A Northern Policy is needed
By Paavo Lipponen, former Prime Minister of Finland
In the European North, international cooperation has developed dramatically, in parallel with the new opportunities and challenges that have emerged in the region. New forms of institutional cooperation have been established: the Arctic Council, the Northern Dimension Partnership, cross-border structures. The Council of Baltic Sea States and the Barents Euro-Arctic Council are also important institutions for regional cooperation. Significantly, Russia is an equal partner in all these structures.
In these times of tensions between Russia and the West, we need to maintain pragmatic cooperation, on a win-win basis, in matters where common interests transcend conflicts. Particularly in the Arctic region, the challenges are common and of global importance: protecting this sensitive environment and exploiting natural resources in a sustainable way. But the environment is the main focus everywhere in the European North, reason enough to keep regional institutions working.
Since the financial crisis began, the European Union has been understandably preoccupied with restoring the economies of its southern members. Demographics weigh heavily, and new challenges, particularly the increasing stream of refugees and immigrants, will keep us busy with problems in the Mediterranean area. However, it would be a mistake to ignore the European North, where great opportunities are emerging for the growth that the EU badly needs. The environmental challenge and cooperation with Russia also represent vital interests for the EU in the North.
What the EU needs is a Northern Policy to coordinate activities in all northern institutions and direct financing for the region from the EU and international financial institutions. There are two prime examples of the need to focus on the North: logistics and the environment.
The South–North transportation and logistics network must be completed and extended to the Arctic coast. The Arctic Report for the Confederation of Finnish Industries suggests that the road connection from Oulu in Finland to Tromsø in Norway should be a near-term priority. Also in Norway, the rail connection from Finland to Narvik should be developed, while preparing for a decision on a rail link from Finland to Kirkenes.
Opening the Northeast Passage to Asia for year-round navigation is not likely until the middle of the 21st century, but certainly worth serious study. A cable connection from Germany to Finnish Lapland to Norway to Asia is another project that would stimulate growth in the EU. Great opportunities for Finnish companies are opening up in northern regions of Norway and Sweden, where several hundred million euros worth of tenders are issued every month. Small and medium-sized enterprises should be helped to seize the day by providing them with up-to-date information on tenders and giving them guidance on how to proceed. Competence in language skills, particularly in Swedish and English, should be improved.
Northern Dimension (ND) cooperation should be a centrepiece in a Northern Policy. It is a real success story in cooperation between the EU and Russia. All of the four partnerships of the ND have produced important results. In the flagship Environmental Partnership (NDEP), EUR 1.4 billion has been invested in waste water treatment plants in north-western Russia and Belarus. The NDEP environmental fund, now standing at EUR 177 million, provides a grant share of a maximum of 20%, with the rest coming from loans from the EBRD, EIB and NIB. Russia is a major donor to the fund. All of this is managed with minimum bureaucracy, with a small EBRD team in St. Petersburg in charge.
The ND Partnership on Public Health and Social Well-Being involves hundreds of experts and administrators in combating communicable diseases and improving ways of life. The ND Partnership on Transport and Logistics has produced important studies on developing traffic infrastructure in the North. The ND Partnership on Culture is concentrating on stimulating creative industries in the region.
Northern Dimension cooperation must not fall victim to tensions caused by the situation in and around Ukraine. Unfortunately, sanctions include freezing financing from the EBRD, EIB and NIB for new projects in the NDEP. This is taking place at a time when the NDEP should be moving to its next phase: energy efficiency. Thousands of power plants in northern Russia are polluting the Arctic with black carbon, which, according to US Secretary of State John Kerry, is “up to 2,000 times more potent than carbon dioxide” at melting ice. The NDEP plans mean modernising existing power plants and building new ones, a huge task that would also provide opportunities for Western companies.
It should be in the interest of all parties to maintain Arctic cooperation and try to keep it outside the East–West tension. The Arctic Council meeting in Canada on 24 April 2015 gave hope of continuity in this respect. Cooperation in combating oil spills and in search and rescue will be enhanced, and an action programme on black carbon implemented.
The EU must decide what its priorities are in a Northern Policy. An immediate task is to secure the continuation of Northern Dimension cooperation, particularly the NDEP, which will be phased out in 2017 if it is not extended. Interest in the Arctic exists in all the major member states: all of them are maritime countries and are willing to share in the exploitation of Arctic natural resources, while they also share a concern for the Arctic environment. A Northern Policy, coordinated by EEAS, would give the EU new purpose.