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Bled (Slovenia), August 28, 2006

Ladies and gentlemen,

First of all, I would like to thank the organizers for inviting me to this Forum. For us, the initiatives of Slovenia in the run-up to the forthcoming EU Presidency are indeed very instructive.  We learn from this experience. And we also want to contribute to the process of generating a broader common European approach.

The Caspian Region represents one of the major security challenges for Europe in the medium term. Our focus today is primarily on energy issues. Lithuania has enough reasons to be concerned about energy security issues, of which stable and secure supply of energy recourses is a major concern. The need for more diverse energy supplies naturally turns our eye at the Caspian Region, where we see vast prospects of cooperation. Therefore, Lithuania supports all initiatives, promoted in the dynamic framework of the EU-Caspian Sea dialogue, which increase the alternatives of energy supply. It is a pragmatic and mutually beneficial approach which ought to be vigorously pursued and further expanded.

However, apart from energy, a closer look on the social and economic transformations in the Caspian Region would reveal a few more aspects of strategic importance to our future. Our task is to turn those aspects from a strategic challenge into a strategic opportunity for Europe. And I am sure that Europe is well fit for this task.

My optimism dwells on three basic judgments. First, our focus has already shifted in the direction of the Caspian Region over the last few years. The EU has advanced substantially in shaping its policies in this direction. The Neighbourhood Action Plans have been drafted with the South Caucasus countries. A ‘Four Spaces’ dialogue is being developed with Russia, including its ‘Northern Caucasus’ dimension. And the EU has appointed its Special Representatives for Central Asia and South Caucasus to coordinate and expand its policies with the region.

Second, the political calendar seems to match our needs of refreshing the EU’s Neighbourhood policies. The Finnish Presidency, as well as the subsequent German Presidency, provide an exceptional political moment for the EU, which has to be used to its full. We expect new initiatives to be launched during this period; and we will gladly embrace those oriented at closer integration between the EU and its European neighbourhood. We believe that these initiatives would be taken forward also by the other EU Member States, including Slovenia.

Third, in recent years the political discussion inside the EU has reached the point where future enlargement has again become a subject of deliberations. Some view this moment as a possibility to add new monsters, such as ‘the absorption capacity’, to the EU’s political vocabulary. However, I suggest that we spend this moment not on ‘literature’ but on substance. In other words, we should try to reach a lasting consensus with our neighbours, and among ourselves, about our long-term strategic goals and objectives.

Ladies and Gentlemen,

The EU’s strategic interests in the East are well known: We want stability, security (including energy security), and cooperation built on shared values. Our policies have been steadfast in pursuing these goals.

But what are the interests of our next-door neighbours?

Yes, our neighbours want better life. They want to develop their societies on the basis of the fundamental European values, such as human rights and the rule of law, as well as the other principles governing the political and economic life of modern Europe. Our neighbours want welfare standards comparable to our own. They want to enjoy all Four Freedoms in a space which represents one of the largest markets in the world. They also hope that the EU can help to resolve the persisting territorial conflicts in Moldova and South Caucasus, which continue inhibiting these nations’ progress towards lasting stability and well-being.

The EU has responded to these expectations by designing the European Neighbourhood Policy in 2003, which provided concrete instruments of practical assistance. Since 2005, a border monitoring mission has been carried out on the state border between Moldova and Ukraine. A training mission was also provided to Georgia. They all have been rather successful and opened up new possibilities of cooperation.

But we still have to ask ourselves whether this is enough; whether the EU has exploited its role fully; and are we prepared to go any further?

To answer ‘yes,’ we have to meet two major preconditions.

First, we need a stronger consensus within the EU as to which principles will guide our policies in the future. Lithuania believes that European security was, and is, indivisible. We cannot build a lasting security in Europe by caring just about our own needs.

The EU needs a stronger CFSP policy, as well as stronger ESDP instruments. We have to apply these instruments more vigorously in solving the existing problems in our Eastern Neighbourhood. Also, we need to involve our partners in the East in the implementation of the CFSP and ESDP policies. They could be invited to join our efforts where they can, through joint declarations on policy issues and common practical actions. In some areas, our European Neighbours could even be invited to involve in the drafting of EU positions. For example, Ukraine can play a very important role in developing the EU cooperation with Russia and Belarus. Meanwhile, Georgia could be a useful partner in developing the ‘North Caucasus’ dimension of the EU-Russia dialogue.

The second precondition applies to the possible transformation of the ENP. We need a clearer strategy towards our Eastern Neighbourhood. The fact that our Eastern neighbours belong to Europe is indisputable. Their right to join the European Union is also a fact established by the EU founding treaties. Thus, a distinction between the ‘European Neighbours’ and the ‘Neighbours of Europe’ has to be established more clearly.

Ladies and Gentlemen,

We suggest that in the future our Neighbourhood policies in the East would be firmly based on the concept of ‘integration’. In our mind, integration provides a sufficient framework both for the EU and its neighbours to develop mutual cooperation. EU membership is not a question which we should seek to answer immediately and at any cost; rather, this is a long-term issue. But I believe we all agree that closer partnerships with our neighbours in Europe will only strengthen European stability and security in the long run.

Perhaps Integration Treaties, based on the existing Action Plans, could be concluded with our European Neighbours. These Treaties would define the strategic framework for EU cooperation with Eastern Neighbours and set out the strategic objectives of this cooperation. The overall aim would be to bring these countries closer to the EU through the development of structural dialogues at all levels, including sectoral cooperation; through economic integration and closer participation of these neighbours in the Internal Market; and through facilitation of people-to-people contacts. The Treaties would set a 10-year time frame for implementing these objectives and establish an instrument of annual review. The review process would allow Eastern Neighbours to proceed further on the principles of individual treatment and differentiation.

Four essential tasks can be established within the framework of the Integration Treaties.

Task 1 – extension of the EU acquis across the EU border. Integration has to be based on the harmonization of the legal standards. Our European Neighbours would be invited to approximate their legislation to the standards which have been developed and exercised by 25 Member States. To run this process smoothly, the EU will have to support it with practical assistance and proper scrutiny. Perhaps the screening procedures could be borrowed from the last round of enlargement to monitor the adoption and the implementation of the Internal Market legislation in the neighbouring states. Also, the EU will have to increase substantially its technical support provided through TAIEX and other instruments.

Task 2 – sectoral agreements. The EU has already developed a broad range of cooperation formats allowing ‘sectoral’ integration between the Union and its European neighbours. Thus, the non-EU countries Iceland and Norway participate in the Schengen area, while the Principality of Monaco and San Marino have effectively integrated into the Euro zone. The Four Freedoms apply fully in all EFTA countries. Meanwhile, Switzerland has concluded seven bilateral agreements with the EU, which allow the Swiss to participate in certain sectors of the Internal Market. There is no reason why our neighbours in the East should be excluded from this ongoing cooperation. Sectoral agreements in such sectors as energy and transport infrastructure development could be a good starting point. These agreements should fall under the general framework of the Integration Treaties.

Task 3 – closer institutional dialogue. We need to structure our individual dialogues with Eastern Neighbours at different levels, including such important sectorial areas as political cooperation, Internal Market, justice and home affairs, and economic and energy cooperation. These newly created structures would monitor the progress achieved in implementing the objectives of the Integration Treaties and the appropriate sectoral agreements. Joint discussions with East Europeans under formula 25+1 should become a rule rather than a privilege.

Also, the EU should facilitate regional cooperation in Eastern Europe, based on the principles of European Integration. This cooperation will certainly increase mutual understanding in the region and may contribute to earlier resolution of the ‘frozen’ conflicts, to the removal of barriers to trade and investment, and to the development of transport and energy infrastructure. Such positive examples of regional cooperation already exist, GUAM and the Black Sea Forum among them.

Finally, Task 4 – a balanced approach. We have to understand that our neighbours’ integration with the EU will be constrained by the domestic problems of ethnic, territorial and geopolitical character.  To demand full compliance with a certain EU regulation, while a country is coping with the existential challenges of territorial integrity, will not always be easy. The growing practical contribution of the EU to the resolution of these most pressing problems in the region would only increase the legitimacy of the entire integration process. Needless to say, it will also strengthen our own security.

Ladies and Gentlemen,

The successful implementation of the Integration Treaties may provide further ideas as to how our relations with the broader Caspian Region could develop. Whether 2008 is a proper benchmark is still a question. But being one of the most integrated international systems in the world, the EU has a moral duty to ‘export’ this experience of integration and perhaps even establish it as a universal norm. A notion of ‘shared sovereignty’ should no longer be just a European ‘property’.

From this perspective, the ‘endgame’ for the EU in the European neighbourhood is rather endless. But I believe it can be measured by new innovative forms of cooperation and integration, producing stability and security to our continent.

I wish that we see this ‘endgame’ namely from this perspective.

Thank you.