Georgette Mosbacher is U.S. ambassador to Poland.
The coronavirus pandemic has not only imposed tragic humanitarian costs on our societies, it has also broadsided our economies. The shutdown of cross-border travel and commerce is expected to cause global GDP to shrink by between 3.0-5.5 percent this year. The eurozone is project to see a slump of between 7.5-10.5 percent. The crisis has demonstrated that economic connectivity is vital. As U.S. Secretary of State Mike Pompeo travels to Central Europe this week, we will be looking for ways to work together with our NATO allies and partners across Europe to rebuild economic prosperity by working together.
The transatlantic community needs a plan to restore growth to our economies and to do so in ways that leverage our strengths, the most important of which in this case is the power of our private sectors. A key element of that transatlantic economic recovery plan should be the Three Seas Initiative, an effort to accelerate the development of cross-border energy, transportation and digital infrastructure in the region between the Baltic, Black and Adriatic Seas.
In a region still suffering from inadequate connectivity and lacking infrastructure, such projects can be important job creators and can drive near-term recovery and long-term growth. By leveraging the power of combined action to foster connectivity, strengthen energy security and drive economic growth and resilience, the Three Seas Initiative will ensure that European economies emerge more cohesive and resilient.
Acting alone, individual Central European countries are limited in their ability to attract capital. Together, the Three Seas Initiative nations constitute 111 million people and a GDP of $1.7 trillion. That combined geo-economic power is significant and has the potential to generate substantial interest from private sector capital around the world.
The Three Seas Initiative is an effort in which Central European democracies are independently bringing strategic value and opportunity to the transatlantic community.
A central element of the initiative is the Three Seas Initiative Investment Fund launched by Poland and Romania. The fund will direct capital to jump-start long overdue multinational infrastructure projects in the region. Estonia, Latvia and Hungary recently pledged investments in the fund and other Three Seas countries are expected to follow. The fund will operate on a purely commercial basis, making investments without political interference — even from its shareholders — into regional projects that promise commercially competitive rates of return.
In February, Secretary Pompeo announced that the United States intends to provide up to $1.0 billion in financing for the Three Seas projects, via the Development Finance Corporation. We hope this investment will motivate the public and private sectors to join us in further transforming the region through exciting investment opportunities. Western investment in the Three Seas region strengthens the transatlantic relationship and binds our free-market democratic societies even more closely together.
By pooling investments into a commercially managed infrastructure fund, Three Seas countries and their partners are not only demonstrating confidence in their region’s economic potential, they are also leveraging the power of private capital. The fund will be a powerful beacon that highlights the economic potential of Central Europe and enables the region to more effectively tap into the more than one trillion dollars of foreign direct investment circling the globe each year seeking opportunities for secure and profitable returns.
The initiative also provides alternatives for the Three Seas countries to strengthen their infrastructure without turning to the People’s Republic of China, whose money always comes with strings attached, or to Vladimir Putin’s neo-imperialistic Russia, which uses energy deals to demand fealty, create dependence and extend its malign influence. Letting communist China or Russia take advantage of the COVID-19-induced economic challenges in the Three Seas region is not an option. Instead, we must see these challenges as an opportunity to spark even greater Western investment in the region and build upon our trusted relationships.
The Three Seas Initiative is an effort in which Central European democracies are independently bringing strategic value and opportunity to the transatlantic community. It provides an innovative way to leverage their economic potential to benefit all of Europe, by generating growth and business opportunities, reinforcing economic resilience and creating long-needed North-South Corridors essential for Europe’s security.
To this end, it is incumbent upon Western Europe and Brussels not to neglect the economic contrast between East and West, to develop policies that respect the noble drive toward solidarity and to understand the economic realities that differ so much between Western and Central and Eastern Europe.
From a U.S. perspective, a more prosperous, economically resilient and secure Europe is a Europe that can be an even better and more capable partner when it comes to addressing the challenges and opportunities of our time.