Europe is undergoing a shift that is placing pressure on its most prominent institutions: NATO and the European Union. Several factors precipitated this shift, including the European financial crisis and the disparate economic and security interests of the more than two dozen member countries of both organizations. The broader geopolitical component of the shift is that the nature of Europe and the imperatives of the individual European countries are not what they were during the Cold War, when the European Union and NATO were created. This is especially the case regarding relations with Russia, as the European Union and NATO have both expanded to include many Central and Eastern European countries that were part of Russia's Soviet-era alliance system, the Warsaw Pact.
With the European Union facing serious financial issues and NATO seeing growing divisions over the alliance's strategic purpose, the idea of regionalization in Europe — the emergence of smaller groupings with more synchronized interests — is becoming more pertinent. This does not mean that NATO and the European Union will cease to exist in the near future; bureaucratic inertia and vested political interests will prevent that from happening. But signs have emerged that such regional groups are becoming a supplement and possible alternative to these two blocs, with one of the most important potential groupings centered on the Baltic region.
Geopolitics of the Baltic Region
The Baltic region centers on the Baltic Sea and comprises Estonia, Latvia and Lithuania but also includes other countries adjacent to or active in the region, such as Sweden, Finland and Poland. More broadly, this region can in certain respects include Nordic and North Sea countries like Norway, Denmark, the United Kingdom, Ireland and Iceland.
The Baltic states — Estonia, Latvia and Lithuania — are the main countries in the region pushing for supplemental security and economic structures. These countries lie on the strategic North European Plain, which would be on the front lines of Russian power projection into the region, and they are a central point both geographically and geopolitically. In the Baltics' existing security and economic frameworks, NATO protects them from Russia (at least nominally), and Baltic economies are oriented toward the European Union. However, the Baltics do not feel comfortable relying completely upon NATO's protection, and the financial and economic benefits and prospects of the European Union are not what they used to be in the context of the financial crisis.
The Baltics therefore have put more emphasis on regional cooperation in order to find areas of mutual interest in the economic and security spheres and to streamline action on these interests. For instance, it is natural that Estonia would have more trade and economic integration with Sweden than it would with Portugal, or share security concerns about Russia's resurgence with Lithuania rather than the more distant France. Financial constraints, such as the need to cut defense budgets, are another important force behind the formation and strengthening of regional defense groups, allowing states to pool resources and therefore cut their individual budgets. Furthermore, increased regional cooperation would allow countries in the Baltic region to better coordinate with the United States or with a power outside NATO to take an action, or to make a decision that might be vetoed by a European or NATO heavyweight like Germany.
So far, formal groupings within the region have been limited to the EU/NATO framework, such as the Nordic Battlegroup, which consists of slightly more than 2,000 soldiers and officers from Sweden, Finland, Norway, Estonia and Ireland. However, the prospect for a more robust grouping that could include both economic and security interests has been in the discussion and planning phases for a few years. It was hinted at during the UK-Nordic-Baltic summit in January 2011, when the prime ministers of the United Kingdom, the Baltic states and Scandinavian countries discussed areas of economic integration and called for the formation of a "new alliance." Although the summit focused mainly on the economic sphere and was limited to an informal group of countries, it showcased the similarities in these countries' interests, which could be applied in the realm of security.
Current Dynamics of the Baltic Region
The formation of a more consolidated group in the Baltic region would have to overcome numerous regional complexities. First, there is the difference in priorities and outlook between the core states in the region (Sweden, Finland and the Baltic states) and those on the periphery (the United Kingdom, Iceland, Ireland, Norway and Denmark). The latter are farther removed from the Russian threat and are more interested in building economic ties, while the former are interested in expanding relations both economically and in the area of security. Still, all of these countries have a sense of vulnerability due to their proximity to Russia and Moscow's power projection in the Baltic Sea. Poland is not formally part of these groupings (it was not represented at the summit or in the Nordic Battlegroup and is instead a member of its own regional grouping with the Czech Republic, Slovakia, and Hungary known as the Visegrad Group) but is still an important and traditional player in the region.
Perhaps most important, the Baltic states are hardly uniform, with different historical, cultural and to an extent foreign policy orientations. Estonia and Latvia are more oriented toward the Nordic countries, while Lithuania (like Poland) has traditionally been more active in mainland Europe toward the east, with national interests in countries like Belarus and Ukraine.
Furthermore, certain countries within the region have conflicting interests. For instance, the Baltics are in many ways more competitive with each other than cooperative, as the three countries' struggle to host a liquefied natural gas plant on their territory shows. Also, Latvia is more cooperative with Russia than the other Baltic states are, exemplified by its opposition to the Rail Baltic project in favor of the Moscow-Riga rail project. Additionally, Poland and Lithuania have cultural and historical tensions involving the Polish minority in Lithuania (something that Russia has exploited). Finally, even if there were no tensions between these countries, their native military capabilities are still overshadowed by NATO heavyweights like the United States, France, and the United Kingdom.
However, in the bigger scheme of things, all of the countries in the region — and particularly the Baltics, Sweden, Finland and Poland — are committed to cooperation when it comes to preserving and protecting their strategic interests. This impetus has only grown as Russia has continued with its resurgence and built up its influence and military presence in areas like Belarus, Ukraine and the Russian exclave of Kaliningrad. And with a more intense focus on regionalized cooperation, this could facilitate a stronger relationship with a foreign power outside the NATO framework.
Recent Developments and Looking Ahead
Some countries in the Baltic region have made steps toward consolidating their policies and resources and attempting to counter Russia's influence. For instance, Poland and Lithuania announced Feb. 16 that they would coordinate their position on NATO's plans for a missile defense system in Europe. Lithuania also proposed that Poland join the country's Energy Security Centre, which has official NATO backing. On Feb. 6, Finland's recently elected President Sauli Niinisto suggested increasing defense cooperation with other Nordic countries in areas like weapons procurements, and there has been speculation that Sweden and Finland (who are not NATO members) could join NATO's Baltic air policing mission, though the Finnish Defense Ministry has rejected the idea.
On the economic front, increased cooperation has focused mainly on energy, one of the most strategic sectors for these economies due to Russia's involvement. Poland and Lithuania announced Feb. 10 that they intend to link national gas grids by 2018. Poland has also said it would invest in shale gas exploration in Latvia and Lithuania. In addition, Sweden is very active in the financial sectors of all three Baltic countries.
All of this increased regional cooperation does not mean the Baltics or other countries in the region have abandoned their commitments to the European Union or NATO. Indeed, the Baltics announced Feb. 17 that they would enlarge their contributions to the NATO air patrolling mission by 50 percent by 2015, following NATO's Feb. 8 announcement that it would make the mission permanent. Even the economic commitment to the European Union in the region is still strong; Estonia joined the eurozone in the midst of the crisis in January 2011, and Latvia has said it intends to keep to its commitment to join the currency bloc by 2014.
However, both the European Union and NATO have demonstrated to the region that they do not sufficiently serve the states' national strategic interests in the face of a resurgent Russia. In many ways, these institutions can even undermine these interests, because members such as Germany do not feel the threat from Russia that the Baltics do and have increased their cooperation with Moscow recently. Therefore, despite the complexities and challenges within the Baltic region, regionalization is likely to intensify in the coming years.