This article is part of the Baltic Sea Region Security Initiative developed by the Carnegie Endowment’s Europe Program.
“The Baltic Sea is a natural treasure at the heart of Europe,” according to German Foreign Minister Annalena Baerbock, and since February 2022, the natural treasure has been increasingly central to discussions about the future of the European security architecture. Some even dubbed the Baltic Sea a “NATO lake” after Sweden and Finland began the North Atlantic Treaty Organization (NATO) accession process.
Yet, the Baltic Sea is not a “NATO lake.” Russia has lakefront property via both the Kaliningrad exclave and St. Petersburg. Through the exclave, Moscow deters conventional confrontations with both air and sea capabilities and a powerful nuclear arsenal that consists of dozens of capable ballistic missiles. Thus, Russia’s conventional capabilities in the Baltic Sea region could threaten regional stability.
The Baltic Sea region is vulnerable to both conventional and unconventional security threats, as well as challenges to political and economic cohesion. Defending the region from these multidimensional challenges should entail facilitating deeper strategic coordination, backed up by institutional alignment using multiple existing forums for cooperation and designing new ones as needed.
The underwater explosions that damaged the Nord Stream pipelines in September 2022 provided a vivid demonstration of one enduring security challenge with implications for wider Europe, due to continued dependence on Russian gas and fossil fuels, namely, the vulnerability to disruptive attacks against critical subsea and energy infrastructure in the Baltic Sea. The damage to the Balticconnector pipeline and several subsea communication cables a year later reinforced the notion that the Baltic Sea is not entirely secure and that countries of the region could do more to increase resilience to attacks and work within NATO and the European Union (EU) to deter them.
The Baltic Sea region is thoroughly integrated into two crucial Western organizations that align countries militarily, economically, and politically: all countries in the region except Sweden, for now, are part of NATO, and all except Norway are EU member states. Despite the ties that the region’s countries share through these institutions, as well as through shared culture and history, sources of friction remain. These detract from the region’s ability to effectively and efficiently address security threats.
Divergences in the region exist between the Nordic states and the Baltic states. In addition, the two most populous countries, Poland and Germany, are not always aligned on how to best overcome security issues. Concerns about Poland’s democratic backsliding and its attendant acrimony with the EU and increased strife with Germany were a significant barrier to political alignment in the region. However, Poland and Germany may cooperate more effectively once the newly elected pro-European government forms in Warsaw. Nonetheless, whatever irritants or missed opportunities for collaboration exist in the region pale in comparison to obstacles elsewhere in the world. Strategic thinking and pragmatic action can make the Baltic Sea region a laboratory for successful transnational cooperation to address emerging security challenges within the broader frameworks of NATO and the EU.
The Carnegie Endowment for International Peace’s Baltic Sea Region Security Initiative hopes to identify and foster insightful dialogue on the issues facing the region in the current geopolitical moment. To seize numerous opportunities in the region, challenges to stability must be overcome via cooperation. In doing so, the region can act as a model for other subregions within NATO and the EU and elsewhere in the world for how to address threat misalignment and mistrust, conventional and unconventional threats, and economic vulnerability.
What Is the Baltic Sea Region?
For the analytical purposes of this article (and the practical work of the broader initiative), the Baltic Sea region consists of the Nordic states (Denmark, Finland, Norway, and Sweden), the Baltic states (Estonia, Latvia, and Lithuania), Germany, and Poland. Each country’s geography, as well as its energy and communications infrastructure dependencies, affects its threat perceptions.
Prior to the end of the Cold War, Russia controlled much of the Baltic Sea. Once Poland and the Baltic states joined the EU and NATO, the Russian exclave of Kaliningrad became wedged between Lithuania and Poland, which reduced Moscow’s influence and position in the Baltic Sea region. Today, Russia remains committed to maintaining its defense posture from Kaliningrad via anti-access area denial zones to protect its military and economic interests in the Baltic Sea. Kaliningrad is crucial to Russia’s military capability as the only year-round ice-free port of the Baltic Fleet. Russia also uses the sea’s shipping routes for oil and gas delivery. In September 2023, 57 percent of Russia’s total oil exports were shipped from its ports on the Baltic Sea. Thus, Russia, too, is concerned about its vulnerabilities in the region.
The United States and the United Kingdom are among the most important security guarantors in the region. As part of NATO’s Enhanced Forward Presence (eFP), the two countries station troops in Estonia and Poland, respectively. The United Kingdom also leads the Joint Expeditionary Forces, which is its main vehicle for influence in the region. Understanding the interplay of different external actors with those in the region is essential to assessing the opportunities to improve security in the Baltic Sea region.
The Four Challenges Facing the Baltic Sea Region
The Baltic Sea region faces four key challenges: threat misalignment and mistrust among countries, conventional threats, unconventional threats (specifically attacks against critical infrastructure in the maritime domain), and economic dependence.
Threat Misalignment and Mistrust
Since the Russian invasion of Crimea in 2014, NATO and the EU have emphasized—with varying degrees of focus and determination—deterring Russian aggression as critical to ensuring European stability. Russia’s full-scale invasion of Ukraine in February 2022 prompted them to renew and strengthen their approaches. Although all countries in the Baltic Sea region share a degree of institutional alignment on regional issues, national threat priorities have historically varied.
The northern and eastern countries of the region have held differing views on the threat of future Russian aggression. The Baltic states and Poland have seen Russia as a strategic threat to both their own security and to the broader stability of the region. This perception has been driven in part by their shared history of Russian occupation or control over the course of the Cold War. After the 2014 invasion, the eastern countries within the region began to increase investments in their defense. Poland created a new Territorial Defense Force, and all three Baltic countries acquired new light-armored vehicles and some firepower needed to slow down a potential Russian advance. The Baltic countries, together with Poland, tried to convince NATO allies after Russia’s invasion in 2014 to acknowledge their threat assessment of Russia, but instead they were labeled “alarmist.”
On the other hand, the Nordic group, together with Germany, has been more open to engagement with Russia. Indeed, prior to the start of Russia’s full-scale invasion of Ukraine, they advocated for NATO’s dual-track policy of deterrence and dialogue. Finland, perhaps surprisingly given its geography and twentieth-century history, pursued constructive relations with Russia to promote dialogue and maintain neutrality, while retaining military capabilities with a fully mobilized wartime force of 280,000 troops and the best-equipped artillery force in all of Western Europe. Sweden also maintained neutrality, but unlike Finland, it only maintained a fully mobilized force of 60,000 troops. In particular, Sweden had an interest in protecting its island of Gotland and continuously participated in NATO exercises alongside Finland in the Baltic Sea. Germany had the most engaged relationship with Russia prior to the war via close political and economic linkages.
These threat perceptions are changing as a result of the war in Ukraine and the so-called shift to the East underway in Europe. The Baltic states and Poland have doubled down on their assessment of Russia as a real threat to European security. Germany, as demonstrated by Chancellor Olaf Scholz’s Zeitenwende speech in February 2022, now acknowledges Moscow’s threat to European security and has committed to decoupling from Russian energy and investing more in defense. Denmark removed its opt-out from the EU’s Common Security and Defense Policy, and Sweden and Finland reversed their long-held neutral stance by applying for NATO membership. However, even with a broad realignment within NATO and in the Baltic Sea region around a more unanimous assessment of the threat from Russia, Poland and the Baltic states remain most likely to match their assessment with action, as evidenced by their early and robust support for Ukraine.
Despite the current alignment, threat perceptions in the Baltic Sea region are still, to an extent, misaligned. Warsaw has clearly outlined the region as an area of “vital importance to Poland’s foreign policy.” Norway, on the other hand, does not have a strategy dedicated to the region; it only has strategies dedicated to the High North and the Arctic. Many countries in the Nordic group also saw the Baltic Sea as a gateway to the Arctic. In fact, the northernmost parts of Norway, Sweden, and Finland are referred to as the European Arctic, which makes up a substantial part of the Baltic Sea region. The Baltic states and Poland continue to see the Russian threat as existential, whereas Finland, Sweden, and Denmark acknowledge the threat but do not see it as existential yet, and Germany views the Russia threat more as a challenge. To some extent, these perceptions are also reflected in each country’s fulfilment of NATO’s 2 percent target on defense spending, as seen in table 1.
| Table 1. Estimated Baltic Sea Region Countries’ Expenditure on Defense as a Percentage of GDP, 2023 | |
| Country | Percentage of GDP Spent on Defense |
| Poland | 3.90% |
| Estonia | 2.73% |
| Lithuania | 2.54% |
| Finland | 2.45% |
| Latvia | 2.27% |
| Norway | 1.67% |
| Denmark | 1.65% |
| Germany | 1.57% |
| Sweden* | 1.30% |
| Source: “Defence Expenditures of NATO Countries,” North Atlantic Treaty Organization, July 7, 2023, https://www.nato.int/cps/en/natohq/news_216897.htm?selectedLocale=en. | |
| Note: *Because Sweden is not yet a NATO member, its defense spending is for 2022 from SIPRI’s Military Expenditure Database. | |
It remains unlikely that countries in the region will align exactly on the extent of threats and consequently how much they need to invest in defense, but at least they need to “agree on what is worth protecting: the stability of the [region], Europe’s security order and the normative principles underpinning it.” However, to be able to agree on these issues, greater trust is required.
Conventional Postures and Threats
The war in Ukraine and the subsequent accession of Sweden and Finland into NATO caused a dramatic shift in Western conventional military capabilities in the Baltic Sea region. Although NATO’s border with Russia doubled overnight when Finland joined, the alliance also gained a member with one of the largest ground forces in Europe, armed with sophisticated modern military technologies. NATO’s presence, and obligations, in the Baltic Sea region were therefore strengthened.
Together, NATO allies have reinforced the region’s defense posture by sending additional ships, planes, and troops to the Baltic Sea. NATO allies in the region have also continued to engage in long-standing joint military exercises—such as BALTOPS, NATO’s premier maritime-led exercise in the Baltic Sea—to practice coordinating efforts to combat regional security threats.
In addition, NATO’s eFP has upgraded deterrence in the alliance’s eastern flank. After the invasion, the eFP, which deploys battle groups to Estonia, Latvia, Lithuania, and Poland, changed significantly to better reinforce the alliance’s deterrence and defense posture. Germany pledged to station 4,000 troops permanently in Lithuania, Canada pledged to deploy an additional 1,200 military personnel in Latvia, and the United Kingdom committed to enhancing the existing battle group in Estonia up to the brigade level as needed. The United States is responsible for NATO’s eFP in Poland, and since the war began, it has helped build up Warsaw’s air defense capabilities.
Despite these efforts, the alliance needs to do more to deal with the increased threat of a conventional confrontation with Russia. Even though the eFP is now larger, these so-called tripwire forces may not be effective in deterring an attack as they may be too small to meaningfully secure NATO’s posture in the Baltic Sea region. Another key vulnerability for NATO efforts in the region is the Suwałki Gap, the small corridor between Poland and Lithuania that is surrounded by Kaliningrad to the west and Belarus to the east. NATO resupply efforts on land to Baltic Sea region countries need to pass through this gap, which is vulnerable to attack from Belarus and Russia.
Since 2016, Russia has invested heavily in its defense posture in Kaliningrad by adding artillery and multiple-launch rocket systems, as well as upgrading its air defense and anti-ship components. The positioning of nuclear weapons on the exclave also makes it a key component of Russia’s nuclear deterrent. Since Russia moved forces out of Kaliningrad to fight in Ukraine, its ground forces in the Baltic Sea region are not as robust as they once were. However, the security of the Baltic Sea region cannot depend on Russian forces being engaged and depleted in Ukraine over the long term. Russia maintains significant capabilities in the region beyond troops, including cruise missiles, submarines, and Iskander ballistic missiles. Thus, it may turn to nuclear saber-rattling if it perceives a credible threat to its position from NATO.
Russia maintains its naval presence in the Baltic Sea through the Baltic Fleet. As of 2022, the fleet contained fifty-two surface warships, one Kilo-class submarine, and numerous support vessels. It has one submarine in its arsenal, though it reportedly could possess six Lada-class advanced submarines if their construction continues. However, the Baltic Fleet has often been described as the runt of the Russian Navy. To compensate for this discrepancy, Russia has invested more heavily in its undersea capabilities. In particular, it has invested in GUGI, its directorate of deep-sea research that maintains a fleet of surface vessels, mini submarines, and other submersibles to engage in sabotage. Estimates suggest that Moscow has increased its subsurface maritime activities by four to five times over the past ten years.
Unconventional Threats, Particularly Against Energy Infrastructure
Russia’s full-scale invasion of Ukraine sparked an overdue reassessment of Europe’s dependence on Russian oil and gas, resulting in an increased focus among European countries on building energy resiliency as they tried to cut ties with Russia. The Baltic Sea region was among the most successful at quickly decoupling from Russian energy, becoming a model for other regions in Europe on how to successfully transition away from Russian energy in the short term. Lithuania became the first country in the EU to stop importing Russian oil and gas entirely. The Baltic countries now are also especially determined to decouple from the Russian electricity grid and become fully integrated with the European grid. The goal is that by the end of 2025, Baltic states will be completely synchronized with the EU’s continental grid.
Countries in the Baltic Sea region are also leading on how to carry out Europe’s energy transition in the long term. Countries in the region have expanded and renewed their commitments to the development of renewable energy to reduce their dependence on fossil fuels entirely. Following the start of the war, eight Baltic Sea region countries (excluding Norway) signed the Marienborg Declaration, agreeing to set a goal for offshore wind production in the Baltic Sea to at least 19.6 gigawatts (seven times the current capacity) by 2030, increase energy resiliency, and reduce dependence on Russia. The Baltic Sea region has potential to become an energy provider for Europe during the energy transition by meeting these renewable production goals.
However, Europe has still lost the cornerstone of its energy supply. Even beyond hydrocarbon imports, Russia’s supply of critical metals and minerals for renewable technology is needed for the energy transition. Russia may leverage these resources to stifle the success of Europe’s energy transition and drive up costs for European consumers. Even though the Baltic Sea region has invested heavily in energy diversification, it is still vulnerable to new dependencies.
The region is also vulnerable to attacks against critical infrastructure in the Baltic Sea that could disrupt energy resiliency. For example, the explosions of the Nord Stream 1 and Nord Stream 2 pipelines were deemed deliberate and damaged sections containing over 778 million cubic meters of natural gas. Investigations are ongoing, and attribution has been difficult to determine. Russia was at first the main suspect because of its capabilities to carry out undersea sabotage via GUGI. Indeed, in 2023, GUGI significantly increased its activities in the Baltic Sea to menace offshore energy infrastructure. The underwater fleet is also capable of targeting subsea fiber-optic cables, which are crucial to the provision of economic and digital services in the Baltic Sea region and Europe. This is why Russia was also the initial prime suspect for the Balticconnector incident, which damaged several communication cables in addition to the pipeline, but the incident was later determined to be caused by an anchor dragged by a Chinese vessel. Currently, the protection and resilience of these subsea critical communication networks are insufficient.
Russia is also capable of carrying out cyber attacks against critical energy infrastructure. Pro-Russian hacking groups have taken responsibility for several cyber onslaughts against European infrastructure, but for the most part the perpetrators of these attacks remain unknown. To name just a few examples, in 2022, several European oil facilities were the target of cyber attacks, and in 2023, German wind turbine maker Enercon lost its remote connection to 5,800 turbines following a large-scale disruption to satellite links. Thus, there are many potential avenues through which Russia, or other actors, could sabotage energy and societal resiliency in Baltic Sea.
Economic Dependence
The Baltic Sea region over the past twenty years has generated strong GDP growth and attracted substantial investment into both technology and infrastructure development. The European Investment Bank (EIB) and the European Structural and Investment Funds (ESIFs) have led investment in the region by contributing to projects by the EU Strategy for the Baltic Sea Region (EUSBSR) aimed at improving prosperity in the region. The EIB also supports regional projects that involve transport, energy, the environment, and climate action, as well as research, development, and innovation. The EIB has focused in recent years on the region’s potential in the energy domain and has partnered with the Nordic Investment Bank to help facilitate the region’s green transition. The extent of investment from the EU and other Western actors in the Baltic Sea region demonstrates the area’s enormous economic potential.
China has used economic investment to advance influence in the region, primarily through the China and Central and Eastern European Countries initiative (China-CEEC)—also known as the 17+1 format—and the 5+1 format. The 17+1 format was launched in 2012 to encourage cooperation and Chinese investment in the region. With similar aims to the 17+1 format, the 5+1 format brings together China and the Nordic countries (including Iceland). Even though the Baltic Sea region has historically not ranked highly among the prime destinations of Chinese foreign direct investment, the region remains appealing for two key reasons: investment there provides China with a successful entryway into establishing greater influence in the Arctic and increases China’s influence in the EU. That being said, the nature of Chinese investment in the region varies from state to state.
Countries in the Baltic Sea region have different national strategies regarding Chinese economic investment, but many have acknowledged the potential threat of these financial linkages. Lithuania, for example, was the first to withdraw from the 17+1 format in 2021; Latvia and Estonia followed in 2022, following Beijing’s lenient stance on Russian aggression in Ukraine. Countries in the region have also blocked Chinese involvement in infrastructure projects due to the potential political and security implications. Poland, in particular, took a tough stance on Chinese investment due to the fact that good relations with the United States are imperative to the country’s security. Yet, some countries in the region still have extensive ties with China, and there is not a unified regional approach for vetting foreign direct investment coming from Chinese companies. This breeds the danger that dependence on Russia will only be replaced by economic dependence on China, which could result in greater unrest in the future. An added threat is also the fact that China and Russia maintain close ties; the two could therefore increasingly coordinate to exert pressure on the region.
How the Baltic Sea Region Can Address Its Challenges
Given these various challenges, countries in the Baltic Sea region need to increase cooperation bilaterally and through regional organizations, as well as strengthen ties with NATO and the EU, to overcome political, military, and economic vulnerabilities.
Building Trust Through Regional Forums
Regional intergovernmental organizations like the Council of Baltic Sea States (CBSS), the Nordic-Baltic 8 (NB-8), and the Nordic Council (NC) have facilitated dialogue on key issues facing the Baltic Sea region for many decades. The CBSS is an important political forum that has primarily focused on coordinating efforts on so-called soft security issues, such as reducing human trafficking in the region. The NB-8 convenes Nordic and Baltic actors to discuss regional issues within an informal format. The NC, though it primarily focuses on the Nordic states, has also engaged regularly in projects in the region, mostly pertaining to sustainable development. These forums have and should continue to adapt their structures to the new geopolitical realities in the region in order to better align countries’ threat perceptions and increase trust.
The CBSS, NB-8, and the NC have adjusted their priorities as a result of Russian aggression in Ukraine. The CBSS redefined its objectives to include hard security concerns and is more focused on building regional resilience. The NB-8 has always been an informal and noninstitutionalized forum for cooperation, but it is now emphasizing working within NATO and the EU to address security threats. The NC has also identified security in the Baltic Sea region as a key issue, as demonstrated by its work with the Baltic Assembly on security policies and securing energy supplies. These intergovernmental forums have successfully convened regional countries to agree on norms for child trafficking and environmental protection, to name a few. These organizations could also bring together countries from the region, including those that do not have formal memberships, to discuss emerging threats. Convening representatives in ad hoc formats could facilitate trust building and threat alignment, so that states work more effectively with each other.
The CBSS, NB-8, and NC should release updated action plans for the region to reflect the changing security situation and emphasize shared commitments to addressing these challenges. If these organizations help countries to align, then the benefits of that cooperation will likely facilitate better policies for addressing conventional and unconventional security threats.
Clarifying Defense and Security Strategies
NATO is the structure best suited for coordinating military efforts in the Baltic Sea. Per Article Five of the NATO treaty, in the event of an attack, NATO member states are committed to defend each other. Planning and coordinating via NATO and the eFP helps countries engage the other NATO members in the region’s defense and contributes to NATO’s deterrent effect. Countries in the region could benefit from continued engagement with the United Kingdom via the Joint Expeditionary Forces, which is a framework nation concept led by London whereby troops are deployed on a rotational basis in the region by northern European countries. The United Kingdom provides command and control guidance under the framework and has a significant stake in security coordination within the Baltic Sea region.
In the coming years, Baltic Sea region countries can deepen coordination on conventional planning within NATO through the alliance’s Joint Forces Command (JFC), whose area of responsibility covers planning, preparation, and execution of NATO military operations in different theaters. Currently, Finland has joined under JFC Brunssum with the Baltic states, Poland, and Germany. After Sweden joins NATO, it is likely to join JFC Norfolk, which is responsible for the North Atlantic and Arctic arenas. There has been an active debate about the optimal command structure within NATO. There are trade-offs to each possible configuration, and however they are resolved, it is imperative to clarify these command structures in the Baltic Sea region and to identify and manage any downsides of the ultimate arrangement.
If regional planning is coordinated via NATO’s JFC, then the division of the Baltic Sea region states into Brunssum and Norfolk JFCs may hinder defense integration in the region. Those JFCs are already overburdened, and separating command and control in the region could create a lack of cohesion. Similarly, the challenges of equitable burden sharing in NATO could reverberate in the region and produce challenges for coordinating resources and commitments for deterring Russian aggression.
To hedge against a future in which the United States might be unable or unwilling to sustain its current role as the principal security provider for Europe, Baltic Sea region countries need to ensure that they are militarily strong enough to defend against Russian aggression. Countries in the region should prioritize cooperation on expanding and improving joint operational plans and exercises; maritime domain awareness; intelligence, surveillance, and reconnaissance capabilities; air and missile defense capabilities; and unmanned underwater vehicle capabilities. In doing so, they can demonstrate their resiliency and capacity to the United States and other NATO allies and send a deterrent signal to Russia. Perhaps counterintuitively, such steps are likely to attract further support for bolstering regional security because they will underscore the value that countries in the region bring to security partnerships.
Coordinating Protection of Critical Infrastructure
There are several organizations that are addressing the security of energy supply chains and renewable energy production goals in the Baltic Sea region. The Marienborg Declaration and the Baltic Energy Market Interconnection Plan have aligned countries on goals for renewable energy production. The CBSS, NB-8, and NC have also emphasized sustainability and expanding clean energy as a priority. However, none of these forums has developed sufficient mechanisms for addressing broader threats to energy infrastructure in the region.
Although the work of the regional organizations mentioned earlier is important, the EU and NATO are most capable to address unconventional threats to energy security in the Baltic Sea region. The EU has committed to combating hybrid threats and protecting critical infrastructure as a part of its Common Security and Defense Policy. Through the EUSBSR, the EU has also established a plan for ensuring energy security. The energy policy area of the EUSBSR is coordinated by Latvia’s Ministry of Economics and Lithuania’s Ministry of Energy, which work together to ensure “competitive, secure and sustainable energy in the Baltic Sea region.” To address the emerging challenges in the region, particularly with respect to energy security, the EUSBSR should release an updated action plan that reflects new challenges, such as sabotage and destruction of critical energy infrastructure, particularly in the maritime domain. The plan should discuss the nature of hybrid threats and how best to deter and protect against them. It should also require coordination and input from all countries in the region on energy security issues.
NATO will likely be the first line of defense against unconventional attacks on critical infrastructure in the region. The alliance has established a NATO Maritime Centre for the Security of Critical Undersea Infrastructure within its Maritime Command. Following the Nord Stream attacks, NATO also created an undersea infrastructure coordination cell to map key subsea vulnerabilities and coordinate cooperation between allies and the private sector. NATO has also collaborated with the EU to launch a new task force on the resilience of critical infrastructure, which mapped out security challenges in energy, transport, digital infrastructure, and space, as well as identified key recommendations to enhance the resilience of critical infrastructure. The EU and NATO have enhanced cooperation on countering hybrid threats, including focusing on cyber defense, resilience, and strategic communication. The EU and NATO should coordinate with public and private stakeholders in the region to increase surveillance and patrolling of critical energy infrastructure and prepare for the aftermath of a potential attack. Countries in the Baltic Sea region could also coordinate in advance of NATO planning meetings on these mechanisms to ensure a unified voice and a shared approach on how the NATO toolbox can best serve the interests and security concerns of the region.
Bolstering Foreign Direct Investment Screening Cohesion
As discussed earlier, countries in the Baltic Sea region have taken different approaches to countering potentially harmful economic investment, particularly from China. Without regional coordination on this issue, the region risks future harmful investments and supply chain vulnerabilities or, worse, an approach in which the policies of one country unintentionally undermine those of partners in the region.
The EU provides the best framework for harmonizing these efforts. Broadly, it is working to implement a de-risking strategy to reduce member states’ dependence on China and ensure the security of supply chains. In 2020, its screening regulation on foreign direct investment (FDI) came into force with the goal of preventing investments that would pose security or public order risks. It states that EU member states should notify the EU of any FDI impacts on security or public order in other member states or EU strategic projects. However, one drawback is that members were not required to implement it. On top of that, EU members in the Baltic Sea region vary in whether they have explicit legislative powers to screen these investments or stop those that may pose security risks. In the Baltic Sea region, Denmark, Finland, Latvia, and Sweden have no such explicit legislative powers, Germany and Lithuania do, and Poland only has the legislative power to materially intervene in these investments. There is therefore an opportunity to enhance a coherent, unified, regional approach on how to intervene against harmful economic investments.
The European Commission is currently reviewing the FDI Screening Regulation and will likely propose a revised regulation before the end of 2023. The EU should take the opportunity to clarify what investments may pose security risks for their member states and require a standard of operation for how countries should make such assessments. The EU could even look at the Baltic Sea region as a testing ground for clarifying these economic measures, as there is clear appetite for ensuring economic security in the region.
Conclusion
It is possible that what used to be dubbed a “sea of peace” could become the future theater of conflict in Europe, and the countries in the Baltic Sea region need to be prepared for it. Framing the Baltic Sea as a “NATO lake” risks breeding complacency. As such, countries in the region, NATO, and the EU must invest properly to secure the region.
Successful cooperation among countries in the region is currently inhibited by differing threat perceptions and levels of trust, unclear command structures, and fractured views of security. Thus, the established structures for cooperation in the Baltic Sea region should reassess their definitions of security and include both conventional and unconventional threats, as well as political and economic risks. Due to the varying nature of these threats, the various institutions in the region need to coordinate how to mitigate and respond to them. These are solvable problems, and the states in the region are competent and have significant capacity, so the opportunity to enhance security is well within reach.
If Baltic Sea region countries can successfully come together within forums and harmonize their assessments of political, military, economic, and energy goals for the region, then they can also better communicate these needs to outside actors such as the United States and the United Kingdom and encourage those actors to continue to invest in the region.
The challenges highlighted earlier will persist unless countries can align their threat perceptions and the intergovernmental structures in the region can adjust to their new reality. If the region can adapt successfully, then it can become a greater vanguard for European security and a model for how the continent should proceed in the context of Russian aggression.
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