 197, 200, 217, 237 –239, 243, 246, 250, 259, 262, 276 –278, 283, 287, 289, 292, 298, 300, 304 –306, 308 –312, 314, 317, 327, 332, 340, 342, 353, 385 healthcare 314 human rights 30, 33, 39, 52 –53, 59, 86, 140 – 141, 152, 158, 162, 164, 169, 179, 192 – 193, 196, 207, 212, 232, 237, 255, 292 – 298, 305, 337, 340, 387

Federal Target Programme 112 – 113, 117, 133

IBM 13, 332 –333

federalism 18, 56, 81 – 82, 84 – 86, 105, 108 – 109, 354

identity 36, 46, 63 –64, 111, 142, 158, 173

federated unit 20, 344, 351

inclusion 19 –21, 23 –25, 29, 35, 40 –42, 49, 52 – 53, 55, 58, 80, 165, 227, 229, 269, 281, 286, 313, 341, 343 –347, 351

Finland 26, 28, 268, 284, 287, 305, 313, 321, 337

IBPP 13, 295, 306 –308, 383

Foreign Direct Investment 13, 74, 137

Information Society 217, 261, 316

foreign policy 31, 38, 48, 82 – 83, 85 – 86, 89, 91, 93 – 94, 98, 103, 108 – 109, 114, 142 – 143, 145 – 146, 155, 157, 161 –

Institutional Building and Partnership Programme 13, 295, 298, 300, 308

insiders 21, 23, 28

Index

397

Integrated Border Management 13, 219, 332 – 333, 338, 342, 348, 360

Kaliningrad problem 48, 55, 57, 115, 177, 188, 190, 206, 251, 264, 285, 346

integration 19 – 20, 27 – 32, 34 – 37, 39 – 42, 44 – 45, 49, 51, 57 – 58, 83, 115, 118, 125 – 126, 129, 139, 143, 156, 160, 165, 169 – 170, 182, 191 – 192, 194, 211, 220, 222, 229 – 230, 243, 280, 284, 306, 312, 317, 325, 338, 341 – 343, 346 – 347, 350 – 351, 354, 357, 359 – 360, 364, 366, 368, 372

Kaliningrad question 205, 346

international law 42, 81 – 82, 86, 90 – 91, 100, 108, 143, 147, 158, 193, 344

Kaliningrad Regional Development Agency 316, 320, 324 Kaliningrad Regional Duma 313, 327

125, 220,

Kaliningrad State University 298, 300 – 301, 303 –305, 308, 318, 320 Königsberg 380

46, 60 –63, 234 –235, 368,

international legal personality 42, 87 – 88, 90 – 91, 106, 108, 162

legal capacity 40, 50, 56, 80 –81, 90 –91, 100, 110, 233, 344

international relations 17, 27, 48, 82, 86 – 87, 89 – 91, 108 – 110, 147, 157, 161, 291

legal status 42, 44, 56, 82, 86, 88, 106, 110 – 111, 113, 117 –119, 133, 344

INTERREG 13, 46, 222, 266, 280 – 282, 290 – 291, 306, 323 – 324, 326, 329 – 330, 333, 338, 342

Lithuania 15 – 16, 18, 47, 55, 57, 65 –68, 71, 73 – 77, 79 –80, 102 –105, 109, 112, 116, 172 –176, 179, 183 –187, 189 – 190, 206, 218, 234, 237, 239, 244 – 245, 247, 249, 251, 255 –256, 259 –260, 262 – 263, 266 –267, 273, 275, 279 – 281, 283 –284, 287, 291, 297, 300, 304 – 306, 308, 311, 319, 322 –323, 325, 329 –336, 338 –339, 342, 350 – 351, 365 –366, 370, 378, 384 –385, 387 – 388

interregional cooperation 24, 49, 94, 200, 208, 220, 312, 315 investment 19, 44, 55, 73 – 74, 77, 79, 94, 98, 101, 116 – 119, 121 – 123, 132, 137, 141, 147, 154, 175, 181, 194 – 196, 200, 210 – 211, 218, 248, 250, 265, 278 – 279, 281, 289, 299, 316 – 318, 320 – 321, 324, 327, 331 Joint Statement on Transit between the Kaliningrad Oblast and the rest of the Russian Federation 68 justice and home affairs 54, 59, 192, 199, 210, 242, 244, 246 – 247, 252, 267, 289, 292, 297, 330, 336 – 340, 342, 348 Kaliningrad economy 44, 71 – 73, 76 – 77, 79, 122 – 123, 127, 133, 317 – 318, 320 – 321 Kaliningrad Facility 247 – 249, 251 Kaliningrad Free Trade Area 43, 220

LIFE 329 –330, 341, 348, 391

Lithuania-Poland-Kaliningrad Neighbourhood Programme 304, 319 local border traffic 69, 252, 335, 339, 377 membership 19 –20, 23 –24, 29 –36, 38 – 41, 49, 51 –53, 65 –67, 75, 86, 142, 149, 156, 164, 167, 169, 173, 191, 194, 222, 226, 232, 236, 244, 257, 344, 361, 392 modernization 38, 66, 93, 98, 124, 126, 131, 133, 146, 153, 156, 158, 166, 168, 301 – 303, 313, 321, 323, 325 –326, 331 movement of people 17, 47, 67, 69, 78 – 79, 116, 152, 173 –174, 179, 202, 211,

398

Index

226, 245, 248, 255, 259 – 260, 262, 334, 373 National Indicative Programme 14, 167, 196, 276 – 278, 291, 294, 297 – 299, 307, 309, 317, 321 – 322, 326, 328, 330, 336, 338, 340, 348, 384 NATO 13, 16, 55, 64 – 66, 79 – 80, 140 – 141, 146, 155, 164, 168, 345, 350 Navy Doctrine of the Russian Federation until 2020 65 ND Framework Document 320 Neighbourhood Programmes 217, 280 – 283, 289, 291, 296, 298, 304, 308, 311, 314, 319, 321, 324 – 325, 329 – 330, 333, 341 – 342, 348 NIS 14, 29, 31, 150, 310 Nordic Council 305

13, 55, 102, 222, 286,

Nordic Council of Ministers 13, 55, 102, 222, 286, 305 Northern Dimension 13 – 14, 24 – 25, 50, 55, 59, 104, 139, 143, 167, 171, 190, 208 – 209, 222, 237 – 238, 241, 243 – 244, 246, 250 – 252, 254, 256, 258 – 259, 264 – 270, 272, 277, 285 – 291, 305 – 310, 312 – 314, 318, 320 – 321, 325 – 328, 330, 336 – 342, 348 – 349, 353, 357, 359, 361, 364, 367, 375 – 376, 378 – 380, 383 – 387 Northern Dimension Environmental Partnership 287, 328 Northern Dimension Partnership in Health and Social Wellbeing 14, 287, 309 Northern Dimension Partnership on Culture 287 Northern Dimension Partnership on Transport and Logistics 14, 287 northern Europe 24 Norway 30, 35, 102, 143, 285 – 287, 300, 305, 312, 328, 330, 342, 364

organized crime 16, 147, 178, 184, 212, 238, 243, 266, 277 –279, 317 –318, 330, 336 – 337, 339 outsiders 21, 23, 28, 290 Pan-European Transport Corridors 322 Pan-European Transport Network 325

322,

paradiplomacy 83 Partnership and Cooperation Agreement 14, 25, 29, 132, 135, 138, 190, 192 – 193, 201, 210, 234, 345, 377 Partnership for Modernization 153 –154, 167, 346 PCA 14, 25, 29, 32, 55, 58, 135 – 136, 138 –141, 143, 147 –149, 152, 159, 167 –168, 173, 175 –177, 180, 184, 190 –204, 206 –208, 210 –211, 213, 215, 222 –225, 227 –229, 234, 236, 245 – 246, 251 –252, 261, 264, 272, 276, 285, 316, 340 –341, 346, 349, 387 people-to-people contacts 154, 166, 213, 217, 283, 287, 289, 330, 338 –340 Permanent Partnership Council 14, 198, 252, 385 PHARE 14, 32, 46, 104, 186, 246, 266, 279, 281 –282, 286, 291, 331, 338 pilot region 19, 42 –44, 54, 57, 111, 115, 128 – 131, 133 –134, 165 –166, 170 – 171, 181 –182, 188, 206, 209, 220 –221, 228 – 229, 236, 239, 241, 275, 338, 342, 344, 347 Poland 14 –16, 28, 36, 47, 57, 61 – 62, 64 – 68, 71, 74 –77, 79 –80, 102 – 105, 109, 144, 152, 165, 172 –175, 183, 186, 189, 206, 234, 237, 239, 244 – 245, 249, 251, 259 –260, 262, 266 – 267, 279 –281, 283 –284, 287, 291, 297, 300, 304 –306, 308, 311, 319, 322, 325, 329 –335, 338 –339, 342, 350 – 351, 368, 370, 384, 387 –388

Index police and judicial cooperation in criminal matters 34 political status 56, 105, 112 – 113, 131, 133, 344 politics of inclusion 20, 23 – 24, 49 Potsdam Conference 62 pre-accession 29, 34 pre-accession structural aid 16 readmission 149, 151, 176, 182 – 183, 186, 190 – 191, 202, 219, 261, 336, 375 region of cooperation 111, 115, 125, 129 – 130 regional cooperation 25, 31 – 32, 47, 154, 156, 191, 203, 207 – 209, 215, 217, 229, 234 – 235, 238, 241, 243, 250, 254, 265, 268, 272, 281, 288, 311, 316, 327, 330, 347, 370 regional economy 55, 70 – 72, 74, 77, 79, 112, 124, 126, 318 regional security 18, 167, 226, 285, 346 regional strategy 57, 112, 125 – 126, 312 Road Maps 50, 58, 111, 121, 167, 210, 212, 214 – 215, 219, 222, 224, 228 – 229, 369 rule of law 30, 39, 88, 141, 143, 152, 154, 158, 169, 173, 184, 207 – 208, 212, 235, 243, 246, 259, 292, 296 – 297, 337, 339 Russia’s Mid-term Strategy 42, 114, 167, 208 Russian legislation 17, 95, 100 SAPARD 14, 32 Schengen 17, 24 – 25, 29, 47, 67 – 68, 80, 102, 144 – 145, 165, 175 – 176, 178, 181, 184, 187, 189, 221, 239, 246 – 248, 251, 263 – 264, 267, 272, 330, 332 – 336, 349 – 350, 369, 377, 387 security 16, 18, 24 – 27, 31, 33 – 34, 36, 38 – 39, 46, 52, 54 – 55, 59, 65 – 66, 79, 88 – 89, 97, 114, 119, 129, 133, 137,

399

140 – 141, 143 –144, 147 –148, 155 – 156, 159 –161, 164, 166, 168, 176, 184, 188, 192, 195 –196, 198, 200, 206, 210, 212, 217, 219 –220, 230, 235, 238, 240, 242 –243, 247 –248, 255, 262 – 264, 271, 273 –275, 281, 283, 286, 289, 292, 298, 308, 325, 329, 333, 337 –338, 340 – 342, 345, 349, 374, 376 –377, 380, 390 semi-integration 27 SEZ 14, 19, 56 –57, 71, 75, 77, 83, 113, 116, 118 –122, 124 –126, 128, 131 – 134, 261, 316 –318, 320, 344, 351, 353 shadow economy 16, 71, 141 shared competences 89 Small Project Facility 14, 279, 304, 310 social development 17, 42, 85, 176, 181, 190, 217, 235, 237, 277, 283, 346 social policy 30, 45, 53, 59, 293, 312 – 315, 340 –341, 356 socio-economic development 121, 126 – 127, 235, 250 –252, 273 –275, 312, 339, 350 soft power 157 soft security 24, 220, 240, 274 sovereignty 15, 18, 24, 26 –27, 42, 62, 64 – 65, 80, 82, 86, 91, 93, 106, 116 – 117, 131, 133, 157, 161, 166, 169, 179, 181 – 182, 188, 220, 262, 349 –350 Soviet Union 62 –64, 69 –70, 75, 78, 81, 83, 138 –140, 157, 191, 285, 383 Special Economic Zone 14, 19, 57, 72 – 73, 77, 79 –80, 108, 110, 112 –114, 117 – 120, 122, 133 –134, 166, 174, 222, 279, 316, 344, 351, 374 Special Programme 277, 281, 288, 291, 294, 298 – 299, 307, 316, 321, 326, 338, 348 Stabilization and Association Agreement 29 State Duma 96, 107, 140, 162, 164, 180, 186, 221, 357

400

Index

strategic partnership 45, 52, 58, 129, 136 – 137, 142 – 143, 148, 150 – 151, 154, 159, 165 – 170, 181, 203, 210, 224, 228 – 229, 255, 262, 267, 282, 346 – 347, 385 subject of international relations 17 subject of the Russian Federation 56, 80 – 82, 102, 105 – 106, 108, 110 – 112, 114, 144, 340, 344 subnational entity 53 sustainable development 95, 116, 124, 129, 194, 207, 274 – 275, 289 – 290, 316, 339, 342, 345, 348 Sweden 15, 28, 102 – 103, 105, 245, 254, 268, 272, 284, 300, 305, 310, 335, 361 TACIS 14, 25, 32, 37, 46, 50, 104, 138, 141, 143, 181, 196, 208, 216, 218 – 219, 246, 250 – 251, 259, 261 – 262, 264, 266, 268, 272, 276 – 282, 286, 290 – 292, 294 – 295, 298, 300 – 301, 303 – 304, 306 – 307, 309 – 316, 318 – 327, 330 – 333, 338 – 339, 341 – 342, 348 Tempus 14, 301 – 303, 308, 341, 348, 375 Trans-European Networks 322 transfrontier cooperation 94, 96, 110 transit 15, 17 – 18, 47, 55, 66 – 69, 72, 74 – 76, 79, 82, 107, 112, 116, 126, 170 – 173, 175 – 190, 195, 204 – 205, 211, 228, 237, 239, 241, 244, 246 – 252, 255 – 256, 260 – 261, 263 – 264, 272 – 275, 277 – 278, 294, 317, 321 – 322, 325, 330, 336, 338 – 339, 342, 345 – 346, 348 – 350, 373, 377, 387, 391 – 392

transport 15 –16, 30, 39, 42, 44, 46, 52, 54, 66, 68, 75, 102, 126 –127, 147, 186, 196 – 197, 199, 202, 207 –208, 218, 234, 239, 243, 246, 262, 277, 284, 289, 298, 317, 321 –323, 325, 331 –332, 334, 340, 389 Treaty of Lisbon 29, 32, 38, 40, 59, 158, 162 – 163, 231 –232, 241, 252, 256, 358, 372, 388 Treaty on Conventional Armed Forces in Europe 12, 66 Union of Baltic Cities 55 USSR 14, 62 –63, 138, 203, 207 –208, 377 visa facilitation 54, 151, 191, 202, 219 visa-free regime 54, 104, 164, 166, 168, 175, 184, 212, 219 –220, 222, 229, 262, 330, 346 visa policy 54, 247 –248, 330, 334, 338 – 339, 348 visa regime 67, 80, 153, 171, 173, 176, 178, 181 –182, 185, 334 Wider Europe 14, 22, 27 –28, 41, 49, 51 – 54, 59, 347, 351, 357, 376 Wider Europe Matrix 51 World War II 15, 61, 64, 326 WTO 14, 43, 75, 121 –122, 149, 154, 164, 195, 211, 222, 224, 226, 265, 316 –317, 392