Kaliningrad, an obscure Russian territory nestled between Poland and Lithuania, was part of East Prussia before World War II. Formerly known as Konigsberg, its name was changed to Kaliningrad when it was transferred to Russia after Germany's 1945 defeat.

Despite its proximity to the Baltic Sea and other European countries, Kaliningrad never became the flourishing trade portal that resource-rich Russia had envisioned. Instead, it has become a region infested with poverty, corruption, AIDS, and a wide variety of contraband, ranging from Afghan heroin to weapons for Al Qaeda. The root of this predicament lies in the rampant corruption among local administrators and the debilitating red tape imposed by the Russian bureaucracy.

The territory, however, could precipitate a collision between NATO and Russia in the near future as NATO seeks to expand to the Baltic states despite Russian opposition. The little publicized region also has recently become an epicenter of controversy between Russia and the European Union because of visa complications due to EU admittance of Poland and Lithuania in 2004. The Schengen Agreement, signed in 1985 and fully implemented in 1995, removed border patrols between EU countries to allow their citizens to move freely within the entire European Union. While this treaty makes travel for EU citizens much easier, it restricts entry into EU countries from non-EU countries. With the implementation of the Schengen agreement in Poland and Lithuania, Russians face a hurdle when traveling through the EU countries to Kaliningrad.

As might be expected, Russia has objected to this prospect and has asked that its almost one million citizens in Kaliningrad be exempted from EU visa rules. At the Council of the Baltic Sea States in June 2002, Russian President Vladimir Putin asked why Russian citizens traveling to Russia from Kaliningrad should obtain permission from foreign officials and called the EU policy "worse than the Cold War." Insisting that the issue was one of sovereignty and human rights for Kaliningrad Russians, Putin, ironically enough, related the situation to that of West Berlin when it was isolated inside the Soviet bloc. While the European Union has acknowledged the legitimacy of Russia's demand and has offered to issue cheap long-term visas to Kaliningrad Russians, Russia has demanded complete exemption from travel restrictions for its Kaliningrad citizens. Two possible solutions are non-stop trains and subsidized flights across Lithuania between Russia and Kaliningrad.

For Poland, Lithuania, and the European Union, however, granting visa-free passage to Russians going to and from Kaliningrad involves huge risks. First and foremost is the increasing problem of illegal Eastern European migrants pouring into EU states. According to the International Organization for Migration, an estimated 1.6 million Eastern Europeans migrated to Western Europe in 2000 alone. Thus, Poland and Lithuania are reluctant to create a zone that could be used as a corridor to their own and other EU countries. In addition, smuggling is rampant in Kaliningrad; euphemized as "border trading," it is commonly condoned by authorities and constitutes a way of life for many in the region. Moreover, Kaliningrad has the highest incidence of AIDS in Europe. The European Union thus often views Kaliningrad as the next Odessa, a Ukrainian port notorious for smuggling and sex tourism. If the Schengen treaty is implemented in Poland and Lithuania, these two states would have little to gain and everything to lose from visa-free passage for Russians, with benefits extending to other EU member states.

The conflict surrounding Kaliningrad is widening the gap between Russia and the European Union. Although more than 11 years have passed since the breakup of the Soviet Union, Russia still opposes EU expansion into the Baltic states—areas that were once Soviet. Now, facing the prospect of its exclave region becoming entirely encircled by EU countries, many Russians are starting to see the European Union as a competitor rather than as an ally. In June 2002, Russian Foreign Minister Igor Ivanov warned, "[The Kaliningrad problem] must be dealt with in a four-party format. Russia, Lithuania, and Poland are prepared for this dialogue, but the European Union is not as yet." Although Russia and the European Union can benefit tremendously from each other in economic and political terms, Kaliningrad, which appears on the surface to be a negligible issue, may alienate them for an extended period of time.

Kaliningrad is a focal point of Russia's other major concern: the expansion of NATO to the Baltic states. NATO accepted Poland as a member in 1999 and invited Lithuania, Latvia, and Estonia to join in November 2001. When the latter states formally join NATO, Kaliningrad will be completely isolated from Russia by NATO members. While Kaliningrad can serve as a military post for Russia and complicate planning for a NATO defense of Lithuania in case of war, it would also be easy prey for attacks because of its isolation from Russia. Even without warfare, there is a considerable chance that Kaliningrad would become an independent, pro-NATO country once it is isolated. In fact, Moscow's motivation for providing the exclave with only limited economic development funds stems from the fear that economic prosperity would lead to an independence movement in Kaliningrad. Russians fear that Kaliningrad could become the next Chechnya. In 1998, Cato Institute research fellow Stanley Kober described the tension between Russia and NATO as tenuous and combustible, writing that "expansion of the alliance, therefore, risks provoking a new and even more dangerous version of the Cold War." In early 2001, reports that Russia had stored nuclear weapons in Kaliningrad raised concerns that Russia might use its exclave as a military base to deter NATO expansion in the Baltic states. Although these reports were unsubstantiated and have since subsided, the episode highlighted the level of tension between Russia and NATO as well as the intensity of their power struggle in the Baltic states.

Given the recent negotiations between the European Union and Russia, the problem surrounding the visa status of Russians traveling to and from Kaliningrad is likely to be resolved and reconciled in a way satisfactory to both sides. Russia and the European Union cannot afford a state of mutual animosity and so will probably compromise. However, the future of the fundamental relationship between NATO and Russia looks grim. With both parties closely scrutinizing one another, the issue of Kaliningrad may determine the relationship between these two powers in the near future.