As Kaliningrad's neighbors prepare to join the EU and NATO, one expert predicted it will become a point of entry into the EU for many of Russia's social ills.
Lithuania's former independence leader Vytautas Landsbergis, meanwhile, said the EU is buying regional stability by consenting to Russia's destruction of Chechnya.
Verhofstadt was touring the Baltic states as Belgium prepares for its presidency of the EU later this year. His comments coincided with the visit to Moscow and Kaliningrad of the EU's Commissioner for External Affairs, Chris Patten and Swedish Foreign Minister Anna Lindh.
Issues surrounding the future of Kaliningrad could be discussed at a summit meeting between the European Union and the Russian Federation to be held in Brussels in October, said Verhofstadt.
"It's most important to find solutions which are acceptable to all, including the Baltic states and the Russian Federation," he said. "The Kaliningrad question can't be allowed to slow up the Baltic states' entry to the EU."
Igor Leshukov, research director at the Center for Integration Research and Programs in St. Petersburg, says plans for Kaliningrad to become a free economic zone - the centerpiece of last May's intergovernmental summit in Copenhagen - have come to nothing. With Lithuania preparing to end visa-free travel for those moving between Kaliningrad and Russia, a lack of real reforms in Kaliningrad spells trouble for the EU and economic decline for Kaliningrad, he says.
"Russia is suspicious of making concessions and losing control over Kaliningrad. It has failed to come up with the expected draft protocol on creating a free economic zone. Last February's meeting in Nida, Lithuania, between Ivan Ivanov from the Russian Foreign Ministry, and his Lithuanian colleagues established important cross-border projects on AIDS, prostitution and organized crime, but this was not the free economic zone pilot project that it was presented as.
"If you improve border crossing arrangements without changing the nature of economics and politics in Kaliningrad, you provide easier access to the EU for all the bad things about Russian business. The EU is closing its eyes to systematic problems."
Atis Lejins, director of Latvia's Institute for Foreign Affairs, agrees that the EU lacks a clear policy on Russia. But, he says, the EU is not to blame. He believes that, until Russia joins the World Trade Organization and lowers import tariffs, cooperation will be limited to such projects as the cleaning of waste released from Kaliningrad and St. Petersburg into the Baltic Sea, a project currently receiving EU funding.
"EU policies towards Russia are largely decorative," said Lejins. "What else can it do? If the EU forgives Russia's debts it will spend the money on military development. Patten was right when he said we need less words and more deeds from Russia. If there are nuclear weapons in Kaliningrad that will put a full stop to further progress. Kaliningrad is a test case for EU-Russia relations."
Lithuania's Foreign Ministry sees no shortcomings in EU policies towards Russia, says Petras Zapolskas, the ministry's press spokesman.
"Organized crime and other problems might arise from Kaliningrad, but it's a good challenge for neighboring states to cooperate to stop Kaliningrad from becoming a black hole," he said. "Diplomatic missions will be established to issue visas to all Russians wanting to come to, or through Lithuania. At the moment, we have no real information about nuclear weapons in Kaliningrad, but if the recent reports are true, we won't be less secure than before."
The Washington Times last week published a story attributed to anonymous U.S. intelligence sources detailing the movement of tactical nuclear weapons into Kaliningrad. Russian officials have denied the reports.
The possible nuclear threat is a concern to Landsbergis, the leader of Lithuania's opposition Conservative Party and a former independence leader.
"The presence of nuclear weapons in Kaliningrad is an anachronism intended to put pressure on the EU. We talk about Kaliningrad as a bridge between East and West, or as a future financial base like Hong Kong, but Hong Kong isn't a nuclear base. Kaliningrad is a litmus test. If these people want to be Europeans and cooperate with the EU, it's up to them."
Last month's decision to restore Russia's voting rights at the Council of Europe will not encourage reform in Russia, says Landsbergis.
"The EU didn't have the political will to put pressure on Russia," he said. "Chechens are being annihilated with the consent of Europe. They're being sacrificed in the name of global relations."
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