The Three Seas Initiative aims to expand with Ukraine

The Three Seas Initiative (3SI) is a geopolitical project, established in 2015, that brings together 12 countries located between the Baltic, Adriatic, and Black Seas (Austria, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia). Its objective is to strengthen relations among its members in Central and Eastern Europe (CEE) in terms of economic development, energy, security, infrastructure, and digital communications, creating a north-south axis opposed to the traditional east-west one. Such an initiative existed once before when Josef Piłsudski´s Poland launched the idea of the Międzymorze (the Land between the Seas or Intermarium) and tried to include the countries between the Baltic, Adriatic, and Black Seas to establish a protection zone against German and Soviet ambitions. Many countries were also wary of Polish ambitions themselves, and so the idea failed at the time. For the modern project, however, the economic aspect of cooperation is emphasised. It must be remembered though that such initiatives always have a geopolitical dimension.

According to the IMF, the Three Seas region faces an overall infrastructure gap in excess of $598 billion, with the financing gap in energy infrastructure estimated at $115 billion. The European Commission, Germany, and the U.S. are also involved in the process to enhance cohesion and further increase transatlantic links, but also to promote their own agenda. In 2017, Donald Trump attended the second summit of the 3SI in Warsaw and in 2020 Mike Pompeo announced that the US would pledge $1 billion towards the initiative. The current Biden administration confirmed potential investments of up to $300 million, however, after the economic hardships the pandemic and the war in Ukraine have created, the approval of this financing is still pending. Although Germany was not interested in the project during its beginnings, the U.S.’ eagerness to commit itself to the region caused Berlin to change their mind, as they understood the important role that CEE countries play in regard to German influence and power projection inside the EU.

The Three Seas Initiative Investment Fund, launched in 2019, counts on the support of member countries, but it is unable to gather the gigantic sums needed without the help of the EU’s Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), the United States International Development Finance Corporation (DFC), and many others including several states and private donors. Washington, Brussels, and Berlin have previously viewed each other’s interest in the 3SI with suspicion, but the current conflict in Ukraine could help ease wary perceptions and focus them on a common goal.

One of the main takeaways of this initiative is that it could help the small and medium-sized countries of CEE, who have historically been at the mercy of larger powers, reinforce resilience and find a balance between the EU, the U.S., and China. It would also serve to counter Russian or Turkish regional aspirations, as the financing of infrastructure projects has a very strong foreign policy component, something that countries like China have been proving in Africa, Central Asia, and even Europe with their own initiatives, the 17+1 (now 14+1 after the Baltic States withdrawal) being a good example. This Chinese initiative seems to be losing steam in Central Europe, but it remains the only direct competitor to the 3SI, especially in Southeast Europe.

During this year’s June 3SI Summit and Business Forum, held in Riga, members of the initiative decided to grant Ukraine participating partner status and support its efforts to join the EU. Ukraine won’t have a strategic partnership as the one linking the 3SI with the U.S. or the EU, but a new form specifically addressed to potential EU member countries. This fulfils one of the U.S. objectives, as expressed by some conservative analysts, to link the 3SI with U.S. national interests and use it to steer non-EU countries away from other powers’ influence. Surprisingly, however, not a single U.S. cabinet official was present at the summit. Ukrainian officials were present, including the President (through a video address) and the Deputy Speaker of the Verkhovna Rada, Olena Kondratyuk. In contrast with previous summits held in Sofia or Tallin, where the topic of cooperation with Ukraine was barely mentioned, this time it topped almost all the discussions and questions. It’s true that the war factor has played a notable role in this, but Ukrainian leadership also seems to be more than interested in joining the project.

Ukraine has considerable incentives for membership as it is interested in post-war reconstruction and diversification. The country is trying to involve itself in the North-South gas corridor project, of which the newly inaugurated Baltic Pipeline is part, spearheaded by several member countries of the 3SI. Ukraine could use its extensive gas supply network and link it with the Poland-Slovakia and Poland-Ukraine interconnectors and the LNG terminals to increase the capacity and help fulfil the energetic needs of the 3SI members. Despite having significant shale gas reserves, Ukraine has remained dependent upon imports of natural gas, mainly from Russia. The war has changed this, as Ukraine aims to become a provider of energy to the EU and decouple itself from the Russian electrical grid. The possibility of future gas exploitations and the reparations and security maintenance of Ukrainian infrastructure will be an important matter to keep an eye on. Ukraine’s objective to become a provider of energy may be in danger, however, after the increased attacks on its power grid.

Ukraine is already a participant of the 3SI Viking Train logistics, an initiative launched in 2015 that connects the port of Odesa with the Baltic States and which serves as a platform for cooperation. Ukraine could also connect with the Trans-European Corridor through the Carpathians, acting as a logistical centre in the connection of northern and southern Europe and possibly lessening the pressure on the Romanian port of Constanta. All of this, however, depends on the outcome of the war. The reconstruction of Ukraine and its damaged infrastructure could mean bigger spending for the 3SI. The expected cost needed for reconstruction in Ukraine reached $349 billion by the beginning of September. A figure that will keep rising as long as the conflict lasts. Poland already occupies an important position in this regard, acting as a transit country for many of the resources that Ukraine needs for the war against Russia, as well as being a host for many Ukrainian emigres or refugees since 2014. Despite all this, investments and projects won’t do much good if the economy remains inefficient. In order to achieve success, Ukraine has a long task ahead and needs to free itself from the oligarchs that have been capturing its wealth for decades. Big investments and projects won’t do much good if the economy remains inefficient.

Diverging priorities have been hindering integration within the 3SI, as well as the war and the economic and energy problems that derivate from it. The needs of the initiative, besides the hard task of fulfilling investments, are reconciling the need for energy security with the sustainable energy transition, trying to prevent the emergence of further regional issues, for example in the Balkans, and effectively engaging with powerful states and organisations. The next 3SI summit will be held in 2023, in Bucharest, and it is more than probable that Romanian authorities will try to boost the inclusion of Moldova. Ukraine chairs the EU Macro-regional Strategy for the Danube, so it can seek common interests with both Romania and Moldova and lobby for a bigger role in the initiative.