Completing Europe - From the North-South Corridor to Energy, Transportation and Telecommunications Union

Istanbul, November 21, 2014 (Newswire.com) - Economic growth and energy security are the backbones of the European Union’s resilience, but are both the weak spots in the chainmail of Europe. This challenge should be addressed by the creation of an integrated set of energy, transportation, and digital links, a North-South Corridor spanning across Central Europe, linking the Baltic to the Adriatic and Black Seas.

This is the central recommendation of comprehensive study of European infrastructure conducted by the Atlantic Council and Central Europe Energy Partners (CEEP) and led by former U.S. national security advisor General James Jones and Paweł Olechnowicz, the founder and Chairman of the Board of Directors of CEEP.

The North-South Corridor, spanning from the Baltic to the Adriatic and Black Seas, is critical to the creation of a single European market. Although the accession of Central Europe's countries to the European Union has contributed largely to the end of division of the continent, this task is far from finished. Europe's economic woes, as well as new security challenges add to the urgency of completing and consolidating the European integration. This is why reanimating, accelerating, and resourcing the project of a North-South Corridor of energy, transportation and telecommunication across Central Europe must be a top priority for the European Union and its Member States, as well as the transatlantic community.

Paweł Olechnowicz, the founder and Chairman of the Board of Directors of CEEP

The report was presented in Istanbul before a transatlantic gathering of government and corporate leaders. Jones and Olechnowicz argued that Central Europe is still burdened by insufficient infrastructural connectivity with Western Europe and weak North-South communication links. This is a legacy from the Soviet era, when intraregional infrastructural integration was actively prevented in order to maintain high levels of dependency on the Soviet Union. Consequently, Central Europe remains a set of inadequately connected national energy markets, isolated from the rest of the EU and exposed to a supply monopoly.

This dependence in Central Europe not only constitutes a supply-security risk, it also increases energy prices in comparison with the Western European market, which is well diversified and more liquid. The disadvantages of missing links are also manifest in the transportation and telecommunications sectors, in which Central European countries generally lag behind their western peers in terms of connectivity. For these reasons, Jones and Olechnowicz call for the reanimation of North-South Corridor.

“The North-South Corridor, spanning from the Baltic to the Adriatic and Black Seas, is critical to the creation of a single European market. Although the accession of Central Europe’s countries to the European Union has contributed largely to the end of division of the continent, this task is far from finished. Europe’s economic woes, as well as new security challenges add to the urgency of completing and consolidating the European integration. This is why reanimating, accelerating, and resourcing the project of a North-South Corridor of energy, transportation and telecommunication across Central Europe must be a top priority for the European Union and its Member States, as well as the transatlantic community,” said Mr. Olechnowicz.

According to the study,  Completing Europe – From the North-South Corridor to Energy, Transportation and Telecommunications Union, the Corridor would establish a powerful set of economic arteries, including energy pipelines and power lines, highways and railways, and telecommunication links extending from Poland’s Baltic coast through the Czech Republic, Slovakia, and Hungary, and to the coast of Croatia. This would largely improve the EU's economic integration and energy security, as LNG terminals and its networks of gas and oil lines and electricity grids would diversify the sources of energy for all Central European states.

Completion of the North-South Corridor also represents an opportunity to increase competitiveness and resilience, providing infrastructure that will enable Europe to compete more effectively in the global economy . Furthermore, raising infrastructure-investment rates along the axis of the corridor provides an effective stimulus to economic growth. Thus, the process of corridor development represents an important contribution to solving Europe’s current macroeconomic, fiscal, and monetary challenges, which include issues of competitiveness, the risk of deflation, high unemployment, and increasingly sensitive intra-EU migration trends.

The report underlines that the North-South Corridor should be approached holistically, guided by a vision that integrates gas and oil pipelines – including the critical development of the Backbone Gas Pipeline between Świnoujście (Poland) and the Krk Island (Croatia) – and infrastructure, electricity interconnections, rail and road networks, and telecommunications investments. The total costs of the projects identified in this report as strategically important and critical to the completion of the Corridor amount to an estimated €50.5 billion (€27 billion for energy, €20 billion for transport and €3.5 billion for telecommunications). These figures are only a small portion of the enormous infrastructure investment needs up to 2020, in the range of €1.5-2 trillion (or an average of €150-200 billion annually), outlined by the European Commission in 2011.