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CSIS New European Democracies Project Summary - February 24, 2006

Core Content Overview

This summary highlights recent developments in Central, Eastern, and Southeast European countries, focusing on energy security, military cooperation, economic policies, and international relations. It is part of the CSIS New European Democracies Project, which tracks daily events in the new EU member states and those set to join in future enlargement rounds.

Central European Update

Czech Republic

• NATO Forum on Energy Security: On 22 February, Prime Minister Jiri Paroubek opened the forum, emphasizing the need for increased EU investments in energy security and diversification, particularly to reduce dependency on Russia.
• Russia-Czech Talks: Putin is expected to meet Paroubek on 1 March to discuss post-2013 gas and oil deliveries. The Czech Republic currently receives 7.5 billion cubic meters of gas from Russia and 2.5 billion from Norway.
• Migration Training Program: The Czech foreign and interior ministries, in collaboration with IOM, will host a one-week training program for twelve Iraqi experts on migration policy and asylum procedures.

Hungary

• Globus Rt. Acquisition: France's CECAB made a public offer to purchase 51% of Globus Rt. at HUF 460 per share, 31% above the legal minimum. Globus, founded in 1924, faced losses of HUF 4.4 billion in 2005 due to cheap EU imports, but its exports increased by 25%.
• Military Deployment: A 136-strong Hungarian light infantry unit departed for Afghanistan on 20 February, operating under NATO Italian command in a German-controlled region. This is the unit's fourth tour since 2004.
• Saudi-Hungarian Trade Talks: Saudi Arabia's under-secretary for Water and Electricity, Ahmed Bin Saleh Al-Khalifa, visited Hungary to promote bilateral trade in energy, farming, IT, and tourism. Discussions centered on Hungarian investments in Saudi Arabia's USD 90 billion water and energy projects.

Poland

• Gas Pipeline Negotiations: Poland is in talks to build a pipeline for 5 billion cubic meters of gas annually from Denmark and Norway. Deputy Minister of Economy Piotr Naimski stressed the need for diversification.
• Military Modernization: Poland plans to spend USD 1.2 billion on army modernization this year, including the introduction of U.S.-made F-16s, Israeli SPIKE missiles, and new transport vehicles.
• Infrastructure Investment: Deputy Minister Jerzy Kwiecinski announced a 35 billion euro investment in infrastructure, part of EU Structural and Cohesion aid. He criticized the lack of investment as the cause of deteriorating infrastructure.
• Election Monitoring: Poland will send 40 short-term observers and 25 monitors to Belarusian elections. Belarus denied the request for a national observation team.

Slovakia

• Job Creation Support: Labor Minister Iveta Radicova allocated SK 500 million to create 5000 jobs, targeting older workers and long-term unemployed.
• Privatization Delay: The Slovak government postponed all privatization deals ahead of the 17 June early elections, affecting the sale of Cargo Slovakia. The delay is expected to cost the company hundreds of millions of crowns.

Baltic States Update

Estonia

• Defense Spending Increase: Defense Minister Jurgen Ligi proposed increasing defense spending by at least 63.9 million euros (1 billion Kroons), aiming to meet NATO's capability goals. Estonia currently allocates only 1.72% of GDP to defense.
• Political Debate: The proposal is expected to be widely debated, particularly by the Center Party.

Latvia

• Holocaust Apology: President Vaira Vike-Freiberga apologized for Latvia's role in the Holocaust, acknowledging the participation of some citizens in Nazi campaigns. She also highlighted the bravery of those who helped protect Jews.
• Investigations and Conferences: The Prosecutor General's Office is investigating Holocaust-era crimes, and a Latvian historical commission is working with Yad Vashem Museum. Two international conferences on Holocaust studies and Jewish communities are planned for 2006.

Lithuania

• EU Fund Allocation Dilemma: Lithuania faces a choice between centralized management of EU funds or distributing them through three ministries. Economy Minister Kestutis Dauksys emphasized the need for efficient fund absorption.
• Racial Discrimination Report: The Council of Europe reported racial discrimination against Roma, Jews, and Chechens in Lithuania, citing poor law implementation and media contributions to hostility. Recommendations include improved legislation and public education.

Southeast European Update

Bulgaria

• U.S.-Bulgaria Law Enforcement Agreement: Signed on 15 February, the agreement provides USD 4 million to support programs in narcotics, human trafficking, cyber crime, and forensics under the SEED Act. Bulgaria has received over USD 460 million in SEED assistance since 1990.
• Defense Industry Focus: Bulgarian arms producers requested government support to improve the defense industry, which focuses on small arms, rockets, and artillery systems. PM Stanishev urged them to focus on exports.

Croatia

• U.S. Partnership Discussions: Foreign Minister Kolinda Grabar Kitarovic met with U.S. Undersecretary Nicholas Burns in Washington to discuss strengthening bilateral ties, especially in stability and security in Southeast Europe. She also discussed Croatia's path to NATO membership with Deputy Defense Secretary Gordon England.

Romania

• EU Relations with Albania: Romanian officials met with Albanian Foreign Minister Besnik Mustafaj in Bucharest to discuss regional issues, including Kosovo's status.
• EBRD Strategy Paper: The EBRD praised Romania's economic growth but criticized corruption and competitiveness. It plans to invest in infrastructure and energy efficiency.
• U.S.-Romanian Military Cooperation: General David McKiernan, U.S. Land Forces in Europe, met with Romanian military officials to discuss cooperation and the transformation of the Romanian Land Forces.

Slovenia

• Foreign Investment Support: The Ministry of Economy announced USD 4.98 million in aid for foreign investors, targeting processing industry, services, and R&D projects.
• Adriatic Shelf Protection: Slovenia declared the continental shelf in the Adriatic Sea a protected ecological zone, expecting the UN to inform member states of the new legislation.
• EU Presidency Coordination: Slovenian officials met with Germany and Portugal in Berlin to discuss their respective EU presidencies in 2007 and 2008, agreeing to exchange information and train officials.

Key Themes

• Energy Security: Multiple countries emphasized reducing dependency on Russia through diversification and new infrastructure projects.
• Military Modernization and Cooperation: Poland and Estonia are focusing on enhancing military capabilities and aligning with NATO standards.
• EU Integration and Fund Utilization: Countries like Poland, Lithuania, and Slovenia are navigating EU fund allocation and absorption challenges.
• Historical Accountability: Latvia and Lithuania addressed historical issues, including Holocaust-related responsibilities and racial discrimination.
• International Relations: Diplomatic and economic ties with the U.S., France, and other nations are being strengthened to support regional stability and development.