Microsoft Word - Pettai_final_pgJune5 39 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 The Baltic States: Keeping the Faith in Turbulent Times1 Vello Pettai2 University of Tartu Abstract As the Baltic states commemorated the centenary of their first appearance as independent states in 2018, their celebrations were mixed with feelings of ambiguity about the road travelled since then. Although today we often see Estonia, Latvia, and Lithuania as 'post-communist' countries, their experience with communism was actually much harsher than in Central Europe, since, for nearly fifty years, the three countries were forcibly a part of the Soviet Union. This has made their journey back into the European community all that more remarkable, and it has also served to keep these countries somewhat more resistant to the dangers of democratic backsliding. After all, their continued independence and well-being are intricately dependent on keeping the European liberal order intact. Nevertheless, the winds of populism have also begun to buffet these three countries, meaning that they have been struggling to keep their balancing act going. This article reviews the development of the Baltic states over the last 20 years, both in terms of domestic politics and EU accession and membership. It profiles the way in which the three countries have been trying to keep their faith in democracy and liberalism alive amidst ever more turbulent political and economic times. 1 Research for this article has come from the European Union’s Horizon 2020 research and innovation programme “POPREBEL: Populist rebellion against modernity in 21st-century Eastern Europe: neo-traditionalism and neo- feudalism” under grant agreement No. 822682. The publication reflects only the author's view and the EC is not responsible for any use that may be made of the information it contains. 2 Vello Pettai is Professor of Comparative Politics at the University of Tartu. 40 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 Introduction It is difficult to begin this manuscript without a personal disclaimer. On September 14, 2003, I went to a cinema in Tallinn to see the recently released and widely acclaimed movie about life in post-communist eastern Germany, Goodbye Lenin. As I walked out of the theater reflecting on my time warp back to 1989-1990, I looked around at the sparkling glass high-rises in the downtown area and the trendy shops doing a bustling business on the retail floors. I walked calmly to a nearby taxi stand offering a row of freshly branded KIA sedans. I climbed into the first car and asked the driver to take me to a school in my residential part of town. When I reached the school and entered its gymnasium, I seized the ballot being handed to me by the electoral official and proceeded to vote a resounding “Yes” to European Union accession. In this respect, I am complicit in the broadscale change that will be recounted in this article about political, economic, social, and foreign policy developments in the Baltic states since 2004. I am not only one who helped make the decision whether to join the EU or not, but also one who laid the groundwork for that transformation by living in, and commenting on the politics of, the region, going back to before re-independence in 1991. Had I known at the time that it would all go so (relatively) fast, I wouldn’t have made some of my more hesitant predictions about how quickly the Baltics might emerge from their “post-Soviet” shadows. Had I known how quickly I would hold in my hand an electronic ID card with which I could cast future electoral votes via the internet from practically any corner on Earth, I would have been less distraught over how long it would take to overcome Soviet bureaucracy. Had I been able to imagine Baltic soldiers serving in Kosovo, Lebanon, or Mali as part of international peace-keeping missions, I might have been more visionary about how geopolitics might evolve. None of this is to say that what has evolved in the Baltic states has been uniquely positive and successful. But it is to take advantage of the benefit of time – not only since 2004, but also going back another 15 years – in order to place into context some of the events and processes we might meanwhile have started to treat with a self-evident presumption. When I was first asked to contribute to this retrospective on EU accession 15 years ago, my mind went back immediately to that sunny autumn day in Tallinn, and I knew that this article could not start with just a standard introduction. From here, however, it will proceed in the more conventional manner. Namely, it will provide a general overview of political development in the Baltic states over the last two decades. Thereafter, it will recall some of the main aspects of the pre-2004 accession process. Third, it will devote a lengthier section to a discussion of the Balts’ experience with membership since 2004. And lastly, it will enumerate some future challenges for the Baltic states, both as nations and as member-states in the European Union. The title of the article is meant to capture some of today’s uncertainty that arguably is felt in particular by the Baltic peoples. These countries have in many ways come the farthest of any of the “new member-states” – all the way from behind the walls of the Soviet Union. Yet, is their faith in the European project that much stronger, or will it, too, erode amid the current period of turmoil? Political development The political development of the Baltic states since re-independence in 1991 has seen a fairly steady progression toward consolidated democracy. All of the three major indices of democracy that go back to the early 1990s (Freedom House, Polity, and Varieties of Democracy) show the three states having already attained a solid level of electoral democracy by 1994. The protection 41 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 of civil liberties, rule of law, and judicial independence has also been good, with more specific databases such as “Nations in Transit” or V-Dem’s Liberal Democracy index showing consistent adherence to the norms of liberal governance. Even during the last five years, the countries have remained firmly in this camp with no signs of the backsliding seen in some other regional countries. Constitutionally, of course, the countries are different, with Estonia and Latvia sticking to parliamentary regimes and Lithuania opting for a semi-presidential form of government. Neither regime has proven particularly problematic, although Lithuania did undergo an ordeal in 2004, when Parliament decided to impeach and then remove from office President Rolandas Paksas for abuse of power. The three states’ party systems have also evolved in slightly different directions. Figure 1 shows the effective number of electoral and parliamentary parties – a measure meant to capture not only the direct number of parties, but also their proportional weight. In the early 1990s, we see that Lithuania started with the most consolidated party system, anchored very much upon an anti- communist vs. ex-communist cleavage. Nationalist politicians organized around the Homeland Union confronted former communist leaders from the Lithuanian Democratic Labor Party. But over the last 15 years, this configuration has become more fragmented, with a series of protest parties emerging and sometimes also disappearing. During this same time, Estonia and Latvia gradually reduced their number of parties, with Estonia actually reaching a point in 2011 where just four parties were elected to Parliament. But, since 2010, Latvia has shown a renewed trend toward fragmentation. Not only have protest parties emerged more forcefully, but also various centrist parties (such as the once-powerful Unity Party) have splintered. Figure 1: Effective number of electoral and parliamentary parties in the Baltic states In Figure 2, we look, therefore, at an additional metric that has been called ‘party system age’ (PSA) (Kreuzer and Pettai 2013). PSA attempts to assess how much a given party system has been perturbed over the years by organizational changes in parties, including the formation of electoral alliances, mergers, fissions, and new parties. The argument is that, not only does the relative electoral strength of parties matter, but also whether they are durable organizations that remain 2 4 6 8 10 E ff . n u m . o f p a rt ie s 92 95 99 03 07 11 15 19 Election year Estonia 2 4 6 8 10 E ff . n u m . o f p a rt ie s 93 95 98 02 06 10 11 14 18 Election year Latvia 2 4 6 8 10 E ff . n u m . o f p a rt ie s 92 96 00 04 08 12 16 Election year Lithuania Data source: Baltic electoral data; own calculations Eff. nr. electoral parties Eff. nr. parliamentary parties 42 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 committed to a brand and imply accountability. Using this measure, we see that Latvia and Lithuania have had particular difficulty in consolidating a consistent set of political parties, while Estonia has had more success in this realm. Figure 2: Party system age in the Baltic states Some of this party fragmentation has also translated into lower levels of cabinet duration. As Figure 3 indicates, the first cabinets that have come together after a parliamentary election have lasted the least amount of time in Latvia – on average just 372 days, or barely a year. Overall, the highest average first-string cabinet duration is in Estonia (739 days). However, Lithuania has been steadily mounting in this category, being the only country in the Baltics to have had a cabinet survive the entirety of a parliamentary term (Algirdas Butkevičius, 2012-2016). 43 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 Figure 3: Average cabinet duration in the Baltic states, 1992-2019 A fourth interesting point of reference concerning political development in the Baltic states relates to the ideological orientation of their governments. Drawing on the ParlGov dataset (Döring and Manow 2019), we can calculate the weighted left-right orientation of each Baltic government and plot these values in Figures 4-6. We can see that, whereas Estonia and Latvia have been led predominantly by right-wing governments (with values above the midpoint of 5), Lithuania has followed a more alternating path, switching between right- and left-wing cabinets. Moreover, the general ideological tilt of Estonia and Latvia is more to the right, with the few truly left-wing parties being more isolated or relatively moderate. 739 502 373 418 603 620 0 200 400 600 800 M e a n d u ra tio n , d a ys Estonia Latvia Lithuania 1st string 2nd string 1st string 2nd string 1st string 2nd string 1st string = first cabinet formed after a parliamentary election 2nd string = all subsequent cabinets before a new election Data source: Döring and Manow (2019), author's own calculations 44 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 Figure 4: Left-right orientation of cabinets and opposition in Estonia, 1992-2019 Figure 5: Left-right orientation of cabinets and opposition in Latvia, 1992-2018 Figure 6: Left-right orientation of cabinets and opposition in Lithuania, 1992-2018 1 2 3 4 5 6 7 8 9 10 La ar I Ta ra nd Va hi I Va hi II Va hi II I Si im an n La ar II Ka lla s Pa rts An si p I An si p II An si p III An si p IV Ro iv as I Ro iv as II Ra ta s I Ra ta s II Government Opposition le ft -w in g ri g h t- w in g L e ft -r ig h t id e o lo g ic a l s ca le Legend: Left-right orientation of each party in cabinet & opposition weighted by its proportional size in the cabinet/opposition. Data source: Döring and Manow (2019), author's own calculations 1 2 3 4 5 6 7 8 9 10 Bi rk av s G ai lis Sk el e I Sk el e II Kr as ts I Kr as ts II Kr is to pa ns I Kr is to pa ns II Sk el e III Be rz in s R ep se Em sis Ka lv iti s I Ka lv itis II Ka lv itis II I G od m an is II D om br ov sk is I D om br ov sk is II Do m br ov sk is II I Do m br ov sk is IV St ra uj um a I St ra uj um a II Ku ci ns ki s Government Opposition le ft -w in g ri g h t- w in g L e ft -r ig h t id e o lo g ic a l s ca le Legend: Left-right orientation of each party in cabinet & opposition weighted by its proportional size in the cabinet/opposition. Data source: Döring and Manow (2019), author's own calculations 1 2 3 4 5 6 7 8 9 10 Sl ez ev ic iu s Va gn or iu s II Pa ks as I Ku bi liu s I Pa ks as II Br az au sk as I Br az au sk as II Br az au sk as II I Ki rk ila s Ku bi liu s II Ku bi liu s III Bu tk ev ic iu s Sk ve rn el is Government Opposition le ft -w in g ri g h t- w in g L e ft -r ig h t id e o lo g ic a l s ca le Legend: Left-right orientation of each party in cabinet & opposition weighted by its proportional size in the cabinet/opposition. Data source: Döring and Manow (2019), author's own calculations 45 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 A final hallmark of political development for Estonia, Latvia, and Lithuania has been their overall success in ensuring good governance (Vilpišauskas 2014). As measured by the Bertelsmann Transformation Index (2018), the three countries have remained near the top 15 countries in the world in terms of their governance performance (with Estonia consistently placing among the top five) (Figure 7). While corruption is still often cited as a problem (particularly in Latvia and Lithuania), the countries’ scores on this indicator have improved noticeably over the last decade. The main focus of concern for the Baltic states has been ethnic politics, with Estonia and Latvia facing the most challenges given their sizeable Russian-speaking minorities.3 After 1945, these populations had grown significantly, thanks to Soviet policies encouraging Slavic migration to the Baltic region. By the late 1980s, Russian speakers amounted to some 35-40 percent of the population in Estonia and Latvia.4 Although in recent years these proportions have fallen (to 27 percent in Estonia and 30 percent in Latvia), the risk of ethnic tensions has remained an ever- present danger, not only internally, but also geopolitically, vis-à-vis Russia. In particular, Estonia and Latvia drew sharp criticism for adopting stark legislation in 1991 that denied automatic citizenship to Soviet-era settlers, as well as to their descendants (even if they were born in the republics). While legally, the two states were in their right to do so (since these non-citizen populations had come to the Baltics under what most Western countries had acknowledged was an illegal Soviet occupation), the move generated overnight an unprecedented 3 While there is no formal definition of who constitutes a “Russian speaker,” for the purposes of this analysis, all ethnic Russians, Ukrainians, and Belarussians (as counted in different national statistical estimates) are encompassed in this category. 4 In Lithuania, Lithuanians constitute roughly 87 percent of the population, and in 2018, the largest minority groups were split about evenly between Poles and Russians (5.6 and 4.5 percent, respectively). See Dambrauskas (2017). 1 5 10 15 W o rl d r a n ki n g 2006 2008 2010 2012 2014 2016 2018 Estonia Latvia Lithuania Data source: Bertelsmann Transformation Index (2018) Figure 7: Country ranking of the Baltic states on the Governance Performance indicator of the Bertelsmann Transformation Index, 2006-2018 46 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 proportion of stateless people (up to 40 percent of the population) that overlapped to a very large degree with the non-titular population. As a result, many Russian speakers not only were fearful of more restrictive language and education laws that nationalist politicians were now keen to enact under independence, but in addition, they had in many cases lost their basic voting rights in these countries, threatening their ability to make their interests heard at all through the political system. While Estonia did agree to give all permanent residents voting rights in local elections, this did not change the national representation of ethnic minorities. As a consequence, the first free Estonian parliament elected in 1992 did not have a single Russian speaker among its 101 members, despite this minority constituting 35 percent of the population. Even today, minority representatives remain underrepresented in both countries’ legislatures.5 In the years that have followed, both Estonia and Latvia have moved to develop minority integration policies that focused on promoting naturalization among non-citizens as well as improving Russian speakers’ ability to communicate in the national languages. As a result of these programs (many of which were financially supported by the European Union), by 2017, the share of stateless people in Estonia and Latvia fell to just 5.9 percent and 11.1 percent, respectively (Statistikaamet 2017a; Centrālā statistikas pārvalde 2019b). A series of sociological surveys conducted during the 2000s also showed that, while minorities’ knowledge of Estonian and Latvian was improving only slowly, among younger generations, the progress was steadier. One study from Latvia showed that, in 2014, fully 77 percent of young people aged 18-24 who were not native Latvian speakers said they could either freely or fluently communicate in Latvian (Lauze 2016, 56). The comparable figure in Estonia was lower, just 63 percent, but still an increase of 15 percentage points over 2011 (Kruusvall 2015, 74). Still, many flashpoints have ensued between the Estonian/Latvian governments and their Russian- speaking minorities during the last 25 years. Most notably, in 2007, an Estonian government decision to relocate a World War II memorial (known as the Bronze Soldier) in the capital city of Tallinn sparked two days of rioting by Russian youths (Ehala 2009). Equally, the Latvian capital of Riga witnessed sometimes tense demonstrations by Russian minority protestors over low pension levels (1998) and educational reforms aimed at increasing the amount of Latvian language instruction (2004 and 2017-18). In one notable wave of mobilization in 2012, minority activists were able to force the holding of a national referendum on whether to make Russian the second official language of Latvia. The constitutional amendment was defeated by a resounding margin of 75 to25 percent. However, it showed that ethnopolitical issues remained a sensitive matter. Ethnicity has mirrored itself in the party system with not only prominent Estonian and Latvian nationalist parties in existence, but also minority-dominant parties holding key stakes in the electoral market (Nakai 2014, Higashijima and Nakai 2016, Nedelcu and DeBardeleben 2016). Both the Center Party in Estonia and the Harmony Center party in Latvia claim to be broad-based political organizations, but during elections, the parties obtain between 65 and 75 percent of their vote from Russian speakers. Their respective support is particularly strong in the two capitals 5 It should be noted that political participation among Russian speakers in Estonia and Latvia is in general much lower than among the titular nations. In this respect, underrepresentation is also prompted by apathy. However, because up to half of the Russian-speaking population does not hold citizenship of their home country (because they either remain stateless or have opted for Russian Federation citizenship), they are also not a segment of the population that politicians will court during elections. The question of citizenship therefore remains a self-reinforcing problem for political interest representation. 47 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 (Tallinn and Riga), as well as in Russian-speaking regions in both countries (Ida-Virumaa in Estonia and Latgale in Latvia). For more than 20 years, this factor has caused both parties to be largely rejected during any national coalition formation. Only in Estonia was this rule broken for a couple of short-lived periods during the 2000s, and never in Latvia. While a major shift did occur in Estonia in 2016, when the chair of the Center Party, Jüri Ratas, became prime minister (and continued in that role after elections in 2019), this was not exactly a landmark watershed of inter- ethnic cooperation, since both of his coalitions included staunch Estonian nationalist parties, who saw it as their role to make sure the Center Party did not push policies that were too favorable for the Russian-speaking community. Hence, a fair amount of mistrust continued. The EU Accession Process Both the successes and difficulties of the Baltic states’ democratic development since 1991 fed into their process of European Union accession during the late 1990s and early 2000s. During this initial period, the EU was unsurprisingly hesitant about taking in three ex-Soviet republics too soon. Not only was there a perception that the three states were too under-developed to cope with EU membership, but also geopolitical concerns were raised, as Russia continued to accuse the Baltic states (particularly Estonia and Latvia) of discriminating against Russian minorities and neglecting Russia’s broader interests (Raik 2003). As Russian president Boris Yeltsin sought precariously to modernize Russia and turn it to the West, it was unclear whether actively encouraging Baltic aspirations to join the EU (not to mention NATO) might not overturn the apple cart. From the Baltic point of view, the determination to push their case for EU membership was unrelenting. Particularly successful was Estonia, when in 1997, it was able to land a spot in the first group of ex-communist countries called to start negotiations with Brussels. While ultimately this did not lead to these countries joining the EU any earlier, it was an important signal for the Baltic states that not only could they make the case that successful political and economic reform can overcome past legacies, but also that geopolitical and ethnic minority issues would not prove a veto to their future integration with the West. As noted, the EU would still pay attention to minority integration policies, most prominently in Estonia and Latvia (Galbreath 2003, Gelazis 2004, Adrey 2005, Hughes 2005, Pettai and Kallas 2009). This would include not only supporting integration programs and language training, but also encouraging the Balts’ active participation in the Council of Europe’s Framework Convention for the Protection of National Minorities and other monitoring forums. But this basic turning point in Western assessments of how to deal with the Balts’ ethnopolitical challenges was crucial for moving the process forward. In terms of the nuts and bolts of accession, a range of scholarly works and reports have already examined this process in detail (Pettai and Zielonka 2003, Vilpišauskas and Nakrošis 2003, Hogan- Brun 2005, Maniokas 2005, Feldman 2006, Norkus 2007, Van Elsuwege 2008, Jacobsson 2009, Grigas et al. 2013, Kerikmäe et al. 2018). Suffice it to say that, because of their small size and their eagerness to join the EU, the Baltic states did not pose much of a headache in terms of any of the major chapters of the acquis communautaire that needed to be negotiated. As Vilpišauskas (2003) recounts, Estonia, Latvia, and Lithuania had to do some adjustments in terms of their agricultural policies as well as free trade relations at the time with Ukraine. They also negotiated a number of transition periods for raising various excise taxes to EU levels and adopting a range of EU 48 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 regulations regarding environment, transport, and other areas. For Lithuania, two specific issues concerned the EU’s demand for a closure of the Soviet-built Ignalina atomic energy station and the future of transit movement to and from Kaliningrad. The former related to how much the EU would support Lithuania financially in this task, while the latter involved assurances that interaction with Kaliningrad would remain facilitated without this adversely affecting Lithuania’s future chances of joining the Schengen border area. By December 2002, all three Baltic states had completed their negotiations, and the stage was set for final ratification of the accession via referendums in 2003. During the period of membership negotiation, popular opinion about the European Union fluctuated in the Baltic states. For example, Whitefield et al. (2006, 194) found that support for the EU was strongest among (a) those who believed they would stand to benefit from the new opportunities, (b) those who viewed the EU as a security guarantor for the future, and (c) those who saw the EU as part of a national-cultural return to Europe (see also Ehin 2001). Interestingly, while some surveys showed that support for accession among Russian speakers was initially high, this appears to have tapered off by 2004, as many minority residents may have begun to realize that joining the EU would mean a more definitive turning away from Russia and the former Soviet Union. Likewise, many Russian speakers had become disillusioned with the prospect that the European Union might somehow defend their rights more forcefully vis-à-vis the Baltic governments. In the event, the fact that neither Estonia nor Latvia was forced to noticeably change their citizenship policies during the course of accession indicated that minority interests would have to be promoted in other ways (Pettai 2004). The final referendum results were relatively unsurprising (Figure 8). Political elites in all three Baltic states pulled all the stops in order to get people to vote yes. The pro-EU campaigns highlighted both the expected economic benefits of membership and the geopolitical significance of locking the three countries into the Western community (Mikkel and Pridham 2004, Pettai and Ehin 2005). Anti-EU arguments focused on retaining national sovereignty and the dangers of being absorbed by a European behemoth. In terms of the ethnic factor, Russian speakers in Estonia proved to be greater supporters of the EU than those in Latvia. Even in the overwhelmingly Russian-speaking city of Narva in Estonia’s northeast, the ‘yes’ vote obtained a majority of 57 percent. Meanwhile, in Latvia, several parts of the eastern Latgale region, including the city of Daugavpils, voted strongly against membership (up to 67 percent). Since only citizens could vote in the referendum, this meant that a sizeable share of the core minority community had reservations about shifting the Baltic states toward the European Union. 49 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 Figure 8: Results of the EU accession referendums in the Baltic states, 2004 The Experience of Membership Since 2004, the expectations that the Baltic peoples had for EU membership have largely been fulfilled, be it in terms of political integration, economic advancement, national security, or European identities. This section will profile these various issues, while acknowledging that not everything has been smooth sailing. Political integration Perhaps the most direct manifestation of the Balts’ success with EU accession involves being at the table and participating actively in EU institutions. All three nations have had their share of prominent EU commissioners (e.g., Dalia Grybauskaite, Valdis Dombrovskis, Siim Kallas). Baltic members of the European Parliament have stood out for their focus on EU foreign policy (e.g., in support of Ukraine) and in favor of tough sanctions on Russia. Several Baltic MEPs (such as Vytautas Landsbergis, Tunne Kelam, and Sandra Kalniete) have drawn attention to issues of historical memory in the EU, seeking recognition for the suffering of peoples under communism alongside that under Nazism. Likewise, the European Parliament has been the venue for several Russian-speaking politicians from the Baltics to advocate their views. The Latvian MEP Tatjana Ždanoka was elected three times to the EP and used that rostrum often to criticize her own country about the plight of Russian speakers. Across the overall spectrum of member-states in the EU, it is not possible to say that the Baltic states constitute a particular regional bloc, even in collaboration with the other 2004 accession countries. If anything, the Baltic states have sought to maintain close coordination with Finland and Sweden. This, in turn, has often brought them into alignment with the Netherlands and 66.8 33.2 64.0 67.0 32.5 73.0 91.0 8.9 63.0 0 20 40 60 80 100 P e rc e n ta g e Estonia Latvia Lithuania Data source: Baltic electoral data; own calculations Yes No Turnout 50 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 Denmark – two member-states who are generally seen as more sovereignty-minded with the EU (Taylor 2018). At the same time, the Baltic states took a relatively cautious stance during 2017- 18, when the European Commission launched legal action against the Polish government’s alleged attempts to circumscribe the country’s courts. During one public occasion, Lithuanian President Dalia Grybauskaite went out of her way to express solidarity with her southern neighbor (Delfi.lt 2018). Economic advancement It goes without saying that the economic benefits of EU accession for the Baltic states have generally been positive. According to one study, Estonia had the highest level of per capita support from the EU’s various structural funds of any former communist member-state. (Varblane 2016, 124). This figure amounted to 2540 euros per person during the period of 2007-2013. The comparable totals for Latvia and Lithuania were around 2000 euros. Overall during the entire period of 2007-2020, Estonia, Latvia, and Lithuania were set to receive a total of seven, nine, and 13.6 billion euros, respectively. The share of this funding in relation to each country’s GDP has also grown from around two percent in the mid-2000s to almost five percent by the 2010s (Kondor- Tabun and Staehr 2015, 2; Varblane 2016, 125). With respect to spending, most of this money flowed into transportation projects, environmental sustainability, educational programs, R&D funding, and regional development. In basic terms, this meant investment in new roads, water treatment facilities, job training programs, higher education support, and rural improvements. During the 2010s, prominent attention was given to the ambitious Rail Baltic project, the creation of a high-speed rail link from Tallinn down to the Polish border (via the cities of Pärnu, Riga, and Kaunas, with a side branch to Vilnius). The objective was to facilitate commercial transport through the region and indirectly extend the link up to Finland through an eventual tunnel between Tallinn and Helsinki. The concomitant environmental costs, however, were equally a point of contestation, since the completely walled-off rail corridor would require special bridges and other accommodations for wildlife and local traffic to cross the straightaway. Additional concerns were raised about the long-term cost of maintaining the railway, since EU funds would only be given for building the project. This question of sustainability became a heightened worry as the EU’s financial period of 2014- 2020 started coming to an end. Studies of the effects of EU cohesion funding have shown that when the level of such support surpasses a threshold of around 2.3 percent of GDP, its effect is to substitute for member-states’ own spending in these areas, thereby creating a dependency that is difficult to compensate if and when EU funding declines sharply (Šlander and Wostner 2018, 730). In the Baltic states, this effect was particularly apparent in infrastructural spending and research funding. This problem of ‘substitution’ was also driven by the EU’s own strict monitoring of programming and allocation rates among the recipient countries, meaning governments would attempt to spend money as quickly as possible and thereby be particularly tempted to substitute their own national spending with EU funds.6 6 As will be discussed below, the financial crisis of 2009-2010 further exacerbated this trend, since the EU decided to speed up its disbursement of funds in an attempt to spur economic activity in these recipient countries. This meant, however, an even stronger substitution effect taking place(see Kondor-Tabun and Staehr 2015, 17). 51 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 EU membership for the Baltic states therefore had a very important fiscal and financial impact. More broadly, however, it is important to acknowledge the psychological effects of membership in terms of stabilizing investor confidence, commercial relationships, and economic activity in general. Although studies of the effect of EU accession on growth rates in the post-communist region have been inconclusive, it is clear that in terms of providing a more viable and promising market economic perspective for the Baltic peoples, EU accession was a worthwhile choice. The Baltic states have gained more opportunities and perhaps less vulnerabilities vis-à-vis the global market by being tightly integrated with their European neighbors. Moreover, the same argument that was noted above regarding political integration applies here: being at the table, in terms of crafting decisions on the euro, European financial regulations, tax harmonization, or any other policy area, matters. However, as one pair of comparative researchers put it, “The economic side of…Eastern enlargement is...a hybrid bag of effects for the EU’s eastern countries because membership in the EU is not a tide that lifts all boats” (Jovanovic and Damnjanovic 2014, 1). This was felt in particular during the global financial crisis of 2009-2010. By now, it is well known that the Baltic states took one of the deepest hits in the EU during this collapse, with GDP contracting between 14 and 17 percent in 2009 and unemployment hitting nearly 20 percent. This tumble was even more stark, thanks to the above average growth rates of seven to eight percent during the early 2000s. Yet, as many analysts have shown (Brixiova et al. 2010, Kattel and Raudla 2013, Staehr 2013), these issues are linked, in that the economic boom starting around 2000 was not only beginning to show signs of going bust in 2008; it was also sent into a freefall when the rest of the world began to ripple from the wider financial crash (Lehmann Brothers, etc.). In this respect, the Baltic countries faced some particularly difficult choices that involved not only the usual options of fiscal austerity, but also how to navigate sensitive (at the time) political ambitions about joining the euro zone. As was often discussed during the crisis, the Baltic states might have improved their economic situation by suspending the process of approximating their national currencies with the euro and by devaluating the exchange rate of these monies in order to regain competitiveness in export markets. However, this would have caused domestic problems for people who had to pay back loans in euros. And it would have constituted a major setback in what had heretofore been a very steady and successful EU integration process (Kattel and Raudla 2013). In the end, the three countries opted for what was known as internal devaluation by radically cutting their national budgets (in particular, public sector wages), tolerating large-scale deficits (up to nearly ten percent of GDP), and suffering some major bank failures (Parex in Latvia and Ukio in Lithuania).7 While Estonia was able to cover some of these shortfalls thanks to some national savings that had been accumulated during the boom years, Latvia and Lithuania were less prepared. Latvia, in particular, was forced in December 2008 to turn to international donors (including the IMF and the EU) for a 7.5 billion euro stabilization package. Lithuania, meanwhile, was not able to bring its budget back into balance until 2014. Long-term state debt in Latvia and Lithuania also grew as a percentage of GDP from around 15-20 percent to 40 percent, while Estonia’s remained around ten percent (Kattel and Raudla 2013). 7 For details, see Kattel and Raudla (2013), Staehr (2013). 52 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 The fact that the Baltic states were EU members during this particularly severe global crisis was probably on the whole a good thing. While the EU could not directly engineer economic recovery nor even hold off future periods of speculative economic growth through regulation, it did provide a more integrated context in which to deal with the challenges the Balts would face. However, this participation also cut both ways. During 2011 and 2012, the three countries would be pulled into the difficult political decisions that the EU needed to make as result of the Greek debt crisis. The three nations’ parliaments would have to ratify their states’ participation in the European Stability Mechanism (ESM), which in many cases proved controversial; in Estonia, the decision to help bail out Greece would even be contested in that country’s constitutional court. These stresses of EU membership were compounded in 2015, when the Baltic states would be called upon to accept a share of the millions of refugees and migrants caught up in Turkish, Greek, and Italian transit camps. Ultimately, the quotas set for Estonia, Latvia, and Lithuania were relatively low (between 600 and 1100 people). However, the policy generated a fair amount of backlash for several reasons. One was the impression that these countries themselves were still developing and couldn’t afford the resources to be spent on sheltering and potentially integrating newcomers over the long term. Another involved the irony of refugees coming into the country just as the three nations had gone through a period of large-scale out-migration of their own people. Since re-independence, the population of the Baltic states had gone down by as much as 25 percent (Figure 9). .75 .8 .85 .9 .95 1 P ro p o rt io n 1995 2000 2005 2010 2015 2020 Year Estonia Latvia Lithuania Data sources: Statistikaamet 2017b, Centrālā statistikas pārvalde. 2019a, Lietuvos Statistikos Departamentas 2019; own calculations Figure 9: Proportional declines in the resident population of the Baltics states, 1995=100% 53 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 On the one hand, all three countries have had continuously negative population growth (deaths surpassing births) for some 25 years, sometimes amounting to 0.6 percent of the population. On top of that, however, out-migration has been an even greater problem with, for example, a net average of 26,000 people leaving Lithuania and 14,000 leaving Latvia each year since the mid- 1990s (see also Berzins and Zvidrins 2011, Lulle 2014). Particularly during the economic crisis, the totals soared to up to 77,000 per year in Lithuania. In Estonia, these numbers have been more modest, and in fact, by 2015, the country had turned around its migration balance, even though the natural population growth rate continued to be negative (Figure 10). National security Tough decisions regarding the Greek debt emergency and the refugee crisis put Baltic commitment to European solidarity to the test. These were among some of the first real moments where the Balts were asked reciprocate for the staunch support they had been getting from Europe regarding some of their own foreign and security policy concerns. On the latter score, the need was often perceived as existential: the EU and NATO constituted the two most fundamental pillars of Baltic foreign policy. Having these two organizations safeguard Baltic security was the main reason why Estonia, Latvia, and Lithuania had joined them in the first place. And, by and large, the Balts got what they wanted, especially in relation to ever more vigilant stances toward Russia. In part, this trend began after the 2007 Bronze Soldier riots in Tallinn, since it soon became clear that Russia had tried to exacerbate the events by sending activists of its own to Estonia. And it was alleged that Russia was behind some of the cyberattacks Estonia witnessed during the crisis. Wariness of Russia continued in 2008 after the armed conflict between Russia and Georgia over South Ossetia. This event, in particular, prompted the Balts to begin demanding from NATO that the alliance put in place a clearer contingency plan for defending Estonia, Latvia, and Lithuania, should Russian expansionism turn in their direction. Lastly, after the 2014 Russian annexation of -10000 -5000 0 5000 10000 C h a n g e , n r o f p e rs o n s 1 9 9 5 2 0 0 0 2 0 0 5 2 0 1 0 2 0 1 5 2 0 2 0 Estonia -40000 -30000 -20000 -10000 0 C h a n g e , n r o f p e rs o n s 1 9 9 5 2 0 0 0 2 0 0 5 2 0 1 0 2 0 1 5 2 0 2 0 Latvia -80000 -60000 -40000 -20000 0 C h a n g e , n r o f p e rs o n s 19 95 20 00 20 05 20 10 20 15 20 20 Lithuania Note: Migration data for Estonia not available before 2004. Source: see Figure 9. Natural population growth Migration balance Figure 10: Natural population growth rates and migration flows in the Baltic states, 1995-2018 54 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 Crimea, the masks were taken off, and a wholesale effort was undertaken to put NATO boots on the ground in the Baltics. The United Kingdom took responsibility for placing rotating troops in Estonia, Canada in Latvia, and Germany in Lithuania. In addition, the United States played a role in the advanced deployment of materiel. The Balts themselves, meanwhile, tried to adhere to the NATO call for Member States to spend at least two percent of their GDP on defense. Estonia fulfilled this criterion, while Latvia and Lithuania fell somewhat short (in part because of the 2009 financial crisis). Within the European Union, the Baltic states lobbied for tough sanctions against Russia, and through mid-2019, these continued to hold, despite occasional calls for their relaxation from other EU countries. This prolonged demonstration of EU unity was a bit of a surprise even for the Balts themselves. Such policies were all the more challenging given that the EU’s outreach to other neighboring countries like Ukraine, Georgia, or Moldova (via the Eastern Partnership) had proven less effective than originally hoped. The Balts had sought to contribute their own efforts to initiatives through training agreements and policy exchanges with these other countries. This, too, was part of their effort to advance their own security through common EU policies. Support for the EU The upshot from the Baltic countries’ experience with membership in the EU can be seen in various questions from the EU’s regularly commissioned Eurobarometer (2019) surveys. On the whole, Balts have expressed average or above-average support for the EU across a number of the questions. In particular, this is apparent from around 2012 onwards, when reverberations from the economic crisis began to subside. For example, when asked whether they are satisfied with how democracy works in the EU, Lithuanians respond positively on average 13.5 percent higher than the mean level in the European Union (see Figure 11). When asked whether they are optimistic or pessimistic about the future of the EU, Lithuanians again exceed the EU mean in terms of their optimism, by an average of 15 percent between 2012 and 2019 (Figure 12). Estonians, too, were generally backers of the EU, although their support did slip noticeably during the refugee crisis. Their image of the EU as being positive declined markedly in 2015 and has only slowly recovered since (Figure 13). As can be seen in Figure 12, their level of optimism about the EU also took a tumble during this period. Lastly, Latvians exhibited the most reticence about the EU, including immediately after accession in the 2000s (see both Figures 12 and 13). At one point during November 2011, the number of Latvians with a positive image of the EU was almost equal to that of those with a negative image (21 compared to 18 percent). In this instance, one could see that the bulk of erstwhile supporters of the EU had shifted mostly to a ‘neutral’ stance (60 percent); the number of negative views of the EU didn’t really increase. Still, it was a low point. 55 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 Figure 11: Levels of Baltic satisfaction with the way democracy works in the European Union, 2004-2019, Eurobarometer surveys 40 50 60 70 % o f re sp o n d e n ts i d e n tif yi n g a s fa ir ly o r v e ry s a tis fie d 1/1/2004 1/1/2006 1/1/2008 1/1/2010 1/1/2012 1/1/2014 1/1/2016 1/1/2018 EU Estonia Latvia Lithuania 50 60 70 80 % o f re sp o n d e n ts i d e n tif yi n g a s fa ir ly o r ve ry o p ti m is tic 1/1/2007 1/1/2010 1/1/2013 1/1/2016 1/1/2019 EU Estonia Latvia Lithuania Figure 12: Levels of Baltic optimism about the future of the European Union, 2007-2019, Eurobarometer surveys 56 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 Figure 13: Baltic respondents’ image of the European Union, 2007-2019, Eurobarometer surveys Future challenges In 2018, the Baltic states celebrated the centenary of their first declarations of independence in 1918. This anniversary was – in contrast to the rest of Eastern Europe – not one of having actually had a hundred years of statehood. Instead, the milestone came with a rather sundry mix of feelings. On the one hand, Baltic independence in 2018 had now lasted longer than that between the two World Wars. At the same time, the combination of these two periods of independence had yet to surpass the amount of time spent under Soviet and Nazi occupation from 1940 to 1991. In other words, a curious ambiguity hung in the air regarding what there was to be actually fêted. Still, one of the oft-repeated mantras from that year was that the people of Estonia, Latvia, and Lithuania had never in their history lived as well as they did now. By this was meant that not only had the socio-economic status of the three nations improved greatly over the last quarter-century, but also, geopolitically, the countries were much better positioned to deal with regional security threats, as well as to build partnerships with their neighbors. As nation-states, the three Baltic peoples also now had the sovereignty and wherewithal to protect and develop their languages and cultures. All of this should have made for buoyant and assertive celebrations. And while there was no shortage of fireworks and other pomp bestowed on the 2018 festivities, there was also a feeling of discontent, particularly in Estonia and Latvia, as right-wing populist forces gained political momentum. In the October 2018 Latvian parliamentary election, a new anti-establishment party called “Who owns the state?” came second in polling (14.2 percent) and for a while appeared poised to nominate the next prime minister – until it became clear that the party leader would not be given security clearance by Latvian law enforcement agencies. Coupled with a strong upsurge by another, previously minor party (the New Conservative Party), the Latvian party system became once again highly fragmented and cut along fairly divisive lines. The appointment of Krišjanis 20 30 40 50 60 % o f re sp o n d e n ts s e e in g E U a s fa ir ly o r ve ry p o si tiv e 1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018 EU Estonia Latvia Lithuania 57 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 Kariņš as prime minister (from Parliament’s smallest party) more than three months after the election only served to epitomize the difficult political constellation in which the country was now situated. Likewise, in Estonia in 2018, observers braced themselves for what was expected to be a swelling of support for the right-wing radical Estonian Conservative People’s Party (EKRE) in advance of March 2019 elections. During the electoral campaign, EKRE’s leaders railed against a ‘deep state’ they claimed had taken over Estonian government; they promised to give power back to the people through more referendums; and they pledged an unprecedented spending program geared towards clearing state debt. When the party scored nearly 18 percent (coming in third), the result was ominous enough for many observers. However, when Prime Minister Jüri Ratas (from the second- place Center Party) decided to outmaneuver the actual winner of the election (the Reform Party) and form an alternative majority coalition embracing EKRE and the conservative Pro Patria party in order to stay in office, the level of angst was raised even higher. Even in Lithuania, Prime Minister Saulius Skvernelis was forced in September 2018 to turn to a somewhat more long-standing, but still widely seen as populist, party, Order and Justice, in order to shore up his majority in parliament. While the basic political orientation of the government didn’t change, the shakiness of the cabinet (and in particular of the junior partner, the Social Democrats) showed that established parties were crumbling there, too. While some analysts endorsed the inclusion of populist forces in these governments as helping perhaps to blunt their future appeal, it was unclear whether the recipes these politicians offered would actually help to alleviate the problems the two countries faced. Lavish promises of new spending on expanded social welfare programs ran counter to a fairly entrenched neo-liberal economic orthodoxy in the Baltics. At the same time, in what seemed like a perpetual downward spiral, all three countries were caught up in a succession of retrenchment plans meant to deal with their continuous demographic declines. Starting with closed-down rural schools and hospitals, moving to redrawn and consolidated administrative districts, and ending with reductions in the size of Parliament itself (broadly discussed in both Lithuania and Estonia), the actual evolution of government in these countries seemed little like the épanouissement that the centenaries had proclaimed. While the Balts still had much to be grateful for in terms of national security via NATO and the European Union (particularly vis-à-vis Russia), these two factors were not givens over the medium term. If the countries did not maintain a solid level of governance and respectability, it was unclear whether partners like the United States (with an increasingly transactionalist view of foreign policy) might not relax some of their security commitments. Equally, the European Union was in a great period of flux, with Brexit topping the agenda. Not only was the UK’s departure from the EU a political headache, but also its consequences for future EU budgets would be of great concern for net recipients from the EU like the Baltic states. Financial support from Brussels was set to decline steeply, which in turn would put even more pressure on national finances amid shrinking tax bases. The ambivalent position of the Baltic states was thus palpable. As the three nations in Europe that had gained perhaps the most, thanks to the end of the Cold War – restored national independence, reintegration with the European community, and economic modernization – they had a strong incentive to keep the faith and support the liberal order that had helped them reach their centenary 58 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 as free peoples. However, many of the same fissures that had begun to afflict that venerable system were also now ripping through their own societies and sapping the strength to develop even further during the next hundred years. In this respect, the Baltic states did not differ from some of the symptoms of ‘democratic fatigue’ (Rupnik and Zielonka 2013) or the ‘hollowing of democracy’ (Greskovits 2015) that other post- communist countries had experienced.8 However, the challenge was to figure out the interplay between distal and proximate factors that contributed to these trends. Interestingly, the long-term legacies of Soviet rule appeared to have made the Baltics slightly more immune to the risk of democratic fatigue in that more people felt a vested interest in making liberal democracy and European integration work after a half-century of foreign incorporation. Because the countries had travelled the farthest in terms of political, social, and economic change since 1989, their populations persisted the longest in maintaining a belief in those commitments. Hence, to paraphrase a distinction brought out by Grigore Pop-Eleches and Joshua Tucker (2017), the Balts’ experience of living through communism seemed to outweigh their experience of living in post-communism in a positive sense. That having been said, the nature of life in post- communism had also changed 30 years after the fall of the Berlin Wall. This existence was no longer simply about the immediate political choices that national leaders made after 1989. It was also about the reverberate effects of developments far outside the region, be it the 2009 global financial crisis, the migration upsurge, or democratic fatigue taking hold in ‘consolidated’ democracies such as the US, the UK, or France. 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Vilnius: Eugrimas. 63 Canadian Journal of European and Russian Studies, 13 (2) 2019: 39-63 ISSN 2562-8429 Published by the Centre for European Studies at Carleton University, Ottawa, Canada Available online at: https://ojs.library.carleton.ca/index.php/CJERS/index The Canadian Journal of European and Russian Studies (CJERS – formerly Review of European and Russian Affairs) is an open-access electronic academic peer-reviewed journal: articles are subject to double-blind peer-review. Topics relate to the European Union, its Member States, the former Soviet Union, and Central and Eastern Europe. The journal is published by the Centre for European Studies, an associated unit of the Institute of European, Russian and Eurasian Studies at Carleton University. CJERS aims to provide an accessible forum for the promotion and dissemination of high quality research and scholarship. Contact: Carleton University The Centre for European Studies 1103 Dunton Tower 1125 Colonel By Drive Ottawa, ON K1S 5B6 Canada Tel: +01 613 520-2600 ext. 3117; E-mail: CJERS@carleton.ca Creative Commons License https://creativecommons.org/licenses/by-nc-nd/4.0/ This Working Paper is licensed under a Creative Commons Attribution-Non-Commercial- No Derivs 4.0 Unported License (CC BY-NC-ND 4.0). Articles appearing in this publication may be freely quoted and reproduced, provided the source is acknowledged. No use of this publication may be made for resale or other commercial purposes. ISSN: 2562-8429 © 2019 The Author(s)