Serbia and the Three Seas Initiative

Date: December 13th 2024

Аuthors:
Vuk Velebit, Pupin Initiative
Andrej Cvejanov, Pupin Initiative

What Is the Three Seas Initiative?

Regional Cooperation Platform: The Three Seas Initiative (3SI) is a regional cooperation platform that brings together 13 EU members connecting the Aegean, Black, and Baltic seas. Members include Austria, Bulgaria, Croatia, Czechia, Estonia, Greece, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia. It was created in 2015 at the initiative of Poland and Croatia in order to increase interconnectivity in Central and Eastern Europe through joint transport, energy, and digital infrastructure projects, encountering support from Washington and Brussels because of the initiative’s potential to advance integration of a traditionally underdeveloped region.

Important Mission, Mixed Results: The Three Seas Initiative operates without formal institutionalization, relying instead on a soft governance model centered on yearly summits, business forums, joint projects, and cooperation through the Three Seas Initiative Investment Fund. While results have been mixed, with the fund falling short of its €5 billion target and varying levels of financial commitment from member countries, the initiative addresses a critical gap: the lack of North-South infrastructure connections in Central and Eastern Europe, where most infrastructure aligns with East-West corridors. Originally envisioned as an alternative to China’s Belt and Road Initiative (BRI), it has not yet reached the scale to be considered a direct competitor. That is bound to change in 2025.

Revival Is On the Horizon

Trump’s Second Term: Donald Trump’s second term will likely bring stronger cooperation with Eastern Europe as part of a strategic effort to counter Russian and Chinese influence while protecting American interests. Eastern European nations have shown a willingness to increase defense spending, modernize their militaries and take a proactive approach in increasing the region’s security, while also having growing economies and a large demand for energy and transport infrastructure development.

A Worthy Partner In Security: The Three Seas Initiative’s security component has been on the rise since Russia’s invasion of Ukraine and all member countries except for Croatia and Slovenia have reached the target of at least 2% of GDP spent on military spending, while members like Greece, Poland and the Baltic states are leading the continent in defense commitments.

One of early supporters of the Three Seas Initiative, President Donald Trump could use the somewhat forgotten forum as an important platform for his Central and Eastern Europe policy. There are several reasons for this:

1. Advancing American Energy Interests: The LNG terminal on Croatia's Krk island, a successful 3SI project, shows how the initiative can reduce the region's reliance on Russian energy by increasing access to American gas through infrastructure investments.

2. Competition With China: The Three Seas Initiative provides a vital opportunity to counter China’s Belt and Road Initiative in Central and Eastern Europe without intensive American involvement on the ground.

3. Reconstruction of Ukraine: Encouraging reconstruction of Ukraine under the umbrella of the Three Seas Initiative would help post-war Ukraine’s European integration through regional interconnectivity-focused investments in infrastructure, strengthening both Ukraine and Eastern Europe in the process.

4. Reaching A Lucrative Market: The Three Seas Initiative’s projects are centered on energy, transportation and digital infrastructure and aim to create a more connected, efficient Eastern and Central European market, providing ample business opportunities for the USA.

5. Strengthening NATO’s Eastern Flank: The Three Seas Initiative aligns with US strategic goals to increase security in Central and Eastern Europe, serving as a complementary framework to NATO by reinforcing infrastructure critical to military mobility and defense readiness in the region.

Why Serbia Fits Right In

Geopolitics, Culture & Post-Communist Market Economies: It only takes a glimpse of the Three Seas Initiative’s map to see why Serbia would be a valuable member. Serbia’s central position makes it a natural bridge connecting Central and Southeastern Europe, and having it as a 3SI member would help solidify the north-south and east-west axes of the initiative. The list of things Serbia and many Three Seas Initiative members have in common is long, including shared Slavic roots, similar cultures, a history of communist oppression and underdevelopment of infrastructure, as well as high economic growth and increased defense spending.

Bridging Gaps & Helping Serbia’s EU Effort: Serbia’s inclusion would bridge gaps between Central Europe and the Balkans, creating a more connected and lucrative regional market that would provide bountiful investment and trade opportunities for all 3SI countries. The European Union also has its reasons to support Serbia joining the Three Seas Initiative. It could serve as a powerful catalyst for aligning the country with EU standards, and give Serbia an opportunity to demonstrate its commitment to adhering to the European regulatory frameworks and values.

Benefits For Croatia & Poland: Two countries that led the effort to create the Three Seas Initiative, Croatia and Poland, also stand to benefit from Serbia’s hypothetical membership. Serbia’s strategic location provides a link between Croatia and the Black Sea, facilitating the creation of efficient transport and energy corridors. Projects such as modernized railways, highways, and pipelines traversing Serbia could boost Croatia’s role as a gateway to the Adriatic and expand its economic reach into Southeast Europe. Serbia’s 3SI membership would extend the north-south transportation and energy corridors southward, increasing Poland’s connection to the Adriatic, Aegean, and Black Sea regions and bringing it larger market access

Serbia’s Foreign Policy Alignment Should Be the Goal, Not An Obstacle

Addressing the Elephant In the Room: Foreign policy is the first and most significant concern that comes to mind when assessing whether Serbia belongs in the Three Seas Initiative. At first glance, one might consider Serbia's foreign policy engagement as merely a component of its EU accession negotiations. However, the distinct processes involved in integrating into the world's most complex supranational organization and joining a regional cooperation framework like the Three Seas Initiative requires a nuanced approach. This distinction is especially critical in light of the shifting geopolitical landscape and the potential implications of Serbia's participation in the Three Seas Initiative for its broader foreign policy orientation.

Opportunity For Dialogue With Sceptics: Several members of the Three Seas Initiative (3SI), particularly Croatia and the Baltic countries, have expressed reservations about Serbia's EU membership, viewing it as potentially at odds with their key priorities. However, would Serbia’s inclusion in the 3SI pose a similar challenge? The current dynamics of the Initiative suggest otherwise. On the contrary, Serbia's participation could serve as an opportunity to enhance bilateral cooperation with concerned member states, address their legitimate concerns through dialogue, and foster joint efforts on projects that diminish Russian influence in the Western Balkans.

Laying the Groundwork For Realignment Towards the West: Brussels and Washington should view Serbia’s potential Three Seas Initiative membership through the same lens. Serbia has already made strides towards fuller alignment with the West over the previous year with numerous strategic decisions such as acquiring Rafale fighter jets from France or signing energy and critical material partnerships with the United States and Germany. There is an upward trajectory in Serbia’s relations with the West and it shouldn’t be overlooked when assessing whether Serbia should join the 3SI. Three Seas Initiative membership would lay the groundwork for Serbia’s further shift towards the West by prioritizing interconnection and partnership with countries the Serbian public views as friends, such as Greece, Hungary and Romania.

Serbian Membership Or Partnership And Worries Over Funding

Simple Way To Become A 3SI Member: Becoming an EU member demands years of extensive reforms and negotiations involving the coordinated and formidable effort of thousands of people. There’s not a country that understands the grueling effort European integrations as well as Serbia does, and that’s why the Three Seas Initiative membership process would be a refreshment for Serbia - it doesn’t exist. Formally, getting all 13 3SI members’ approval would be enough for Serbia to become a member.

Strategic & Regional Partnerships: Asides from full membership, other countries can get involved as strategic or regional partners. Strategic countries include the United States, the European Commission, Germany, and Japan, with the United States being the biggest backer of the Initiative. For example, in December of 2020, the United States International Development Finance Corporation (DFC) approved a $300 million investment into the Three Seas Initiative Investment Fund.

Serbia Should Become A Member: Ukraine and Moldova have recently become regional partners of the Initiative, but they are far behind Serbia when it comes to European integration and most other metrics and it wouldn’t make sense for Serbia to become a regional partner considering its far more similar to 3SI members.

Worries Over Funding: The trouble arising with Serbia’s Three Seas Initiative membership lies in funding. 3SI projects are partially funded by the EU, and as a member, Serbia couldn’t access these funds as it is not an EU member. This obstacle could be circumvented in different ways. If Brussels’ regulations permit, a portion of funds allocated for infrastructure in Serbia under the Growth Plan for the Western Balkans could be directed towards 3SI projects. Given the flexible governance of the Initiative and the support from Brussels, it is entirely feasible to structure project financing so that funds designated for EU members are not allocated to components involving Serbian participation.

Why Should America Care About It?

Important Security Implications: The United States stands to gain significantly by further supporting the Three Seas Initiative, particularly through actively advocating for Serbia’s inclusion as a member. 3SI has potential to bring Serbia closer to the West and EU by creating strong partnerships with 3SI members. With Serbia as a member, the Three Seas Initiative could successfully complement the European Union and NATO in maintaining stability in the region and decrease the need for American involvement on the ground. As NATO membership is unlikely at this point in time and while EU membership is getting closer, but still isn’t on the table, Serbia is formally isolated from the Euro-Atlantic security system and making it a part of the Three Seas Initiative would make sure the present trend of Serbian military cooperation with the West continues while still maintaining Serbia’s official policy of military neutrality.

Shifting the Focus Towards Economic Cooperation: Enhancing stability in the Western Balkans would allow President Trump's incoming administration to direct greater attention to its core priorities, particularly fostering economic opportunities. Serbia’s 3SI membership would do a lot in this regard. Due to its size and position, Serbia is the key to the Western Balkans market’s integration into the European market and its 3SI membership would significantly accelerate the process, providing a lot of opportunities for the United States. Investments in energy infrastructure could also help reduce Russian dominance in gas supply by promoting the import of LNG from the United States. Moreover, Serbia’s participation in the 3SI could encourage a strategic shift away from its heavy reliance on China for infrastructure development.

Making It Happen

There are several key steps which should be taken by different actors in order for Serbia’s membership in the Three Seas Initiative to materialize.

1. An Endorsement From Washington: Since the future success of the Three Seas Initiative depends on the new administration’s dedication to it, an endorsement of Serbia’s 3SI membership by President Donald Trump would provide more than necessary momentum for Serbia.

2. Serbia Has To Decide: Serbia needs to make becoming a 3SI member a strategic goal and communicate its intention to the public transparently and with clarity in order for its membership to happen.

3. Approaching Key Allies: In case of 3SI membership becoming a strategic goal, Serbia should approach member countries that could provide most diplomatic support to Serbia's membership campaign.

4. Starting Tough Conversations: Immediately upon deciding to pursue 3SI membership, Serbia should initiate an increase in bilateral engagement with the Baltic countries and Croatia in order to gain a better understanding of their concerns and potential remedies. This should be done regardless of 3SI, as it also matters for Serbia’s EU membership.

5. A Diplomatic Offensive: Serbia would need to put in a great diplomatic effort in order to gain support of 13 current members crucial for 3SI membership, and draw endorsements from other members of the EU.