One would find it hard to name a part of the former Soviet Union, where high expectations and great potential have been wasted so miserably as in the tiny Russian “island” situated in the heart of Europe – the Kaliningrad Oblast. Amidst tumultuous 1990s many romantically predicted that Kaliningrad would soon become either a “Baltic Hong Kong” or the “Fourth Baltic Republic.” The past twenty five years have dispelled these sentiments leaving instead merely one word applicable to the current situation of Kaliningrad – disappointment. What are the reasons of such an inglorious outcome and how is it possible that an area bordering dynamically developing members of the European Union is now reduced to the doles of Moscow in exchange for being a “scarecrow of Europe”?