WEB EDITION No. 3 - Jun. 1992 Vol. 40 - pp. 23-27

EUROPEAN INTEGRATION AND NEW REGIONAL COOPERATION INITIATIVES Ünal Çeviköz of NATO's Economics Directorate There is a remarkable correlation between the growth of democratization movements in Central and Eastern Europe (C+EE) and the proliferation of new ideas for multilateral cooperation. As the centrally planned economies proved unsuccessful and the former communist countries announced their commitment to the market system, cooperation initiatives between East and West European countries multiplied. The European Community continues to be the main focus of attention. The new democracies of Central and Eastern Europe have hurried to join the already long waiting list for membership, in open competition with even more new applicants from the West. At the same time, they have also begun to participate in several newly emerging regional cooperation initiatives. Apparently, in contrast with what has been suggested in certain West European capitals about the alternative nature of such new initiatives, they do not see regional cooperation as a competitive structure to replace their plea for EC membership in the long-run. In fact, it can be argued that overlapping regional cooperation schemes may serve pan-European integration by complementing the EC, while C+EE countries prepare the necessary and sufficient conditions required for EC membership. Regional cooperation schemes are not new in Europe. One can recall the Nordic Council, as well as newly-revived Baltic cooperation. The countries along the River Danube cooperate under the Danube Commission for the regulation of navigation on the river. Attemptsto establish multilateral cooperation in the Balkans should also be noted. Nevertheless, incompatible East and West European socio-political systems in the past have hampered the development of such schemes. As the systemic differences have been reduced, however, three new organizations have appeared which deserve attention here, namely, the Hexagonal (soon to be renamed the Central European Initiative), the Black Sea Economic Cooperation Region (BECR) and the Council of the Baltic Sea States. The origin of the Hexagonal initiative dates back to a series of close contacts between Italy, Austria, Hungary and Yugoslavia. It was formalised at a meeting of the Foreign Ministers of these four countries on 11 November 1989 in Budapest. The joint declaration released at the end of the meeting established the Quadrilateral Initiative, the main aims of which were stated as improving the political atmosphere in Europe, strengthening the CSCE process and promoting the greater unity of Europe. The Foreign Ministers also declared their belief that "the development of sub-regional, regional and inter-regional cooperation could significantly contribute to the gradual creation of a common economic area on our continent". (1) The Quadrilateral Initiative was transformed into a five member cooperation scheme in 1990, with the accession of Czechoslovakia, and its name was changed to the Pentagonal Initiative. On 1 August of that year, the group held its first summit meeting in Venice, resulting in the release of two important political documents. In the first, the Pentagonal Initiative was presented as "a new form of cooperation for promoting joint efforts, taking into consideration the emergence of a new era in Europe" and as "a component of a much broader European architecture". (2) The second document was the message of the five Prime Ministers to the members of the CSCE in which the view that regional cooperation could play a vital role for the future architecture of Europe was explicitly emphasized. Poland became the sixth member of the Initiative at its second summit meeting, which took place in Dubrovnik on 27 July 1991, with a further change of name to Hexagonal. But the Yugoslav presidency of the Initiative at that time was prevented from functioning efficiently by civil war in Yugoslavia which also had a negative impact on various projects. On 30 November 1991, the Foreign Ministers of the member countries, except Yugoslavia, met in Venice and agreed that the presidency should be shifted, effective 1 January, 1992, to Austria. The Hexagonal held its first Foreign Ministers' meeting under the Austrian presidency in Klagenfurt on 21 March this year and decided to recommend to the Prime Ministers that it be renamed the Central European Initiative, in order to better expressits regional character. A meeting of Prime Ministers is to take place later this year, at which time Slovenia and Croatia are alsoexpected to become new members. With a history of slightly less than three years, the Hexagonal has ambitiously embarked upon 119 projects in areas such as culture, energy, the environment, information, science and technology, telecommunications, transport, etc., of which fifteen are already completed. Although the Hexagonal has been successful in accelerating the implementation of already existing inter-governmental projects between the member countries, the recent situation in the Balkans has had an adverse effect on this process. Black Sea Economic Cooperation Another new initiative came from Turkey, namely the Black Sea Economic Cooperation Region (BECR), embracing Bulgaria, Romania, Moldova, Ukraine, Russia, Georgia, Azerbaijan, Armenia and Turkey. The declaration on the establishment of the BECR was initialled in Istanbul by the Foreign Ministers, or Deputy Foreign Ministers, of these nine countries on 3 February 1992. This declaration is tentatively scheduled to be signed by Heads of State or Government this summer. Meanwhile, Greece and Yugoslavia, who had participated in the previous meetings as observers, have been invited to make their applications for membership as founder states. The BECR is largely inspired by recent developments in Europe aimed at the establishment of a new European architecture. The project is neither presented as an alternative to the European Community, nor is it believed that it will become an impediment to EC membership for its individual member states. The main motivation is to create a regional economic cooperation scheme between nine countries which would contribute to political stability, economic development and (especially in the case of former Warsaw Pact members) to the transition to market economies. The complementary nature of the project with the all-European integration process is explicitly expressed. The participating states have therefore declared their intention to develop economic co-operation as a contribution "to the CSCE process, to the establishment of a Europe-wide economic area, as well as to the achievement of a higher degree of integrat ion into the world economy". (3) Aiming to increase the free circulation of people, goods, services and capital between its members, the BECR differs slightly from the Hexagonal initiative in that the BECR includes both inter-governmental and non-governmental cooperation. As far as the inter-governmental aspect is concerned, the states declare their readiness to cooperate in fields such as transport, communications, informatics, mining and processing of mineral raw materials, energy, the environment, tourism, agriculture and agro-industries and many others, and to prepare the necessary infrastructure. They also plan to exchange economic and commercial information, including statistics. But the distinct characteristic of the BECR is its emphasis on non-governmental cooperation. In this context, the participating states are seen as agents providing favourable business conditions for enterprises, firms and individual entrepreneurs in their respective countries. Appropriate conditions will thus be established for investment, capital flows and industrial cooperation. The states are also to encourage the conclusion of financial arrangements at governmental and non-governmental level and will consider the possibilities of establishing a Black Sea Foreign Trade and Investment Bank. The BECR is regarded with some caution in certain circles, as if it were destined to get stuck with similar problems as the Hexagonal, for it envisages cooperation in an area marked by local conflicts or potential hot spots. The situation in the Caucasus, Moldova, in the Balkan peninsula, as well as the tense relationship between Russia and the Ukraine, may justify this view to a certain extent. Yet the economic inter-dependence of the former CMEA (4) members in the region and of the members of the Commonwealth of Independent States (CIS) suggest that those conflicts may eventually subside or remain merely political, without drastically hampering the rational and functional development of economic, commercial and financial ties. The need to develop sound economic links with the West, through the Western members of the BECR, is also an essential priority for such countries. This may also act as a catalyst for stabilization. Council of the Baltic Sea States The newest among the three regional cooperation initiatives under study here is the Council of the Baltic Sea States, encompassing ten countries in the Baltic area, namely Latvia, Lithuania, Estonia, Russia, Poland, Germany, Finland, Sweden, Norway and Denmark. Foreign Ministers of these countries, after a meeting in Copenhagen on 5-6 March 1992, declared the establishment of this new cooperation zone, which is reminiscent of the ancient Hanseatic League. Despite the political differences between countries of the region, such as those between Poland and Lithuania or between Russia and the three Baltic States, where former Soviet troops have still notbeen withdrawn, this regional forum could well have a good chance of helping to improve the economies of its poorer members. Apparently, and not surprisingly, the main task of the initiative will emerge as facilitating the transformation of Poland, Russia and the three Baltic States into demo-cratic and free market societies. This will require a flow of financial aid and know-how, as well as technology, from Germany, Denmark and Scandinavia to these countries. Intensified cooperation and a coordination of policies in such fields as trade, the environment, energy, transport and communications, is envisaged, and the initiative is likely to move into other fields such as culture and education. Thus the former communist states of the region will be tied into the Western democratic and free market system, which will also facilitate the linkage of these countries with the EC and the European Economic Area (EFTA and the EC). Contributing to the integration of Europe A common characteristic of all these regional schemes is the underlying determination not to create bureaucratic structures. They will not, for example, have permanent secretariats. There are to be annual Foreign Ministers meetings, frequent and operational experts meetings, and regular summits in order to provide political endorsement of decisions and to adopt functional infrastructure projects. Another interesting feature is the simultaneous membership of both West European democratic countries and former communist countries of Eastern Europe in these new organizations. Yet they are not merely aimed at reconciling differing social, economic and political systems, as has frequently been asserted in the past, but are realistic attempts at cooperation in transforming a defunct system into an orderly and better functioning one. In fact, these initiatives are also important mechanisms for the Central and East European countries and members of the CIS to develop and diversify their foreign economic relations. As a corollary to this, the NATO Economics Colloquium, held in Brussels between 8-10 April 1992, on the subject of the External Economic Relations of the Central and East European Countries, also included in its programme an analysis of the relevance of these regional cooperation initiatives. The search for a more homogeneous Europe, with a new security structure, has accelerated after the introduction of democratic processes in Central and Eastern Europe. Principles of the Helsinki Final Act of 1975, such as pluralism, democracy, respect for human rights and fundamental freedoms which were long neglected by the communist regimes of the past, have become important aims of the new governments after democratic multi-party elections. The commitment of these new governments to the market economy provided a further step forward in overcoming the division of Europe. As a result, the CSCE Conference on Economic Cooperation in Europe (the first of its kind since the adoption of the Helsinki Final Act), which was held in Bonn between 19 March and 11 April 1990, came to the conclusion that this new environment would prove more favourable for the development and diversification of economic relations between the countries which participate in the CSCE process. (5). In this respect, it can safely be asserted that the aim of the newly emerging regional cooperation projects, such as the Hexagonal, the BECR and the Council of the Baltic Sea States, inspired by the dramatic developments in Central and Eastern Europe and guided by the principles of the CSCE, is to develop among their partners broad cooperation in the political, economic, technical-scientific and cultural fields which should make a concrete contribution to the gradual integration of Europe. These initiatives will also promote contacts in border areas, encourage regional cooperation and, above all, contribute to the evolution of democratic systems in those areas of Europe where democracy can still be considered as fragile. Consequently, these regional initiatives will become important pillars of the overall European architecture. Many hold that it would be discriminatory if European Union is only achieved between the members of the European Community, without the preparation of an appropriate structure for the harmonious integration of non-member European countries within a common economic space. Regional cooperation initiatives in Europe could provide suitable means for the dissemination of certain norms and standards, principles and policies and to prepare the new European democracies for a smooth integration into the world social, political and economic system. The initiatives described here offer broad opportunities in this respect, from the Baltic to the Mediterranean and from the Adriatic to the Caspian Sea. Several European organizations have taken on serious responsibilities in the formation of the new European architecture and they all have their relevant and positive contributions to make to this process. Although their functions may seem to be compartmentalized,they are by no means mutually exclusive. In fact, the interlocking feature of the European institutions and organizations gives a sounder, a fundamentally stronger infrastructure to the formation of the future democratic Europe. Yet reference to the functional significance of regional cooperation in this process is surprisingly rare. The Hexagonal, the BECR and the Council of the Baltic Sea States have committed themselves to avoid duplicating the work of existing international organizations, yet they are likely to assume increasing responsibilities on the path to pan-European integration. Notes: (1) Joint Declaration Quadrilateral Initiative, Budapest, 11 November 1989. (2) Policy Document on the Pentagonal Initiative, Venice, 1 August 1990. (3) Declaration on the Black Sea Economic Cooperation Region, Istanbul, 3 February 1992. (4) The Council of Mutual Economic Assistance or COMECON. (5) Document of the Bonn Conference on Economic Cooperation in Europe, convened in accordance with the relevant provisions of the Concluding Document of the Vienna meeting of the CSCE, Bonn, 11 April 1990. © Copyright by North Atlantic Treaty Organisation 1992.