Speech by President of the Republic Tarja Halonen at a seminar arranged by the Herbert Quandt Foundation in Berlin on 24 November 2000

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The Soviet Union has disintegrated, but Russia remains a country with a vast area and a large and diverse population. Throughout her history, Mother Russia has been contemplating herself and pondering her place among the peoples of the world. In this respect, there is nothing exceptional about today's discourse.

Likewise traditional is the great question of Russia and Europe. The country's political leaders are nowadays in relatively good agreement that Russia is part of Europe. That is good, because a Russia that feels part of Europe, and not isolated by it, lies in the interests of all Europeans.

Russia's decision in 1992 to apply for membership of the Council of Europe and her acceptance four years later of conditions that included having to carry through a whole series of difficult reforms were historic. The road to democracy, respect for human rights - including those of minorities - and the rule of law is a challenging one for everybody. Add to all that the creation of a market economy and the agenda for many years ahead is full.

I believe Russia's political leadership has grasped that this enormous challenge must be taken up if the country is to become stable, prosperous and competitive not only in Europe, but also globally. But is there enough patience and skill to enable reforms to be carried through at the same time in all of these sectors: democracy including human rights, the rule of law, and the economy. Or, to use an expression that may sound a little womanly, but is very descriptive: to plait them so that no sector lags behind the others. If it is allowed to fall behind, it will very soon ruin the results achieved in the other sectors.

Russia knows the direction and the goal, but trends of development in Russian society are going at different speeds, often in a variety of directions, and sometimes they contradict each other. On the one hand, a genuine civil society seems to be developing apace, but on the other, attempts are being made to curb the freedom of the press; the country is more stable than it has been for ages, but at the same time there is a desire to centralise power even more; elections are almost everyday routine, but yet officials are being appointed to oversee elected regional leaders; economic growth is rapid, but there are few signs of poverty abating; Russia wants a role in positive cooperation to resolve international crises, but is striving at the same time to maintain her own spheres of interest.

Divergent trends of development and mixed signals are not surprising in a phase of change such as that in which Russia now finds herself. Russia is looking at different sub-sectors in her effort to find a course. Responsibility for the development of Russia resides with the Russians, but the rest of us can support development that we consider correct.

Russia's democratic system has been operating within a constitutional framework. Elections on both the federal and lower levels have been and are being arranged. They have not gone off entirely without irregularities, but there has been no evidence of large-scale abuses.

The development of civil society in Russia took big strides forward in the 1990s. This activity on the grass-roots level often goes unnoticed by the media, which concentrate on more spectacular political events. Small steps forward by democracy do not sell as well as high-level political speculation and intrigues. Even on the scale that they have already achieved, freedom of expression and freedom to obtain information are historic achievements.

The collection this autumn of over two million signatures calling for a referendum indicates the budding strength of civil society. The objective is to restore independent forestry and environmental authorities and ban the importation of nuclear waste. What is new about all this is that citizens are taking an interest in administrative and legislative changes and that they believe they can influence decisions. What is gratifying about it is that people are also prepared to act according to their convictions. I cannot remember having seen such initiative in Russia in the past. In my view, this is the democratic development that Russia has set as her goal.

Yet, the attitude to the fourth estate is following a different path. There appears to be no shared understanding of how important a role free news mediation plays in ensuring an effective democratic system and economic development. Many believe that centrally-run control systems are a better guarantee of stability and legality than the critical comments of free media.

The Russian economy is showing the best growth figures in decades. There are good prospects that this growth will be sustained. However, this will require profound structural changes, such as equitable treatment of economic actors, greater transparency in administrative practices, tax reform, land reform and the creation of a banking system. A modern information society can not be based on orders and commands; it needs the voluntary, fairly-regulated actions of people.

The development of the rule of law in Russia is still feeling its way, as you can gather from what I have said so far. The leadership has been striving to increase stability through strengthening central power and emphasising law and order. This should eventually lead to the emergence of the rule of law in Russia.

An important legal reform now in the pipeline is part of this process. It envisages the country being divided into 21 administrative law districts, in which independent courts of administration would be created. If it succeeds, the reform will bring a solution to the problems that citizens and companies encounter in their dealings with various authorities. The task of the courts of administration would be to adjudicate on such matters as complaints concerning the actions of authorities, the competence of local legislation, irregularities in regional elections, and tax matters.

In the background to the proposed legislation is a clear desire to bring uniformity to the actions of officials throughout Russia. This would be a significant step forward in a country where matters have traditionally been taken care of through administrative edicts rather than within a framework of law. Naturally, the regional courts of administration will have to be supplemented by a national one.

We here know, and so do the Russians themselves, that there is no shortcut to happiness for their country. Changes will require an enormous amount of work and the time available is not unlimited. Europe is integrating at a rapid pace and cannot afford to wait, because globalisation will not wait, either.

But it lies in the interests of also us other Europeans and of the EU that Russia copes. It will be worth our while to support and help Russia to accomplish her gigantic task of development. Cooperation within the Council of Europe framework is very important. It will pay the EU to support this in addition to its own programmes.

Relations between the European Union and Russia are guided by the Partnership and Cooperation Agreement that entered into force in late 1997. Our goal in practice is to achieve nearly the same kind of relationship as the EU has with associated states. This will require hard and determined work on both sides.

The relationship between the EU and Russia will become closer with enlargement. Estonia, Latvia, Lithuania and Poland will join Finland as EU members with which Russia shares a border. Just like Finland, these countries have a clear interest in developing relations between the EU and Russia.

The EU is Russia's most important trade partner. Russia's leaders agree with this perception. Enlargement could increase the EU's share of Russia's foreign trade to over 50 per cent. The emerging mutual dependence is a phenomenon with effects that we Western Europeans have been able to enjoy for decades.

Energy questions assumed a conspicuous role on the EU-Russia agenda this autumn. This underscores the topical relevance of the European Union's Northern Dimension policy, which has the aim of putting in place the prerequisites for both economic cooperation and solving common health and ecological problems. By supporting development in the north-western and northern parts of Russia close to the EU we can ensure better conditions for also broader cooperation between the EU and Russia.

With regard to EMU, Russia has adopted a wait-and-see approach. Until euro banknotes replace Finnish and German marks, francs and liras, the whole Economic and Monetary Union will remain an abstraction with relevance only in the eyes of experts.

The attitude that Russia has adopted to EU enlargement and also to the development of the Common Security and Defence Policy is positive. The accession of the countries of Eastern Central Europe to the EU is often seen in Russia as an alternative to their joining NATO. Similarly, development of the EU's crisis-management capability can be seen as something that competes with and weakens NATO. In actual fact, however, the EU is developing its capacity to manage crisis in close cooperation with NATO and several countries are candidates for membership of both the European Union and NATO.

The foundation of agreements between the European Union and Russia as well as the joint institutions and instruments based on it are in order. The task now is to get the commitments jointly undertaken in the Partnership and Cooperation Agreement implemented.

In addition to multilateral relations, bilateral relations between various countries have a very important position. They create the human side of real cooperation. The actors involved are, however, nation-states. Germany is justifiably proud of her own relations with Russia and I can say the same for Finland.

Relations between Finland and Russia have been developing favourably in the past decade. I can say without any exaggeration that they are better than they have ever been. In addition to a regular dialogue between our leaderships, we have also intensified our cooperation with the Russian regions geographically close to us.

In the past, even minor practical problems had to be handled through Moscow. Now, on the basis of the 1992 cooperation agreement between our two countries, we can deal directly with adjacent Russian provinces in questions relating to, for example, the environment and training. This is a significant improvement compared with the past. It has enabled us to establish links to the actors who solve practical problems. This model easily lends itself to adaptation for use in cooperation between Russia and other countries with which she shares a border.

The factor that I regard as most important from the perspective of Russia's future development is her engagement with Europe. This means a commitment to our common values: democracy, a market economy and the rule of law. It also means Russia being a European state, part of the continent we share, a party to European conventions and a participant in European organisations and processes. All of us certainly agree that there are no credible alternatives to this road.