Opening of BSSSC Annual Conference

(State Secretary Torgeir Larsen held this speech on behalf of Foreign Minister Jonas Gahr Støre at the Baltic Sea States Subregional Cooperation (BSSSC) Annual Conference.)

Chairman of the BSSSC Mr Geblewicz,
Chairman of the Eastern Norway County Network Mr Haabeth,
Dear participants,

It is a great pleasure for me, on behalf of the Norwegian Government, to welcome you all to Norway. The Foreign Minister sends his warmest regards and regrets that he was prevented from coming at the last minute. He wishes you all the best for the conference.

Let me first commend the present Chair of the BSSSC. The West-Pomeranian region is playing an important role in promoting regional development.

I am also happy to note that many young people from Baltic and Nordic countries are here, as you have attended your own Green Conference.

Turning to the host of this conference, the Norway County Network. The Ministry of Foreign Affairs cooperate closely with the network, and I thank you for inviting us regularly to your meetings.

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You have chosen a demanding but timely topic: "From Economic Crises to Opportunities and Actions". The question of how to turn the economic crisis around is the most challenging question facing Europe today. We see how many countries, not least in southern Europe, have gone through several difficult phases since 2008: from financial crisis, to debt crisis, to social crisis and mass unemployment. Drastic measures and hard-hitting cuts are made all over Europe these days to revitalise the economy – and we often see political friction as a result.

Our region has also been affected by the crisis – and it is not over. But, according to the "The state of the Baltic Sea Region Report" (by the Baltic Delopment Forum in Copenhagen), our region has responded well to the challenges. This means that our region is in a good position to use the available opportunities and translate them into action.

Let me emphasise this: an active response to the crisis is necessary, regardless of how hard your country has been hit.

No country in Europe is unaffected by the current situation. We depend on each other. Our economies are interlinked, people travel across borders, looking for work. We are neighbours, allies and friends; we have to find common solutions to the problems we face.

Common solutions and rapid solutions are needed. Unemployment rates are soaring. In Spain, more than half of the under-25s in the workforce are jobless.

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Regional cooperation - overcoming national boundaries - is at the heart of European integration. Regional cooperation is the machine for European growth and development. And we all belong to more than one region.

Each region is different, each has its unique identity, goals and challenges. For regional cooperation to be successful, I believe four factors are essential: Effective institutions, resource management, environmental sustainability and sound economic and social development.

First: Effective institutions. Since the early 1990s the Baltic Sea Region has established several effective instruments and institutions, to the benefit of the region's governments, municipalities and towns, the private sector, and civil society – within each country, but also across our borders.

When the Barents Euro-Arctic Council (BEAC), was established in 1993, a separate council for the regions, the Barents Regional Council, was also established. This meant that, for the first time, there was an organised framework for concrete cooperation projects between Russian oblasts, Swedish and Finnish regions and Norwegian counties. It was soon recognised that a similar framework was needed for the Baltic Sea Region, and the result was the establishment of the Baltic Sea States Subregional Cooperation.

The discussion is ongoing: has the intergovernmental institutional structure in the region become too complicated?

Well, to my knowledge overlap has not been a serious obstacle or problem. But there are obvious challenges ahead, especially when new partnerships under the Northern Dimension are established as independent institutions. We must be willing to make the necessary adjustments.

The BSSSC has become the umbrella organisation for the Baltic Sea Region. And this Annual Conference is a clear indication of its success. Progress in the Baltic Sea Region cannot be achieved by working at the intergovernmental level alone, through the Council of the Baltic Sea States and the Northern Dimension. We can provide frameworks and political guidance for cooperation. But when it comes to the practical implementation on the ground we need the BSSSC and many others.

However, intergovernmental level efforts require the active support of national parliaments. Through their own organisation, the Baltic Sea Parliamentary Conference (BSPC), national parliaments play an active and constructive role in mobilising support for efforts to meet regional challenges.

The cooperation between the Parliamentary Conference and the Council of the Baltic Sea States has proved to be pragmatic and effective, enabling us to synchronise our political priorities and better succeed in reaching our common goals.

The second factor which I believe is crucial for regional cooperation is wise and competent management of resources.

Our region is fortunate: The region as a whole has substantial energy resources. This includes oil and gas reserves of the Russian Federation and Norway, as well as renewable energy resources like hydropower. Other countries in the region have made remarkable progress in the areas of wind and solar power.

We are fortunate. But good fortune is not enough on its own. We also need skills. Natural resources have led to wars and the destruction of societies in many parts of the world. If natural resources are to be a source of prosperity and regional growth, we need close cross-border cooperation, sustainable policies, and long-term perspectives.

We also need a skilled labour force. Close cooperation between our universities, new concepts like the Council of the Baltic States' EuroFaculty Programme, and a relatively open labour market across our borders have proved invaluable for our industries and societies as a whole.

In relation to our population, Norway has today the highest number of skilled immigrants in Europe. Without these immigrants, we would not have been able to maintain a satisfactory level of productivity.

So: What have we achieved when it comes to the management of energy resources? Let me mention one area, where we have come much further than most people believed possible: Renewable energy.

The EU Renewables Directive, which is also relevant to the EEA countries, means that a country like Norway will increase its share of renewables by up to 67.5 per cent by 2020. We will do this in cooperation with Sweden, through the Green Certificate Scheme. To my knowledge, this scheme is the first cross-border support scheme for renewable energy to have been established between two countries in Europe. The scheme is not only beneficial for the environment, but also for industry, as it provides a stable and predictable framework.

On the issue of energy security, I believe the Baltic Sea Region is on the right track. But there are still grids and infrastructure that need to be put in place to ensure more diversified access to energy for all. All countries in the region should help contribute to this aim.

This leads me to the third factor: environmental sustainability. There is a growing understanding in the Baltic Sea Region that future development must be based on sustainability. Whether this is in the exploitation, production, use or saving of energy, in industry, agriculture or in our daily lives. Green growth is clearly needed for environmental and climate reasons. But it also has great potential for creating new jobs.

The climate and environmental challenges we are facing are enormous. I have in mind the polluted state of the Baltic Sea, in particular. But also on land: the places where people live, where children grow up. The region needs to focus on sustainable urban and rural development, on sustainable consumption and production and not least on innovation and education for sustainable development. Baltic 21, for instance, has been successful in working for sustainable development in all sectors of the region.

The Baltic Sea is a major shipping route, with growing vessel traffic, for the transport of goods as well as passengers, including cruise tourists. There are around 2 000 ships at any given time in the Baltic Sea and the number of ships entering and leaving the area increased by 20 % between 2006 and 2010.The Baltic Sea is thus crucial for economic development of the region.

However, the same applies to shipping as it does to other sectors: future shipping in the region must be "clean" and "green"; we must invest in "clean shipping", and it must be made competitive. This will take time, but we are on the right track.

Appropriate targeted incentives should be introduced. New regulations from the International Maritime Organization (IMO) on emissions to the air from vessels in the Baltic Sea will be in place from 2015–16.

In general, Norway supports all technological solutions which meet the new IMO requirements for the maritime industry in the Baltic Sea. However, during our CBSS chairmanship, we wished to place particular emphasis on exploring one of the most promising alternatives: Liquefied Natural Gas (LNG) as fuel for ships. By using LNG, sulphur and particle emissions are eliminated, and emissions of nitrogen oxides (NOx) are reduced by 90 % compared to conventional fuel. And, as an added bonus, CO2 emissions are reduced by around 20 %.

We believe that the Baltic Sea has the potential to become a pilot area for the use of LNG or other environmentally-friendly fuels in Europe for many reasons:

this is a region with strong and innovative maritime industries and traditions, the distances in the Baltic Sea are ideal for short sea shipping, with several fixed routes for cargo and passenger traffic, cooperation on maritime issues between the Baltic Sea states is close and productive.

Let me now turn to the fourth and final factor regarding regional success: Eliminating differences in economic and social development.

The grave financial situation of many European countries and soaring unemployment rates is leading to demographic problems.

Mobility is generally an advantage for the labour market. But what we are witnessing now is that many people are leaving their rural homes, acquiring new skills, and then not returning. In some countries the number of people leaving is so substantial that the population is drastically reduced.

These countries stand to lose two of their most valuable comparative advantages: low-cost labour and valuable skills.

But they also risk losing another essential element: Faith in the political system. 15-20 years ago, we often heard harsh criticism of Norway's political model: Our taxes were too high, our unions were too strong, our financial elite too small. Norway, they claimed, would simply never be able to make it in the global economy.

Today, the critics have fallen silent. In fact, they now look to the north to learn how sound economic management, secure jobs and education for all result in a high level of value creation. The Nordic welfare model was a main topic at the World Economic Forum in Davos in 2011.

In our region, we are all struggling with challenges such as aging populations, pension obligations and increasing healthcare needs. It is no coincidence that demographic developments in the region were one of the main topics for discussion at the Council of the Baltic Sea States' (CBSS) prime ministers' meeting in Stralsund last June.

But despite challenges and crises, let us not forget that over the last 20 years the Baltic Sea Region has succeeded in ironing out some of its economic disparities – as well as social and political differences. The rule of law is today a guiding principle – improving the predictability, stability and the climate for business and cross boarder activity in the region.

Through the EEA and Norway Grants, Norway helps to reduce social and economic disparities in all the newest EU member states. In our region we cooperate with Poland, Estonia, Latvia and Lithuania on a wide range of projects concerning environmental affairs, sustainable development and support to civil society.

Our region has the instruments, the resources and the ideological and intellectual capacity to make the necessary progress, in both economic and social terms. We must continue to work together to consolidate the principles and values we share.

Thank you.