Finland: The European Union’s Nordic Gate

With stronger ties to the EU than any other Nordic country, Finland has played an active role in building the Union and in fostering closer ties between Europe and Russia. H.E. Esko  Hamilo, the Ambassador of Finland to France, speaks of his country’s desire to heighten the role of Europe’s «Northern Dimension» and its efforts to spur wider international cooperation without relinquishing its non-aligned status.

The Diplomatic Letter: Mr Ambassador, The parliamentary elections of spring 2003 unhinged Finnish stability a bit. Prime Minister Anneli Jaatteenmaki’s resignation was directly linked to Finland’s stance on the Iraq crisis. Has this shakeup affected the openness of Finnish foreign policy? What do you think prompted the changeover that ousted the coalition led by Paavo Lipponen since 1995 and brought the Centre Party to power ?

H.E. Esko Hamilo: Indeed, the elections of spring 2003 resulted in a change of government. After eight years of a coalition led by the Social Democrats with the Conservatives as their main partner, the elections propelled the Centre Party from opposition into the leading role, with the Social Democrats as their main partners.
However, I see a great stability in Finnish political life. For the past twenty years, two of the three biggest parties have always been part of the government, with the third in opposition. We have seen all three possible combinations. This changeover thus has an element of continuity and demonstrates that all parties are able to work together.  
A debate on the stance taken by Finland in regard to the Iraqi crisis may have been instrumental in the outcome of the election and indeed did lead to the resignation of Prime Minister Anneli Jaatteenmaki, only a few weeks after she took office. The debate however dealt very little with the substance of foreign policy, but rather with the methods used in the election campaign. Prime Minister Jaatteenmaki personally lost the confidence of Parliament, mainly for not coming out openly about the way confidential documents had been used. The government stayed in place, with a new prime minister, Mr Matti Vanhanen, also from the Centre Party. If anything, the incident underscored how fine is the line between openness and confidentiality in politics.
All in all, I think that a desire for change was the main factor in the election outcome, after a long reign by the same parties.

T.D.L.: After a sharp drop in economic activity in 2001, your country is now on the road to recovery. What is the government doing to ensure strong growth and make the Finnish economy less vulnerable to the ups and downs of the global economy? Is it planning to launch new measures to fight unemployment, which hit 9% in 2002?

H.E.E.H.: Finland has many strengths on which a strong economy can be built. According to the World Economic Forum, Finland has regained its position as the world's most competitive country. The share of GNP devoted to research and development is the highest in Europe, which does a lot to explain the recent economic achievements as well as the rise of companies like Nokia. What’s more, a recent survey by Transparency International identified Finland as the least corrupt country in the world.
The new Finnish government's main economic goal is to achieve an employment rate of 75%, as opposed to the current rate of 67.5%. This is a demanding objective. We will have to overcome many challenges: making our tax system more competitive, improving the availability and cost of suitable labour, and overcoming the aging of the workforce. The employment targets will require strong economic growth throughout the legislative session. Achieving our goals will put an end to the current cyclical downturn in Finland.
Fiscal policy is designed to keep central government finances strong. Having adequate fiscal leeway is essential for ensuring economic growth. To that end, the government anticipates a reduction in the public debt-GDP ratio.
Finland is bent on becoming a competitive location for business in terms of infrastructure and taxation. Taxes on labour will be eased by lowering income taxes. A general 1% tax break was implemented in July 2003. Corporate taxes will be lowered in order to make the Finnish tax system more competitive at the international level.
A high employment rate requires successful cooperation between the various social partners. Solutions to help reconcile work and family life are needed. People must enter the labour market earlier and leave it later. Foreign labour must be accepted in times of labour shortage. The government is striving to narrow regional differences in development and to increase employment, particularly where unemployment is running high.  

T.D.L.: Spurred by a Finnish initiative, Europe’s plan to develop its “Northern Dimension” was a top priority for the Danish presidency in 2002. Could you describe the headway in fostering the development of this interdependent Nordic zone? Could this concept open up new strategic or trade opportunities for EU member countries?

H.E.E.H.: The Northern Dimension is an integral part of European Union foreign policy. We are happy to say that the Danish presidency did, indeed, take an important step forward. But this issue concerns the European Union as a whole. The concept of the Northern Dimension has prompted the Union to incorporate the challenges and potential of Northern Europe into its agenda. In October 2003, the European Council approved the new Action Plan for the Northern Dimension. This plan lays out far-reaching objectives in a wide array of areas, reflecting the strategic and economic opportunities available to EU member countries and their partners. Shortly after the initiative was launched, we underscored the opportunities that would be opened up by building positive interdependence.
That said, before the Northern Dimension concept was put forward, cooperation in this region already took a variety of forms: intergovernmental, economic, regional, local, and cooperation between NGOs. As concerns the Northern Dimension, we have seen the greatest headway in the area of environmental cooperation. The Northern Dimension Environmental Partnership is an innovative project that brings the region’s countries together with partner countries interested in this issue, as well as international financial institutions. The European Commission has also played a very important role. We are eager to see what will be accomplished through the recently created Northern Dimension Partnership for Public Health and Social Well-being. What’s more, information society objectives were recently incorporated into the Northern Dimension Action Plan.

T.D.L.: A decade after the collapse of the USSR, Russia and Norway are still arguing over maritime limits, while the melting of Arctic glaciers has become a long-term but ever-present threat. What are your thoughts on the touchy geopolitical situation in the Barents Sea region? During his September 2001 visit to Finland, Russian President Vladimir Putin became the first Russian leader to pay tribute to former Finnish President Marshal Mannerheim. How would you describe your country’s current relations with its powerful neighbour?

H.E.E.H.: There is little I can say about the maritime limits between Norway and Russia, as this problem concerns these two countries alone. It is, however, extremely important to find a solution to this problem before it erupts into a dispute. The region’s potential energy resources could, for instance, spark such a clash.
Howbeit, the disagreement over maritime limits has not generated any problems in the political or military arenas. Problems of the sort are a thing of the past, but could eventually resurface due to the North’s armaments potential. In the post-Cold War world, northern regions are vulnerable above all to environmental threats, especially global warming.
For the very first time in the history of our two countries, it can now be said that Finland and Russia enjoy normal relations, as should be the case between two nations. Russia has become a member of the international community, and has promised to respect the same rules and regulations as other countries. The past no longer haunts our relations. Russia is now able to fully appreciate the great efforts Finland had to make in order to defend its independence.
Finland and Russia are not divided by any political problems at this time. Close cooperation, all across the board, has substantially bolstered their ties. Having said that, as is always the case between neighbouring countries, now and then our long common border does spark a number of questions concerning cross-border traffic and customs practices. The important thing is to be able to discuss them, and to have competent authorities that can resolve them.
Moreover, Russia is one of Finland’s leading trade partners. For the fourth consecutive year, Finnish exports to Russia are on a sharp rise. Russia is one of the most important target markets for Finnish companies. Thanks to strong energy imports, Russia has also become Finland’s second supplier.
And yet the unpredictable nature of the Russian trade climate and the lack of an agreement protecting investments have had a dissuasive effect on investment in Russia. Continued crises, like the one with oil giant Yukos, further underscore the need for an investment protection agreement.
Setting up international cooperation programs to protect the environment and laying out then enforcing joint regulations are key goals for Finland. The Baltic Sea is our biggest concern, as it is particularly vulnerable. The increasing number of petroleum tankers in the northern Baltic Sea underscores the need to make petroleum transport safer and heighten our ability to prevent petroleum-related accidents.
We are seeing more and more contact between Finnish and Russian nationals on both sides of the dual border, giving a more human touch even to our purely commercial relations. Finland is looking for ways to simplify bilateral visa-granting procedures, working in partnership with the other Schengen Treaty signatory States.

T.D.L.: In May 2003, the member States of the Barents Euro-Arctic Council signed a nuclear security agreement in Stockholm. Could you tell our readers how this cooperation will be set up and coordinated? On a broader lever, has the Barents Euro-Arctic Council made headway in promoting cross-border cooperation and protecting the environment? Is it still trying to create a denuclearised zone that would encompass both the Scandinavian and Kola peninsulas?

H.E.E.H.: A framework agreement for a multilateral environmental program targeting the Russian Federation’s nuclear sector was indeed signed in Stockholm in May 2003. The “nuclear security” section of the Northern Dimension Environmental Partnership Support Fund, managed by the European Bank for Reconstruction and Development, has also become operational. Nearly 150 million euros will be set aside for projects enhancing nuclear security in northwest Russia.
Activities launched under the G8 Global Partnership initiative have moved into the practical stage, as projects are selected and organised. Finland and four other non-G8 members were invited to take part in the Global Partnership initiative at the Evian Summit.
The environmental arena probably offers the most visible examples of successful cooperation in the Barents Sea region. In addition to cooperation to enhance nuclear security, environmental cooperation efforts are pushing forward on several other fronts. Most importantly, with cooperation from Russian authorities, the most polluting sites in the Russian section of the Barents Sea region have now been identified.
Cooperation in the forestry industry has become another key cooperation area in the Barents Sea region. Forests are the region’s most important renewable natural resource, and are also the main means of subsistence for a good part of the population. The vast forested lands of Northern Europe are of vital importance to the entire globe, because of their diversity and economic weight as well as their role as a carbon pump. Creating a sustainable forestry economy, by working together to identify and implement common goals, is a considerable challenge. We must get the various forest industry actors to work together and to divide up tasks at both the local and regional levels, to ensure cooperation between forestry  actors in every country in this region. A new form of cooperation that originated in Canada, called “model forest,” is in the development stage.
The initiative to create a denuclearised zone in Northern Europe was initially meant to include Finland, Sweden, Denmark, Norway, and Iceland. It was launched by President Kekkonen in 1963, in response to the security situation in Northern Europe during the Cold War.
This initiative must be viewed within that particular historical context. It lost much of its importance with the end of the Cold War, as this brand-new situation made it far less useful. A future rekindling of the initiative to create a denuclearised zone in Northern Europe would thus seem highly unlikely.

T.D.L.: Ten new European countries, including three Baltic States, will soon become official members of the European Union. What advantages but also what challenges does EU enlargement present for Finland? The Baltic region has become a key European hub for all kinds of illicit trafficking. Could you describe how Finland and its Baltic neighbors are cooperating in the fight to wipe out crime and ensure the rule of law?

H.E.E.H.: European Union enlargement is in keeping with Finland’s political and economic interests. From our geographic standpoint, expanding the Union into the Baltic Sea region is of utmost importance. The upcoming addition of Estonia, Latvia and Lithuania will strengthen the European Union’s Northern Dimension and bolster the economic and political growth of Northern Europe.
Enlarging the Union will heighten stability and security on the entire continent. It does however have an adverse effect, as it will also create an easier operational framework for international criminal activities.
As soon as they join the EU, the new member countries will have to begin respecting Union regulations concerning judicial and domestic affairs, with the exception of a few areas of the Schengen Treaty. They will also start taking part in European police and customs cooperation. We will see increasing information exchange between current and future EU member countries. The accession of these new countries will have a positive impact on the fight against crime, especially in the long term. Our cooperation networks and crime fighting methods will be harmonised, making it easier to combat cross-border crime between current and future member countries.
Union enlargement will also set new European instruments into action, enabling us to create the necessary conditions for stepping up judicial cooperation. The European Convention on Mutual Judicial Assistance in Criminal Matters and the Framework Decision on the European Arrest Warrant are the key tools in this judicial cooperation.
Finland has also signed a bilateral agreement to fight crime as well as a cooperation agreement to fight organised crime with the Baltic countries.

T.D.L.: Your country believes firmly in the equality of EU member States, as it reconfirmed alongside fifteen other “tiny” European countries in Prague and again in New York, before the start of the Inter-Governmental Conference (IGC). How do you feel about the progress in negotiations on institutional issues and procedures, which are gradually forging the future European Constitution? What is your take on the recent strengthening of the Franco-German couple in the face of the tumultuous global economic situation?

H.E.E.H.: It is only natural that closer cooperation comes about among those who share similar ideas and thoughts. That is why Finland has been quite active in the so-called group of like-minded countries, which consists of a dozen small member or applicant countries and was very active already during the Convention. The outcome of the Convention included many of the points that this group found to be important.
The aim is by no means to cause any division within the Union, but to make it possible to exchange ideas and to ensure consistence in the actions of those who share similar ideas about the Inter-Governmental Conference. A main aim of the Conference is to ensure that all the member countries are able to participate in an equitable fashion.
As to the results of the Conference, they may already be known when this interview comes out, so I will refrain from any speculation on that score.
As for strong French-German relations, these two countries have  played a very important role in European cooperation from the very beginning, and often acted as a motor for greater integration. This close cooperation in the different sectors of the European arena will also be crucial in future, within the economic framework as well. I regret that the stability and growth pact has not been fully respected.

T.D.L.: NATO membership is a hotly debated issue in Finland, and is still opposed by a good many Finns. With the creation of the NATO-Russia Council in May 2002, and three Baltic States set to join the Alliance in May 2004, does Finnish neutrality still have its place? What does your country gain by maintaining its non-aligned status? Certain European countries recently expressed their desire to strengthen the ESDP. What kind of technical ties would you like to see NATO eventually build with the European Defense?

H.E.E.H.: Today Finland is, of course, a member of a political alliance: the European Union. In that light, it is a bit behind the times to speak of neutrality, even if Finland is not a member of a military alliance.
When making decisions concerning defence, Finland has to bear in mind its geopolitical position and historical experience. At the same time, changes in the security environment and developments in the European Union must be taken into consideration. In any case, if  current developments in the security environment continue, I believe that it is fair to say that any large-scale attack on Finland is highly unlikely.
Finland strongly advocates strengthening the Common Foreign and Security Policy of the European Union, while underlining the importance of transatlantic cooperation. NATO is even today of vital importance. Indeed, should Finland consider joining a military security organisation, NATO would be an obvious choice, insofar as the European Union cannot as yet offer credible security guarantees.
However, making decisions on security policy requires caution, and as long as there is uncertainty about any of the new security solutions, it is better to stick to the old ones. Finland is in no hurry to change its policy of non-alliance.
To come back to the European Security and Defence Policy, Finland considers that it can and should be enhanced in a way that strengthens the unity of the Union. Crisis management activities and related capacity development, along with armament cooperation, can be expanded on the basis of existing principles. Participation in these efforts must be open to all Member States willing to get involved.
It is doubtful whether a common defence obligation would be of any added value at this stage, nor would it necessarily be credible. It may be too early to determine the optimal relationship between NATO and the European Union. In any case, unnecessary overlap should be avoided.

T.D.L.: In 1999 your country obtained firsthand experience in crisis management in Kosovo. Is it now ready to cooperate more closely with its European partners in the defence and security arenas? Does the new Finnish head of the United Nations Mission in Kosovo (UNMIK), Harri Holkeri, have much room to maneuver as he pushes forward with the implementation of the U.N. resolution calling for “substantial autonomy” for Kosovo within Serbia-Montenegro?

H.E.E.H.: While the security situation in Kosovo has improved, it is still very tense. NATO is considering cutting its troops in Kosovo in 2004, becoming a force focused primarily on dissuasion. It is, of course, continuing to actively cooperate with the European Union. The EU is planning to take over security operations in Bosnia-Herzegovina, probably at the end of 2004. It is also already heavily involved in the civil sector.
The Western Balkans are of key importance to the Union’s security policy. There is good reason for optimism right now. In Macedonia, for instance, the European Union’s efforts have born fruit. The EU stabilisation and association process, along with the Stability Pact for Southeast Europe, have heightened the Union’s influence in the region. For the very first time, the countries of the region share a common foreign policy goal: joining the European Union, now the cornerstone of regional stability.
As the person in charge of implementing UN Security Council resolution 1244, the head of the United Nations Mission in Kosovo has a very difficult and delicate mission. The focus right now is on creating essential conditions: improving security, creating conditions that will enable refugees to return home, promoting the rule of law, and building a viable economy. These conditions must be met before we can move forward to build a democratic society, transfer power to Kosovo’s autonomous institutions, and open negotiations on Kosovo’s future. It is absolutely vital that both the Albanians and the Serbs continue to take part in the recently opened dialogue on ways to make daily life easier for Kosovo’s inhabitants.

T.D.L.: The international community continues to actively combat the proliferation of weapons of mass destruction. Finland’s Deputy Permanent Representative to the United Nations, H.E. Jarmo Sareva, was recently appointed chairman of the UN Disarmament and International Security Commission. Could you describe the political objectives your country will champion within this body? Would you like to see greater multilateralism in this area? On a broader level, should multilateralism be the main model for relations between States?

H.E.E.H.: Let me start with multilateralism. It must be said that multilateralism and its emblem, the United Nations, have lately gone through a trying time. Yet while multilateralism has been challenged by unilateral actions, it was also proven that we still need multilateralism and multilateral cooperation, as well as the United Nations. International cooperation is needed in many areas: in managing and preventing crises, in disarmament and arms control, in promoting human rights and international law in general, in fostering sustainable development, in strengthening the global governance of environmental issues, and in creating coherence and cooperation on economic and social issues.
Combating the spread of weapons of mass destruction calls for new initiatives and new approaches. In order to supplement  international instruments, we need fresh perspectives on how to confront the problem of weapons of mass destruction. Finland welcomes all the new efforts – open to all – such as the G8 Global Partnership Against the Spread of Weapons and Materials of Mass Destruction.  

T.D.L.: In committing itself to reach an Official Development Assistance/Gross National Income ratio of 0.7%, your country has confirmed its desire to play a more decisive role in North-South cooperation. Could you outline the main goals of Finland’s development assistance policy for our readers? Finnish NGOs are an integral part of this strategy. What role are they playing in international relations?

H.E.E.H.: Indeed, the quest to double our development aid in order to achieve the 0.7% level shows our willingness to bear responsibility in helping those less fortunate. Our development cooperation emphasises poverty alleviation, equality and education, aiming to make an sustainable impact on development. We try to concentrate on fewer countries and sectors, which allows us to take specific issues into account and thus to improve quality. Not only do rich countries need to redirect their aid resources, poor countries also need to modify their operational environment. They need to make a commitment to respect human rights and to fight against corruption, for instance.
The so-called Helsinki process was launched one year ago, in Helsinki, of course. It aims at improving current global governance structures and offers a forum for open and equitable dialogue between the key actors in the North and the South, such as governments, NGOs and the corporate world. All must participate in  discussions on how to find the very best way to finance the battle to reduce world poverty.
Non-governmental organisations play an important role in Finnish development cooperation. The government intends to funnel a considerable amount of Finnish development assistance through NGOs, with the state remaining the principal channel of aid. NGO projects are often very efficient, since they work at the grassroots level. They also provide Finnish citizens with a platform to develop people-to-people networks in partnership countries.

T.D.L.: France and Finland have cooperated actively in the computer and telecommunications sectors, and in recent years have begun focusing their efforts on technology, biotechnology in particular. Could you describe the achievements that led to the new partnership framework outlined during the 2002 visit to Paris by Finnish Minister of Foreign Affairs Erkki Toumioja? What are our countries doing to strengthen their relatively weak economic partnership, and expand their cultural ties?

H.E.E.H.: Active international cooperation is vital for Finland, taking into account the small size of our home market. Relations between Finland and France are traditionally excellent. With Finnish membership in the European Union, the partnership between the two countries has become even more active. Frequent ministerial visits in both directions are another example of this fruitful partnership.
A few years ago, the Finnish and French prime ministers signed a joint declaration on the information society. That has led to wide cooperation between our countries. It is in fact important for Finland and France, two countries at the forefront of new technologies, to regularly exchange their experiences.
Biotechnology is another area with a bright future. In fact, a joint declaration on closer cooperation in this field was signed by the Finnish and French prime ministers in November 2003. This will make it possible to further enhance cooperation within the European framework, but also to promote industrial and commercial cooperation as well as partnerships between private technology companies.
Trade between the countries is doing well, although, as we often hear said, there is still untapped potential. WIth regard to exports, France is Finland’s fifth largest client. These exports consist of high-tech items, e.g. Nokia products, as well as traditional forestry products, especially paper in all its forms. Lately Finland has posted  a bilateral trade surplus, but that situation may be at least partly corrected by its recent decision to start the process of buying a nuclear power plant from Framatome-Siemens.
As for culture, I could, of course, go on for pages and pages. Let me just say that I am pleased with the visibility of Finnish culture in France, especially of our musical artists, like Karita Mattila and Kaija Saariaho, and of several conductors who are often heard and seen in France and are well liked here. Finnish films, notably those by Aki Kaurismaki, have received a lot of publicity in France, especially after the 2002 Cannes Festival. Even Finnish writers seem to be gaining in popularity.
I am especially happy that France, following a decision made by President Chirac himself, recently decided to offer Finland the opportunity to organise a Finnish cultural cycle in France in the year 2008. We shall of course do our utmost to make this event a real showcase of Finnish culture in France.
Let me also mention that in the field of culture it works both ways: during her recent visit to Finland, French Minister of European Affairs Noelle Lenoir officially opened the new French Cultural Centre in Helsinki.