Institute of Central Europe
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Estonia: the concept of a ‘personal state’

In 2024, Estonia, one of the world’s leaders in digitalisation, announced the next stage in the development of its public administration. The concept of a ‘personal state’ (Est. personale riik) is intended to elevate the relationship between citizens and the administration to a new level. The state aims not only to respond to citizens’ needs, but also to anticipate them by offering personalised services in advance. The implementation of this concept can set new standards in the global approach to the digitisation of public services. However, it also raises social concerns about the protection of privacy and the preservation of citizens’ autonomy in an increasingly digital world.

A personal state. In 2024, the Estonian government announced the next stage of the digital transformation of the state by introducing the concept of a ‘personal state’. This idea represents the next step in the long-term process of digitalisation, which the Ministry of Economic Affairs and Communications divided into three stages in the publication “Personaalne riik”[1]:

– 2000-2010: e-state (e-Riik) – In this phase, basic digital services were implemented that improved the functioning of the public sector. However, they essentially reflected the mechanisms and logic of their traditional, non-digital counterparts.

– 2010-2020: digital state (digiriik) – This phase was characterised by the proliferation of digital services and the emergence of a data-driven society. Digital services began to outperform their non-digital counterparts in terms of efficiency.

– 2020-…: personal state (personaalne riik) – This stage involves the creation of new types of services for which there are no non-digital counterparts. The aim is to create personalised services through the use of data and machine learning.

The main premise of the latest concept is that public administrations should be proactive. Instead of waiting for a citizen to ask for a specific service, the authorities should anticipate needs and offer appropriate support or information. The new concept is based on the idea that the state, which has access to the citizen’s data, can operate in the background, providing personalised services and assistance in administrative matters, taking into account the citizen’s individual needs. The system designed in this way is intended to provide digital public services that have five characteristics: a focus on citizens’ needs, widespread availability, proactivity, credibility and transparency, and the creation of added value for society.

This is not a utopian vision – Estonia, based on the solid foundations laid in previous stages of digital development, is ready, as the authors of the new concept point out, for another breakthrough step, striving to become a world leader in creating a personalised state.

The plan to implement the concept of a ‘personal state’ in Estonia includes several key stages. The first step is to develop a public service maturity model based on the characteristics of ‘personal state’ services and to integrate these characteristics into the Estonian “Digital Society Development Strategy 2030” (Digiühiskonna arengukava 2030) by the end of 2024. In parallel, work will be carried out to identify the legal possibilities and constraints for the implementation of this concept. The next stage will see the development of at least 10 services related to life events for citizens and 10 services for entrepreneurs, as well as the development of interoperable central service channels by the end of 2025. The concept of the ‘personal state’ is likely to be largely decentralised, as has been the case in Estonia so far, but some tasks may be carried out within the newly established Ministry of Justice and Digital Affairs in Kristen Michal’s government, headed by Liisa-Ly Pakosta. It is worth noting that the author of the ‘personal state’ concept is the liberal and innovative Estonia 200 party, of which Pakosta is a member.

e-Estonia. Estonia has established a strong position in the field of digitalisation thanks to the consistent strategy of building a knowledge-based society, adopted shortly after regaining independence. The key to this success was the favourable geopolitical conditions following the collapse of the Soviet Union, which facilitated the creation of a new system based on information and communication technologies. Experienced scientists from the Soviet period played an important role in the creation of this system and made a significant contribution to the development of the ICT sector. In addition, the geographical proximity to the Nordic countries led Estonian ICT specialists to initiate a number of joint projects with telecommunications companies from Sweden and Finland. As a result, during the 1990s, the Nordic countries had a significant influence on the development of digital policy in Estonia, both in normative and practical terms. At the same time, however, Estonia adopted an innovative approach, focusing on building unique systems from scratch rather than modifying existing solutions. Effective management was based on decentralised digital policy and a strong public-private partnership. The bold and far-sighted plans made at the time led to Estonia’s current position – and, just as importantly, recognisable brand – as an innovative country where digital technology drives socio-economic development. This is also reflected in its high rankings in digital public services – second out of 35 European countries according to the eGovernment Benchmark 2023 and second out of 193 UN countries according to the UN E-Government Survey 2024. The latter ranking, published in September 2024, stated that “Estonia continues to strengthen its global leadership in digital government through solid infrastructure and forward-looking initiatives. […] Estonia has developed a comprehensive digital identity system that enables seamless access to online public services. With a focus on data-driven governance, Estonia is also a pioneer in the integration of artificial intelligence, cybersecurity, and next-generation technologies such as 5G. Estonia’s national strategy is closely aligned with the Sustainable Development Goals (SDGs) and the European Union’s digital strategy, supporting international cooperation and innovation in the delivery of public services.”

Conclusions

– The concept of a ‘personal state’ opens up new possibilities for improving the quality and efficiency of public services. In simple terms, this means that the system will be able to automatically inform citizens about mundane but important matters. For example, it could remind people when documents are due to expire, provide parents with information on the education options available for their children, or inform senior citizens about the benefits to which they are entitled. Furthermore, this concept lays the groundwork for a ‘digital welfare state’, where advanced data analytics and artificial intelligence enable more complex, proactive actions by public administrations. In practice, the system could provide information on available support programmes, such as courses to improve professional skills, tailored to the individual situation and needs of the citizen and taking into account forecasts of the development of the local labour market.

– This approach is based on the concept of ‘choice architecture’ developed by Nobel laureate Richard Thaler. It involves creating conditions that make it easier for citizens to make beneficial choices without restricting their freedom of choice. This is achieved through ‘nudges’, i.e. suggestions from the system that can encourage behaviour deemed desirable from the point of view of society and the individual. For example, the system could suggest optimal pension saving strategies adapted to the individual’s financial situation.

As a pioneer in the digitalisation of public services, Estonia is setting trends in this area (“Komentarze IEŚ”, No. 282). Its experience in implementing the concept of the ‘personal state’ can inspire other countries to adopt similar solutions. Estonia’s success in this area can therefore be an important point of reference in the global discussion on the future of digital public administration.

– At the same time, the personal state concept can be an effective remedy for Estonia’s current economic challenges (“IEŚ Commentaries Brief”, No. 1172). By acting proactively and personalising services, the public administration can both reduce the state’s administrative costs and more effectively support economic development and the competitiveness of the Estonian economy.

– However, the implementation of this approach presents considerable challenges. The debate in the Estonian media surrounding this topic reveals concerns mainly related to the potential violation of citizens’ privacy and excessive state interference in private lives. Among other things, representatives of some non-governmental organisations and the scientific community in Estonia point to the restriction of individual autonomy due to excessive anticipation of needs by the system. They also emphasise the need for deeper reflection on the ethical aspects of the concept of the ‘personal state’. Moreover, they underline the risks associated with the collection and use of large amounts of personal data, which could lead to abuse or information leakage.

– The coalition partners of Estonia 200 – the Reform Party and the Social Democrats – have also expressed some concerns about the proposed concept, pointing to the high costs of modernising the IT system, which may be incomprehensible to citizens in the country’s difficult economic situation.

[1] https://www.mkm.ee/sites/default/files/documents/2024-02/PersonaalneRiik-MKM_05.02.2024.pdf

Intensification of natural gas cooperation between the Baltic States and Finland

For many years, the Baltic States and Finland have actively worked to strengthen energy security, focusing on the creation of a unified natural gas market, increasing trade, and—since the outbreak of the full-scale war in Ukraine—coordinating anti-crisis measures in the energy sector. One key aspect of this effort was the adoption of amendments to Latvia’s Energy Act (Enerģētikas likums), which now allows the Inčukalns underground gas storage (UGS) facility to store reserves from Lithuania, Estonia, and Finland as part of their strategic gas reserves.

Steps toward a unified natural gas market. The Baltic States and Finland have long cooperated in strengthening regional energy security, particularly within the electricity ( “IEŚ Commentaries”, no. 512) and natural gas markets. Years ago, recognising their heavy reliance on Russian gas supplies and following the outbreak of the war in Ukraine, these countries took decisive actions to establish an integrated natural gas market. The goal was to enhance security through two key measures; first, trade was expanded, enabled by the development of regional import and transport infrastructure[1]. Second, market integration was pursued through the launch of a unified natural gas market involving Latvia, Estonia, and Finland (known as the FinEstLat market) on January 1, 2020. This integration introduced single transmission tariffs, reducing administrative burdens, increasing market competition, and optimising the use of energy infrastructure. These steps are part of broader efforts to build a single natural gas market across the European Union, driven by transmission operators in these countries[2].

Enhanced energy cooperation. The war in Ukraine has accelerated the push for better coordination, particularly in times of crisis. A significant milestone was the signing of agreements under the solidarity measure (Article 13 of the Regulation)[3], which ensures that protected customers can receive natural gas supplies during an energy crisis. These agreements, concluded in 2022, improved coordination of crisis measures and enhanced regional cooperation in the natural gas market[4]. More recently, the Latvian parliament (Saeima) took another step in this direction by adopting new legal provisions on September 12, 2024. These regulations further strengthen the security of natural gas supplies and respond to the growing need for trade. Under the revised Energy Act, the Inčukalns UGS in Latvia can now hold natural gas reserves from Lithuania, Estonia, and Finland as part of their strategic reserves. According to EU legislation, including Directive 2009/73/EC[5], member states must ensure free access to storage infrastructure, which includes cross-border cooperation on natural gas storage. In line with these regulations, the Inčukalns UGS is available for use by the Baltic States and other EU countries. However, member states are required to maintain their own stockpiles of natural gas, and currently, only Latvia possesses such a UGS in the region, as neither Estonia, Lithuania, nor Finland have comparable storage facilities.

Challenges and limitations in the Baltic Sea region. While Latvia’s latest legal amendments aim to establish a regional system for natural gas supply security based on a unified market, there are still two major factors hindering full integration. First, the region has a limited number of suppliers, as the market was long dominated by Russia ( “IEŚ Commentaries”, no. 587; “IEŚ Commentaries”, no. 724). However, given the current geopolitical situation, the shared perception of threats is driving efforts towards greater market harmonisation. Second, Lithuania has been reluctant to fully engage in the development of a unified natural gas market. Lithuania’s position stems from its advantageous infrastructure, which ensures its national energy security, including the Klaipėda LNG terminal and the GIPL gas pipeline. As a result, the timeline for Lithuania’s integration into the FinEstLat market has been postponed multiple times, with the current target set for October 2024. While Lithuania supports market integration, it expresses concerns that the current arrangements may not benefit all participants equally. There is a fear that Lithuania’s position could be weakened in an integrated market, where it would become just one of several equal players compared to its current role as a key regional security provider. Another issue is the inter-operator compensation mechanism, which governs the division of natural gas transport costs within the region.

Conclusions

  • The Latvian Saeima’s approval of new legal regulations governing natural gas reserves concludes many months of efforts, including: 1) multilateral intergovernmental negotiations, and 2) the process of securing approval from national energy regulators in Lithuania, Estonia, and Finland regarding the use of the Inčukalns UGS. These measures have enhanced energy security and strengthened regional cooperation, giving individual countries better access to the only gas storage facility in the region.
  • Latvia’s existing infrastructure stabilises supply and supports the functioning of the regional natural gas market while also promoting integration within the broader process of building a single EU gas market. Increased cooperation enables the full use of the regional infrastructure and aids in diversifying the sources and routes of natural gas supplies. The effectiveness of these measures was demonstrated during the repair of the Balticconnector gas pipeline (8 October 2023 – 22 April 2024).
  • Lithuania’s unique position, due to its LNG terminal in Klaipėda and the GIPL gas pipeline, allows it to secure alternative gas supplies independent of Russia. Therefore, Vilnius has remained cautious about joining the FinEstLat market, as it gains less from integration compared to Latvia, Estonia, and Finland, which are more reliant on the shared gas market. To facilitate Lithuania’s full integration into the regional system, it will be essential to develop mechanisms that recognise and incorporate the strategic advantages Lithuania brings to the table in the creation of a unified natural gas market.

[1] In the Baltic States and Finland, transport capacities (including the Poland-Lithuania and Estonia-Finland interconnectors) and import capacities (regasification terminals in Świnoujście, Klaipėda, Pori, Tornio, Inkoo, and Hamina) were expanded.

[2] The single market has led, among other things, to the elimination of internal tariffs for the transmission of natural gas in the region and has introduced a unified system of entry tariffs supported by an inter-operator compensation mechanism.

[3] Regulation (EU) 2017/1938 of the European Parliament and of the Council of 25 October 2017 concerning measures to safeguard the security of natural gas supply and repealing Regulation (EU) No 994/2010.

[4] The agreements were concluded between: Latvia and Estonia (4 January 2022, i.e., before the outbreak of a full-scale war in Ukraine), Latvia and Lithuania (10 March 2022), and Estonia and Finland (25 April 2022).

[5] Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC.

Russians banned from buying property in states of the Baltic Sea region

The countries of the Baltic Sea region have been of interest to Russian entrepreneurs and investors for years due to their geographical proximity and dynamic economic development. As a result, some real estate located near strategic facilities is currently owned by Russians, posing a challenge to the security of the countries in the region. Bans on the purchase of land by citizens of hostile states, or plans to introduce such restrictions in the Baltic states, Finland and Norway, are intended to strengthen their national security.

Lithuania. In May 2023, Lithuania enacted regulations aimed at ensuring national security and realising the state’s interests in connection with Russia’s military aggression against Ukraine. Among other measures, they have restricted the purchase of real estate by Russian citizens (only Russians with permanent residence permits can buy land and apartments). Lithuanian statistics show a steady increase in the number of real estate purchases by Russians and Belarusians in recent years. For example, in 2018 there were 530 and 213 transactions by Russian and Belarusian citizens, respectively, while in 2021, these figures rose to almost 800 and 400. So far, the most popular properties among foreigners have been those located in and around Vilnius, Visaginas and Klaipėda. The restrictions introduced in 2023 were initially temporary, lasting for one year. The government then decided to extend the restrictions until May 2025, but they still only apply to Russian citizens. Some Lithuanian politicians believe that these restrictions should also apply to Belarusians.

It is possible that the tightening of land acquisition rules will also affect citizens of other countries. A public opinion poll conducted in March 2024 (Vilmorus) showed that 58% of respondents supported the ban on the purchase of real estate by Russian citizens who do not have a temporary or permanent residence permit in Lithuania (in the case of Belarusian citizens, the figure was 56%). It should be noted, however, that property purchases by Belarusian and Russian citizens have so far not accounted for a significant share of property transactions – in the case of Lithuania, these purchases only accounted for 1-2% of annual sales before the restrictions were introduced.

Estonia. Similar discussions began in Estonia in 2022, as Russians often bought property in the country due to its geographical proximity (especially in the Ida-Virumaa region and in Tallinn). However, visa and transit restrictions (“IEŚ Commentaries”, No. 531; “Komentarze IEŚ”, nr 689), which led to difficulties in managing real estate, caused them to withdraw from the market (in recent months, transactions involving Russian citizens have mainly been sales). More than 40,000 property owners in Estonia are citizens of the Russian Federation.

Concerned about the security of the state, the Ministry of the Interior prepared a report on real estate owned by foreigners in Estonia as early as 2022, which revealed that Russians and Belarusians own real estate located near places of strategic importance, which may pose a risk to national security. One example is the Kalevi Panorama housing estate in Tallinn, which is owned by a Russian company and is located a short distance from the military campus and headquarters of the Estonian Defence Forces. The Ministry cited similar examples from Norway and Finland. As a result, it was concluded that it was in Estonia’s interest to limit the possibility for citizens of countries outside the European Union to own real estate within its territory. It was also deemed necessary to subject the border zone, as well as areas close to critical infrastructure facilities, to special monitoring.

The Ministry of the Interior has announced that it will present a draft law on this issue at the end of this year. It is expected that this law will introduce a ban on the purchase of real estate by foreigners near places of strategic importance. This measure will mainly target citizens of Russia and Belarus, although those with permanent residence permits in Estonia may be treated somewhat more leniently.

Finland. In early September 2024, the Finnish Ministry of Defence announced the suspension of six property purchase transactions by buyers from outside the EU and the European Economic Area (EEA) for reasons related to national security (according to the regulations, from 1 January 2020 all buyers of real estate from outside the EU or the EEA must obtain a purchase permit from the Ministry of Defence). The targets were to be Russian citizens and dual nationals, including Russian citizens suspected of links to the Kremlin or organised crime groups. Subsequently, the Finnish Defence Minister, Antti Häkkänen, presented a bill that would – under certain circumstances – prohibit citizens of hostile countries from buying land in Finland. The current rules do not provide the authorities with sufficient tools to prevent suspicious transactions. Interestingly, the number of Finnish real estate purchases by Russians increased by 64% in 2022 compared to the previous year. A significant decrease in such transactions occurred only after the new visa regulations came into force in November 2023 (“Komentarze IEŚ”, nr 1005), with almost all current applications for land purchase permits by Russians coming from persons permanently residing in Finland.

Norway. Norway is also considering measures to restrict the sale of real estate to Russian citizens. The country’s authorities have noticed a tendency for Kremlin-linked entities to purchase real estate close to critical infrastructure and military bases. One example of such a transaction is the purchase by the Russian Orthodox Church of land close to Norway’s largest naval base, Haakonsvern.

Latvia. Following Finland’s example, Latvia also intends to initiate similar legislative work. The idea of introducing a ban on the purchase of real estate by Russian citizens was raised by Latvian Foreign Minister Baiba Braže (New Unity) during a working visit to Finland in June 2024. The issue was also discussed during the Minister’s meetings with representatives of Lithuania, Estonia and Poland. Then, on 30 July, in response to a request from the Parliamentary Committee on the National Economy, Agriculture, Environment and Regional Policy to assess the possibility of legislative changes and restrictions on the purchase of land in Latvia by citizens of Russia, Belarus and other hostile countries, Braže expressed support for such an initiative. For years, Latvia has attracted great interest from investors from post-Soviet countries. In 2022, the procedure for issuing temporary residence permits based on the purchase of real estate or investment in Latvia to citizens of Russia and Belarus was suspended. During the 12 years of the so-called ‘golden visa’ programme, which was aimed at stimulating Latvia’s economic growth, this opportunity was used mainly by citizens of Russia, as well as Chinese, Ukrainians, Uzbeks and Kazakhs.

Conclusions. The ban on land sales, already in force (Lithuania) or planned to be introduced (Estonia, Finland, Norway, Latvia), applies in particular to Russians and Belarusians – citizens of countries that violate the territorial sovereignty of neighbouring countries. The aim of the regulations in this area is to strengthen national security and reduce the risk associated with transactions by persons suspected of having links to the Kremlin regime.

Despite being aware of the existing threats, Poland has not decided to introduce similar restrictions. The housing market in Poland is almost completely open to foreigners. A permit from the Ministry of Internal Affairs and Administration (MSWiA) is only required to buy property in the border zone, but this does not apply to European Union citizens. Since 2017, the MSWiA has recorded an increase in the number of real estate purchase transactions by Russians (more than double the number of apartments purchased compared to 2022), though a decrease of 15% was already observed in 2023. In the case of Belarusian citizens, there has been a sevenfold increase in the number of transactions since 2017. Russian and Belarusian citizens also remain among the top foreign buyers of property in Poland (4th and 2nd place respectively, MSWiA data, 2023).

It should be noted that China also follows a similar strategy of acquiring real estate in the vicinity of strategically important facilities. In Japan, PRC citizens own land close to Japanese critical infrastructure facilities and military bases. The law passed in Japan in 2022, which aims to prevent espionage and sabotage by restricting the acquisition of real estate near areas of national security importance, is mainly aimed at citizens of China, Russia and North Korea. China is also interested in acquiring land in the Arctic archipelago of Svalbard, but the Norwegian government has successfully resisted it so far.

Austria and Central Europe: Foreign Policy, Migration, and Energy Strategies

Poland’s Presidency in the European Union Strategy for the Baltic Sea Region (EUSBSR)

On 1 July 2024, Poland assumed the annual presidency of the European Union Strategy for the Baltic Sea Region (EUSBSR), which will last until June 2025. In addition to advancing projects aligned with the three primary priorities – protecting the sea, fostering regional integration, and enhancing prosperity – Poland intends to improve regional security and increase cooperation with Ukraine. A critical task will also involve the ongoing coordination of activities within the EUSBSR and updating the action plan.

EUSBSR Overview. The EU Strategy for the Baltic Sea Region, adopted in 2009, is one of four macro-regional strategies operating within the EU and neighbouring states. It encompasses territories from eight EU member states along the Baltic Sea: the three Baltic States (Estonia, Latvia, and Lithuania), three Nordic countries (Denmark, Sweden, and Finland), Poland, and five federal states of Germany (Berlin, Brandenburg, Hamburg, Mecklenburg-Western Pomerania, and Schleswig-Holstein).

Cooperation within the EUSBSR focuses on three main priorities: protecting the sea, increasing regional integration, and promoting prosperity (see more: “IEŚ Commentaries”, No. 34). Since 2021, these goals have been pursued through a revised action plan consisting of 44 activities divided into 14 policy areas (PAs). The current action plan is designed to implement the priorities of the EU’s strategic agenda for 2019–2024[1] and align the EUSBSR with the UN’s 2030 Sustainable Development Goals (see more: “IEŚ Commentaries”, No. 286). The reform of the action plan also simplified the management structure, eliminating horizontal actions and establishing the Baltic Sea Strategy Point (BSP), which began operations in Turku (Finland) and Hamburg (Germany) in October 2022.

Priorities and Tasks of Poland’s EUSBSR Presidency. The Baltic Sea Region (BSR) states are regarded as essential allies of Poland, with whom, as stated, “we understand each other without saying a word”[2]. The region has gained strategic importance following Finland and Sweden’s accession to NATO (see more: “IEŚ Commentaries”, No. 901 and No. 1075). Thus, alongside implementing agreed projects, strengthening security and resilience in the BSR will be a priority for Poland. Previous experiences highlight the need for enhanced cross-border coordination, the exchange of best practices, and improved strategic communication to boost social cohesion and trust in state decisions and actions (see more: “IEŚ Commentaries”, No. 1187). Building resilience also requires combating disinformation and Russian propaganda, including efforts to counter foreign information manipulation and interference (FIMI), which often accompanies espionage and other asymmetric activities (see more: “IEŚ Commentaries”, No. 1043).

Another goal will be to increase Ukraine’s involvement in the Strategy, facilitated by the action plan’s revision, set to conclude in December 2024. It is worth recalling that before Russia invaded Ukraine in February 2022, some EUSBSR projects included cooperation with partners from Belarus and Russia. In March 2022, the European Commission announced the suspension of cooperation with Russia and Belarus, which affected nine EU programmes under the European Neighbourhood Instrument and the transnational cooperation programme Interreg Baltic Sea Region. Shortly after that, the National Coordinators Group (NCG) made similar decisions regarding the EUSBSR (see more: “IEŚ Commentaries”, No. 561). In addition to integrating Ukraine, the new action plan will support the EU’s 2024-2029 strategic agenda, structured around three pillars: (1) a free and democratic Europe, (2) a strong and secure Europe, and (3) a prosperous and competitive Europe. The agenda, adopted by the European Council on 27 June 2024, aims to enhance Europe’s sovereignty and better prepare it for current and future challenges[3].

Poland’s presidency will also involve coordinating the work of the NCG and political area coordinators (PACs), facilitating decision-making processes for the strategy’s ongoing management. Despite 15 years of cooperation within the EUSBSR, challenges remain, such as relatively low political leadership engagement in some states, the need for better communication and visibility of the Strategy among regional communities, and the lack of alignment between action plan projects and territorial cooperation programme priorities. In the long term, the strategy’s institutional memory improvement will be supported by the BSP’s activities in Turku and Hamburg. However, strengthening the support structures for national coordinators and further cooperation with other international organisations are also worth considering. The complex coordination structure (stemming from the “3 No’s” principle – no new funding sources, no new legislation, and no new institutions) poses challenges involving the NCG, presidency, BSP, steering groups, PACs, the European Commission, and the High-Level Group on macro-regional strategies.

Conclusions. From Poland’s perspective, it is crucial to shape the cooperation architecture in the BSR actively and use the EUSBSR presidency to enhance action dynamics in the northern direction. Poland’s involvement in other regional cooperation frameworks (e.g., the Council of the Baltic Sea States, the Helsinki Commission – HELCOM, and Vision and Strategies around the Baltic Sea – VASAB), combined with its upcoming presidencies (Poland will assume the presidency of the CBSS and VASAB in July 2025), offers opportunities for better cross-sectoral coordination, improving regional strategic communication, and presenting a united regional voice.

Poland’s prioritisation of security and cooperation with Ukraine reflects how these issues significantly influence Baltic regional collaboration and the foreign policies of Baltic and Nordic states (see more: “IEŚ Commentaries”, No. 1023). In the coming months, cross-border activities in the BSR focused on strengthening societal resilience, increasing critical infrastructure security, energy security, civil protection, and planning will all be particularly important (see more: “IEŚ Commentaries”, No. 1187).

[1] They were presented on 20 June 2019 and included: (1) protecting citizens and freedoms, (2) developing a strong and vibrant economic base, (3) building a climate-neutral, green, fair, and social Europe, and (4) promoting European interests and values on the global stage.

[2] Radosław Sikorski, Information of Minister of Foreign Affairs on Polish foreign policy tasks in 2024,25 April 2024, p. 13, https://www.gov.pl/attachment/2f81743f-0746-4efe-9f2d-f9b0a7415d2a.

[3] European Council, Strategic Agenda 2024-2029, https://www.consilium.europa.eu/media/4aldqfl2/2024_557_new-strategic-agenda.pdf.

Debata w sprawie zmian traktatów Unii Europejskiej w państwach Europy Środkowej

Croatia’s Oil Infrastructure: A Key Element of Central European Energy Security

Due to its strategic geographical location and existing infrastructure, Croatia plays a critical role in the supply of crude oil to refineries in Bosnia and Herzegovina, Serbia, Hungary, and Slovakia. The Omišalj crude oil terminal and the Adria pipeline are particularly significant in this regard. The importance of this infrastructure has grown since the outbreak of the full-scale war in Ukraine in 2022. Recent sporadic disruptions in crude oil supplies from Russia via the Druzhba pipeline have accelerated the shift by Central European refineries away from Russian crude oil, making the Adria pipeline a key alternative.

Omišalj crude oil terminal and pipeline system. In Croatia, the state-owned company JANAF (Jadranski naftovod) operates the Omišalj cryde oil terminal and the Adria pipeline, both critical to the country’s crude oil infrastructure. Situated on the island of Krk, the Omišalj terminal has a storage capacity of 1.4 bcm for crude oil (spread across 17 tanks of varying sizes) and 80,000 cubic meters for fuels (across six tanks). The terminal benefits from natural protection from winds, enabling 24-hour unloading operations. Furthermore, the deep approach channel allows even the largest tankers to access the terminal. The pipeline network, spanning a total of 631 kilometres, supplies refineries in Croatia (Rijeka), Bosnia and Herzegovina (Bosanski Brod), Serbia (Pančevo), Hungary (Százhalombatta), and Slovakia (Bratislava). The Adria pipeline, with a nominal capacity of 480,000 barrels per day, is divided into several sections. The first (Omišalj – Urinj), a short section (7 km), supplies crude oil to the Rijeka refinery (with a throughput of 90,000 barrels per day). The second (Omišalj – Sisak) allows crude oil to be delivered to Sisak, where a refinery operated until 2019 (66,000 barrels per day). The third (Sisak – Virje – Gola) is a pipeline that delivers crude oil to the border with Hungary, from where crude oil is then sent to refineries in Hungary (165,000 barrels per day) and Slovakia (124,000 barrels per day). This section has a capacity of 280,000 barrels per day. The fourth section (Virje – Lendava) has previously enabled the supply of crude oil to the Lendava plant in Slovenia. The fifth and sixth sections (Sisak – Slavonski Brod and Slavonski Brod – Bosanski Brod) are responsible for supplying crude oil to refineries in Bosnia and Herzegovina. The seventh section (Slavonski Brod – Sotin) allows crude oil to be exported to the Panchev plant in Serbia. The entire Adria pipeline system is thus made up of several sections, which currently allow the delivery of crude oil to five refineries (in the past, up to a maximum of eight)[1]. Storage facilities along the pipeline, located in Sisak (660,000 cubic meters) and Virje (40,000 cubic meters), ensure the safe transport of crude oil. Currently, the Adria pipeline supplies crude oil to refineries in Rijeka, Bosanski Brod, Pančevo, and partially to those in Százhalombatta and Bratislava.

Importance of Croatia’s oil system for Hungary and Slovakia. At present, refineries in Hungary and Slovakia primarily import crude oil from Russia through the southern route of the Druzhba pipeline. However, due to sanctions on Russia following its invasion of Ukraine, both countries have started transitioning to non-Russian crude oil supplies. According to political agreements, they are expected to complete this transition by 2025. In 2022, Budapest indicated that the transition to non-Russian crude oil supplies for the Százhalombatta refinery would require modernization of the Adria pipeline. Bratislava expressed a similar view, suggesting that without upgrades, the shift away from Russian crude oil would be difficult. However, considering the existing capacity of the Croatia-Hungary (280,000 barrels per day) and Hungary-Slovakia (120,000 barrels per day) routes, no upgrades to Croatian infrastructure are currently necessary. This suggests that Hungary’s and Slovakia’s claims about the lack of alternative crude oil supply routes are not entirely accurate. Two key reasons explain their reluctance to fully embrace crude oil imports through Croatia. First, technological factors. Undoubtedly, refineries in Hungary and Slovakia import crude oil from Russia, using import channels that have been in place and proven for years (the Druzhba pipeline). Technologically, importing crude (even of comparable grades) from other directions would translate into an increase in supply costs, as well as a possible reduction in the optimization of alternatives to Russian-sourced crude oil processing at existing facilities (investments carried out in previous years were designed to maximize the processing of the Urals grade crude). Thus, the profitability and production profile of these refineries could change. Second, political and business considerations. Importing crude from two independent sources (Russia and Croatia) offers economic advantages, such as the ability to negotiate more favourable transmission tariffs. Additionally, political relations between Hungary and Croatia have been strained for years, further complicating energy cooperation. If Hungary and Slovakia were forced to abandon Russian imports, they would become fully reliant on the Adria pipeline, potentially diminishing their financial and geopolitical leverage. Since 2022, Hungary has also raised concerns over JANAF’s significant tariff increases for crude oil transport.

Croatian fuel terminals on the Adriatic Sea. Croatia operates just one refinery, located in Rijeka, which is currently undergoing modernization[2]. This means that at times, the country has no domestic crude oil processing, necessitating fuel imports to meet demand. Most of the country’s storage capacity is dedicated to crude oil (80%), with only 20% allocated for fuel storage. JANAF holds a 70% market share in domestic storage, followed by INA (a subsidiary of Hungary’s MOL), which owns the Rijeka refinery (15%), and Adriatic Tank Terminals (11%), which is dedicated exclusively to fuel. Smaller companies, including Luka Koper Kepol Terminal, own the remainder of storage capacity. Fuel imports are primarily handled through the Omišalj terminal (80,000 cubic meters) and the ports of Ploče (268,000 cubic meters, split between Luka Koper Storage and Adriatic Tank Terminal) and Zadar (16,000 cubic meters, owned by Kepol Terminal). The existing import and storage infrastructure is sufficient to meet domestic demand, while also playing a minor role in supplying neighbouring countries.

Conclusions

  • Croatia’s role in the regional crude oil market is of utmost importance, not due to its capacity to supply fuels, but because of its crude oil supply capabilities. The existing handling capacity of the Omišalj terminal, along with the Adria pipeline, currently enables the refineries connected to this infrastructure to fully meet their crude oil supply needs without requiring any upgrades to the pipeline.
  • Hungary and Slovakia face strategic decisions regarding the future of their crude oil industries. The impending end of the derogation period on imposed sanctions, and consequently the necessity to import oil from sources other than the Russian Federation, will undoubtedly create a need to secure crude oil supplies via Croatia. Recent events, such as Ukraine limiting the transit of crude oil through the southern section of the Druzhba pipeline (“IEŚ Commentaries”, no. 1176), highlight that beyond political factors, other elements are also influencing the need to change crude oil import routes. The threat of halting crude oil supplies from Russia, given the ongoing military conflict, remains a very real possibility.
  • The lack of diversification in crude oil supply sources and routes in Hungary and Slovakia is primarily the result of their foreign policy choices and their desire to continue cooperation with Russia. This is not due to technological or infrastructural constraints, as evidenced by the lack of modernization efforts on the Adria pipeline. Thus, the choice of supply routes is politically driven, creating room for influencing the decisions of Budapest and Bratislava to reduce their energy cooperation with Russia.

[1] In the past, the Adria pipeline supplied crude oil to the Sisak refineries in Croatia, Lendava in Slovenia and Novi Sad in Serbia. Currently, these plants are no longer in operation.

[2] Work is underway at the refinery to build a delayed coking unit, which will lead to an increase in capacity to produce high-margin products (including gasoline, diesel) in 2025.

“Soft security” in the Baltic Sea Region: regional cooperation to enhance societal resilience and critical infrastructure protection

The Nordic states consider critical infrastructure protection as part of their comprehensive security. The long-standing tradition of trans-border cooperation in this area will facilitate the implementation of the EU’s Critical Entities Resilience (CER) Directive. The exchange of experience and practical operational cooperation within regional structures (Nordic Council of Ministers and Council of Baltic Sea States) also contributes to resilience in the ‘soft security’ areas in the Baltic Sea region.

The importance of critical infrastructure in enhancing the resilience of the Nordic states. The Nordic states perceive the protection of critical infrastructure as an important part of a broader system to strengthen the resilience of society. They have shifted their emphasis from protecting critical infrastructure to building and strengthening its resilience relatively early compared to other European countries. This approach, which is characteristic of the Nordic model, is part of a broad understanding of civil protection and is part of a comprehensive view of security (see more in “IEŚ Commentaries”, No. 1045). It is based on the concept of total defence and civil defence systems that were built up during the Cold War. The main focus of this approach is on the performance of society and government under all circumstances, rather than protecting individual components of critical infrastructure from extreme events.

The solutions adopted so far by the Nordic EU members differ in the details. The Swedish civil defence model focuses on the local level of resilience. In Denmark, the core emphasis is not on the critical infrastructure itself but on the prevention of the possibility of its malfunction and/or damage and the minimisation of the consequences of such events. Nevertheless, both models follow the 2006 Finnish critical infrastructure protection strategy, which focuses on the need to secure the delivery of vital societal functions rather than protecting the infrastructure itself. This means that resilience is based on prevention, mitigation, and preparation before a crisis occurs as well as the response during a crisis. It also includes post-crisis recovery, for example, in the event of an interruption to a critical service.

A gradual harmonisation of solutions in this area is expected in the coming years as a result of decisions taken within the European Union. On 14 December 2022, the Critical Entities Resilience Directive (CER Directive)[1] and the amendments to the Directive on measures for a high common level of cybersecurity within the Union (NIS 2 Directive)[2] were adopted at the proposal of the European Commission. Both directives entered into force in mid-January 2023 and should be transposed into the national laws of EU Member States by 17 October 2024.

Both documents considerably broadened the understanding of critical infrastructure, allowing the inclusion of the resources of entities operating in eleven sectors, which include energy, transport, banking, financial market infrastructure, health, drinking water, wastewater, digital infrastructure, public administration, space and food production, and processing and distribution. The European Commission has thus covered key societal functions, critical infrastructure sectors, and Critical Entities in a single document.

Baltic regional formats as platforms for sharing experiences. The Nordic states have played an active role in shaping EU policy on critical infrastructure protection. They have cooperated intensively with NATO and EU structures in the second decade of the 21st century in this regard through the exchange of experience and best practices on critical infrastructure protection. The recognition that critical infrastructure resilience needs to be seen as a much broader task than just crisis planning, accompanied by a desire to develop mechanisms for better coordination between the Nordic states, is also constantly present in the work of the regional structures, i.e., the Nordic Council of Ministers (NCM) and the Council of the Baltic Sea States (CBSS). It is worth noting that so far this cooperation has focused on civil protection rather than critical infrastructure resilience.

In Northern Europe, the first framework agreement on rescue services cooperation was concluded in 1989 between Denmark and Norway, while Finland and Sweden joined in 1992 and Iceland in 2001. This cooperation, which includes practical and operational cross-border arrangements, is called Nordred. In connection with this, a number of such regional and local agreements have been concluded between municipalities in Sweden, Finland, Norway, and Denmark. Since 2005, civil protection has been included at a higher level in the areas of NCM cooperation. In practice, this means high-level ministerial or director-general meetings twice a year resulting in joint statements such as the Hague Declaration (The Hague I) of 2009 and the second Hague Declaration (The Hague II) of 2013, issued by the Nordic ministers responsible for civil protection. Both documents addressed the adoption of the same strategic approach towards civil protection across the Nordic region, which has been reflected in practical terms in regular, rotating training in emergency decision-making and improved cross-border crisis management.

Strengthening societal resilience has been one of the major priorities of the CBSS’ work in recent years. Finland’s presidency (July 2023 – June 2024) has been accompanied by the promotion of the concepts of comprehensive security and enhanced emergency preparedness. Their importance in cross-border cooperation in the CBSS was highlighted in the Porvoo Declaration, which was adopted at the 21st Ministerial Session of the CBSS in June 2024. States in the region have advocated strengthening resilience and crisis preparedness, emphasising the need to strengthen ties between democratic and like-minded states in the region.

This is being followed up by Estonia, which seeks to further enhance resilience in areas of so-called ‘soft security’. During its presidency (July 2024 – June 2025), Estonia intends to make use of CBSS structures, including operational cooperation within the Baltic Sea Region Border Services Cooperation (BSRBCC) and the Civil Protection Network (CPN). Increased situational awareness and preparedness for unexpected situations is necessary given the deterioration of the overall security situation of the BSR after Russia’s aggression against Ukraine (see more in “IEŚ Commentaries”, No. 875) and after taking into account the impact of major incidents in the region (destruction of parts of three of the four Nord Stream 1 and 2 pipelines, damage to the Balticconector pipeline). Estonia, under its Presidency, also plans to put more emphasis on issues related to the protection of critical infrastructure in the Baltic Sea basin, the challenges of mass evacuation and sheltering, and the instrumentalization of migration at the eastern borders of the states of the Baltic Sea region. Therefore, through cooperation with the Baltic Sea states, Estonia complements its national civil defence activities (see more in “IEŚ Commentaries”, No. 1179).

Conclusions

  • The Nordic states have been taking steps to ensure the resilience of critical infrastructure for more than fifteen years. The model they have adopted refers to the concept of total defence and is characterised by an extension of the concept of societal resilience. The follow-up to this way of thinking is a shift from the protection of critical infrastructure facilities to resilience-improving activities, combined with the inclusion of a variety of actors and the coordination of activities across multiple sectors.
  • The Nordic model, adapted to the specific needs and capabilities of individual states, is evolving as the security environment changes. The risk of damage to critical infrastructure systems is no longer just a potential hybrid threat, but a real possibility to disrupt services critical to the functioning of society. Therefore, greater emphasis must be placed not only on enhancing the resilience of critical entities but also on the physical and cyber protection of critical infrastructure. At the same time, the applicability of Nordic solutions in other BSR and Central European countries requires their adaptation to local circumstances. They must take into account a number of variables, including but not limited to existing social and political structures and legal arrangements.
  • The CBSS’s expert groups and networks provide a good platform for the exchange of experience between specialists/experts and politicians from the countries in the region. Responding to practical needs, they contribute added value to regional cooperation and enhance resilience in areas of soft security, especially in the context of the coordination of cross-border activities, exchange of best practices, and improved risk management.

[1] Directive (EU) 2022/2557 of the European Parliament and of the Council of 14 December 2022 on the resilience of critical entities and repealing Council Directive 2008/114/EC, (Official Journal of the European Union L 333, 27.12.2022), https://eur-lex.europa.eu/eli/dir/2022/2557/oj

[2] Directive (EU) 2022/2555 of the European Parliament and of the Council of 14 December 2022 on measures for a high common level of cybersecurity across the Union, amending Regulation (EU) No 910/2014 and Directive (EU) 2018/1972, and repealing Directive (EU) 2016/1148 (NIS 2 Directive), (Official Journal of the European Union L 333, 27.12.2022), https://eur-lex.europa.eu/eli/dir/2022/2555/oj

Expansion of natural gas infrastructure in Southern Europe

The process of expanding energy transport capacity is currently underway in Southern Europe, with a particular focus on the natural gas market. Since the outbreak of the full-scale war in Ukraine in 2022, the primary goal has been to ensure greater diversification of natural gas sources and supply routes to Central European countries. Given the reduced availability of natural gas from Russia, many countries are striving to play a more significant role in the European natural gas market. A crucial aspect of this is the construction of appropriate infrastructure, including interconnectors, which are of fundamental importance.

Expansion of the IGB natural gas pipeline despite unfavourable market conditions. In early August 2024, the joint venture ICGB AD[1], operator of the Interconnector Greece-Bulgaria (IGB), announced plans to increase the pipeline’s transmission capacity from 3 to 5 bcm per year, despite the lack of market interest in reserving additional capacity (binding capacity reservations were open from 2-12 July 2024). The IGB pipeline facilitates the transport of natural gas from Azerbaijan, Greece (Revithoussa regasification terminal, and from the end of 2024, Alexandroupoli), and Turkey (domestic production and regasification terminals such as Marmara Ereğlisi, Etki Liman, Botaş Dörtyol, and Gulf of Saros FSRU) to Bulgaria and onward to Central Europe. Despite the absence of binding offers for the additional 2 bcm per year, the company has decided to proceed with the pipeline expansion due to the potential future demand for transporting gas from Southern to Northern Europe. The expansion of the IGB pipeline is significant in the context of the “Vertical Gas Corridor”[2], which includes transmission system operators from Greece, Bulgaria, Romania, Hungary, Ukraine, Moldova, and Slovakia. This initiative aims to increase natural gas supplies to Central and Southeastern Europe as well as to Ukraine and Moldova by the end of 2025. Interestingly, non-binding offers received during the initial phase amounted to approximately 4 bcm per year for the following years. However, the binding phase, completed in July 2024, differed significantly from earlier declarations. At least four factors contributed to this situation. First, a one-and-a-half-year delay in the construction of the Alexandroupoli regasification terminal in Greece (expected to have an import capacity of 5.5 bcm per year from late 2025), which affected the synergy between the two projects. Second, the low price of natural gas in Turkey, influenced by the high availability of Russian natural gas (in July 2024, TurkStream pipeline deliveries reached their second-highest level in history). Additionally, the high price of LNG on the spot market in the Mediterranean has had an impact. Third, reduced demand for natural gas in the region, driven by price fluctuations in 2021-2023. Fourth, uncertainty surrounding the supply of Russian natural gas to Europe via Ukraine, with the transit agreement expiring on 31 December 2024. It remains unclear how the potential cessation of supplies from this direction will impact natural gas availability in Central European countries. Bulgaria is particularly interested in expanding the IGB pipeline’s transmission capacity as it seeks to play an increasingly important role on the region’s energy map (“IEŚ Commentaries, no. 864).

Intensification of Cooperation between Serbia and Romania. In early August 2024, Serbia and Romania signed a Memorandum of Understanding to build an interconnector linking both countries, with a transmission capacity of 1.6 bcm per year. The reversible pipeline will allow for natural gas transport in both directions. If completed, Serbia will be connected to the BRUA natural gas pipeline (linking Bulgaria, Romania, Hungary, and Austria). The Serbian section will be 12 km long, starting in Mokrin in the northeast, while the Romanian section will span approximately 85 km (97 km in total). Construction is expected to begin in 2025, with the Serbian section completed by 2027 and the Romanian section by 2028. The total investment cost is estimated at around EUR 99 million, with 88% incurred on the Romanian side (approx. EUR 87 million) and 12% on the Serbian side (approx. EUR 12 million).

Given Serbia’s geographical location, the construction of another natural gas pipeline will strengthen its position on Europe’s energy map. As a transit country, Serbia currently has access to import infrastructure in Greece (LNG terminals) and the Azerbaijani market via Bulgaria. The expanded infrastructure will allow Serbia to import natural gas produced in Romania as part of the Neptune Deep project, including the development of the Domino and Pelican South fields (“IEŚ Commentaries”, no. 1164). Additionally, with the construction of the natural gas pipeline to North Macedonia, Serbia will enhance its role as a transit supplier to Bosnia and Herzegovina and Hungary, leading to better integration of Southern and Central European markets. This development will also bolster energy security in the region concerning natural gas supplies.

For Romania, constructing this natural gas pipeline offers an opportunity to channel natural gas from the Neptune Deep project to Serbia and, indirectly, to other European countries. Playing a more significant role as a regional exporter requires developing appropriate infrastructure. Increased competitiveness and diversification of natural gas supplies are the main benefits for Romania, one of the leading producers of this commodity in the region.

Conclusions

  • The natural gas infrastructure being built and expanded in Southern Europe is primarily aimed at ensuring greater diversification of natural gas sources and supply routes. These efforts are crucial as the natural gas agreement between Russia and Ukraine regarding transit is set to expire. The potential cessation of natural gas supplies from this direction raises concerns about the impact on natural gas availability and energy security in Southern and Central Europe. Interestingly, Ukraine has recently indicated that it might allow natural gas supplies from 2025, provided the gas originates from countries other than Russia, such as Azerbaijan, though this would be a complex process.
  • The ongoing development of transmission capacity in Southern Europe faces challenges, primarily due to the still high availability of Russian natural gas (in Turkey), reduced regional demand (a result of recent energy crises), and potential difficulties in financing new energy projects (IGB pipeline financing includes consideration of American funds, including USAID).
  • However, the difficulties in expanding the IGB pipeline appear to be temporary. With the commissioning of the Alexandroupoli regasification terminal and the potential cessation of Russian natural gas supplies via Ukraine, the natural gas import option for many countries will likely shift to Southern Europe. The IGB pipeline will then play a crucial role in ensuring energy security for Southern and Central European countries.

[1] ICGB AD is registered in Bulgaria and its shareholders are Bulgarian Energy Holding (50%) and IGI Poseidon SA from Greece (50%). In turn, the shareholders of IGI Poseidon SA are the Greek company DEPA International Projects SA (50%) and the Italian energy group Edison SpA (50%).

[2] It does not plan to build new natural gas pipelines, but to implement previously defined, although partly still unfinished, projects (e.g., modernisation of the natural gas pipeline network in Bulgaria, construction of the Bulgarian-Romanian interconnector).

Digital Ukraine – the idea of modernizing the state

The digitization process in Ukraine gained momentum only after Volodymyr Zelensky and his entourage took power in 2019. It was then assumed that the “digitalization” of the state would help bridge the civilizational gap between Ukraine and the West and accelerate the modernization of the economy and public institutions. Within a few years, significant success was achieved. Digitization is also expected to be one of the fundamental pillars of the post-war reconstruction and modernization of Ukraine, serving as the foundation of an innovative economy. However, considering the ongoing war and its consequences, this assumption is now in question.

From declarations to actions. In the first decade of the 21st century, Ukraine adopted its first legal acts regarding the development of an information society and the computerization of the state. In practice, however, little action was taken. The change was brought about by the events of 2014: Ukraine’s pro-Western course, the annexation of Crimea by Russia, and their consequences.

At that time, numerous voices appeared, emphasizing the need to modernize the state, intensify activities in the field of cybersecurity, and develop digital technologies as important factors for economic integration with the West. This was also the result of the ongoing generational and mental shift and the growing sense of identification with Ukraine, especially among those born in the independent Ukrainian state.

In 2015, the national development strategy “Ukraine – 2020” was adopted, followed a year later by the “Digital Agenda of Ukraine,” which aimed to organize the process of digital transformation as a factor in the development of the state and society. In 2018, the Coordination Council for the Development of the Digital Economy and Society was established and the “Concept of the Development of the Digital Economy and Society for 2018-2020” was adopted. Digital transformation tasks were also included in the “State Regional Development Strategy for 2021-2027,” adopted in 2020, and digital development programs were also developed at the level of individual regions.

However, it was only Volodymyr Zelensky, during his campaign before the 2019 presidential election, who clearly focused on digitalization as a lever for Ukraine’s modernization and development, making it one of the main goals of his presidency. The “digital leap” was intended to eliminate the economic and civilizational distance separating Ukraine from the West, and thus facilitate integration with Western structures. This opinion was shared by Zelensky’s entourage, consisting largely of young people who appreciated modern technologies.

They recognized that the country had too many bureaucratic and archaic administrative procedures at the systemic level, often dating back to the Soviet era. Such a situation obviously promoted corruption and slowed down the modernization of the state and the development of an innovative economy and civil society, placing Ukraine – which aspired to integrate with the Western world  among the peripheral countries in terms of technology, economics, and society. As a result, one of the most important demands of Zelensky’s election campaign was the maximum “digitalization” of Ukraine. The “State in a Smartphone” program was intended to serve this purpose –transferring most administrative and public services to the digital sphere.

Speeding up the process. The Ministry of Digital Transformation, which was established in 2019 on the basis of the State Agency for Digital Administration (established in 2015), is responsible for the digitization of the state. Since the beginning, it has been headed by Mykhailo Fedorov, born in 1991; when he took office, he became the youngest minister in the history of Ukraine. He also serves as Deputy Prime Minister for innovation and development of education, science and technology. Unlike many prominent representatives of the Ukrainian political elite, Fedorov is not seen as controversial and is not associated with corruption scandals. He is appreciated for his energy in action and for keeping his promises,  ranking very high in public trust in politicians, second only to Zelensky. A sociologist and manager by education, he was an entrepreneur in the advertising and marketing industry. His political career is associated with Zelensky; as part of his presidential election campaign, Fedorov very effectively managed online activities. He later became the president’s adviser on digital issues, and in the summer of 2019, he headed the ministry. He set the goal of digitizing all the most important public services by 2024.

The systemic digitization of public services began with the launch of the unified public services portal Diia (short for “State and Me” Ukrainian: Держава і я) in April 2020. Diia is an e-service consisting of a portal, a mobile application, a digital educational platform, and a business platform. Since the launch of the Diia portal, 165 electronic public services have been implemented by the end of 2023, including: digital passport, registration of civil status certificates, formalities related to a child’s birth, pensions, business activities, medical services, driving licenses, or real estate registration. A qualified electronic signature and many solutions supporting democratization (e-petitions, participatory budget, etc.) were implemented, which simultaneously improved the process of state decentralization. At the beginning of 2024, the number of registered users of Diia exceeded 20 million people (representing the vast majority of the adult citizens of Ukraine).

Multidimensionality. The digitization of the state is not limited to the sphere of public services. It also holds strategic importance in the context of integration with the structures of the European Union. In 2020, the implementation of the “road map” for Ukraine’s integration with the EU Digital Single Market began. The goal is not only to deepen integration with the EU, but also to increase the efficiency and competitiveness of the Ukrainian economy, increase exports, and improve the quality of life of society.The position of Chief Digital Technology Officer – an individual responsible for the conversion from analog to digital activities – was introduced in state institutions in 2020. Furthermore, appreciating the growing importance of artificial intelligence, the “Concept for the development of artificial intelligence in Ukraine for a period of 10 years” was adopted in 2020 as well.

The high technology sector is also very important from the point of view of the Ukrainian economy. Before February 2022, the export of IT services amounted to almost 10% of the total export of Ukrainian services, and it was estimated that by 2025, the revenues from this sector would reach USD 16.5 billion (which in total would provide employment for 2 million people), and its share in GDP would increase from 5% to 10%. Ukraine ranks second among the countries of Central and Eastern Europe in terms of the number of IT specialists, second only to Poland, and this number is constantly growing (in 2023, it exceeded 300,000 people).

Russia’s invasion in 2022 did not stop Ukraine’s digitization process, although it did slow it down in the civilian sector. Security issues have become particularly important, which is reflected in the development of new technologies. The Diia platform has acquired new functions, such as warnings about air alarms, purchasing war bonds, and the ability to inform about sighted Russian troops, suspicious behaviour, etc.. Moreover, thanks to the cooperation of the Security Service of Ukraine and private entities, an application for identity verification, TyHto (“You who?”), was created. It is worth noting that previous experience is being used innovatively, as exemplified by the Diia.pl application, intended for Ukrainian citizens residing in Poland and operating as part of the Polish digital platform mObywatel (“mCitizen”).

Conclusions. Many plans and promises regarding reforms were not implemented by Zelensky’s team (which is a source of growing disappointment in Ukraine), and many were halted by the Russian invasion. However, the digitization of the state, which is crucial from the point of view of modernization, civilization development, and overcoming the Soviet legacy, has largely proven to be a success. Paradoxically, the COVID-19 pandemic, followed by the Russian invasion, led to the acceleration of the digitization process, enabling the functioning of state institutions and giving a significant impetus to deepen innovation. The traditionally high level of distrust among Ukrainians towards public institutions and the state has been significantly reduced in this case; the progress of the digitization process is assessed positively.

From a broader perspective, the future of the country will be related to digitization, the development of artificial intelligence, and innovative technologies in the economy, public services, and defense. The post-war reconstruction of Ukraine is also expected to be based on this. Additionally, digitization is intended to contribute to integration with Western structures and strengthen defense against Russian aggression (including current and potential future threats in both militarily and cyberspace domains, as well as the information sphere).

However, it is not known to what extent these plans will be possible to implement. Ukraine is in a challenging situation: the war continues and it is difficult to expect its quick and beneficial end for Ukraine. The country is devastated and exhausted by the conflict, in poor financial condition, and experiencing deteriorating public morale. The end of the war will bring new problems: the need to face the reconstruction of the country’s material infrastructure and a demographic collapse. In a pessimistic scenario, Ukraine may not only fail to become a technological leader and integrate civilizationally with the West, but it may also struggle to return to the pre-2022 state of affairs.