Mr. Chairman!
Ladies and Gentlemen!


I am glad that I was among the people who created the Pro Baltica Forum last summer. The participation of the Finnish and German intellectual resources and economic potentials, first, in the process of the Baltic states becoming their own selves again, and second, in their integration into Europe, is in the interests of all of us. By us I mean the states, as it helps establish stability in the reborn northerly region of Central Europe; I also mean private enterprise, as thanks to the dynamic times the geopolitical position of Estonia and Finland has gained a significance immeasurably higher than it had in the glorious days of the historic Hansa. And thirdly I have in mind Finnish and Estonian creative work in the field of culture, which, paradoxically, appears to be moving away from Europe in spite of its integration with Europe: the reinforcement of regional identities is the reverse side of European integration. The present Germany is comprised of more Germanies than in the post-Bismarck era. A unified standard of bolts and nuts provides a footing for the hunger after, and appreciation of, dissimilarities in cultures, poetry, music, architecture, landscapes. Electricity is generated from opposite poles. The field of tension between opposite poles will generate new ideas. This is a synergic miracle, but we shall speak of miracles when we discuss culture.

2.

Once in a while I manage to get out of my presidential skin and view myself, my country and the Baltic states from the side. The picture I see when observing the mutual integration of the Baltic states is funny but also tragicomic. Up to now this integration has been a mere exercise in verbal rhetoric. All three want to integrate into Europe. To dive head first into the primeval ocean as if it were nutritious broth, and to start integrating only once they are inside the warm womb of Europe. Via Baltica, the shortcut to Europe, has become a caricature of itself. Trucks are waiting up to three days on Estonian-Latvian and especially on Lithuanian-Polish borders. Three days means 72 hours: in other words, such destinations of our goods as Berlin or Frankfurt have moved beyond the snow-capped peak of Kilimanjaro. As I met Mr. Ulmanis, the President of Latvia, in early August and Presidents Brazauskas and Ulmanis at the Baltic Presidential Council on August 27, I pointed out a task: Baltic integration is conditio sine qua non for our integration into Europe. This is my first thesis.

The second thesis: Baltic integration has to take place on all hierarchical levels from bottom to top: local governments; political parties; private enterprise; unification of legislation on the legislative level and its implementation on the executive level; setting the objective of a common economic and national security space and its representation on the presidential level.

All this has already come up before, and the risk of rhetoric is still high. Therefore the third thesis is inescapable though difficult for all of us: to optimize the division of labour between the Baltic States. It is our duty to learn from history. A week before the Baltic states were occupied my father wrote in the journal "Revue Baltique": the Baltic economies are competitive and not complementary, therefore cooperation is minimal.

Unless we learn from history to forestall mistakes, history will repeat itself.

3.

National security and regional stability are based on common interests, and common interests - on a common economy. Power engineering has been the blood circulation of the economy ever since the stone axe era, and nowadays the circuit has taken the shape of pipelines or power grids.

A unified energy system is a prerequisite for mutual Baltic integration and also a prerequisite and the best launching pad for integration with Europe. Leaving aside the Estonian electricity export, I would like to draw your attention to the North-South natural gas pipeline network, a North-South project. It would begin at the North Sea - with another possible branch starting at the Barents Sea later on -, proceed through Sweden and Finland to the Baltic states, incorporate the huge natural underground gas depositories in Latvia, and link up with the Central European gas network in the south. Let us combine this with division of labour in the production of electricity and in the processing of oil products. Let us connect the project to the pipeline coming from Russia: the result will be a balanced and stable energy system. The presidents of the three Baltic states approved of this project at their meeting on the 27th of August.

The first time I spoke about the North-South project was at the beginning of May on my visit to Poland, and Prime Minister Suchocka got very interested in it. A few weeks ago the board of the Dresden Bank communicated through Mr. Walter that the bank would readily undertake a study for setting up an international banking consortium to realize the project. From the viewpoint of security policy I would like to underscore that the North-South project would counterbalance our current dependence on Russia. Consequently, we may offer considerably more active forms of cooperation to Russian entrepreneurs who might be interested in the liquefaction of natural gas and its westward export through some of the Baltic terminals. The existing tensions would be supplanted by balanced cooperation between all the four quarters.

I would be happy if the Pro Baltica Forum chose to take an active part in this.

The fundamental issue is the settlement of priorities and ways for their accomplishment. It seems to me that at present we should lay the main stress on the delineation of such projects that are of a stategic character, and which can play a pivotal role in the economic integration of the region. In case of a favourable political situation such integration might also encompass St. Petersburg and its environs as well as Kaliningrad (Königsberg).

Another very important project is that concerning transport. Apart from the Via Baltica motorway and the related infrastructure, it should also consider the specialization and complex construction of ports. I do not mean the Tallinn passenger port as a questionable initial or final point of Via Baltica on the territory of the Baltics: I mean commercial ports for east-west and north-south re-export. The Paldiski has a particularly valuable geographical position among them; alas, now that it has been abandoned by the Russian navy it is in a wretched state.

The airfields based in the Baltic states also must be taken into rational use for the international traffic of people and goods.

These projects will be complete with telecommunications. Such regional projects, involving all the Baltic states, are more likely to get financial support from the World Bank and European banks and foundations than narrower projects would. The first move should be trying to find the money for preparing initial assignments, for announcing international competitive tenders or for preparing the economic grounds. Regional projects should certainly not exclude grants in support of training, science, historical and cultural heritage.

4.

In order to associate international, Estonian and Baltic economic and scientific potentials, I have decided to initiate a Baltic International Institute. To begin with, I will employ an executive secretary, and will set the objective of inviting ten to twenty people once or twice a year, who would make up a think-tank. I have contacted my friends in the Nordic countries as well as in Germany, the United States and Russia. I would be happy if the the Pro Baltica Forum took an active part in this new structure. The Baltic International Institute will generate ideas, whereas you will pick out the suitable ones or will ridicule us. For the process of integration we need both your dry matter-of-fact competence and your humour in an equal proportion. The think tank will no doubt also need some good beer, but this can be catered by the Saku Brewery, which is a practical and tasty example of the attractions of integration, dangerously tasty attractions.

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