NEW YEAR`S SPEECH BY MR MARTTI AHTISAARI, PRESIDENT OF THE REPUBLIC OF FINLAND, ON 1.1.1996

After the general election in March, a broadly-based majority government was quickly formed in our country. It has worked with a unity of purpose to implement its programme.

Our country faces its fifth year of high unemployment. Nevertheless, that has not disheartened our citizens. It is such an attitude and a resolute will for cooperation that are now called for in the name of the country's interests.

I am especially thankful to the thousands of citizens who have gotten in contact at meetings and gatherings, by post or in other ways. This has been important to myself and my wife. Through you, the reality of Finnish everyday life has been present.

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According to the latest Ministry of Labour statistics, 448,700 of our citizens are without work. No fewer than 57,500 of them have already been jobless for over two years.

Neither determined stabilisation of state finances and a marked lowering of interest levels nor even a two-year incomes agreement have yet manifested themselves in an increase in employment.

I believe that a turn towards overcoming unemployment is at hand. The hard economic solutions that have had to be adopted are beginning to take effect, albeit with a time lag.

In our public finances, painful spending cuts have had to be made. Indeed, the Finns have shown a commendable understanding of reality. If moderation prevails and the economy is steered onto a course of sustained growth through our joint efforts, there will be no further necessity in the years ahead for substantial new cuts.

In solving the problem of unemployment, the creation of new jobs holds a key position. In addition to this, the job-sharing system and working-time models more versatile than those currently in use must be open-mindedly availed of. Here, also the trade-union movement has an important task.

Although in the circumstances of the current recession we have often been able to combine our forces, we need an even stronger commitment to reducing the high level of unemployment.

I find it very encouraging that local-level cooperation hasincreased in efforts to overcome unemployment. Both the unemployed and employers have begun pulling together.

It is on the local level that obstacles in the way of employment and opportunities of achieving it are best known and recognised. The society of citizens has been dynamised. A new spirit of voluntary cooperation and collective responsibility, something that nearly vanished from us during the period of rapid economic growth, is emerging. Now we must create procedures through which such activity will be given even greater encouragement.

The best solutions emerge in the midst of problems. I want to encourage every Finnish municipality, town and city along with their inhabitants and through the actions of both companies and associations to engage open-mindedly in cooperation of a completely new kind. Every new job is to the benefit of the whole district.

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Finland has been a member of the European Union for a year. We can be satisfied with the results. Our country's international position has been strengthened and our constructive line has gained recognition. Membership serves our national interests.

The government of the country has been able to rely on the support of solid public opinion in championing Finnish interests in the Union. Indeed, our work in the European Union can succeed only if it is supported by the will of the people.

It was understandable that in rural areas membership of the EU was perceived as a downright threat. That created even a mood of despair. Now the situation has been clarified, because we know the factors on the basis of which long-term goals can be set for rural development. Preserving the vitality of the countryside accords with the interest of each and every Finn.

Membership of the Union has increased foreign investment in Finland. This development is continuing.

Our membership has contributed to the attention of the European Union being focused more on northern regions than it has been in the past. In the Union's own development, northern circumstances are now being taken into consideration. In external relations, special attention is being paid to our immediate environs, Russia and the Baltic region. We are striving through our own actions to ensure that the EU will continue to keep these regions in a central position in its external relations.

From the perspective of the future of the European Union, it was important that decisions concerning Europe's economic and monetary union were made at the Madrid summit. Member states must ensure that the transition to EMU is made on as broad a basis as possible and that the economic position of the member states joining is strengthened.

The economic policy required for economic and monetary union has often been presented as the opposite to taking care of employment. Over the medium and long term, however, a disciplined economic policy and balance in state finances are essential if unemployment is to curbed. It is true that participation in EMU will bring new challenges for us, but remaining outside would make it even more difficult to mitigate the problems of our economy and especially to reduce unemployment. An economic policy based on inflation and the resultant devaluation would no longer be possible in any circumstances, nor desirable.

The European Union should not close itself in, but rather preserve its capacity for enlargement. That presupposes determined internal development of the Union. In this we wish to make our full contribution. Enlargement of the European Union will be the best guarantee that our continent will not revert to being the battlefield that it was in the past, but will instead change into a continent of interaction and prosperity.

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The development that has taken place in the international community in the course of the past twelve months has been exceptionally encouraging. Above all, the launching of a peace process and reconstruction in war-ravaged Bosnia opens opportunities for stability and cooperation also more widely in Europe.

It was important that the Peacekeeping Act could be approved almost unanimously in Parliament. We thereby preserved our national unity of purpose in a central question of foreign and security policy. For that I wish to express my thanks.

Implementation of the Bosnian peace process provides a unique opportunity to demonstrate that in our continent even difficult security problems can be resolved through cooperation rather than by feeding the threatening images of the past and conforming to the inter-bloc demarcation lines of yesteryear.

Nevertheless, it must be remembered that the peace process is only at the beginning. The road to a lasting peace in the Balkans will be a long one, and that peace will not come without sacrifices. We must also be prepared to make our own contribution to rebuilding the war-devastated country, so that the understandable bitterness of people can be mitigated and reasonable living opportunities guaranteed them. That, too, is an important task from the perspective of preserving peace.

The parliamentary elections held in Russia strengthened the democratic development in the country. The international community must now determinedly support those endeavours that will hasten Russia's entry into various cooperative arrangements both in Europe and globally.

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Finland has good prospects of developing into a country where there is room for different cultures and interaction between them. In fact, that is a vital precondition for the development of our own national culture.

Our country does not yet have a coherent policy on immigration and migration. A study initiated by the Government as well as the ongoing broad discourse on the issue will create a basis for the formulation of such a policy.

The atmosphere of uncertainty created by economic setbacks has engendered, also in Finland, a substrate for the growth of xenophobia and even for racialist outbursts.

The responsibility now lies with each and every Finn.

Let us take up this challenge. Let us keep our society of citizens healthy also in the future.

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I wish all citizens the best for the year just beginning and the blessing of God.