Three Seas Talks – Hannes Swoboda, PhD, President of the International Institute for Peace (IIP)

Stefan: Hi, everyone. This is a Three Seas podcast series with experts from each and every one of the 3SI countries. I’m Stefan Tompson, your host, and today I am with Hannes Swoboda from Austria. Hannes, maybe we could start with a brief introduction about you. Could you tell me about where you work, what your work consists of what you specialize in?

Hannes: Well, I’m Hannes Swoboda. I am now a president of the International Institute for Peace, but also a president of the Vienna International Institute for Economic Studies. I have been for many years, decades even in politics in Vienna and then in the European Parliament. My main focus has always been politics, but also economics. I studied economics and law at the University of Vienna. Of course, Europe is still my favorite subject in many respects. So, I’m very happy to join you at this broadcast.

Stefan: Thank you. Maybe we could start with the Three Seas. It is obviously such an interesting concept. We have these states located between the Baltic, the Adriatic and the Black Seas. One of the main core elements that unites all of these countries is their experience with communism. In that regard, Austria is a bit of an outlier. Could you give me your perspective on the Three Seas and the beginning of this concept from a sort of political angle? Why did Austria choose to join? Would you agree that Austria slightly stands out from the rest of the countries?

Hannes: In a way, yes. Of course, Austria has not, fortunately, had that communist experience many other countries in Europe had. We were quite lucky that the Soviet troops left in 1955 after occupation, together with, of course, the Western powers. That gave Austria a neutral status, not only in legal sense; Austria also chooses not to be involved in critical issues like now with the Ukraine war. On the other hand, we are in the center of Europe, amidst many other countries. We lost our access to the sea after the WW1. But we are not very far away from the Adriatic Sea.

We are a bit in between, we are a bit outside. I think our self-orientation is towards our neighborhoods in the north, east, west and south. We define ourselves sometimes as a bridge. Bridge is not a very comfortable area to stay in, but this allows us to have good relations with all our neighbors – good economic, political and, very often, human relations. We also have immigrants from many areas, especially from southeastern Europe. So, we are not on our own in that sense. We are very well connected to our neighborhood.

Stefan: It’s an interesting idea, this idea that Austria is a bridge. I do sort of agree with that. I’ve been to Vienna a few times, and this description definitely fits. There is one incredible place [I’d like to mention]. Just a brief anecdote about my time in Austria, Vienna. I’m sure you know it, of course. There’s an incredible cafe called Central Cafe, in which in January of 1913 sat Joseph Tito (who later ran Yugoslavia), Adolf Hitler (obviously, we know who that was), Sigmund Freud, but also, Trotsky, who eventually went on to lead the Bolshevik Revolution. It’s such an incredible meeting place, the living room of Europe; Vienna really does still have that feeling. It’s an incredible city, it’s an outstanding place.

So, [what you said] is very interesting. I do agree with that. Another thing I want to ask you about: from the perspective of geopolitical experts in Poland and other countries that I’ve spoken with, there have been some sort of reticence towards the Austrians, since they don’t share our experiences. They’ve got a different GDP per capita, they’re far wealthier, they haven’t had their development hampered, so there’s this feeling of lack of trust. Rather than looking at the Austrians as a potential kind of negotiator, this bridge that connects us. Is that something that the Austrians experience in their relations with your partners to the east?

Hannes: Yeah, I would say yes. On the one hand, of course, we have that history of being the center of Austrian Hungarian monarchy, which not only consisted of Austria and Hungary, but also countries that came later: Czechia, Slovakia, even part of Poland, and of course the Balkans. So, it’s a mixed experience.

One side, of course, it is positive. We have been this multicultural, multireligious empire with much respect towards the different languages and so on. On the other hand there was this semicolonial approach, in a way we treated other people, especially from the eastern part. The German speaking minority in that empire was very proud of their cultural and economic progress, and prosperity. So, it’s a very mixed picture, which you can still in Europe, in Austria and Vienna. On the one hand, many foreign people live and work here. On the other hand, we are not always very respectful to our neighbors and to our immigrants.

Stefan: Going back to the broad concepts… What do you think are the main challenges towards making the Three Seas happen? There was a conference recently that I was at. I was moderating a panel with a number of the experts, actually, the experts I talked to in these podcasts. The Austrian ambassador to Poland arrived and he said very brutally “the truth is the 3SI doesn’t exist, it’s just an idea”. I think that’s an interesting approach to the issue. In many ways, when I look at it the Three Seas is a great idea. It’s a phenomenal idea, especially to us in Poland and certainly to our partners from other countries with similar experiences. It’s this idea that we have this opportunity to get this historic justice and to catch up, to rebuild this infrastructure on the north south axis instead of just being a transit zone between East and West.

But actually, when I look at it from a nonromantic point of view the 3SI has a very long way to go. The money in the 3SI investment fund is not enough to cover even 1% of the projects that are outlined as part of this great big plan. So my question to you is: with this sort of stereotypical Austrian pragmatism in mind, what’s your perspective on this?

Hannes: I think things have changed, especially with the Ukrainian war. Of course, nowadays everybody says all things have changed because of the Ukrainian war. But if you look at it geographically and politically, Poland’s importance grew, at least on this side of the European Union. [The war also reinvigorated] the EU enlargement question, [in which I’m particularly interested], since I am dealing very much with the Balkans and the issue of their potential accession to the EU.

Poland right now is also speaking in some way on behalf of Ukraine and Ukraine hopefully will remain an important country in the Black Sea. [In the Three Seas] your focus is on the North-South connectivity. The EU enlargement is oriented towards east, meaning Ukraine and Moldova, and southeast, meaning the neighbors of Austria and Croatia in the Balkans.

This question of North-South connectivity has gained a new impetus due to unfortunate, terrible aggression of Russia against Ukraine. So, I think, yes, [the Three Seas] is still an idea and not a real, concrete project. But I think that if you look into the future infrastructure of that wider Europe, including energy infrastructure, gas pipelines, maybe future pipelines for hydrogen and so on, I think it has a future. It’s an idea that has a future and it could become stronger and more important in the future because of the terrible aggression of Russia against Ukraine, and it’s continued interference in Moldova.

Stefan: From a sort of leadership perspective, one of the accusations towards Poland is that the Three Seas Initiative is a revival of the Pilsudski’s Intermarium vision, of essentially bringing Poland to this leadership position in Central and Eastern Europe. By virtue of its size, its economy, and even its population in comparison to the other eleven members that form the Three Seas Initiative, Poland obviously has been the spiritus movens of the Initiative.

How do you see this from an Austrian perspective of a wealthier country? How do you look at this? Is there some sort of dissonance that you are part of this geopolitical initiative that is in a sense Polish led? I’m not sure how to phrase it in a way that isn’t too crude or that simplifies the concept that I’m trying to bring out here. I don’t know if you understand where I’m getting at….

Hannes: Yeah, I understand. Of course, there was some skepticism. Let’s be frank, looking at some of the politics of the present Polish government there was even additional skepticism. On the other hand, if you look long term, governments come and go. The Polish government has some policies that I don’t like and some that I very much like. And due to what the government does now [with Ukraine], of course they get a stronger position [in Europe]. We cannot judge initiatives based only on our attitude towards the governments that proposed them, we have to judge them based on their long term perspectives.

If the Initiative would be outside the EU framework, then I would be skeptical. But you see, Germany  – one day it’s a leading country, the next day it’s weak. People say that now a rebalancing is happening inside the European Union. You don’t have one country that is the leader in all respects. You have initiatives, which sometimes are stronger, and sometimes weaker, but because Austria and other EU countries are participating in them, they matter. All EU members have the same voting rights in European institutions, of course, depending on the size.

So, I don’t see a problem if a country like Poland takes an initiative. That does not mean that it is dominating the others, that is enforcing on others certain kind of policies. No, we are far away from that because what we now see in Europe, and that’s also one advantage of the European Union, is that you don’t have two or three leaders to which all the others have to adapt. No, even small countries can have their own initiatives, have their own voice and find allies to cooperate with to counter stronger and more dominant countries.

Stefan: It’s an interesting perspective on the European Union. I haven’t thought about this problem or this topic sufficiently. It is true certainly from the perspective of Poland. I lived in for many years in the United Kingdom, so I’ve also heard this debate from the British side as well. It’s interesting because in the European Union there does seem to be a very strong influence of German financial capital. It’s just such an overwhelmingly dominant force that it does play a very strong, strong role in the European Union even despite the power of veto of member states and the process of unanimity. It’s an interesting point you bring up, that that this idea of German hegemony in the EU might not necessarily be as accurate as people portray it.

What do you think in terms of just economics? I mean, geopolitical or political alliances are incredibly dependent on the economic power that they have. Ultimately, if you look at the twelve three seas nations combined, their economic weight is still outperformed by Germany or by France. Can it essentially become a meaningful political,geopolitical alliance without the necessary capital?

Hannes: Yes, because I think Germany also has an interest in it. At least, Germany has always had an interest in the Eastern partnership. Of course, there was this element with Russia, which is now decreasing. Germany knows that it has to have a good relationship with its Eastern partners. Even more now because the East for the moment stops at the borders with Russia. So, I think its interest is to have in the east strong economic partners, from Poland towards southeastern Europe. You can see that Olaf Scholtz is now very much engaged in this region, the same is even more true for France. France was always very hesitant about its engagement in this area and now is getting more engaged. You could see the example of that at the recent summit in Tirana between EU and Western Balkans. So I think there is some new orientation or reorientation towards these eastern countries who are more or less involved in the 3SI initiative. And with that reorientation money will come, especially for the infrastructure.

As I said before, the energy infrastructure is vital for the economic well-being of all of us. Even strong France has now difficulties because of the disrupted energy supplies in their own country. What we need is a European energy system where the flows can go in every direction, whenever it is needed. Of course, it means that we first have to have enough energy, only then we can speak about the distribution.

Nobody can win economically inside Europe, unless we are all winning more or less. Even now the European Union is giving money for the energy sector in the Western Balkan countries. So, I think yes, it is possible [to succeed without own capital]. Of course, you will never catch up totally, but there is a strong support [for the development of the Three Seas]. Poland is the best example how much you can gain from membership in the EU, just look at the economic differences between Poland and Ukraine.

Stefan: You mentioned the funds coming from Germany and from the European Union, which would make a lot of sense. It’s a very obvious source of funding. Obviously we are all members of the European Union as the 3SI participation is conditional on being in the European Union. In Poland many certainly look to the United States of America [for support]. There is an argument that essentially as a poorer economy and also a NATO eastern border country, essentially we are forced by our geopolitical conditions to seek American protection.

Some argue that we should build our axis on Berlin and Brussels, but the current [Polish] government is very keen on building a very strong alliance with Washington. Certainly, many of the political elite today in Poland seem to think that the financing for the Three Seas should come mostly not from Germany or from the European Union, but from other partners outside of Europe, especially Washington, but also Asian countries. Some have even argued for countries of the Persian Gulf. What do you think of that sort of realigning? Certainly, Poland has been realigning its defense and leaning in very heavily on Washington. I think that’s just a political reality that we have today. What’s the Austrian perspective on that?

Hannes: It would be very pragmatic on this issue. If you look, for example, let’s say Mr. Trump is coming again, what does it mean for NATO? What does it mean for the alliance?

I think we should not rely on any outside country too much, but to be pragmatic. The US is currently supporting and defending us, especially concerning the war in Ukraine, but the Republicans already signaled that this might change. Maybe at the end of the day they will continue their support, but you never know. Inside the European Union, we make such decisions together.

As for the countries of the Gulf… Yes, we should not exclude them, but we should be careful not to end up too dependent on outside sources. We must seek balance. See for example, what’s happening in the Balkans. Serbia is too dependent on Russia, as well as on some of the Emirates and the countries of the Gulf. Let’s have a balanced engagement, a balanced financing from the European Union, the US and other countries. I’d not exclude any potential financing for the Initiative, unless it has too many strings and conditions attached. But let’s ensure that this mix is reasonable and does not sense create new dependencies. Because we see dependencies, including on China, as not good. They want to invest and be part of our international global connection? Good. But if it means that we are too dependent on them, it would not be good.

Stefan: Yeah, when you were talking about Serbia I wanted to ask you about the Chinese element. You mentioned reliance on Russia and reliance on some emirate countries. But the Chinese link is very interesting. It’s very interesting to have seen what some countries, small countries like Lithuania have done, for example. A very hard-line approach on China with very strong partnership with Taiwan. There was obviously the 17+1 initiative that turned into, I think, 16+1. I think it might even be 15+1 now, I’m not sure about that. Definitely some countries are not all that keen on partnership with China. There’s a lot of skepticism towards that. Is there a lot of skepticism towards China and Chinese investment in Austria?

Hannes: We don’t have that much investment from China. I was always very critical about this 16, 17+ format, because I think that the European Union is strong enough to have relationship, pragmatic relationship [with China].

I think the major political and economic war which now is at stake is with Russia. We don’t need another war with China or to be “at war” with everybody. There’s now a big aggression against Ukraine, against Europe, by Russia and we have to deal with it first. We have to find ways to make other countries, from China to India to South Africa to Latin American countries, at least understand what is at stake. And convince them to not help Russia, even if they are unwilling to fight against it or introduce sanctions. We have to be pragmatic here.

But I think that any kind of strong influence by any outsider, especially a big one, of course is bad. In this context, I think that any kind of legislation of the European Union which says we should refrain from inviting China into critical infrastructure and critical companies is good.

Stefan: Sort of a practical question: what are the next steps that could be done by the region to actually bring it from the realm of paper ideas into reality? Where do we go from now?

Hannes: I think, first of all, we would have to define the priorities where we would like to bring forward the idea. I think energy is obviously one of the priorities in the short term, meaning what kind of infrastructure we need for hydrocarbons as long as they are used and has to be used. And then of course for the energy transition and direction of sustainability and so on.

I think the second would be a common industrial policy we need to have because we are competing not only within Europe but with the rest of the world. Especially concerning is the question of raw materials, where we have to have a good supply of those raw materials, that we need for the energy transition. I think these are the major political and economic aims on the table.

Now, we have to think about what can be done in our region. Common infrastructure from transport to energy, I think, is for me the major element needed to strengthen the region economically. Therefore, we have to ask ourselves what would encourage investors, make them interested in investing here. Investors certainly need peace and stability in the region. We also need to figure out what kind of investment mix we can have from European sources, US sources, emirates, etc. We need to be certain that we know how to make our future financial structure feasible and viable inside Europe. We could be a good example how to bring different investors together without creating new dependencies. That, I think, is the major challenge.

Stefan: A final question… You’re probably one of the older people I’ve spoken to from the region and one of the older experts that I’ve discussed this issue with. Are you optimistic about the future of the region, the Three Seas and Central-Eastern Europe in general?

Hannes: Yes, I’m optimistic in the sense that we are in a transition period. The West, so to say, has more established democracies and after the II World War it benefitted from the US support. The Eastern part had a different history. If you look at some of the countries, they had not much democratic experience even after WW1 and then they ended up in a horrible situation after the WW2, so we have to give it time.

I am very grateful for the Polish initiative, because Poland is one of the strongest country [in the region]. I am optimistic that more and more countries now know which direction they have to follow. Thanks to Russian it has become clear which path is not the right one, even if some countries like Serbia still have this ideological orientation towards Russia. Overall I think, and here Poland can have a big role to play, that countries of the region will develop towards more mature democracy, towards economic well-being, towards energy and climate transition. Yes, absolutely I’m optimistic, but they need some time.

Stefan: It was very good to hear, thank you so much for your time, much appreciated.

Hannes: Thank you so much for this interesting talk.