SPEECH BY PRESIDENT MARTTI AHTISAARI OF THE REPUBLIC OF FINLAND
AT CHATHAM HOUSE, LONDON ON 24.11.1997
FINLAND'S EVOLVING ROLE AS A EUROPEAN PARTNER
It is a great pleasure and honour to address the Royal Institute of International Affairs once again. The last occasion on which I came to this illustrious forum was in October 1995. Finland was then in her first year as a member of the European Union. What I want to talk about today is how we have experienced our membership of the EU and how we see our position in Europe. But before doing so let me have a glance at our history.
In December we shall be celebrating the 80th anniversary of our independence. Our history as an independent state since 1917, and before that first as the eastern part of the Kingdom of Sweden for 600 years and then as a western grand duchy within the Russian Empire for a century, is a history of European power politics. It must be acknowledged that Finland has almost always been the object of this power politics. We have adapted to history rather than made it. But our history since independence is a story of how Finland has evolved from an object of history into a maker of history.
For the greatest part of this millennium, the history of Finland was part of the history of a power struggle between the Kingdom of Sweden and the Russian Empire. As one of the sub-plots of the Napoleonic Wars, Finland was assigned to the Emperor of Russia. Thereafter, as an autonomous grand duchy within the Russian Empire, we created national and eventually democratic institutions, and for the Finnish economy Russia was a domestic market.
As a consequence of the upheavals of the First World War and after the collapse of the Russian Empire, Finland achieved independence. Then, just before the Second World War, Germany and the Soviet Union decided that Finland belonged to the eastern sphere of influence. The division was never implemented with respect to Finland, because the Finns did not submit to it. Our will for independence was strong and we showed in the Winter War that the fate of Finland would no longer be decided over our heads. Our democratic system remained unscathed throughout the Second World War and the upheavals that followed it.
In the aftermath of the Second World War, the Cold War froze Europe into two camps. As Europe was choosing sides, Finland chose neutrality. Our living space between the two superpower-led blocs was initially narrow and our opportunities to exercise influence were slight. Finland determinedly set about increasing her room for manoeuvre.
For a country dependent on foreign trade it was vital to safeguard the interests of her export sector in the main markets, which lay in the West. An important step was accomplished already in 1949 when we joined GATT.
From the fifties onwards the states of Europe began putting free-trade arrangements in place. Now, how Finland would relate to those arrangements became a question of central importance for our export sector. To be able to conduct our policy of neutrality alongside our economic interests in the circumstances of the East-West confrontation then prevailing, we had to ensure that any steps we took in Western integration were paralleled by outwardly-similar arrangements with the members of the socialist bloc.
Grasping the opportunities that presented themselves, Finland concluded special agreements first with EFTA and then with the EEC. Thanks to these, Finland secured the same benefits in important market areas as her Western competitors, but was also able to continue her substantial trade with the East.
As we entered the seventies, our policy of neutrality grew from adjusting to influencing. That application of influence culminated in the Conference on Security and Cooperation in Europe and its Helsinki Final Act in 1975. The CSCE was a turning point in the history of the Cold War and, as has later become obvious, it also accelerated the change that ultimately brought down the socialist system from within. It is only eight years since the Cold War ended, but the European political landscape has been transformed in a way that hardly anyone could have imagined.
Yet not all has changed from Finland's point of view. We remain uninvolved in any military alliance and maintain a strong independent defence. We believe that this policy best serves the end of maintaining stability in northern Europe, which accords with our interests. Working together in military matters is one aspect of our strong involvement in building up a new European cooperation.
As we celebrate the jubilee of our independence in 1997, we do so in a mood of confidence. Joining the European Union was a natural choice for us. Our economy is anchored in western Europe. Our membership of the European Union is, however, founded above all on political consideration - now that we are members, we sit as an equal partner at the table where decisions that affect us are made in any event. If we had remained outside the EU, we would once again have been accommodators; now we have a say.
Ladies and Gentlemen,
I have no hesitation in saying that Finland's joining the European Union strengthened our independence. The idea of EU membership as a reinforcer of national sovereignty may sound odd when it is presented out of the blue, but nevertheless it is true. Finland is a small state, and a small state comes up against the limits of its own sovereignty faster than a large one. That does not, of course, mean that there are no limits to the sovereignty of a larger state. Few states today can alone control such factors with an essential bearing on their welfare as interest and currency exchange rates, not to mention share prices.
The European Union as an instrument of nation-states and fortifier of their sovereignty is by no means a new or revolutionary insight. As Professor Alan Milward of the London School of Economics points out, the idea was already clear in the minds of those who founded the Coal and Steel Community. That community was created to perform the tasks that member states found they simply could no longer handle on their own. That pragmatic project was far from federalism.
For Finland the European Union is a means of pursuing our own interests. The most topical challenges that we now face are EMU and EU enlargement. Finland is ready to participate in the third phase of economic and monetary union. EMU is the central instrument that the European Union and its member states have employed to respond to the challenge of globalisation. Both in Finland and in Britain, we have had direct experience of the fact that national currencies and monetary systems are not immune to the effects of international capital flows. If we wish to preserve our opportunities to influence monetary policy in today's world, I see no real alternative to economic and monetary union. At the moment, there is only one European currency among the world's big three. With EMU, the euro will take first place.
Britain has an important role in the EU's present stage of development. Much is expected of the UK Presidency, since the process of enlargement will be set in motion and decisions on EMU taken during those six months.
EU enlargement has an important position in consolidating the cooperative European system that has been created since the division of our continent ended. Our goal is a large EU. The Luxembourg summit in December will truly be an historic milestone.
All in all, there are many factors that unite us Finns and Britons. We Finns consider Britain a northern European state. One of us. Britain's strong trade links with the Baltic Sea region date back to the 13th century. British policy with respect to the region was formulated by no less a figure than Oliver Cromwell himself, who in 1658 emphasised its importance for the prosperity of Britain.
Now that the Cold War has ended, the Baltic Sea region is in a unique situation. The disappearance of the Iron Curtain has allowed the region to resume its natural contacts and restore the close ties that were artificially severed by the upheavals of this century. It is important to note that the EU has a strong presence in the Baltic and that enlargement will only strengthen this. The accession of Finland also brought the EU its first and so far only common frontier with Russia. Russia, too, is a natural part of the Baltic Sea region and a significant part of her commercial interface with the outside world is located there. Russia's natural dependence on ports and other infrastructure in the Baltic States is an important part of the interdependence from which a new relationship of cooperation between Russia and those three states will grow when the opportunity comes.
How western Europe builds its relations with Russia will be decisive from the perspective of European development. I said in my 1995 speech here that "the Eurasian giant is muddling through". Now in 1997 one could perhaps say that Russia has become better at "muddling through".
Western Europe's relations with Russia are not just a matter of security; other factors that affect our wellbeing are likewise at stake. Western Europe depends on imported energy and the significant energy resources of the future are the oil and gas fields of north-western Russia. We must build links to those sources so that the EU can retain its economic competitiveness. North-western Russia is likewise in a decisive position in the sense that many dangers that threaten our environment and nuclear safety are concentrated in the region. Large military industrial facilities belonging to the former Soviet Union were located there and their dilapidation has caused substantial problems.
Finland has proposed that the EU should have its own "Northern Dimension" policy. This would promote close cooperation between the Baltic Sea region and north-western Russia, on the one hand, and the EU, on the other, in addition to more effectively addressing the problems in the region that affect all of us. This new Northern Dimension of the EU would require neither additional funding nor new institutions. Its great benefit is that the many measures and policies that apply to the region would be given the coherence that is essential if they are to effective. This is a good example of the category of questions in which the EU can contribute significant added value.
The Northern Dimension would be part of the EU's external relations. The Union should first agree within its own circles on the shared perceptions and common policies that are needed to implement the Northern Dimension. After that, it would be useful to discuss with the United States and Canada the forms that their participation could assume.
Links across the Atlantic with North America are natural for Europe. The EU can not build up its global influence in a setting of rivalry with the United States, but rather in cooperation with it. The American contribution to the security of Europe remains important. Bosnia is an everyday reminder of that.
I believe that the EU itself holds the key to the development of a successful transatlantic relationship. Only a tighter-knit and more efficient EU will be able to participate as an equal partner in this dialogue. Therefore it is important that we in the EU continue to develop our common foreign and security policy.
When I last spoke at this institute, I proposed that the United States, Russia and the European Union commence a regular political dialogue. After all, the individual sides of this triangle already have good mutual contacts. If the Union's initiative were to lead to this geometry becoming an effective political relationship, our external profile would be brought more sharply into focus and our influence would increase in matters of importance to us.
The biggest challenge facing societies today is that of responding to globalisation and its demands. The factors of production move freely and this has rendered politicians who function within the narrow limits of nation-states toothless. It may be, however, that globalisation has too often been presented in a way that is tinged with menace. Ease of communication, the dismantling of boundaries and growing volumes of exchange are not a threat. They are a challenge, which if handled correctly will increase our collective prosperity.
I doubt very much whether there is any better place to talk about globalisation than here in London, the home of the City. Perhaps people in Britain find it easier to remember that globalisation is no new phenomenon. After all, Britain was investing abroad on a large scale already in the 19th century. Even then, the City was an international marketplace and international contacts were intense. From that perspective, the present wave of globalisation is a second coming as the close-knit structures that nation-states put in place in the aftermath of the two world wars are loosened up. Britain is also a living example of how there are ups and downs in prosperity, of how economic policy choices can make a difference between obsolescent and uncompetitive industry and a modern, competitive economy. Isolation shows that challenges can at best be postponed, but not bypassed. Globalisation has to be faced.
Globalisation has brought Finland, a country on the periphery of Europe, closer to world centres. Or perhaps it would be better to say that world centres have come closer to us. It is no coincidence that Finland heads the world table in terms of density of Internet connections and mobile phones. In a very short time, technology has made "distance" a word that may soon be found only in older editions of dictionaries. For us Finns, who have always lived at the mercy of a beautiful but severe natural environment, an ability to cope is a vital requirement. We take the challenge of globalisation seriously.
The EU is an important instrument in responding to the challenges of globalisation. As I have already said, EMU will make the EU the world's leading economic actor. EMU is one part of a project that will make the EU more open and competitive internationally. Bringing the single market to completion is the other side of this coin. Once the EU has a common currency and a genuinely single market, we shall be better prepared than at present to face up to globalisation. I would like to emphasise here that the EU's competitiveness is not an abstraction remote from the reality of everyday life, but rather something that very tangibly affects work, jobs and the quality of life.
Facing up to globalisation also means openness. I believe that the EU could be more open and disposed to free trade than it presently is. In this respect, too, we in Finland expect much of the British EU Presidency in the first half of 1998. It will be no insignificant term where responding to the challenges of globalisation is concerned: a decision on the beginning of EMU will have to be made, the single market is waiting for the final touches and an enlarging EU must also be a more open one. More attention must be paid to the European Union's competitiveness. Enlargement is part of this overall picture. I believe that, properly handled, it will give the EU new economic vitality.
When I last addressed this distinguished forum, I concluded my speech with a quotation from Winston Churchill:
"It is not our task or wish to draw frontier lines, but rather to smoothe them away. Our aim is to bring about the unity of all the nations of all Europe."
Today we are closer to that dream than ever before. The EU is expanding and Russia is stepping up her cooperation with the rest of Europe. The division of our continent has permanently ended and made way for natural and uncomplicated interaction between the countries and regions of Europe. Our continent is more united than it has ever been.
It is time to ponder how Churchill's vision could be applied to the whole world. Globalisation is only in its infancy and we must return to this theme incessantly, because our response to the challenge of globalisation will decide what kind of life future generations live.