Estonia Latvia and Lithuania Background and U S -Baltic Relations Updated January 2 2020 Congressional Research Service https crsreports congress gov R46139 SUMMARY Estonia Latvia and Lithuania Background and U S -Baltic Relations Estonia Latvia and Lithuania often referred to as the Baltic states are close U S allies and considered among the most pro-U S countries in Europe Strong U S relations with these three states are rooted in history The United States never recognized the Soviet Union’s forcible incorporation of the Baltic states in 1940 and it applauded the restoration of their independence in 1991 These policies were backed by Congress on a bipartisan basis The United States supported the Baltic states’ accession to NATO and the European Union EU in 2004 R46139 January 2 2020 Derek E Mix Analyst in European Affairs Especially since Russia’s 2014 invasion of Ukraine potential threats posed to the Baltic states by Russia have been a primary driver of increased U S and congressional interest in the region Congressional interest in the Baltic states has focused largely on defense cooperation and security assistance for the purposes of deterring potential Russian aggression and countering hybrid threats such as disinformation campaigns and cyberattacks Energy security is another main area of U S and congressional interest in the Baltic region Regional Security Concerns U S NATO and Baltic leaders have viewed Russian military activity in the region with concern such activity includes large-scale exercises incursions into Baltic states’ airspace and a layered build-up of anti-access area denial A2AD capabilities Experts have concluded that defense of the Baltic states in a conventional military conflict with Russia likely would be difficult and problematic The Baltic states fulfill NATO’s target of spending 2% of gross domestic product GDP on defense although as countries with relatively small populations their armed forces remain relatively small and their military capabilities limited Consequently the Baltic states’ defense planning relies heavily on their NATO membership Defense Cooperation and Security Assistance The United States and the Baltic states cooperate closely on defense and security issues New bilateral defense agreements signed in spring 2019 focus security cooperation on improving capabilities in areas such as maritime domain awareness intelligence sharing surveillance and cybersecurity The United States provides significant security assistance to the Baltic states the National Defense Authorization Act for Fiscal Year 2020 P L 116-92 increased and extended U S assistance for building interoperability and capacity to deter and resist aggression Under the U S European Deterrence Initiative EDI launched in 2014 the United States has bolstered its military presence in Central and Eastern Europe As part of the associated Operation Atlantic Resolve rotational U S forces have conducted various training activities and exercises in the Baltic states NATO has also helped to bolster the Baltic states’ security At the 2016 NATO summit the allies agreed to deploy multinational battalions to each of the Baltic states and Poland The United Kingdom leads the battalion deployed in Estonia Canada leads in Latvia and Germany leads in Lithuania Rotational deployments of aircraft from NATO member countries have patrolled the Baltic states’ airspace since 2004 deployments have increased in size since 2014 Potential Hybrid Threats Since 2014 when the EU adopted sanctions targeting Russia due to the Ukraine conflict tensions between Russia and the Baltic states have grown These conditions have generated heightened concerns about possible hybrid threats and Russian tactics such as disinformation campaigns and propaganda to pressure the Baltic states and promote anti-U S or anti-NATO narratives A large minority of the Estonian and Latvian populations consists of ethnic Russians Russia frequently accuses Baltic state governments of violating the rights of Russian speakers Many ethnic Russians in the Baltic states receive their news and information from Russian media sources potentially making those communities a leading target for disinformation and propaganda Some observers have expressed concerns that Russia could use the Baltic states’ ethnic Russian minorities as a pretext to manufacture a crisis Cyberattacks are another potential hybrid threat addressing potential vulnerabilities with regard to cybersecurity is a top priority of the Baltic states Congressional Research Service Estonia Latvia and Lithuania Background and U S -Baltic Relations Energy Security The Baltic states have taken steps to decrease energy reliance on Russia including through a liquefied natural gas LNG terminal in Lithuania and projects to build pipeline and electricity interconnections with Poland Finland and Sweden Congressional Research Service Estonia Latvia and Lithuania Background and U S -Baltic Relations Contents Introduction and Issues for Congress 1 Domestic Politics 1 Estonia 2 Latvia 4 Lithuania 5 Economic Issues 6 Banking Sector Concerns 7 Regional Relations with the United States 8 Security Partnership and Assistance 9 Economic Relations 10 Regional Security Concerns and Responses 11 Defense Spending and Capabilities 12 U S European Deterrence Initiative 13 NATO Enhanced Forward Presence 14 NATO Air Policing Mission 15 Potential Hybrid Threats 15 Disinformation Campaigns and Ethnic Russians in Baltic States 15 Cyberattacks 16 Energy Security 17 Conclusion 18 Figures Figure 1 Map of the Baltic Region 2 Figure 2 NATO Enhanced Forward Presence in the Baltic States 14 Tables Table 1 Baltic States Defense Information 13 Contacts Author Information 19 Congressional Research Service Estonia Latvia and Lithuania Background and U S -Baltic Relations Introduction and Issues for Congress Many U S officials and Members of Congress consider Estonia Latvia and Lithuania often referred to collectively as the Baltic states to be valued U S allies and among the most pro-U S countries in Europe Strong ties between the United States and the Baltic states have deep historical roots Lithuania Latvia and Estonia gained their independence in 1918 after the collapse of the Russian Empire In 1940 they were forcibly incorporated into the Soviet Union but the United States never recognized their annexation 1 The United States strongly supported the restoration of the three countries’ independence in 1991 and it was a leading advocate of their accession to NATO and the European Union EU in 2004 The United States and the Baltic states work closely together in their respective bilateral relationships and within NATO as well as in the context of U S -EU relations The U S -Baltic partnership encompasses diplomatic cooperation in pursuit of shared foreign policy objectives extensive cooperation on security and defense and a mutually beneficial economic relationship 2 The United States provides considerable security assistance to the Baltic states including financing assistance and defense sales intended to strengthen their military capabilities Since 2014 U S focus on the Baltic region has increased driven by concerns about potential threats posed by Russia Developments related to Russia and the implications for U S policy and NATO likely will have continuing relevance for Congress Estonia Latvia and Lithuania are central interlocutors and partners in examining and responding to these challenges As indicated by annual security assistance appropriations as well as resolutions and bills adopted or introduced in recent years Congress supports the maintenance of close relations and security cooperation with the Baltic states The House Baltic Caucus a bipartisan group of 70 Members of the House of Representatives and the Senate Baltic Freedom Caucus a bipartisan group of 11 Senators seek to maintain and strengthen the U S -Baltic relationship and engage in issues of mutual interest 3 Domestic Politics Although outside observers typically view Estonia Latvia and Lithuania as a group citizens of the three countries tend to point out that alongside the three countries’ many similarities are notable differences in national history language and culture 4 Cooperation and convergence among the Baltic states remains the central trend but each country has its own unique domestic U S Department of State Office of the Historian “Press Release Issued by the Department of State on July 23 1940 ” at https history state gov historicaldocuments frus1940v01 d412 Also see U S Department of State “SeventyFifth Anniversary of the Welles Declaration ” July 22 2015 at https 2009-2017 state gov secretary remarks 2015 07 245160 htm 2 See White House A Declaration to Celebrate 100 Years of Independence of Estonia Latvia and Lithuania and Renewed Partnership April 4 2018 3 In the 116th Congress the cochairs of the House Baltic Caucus are Representative Adam Schiff and Representative John Shimkus The cochairs of the Senate Baltic Freedom Caucus are Senator Charles Grassley and Senator Richard Durbin 4 See for example Rein Taagepera Lithuania Latvia and Estonia 100 Years of Similarities and Disparities International Center for Defence and Security Estonia February 16 2018 at https icds ee lithuania-latvia-andestonia-100-years-of-similarities-and-disparities 1 Congressional Research Service 1 Estonia Latvia and Lithuania Background and U S -Baltic Relations political dynamics and the viewpoints and priorities of the three countries are not always completely aligned Estonia Latvia and Lithuania stand out as the leaders of democracy among post-Soviet states and are the only post-Soviet states that have joined NATO and the EU 5 Since the restoration of their independence nearly 30 years ago the three countries’ governments have tended to consist of multiparty coalitions which have maintained broadly pro-market pro-U S NATO and pro-EU orientations Figure 1 Map of the Baltic Region Source Created by CRS using data from the Department of State and ESRI Estonia The government of Estonia is led by the center-left Center Party in a coalition with the far-right anti-immigration Conservative People’s Party of Estonia EKRE and the conservative Pro Patria Fatherland party Juri Ratas of the Center Party is Estonia’s prime minister The Center Party came in second in Estonia’s March 2019 general election with 23 1% of the vote 26 seats in Estonia’s 101-seat unicameral parliament the Riigikogu it was able to form a government after it unexpectedly reversed its campaign pledge not to work with the far-right EKRE 6 EKRE came in third in the election with 17 8% of the vote more than doubling its share of the vote from the 2015 election and winning 19 seats a gain of 12 seats 7 The center-right Reform Party which led a series of coalition governments from 2005 to 2016 came in first place Greg Myre “Why Can’t the Former Soviet Republics Figure Out Democracy ” NPR February 19 2014 Tarmo Virki “Three Estonian Parties Including Far-Right EKRE Agree on Coalition Plan ” Reuters April 6 2019 7 See full election results at Valimised Voting and Election Result as of March 8 2019 at https rk2019 valimised ee en election-result election-result html 5 6 Congressional Research Service 2 Estonia Latvia and Lithuania Background and U S -Baltic Relations in the 2019 election winning 28 9% of the vote 34 seats However it was unable to secure enough support from potential coalition partners to form a government The Center Party whose support comes largely from Estonia’s Russian-speaking population about 30% of the population previously led a coalition government with Pro Patria and the center-left Social Democratic Party from November 2016 until the 2019 election In late 2016 a changeover in the party’s leadership reoriented the Center Party away from a Russian-leaning outlook to a clear pro-Western stance in support of Estonia’s membership in NATO and the EU Estonia at a Glance Population 1 319 million Ethnicity 69% Estonian 25% Russian Languages Estonian is the official language and first language of 68 5% of the population Russian is the first language of 30% of the population Religion 54% listed as none 16 7% as unspecified 16 2% Orthodox 10% Lutheran Gross Domestic Product GDP 2018 Current Prices $30 761 billion per capita GDP approximately $23 330 Currency euro € €1 is approximately $1 10 Political Leaders President Kersti Kaljulaid Prime Minister Juri Ratas Foreign Minister Urmas Reinsalu Defense Minister Juri Luik During the 2019 campaign the Center Party advocated for a progressive tax system higher social spending a simplified path to citizenship for noncitizen residents and maintenance of the country’s dual Estonian- and Russian-language Sources International Monetary Fund IMF “World Economic Outlook Database ” October education system 8 The Reform Party by 2019 Central Intelligence Agency CIA World contrast advocated maintenance of a flat tax Factbook tight fiscal policy and Estonian language exams for obtaining citizenship The Reform Party also called for rolling back Russian-language education in the country’s school system Observers assert that EKRE benefitted in the 2019 election from antiestablishment sentiment among voters and gained support by appealing to rural Estonians who feel economically left behind 9 In addition to opposing immigration EKRE is adamantly nationalist skeptical of the EU and anti-Russia Some analysts suggest there is a potential for friction between the Center Party and EKRE on issues such as citizenship immigration and abortion policy 10 In 2016 Estonia’s parliament unanimously elected Kersti Kaljulaid as president Kaljulaid is the country’s youngest president aged 46 at the time of her election and its first female president A political outsider with a background as an accountant at the European Court of Auditors she was put forward as a surprise unity candidate after Estonia’s political parties were unable to agree on the first round of candidates The president serves a five-year term and has largely ceremonial duties but plays a role in defining Estonia’s international image and reflecting the country’s values 8 Joanna Hyndle-Hussein Estonia The Liberal Reform Party Returns to Power Centre for Eastern Studies Warsaw March 5 2019 9 Jean Mackenzie “Estonia How Boom-Time Baltic Republic Embraced Far Right ” BBC News May 15 2019 and Evan Gershkovich “Estonia Joins the Far-Right Club ” Politico Europe April 30 2019 10 Economist Intelligence Unit Estonia Country Report 3rd Quarter 2019 Congressional Research Service 3 Estonia Latvia and Lithuania Background and U S -Baltic Relations Latvia Latvia’s October 2018 general election produced a fragmented result with seven parties winning seats in the country’s 100-seat unicameral parliament Saeima 11 After three months of negotiations and deadlock a fiveparty coalition government took office in January 2019 Prime Minister Krišjānis Kariņš of the center-right New Unity Party JV leads the government 12 Latvia at a Glance Population 1 929 million Ethnicity 62% Latvian 25 4% Russian Languages Latvian is the official language and first language of 56 3% of the population Russian is the first language of 33 8% of the population Religion 63 7% listed as unspecified 19 6% Lutheran 15 3% Orthodox GDP 2018 Current Prices $34 882 billion per capita GDP approximately $18 033 Currency euro € €1 is approximately $1 10 Political Leaders President Egils Levits Prime Minister Krišjānis Kariņš Foreign Minister Edgars Rinkēvičs Defense Minister Artis Pabriks JV leveraged its experience as a member of the previous governing coalition to put together and lead the new government despite being the smallest party in the Saeima with eight seats The other coalition members are the conservative nationalist National Alliance NA Sources IMF “World Economic Outlook and three new parties the antiestablishment Database ” October 2019 CIA World Factbook Who Owns the State KPV LV the New Conservative Party JKP which campaigned on an anti-corruption platform and the liberal Development For alliance The coalition partners hold a combined 61 seats in the Saeima and appear likely to maintain the broadly center-right fiscally conservative and pro-European policies followed by recent Latvian governments At the same time the strong showings in the election by KPV LV and JKP each won 16 seats appeared to reflect deepening public dissatisfaction with corruption and the political establishment following high-profile bribery and money-laundering scandals in 2018 13 The three parties of the previous coalition government the centrist Union of Greens and Farmers ZZS the Unity Party rebranded New Unity in 2018 and the NA lost nearly half their total seats dropping from a combined 61 seats to 32 seats 14 The center-left Harmony Social Democratic Party SDPS which draws its support largely from the country’s ethnic Russian population remained the largest party in parliament with 23 seats With five of the seven parties in the coalition government the SDPS and ZZS are the parliamentary opposition The next general election is scheduled to take place in 2022 On May 29 2019 the Saeima elected Egils Levits to be Latvia’s next president A former judge at the European Court of Justice Levits formally took office on July 8 2019 Outgoing President Raimonds Vejonis of the ZZS declined to run for a second term The president performs a mostly ceremonial role as head of state but also acts as commander-in-chief of the armed forces and has the power to propose and block legislation 15 11 Joanna Hyndle-Hussein Parliamentary Elections in Latvia The Fragmentation of the Political Scene Centre for Eastern Studies Warsaw October 9 2018 12 Gederts Gelzis “Latvia’s Karins Confirmed as PM Ending Lengthy Political Deadlock ” Reuters January 22 2019 Karins was born and educated in the United States before moving to Latvia in 1997 13 John O’Donnell and Gederts Gelzis “Corruption Scandal Casts Long Shadow over Latvia ” Reuters April 12 2019 14 See Central Election Commission https sv2018 cvk lv pub ElectionResults 15 Corinne Deloy Egils Levits Candidate Supported by the Government Coalition Parties Should Become the Next President of the Republic of Latvia Robert Schumann Foundation May 27 2019 Congressional Research Service 4 Estonia Latvia and Lithuania Background and U S -Baltic Relations Lithuania Lithuania has a centrist coalition government composed of four political parties and led by the center-right Lithuanian Peasants and Greens Union LVŽS The LVŽS emerged as the surprise winner of the country’s October 2016 parliamentary election winning 54 of the 141 seats in the Lithuanian parliament Seimas after winning one seat in the 2012 election 16 The prime minister of Lithuania is Saulius Skvernelis a politically independent former interior minister and police chief who was selected for the position by the LVŽS while remaining independent Skvernelis campaigned for the LVŽS A major factor in the 2016 election outcome was the perception that Skvernelis and the LVŽS remained untainted by a series of corruption scandals that negatively affected support for most of Lithuania’s other political parties 17 Lithuania at a Glance Population 2 784 million Ethnicity 84% Lithuanian 6 6% Polish 5 8% Russian Languages Lithuanian is the official language and first language of 82% of the population Russian is the first language of 8% of the population Polish is the first language of 5 6% of the population Religion 77 2% Roman Catholic 4 1% Russian Orthodox 10 1% listed as unspecified GDP 2018 Current Prices $53 302 billion per capita GDP approximately $18 994 Currency euro € €1 is approximately $1 10 Political Leaders President Gitanas Nausėda Prime Minister Saulius Skvernelis Foreign Minister Linas Linkevičius Defense Minister Raimundas Karoblis Sources IMF “World Economic Outlook Database ” October 2019 CIA World Factbook The LVŽS initially formed a coalition government with the center-left Social Democratic Party of Lithuania LSDP which led the previous coalition government following the 2012 election 18 In September 2017 the LSDP left the coalition amid tensions over the slow pace of tax and pension reforms intended to reduce economic inequality Prime Minister Skvernelis subsequently led a minority government of the LVŽS and the Social Democratic Labour Party of Lithuania LSDDP a new party that splintered off from the LSDP In July 2019 the LVŽS and the LSDDP reached an agreement to form a new coalition government with the addition of the nationalist-conservative Order and Justice Party and the Electoral Action of Poles in Lithuania-Christian Families Alliance The four parties in the current coalition control a parliamentary majority with a combined 76 out of 141 seats in the Seimas The coalition’s domestic agenda focuses primarily on boosting social programs including greater spending on social insurance and increased benefits for families students and the elderly 19 The opposition parties are the center-right Homeland Union-Lithuanian Christian Democrats which came in second place in the 2016 election with 31 seats the LSDP and the center-right Liberal Movement The next general election is scheduled to take place in October 2020 Gitanas Nausėda a pro-European politically independent centrist and former banker won Lithuania’s May 2019 presidential election 20 He replaces Dalia Grybauskaitė who served as “Lithuania Election Farmers’ Party in Shock Triumph ” BBC News October 24 2016 Elisabeth Bauer Linus Kojala and Augustina Zamuskeviciute Parliamentary Elections in Lithuania October 2016 Konrad Adenaur Stiftung September 2016 18 Agnia Grigas Can Lithuania’s New Government Maintain Stability Atlantic Council of the United States November 11 2016 19 Joanna Hyndle-Hussein Lithuania A New Government Coalition with the Participation of the Polish Minority Party Centre for Eastern Studies Warsaw July 10 2019 20 Agnia Grigas Lithuania Shuns Populism with the Election of a Pro-EU President Atlantic Council of the United 16 17 Congressional Research Service 5 Estonia Latvia and Lithuania Background and U S -Baltic Relations president from 2009 to 2019 and was consistently regarded as Lithuania’s most popular politician The powers of the Lithuanian presidency the only presidency in the Baltic states to be directly elected are weaker than those of the U S presidency However the Lithuanian president plays an important role in shaping foreign and national security policy is commander-in-chief of the armed forces appoints government officials and has the power to veto legislation Efforts to combat corruption remain a focus of Lithuania’s government Following a series of bribery scandals involving leading politicians and one of the country’s largest companies the Seimas adopted a new law in 2018 appointing special prosecutors to investigate cases of political corruption 21 Russian Speakers in the Baltic States The collapse of the Soviet Union in 1991 left millions of ethnic Russians living outside Russia’s borders Russian speakers make up about 30% of Estonia’s total population and 90% of the population in some of its eastern regions About 34% of Latvia’s population speaks Russian as their first language many of Latvia’s ethnic Russians are concentrated in urban areas such as Riga and Daugavpils the country’s second-largest city Lithuania has a much smaller percentage of Russian-speakers approximately 8% Researchers caution against implicit assumptions that the Baltic states’ Russian-speaking communities monolithically support Russia or pro-Russian narratives surveys indicate a diversity of attitudes within these communities with regard to viewpoints toward Russia and Russia-related questions Nevertheless the Baltic states’ Russian-speaking populations remain a significant factor in both Russian policy toward the region and assessments of the potential security threat posed by Russia see “Potential Hybrid Threats” section below Sources Paul Goble “Experts Estonia Has Successfully Integrated Nearly 90% of its Ethnic Russians ” Estonian World March 1 2018 Mārtinš Hiršs The Extent of Russia’s Influence in Latvia National Defence Academy of Latvia Center for Security and Strategic Research November 2016 CIA World Factbook Economic Issues The 2008-2009 global economic crisis hit the Baltic states especially hard each of the three countries experienced an economic contraction of more than 14% in 2009 The social costs of the recession and the resulting budget austerity included increased poverty rates and income inequality and considerable emigration to wealthier parts of the EU The Baltic economies have since rebounded however benefitting from strong domestic consumption external demand for exports and investment growth including from EU funding 22    Estonia’s gross domestic product GDP grew by 5 8% in 2017 and 4 8% in 2018 It is forecast to grow by 3 2% in 2019 and 2 9% in 2020 Unemployment declined from 16 7% in 2010 to 5 4% in 2018 Latvia’s GDP grew by 4 6% in 2017 and 4 8% in 2018 it is forecast to grow by 2 8% in 2019 and 2 8% in 2020 Unemployment declined from 19 5% in 2010 to 7 4% in 2018 Lithuania’s GDP grew by 4 1% in 2017 and 3 5% in 2018 it is forecast to grow by 3 4% in 2019 and 2 7% in 2020 Unemployment declined from 17 8% in 2010 to 6 1% in 2018 States May 29 2019 and Andrius Sytas “Lithuania’s Nauseda Wins Presidential Election ” Reuters May 26 2019 21 Linas Jegelevičius “Major Political Corruption Case Reaches Court in Lithuania ” Baltic News Network April 19 2018 22 Economic statistics from International Monetary Fund IMF “World Economic Outlook Database ” October 2019 Figures are rounded to the nearest tenth of a percentage Also see Economist Intelligence Unit Estonia Country Report 4th Quarter 2019 Latvia Country Report 4th Quarter 2019 and Lithuania Country Report 3rd Quarter 2019 Congressional Research Service 6 Estonia Latvia and Lithuania Background and U S -Baltic Relations Despite the crisis and aftermath each of the Baltic states fulfilled a primary economic goal when each adopted the euro as its currency Estonia in 2011 Latvia in 2014 and Lithuania in 2015 The public finances of the Baltic states remain well within guidelines set by the EU which require member states to have an annual budget deficit of less than 3% of GDP and maintain government debt below 60% of GDP Both Estonia and Latvia recorded a budget deficit below 1% of GDP in 2018 and Lithuania had a small budget surplus Gross government debt in 2018 was approximately 8 3% of GDP for Estonia making it the EU’s least-indebted member state 35 9% of GDP for Latvia and 34 2% of GDP for Lithuania 23 Baltic States Trade at a Glance Estonia Top Trading Partners Finland Russia Germany Sweden Latvia China Lithuania Leading Exports electronic equipment including computers mineral fuels wood and wood products Latvia Top Trading Partners Lithuania Estonia Germany Russia Poland Sweden Leading Exports wood and wood products electronic equipment including computers machinery and mechanical appliances Lithuania Top Trading Partners Russia Germany Poland Latvia United States Italy Leading Exports mineral fuels machinery and mechanical appliances furniture According to a study by the European Source World Bank “World Integrated Trade Commission foreign direct investment FDI in Solution Database ” the Baltic states remains below precrisis levels 24 With considerable investment in the financial services sector Sweden is the largest foreign investor in the region followed by Finland and the Netherlands Estonia has been the most successful of the three Baltic countries in attracting FDI with FDI equivalent to approximately 100% of gross value added in 2015 compared to approximately 63% for Latvia and 40% for Lithuania 25 Banking Sector Concerns U S and European authorities have expressed concerns about the practices of banks in the region that cater to nonresidents largely serving account holders based in Russia and other countries of the former Soviet Union In 2018 two scandals in particular brought attention to moneylaundering challenges in the region In February 2018 the U S Department of the Treasury designated ABLV Bank then the thirdlargest bank in Latvia as a financial institution of primary money laundering concern Treasury accused it of money laundering bribery and facilitating transactions violating United Nations sanctions against North Korea 26 Following a run on deposits and a decision by the European Central Bank not to intervene ABLV initiated a process of self-liquidation 27 The Latvian government subsequently made reforming the banking sector and strengthening anti-moneylaundering AML practices top policy priorities IMF “World Economic Outlook Database ” October 2019 Jorge Durán FDI Investment Uncertainty in the Baltics European Commission March 2019 Hereinafter Durán FDI Investment Uncertainty 25 Durán FDI Investment Uncertainty pp 3-5 26 U S Department of the Treasury Financial Crimes Enforcement Network FinCEN Names ABLV Bank of Latvia an Institution of Primary Money Laundering Concern and Proposes Section 311 Special Measure February 13 2018 27 “Latvian Banking Regulator Approves Liquidation of ABLV Bank ” Reuters June 12 2018 23 24 Congressional Research Service 7 Estonia Latvia and Lithuania Background and U S -Baltic Relations A September 2018 report commissioned by Danske Bank Denmark’s largest bank indicated that between 2007 and 2015 some €200 billion approximately $220 billion worth of suspicious transactions may have flowed through a segment of its Estonian branch catering to nonresidents primarily Russians 28 The activity continued despite critical reports by regulatory authorities and whistleblower accounts highlighting numerous failures in applying AML practices In February 2019 the Estonian Financial Supervision Authority ordered Danske Bank to cease operations in Estonia Danske Bank subsequently decided to cease its activities in Latvia and Lithuania and Russia as well 29 Regional Relations with the United States The U S State Department describes Estonia Latvia and Lithuania as strong effective reliable and valued allies that have helped to promote security stability democracy and prosperity in Europe and beyond 30 Many citizens of the Baltic states remain grateful to the United States for consistently supporting their independence throughout the Cold War and playing a key role in promoting the restoration of independence in 1991 Most policymakers in the Baltic states tend to see their countries’ relationship with the United States as the ultimate guarantor of their security against pressure or possible threats from Russia All three Baltic states joined NATO and the EU in 2004 with strong U S support In addition to maintaining a pro-NATO and pro-EU orientation the Baltic states have sought to support U S foreign policy and security goals For example they have worked closely with the United States in Afghanistan where the three Baltic states have contributed troops to NATO-led missions since 2002-2003 31 The three countries also have been partner countries in the Global Coalition to Defeat the Islamic State providing personnel training weapons and funding for efforts to counter the Islamic State in Iraq and Syria since 2014 32 The Trump Administration and many Members of Congress have demonstrated support for strong U S relations with the Baltic states In April 2018 President Donald Trump hosted the presidents of the three Baltic states for a quadrilateral U S -Baltic Summit intended to deepen security and defense cooperation and reaffirm the U S commitment to the region 33 The presidential summit was followed by a U S -Baltic Business Summit intended to expand commercial and economic ties 34 During the 115th Congress the Senate adopted a resolution S Res 432 congratulating Estonia Latvia and Lithuania on the 100th anniversary of their independence applauding the U S -Baltic partnership commending the Baltic states’ commitment to NATO transatlantic security 28 Bruun and Hjejle Report on the Non-Resident Portfolio at Danske Bank’s Estonian Branch prepared at the request of Danske Bank September 19 2018 29 Danske Bank “Danske Bank Closes Down Its Banking Activities in the Baltics and in Russia ” Company Announcement No 4 2019 February 19 2019 30 See U S Department of State U S Relations With Lithuania May 23 2019 U S Relations With Latvia September 24 2018 and U S Relations With Estonia April 12 2018 31 See NATO “Resolute Support Mission RSM Key Facts and Figures ” June 2019 32 See Global Coalition Against Daesh “Estonia ” at https theglobalcoalition org en partner estonia “Latvia ” at https theglobalcoalition org en partner latvia and “Lithuania ” at https theglobalcoalition org en partner lithuania 33 The White House “Remarks by President Trump and Heads of the Baltic States in Joint Press Conference ” April 3 2018 Also see Anke Schmidt-Felzmann The U S -Baltic Presidential Summit 100 Years with Russia Foreign Policy Research Institute April 3 2018 34 U S Chamber of Commerce U S Baltic Business Summit April 3 2018 Congressional Research Service 8 Estonia Latvia and Lithuania Background and U S -Baltic Relations democracy and human rights and reiterating the Senate’s support for the European Deterrence Initiative EDI as a means of enhancing Baltic security on EDI see “U S European Deterrence Initiative ” below 35 Security Partnership and Assistance The United States provides significant security assistance to its Baltic partners According to the State Department as of July 2019 U S security assistance to the Baltic states has included     more than $450 million in defense articles sold under the Foreign Military Sales FMS program and more than $350 million in defense articles authorized under the Direct Commercial Sales process since 2014 more than $150 million in Foreign Military Financing FMF since 2015 with the aim of strengthening the Baltic states’ defensive capabilities in areas such as hybrid warfare electronic warfare border security and air and maritime domain awareness and enhancing interoperability with NATO forces approximately $1 2 million annually per country in International Military Education and Training IMET funds contributing to the professional education of military officers and $290 million in funding from the Department of Defense under Title 10 train and equip programs since 2015 including approximately $173 million in FY2018 36 Since 1993 the Baltic states have participated in the U S National Guard State Partnership Program Under the program Estonia’s armed forces partner with units from the Maryland National Guard Latvia’s armed forces partner with the Michigan National Guard and Lithuania’s armed forces partner with the Pennsylvania National Guard 37 In 2017 the United States signed separate bilateral defense cooperation agreements with each of the Baltic states The agreements enhanced defense cooperation by building on the NATO Status of Forces Agreement to provide a more specific legal framework for the in-country presence and activities of U S military personnel 38 The National Defense Authorization Act for Fiscal Year 2018 P L 115-91 authorized the Department of Defense to conduct or support a security assistance program to improve the Baltic states’ interoperability and build their capacity to deter and resist aggression The program was authorized through 2020 with a spending limit of $100 million In November 2018 the United States and the three Baltic states agreed to develop bilateral defense cooperation strategic road maps focusing on specific areas of security cooperation for the period 2019-2024 In April 2019 the United States and Lithuania signed a road map agreeing to strengthen cooperation in training exercises and multilateral operations improve maritime domain awareness in the Baltic Sea improve regional intelligence-sharing surveillance and 35 A similar resolution H Res 826 was introduced in the House of Representatives U S Department of State Bureau of Political Military Affairs U S Security Cooperation with the Baltic States July 17 2019 37 National Guard State Partnership Program “State Partnership Program Map ” January 18 2019 38 U S Embassy in Estonia “Signing of Defense Cooperation Agreement—Remarks by Ambassador James D Melville ” January 17 2017 U S Embassy in Lithuania “United States and Lithuania Signed Defense Cooperation Agreement ” January 17 2017 and “‘Status of Forces’ Deal Signed ” Latvian Public Broadcasting January 13 2017 36 Congressional Research Service 9 Estonia Latvia and Lithuania Background and U S -Baltic Relations early warning capabilities and build cybersecurity capabilities 39 In May 2019 the United States signed road map agreements with Latvia and Estonia outlining similar priorities for security cooperation 40 In the 116th Congress the National Defense Authorization Act for Fiscal Year 2020 P L 116-92 extended security assistance to the Baltic states for building interoperability and deterrence through 2021 and increased the total spending limit to $125 million The act also requires the Secretary of Defense and the Secretary of State to jointly conduct a comprehensive assessment of the military requirements necessary to deter and resist Russian aggression in the region The committee report S Rept 116-103 for the Senate version of the Department of Defense Appropriations Act 2020 S 2474 recommends allocating $400 million to the Defense Cooperation Security Agency to fund a Baltics regional air defense radar system A sense of Congress resolution introduced in the House of Representatives H Res 416 would reaffirm U S support for the Baltic states’ sovereignty and territorial integrity and encourage the Administration to further defense cooperation efforts Partially reflected in the National Defense Authorization Act for Fiscal Year 2020 the Baltic Reassurance Act H R 3064 introduced in the House of Representatives would reiterate the U S commitment to the security of the Baltic states and require the Secretary of Defense to conduct a comprehensive regional defense assessment Economic Relations U S economic ties with the three Baltic states remain relatively limited although the State Department has stated there are “growing commercial opportunities for U S businesses” and “room for growth” in the relationship 41   In 2018 U S goods exports to Estonia were valued at $346 1 million and goods imports from Estonia were valued at $953 5 million 42 Main U S exports to Estonia are computer and electronic products chemicals machinery and transportation equipment Estonia’s top exports to the United States are computer and electronic products petroleum products and chemicals electrical equipment and medical instruments 43 U S affiliates employ about 3 570 people in Estonia and U S FDI in Estonia was about $100 million in 2017 44 In 2018 U S goods exports to Latvia were valued at $510 4 million and goods imports from Latvia were valued at $727 1 million 45 Main U S exports to Latvia are transportation equipment and computer and electronic products top U S U S Department of Defense “United States Lithuania Sign Defense Cooperation Plan ” press release April 2 2019 Terri Moon Cronk “U S Estonia Sign 5-Year Road Map of Defense Cooperation ” U S Department of Defense May 22 2019 and U S Department of Defense “U S Latvia Reaffirm Relationship in Bilateral Meeting ” May 10 2019 41 U S Department of State U S Relations with Lithuania May 23 2019 and U S Relations with Latvia September 24 2018 42 U S Department of Commerce U S Census Bureau “Trade in Goods with Estonia ” at https www census gov foreign-trade balance c4470 html 43 U S Department of State U S Relations with Estonia April 12 2018 44 Daniel S Hamilton and Joseph P Quinlan Johns Hopkins University School of Advanced International Studies The Transatlantic Economy 2019 p 127 Hereinafter Hamilton and Quinlan Transatlantic Economy 45 U S Department of Commerce U S Census Bureau “Trade in Goods with Latvia ” at https www census gov foreign-trade balance c4490 html 39 40 Congressional Research Service 10 Estonia Latvia and Lithuania Background and U S -Baltic Relations  imports from Latvia are beverage products and transportation equipment U S affiliates employ about 1 325 people in Latvia and U S FDI in Latvia was $71 million in 2017 46 In 2018 U S exports to Lithuania were valued at $706 4 million and imports from Lithuania were valued at nearly $1 268 billion 47 Main U S exports to Lithuania are used machinery chemicals computer and electronic products and transportation equipment top U S imports from Lithuania are petroleum and coal products chemicals and furniture U S affiliates employ about 2 250 people in Lithuania and Lithuania has not attracted significant levels of U S FDI 48 Regional Security Concerns and Responses Officials in the Baltic region have noted with concern what they view as increasing signs of Russian foreign policy assertiveness These signs include a buildup of Russian forces in the region large-scale military exercises and incursions by Russian military aircraft into Baltic states’ airspace 49 Unlike Georgia and Ukraine the Baltic states are members of NATO and many observers contend the alliance’s Article 5 collective defense guarantee limits potential Russian aggression in the Baltic region Nevertheless imposing various kinds of pressure on the Baltic states enables Russia to test NATO solidarity and credibility 50 Defense experts assert that Russian forces stationed near the Baltic region including surface ships submarines and advanced S-400 air defense systems could “allow Russia to effectively close off the Baltic Sea and skies to NATO reinforcements ”51 According to a RAND report based on a series of war games staged in 2014 and 2015 a quick Russian strike could reach the capitals of Estonia and Latvia in 36-60 hours 52 Kaliningrad Russia’s Strategic Territory on the Baltic Kaliningrad a 5 800-square-mile Russian exclave on the Baltic Sea located between Poland and Lithuania is a key strategic territory for Russia allowing the country to project military power into NATO’s northern flank see Figure 1 The territory has a heavy Russian military presence including the Baltic Fleet and two airbases Russia has repeatedly deployed Iskander short-range nuclear-capable missiles in Kaliningrad and reports indicate that a new deployment in 2018 could be permanent According to NATO officials Russia is using Kaliningrad to pursue an anti-access area denial A2 AD strategy that involves layering surface-to-air missiles to potentially block access to the Baltic states and much of Poland Analysts 46 Hamilton and Quinlan Transatlantic Economy p 135 U S Department of Commerce U S Census Bureau “Trade in Goods with Lithuania ” at https www census gov foreign-trade balance c4510 html 48 Hamilton and Quinlan Transatlantic Economy p 136 49 Valerie Insinna “British Air Force Charts a Rise in Russian Activity Around Baltic States ” DefenseNews July 18 2019 and Teri Schultz “NATO Says More Russian Buzzing of Baltic Airspace a Risk for Deadly Mistakes ” Deutsche Welle June 27 2017 50 See Raphael S Cohen and Andrew Radin Russia’s Hostile Measures in Europe RAND Corporation pp 19-61 2019 and House Committee on Foreign Affairs Subcommittee on Europe Eurasia and Emerging Threats U S Policy Toward the Baltic States hearing witness statements March 22 2017 51 Henry Meyer “Putin’s Military Buildup in the Baltic Stokes Invasion Fears ” Bloomberg July 6 2016 52 David A Shlapak and Michael W Johnson Reinforcing Deterrence on NATO’s Eastern Flank Wargaming the Defense of the Baltics RAND Corporation September 30 2016 Also see Paul K Davis et al Exploring the Role Nuclear Weapons Could Play in Deterring Russian Threats to the Baltic States RAND Corporation 2019 47 Congressional Research Service 11 Estonia Latvia and Lithuania Background and U S -Baltic Relations warn that Kaliningrad’s geographic isolation creates a scenario in which Russia could try to seize the Suwałki Gap the 100-kilometer border between Poland and Lithuania separating Kaliningrad from Russia’s ally Belarus Sources Maria Domańska et al Fortress Kaliningrad Ever Closer to Moscow Centre for Eastern Studies Warsaw October 2019 LTG Ret Ben Hodges Janusz Bugajski and Peter Doran Securing the Suwałki Corridor Center for European Policy Analysis July 2018 Dominik Jankowski Six Ways NATO Can Address the Russian Challenge Atlantic Council July 4 2018 “Russia Deploys Iskander Nuclear-Capable Missiles to Kaliningrad ” Reuters February 5 2018 Defense Spending and Capabilities The breakup of the Soviet Union left the Baltic states with virtually no national militaries and their forces remain small and limited see Table 1 The Baltic states’ defense planning consequently relies heavily on NATO membership and these states have emphasized active participation in the alliance through measures such as contributing troops to NATO’s mission in Afghanistan In the context of Russia’s invasion of Ukraine and renewed concerns about Russia the Baltic states have significantly increased their defense budgets and sought to acquire new military capabilities Lithuania has the largest military of the three Baltic states with 19 850 total active duty personnel in 2019 53 According to NATO Lithuania has increased its defense spending from $427 million in 2014 to an expected $1 084 billion in 2019 equivalent to 1 98% of GDP NATO recommends that member states allocate 2% of GDP for defense spending 54 The defense ministry has moved ahead with plans to acquire new self-propelled artillery systems and portable anti-aircraft missiles as well as elements of a medium-range air defense system After abolishing conscription in 2008 Lithuania reintroduced compulsory military service in 2015 due to concerns about Russia a move that brings 3 000 personnel to the armed forces per year According to NATO Estonia’s defense spending is expected to be 2 13% of GDP $669 million in 2019 55 The country’s armed forces total 6 600 active personnel and 12 000 reserves plus a volunteer territorial defense force with about 15 800 members 56 Estonia has taken steps to upgrade its air defense system and modernize a range of ground warfare equipment including anti-tank weapons Estonia has compulsory military service for men aged 18-27 with an eightmonth basic term of conscripted service Latvia’s armed forces total 6 210 active personnel 57 According to NATO figures Latvia has more than doubled its defense spending as a percentage of GDP over the past five years from 0 94% of GDP in 2014 to 2 01% of GDP $724 million in 2019 58 Acquisition priorities of the Latvian armed forces include self-propelled artillery armored reconnaissance vehicles multi-role helicopters anti-aircraft missiles and anti-tank missiles 53 International Institute for Strategic Studies IISS The Military Balance 2019 pp 125-126 Hereinafter IISS Military Balance 54 NATO Public Diplomacy Division Defence Expenditures of NATO Countries 2012-2019 June 25 2019 Hereinafter NATO Public Diplomacy Division Defence Expenditures 55 NATO Public Diplomacy Division Defence Expenditures 56 IISS Military Balance pp 101-102 57 IISS Military Balance pp 123-125 58 NATO Public Diplomacy Division Defence Expenditures Congressional Research Service 12 Estonia Latvia and Lithuania Background and U S -Baltic Relations Table 1 Baltic States Defense Information Active Armed Forces Personnel Reserves 2019 Defense Budget Defense Spending % of GDP Estonia 6 600 12 000 $669 million 2 13 Latvia 6 210 15 900 $724 million 2 01 Lithuania 19 850 6 700 $1 084 billion 1 98 Sources International Institute for Strategic Studies IISS The Military Balance 2019 and NATO Public Diplomacy Division Defence Expenditures of NATO Countries 2012-2019 June 25 2019 U S European Deterrence Initiative Under the European Deterrence Initiative EDI which was launched in 2014 and originally called the European Reassurance Initiative the United States has bolstered security cooperation in Central and Eastern Europe with enhanced U S military activities in five areas 1 increased military presence in Europe 2 additional exercises and training with allies and partners 3 improved infrastructure to allow greater responsiveness 4 enhanced prepositioning of U S equipment and 5 intensified efforts to build partner capacity of newer NATO members and other partners 59 As of December 2019 there are approximately 6 000 U S military personnel involved in the associated Atlantic Resolve mission at any given time with units typically operating in the region under a rotational nine-month deployment 60 The United States has not increased its permanent troop presence in Europe about 67 000 troops including two U S Army Brigade Combat Teams or BCTs Instead it has focused on rotating additional forces into the region including nine-month deployments of a third BCT based in the United States 61 The rotational BCT is based largely in Poland with units also conducting training and exercises in the Baltic states and 14 other European countries 62 The Fourth Infantry Division Mission Command Element based in Poznań Poland acts as the headquarters overseeing rotational units EDI funding increased substantially during the first years of the Trump Administration from approximately $3 4 billion in FY2017 to approximately $4 8 billion in FY2018 and approximately $6 5 billion in FY2019 63 For FY2020 the Administration requested $5 9 billion in funding for the EDI defense officials explained that the reduced request was due to the completion of construction and infrastructure projects 64 In September 2019 the Department of Defense announced plans to defer $3 6 billion of funding for 127 military construction projects in order to fund construction of the U S -Mexico border wall with approximately $770 million of 59 See Eerik Marmei and Gabriel White European Deterrence Initiative Bolstering the Defense of the Baltic States International Centre for Defence and Security Estonia December 2017 60 See U S Army Europe “Atlantic Resolve ” at http www eur army mil atlanticresolve 61 See U S Army Europe Public Affairs Office “Fact Sheet Atlantic Resolve Armored Rotation ” September 1 2019 and U S Army Europe Public Affairs Office “Fact Sheet Atlantic Resolve Aviation Rotation ” September 1 2019 62 See for example David B Larter “On the Borders of Putin’s Baltic Fortress Lithuania Cheers Local Buildup of U S Forces ” DefenseNews October 14 2019 63 See CRS In Focus IF10946 The European Deterrence Initiative A Budgetary Overview by Pat Towell and Aras D Kazlauskas 64 Aaron Mehta “European Defense Fund Takes a 10 Percent Cut in New Budget ” DefenseNews March 12 2019 Congressional Research Service 13 Estonia Latvia and Lithuania Background and U S -Baltic Relations this money to come from EDI-related projects 65 Affected initiatives in the Baltic states reportedly include the planned construction of a special forces operations and training facility in Estonia NATO Enhanced Forward Presence At the 2016 NATO Summit in Warsaw the alliance agreed to deploy battalion-sized approximately 1 100-1 500 troops multinational battle groups to Poland and each of the three Baltic states see Figure 2 66 These enhanced forward presence units are intended to deter Russian aggression and emphasize NATO’s commitment to collective defense by acting as a tripwire that ensures a response from the whole of the alliance in the event of a Russian attack Figure 2 NATO Enhanced Forward Presence in the Baltic States Source Created by CRS with information from NATO NATO’s Enhanced Forward Presence October 2019 Notes The United States leads a fourth battlegroup in Poland with contributions from Croatia Romania and the United Kingdom Germany leads the multinational battalion in Lithuania with troop contributions from Belgium the Czech Republic Iceland the Netherlands and Norway Canada leads the multinational battalion in Latvia with troop contributions from Albania the Czech Republic Italy Montenegro Poland Slovakia Slovenia and Spain The United Kingdom UK leads in Estonia with contributions from Denmark France and Iceland The United States leads the multinational battalion in Poland with contributions from Croatia Romania and the UK 67 NATO continues to resist calls to deploy troops permanently in countries that joined the alliance after the collapse of the Soviet Union due to concerns in some member states that doing so could violate the terms of the 1997 NATO-Russia Founding Act 68 Accordingly the enhanced NATO presence has been referred to as continuous but rotational rather than permanent Paul Sonne and Seung Min Kim “Pentagon Takes Money from Puerto Rico European Projects to Fund Trump’s Wall ” Washington Post September 4 2019 66 See Kalev Stoicescu and Pauli Järvenpää Contemporary Deterrence – Insights and Lessons from Enhanced Forward Presence International Centre for Defence and Security Estonia January 28 2018 67 NATO “Enhanced Forward Presence - Map ” October 25 2019 68 The document states that “NATO reiterates that in the current and foreseeable security environment the Alliance will carry out its collective defense and other missions by ensuring the necessary interoperability integration and capability for reinforcement rather than by additional permanent stationing of substantial combat forces ” Proponents of extended permanent basing assert that the “current security environment” with regard to Russia has changed considerably since 1997 See NATO Founding Act on Mutual Relations Cooperation and Security Between NATO and the Russian Federation Signed in Paris France May 27 1997 65 Congressional Research Service 14 Estonia Latvia and Lithuania Background and U S -Baltic Relations NATO Air Policing Mission Lacking their own fighter aircraft the Baltic states rely on their NATO allies to police and defend Baltic airspace NATO launched the Baltic Air Policing mission in 2004 The mission originally consisted of rotating four-month deployments of four aircraft Following Russia’s invasion of Ukraine in 2014 deployments increased to 8 to 12 aircraft at a time The Baltic states contribute to mission costs including by providing ground services for the aircraft and supplying aviation fuel In September 2019 Belgium took over as the air-policing mission’s lead nation with four Belgian and four Danish F-16s operating from Šiauliai Air Base in Lithuania augmented by four Czech Gripen fighters based at Ämari Air Base in Estonia 69 From May to August 2019 in what was the 50th rotation of the Baltic Air Policing mission Hungary was the lead nation with Hungarian Gripens joined at Šiauliai by F-18s from Spain and British Eurofighters augmenting from Ämari 70 Potential Hybrid Threats In recent years tensions between Russia and the Baltic states have been exacerbated by reciprocal accusations of spying illicit cyber activity including the hacking of Baltic states’ government websites and a Russian propaganda offensive directed at Russian speakers in the Baltic states Baltic states’ support for EU sanctions on Russia due to its invasion of Ukraine also has exacerbated tensions as have Russian retaliatory sanctions targeting agricultural products Many observers have expressed concerns about Russia targeting the Baltic states with hybrid warfare tactics such as those it has used in Ukraine Disinformation Campaigns and Ethnic Russians in Baltic States The presence of a large ethnic Russian population in the Baltic states is a factor in these concerns especially given that Russian claims of persecution against Russian communities were part of Russia’s pretext for intervention in Ukraine According to statements by Russian officials including President Vladimir Putin one of the central principles of Russian foreign policy is acting as the defender and guarantor of the rights of Russian-speaking people wherever they live 71 Russia routinely accuses Estonia and Latvia of violating the human rights of Russian-speaking minorities by discriminating against the Russian language in official usage 72 Although international organizations generally have rejected these charges some segments of the countries’ Russian-speaking communities are poorly integrated into society 73 About 230 000 people in Republic of Lithuania Ministry of National Defence Vice-Minister of National Defence V Umbrasas NATO’s Air Policing Mission Will Continue to Be as Important to Lithuania Latvia and Estonia as Ever September 3 2019 70 NATO “Hungary to Lead NATO’s Baltic Air Policing Joined by UK and Spain ” April 17 2019 71 President of Russia “Address by President of the Russian Federation ” March 18 2014 at http en kremlin ru events president news 20603 72 In April 2018 for example Latvia adopted a law mandating that Latvian is to gradually become the sole language of instruction in the country’s public schools Although the reform is popular among ethnic Latvians many in the country’s Russian-speaking population have objected to the law as discriminatory Russia strongly criticized the law and threatened to impose economic sanctions against Latvia in response See “Russia Threatens Sanctions over Latvian Language in Schools ” BBC News April 3 2018 73 Isabelle de Pommereau “Estonia Reaches Out to Its Ethnic Russians at Long Last ” Deutsche Welle February 24 69 Congressional Research Service 15 Estonia Latvia and Lithuania Background and U S -Baltic Relations Latvia and 76 000 people in Estonia the majority of whom are ethnic Russians are noncitizen residents who are not allowed to vote or hold public office because they have not passed a citizenship test which includes language and history components Additionally approximately 55 000 Russian citizens live in Latvia and 89 000 Russian citizens live in Estonia 74 Many in the ethnic Russian community receive their news primarily from Russian-language television and newspapers and Russian media dominates the information market in Russianspeaking regions 75 In the past Latvia and Lithuania have imposed fines and temporary bans on Russian media outlets such as Rossiya and Sputnik due to what authorities considered dangerous and unbalanced reporting 76 Analysts have documented how Russia uses traditional media e g radio television and social media to propagate disinformation in the Baltic states and many other European countries 77 Russian disinformation efforts against the Baltic states typically attempt to polarize society by portraying the Baltic states as illegitimate and dysfunctional the EU as ineffective and divided NATO and the United States as imperial powers and Baltic governments as Russophobe fascist regimes that oppress their ethnic Russian populations Russian outlets repeatedly have sought to stir up opposition to NATO deployments in the region by fabricating stories of criminal activity by deployed NATO soldiers 78 There is no movement among Russian-speaking communities in the Baltic states advocating absorption by Russia and survey data indicate that these communities are not a unified homogenous group in terms of how they view competing political narratives 79 Analysts believe most members of these communities prefer to live in Estonia or Latvia rather than Russia noncitizen residents enjoy benefits such as visa-free travel throughout the EU and average wages are considerably higher than in Russia 80 Concerns remain however that Russia could attempt to foment tensions or civil unrest as a pretext for intervention or in an attempt to seize territory populated by ethnic Russians Cyberattacks Vulnerability to potential cyberattacks is a primary concern for the Baltic states Following a period of heightened tensions with Russia in 2007 Estonia’s internet infrastructure came under 2018 74 Council of Europe “Latvia Takes Important Step Toward Eliminating Child Statelessness ” press statement October 18 2019 “Number of Stateless Residents in Estonia Drops by over 2 200 in 2018 ” ERR News Estonian Public Broadcasting January 3 2019 and “Population of Russian Citizens in Latvia Grows by 28 000 over Decade ” Public Broadcasting of Latvia July 24 2017 75 See Andrew Whyte “Russian-Speakers Increasingly Turning to RTR Planeta for ‘Propaganda’ Dose ” Estonian Public Broadcasting October 25 2018 and Mārtinš Hiršs The Extent of Russia’s Influence in Latvia National Defence Academy of Latvia Center for Security and Strategic Research November 2016 p 12 hereinafter Hiršs Extent of Russia’s Influence 76 “Latvia Shuts Down Russian ‘Propaganda’ Website Sputnik ” Euractiv March 30 2016 and Liudas Dapkus “Latvia Lithuania Ban Russian State TV Broadcasts ” Associated Press April 7 2014 77 See for example Todd C Helmus et al Russian Social Media Influence Understanding Russian Propaganda in Eastern Europe RAND Corporation 2018 78 Edward Lucas and Peter Pomeranzev Winning the Information War Center for European Policy Analysis August 2016 79 Hiršs Extent of Russia’s Influence pp 3 and 9-23 80 Emily Ferris Probing the Baltic States Why Russia’s Ambitions Do Not Have a Security Dimension Royal United Services Institute for Defence and Security Studies November 21 2018 Congressional Research Service 16 Estonia Latvia and Lithuania Background and U S -Baltic Relations heavy attack from hackers Estonian officials said some assaults came from Russian government web servers although many others came from all over the world 81 According to analysts what appeared as a series of smaller individual distributed denial-of-service attacks was most likely a coordinated large-scale effort 82 The attacks did little long-term damage and they gave Estonia experience in facing such incidents and prompted the country to strengthen its cyber defenses 83 Estonia hosts the NATO Cooperative Cyber Defense Center of Excellence which opened in 2008 The center fosters cooperation and information sharing on cybersecurity between NATO countries conducts cyberwarfare research and training and organizes exercises and conferences preparing NATO countries to detect and fight cyberattacks 84 In 2018 Lithuania adopted a national Cyber Security Strategy and integrated several government agencies into the National Cyber Security Centre NCSC under the Ministry of Defense Lithuania’s NCSC registered more than 53 000 cybersecurity incidents in 2018 85 The International Telecommunication Union’s Global Cybersecurity Index 2018 ranked Lithuania fourth and Estonia fifth in the world based on measurements of legal technical organizational capacity building and cooperation measures related to cybersecurity The UK was ranked first United States second and France third 86 Energy Security In 2014 a decade after joining NATO and the EU the Baltic states continued to import 100% of their natural gas from Russia This dependence raised concerns that Russia could use energy as political and economic leverage against the Baltic states prompting them to diversify their supply sources and improve their integration with European natural gas networks In 2014 a floating liquefied natural gas LNG terminal became operational at the Lithuanian port of Klaipėda The nearly 300-meter-long vessel the Independence has the capacity to supply 100% of Lithuania’s natural gas needs and 90% of the total natural gas needs of the three Baltic countries combined 87 In 2014 the Lithuanian gas company Litgas signed a five-year deal with Norway’s Statoil now Equinor to provide 540 million cubic meters of gas to the facility annually Gazprom subsequently agreed to cut the price Lithuania pays for natural gas The United States began exporting LNG to Lithuania in 2017 88 Currently Lithuania imports nearly NATO Strategic Communications Centre of Excellence “2007 Cyber Attacks on Estonia” in Hybrid Threats A Strategic Communications Perspective Annex of Case Studies 2019 pp 51-69 82 Rain Ottis Analysis of the 2007 Cyber Attacks Against Estonia from the Information Warfare Perspective NATO Cooperative Cyber Defence Centre of Excellence 2008 83 Damien McGuinness “How a Cyber Attack Transformed Estonia ” BBC News April 27 2017 84 See NATO Cyber Defence Center of Excellence at https www ccdcoe org Lithuania hosts the NATO Energy Security Center of Excellence and Latvia hosts the NATO Strategic Communications Center of Excellence See NATO Centres of Excellence at http www nato int cps en natohq topics_68372 htm 85 National Cyber Security Centre under the Ministry of National Defence National Cyber Security Status Report 2018 86 International Telecommunications Union Global Cybersecurity Index GCI 2018 p 62 at https www itu int en ITU-D Cybersecurity Pages global-cybersecurity-index aspx 87 Nerijus Adomaitis “We Can Survive Without Russian Gas Now Says Lithuania’s President ” Reuters October 21 2014 Also see Andrius Sytas “Lithuania LNG Port Aims to Be Baltic Hub Double Flows ” Reuters January 21 2019 88 Andrius Sytas “Lithuania Receives First LNG from the United States ” Reuters August 21 2017 81 Congressional Research Service 17 Estonia Latvia and Lithuania Background and U S -Baltic Relations 58% of its natural gas from Russia accounting for approximately 19% of its primary energy consumption 89 Although Estonia and Latvia continue to import all of their natural gas from Russia natural gas accounts for a relatively low share of the countries’ overall energy supplies Oil shale accounts for about 85% of Estonia’s domestic energy supply whereas natural gas accounts for less than 6% Russian natural gas accounts for approximately 24% of Latvia’s primary energy consumption hydropower is Latvia’s largest source of energy 90 In addition to Lithuania’s LNG facility numerous initiatives aim to reduce regional energy dependence on Russia through supply diversification and increased interconnectivity A pipeline from Poland to Lithuania linking the natural gas networks of the Baltic states to the rest of the EU is expected to be completed in 2021 91 The Baltic Connector pipeline linking the gas infrastructures of Estonia and Finland is expected to become operational in 2020 92 Poland opened an LNG terminal in 2015 and Finland opened one in 2019 As a remnant of the Soviet era the Baltic states’ power grids remain connected and synchronized with those of Russia including Kaliningrad and Belarus a control center in Moscow regulates frequency and manages reserve capacity for the Baltic states’ electricity supply Two strategic projects to integrate the region’s power grid into the wider European electricity market became operational in 2016 the LitPol link connecting Lithuania with Poland and the 450-kilometer undersea NordBalt cable connecting Lithuania with Sweden 93 Previously two connections between Estonia and Finland were the only infrastructure linking the region’s electric grid to the rest of Europe In 2018 the governments of Estonia Latvia and Lithuania reached an agreement with the European Commission on plans to synchronize their electricity grids with the rest of Europe by 2025 94 Many U S officials and Members of Congress regard European energy security as a U S interest In particular there has been concern in the United States that Russian energy dominance could affect the ability to present a united transatlantic position when it comes to other issues related to Russia Successive U S Administrations have encouraged EU member states to reduce energy dependence on Russia through diversification of supply They also have supported European steps to develop alternative sources and increase energy efficiency In the 116th Congress related bills include the European Energy Security and Diversification Act of 2019 House-passed H R 1616 and S 704 the Protect European Energy Security Act H R 2023 and the Energy Security Cooperation with Allied Partners in Europe Act of 2019 S 1830 Conclusion The Baltic states are likely to remain strong U S allies and important U S security partners in Europe Analysts believe close cooperation between the United States and the Baltic states will 89 BP Statistical Review of World Energy 2018 and Cedigaz statistical database BP Statistical Review of World Energy 2018 and Cedigaz statistical database 91 European Commission Construction of the Gas Interconnection Poland-Lithuania GIPL Including Supporting Infrastructure January 2019 92 European Commission Interconnector Between Estonia and Finland BalticConnector February 13 2017 93 “Completion of NordBalt and LitPol Closes the Baltic Ring ” ModernPowerSystems March 23 2016 at https www modernpowersystems com features featurecompletion-of-nordbalt-and-litpol-closes-the-baltic-ring4847289 94 European Commission European Solidarity on Energy Synchronisation of the Baltic States’ Electricity Network with the European System Strengthens Security of Supply June 27 2018 90 Congressional Research Service 18 Estonia Latvia and Lithuania Background and U S -Baltic Relations continue for the foreseeable future in areas such as efforts to deter potential Russian aggression the future of NATO energy security and economic issues The Baltic states likely will continue to look to the United States for leadership on foreign policy and security issues During the 116th Congress the activities and funding level of the EDI bilateral security cooperation with the Baltic states and the regional presence and activities of NATO forces may remain of interest to Members of Congress Efforts to bolster the capabilities of the Baltic states’ armed forces including through defense sales and the provision of U S security assistance also may be of congressional interest The Baltic states likely will be of continuing importance in the area of European energy security In addition Members of Congress may wish to remain informed about potential security threats to the Baltic states posed by Russia including conventional military concerns and hybrid threats such as disinformation campaigns and cyberattacks Members of Congress may have an interest in assessing how the Baltic states as well as other NATO and EU member states can develop capabilities to counter such hybrid threats Author Information Derek E Mix Analyst in European Affairs Acknowledgments The author thanks CRS Visual Information Specialist Amber Wilhelm and CRS Geospatial Information Systems Analyst Calvin DeSouza for their work in creating the graphics for this report Disclaimer This document was prepared by the Congressional Research Service CRS CRS serves as nonpartisan shared staff to congressional committees and Members of Congress It operates solely at the behest of and under the direction of Congress Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role CRS Reports as a work of the United States Government are not subject to copyright protection in the United States Any CRS Report may be reproduced and distributed in its entirety without permission from CRS However as a CRS Report may include copyrighted images or material from a third party you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material Congressional Research Service R46139 · VERSION 3 · UPDATED 19