The Commission presents a report on the Implementation of the EU Strategy for the Baltic Sea Region (EUSBSR) adopted by the European Commission in June 2009 (see COM(2009)0248) and endorsed by the European Council in October 2009. The report follows the 2010 interim review, discussed with a wide range of stakeholders at the Annual Forum in Tallinn on 14-15 October 2010. Since the Strategy is a dynamic innovative process that needs time, this report includes recommendations for improvements in the years to come. It also serves as inspiration for the EU Strategy for the Danube Region, and for other possible future initiatives, including those with a similar or greater maritime dimension.

The Strategy addresses key challenges and untapped potential of this large region, covering about one third of the total area of the EU with almost 85 million inhabitants (17% of EU population). It provides an integrated framework for improving the environmental condition of this shallow enclosed sea, tackling transport bottlenecks and energy interconnections. It facilitates development of markets across borders, as well as common networks for research, innovation and enterprise. With these concrete steps, the Strategy contributes significantly to such major EU policies as Europe 2020 and the Integrated Maritime Policy , as well as reinforcing the EU integration of the Region following enlargement.

Main achievements : the Strategy has led to concrete action, with a more streamlined use of resources. New working methods and networks have been established, and many initiatives developed. These comprise:

new projects : the report gives details of the many new projects have been developed and funded to fulfil the aims of the 15 Priority Areas set out in the Action Plan accompanying the Strategy. The projects listed in the report are just a few examples of the more than 80 Flagship Projects being implemented under the Action Plan. Other projects respond to the whole spectrum of interlinked challenges in the Region, such as developing marine protected areas, (making the Baltic Sea the first maritime region worldwide to reach the target of the Convention of Biological Diversity of designating at least 10% of its area as protected). Other projects address further topics in a Baltic-wide cooperative approach, such as the control of hazardous substances, the removal of single market barriers and the enhancement of cooperation among some 200 regional universities, new momentum to existing projects : the Strategy builds on experiences of past cooperation and existing projects. It provides increased visibility, expanded networks, and clearer direct links to national and European policy making, and also ensures focus and economies of scale. This is done by clustering projects sharing similar themes. new and developing networks : the Strategy provides a common reference point for the many organisations in the Baltic Sea Region. Increasingly, people and structures are basing their work on the priorities set out in the Action Plan. policy development and coherence : the integrated way of working also encourages better policy development and alignment, along with a more efficient implementation of existing approaches. It also means ensuring that sectoral policies – including transport, education, energy and climate, environment, fisheries, industry, innovation, health and agricultural policies – are coherent and suited to the needs of the Baltic Sea Region as a whole. alignment of funding and other financial initiatives : alignment of available funding with the Strategy is key to the success of the implementation process. Focusing the efforts of Cohesion Policy, which alone makes some EUR 50 billion available for the Baltic Sea Region, along with major EU and national funding sources, has been a challenge. The report gives details of the advances that have been made and notes that the Commission and the European Investment Bank (EIB) are assessing the potential of a joint Implementation Facility. cooperation with non-EU Member States in the Baltic Sea Region : the three countries most concerned, Russia, Norway and Belarus, have all indicated their support. The report gives particular details of cooperation with Russia. Cooperation with non-Member States within the framework of the Strategy has been bolstered by EUR 20 million in the 2010 EU budget, at the initiative of the European Parliament. It is primarily for environmental projects, via the Northern Dimension Environmental Partnership and HELCOM.

Recommendations: overall, it is clear that the Strategy is a new way of bringing multiple partners and policy areas together to achieve more than any could do alone. For its part, based on the experience reported here, the Commission recommends:

reinforcing the integrated nature of the Strategy through closer alignment with the themes and flagships of Europe 2020;

ensure the European nature of the Strategy through regular discussions of the Strategy at policy Councils;

prioritising work on establishing targets to make the Strategy more focused and more concrete as regards to its main aims;

maximising efforts to align Cohesion Policy and other funding sources in the Region with the objectives of the Strategy;

strengthening implementation structures (especially Priority Area Coordinators and their steering groups) both financially and in terms of staff. National coordination committees should be set up, and national contacts for each Priority Area should be identified. Structures need to be thoroughly embedded in ministries and/or other relevant bodies;

developing a "Communication initiative" to ensure broader participation in the Strategy, as well as understanding of its achievements.

In addition, the Commission will continue its work on identifying the value-added of this new macro-regional approach, which could be based on an external evaluation of the Strategy's impact. Its conclusions will be incorporated into the report on the macro-regional strategy concept, which the Council has requested for June 2013, drawing on the best possible analysis of the experience gained. These recommendations require more high-level input from all stakeholders. The Commission believes that the achievements and appreciation of the Strategy so far justify this further effort.

The European Parliament adopted a resolution on the European Union Strategy for the Baltic Sea Region and the role of macro-regions in the future cohesion policy.

Members welcome the approval of the European Commission and the support of the Council for the Strategy for the Baltic Sea Region, which Parliament has been calling for since 2006. They welcome the fact that the Strategy is the result of broad consultation with interested parties in the Member States, including not only national, regional and local authorities but also the academic and business communities as well as NGOs.

Whilst welcoming the establishment of a civil society forum in the region, the resolution recommends, in this context, increasing the local communities’ involvement by setting up wider and more focused communication and consultation tools. The Commission is called upon to create a special web portal devoted to the Baltic Sea Strategy, which would act as a forum for the exchange of experiences regarding current and future projects.

Pilot project : Members consider that the Strategy should be used as a pilot project future macro-regional strategies and the Strategy's success can be a model for the way in which future strategies can be implemented. It emphasises the idea of creating functional regions, focused around joint objectives and development problems, can lead to an increase in the effectiveness of EU regional policy.

The resolution states that the overriding goal is to find optimal mechanisms that can be transferred to future macro-regional strategies .

Parliament believes that the Strategy’s territorial dimension will lead to the concrete development of the idea of territorial cohesion, which the Treaty of Lisbon places on an equal footing with economic and social cohesion, and with this in mind calls on the Commission to engage in active dialogue on the role and impact of EU macro-regional policies after 2013 .

The use of Structural Funds : the resolution calls on the Member States and regions to take advantage of the Structural Funds available for 2007-2013 in order to ensure maximum support for the Strategy, in particular to promote job creation and economic growth in areas most affected by the economic crisis. It notes that implementation of the Baltic Sea Strategy has as yet been very slow. It considers that the appropriations earmarked in the 2010 EU budget may be used to improve implementation and reminds the Commission of the importance of this money being allocated as soon as possible for purposes in line with the targets of the Baltic Sea Strategy.

External dimension : Parliament calls for improvement, in the context of the Strategy for Baltic Sea Region as well as of the future macro-regional strategies, of the relations between the European Union and the non-EU states , particularly in the implementation of large-scale projects with significant environmental impact. Furthermore, they call for cooperation between the EU and non-EU states to strengthen security within the region and support the fight against cross-border crime.

The resolution draws attention to the need to seek greater cooperation particularly between Russia and Belarus, and the Baltic States when constructing the energy network, and to take greater advantage of the energy dialogue between the EU and Russia for this purpose, which would at the same time open up opportunities for involving Russia in the Baltic Sea Strategy.

Stressing the need to reduce the region’s dependence on Russian energy , Members welcome the European Commission’s statement on the need for more interconnections between Member States in the region and greater diversification of energy supplies. They call in this regard for increased support for the creation of LNG ports.

Members believe that the new Partnership and Cooperation Agreement with Russia should take account of the cooperation in the Baltic Sea Area. They believe that the EU-Russia common spaces will provide a valuable framework in this regard, and call on Russia to play an equal part in such cooperation. The resolution also considers that Baltic Sea Region Cooperation should be prioritised and should take place at the highest political level of Heads of State and Government, since it is crucial in driving forward cooperation between the Baltic Sea countries and ensuring that political ambitions are realised.

Environmental and energy aspects : the resolution emphasises the need for an environmental impact assessment of energy infrastructure projects (currently under construction and in the future), taking into account, in particular international conventions. It calls on the Commission to design an adequate reaction plan for technical accidents and any other possible catastrophes, providing also for ways of dealing with these events from an economic point of view.

Parliament emphasises the need to establish a Baltic Sea Environmental Monitoring Centre , an early-warning system for accidents and serious cross-border pollution, and a joint action force to deal with such situations.

The resolution draws attention to the strategic significance of the Baltic Sea region for the development of joint projects on energy infrastructure that improve diversification of energy production and supply. It also emphasises that, in view of the intended expansion of nuclear energy in the Baltic Sea region, EU countries have to follow the strictest safety and environmental standards and the European Commission has to watch and monitor whether the same approach and international conventions are followed in the neighbouring countries, especially in those which are planning to build nuclear power plants near external EU borders.

Recalling that the Baltic Sea is one of the most polluted sea areas in the world, Parliament emphasises the need for the EU and its Member States surrounding the Baltic Sea Region urgently to address the serious environmental problems affecting the Region , principal among which are eutrophication, the impact of hazardous substances deposited on the seabed and threats to aquatic biodiversity, with particular regard to endangered fish populations.

Transport and tourism aspects : Parliament emphasises that it is a priority to create an effective and environmentally friendly sea, land and inland transport and communication network , taking account of the provisions of the updated version of the Natura 2000 document and paying particular attention to links between the Baltic Sea region and other European regions through the Baltic-Adriatic Corridor and the Central European Transport Corridor.

The resolution highlights the following issues:

this strategy should, inter alia, help to address the lack of appropriate infrastructure and accessibility, as well as low interoperability between various national transport networks owing to different technical systems and administrative barriers, in order to develop a comprehensive multimodal transport system across the Baltic Sea Region; the importance of integrating the Baltic Sea Region more closely into the TEN-T priority axes , in particular with regard to the Motorways of the Sea, extending the rail axis from Berlin to the Baltic coast, improving the rail axis from Berlin to the Baltic coast in combination with the Rostock-Denmark Seaway connection, and making more rapid progress in upgrading and using the Rail Baltica axis; the need to complete the interconnections between the Baltic Sea Region and other European regions via the Baltic-Adriatic corridor; it is important to enhance the Baltic Sea Region’s transport capacity towards the east, in particular in order to promote transport interoperability, especially for railways, and to speed up freight transit at the borders of the European Union; themes such as water sports , wellness and spa tourism, the cultural heritage and landscapes to offer great potential for developing the region’s profile as a tourist destination. Members stress, therefore, the need to protect natural coastal areas, landscapes and the cultural heritage as a resource for ensuring a sustainable economy in the Baltic Sea Region in the future; improvements in transport links and the elimination of bottlenecks should be of no less importance (border-crossing difficulties at checkpoints on the EU’s eastern border with the Russian Federation) could be solved via this strategy in order to ensure the smooth flow of goods through the Baltic Sea Region.

Lastly, Parliament welcomes the inclusion in the Commission’s action plan of the objective of making the Baltic Sea a model region for clean shipping and a world leader in maritime safety and security.

The Committee on Regional Development adopted an own-initiative report drafted by Wojciech Michał OLEJNICZAK (S&D, PL) on the European Union Strategy for the Baltic Sea Region and the role of macro-regions in the future cohesion policy, in response to the Commission communication on the same subject.

Members welcome the approval of the European Commission and the support of the Council for the Strategy for the Baltic Sea Region, which Parliament has been calling for since 2006. They welcome the fact that the Strategy is the result of broad consultation with interested parties in the Member States and welcome, in this regard, the establishment of a civil society forum in the region such as the Baltic Sea Action Summit. The Commission is called upon to create a special web portal devoted to the Baltic Sea Strategy, which would act as a forum for the exchange of experiences regarding current and future projects.

The committee calls on the Member States and regions to take advantage of the Structural Funds available for 2007-2013 in order to ensure maximum support for the Strategy, in particular to promote job creation and economic growth in areas most affected by the economic crisis. It notes that implementation of the Baltic Sea Strategy has as yet been very slow. It considers that the appropriations earmarked in the 2010 EU budget may be used to improve implementation and reminds the Commission of the importance of this money being allocated as soon as possible for purposes in line with the targets of the Baltic Sea Strategy.

The report states that the overriding goal is to find optimal mechanisms that can be transferred to future macro-regional strategies . Members point to the need to promote new areas with development and innovation potential and to take the opportunity of using the added value of the Baltic Sea Strategy and other future macro-regional strategies to reach new level of synergy which can reduce existing disparities.

The European Commission is called upon to analyse the first results and experiences in connection with the implementation of the Strategy for the Baltic Sea Region, which will help to map out possible sources and methods for financing macro-regional strategies and help in using the example of the Strategy as a pilot project for other macro-regional strategies to demonstrate their functionality.

Members believe that the Strategy’s territorial dimension will lead to the concrete development of the idea of territorial cohesion, which the Treaty of Lisbon places on an equal footing with economic and social cohesion, and with this in mind calls on the Commission to engage in active dialogue on the role and impact of EU macro-regional policies after 2013 .

External dimension : Members call for improvement, in the context of the Strategy for Baltic Sea Region as well as of the future macro-regional strategies, of the relations between the European Union and the non-EU states, particularly in the implementation of large-scale projects with significant environmental impact. Furthermore, they call for cooperation between the EU and non-EU states to strengthen security within the region and support the fight against cross-border crime.

The report draws attention to the need to seek greater cooperation particularly between Russia and Belarus, and the Baltic States when constructing the energy network, and to take greater advantage of the energy dialogue between the EU and Russia for this purpose, which would at the same time open up opportunities for involving Russia in the Baltic Sea Strategy.

Stressing the need to reduce the region’s dependence on Russian energy , Members welcome the European Commission’s statement on the need for more interconnections between Member States in the region and greater diversification of energy supplies. They call in this regard for increased support for the creation of LNG ports.

Members believe that the new Partnership and Cooperation Agreement with Russia should take account of the cooperation in the Baltic Sea Area. They believe that the EU-Russia common spaces will provide a valuable framework in this regard, and call on Russia to play an equal part in such cooperation. The report also considers that Baltic Sea Region Cooperation should be prioritised and should take place at the highest political level of Heads of State and Government, since it is crucial in driving forward cooperation between the Baltic Sea countries and ensuring that political ambitions are realised.

Environmental and energy aspects : the report emphasises the need for an environmental impact assessment of energy infrastructure projects (currently under construction and in the future), taking into account, in particular international conventions. It calls on the Commission to design an adequate reaction plan for technical accidents and any other possible catastrophes, providing also for ways of dealing with these events from an economic point of view.

Members emphasise the need to establish a Baltic Sea Environmental Monitoring Centre , an early-warning system for accidents and serious cross-border pollution, and a joint action force to deal with such situations.

The report draws attention to the strategic significance of the Baltic Sea region for the development of joint projects on energy infrastructure that improve diversification of energy production and supply. It also emphasises that, in view of the intended expansion of nuclear energy in the Baltic Sea region, EU countries have to follow the strictest safety and environmental standards and the European Commission has to watch and monitor whether the same approach and international conventions are followed in the neighbouring countries, especially in those which are planning to build nuclear power plants near external EU borders.

Recalling that the Baltic Sea is one of the most polluted sea areas in the world, Members emphasise the need for the EU and its Member States surrounding the Baltic Sea Region urgently to address the serious environmental problems affecting the Region , principal among which are eutrophication, the impact of hazardous substances deposited on the seabed and threats to aquatic biodiversity, with particular regard to endangered fish populations.

Transport and tourism aspects : Members emphasise that it is a priority to create an effective and environmentally friendly sea, land and inland transport and communication network , taking account of the provisions of the updated version of the Natura 2000 document and paying particular attention to links between the Baltic Sea region and other European regions through the Baltic-Adriatic Corridor and the Central European Transport Corridor.

The report highlights the following issues:

this strategy should, inter alia, help to address the lack of appropriate infrastructure and accessibility, as well as low interoperability between various national transport networks owing to different technical systems and administrative barriers, in order to develop a comprehensive multimodal transport system across the Baltic Sea Region; the importance of integrating the Baltic Sea Region more closely into the TEN-T priority axes , in particular with regard to the Motorways of the Sea, extending the rail axis from Berlin to the Baltic coast, improving the rail axis from Berlin to the Baltic coast in combination with the Rostock-Denmark Seaway connection, and making more rapid progress in upgrading and using the Rail Baltica axis; the need to complete the interconnections between the Baltic Sea Region and other European regions via the Baltic-Adriatic corridor; it is important to enhance the Baltic Sea Region’s transport capacity towards the east, in particular in order to promote transport interoperability, especially for railways, and to speed up freight transit at the borders of the European Union; themes such as water sports , wellness and spa tourism, the cultural heritage and landscapes to offer great potential for developing the region’s profile as a tourist destination. Members stress, therefore, the need to protect natural coastal areas, landscapes and the cultural heritage as a resource for ensuring a sustainable economy in the Baltic Sea Region in the future; improvements in transport links and the elimination of bottlenecks should be of no less importance (border-crossing difficulties at checkpoints on the EU’s eastern border with the Russian Federation) could be solved via this strategy in order to ensure the smooth flow of goods through the Baltic Sea Region.

Lastly, Members welcome the inclusion in the Commission’s action plan of the objective of making the Baltic Sea a model region for clean shipping and a world leader in maritime safety and security.

PURPOSE : Communication concerning the EU Strategy for the Baltic Sea Region.

CONTEXT : eight of the nine states bordering the Baltic Sea are members of the EU. The introduction of Community rules, and the opportunities created by Community instruments and policies (for example cohesion policy, the strategy for sustainable development, environmental policy, the integrated maritime policy, the internal market and the Lisbon Agenda) have opened important new possibilities for a more effective co-ordination of activities, thus delivering higher standards of living for the citizens of these Member States. However, full advantage of the new opportunities that EU membership provides has not yet been taken and the challenges facing the region have not yet been adequately addressed.

Recognising this, the European Parliament published a report in late 2006 calling for a strategy for the Baltic Sea Region, and the European Council in 2007 invited the Commission to present a EU strategy for the Baltic Sea region.

This Communication presents the strategy requested by the European Council. The strategy seeks to provide both a co-ordinated, inclusive framework in response to the key challenges facing the Baltic Sea Region and concrete solutions to these challenges. It should be read with the indicative action plan.

CONTENT : The action plan is organised around four pillars. The individual actions and flagship projects have been selected for their fast implementation and impact.

The four pillars are:

An environmentally sustainable region : available data suggest that pressures such as pollution by nutrients, predominantly nitrates and phosphates, cannot easily be absorbed but have rapid and visible impacts. The Action Plan covers the following priority areas:

to reduce nutrient inputs to the sea to acceptable levels; to preserve natural zones and biodiversity including fisheries; to reduce the use and impact of hazardous substances; to become a model region for clean shipping; to mitigate and adapt to climate change.

A prosperous region : due to small national markets in the Baltic, it is essential to upgrade the business environment to stimulate development of local enterprises and attract foreign investors. Despite the internal market, practical obstacles to trade in goods and services still exist. Transfer of knowledge and competence and deepened cooperation from the Nordic countries and Germany can greatly help Poland and the Baltic States to continue catching up.

The Action Plan covers the following priority areas:

to remove hindrances to the internal market in the Baltic Sea Region; to exploit the full potential of the region in research and innovation; implementing the Small Business Act and promote entrepreneurship, strengthen SMEs and increase the efficient use of human resources; to reinforce sustainable agriculture, forestry and fishing.

An accessible and attractive region : Northern Finland, Sweden and the Baltic States, have the lowest accessibility rates in the whole of Europe in both internal and external relations. The causes are the large size of the region, resulting in long travel distances and times, and difficult geographical and climate conditions. Low infrastructure or service density implies high prices. Improvements must be through sustainable modes of transport. The paper also discusses the energy markets. The latter lacks appropriate infrastructures and are too nationally oriented instead of being linked across the region. This creates higher energy supply risks and prices. In addition, for the internal energy market to function well, countries need to be interconnected. However, Estonia, Latvia, and Lithuania remain, with the exception of the Estlink power cable between Estonia and Finland, essentially isolated from the wider energy networks of the EU.

The Action Plan covers the following priority areas:

to improve the access to, and the efficiency and security of, the energy markets; to improve internal and external transport links; to maintain and reinforce the attractiveness of the Baltic Sea Region in particular through education, tourism and health.

A safe and secure region : the main issues are marine pollution and cross-border crime. Due to its strategic position, the Baltic Sea Region is a natural route for oil transport, and there is also an increasing trend towards transport of liquefied natural gas. These activities carry risks for the environment. In 2007 there were 120 ship accidents in the Baltic Sea. Further actions are still needed to improve maritime safety and surveillance agencies and disaster response.

The paper goes on to discuss the region's crime patterns, which are influenced by its geographical location, differing economic and social conditions, differences in prices of excisable products, along with the openness and ease of access within the Baltic Sea Region that is a feature of intra- Community relations. The Action Plan covers the following priority areas:

to become a leading region in maritime safety and security; to reinforce protection from major emergencies at sea and on land; to decrease the volume of, and harm done by, cross border crime.

Horizontal actions : a number of cross-cutting actions are fundamental to the entire strategy. These include the development of integrated maritime governance structures and maritime and land-based spatial planning. The BONUS-169 project combining an ecosystem approach with an effective science/policy interface funded under FP7 is central to the success of the strategy.

Governance and implementation proposals : the paper discusses the need for a flexible approach in view of the wide range of actions, and makes the following proposals:

policy development : general oversight will be within Community structures, with periodic reports and proposals for recommendations from the Commission to the Council. The Commission will be responsible for co-ordination, monitoring, reporting, facilitation of the implementation and follow-up. In partnership with the stakeholders of the region, it should prepare regular progress reports, and use its power of initiative to make proposals for adaptation of the strategy and action plan whenever these are required. The Commission will work in partnership with the other institutions, Member States and regions, international financing institutions, and intergovernmental organisations such as HELCOM to identify co-ordinating bodies at the level of priority areas and lead partners for flagship projects. There will be an annual forum to bring together partners concerned with different aspects of the strategy. Relations with third countries should be conducted primarily through the Northern Dimension with the option to use alternative channels when useful; practical implementation : these arrangements will encourage efficient policy co-ordination, more effective application of Community legislation and better co-ordination of funding instruments. The Commission is not proposing additional funding or other resources at this time. However, some of the specific actions and projects will require financial support. A major source is the Structural Funds available in the region – most programmes already allow actions envisaged in the strategy. Programming authorities can review the allocation criteria and facilitate the selection of projects aligned with the strategy. Furthermore, the Commission will welcome appropriate modifications of the programmes where necessary.

Funding : Member States have agreed to examine funding projects and actions aligned with the Strategy priorities from their own resources. The European Investment Bank and other international and regional financial institutions, such as the Nordic Investment Bank and the European Bank for Reconstruction and Development, could also contribute.