Day 1 can be found here
Three Seas Investment Talk calls for steps to close liquidity-investment gap
STA, 6 June 2019 - The Investment Talk panel, held on Thursday at the business forum of the Three Seas Initiative summit in Ljubljana, noted the major infrastructure investment gap affecting central and east Europe, and called for effective steps and funding instruments to bridge the glaring discrepancy between existing fiscal liquidity and actual investment.
The opening address was delivered by Slovenian Economy Minister Zdravko Počivalšek, who underlined Slovenia's view that it was key to also focus on innovation along with the three pillar areas of the Three Seas Initiative - infrastructure, energy and digital interconnectivity.
To achieve an investment breakthrough, "attracting and supporting investment in supply chains is simply not enough any more", said Počivalšek, while calling for open and transparent investment policies, for Three Seas' openness to private-public investment projects and to any source of capital and connectivity platform.
The panel featured the heads of the Slovenian and Polish promotional development banks, Sibil Svilan and Beata Daszynska-Muzyczka respectively, as well as European Investment Bank (EIB) vice-president Vazil Hudak and European Bank for Reconstruction and Development (EBRD) vice-president Jürgen Rigterink.
Looking at the drop in investment after the 2008 crisis that disproportionally affected eastern Europe and added to its infrastructure gap - estimated at EUR 500 billion - the panellists noted the discrepancy between current high liquidity and the amounts that actually get channelled into projects.
While the EIB and EBRD officials noted a lack of "bankable" projects, issues with implementation and the need for their institutions to preserve AAA credit ratings so that "cheap and long" can keep coming, Svilan and Daszynska-Muzyczka urged a change of the investment mindset away from short-term logic focused solely on profitability and returns.
The key challenge will be using the right combined instruments - national, supranational, private etc. - to secure appropriate risk sharing, and also to focus on quality projects as opposed to only quantity, added Svilan, who urged accountability and sustainability.
His Polish counterpart is also in favour of blending instruments, while she also wondered whether east European countries should not perhaps be allowed to engage in bigger deficits to speed up economic and infrastructure convergence.
She said it would take 100 years for this part of Europe to catch up if it only leant on the funding envisaged for infrastructure in the EU's new financial perspective. Thus, a kind of new mini Marshall Plan, but this time for Eastern Europe, would be in order, she added, while saying the emerging Three Seas Fund, "a private fund, based on the rate of return" could be one of the instruments complementing it.
Svilan argued the richness in diversity principle in Europe also applied to financing instruments. "We need different instruments to catch different situations and that is also what we're trying to do with this fund, we're looking for something new to combine it with what is already going on in Europe. But that does not mean we'll exclude anyone," he said, arguing that the EIB, World Bank, EBRD and others should also be included.
Hudak of the EIB meanwhile pointed out that EFSI, also known as Juncker's investment plan for Europe, was an example that addressed the risks sharing need, with guarantees generating billions in private investment.
Commenting on the note of panel moderator, Gorazd Renčelj of the Slovenian Foreign Ministry, that 82% of the signed contracts within EFSI had gone to the EU-15 member states, Hudak agreed that what seemed as unfair distribution should be modified, while he pointed to plans to apply the Junker plan principle, "a mini Juncker", within the Three Seas initiative.
Rigterink, who expressing his reservations about "setting up new funds every single time", emphasised the principle of additionality and the EBRD's strong belief that the market should not be distorted in any way.
As for profits, he said that "we do not want to maximise profitability but optimise it". The EBRD "also has this development angle, but we need to be profitable to grow" and keep the shareholders happy.
Three Seas business panel calls for concrete results, representation
STA, 6 June 2019 - The business part of the Three Seas Initiative summit concluded on Thursday with a panel which called for the agreements and plans by the 12 members of the initiative to be made concrete as soon as possible, and agreeing that the group should form a steering committee in order to communicate better with other organisations.
Opening the panel in Ljubljana, Slovenian Foreign Minister Miro Cerar said that now that the summit was ending, "we must deliver, we have had a lot of ideas and projects and we need to come up with some concrete results."
If the initiative makes concrete results, if it results in things that will connect people better with roads and rails, it will be more persuasive to the people, he said, adding that "this is our main task now."
Cerar's Polish counterpart Jacek Czaputowicz agreed, saying that "success of the initiative will be measured by kilometres of road" and that the meetings indeed discussed concrete projects of common interest.
As most of the countries of the Three Seas Initiative had "found themselves on the wrong side of the Iron Curtain", they are less developed than the western countries and have the common interest in the EU, he said.
Retired US General James L. Jones, a former US national security advisor, made the point that while Three Seas was a great strategic initiative which will benefit the region, its nations did not realise what it takes to make it work.
There is a lack of architecture, there is no single point of access, no staff, no website, and there is a lack of a steering group that can respond to inquiries, Jones said, adding that the 16+1 initiative was better organised.
The US feels very tied to Europe as the continents have common values and common history, and believes that the defence of Europe starts in the Black Sea. "We are faced with at least one country which tries to destabilise and fracture the relationship."
Cerar said that the idea should be considered of creating a steering committee, a "small administrative force that would communicate with other countries". Perhaps the next step is making a body which would represent the initiative, but not with too much bureaucracy, he added.
Czaputowicz agreed too, saying that practical steps were needed to change the formula of the initiative, including further institutionalisation, a kind of a secretariat. "This practicality is important", he said, endorsing the idea to make a steering group.
As for investments, Jones said that the US needed evidence that everybody in the initiative was in in terms of funding, and only then the private and public sector would take it seriously.
Czaputowicz said that Poland already had a terminal for US gas which was less expensive than Russian gas, while Cerar said that the initiative needed more investments "from our friends from the US", noting that most investments were concentrated with a few larger EU states.
"But we should never forget what connects us the most - our common values and the rule of law. Without this glue, Europe is not what it is, or what it used to be," the Slovenian foreign minister concluded.
The panel also featured Slovenian Minister of Education, Science and Sport Jernej Pikalo, who discussed how to keep talented people in the region. He said maintaining and nurturing talents was one of the biggest issues governments had.
He said countries had to invest in education, which was one of the most complex issues as education was always lagging behind the developments, changes in technology. "We need to create conditions in which talent can thrive".
Pikalo also pointed to gender balance as one of the most important things. "Women must have equal access and equal opportunities and chances also in terms of the later professional life," he concluded.
Three Seas Initiative Summit calls on EU to consider its goals
STA, 6 June 2019 - Presidents of the Three Seas Initiative called on the EU following a summit at Brdo pri Kranju on Thursday to incorporate the initiative's goals in its existing and future policies, with interconnectivity and energy security topping the list of the initiative's priorities.
Presenting the declaration after the summit, Slovenia's President Borut Pahor said that the initiative aimed not only to bridge the gaps between participating countries but also in the EU and strengthened transatlantic relations.
As a platform at presidential level, the initiative is an opportunity to create an equally strong voice in the EU for the participating countries and strengthens the democratic legitimacy of the EU.
Bringing together 12 countries situated between the Baltic, Adriatic and the Black Sea, the initiative aims to improve the competitive edge of member states and improve the life of its people with concrete projects, Croatian President Kolinda Grabar Kitarović said.
To realise the projects, the initiative has established its own fund. While today no concrete figures were revealed about the Three Seas Fund, declared functional yesterday at the business forum accompanying the summit, it was said that the European Investment Bank had promised its support for the fund today.
According to a report by German news portal DW, the fund was established only days ago and has a balance of around EUR 500 million with the goal to reach EUR 4-5 billion.
Also present was the outgoing president of the European Commission, Jean Claude Juncker, who praised the initiative for its concrete projects, and also illustrated with figures how much the EU has already invested and will continue to invest in the region.
"Between 2014-2020, we have invested from the structural fund EUR 60 billion in this region. The Juncker plan has generated in these years EUR 42 billion for the 12 member states of the region. I believe that we have done and will do everything to support the efforts aiming at better cohesion and better connectivity in the region."
For the next financial perspective, 2022-2027, the Commission has foreseen EUR 42.3 billion to improve the interconnectivity in Europe and in particular in this region, said Juncker.
The press conference was also addressed by presidents of Romania and Poland, Klaus Werner Iohannis and Andrzej Duda, with the latter saying that the next summit of the initiative would take place in Estonia, where the presidents had been invited by President Kersti Kaljulaid.
The presidents expressed in their statements, as well as the declaration, an invitation to other potential partners, encouraging "the inclusion of actors from the Three Seas Initiative member states and the US to the existing network".
They were especially pleased that the two-day event hosted by Slovenia was attended not only by Juncker but also German President Frank-Walter Steinmeier, as well as US Secretary of Energy Reick Perry. The latter took part in the presidential panel hosted by Pahor as part of an accompanying business forum yesterday, inviting participants to buy US gas.
