The official view is that Russia has ‘fought all the way’ to preserve its sovereignty and protect the rights of Kaliningrad’s inhabitants. As negotiations between Russia and the EU over the transit issue dragged on during 2002 the rhetoric coming from Moscow was uncompromising. The EU’s visa plans for Kaliningrad were “worse than the Cold War” and would “divide the sovereignty of Russia”. Mr. Putin, whose in-laws come from Kaliningrad oblast, “flatly rejected the visa plan” and Russia “will do its utmost to guarantee totally the rights of its citizens living in Kaliningrad”.
But other influential voices were singing from a different song sheet. Writing in the main Lithuanian daily, Lietuvos Rytas, leading Russian commentator Vladimir Pozner called the proposed visa regime “Russia’s problem”, adding “Lithuania has the right to demand visas from those who travel across its territory” There is nothing to discuss”.  It should be added that Pozner has strong contacts with the Western establishment having co-hosted the Phil Donahue show in New York during the early 1990s. Pozner grew up in the US where his father was a Soviet trade representative as cover for his service as a KGB officer. Despite his family’s KGB past, Pozner has generally reflected the Western-orientation of the new Russian elite, which of course also includes ex-KGB officers. Pozner’s understanding for Lithuania’s visa policy may be taken as likely to reflect the coincidence of the real official Moscow line with the US/EU position.
Therefore, it was no surprise that two weeks later on 22nd October a “breakthrough” was announced at the Luxembourg summit between the EU and Russia: Moscow now accepted the need for a simple visa regime. As on numerous other occasions over the past ten years - including acquiescing to NATO expansion to the Baltic States - Russia had caved in to Western demands. The Moscow press “savaged the deal” saying that Russia has been put in a “humiliating position”. 
However, an overview of Moscow’s policy towards the oblast shows that this disregard for its citizens is nothing new. Since the collapse of the Soviet Union Moscow has played a duplicitous game in Kaliningrad, but its meddling in the internal affairs of the region intensified after Vladimir Putin’s election as Russia’s president in March 2000. This came to a head with the gubernatorial elections in November, 2000.
The first elections for regional governors were held in Russia in 1996. Up to this time Kaliningrad had been run by a Yeltsin appointee, Yuri Matochkin. But Matochkin was beaten in the second round of voting by the then manager of Kaliningrad’s fishing port, Leonid Gorbenko. In a clash of interests familiar to BHHRG in many other parts of the former Communist bloc, Gorbenko was viewed as the ‘local’ man who had vowed to promote self-sufficiency for Kaliningrad - but within a sovereign Russia - while Matochkin and his allies favoured familiar new world order policies, prioritising foreign investment; such people were silent on Kaliningrad’s place in the Russian Federation.
After his election victory, defeated supporters of Mr. Matochkin, like Kaliningrad Duma deputy, Solomon Ginszburg, continued to hound Gorbenko and, at the same, time reinforce their contacts with foreign, mainly European, governments. Mr. Gorbenko’s term in office, 1997-2000, was declared to have been “wasted years” during which the governor “was reluctant to develop international contacts and especially foreign capital Presumably, Mr. Gorbenko’s opponents wanted the Kaliningrad region to be run for the benefit of Western businessmen rather than its own inhabitants. Foreign investment in these circumstances has tended to mean a ‘fire sale’.
The campaign against Gorbenko was not helped by the fact that the economic situation had improved during his period in office -- despite the fact that Kaliningrad suffered, like all Russia’s regions, during the financial meltdown of 1998. However, its prospects were undoubtedly enhanced by its status within Russia as a free economic zone (FEZ) -- later changed to special economic zone (SEZ) – which afforded the region special tax and tariff breaks. Despite Gorbenko’s reputation for being hostile to DFI, foreign investors were showing an interest: in 1999 BMW invested $25m. In a joint venture to manufacture vehicles in Kaliningrad.
In July 2002 journalists were writing that “until recently, it all went rather well. Kaliningrad’s standard of living, much lower than Russia proper 10 years ago, surged ahead” But Western commentators were quick to warn “negative opinions about this situation cannot be altered by the facts” the ‘facts’ being that “last year [Kaliningrad] reported a substantial increase in real income of the inhabitants in relation to 1999 (26.8% compared to the Russian average of 12.7%) and inflation was lower than nationwide (17.5% to 20.2%)”. Unemployment is also low despite the propaganda to the contrary. BHHRG was told that it stood at c. 2%-3% and that anyone who wanted a job could find one in the hundreds of small businesses that have been set up.
Help, however, was at hand. Despite the fact that Gorbenko had supported his election, President Putin was not going to return the favour. As the gubernatorial elections of 2000 approached the newly-elected president threw his weight behind the candidacy of the commander of the Baltic Sea Fleet, Alexander Yegorov, a political novice. A media blitz against Gorbenko had been underway for some time. According to Radio Free Europe,  “independent NTV has done a fair amount to spoil his image” with an exposée of the governor’s alleged corrupt activities on the investigative programme Itogi in December 1999. This was followed by more damaging allegations in the local Kaliningrad media.
After such a blisteringly negative media campaign it was not surprising to find that Gorbenko lost the election in November, 2000 to Yegorov by 34% to 56%. However, only 47% of the population turned out to vote in the second round and a further 8% spoilt their ballot papers. So, it was hardly a massive endorsement of Yegorov even if it was a serious defeat for Gorbenko. It was also called a “dirty election” and even Mr. Gorbenko’s detractors noted the virulence of the campaign against him.  Why was this so? One reason may be that economic improvements in Kaliningrad, especially at the port, took work and profits away from neighbouring St. Petersburg, its main competitor. As a former member of the St. Petersburg city apparatus under its late mayor, Anatoli Sobchak, Putin may have been encouraged to help his former employers by shoeing in a more amenable ‘competitor’.
Other rivalries may have played their part. It was rumoured that the BMW dealership in Moscow was unhappy with Mr. Gorbenko’s BMW plant as “in all, BMW hopes that costs [in Kaliningrad] will be about 20% less than BMW cars that are imported into Russia”. In other words, BMW dealers in mainland Russia (particularly the capital) saw their profit margins threatened. 
Originally the idea for free economic zones – in Kaliningrad and other parts of Russia- was to give a boost to regions with particular difficulties. But, the idea wasn’t very well thought through. When Russia’s new (greedy and unprincipled) business class saw that FEZs meant unwelcome competition, they pressed for their closure. In fact, no proper legislation was ever passed to regulate their operation, something which alarmed foreign investors. In 1995, to placate critics, Kaliningrad’s FEZ status was replaced by the less favourable SEZ. Then, after Yegorov’s election, a new tax code was passed in January 2001 that all but removed Kaliningrad’s competitive status. There were demonstrations in the city and the plan was dropped. No doubt, with knotty hurdles like visas to be overcome it was thought better to put issues like tax and tariffs on to the back-burner for the moment.
But, it is also the case that Putin’s policy of increasing cooperation with the West would involve a continuing acquiescence in Kaliningrad’s “black hole” status as well as capitulating to the EU’s demands over visas. All of which has taken place. According to the Council of Baltic Sea States there has been “no improvement in policy making” since Yegorov took power.
The answer to these seemingly destructive policies lies in the EU’s and NATO’s geo-political ambitions. Kaliningrad used to be a major base for the Russian navy. Its port is ice-free. By controlling the goods which pass from it to the rest of Russia, the EU can slowly choke off the enclave and entangle within its sphere of interest the last remaining outpost of Russian power on the southern coast of the Baltic. With Kaliningrad more and more enmeshed in Euro-regulation, Russia will have to fall back on St. Petersburg as her only outlet, along with the nearby Primorsk oil terminal. The Baltic, which is already to all intents and purposes a NATO lake, will become so even more if Russia’s navy loses its Kaliningrad base.
 Baltic Times 10th June 2002,
 Rokas M. Tracevskis “Lithuania to end visa-free travel for Kaliningraders” Baltic Times, 3rd –9th October, 2002,
 Gregory Feifer “Moscow loses negotiations over Kaliningrad”, RFE/RL, 15/11/02,
 RFE/RL 19/4/2000,
 See Krickus op. cit.,
 See Krickus op. cit. p.200.
 Matthew Fisher, National Post, 18/7/02,