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The Atlantic Council of the United States

Nordic-Baltic Security in the 21st Century:
Continued Transformation Toward a Larger Role in the World?

The Regional Security Agenda: U.S. Perspectives

Welcome and Introduction:
Frederick Kempe,
President and CEO,
The Atlantic Council

Robert Nurick,
The Atlantic Council

Jonas Hafstrom,
Ambassador of Sweden to the United States

James Townsend,
Deputy Assistant Secretary of Defense for European and NATO Policy,
Department of Defense

Marie Yovanovich,
Deputy Assistant Secretary of State for Northern and Central Europe,
Department of State

Date: September 7, 2011 

Transcript by
Federal News Service
Washington, D.C.

FREDERICK KEMPE: Good morning and welcome to the Atlantic Council. I’m Fred Kempe, president and CEO, and I’m terribly pleased to see – to launch this conference on Nordic-Baltic security in the 21st century.

I was just talking to Ambassador Hafstrom – to Jonas – and saying, too often in this town, we focus on what’s going wrong in the world and the terrible need to fix it. And very often, we overlook the need to capture what’s going right in the world and leverage it to create a more secure world, a more prosperous world and a stronger Atlantic community. We’re debating a lot in the Atlantic Council right now what the new Atlanticism has to be and how we have to take the new Atlanticism into a century of enormous economic security challenges around the world, ranging from the eurozone to Libya, and work better together to tackle all of these things. And I think there’s no better example for the world right now of a relative success story than the Nordic-Baltic area, and also, that provides all sorts of opportunities for trans-Atlantic cooperation with that region.

The World Economic Forum’s competitiveness report is out today, and Sweden is number two in the world, just a hair beneath that very weak currency country, Switzerland. And the U.S. was third. And very tellingly, in the top 15 are all of the Nordic countries; Finland, seventh; Denmark, ninth; and Norway, fourteenth. There was, obviously, a terrible tragedy in Norway over the summer, but that put to the side, this is a really great regional story.

I see a lot of friends in the audience, including many of the ambassadors from the region. Thank you all for coming today. This conference is a capstone event of our trans-Atlantic initiative on Nordic-Baltic security. This yearlong effort grew out of a series of meetings over the last three years with senior leaders from the Nordic-Baltic region, including ministers of defense, foreign affairs, chiefs of defense, heads of government. We’ve tried to create the Atlantic Council as a platform for these regional leaders and cabinet members as a place where they can come not only to speak and speak to audiences but also to have private consultancies in something that we called strategy sessions. And we think that this has been a successful effort.

When we start something, we don’t ever want to do it – especially something this ambitious – as a one-off conference, as a one-off event or project. We really see this as an ongoing initiative to link Washington and North America more closely to the Nordic-Baltic region.

These meetings and dialogues made us realize that the region has undergone a fantastic transformation since the end of the Cold War, has come out of the financial crisis much stronger, obviously, than many other countries, and particularly other European countries, and that there was an opportunity for the region to further deepen its collaboration on security, defense and foreign policy issues and play a larger role, a leadership role in trans-Atlantic and global security in concert with the EU, with NATO and with the United States.

However, we also realized as we started in on this that this opportunity had not been noticed or acted upon in Washington. This is a very busy town. Attention spans aren’t always as large as we would like them to be, and we see this effort as also something that will focus the attention of Washington, the administration and institutions and departments in Washington on this region which we think is a really important side effect of what we’re doing.

So with the assistance of Sweden’s ministry for foreign affairs, we started the trans-Atlantic initiative on Nordic-Baltic security to raise the level of debate and attention to Nordic-Baltic security issues in Washington and, as I said, to provide a platform for dialogue between representatives and experts from the region and counterparts in Washington to provide policy-relevant advice. That’s what we are. We’re a policy shop; policy-relevant advice to the countries of the region and the United States on how we can specifically work to further deepen cooperation.

The conference today is the result of those deliberations, and you’ll see a compendium – I think many of you have already picked it up; if you haven’t, please do, it’s outside – that we’re releasing today that aggregates the best knowledge and advice that stem from this initiative. It ranges from the NATO role to the region’s role in the world to questions of energy security and a discussion of how the region emerging from these crises and from the Cold War stronger – what possibilities that raises.

I want to, therefore, also thank Ambassador Hafstrom, and I hope you also pass on our thanks to Stockholm and to Foreign Minister Carl Bildt, a longtime friend of the Atlantic Council and many of us. I also want to thank Henry Liljegren, a board member of the Atlantic Council, former Swedish ambassador in Washington, who brought our attention and riveted our attention to the transformation under way in the region some time ago and has played a real key role in the design of this initiative.

I also want to recognize our executive vice president, Damon Wilson, for his leadership and vision in bringing this initiative to fruition after having worked so closely with the region during his time in government and at the White House.

Last but not least, many thanks to council senior fellow Bob Nurick. I don’t know – where are you, Bob? Thank you so much for leading this initiative and, in particular, to our – one of our – a couple of our resident Swedes, Associate Director Magnus Nordeman, who has a rich understanding not only of the region but also a rich understanding of how Washington works and security things here work. And he’s been a great animator of this initiative and steady hand on the development and the substance of the initiative.

With that, I want to turn the podium over to Sweden’s ambassador in Washington, Jonas Hafstrom, to open up this conference.

Ambassador Hafstrom is a dear friend of the Atlantic Council, one of the most impressive strategic thinkers in the Washington diplomatic community. I turn to him for advice often.

Before coming to Washington, he served as the ambassador of Sweden to Thailand, a post that, at times, was very challenging due to the enormous Indian Ocean tsunami in 2004. He also served as the foreign policy adviser to the then-Prime Minister Carl Bildt, another close friend, as I said, of the Atlantic Council.

Thanks very much for your and your ministry of foreign affairs’ support. We’re so delighted to have you here with us today. The podium is yours. (Applause.)

AMBASSADOR JONAH HAFSTROM: Well, President and CEO of the Atlantic Council Fred Kempe, Deputy Assistant Secretary Jim Townsend, (Pentagon ?), Deputy Assistant Secretary Masha Yovanovitch, State Department, excellencies and distinguished guests and dear, dear friends, shortly after I arrived in Washington four years ago, the Swedish embassy hosted together with the Atlantic Council the Christopher Makins lecture in House of Sweden.

One of the outstanding guests in the audience at that time was Dr. Vike-Freiberga, former president of Latvia. I could hardly think of a better way to demonstrate to the Nordic-Baltic commitment to the trans-Atlantic dialogue than to stand here today with the President Freiberga here later on this morning and warmly welcome you to this seminar on Nordic-Baltic security in the 21st century.

Few statesmen can claim a trans-Atlantic post of her caliber. Throughout her life and career, she built bridges to the rest of Europe and across the Atlantic. And I cannot let this moment pass without mentioning the very special relationship between Sweden, Latvia and the Baltic states, a relationship to which President Vike-Freiberga have greatly contributed.

Actually, the capital closest geographically to Stockholm is Tallinn. The reality of this proximity became apparent in Sweden in the late ’80s as the cause for freedom for the Baltic republics grew louder. The Swedish people and leadership quickly started to build political and cultural ties to our eastern neighbors. In 1989 and 1990s, Sweden was the first country to set up local diplomatic offices in Tallinn and Riga, and later on in Vilnius.

Grassroots movements – these are called Monday movements – started to hold public meetings all over Sweden every Monday at noon under the slogan "We support the Balts." The meetings, which drew participants from all political parties and walks of life, continued until Latvia and Estonia declared restored independence in August 1991. Lithuania, as you all know, had already declared independence in 1990.

Looking back over the past 20 years, it is obvious that the process of preparing for the accession to both European Union and NATO has been the major factor driving political, economic and social reforms in all three Baltic countries. Today, you know, the three Baltic States have performed far better than any other area of the former Soviet Union. Despite the severity of the financial crisis the past few years, they have all become models of economic reform and financial stability.

The Nordic-Baltic security has been a cornerstone in Sweden’s foreign security policy for a long time. That’s why it wasn’t an easy – it was an easy decision for my government to support and join forces with Atlantic Council on this project. This report aims to raise awareness in Washington on Nordic-Baltic security issues.

Today, the Nordic region and the Baltic Sea region are characterized by stability, dialogue and cooperation. This is partly the result of the fact that all the Nordic and Baltic Sea countries, apart from Russia, are now members of the EU and/or NATO. It would be an understatement to say that the Nordic-Baltic cooperation is flourishing. And through this joint cooperation, we have more of an impact than we would have had as individual countries.

The project to deepen cooperation in security and defense policy in the Nordic region has begun, and we continue to work with a serious proposal made in the report written by former foreign minister of Norway, Mr. Thorvald Stoltenberg.

Directly to our north lies a challenge of growing significance. Baltic issues are increasingly important when it comes to addressing environmental security, emergency prevention and preparedness and response. Throughout the 20st century and continuing into the 21st, trans-Atlantic cooperation has been essential in creating security in our part of the world. The partnership with the United States that our region enjoys is evident in many areas. Defense cooperation and our history of hosting U.S.-NATO exercises are just a couple of examples.

We are grateful to the United States for the way the expansion of NATO has been handled, and we are indebted to the late Dr. Ron Asmus who, together with our friend, Bob Nurick, was instrumental in the Baltic efforts to join NATO. However, the trans-Atlantic cooperation requires the understanding of the political development and policymaking on both sides of the Atlantic Ocean. That’s why the political directors from the Nordic-Baltic countries and the United States, in their meetings – so-called EPINE – meet twice a year and cooperate in a highly productive way. However, this can be further enhanced.

The Atlantic Council efforts to provide a platform for discussions on Nordic-Baltic security in Washington is most valuable in furthering this cooperation. I would like to thank my friend, the president and the CEO of the Atlantic Council, for his strong leadership and the executive vice president, Damon Wilson, for making this important report possible.

I used to tell people back home that the Atlantic Council is one of the best think (tanks ?) in town, if not the best. And I’m confident, Fred and Damon, that the work done by the council has renewed Washington’s interest in the Nordic-Baltic region. Thank you. (Applause.)

ROBERT NURICK: Thank you very much. We’re going to get started right away with the first panel discussion. And we’re very fortunate to have, on my right here, Masha Yovanovitch, and on my left, Jim Townsend, to begin the discussions here.

Fred mentioned before that one of the reasons for our interest in the project in general was that a lot of interesting things were happening in the region, and we weren’t sure that people had noticed this quite as much in Washington as we think they should. Well, we have two people who have very certainly noticed it and have been dealing with it on a day-to-day basis.

If you go through the report that we’ve circulated – the compendium report – you’ll see that running through a lot of the – a lot of the papers are questions about – about the views in policies of the U.S. government, of the administration. What are its priorities in the region? Well, how does it view its interests in the region? What does it see as its main security challenges? What does it expect from the region?

We have two people here who are going to be – are going to educate us on these questions because these are the issues they deal with day to day. We’re going to start with Masha Yovanovitch, who has had a very, very interesting and diverse career in the State Department. In the early days, I’m told, she has been posted, let’s see, in Moscow, London, Ottawa and Mogadishu. She was DCM in Kiev. Before she returned to Washington, she was ambassador in Armenia and Kyrgyzstan. She has served in Washington as senior adviser to the undersecretary for political affairs. She’s been on the Russia desk. She’s been in the office of European security affairs. And as of June of this year, she has taken over as deputy assistant secretary in the bureau of European and Eurasian affairs with particular responsibility for the Nordic-Baltic region.

She will begin – she will be speaking about foreign and economic issues primarily. Jim will be speaking about hard security and defense. We’ll start with Masha. The floor is yours. Welcome.


Well, thank you for the invitation to come here and address you all. It’s always a pleasure to engage with the Atlantic Council. I see some old friends, obviously; new friends as well here. And I’m especially pleased that there are so many ambassadors here and representatives from the Nordic and Baltic nations.

Since I started in June, I’ve been really impressed by the generosity and the leadership of your countries working individually with each other and also with the United States to really – to make a better world. You know, your introduction was very kind because, as some of you know, I’m new to this particular part of Europe. And it’s really been – at the risk of sounding a little bit naive – but it’s really been a revelation to me the depth and the breadth of our bilateral relations with your countries and our multilateral efforts and initiatives. And frankly, it’s been inspiring as we work together to make a better world.

And from a foundation of partnership and friendship, the U.S. has cooperated closely and effectively with, I think, all of your countries to meet a broad range of challenges. And the challenges that we’ve chosen to tackle have been inspired by the values we share and the vision they inspire of a world that is secure, prosperous and free.

Realizing that vision has been no simple task. We have found it necessary to use varied but mutually supportive means to attain that reality. And when we talk about security, we’re not only talking, as you mentioned, about military might but also the strength that a robust economy and a strong democracy can provide. And today – and I guess I should say every day – I will defer to my colleague, Jim, to discuss the role of hard security – that hard security plays in reaching our goals, and I will focus, as Bob mentioned, on the roles that economic assistance and institution building, suffused with determination, have played to further ensure our security.

In that light, it may surprise you that I’m going to actually start with a reference to our NATO mission – our joint NATO mission – in Afghanistan. While it’s true, of course, that our Nordic and Baltic partners have been important and essential contributors to the military operations there, I’d also like to point out – as I think you probably all know – the really substantial contributions to the equally important activities of reconstruction and development.

Leading, manning and funding the PRTs as well as training Afghans in such essential professions as law enforcement, teaching and medicine, the Nordic and Baltic countries are working with us and the Afghans to build a foundation of infrastructure and knowledge that will be key to the future stability and development of Afghanistan.

Outside of the framework of NATO, our Nordic friends are leaders in development on a global scale. That really serves, I think, in many ways as a model for us. Our Nordic friends are devoting significant percentages of their GDP towards international assistance.

To combat piracy, for example, Denmark and Norway are providing funds to construct prisons in Somalia – my old stomping grounds, as you mentioned – so that more pirates can be brought to justice. And the United States has been working with Denmark, Norway and Sweden to provide famine relief in those countries. Last year, the United States and Norway inaugurated our bilateral global issues dialogue, a forum for consultation and cooperation on issues of mutual interest, among them, increasing civilian security through humanitarian aid.

Our cooperation also extends to developing energy supplies that are both sustainable and secure, a goal that requires institution building as well as economic investment. In the development of sustainable energy, the Nordic countries, once again, are models to emulate. Fortunately, the U.S. is involved in forums through which we can benefit from your expertise as well as share advances that we are making. Through the Swedish-American Green Alliance, researchers, entrepreneurs and policymakers from Sweden and the United States participate in an educational exchange on sustainable energy, cultivating partnerships on the road to a sustainable future.

Similarly, Norwegian and American universities are collaborating on research regarding renewable energy and alternative fuels. And I’ve learned that we are now in a friendly competition with Finland to have the greenest embassy in each other’s capital, a goal well worth pursuing. (Laughter.)

As former Soviet states, the Baltic countries face greater challenges in securing their energy future. Latvia, Lithuania, Estonia, for the most part, remain isolated from EU electricity markets and dependent on a single supply of imported gas. To assist them in the diversification of their sources of energy as well as further their integration into the European Union, the Baltic Sea states as well as Denmark, Finland, Sweden and Norway, as observers, signed the Baltic Energy Market Interconnection Plan in 2009.

Sponsored by the European Commission, implementation of the plan will connect the three countries to wider EU energy market networks and increase diversification of natural gas routes and sources. With great determination, the Baltic nations have been pushing this agenda forward, determination that we in the United States strongly support both through bilateral engagement and through our voice on the U.S.-EU Energy Council which is, of course, chaired by Dick Morningstar. And we will continue providing such support until the job of Baltic energy diversification and integration is complete.

Partnership and institution building to promote stability and social equality is an important hallmark in our relationship with the Nordic and Baltic countries. The Nordic countries have long histories of supporting democracy and human rights beyond their borders and have played really important roles in efforts to solve some of the world’s most intractable disputes.

Norway remains a leader in Middle East peace process efforts from the Oslo Accords to their current role in guiding donors to the Palestinian people through the ad hoc liaison committee. Sweden and Finland, likewise, have played vital roles in war-torn parts of the world such as the Balkans, from the Nobel Peace Prize-winning efforts of former Finnish President Martti Ahtisaari in Kosovo to the key assistance of Sweden in rebuilding Bosnia and Herzegovina.

As the Baltic countries’ transition to democracy is recent, many in the international community – and I think perhaps especially the United States – have looked to the Balts as effective advisers to others still in transition, much like the Baltic Charter countries assisted the Adriatic countries – the charter countries – in preparing for NATO entry.

Estonia, Latvia and Lithuania have been enthusiastic and generous in sharing the lessons that they have learned, providing technical and financial support to Armenia – a country close to my heart – Azerbaijan, Belarus, Georgia, Moldova and Ukraine and, of late, to countries in North Africa as well.

In the wake of terrorist attacks, a challenge many democracies have been struggling with is finding a balance between security and tolerance. This challenge most recently arose in Norway due to the tragic events of July 22nd, but it has affected many of the countries that are represented here today.

How do we respond to the threat of terrorists from right-wing nationalists to international jihadists while ensuring that our societies continue to reflect our values of openness and the rule of law? We are all, obviously, seeking an answer to that question, and the U.S. is looking to strengthen our counterterrorism cooperation not only with Norway but with our other Nordic colleagues.

In addition to developing effective law enforcement measures to find and prosecute terrorists, we would like to collaborate with you in using education as a tool with which to fight violent extremism. We believe that education can increase the extent to which societies embrace diversity, which can lead to a decrease in the prevalence of violent ideologies.

Therefore, the United States is interested in collaborating with the Nordic countries to develop programs promoting understanding between mainstream society and groups that feel excluded from that society. Together, we can work towards achieving the often elusive balance of societies that are both tolerant and secure. And we are confident that the Nordic countries have a lot to share with us in that respect.

We have faced many of the challenges I have referred to today through the frameworks of international organizations such as NATO, the U.N. and the EU as well as bilateral forums such as the U.S. -Norway Global Issues Dialogue.

Before I close, I’d like to highlight another forum, one that is dedicated to U.S. engagement with our Nordic and Baltic friends and that the Swedish ambassador just highlighted, EPINE or the Enhanced Partnership in Northern Europe. Since its establishment in 2003, we believe EPINE has provided a forum for policy – a really useful forum – for policy discussion and coordination among the Nordic and Baltic States and the U.S. at both the political director level and the working levels.

And in fact, we are now preparing the next meeting which will be hosted at the Department of State in October.

As the capacity of EPINE members has grown, so has the focus of our cooperation from democracy building in the former Soviet space to the challenges presented by the Arctic region and Afghanistan. Similar to EPINE, the NB8 is a dynamic force multiplier in shaping both the European and the global agenda.

In conclusion, I’d just like to once again state the obvious, but I think it bears repetition. The relationship between the United States and the Nordic and Baltic countries runs long and it runs deep. Working together, we can realize our vision of a world that is secure, prosperous and free and has served to broaden and strengthen our partnership.

And so I’d like to salute all of you who are actually making the relationships and our initiatives a reality. And I’d like to salute your leaders for their cooperation, their generosity and their determination. And speaking on behalf of the United States, I’d just like to say we look forward to many more years of cooperating with you to make a better world.

So thank you very much, and thanks for the chance to be here. (Applause.)

MR. NURICK: Thank you, Masha. (Applause.) Thank you very much.

Our next speaker is Jim Townsend. I think I first started working with Jim – and I hate to tell you how long ago this was – in the mid-1980s. We were teenagers then. (Laughs.) Early 1980s.

I was at Rand, and Jim was head of –

JAMES TOWNSEND: You were at ACDA and I was at ACDA.

MR. NURICK: Ah, I’d forgotten about that part. (Laughter.)

What I was thinking of that’s relevant to our subject today was work when Jim had moved to the Defense Department and was working on Baltic issues. He was – he ran one of the offices there in the Office of Secretary of Defense with particular responsibility for this issue. We started strategizing then on the question of Baltic membership.

And I have to tell you he supported some of the Rand work, for which I am still grateful. (Laughter.)

He has moved up since then through the ranks in the Office of the Secretary of Defense, having more and more responsibility, more and more staff, more and more headaches. He then, after a very, very interesting and distinguished career in the Pentagon, came here to the Atlantic Council where he was vice president in charge – responsible for the international security program.

The Obama administration had the very good sense to bring him back and to recruit him back to the Pentagon where he’s now the deputy assistant secretary of defense, again, with particular responsibility for NATO and therefore with NATO relations and NATO issues concerning the Nordic-Baltic region.

So with that background, there’s no one better equipped to talk about U.S. defense interests and concerns in that region.

Jim, over to you.

MR. TOWNSEND: Well, thank you very much, Bob. And Masha, thank you for your remarks, too. They were excellent, and I’m really so happy to be able to share the stage with you. This is – the Paul Mill approach, I’ve always found, is the best way to go about bilateral relationships, and I’m looking forward to working with you in the months and year or so to come for us to do some great things.

It’s great to be back at the Atlantic Council. It is great to be with Fred back in the trenches again and doing what I – very, very good – that’s a Pentagon phrase – but probably not real appropriate for here – (laughter) – but back in the harness here at the Atlantic Council doing great things. And so thank you for this.

And Ambassador Hafstrom, thank you for your support for this program. It’s near and dear to my heart and has brought together so many good friends and colleagues over the years. I was telling someone it’s like the alumni weekend; you know, we’re all here, all we’re missing is the keg – (laughter) – in the corner, Fred. So it is – it is – it is really – it’s great to be here.

I’m going to make just a couple of remarks, and then we can go right to questions, and I’ll be as fast as I can.

But I always like to start off a bit like Ambassador Hafstrom and look at how far we’ve come. And I like to do that with a story. As Bob said, I’m in an office that does NATO and the EU as well as all the bilateral relationships for all the nations of Europe. So it’s a heavy – it’s a heavy load. You’re lucky, Masha – (laughter) – you only do just a bit of it. I have to do it all.

But when I was a desk officer there in the early ’90s – this must have been about 1992 – I was the Nordic desk officer. And at that time, the Baltic nations were coming out of the Soviet Union. And so my boss’ thinking, very creative, said, Jim, you’re going to do the Nordic countries as well as the Baltic countries. So I then took on a big portfolio.

And one day, I was sitting at my computer terminal and typing away – the early days of word processing on your desk – and I was typing away, and I heard a voice behind me in my doorway. And it said, Mr. Townsend – and I turned around and it sounded like it was maybe from a young intern or a young academic and someone didn’t put it on my calendar. And so I turned around and said, yes? And he said, hi, I’m here to see you. And I thought it was an intern or someone, and I said, well, come on in and have a seat. And I said, how could I help you? And he goes, well, my ambassador told me to come see you.

And I said, well, great. He goes – he says, I’m the secretary – he goes, I’m the minister of defense of Estonia. (Laughter.) And I said, excuse me? I said, you’re from the Ministry of Defense? And he goes, no, I’m the minister of defense. (Laughter.) And I said, really? I said – and this Tom Ilves, Tom Ilves was the ambassador at the time. And so I said, well, are you – I said, does my boss, the secretary of defense, know that you’re here? Because you’re his counterpart. And he goes, no, I’m here on vacation, but I dropped by the embassy and they just said to come by and see you. (Laughter.)

And I said – I said, well, that’s really great, and I’m scrambling now to think I’ve never – you know, usually when I see a minister of defense, I’m taking notes and, you know – I said, well, I tell you, it is great to see you; why don’t we go have lunch, have you eaten? And he goes, no. And I said, well, let’s go eat. I said, give me a moment to make a phone call.

So I picked up the phone and I called down to all of my contacts in the Pentagon that had anything to do with the Baltics. I said, we’re going to go down to the dining room; meet me down there in five minutes; we’re going to have lunch with the minister of defense of Estonia. And they went, what? (Laughter.) And I said, just get down there. (Laughter.)

And we had a very good discussion with a very young minister of defense. I’m not sure how long he stayed on, and I can’t even remember his name. He was a – he had just gotten out with a Ph.D. in psychology, I think. But it was a wonderful – it was a wonderful lunch and frankly, it was a wonderful launch for our relationship with Estonia because whether it’s the Baltic nations or it’s the Nordic countries, there is this youthful vitality and energy and intellectualism that is shot through the whole region.

And sitting down there with that young Ph.D. student and talking about how do we go about building what was then a nonexistent relationship between the Pentagon and our counterparts in Estonia, it was – it was full of ideas, it was full of energy, it was full of promise. And we set off and we went.

And to me, it’s useful for us today to look back at those times not only to see how far we’ve come but to see what can happen when the Nordic-Baltic community comes together because, if you remember, this was before – I mean, there’s always been a Nordic-Baltic community, but this was before it was, you know, on paper and there were meetings and this type of thing. This was a time in the early ’90s where, if you talked to a number of the Nordic countries that were in NATO, I had suggested once in my naivete as the young Norwegian desk officer, I had suggested that why don’t we have a collection of the Nordic nations to come together and do things or whatever?

And there were problems with that because there were NATO members at the time. There were neutral members at the time. Of course, the Baltic nations were still part of the – have been still trying to break out of the Soviet Union, if you will. And so there were problems with the community coming together in a formal way. There were political issues. There were other things as well. And so what brought everyone together was that I was coming in in the ’90s to help bring the Baltic nations out of the Soviet Union and to help them stand on their own feet, become members of the European institutions and to build institutions sometimes from scratch in those capitals. And it brought us together. It got us past the politics in some capitals that made us move cautiously. And it became a grand thing.

And that is why we’re all here today talking about the Nordic-Baltic community, talking about the promise that is part of this community. And it came just storming out of that period of us gathering in Stockholm or gathering in Copenhagen, gathering in places where we sat down and – some of you were there – in those big circles and we sat there with our new Baltic allies and new Baltic friends and we said, how can we come together and build some institutions? And we built the BALTBAT – remember, the Baltic Battalion – and all of the various ideas that we came up with in that very freethinking time.

Bob, you remember Iran was throwing ideas in there. We were all in there. And it was – and it has helped to create this community. And I think it’s important, as we look forward – as I will do in a minute when I get back to my notes – (laughter) – that we remember how it was and how it was that we all came together and how unique this is. And I’ll talk about that in a second, too. Just let me look at these notes.

You know, there have been some extraordinary things that have happened just over the past couple of years, and a lot of them, I think – I mean, if you look around the region, you could go to each country and there’s so many that stand out, whether it’s economics or in terms of recovery, that type of thing. But I do like to start off looking at Sweden and what Sweden has done in terms of the solidarity declaration. The Stoltenberg Report, of course, came out of Norway, I believe, if I’m not mistaken there. There were some extraordinary events that happened over the past couple of years that really sealed the community. And a lot of it was Sweden continuing to watch its policies evolve in terms of how Sweden – how the Swedish relationship in the region and its feeling of responsibilities within the region, the Swedish engagement with NATO through Partnership for Peace, the Swedish engagement with the European Union. And it brought great benefits and was, I think, a great accelerant to the coming together of the community.

And I look on a couple of meetings that I had in Stockholm just a couple of years ago, listening to all of that had happened in terms of Swedish policy that happened very quietly in terms of the United States. It was – there were some things that we were kind of learning for the first time, and it struck me as another metric of how far that community had gone – that Nordic-Baltic community had gone – and how far Sweden had gone in terms of this evolution of its regional policies.

It’s a – it’s a tremendous place where we find ourselves and a place where we saw Sweden able to take such a proactive role in terms of supporting that U.N. mission when it came to Libya. I think a lot of what Sweden was able to contribute to the NATO mission down there, working with Denmark, working with Norway in terms of providing air support – a lot of that political willingness in Stockholm to support the U.N. obviously is naturally there because of the Swedish role with the U.N., but this was something that was extraordinary as far as the use of Swedish aircraft for the first time, I think, since 1963, Peter – isn’t that right? And they did a super job working with the allies down there.

And so, to me, another metric today of this community and of this evolution in that community is the fact – the role that Sweden played – that important role that Sweden played supporting the United Nations as a part of that NATO mission.

And so, like Fred was saying in his opening remarks – and Fred made so many good points. In fact, I had to scratch off half of my points because Fred had made them in his opening remarks. You’re absolutely right; it’s time that Washington understood better how regional approaches can really actually bear fruit.

And I say that because attention spans are short. We are overcome in the policy areas with so many issues Masha and I deal with every day. We don’t – we don’t have the luxury of dealing with such good news as comes out of this region. And I think it is important for what the Atlantic Council is doing supported by the Swedish MFA, what all of us are doing in giving us in Washington, as well as in Europe – and I want to stress this. It’s not just, I think, Washington getting the word, but it’s also in Europe of how a region of Europe is able to come together and do creative things in an era of austerity that we are in right now.

I can tell you – and Masha and I are working on this together – so are a number of you in the audience – we’re grappling with how do you – how do you make an alliance work in this era of austerity. Those who do the European Union are wrestling with the same thing in terms of the euro.

We’re trying to figure out – the NATO secretary general has a thing called "smart defense" where he’s talking about nations coming together cooperatively to develop military capabilities. Well, it’s the – the Nordic-Baltic community is walking that walk. There is a lot of talk out there about this. It’s important to start off with talk, obviously. But I think the work that is being done in the Nordic-Baltic community demonstrates very well to NATO, to the EU, to all of us how this kind of cooperation can work. The benefit is there, and it’s not just military. It’s also on the economic side. I think Masha laid out very well a lot of the areas in which this kind of community coming together can bear fruit in this time that we are in.

I will also say that, as you look at Europe – which is, of course – I agree with whoever came up with this idea of Europe as a continent of regions – you can’t necessarily replicate the Nordic-Baltic community easily in other regions of Europe. We tried back in the ’90s, with the Balkans – (chuckles). We said, look, look what they’re doing up in the Nordic – and that didn’t quite work. There were, you know, problems that were down there that are not up in the north.

But I think, though, the concept of regions and the concept of regions working together – whether it’s military but also economic and politically – that’s absolutely crucial. It’s crucial for the EU; it’s crucial for NATO as well. And I think – and I think this is certainly a great example of that.

Let me tell you something else that I haven’t heard said yet which I have seen in the Nordic-Baltic region. It is becoming a center for intellectual thought in terms of foreign policy, in terms of defense policy, in terms of security. And I see Kadri Liik sitting right there in the audience. She is one of the – one of the movers and shakers of this, certainly, in the Baltic area, but I will say in the Nordic-Baltic area. She and her group do conferences. There’s conferences in Latvia. There’s conferences in many of the Nordic capitals where an intellectual leadership role is being taken. And Bob Nurick is part of this, too.

And I think that is something else, too, when you look at what a region can do, what individuals and groups can do in terms of the intellectual thought on how do you take forward creative approaches to problems in the trans-Atlantic community. There’s where those are birthed.

And we can’t have enough minds working on these issues. And so I see that happening as a result of this Nordic-Baltic community coming together and people like Kadri taking advantage of that and taking forward that intellectual thought.

I think – I take a great – I think it’s a great thing that this region has both NATO and the EU in it. Whether it’s EU-NATO members or just NATO members or just EU members, it is – it is – it helps it be that incubator for ideas. It helps prove the point that NATO and the EU, while institutionally we have our problems in terms of actually working together to the depth that we want, it shows that we have to do it and it shows that we can do it. And it’s a model, on a practical basis, of what happens when NATO and EU members can come together.

And I think in terms of incubators for NATO-EU cooperation, that incubator of how that cooperation can come about can be found in the Nordic-Baltic community.

I will say this, too. If there is a thought out there that things are going so well in the Nordic-Baltic community in terms of the economics, security, that they are going to be fine on their own and, you know, that that is an area that we don’t – that we on a bilateral basis or that NATO or the EU doesn’t have to focus on because things are going so well, I want to dispel you of that view. And I want to dispel you of that view in this way. What the Nordic-Baltic community does together is a complement and is an aid and an assistance to what the U.S. does on a bilateral basis, again, concerning security and defense – although Masha probably would say the whole array, as she said, of political things.

It’s a complement to what we do on a bilateral basis. It’s a complement to what we do on a NATO basis. It was mentioned – I can’t remember who mentioned this – I think, Ambassador Hafstrom, you did. We are increasing in terms of the U.S. engagement there. We’re doing more exercises together. We are doing more on a bilateral basis as well. There is an uptick in terms of what we can do and how we can go about doing that with the nations of that region.

We’re able to do that because of the nations that we’re dealing with who, on their own, are also creating this critical mass of capability. So it makes it easier for us to go in and to work with you all. And for us, regional stability is a key building block of stability throughout the trans-Atlantic community. It’s a key building block for NATO. It’s something where, if you’re sitting at SHAPE and you’re doing NATO planning or you’re sitting in Washington or at EUCOM and you’re doing planning for that region, there is an excitement and an effort to lean forward in doing things with the militaries, with the ministries of defense and on the civilian and the political side too in that region. It’s not something – it’s not a place where we go, they’re in good shape; we’re going to go to Mogadishu and work on problems there. It makes it even more attractive for us because of the benefits we get bilaterally, because of the benefits NATO gets, because of the benefits, I assume, the EU gets of working in that region makes it all worthwhile. So I want to make sure that that point is well understood.

I’m going to sum up and say a couple of things. One is my question to the Nordic-Baltic community is: Where are you going to go with this community that you’re building? In the think tank cadre, as you all think about this community, what are you going to do with this? What’s your ambition for this very unique region?

It’s not going to be good enough to sit back and just enjoy it. I think it’s something that’s got to be an engine for exporting stability and cooperation in Europe and in other places as well. And so I’m going to be very interested to see where your ambition might lie and what you might be doing, where you might be in 10 years.

Also, I’m interested in what your focus is, too. I mean, certainly, in terms of defense, we could come up with all kinds of, you know, focus for the, you know, Nordic-Baltic cooperation, but are you going to have a broad focus, so i.e., there’s not going to be much focus at all? Or is there going to be certain areas where there’s going to be a specialization? Or is that not good for the Nordic-Baltic community at all? Specialization or niche is not good, keep it broad going across a broad front, I don’t know. But it’s going to be interesting to me to see where you go and what you choose to be your champion, what you feel you’re going to want to do.

Two last points. Iceland. Iceland is part of this Nordic-Baltic community. Iceland has a special relationship with the United States, and we had a big base on Iceland – where’s Damon? Damon and I worked on this back in the – back in the – when was it? – in the mid-2000s, I guess.

Iceland has a bilateral defense agreement with the United States which is really important and to which we hold dear, which we continue to work on. And so sometimes, I think there could be an impression – and it’s just me here – that because Iceland has this relationship and is geographically far away that sometimes we don’t remember that it’s actually part of this Nordic-Baltic community as well.

And to me, I believe that now that our base is no longer there, I think that there is a – there’s an importance not only for the United States to continue its strong relationship with Iceland on the defense side – which we continue to work on and continue to build – but that Iceland is made part of the Nordic-Baltic community – takes a – plays a deeper role in the Nordic-Baltic portion as well that does defense. And that’s complicated to say because Iceland doesn’t have a defense force, and it’s going through a reorganization in terms of how it deal with its defense issues.

But I think that – I think its membership in this Nordic-Baltic community and the role that it can play there in terms of security is very important. And I wanted to highlight that to you all.

OK. Last challenge, and then I’m going to be quiet. Last challenge is this. You know, it was alluded to earlier – oh, it was in the paper, Damon, that you and Magnus wrote about the attempts made in the Nordic-Baltic community to do joint procurement. And I remember those, too. And I remember we tried in 1998 to do some things that just didn’t work.

I challenge the Nordic-Baltic community to revisit this because, in this era of austerity where we are now, particularly when it comes to defense, we have got to make that work. I know the reasons why the submarines and other things didn’t work in the past in terms of a joint approach. We need to revisit that. We need to come up with ways to make that work. And I think it’s the Nordic-Baltic community that would be best placed to do that because of the sophistication there, because of the creativity that’s there.

When we talk about that community being an incubator, I think it’s got to be an incubator for this because we keep running into problems with these cooperative approaches. And the secretary-general is talking about doing it again, and I think that’s fine, but we’ve got to make it work. And I think the community that can make it work is the Nordic-Baltic community. EU is there. NATO is there. The need is there. You know, industrial cooperation between the industries is there. Looking at Ambassador Liljegren, and the American industries are there. There’s a natural partnership there.

I hope that we can redouble our effort. And if you’re looking for a focus, that can be at least part of it.

Thank you very much.

MR. NURICK: OK. Thank you very much, Jim. (Applause.)

We’re on a very tight schedule. We just have a few minutes for questions.

Let me quickly ask one, and then I think we’ll have – I hope we’ll have time for one or two more before we move to the – to our next panel.

It’s really the same question for both of you. Masha, you laid out a very ambitious, wide-ranging agenda of bilateral and multilateral engagement and initiatives. Jim, you gave an argument. You explained why it is that Nordic-Baltic cooperation will enhance rather than be a substitute for U.S. engagement in the region.

The question to both of you is: How will this era of austerity affect this?

Masha, for you, do you worry that pressures on the State Department budget are going to allow you to sustain these efforts? If not, if you think that you’re going to have to make some choices, where do you think the priorities ought to be?

And for Jim, the Defense Department has had much more expansive budgets than State has had, but they’re going to be under pressure as well. If the pressure starts affecting your programs, how do you sustain the signal that engagement is meant to send – the political signal that’s meant to send to the region? How do you sustain – how do you continue to support cooperation and still remind the Baltic states and the Nordic states that this is to enhance U.S. engagement there; it’s not to substitute for it?

So very quickly.

MS. YOVANOVITCH: Well, I’m very glad it’s an easy question.

I think that – I mean, you’re absolutely right. Obviously, in an era of budget cuts, we need to think about how do we continue to engage, because I think the bottom line is we can’t just stop engaging. We need to continue engaging with the Baltic and Nordic countries bilateral as well as multilaterally. I mean, that’s not a choice for us.

The question, as you said, is how do you do that. And I mean, the secretary has outlined, you know, her smart diplomacy kind of initiative, and I think what we need to do is we need to figure out not only how we can work smarter, how we can continue what we’re doing and perhaps even expand, whether it’s, you know, in the high north where I think we are – we are working with all of you to do some very, very interesting initiatives, but in other areas as well.

And I think one of the things that we – and this is not new – but one of the things that we’re doing is that we’re not only relying on governments. We’re relying increasingly, you know, as you mentioned, on think tanks, on NGOs, on interested citizens, on corporations who understand the significance of what we are all trying to accomplish and who are willing to play important roles there. And I think leveraging that is going to be really, really critical.

But I think the bottom line is we need to continue what we’re doing. We just need to figure out exactly how we’re going to do that.

MR. NURICK: Thank you.


MR. TOWNSEND: Well, very much along the lines of what Masha said, relations with nations on the defense side is not – is not the – the foundation is not just military exercises or this type of thing. I mean, obviously, as we go through the U.S. budget drill that we’re going through right now, there will be impacts.

But, to me, two points: One is that’s not going to stop the deep engagement that we’re going to have in this region on a defense basis. It’s something that will continue on because of the benefit we get out of it. And we’re going to want to continue to work with our colleagues there.

But secondly – and just to repeat myself a little bit – it enhances the importance of what the region is doing because, as we are dealing with this austere era and this time of budgets, we’ve got to be more creative about our approaches as well. And you find a lot of that creativity in the Nordic-Baltic countries that we can also learn from as well.

You know, as you alluded to, there was a time when DOD had a big budget and we could afford not necessarily to be as creative as others are forced to be. Now, it’s our turn. And I think as we look at what is happening in terms of cooperation among the militaries in the Nordic-Baltic countries and procurements and how things are done there, I think there’s a lot of lessons for us, too.

So it’s the wave of the future and something that we can learn from.

MR. NURICK: Thank you.

We have time, I think, for just one quick question.

Mr. Ambassador?

AMB. HAFSTROM (?): We have lived in the meeting place of tectonic plates for 1,000 years, and these last 10 years have been best of them. So it’s a stable, peaceful, corner in the world, and one fundamental must be now remembered when we look forward. The agreement between Clinton and Yeltsin reached in ’97 in Helsinki saying that the Baltic countries can be NATO – will be NATO members. The fundamentals of this stability is that the United States will continue its commitment for the security of the Baltic countries. So very much cooperation, more cooperation between Baltic-Nordic countries and the states. Also, there are many bridges to be built from our side to Russia, but fundamental point is that whatever happens in the cooperation development in military or any other cooperation, the cornerstone of the stability will be also in future that United States keep its commitments to the Baltic countries.

MR. NURICK: Thank you very much.

Unfortunately, we’ve run out of time. Indeed, we’ve run over a little bit. I’m going to ask you to keep your seats while the first panel gets miked up and organizes itself here. And while they’re doing that, let me just conclude by asking you to join me in thanking Masha and Jim for taking time out of their very, very busy schedules – (applause) – and getting us off to such a good start. (Applause.) Thank you very much.


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