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The Three Seas Initiative is aimed at promoting cooperation and stimulating more rapid economic and wider social development. The 12 participating states share many common traits, but there are also major differences between them. The Ministry of Foreign Affairs of the Republic of Slovenia gives some perspectives on the Initiative’s main goals and objectives. 

Author: Rok Tomšič, Ministry of Foreign Affairs of the Republic of Slovenia

The Central and Eastern European region included in the 3SI has great potential in terms of economic development in digitalisation but requires considerable financial resources for investments to be able to catch up with the western EU member states. The 3SI participating countries have expressed a great need for coordinated multinational, i.e., cross-border infrastructure projects to be designed within the initiative. Those include investments in energy, transport and logistics, and digitisation as well as in R&D in new technologies. There also needs to be an increased focus on cybersecurity. All of the above present great opportunities for closer cooperation between the countries in the region.

The discussions at the Three Seas virtual summit held on 19 October 2020 showed that the participating countries shared very similar views. The Initiative is becoming increasingly influential, including in international political debates. Due to the global health situation, the summit focused on the economic ramifications of the pandemic.

Since its foundation, the Initiative has been consolidated and made substantial progress in terms of its agenda. Its influence in the wider EU context is on the rise, with many recognising it as one of the avenues to make the EU stronger. In addition, the Three Seas Initiative Investment Fund (3SIIF) is becoming an instrument facilitating the optimal functioning of the Initiative as with co-funding infrastructure projects in the region. Financial contributions to the Fund are growing, reflecting the trust the participating states are putting in the 3SI.

Opportunities for Slovenia

Since its foundation, the Initiative has been consolidated and made substantial progress in terms of its agenda. Its influence in the wider EU context is on the rise, with many recognising it as one of the avenues to make the EU stronger. In addition, the Three Seas Initiative Investment Fund (3SIIF) is becoming an instrument facilitating the optimal functioning of the Initiative as with co-funding infrastructure projects in the region. Financial contributions to the Fund are growing, reflecting the trust the participating states are putting in the 3SI.

However, there is a marked investment gap between EU member states. In terms of modernising transport, energy, and digital infrastructure, the area between the Baltic, the Adriatic and the Black Seas requires carefully designed projects enabling quality connections along the North-South axis. It seems reasonable to try to draw a line between the public and private sector investments, set priorities for public investments and ensure their funding. Due to the burdens placed on public financial resources by the fallout of the COVID-19 pandemic, alternative ways of financing strategic infrastructure projects in the region need to be found. And this is where the 3SIIF can step in. Its positive impact might boost infrastructure and spur other projects in the region, with a spill over effect on the rest of the EU and its neighbourhood.

One could argue that Slovenia and the 3SI countries are mutually dependent: on the one hand, Slovenia is interested in improving the quality of its inland infrastructure connections with the 3SI countries. On the other hand, Slovenia is important for those countries precisely because of its geostrategic position at the intersection of two Pan-European transport corridors. In addition,
the Port of Koper is an important hub for overseas destinations.

Major challenges

The 3SI not only has a positive impact on EU unity, but also enables its better connectivity. It strengthens cohesion, which in turn can reduce the investment gap between the eastern and western parts of the EU.

Before the pandemic, the 3SI region saw the highest rates of economic growth in Europe, and worth striving to maintain its economic growth. It is vital to strengthen the intergovernmental cooperation in the region in order to bridge the infrastructure and connectivity gaps. With a growing need to make the Initiative operational, it would make sense to advocate for the closer engagement of national governments in its activities. This is particularly true in terms of providing legal bases and favourable business environments conducive to the realisation of concrete infrastructure projects. As EU member states and therefore part of the common economic and customs area, the 3SI participating countries have a unique advantage in attaining their economic goals.

For them, one of the greatest challenges will be the implementation of infrastructure projects marked as priorities. These projects will require private capital, or else their realisation might be jeopardised. Certain 3SI countries advocate for a smaller number of infrastructure projects with a realistic chance of being completed. It is therefore vital to move from supporting the projects in principle to taking concrete steps. In the long term, in addition to developing infrastructure connections, it is reasonable to expect closer cooperation in other areas as well, such as in science and education.

Organizational approach of the Republic of Slovenia to the Three Seas Initiative
The following institutions are involved in organizational, technical, as well as substantive activities related to the operation of the Republic of Slovenia in the 3SI initiative:
– Office of the President of the Republic, in terms of coordination with the offices of the Presidents of other 3SI member states;
– The Office of the Prime Minister, where the national coordinator for the 3SI initiative is State Secretary Mr. Bojan Pograjc;
– the Ministry of Foreign Affairs, which acts as a contact point within the government; the contact point for 3SI inside the Slovenian Government is Mr. Anže Logar, Minister of Foreign Affairs;
– SID Bank, which has developed a partnership with 3SIIF.

Capitalising on strong ties within 3SI

In the second half of 2020, Slovenia strengthened some of its important international partnerships, most notably with the USA and certain other countries. Slovenia shares the US’s view that economic development and the necessary infrastructure in the region must rely on the principles of green economy and sustainable development, while respecting democratic values, the rule of law, transparency, and the tenets of market economy. Slovenia welcomes the growing interest of the US in central and eastern Europe, which significantly contributes to the development of transport, infrastructure, and digital projects as well as to the strengthening of transatlantic relations. A common goal connecting the US and the 3SI participating states is the unification of the energy market and the accompanying energy infrastructure.

The US’s increasing interest in central and eastern Europe is also reflected in the US administration’s active support for the 3SI. All these endeavours have a role to play in improving the infrastructure, energy, and digital connectivity between the 3SI participating states. The involvement of the US in the Initiative, and potentially also in the 3SIIF, coupled with the high-level participation of 3SI countries, the European Commission, and the US in the 2020 virtual summit, could be a steppingstone to the further strengthening of transatlantic relations.

Ultimate objectives

The 3SI objectives related to investments in the region’s transport, energy and digital infrastructure and the need to fund them remain at the forefront. In addition to the existing funding sources, such as the budgets of the 3SI countries and the EU, new sources are needed, the 3SIIF being one of them. In any case, efforts need to be made to attract private capital and encourage the establishment of private-public partnerships. The possibilities outlined above instil optimism even at the time of the current health and economic crisis, as they promote further progress.

Exiting the COVID-19 crisis will be asymmetrical. A possible solution might be more intensive efforts to attract private capital investments for infrastructure projects, establishment of public-private partnerships and application of new financial instruments, including the 3SIIF. Unless the way of funding is changed, it will be hard for central and eastern European countries to take the needed steps forward in terms of upgrading their transport, energy, and digital infrastructure.

Usually, investments imply risks, but now the situation is reversed – it is less risky to invest than not to invest at all. Furthermore, investments in infrastructure will have multiplier effects. Hence, creating favourable business environments for foreign investors is a must.

Connectivity remains the backbone of the economies and societies in the region, and this is why there need to be functional connections. More than ever before, countries need to ensure reliable and operational connections between the East and the West, and the North and the South of Central and Eastern Europe as well as strong transatlantic connections. And finally, the Three Seas Initiative remains an important European regional contribution to greater economic convergence in the EU.

Adriatic Journal

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