Speech by President of the Republic Tarja Halonen at the Finnish-Latvian Business Forum on 26 April 2006

It is really a great pleasure for me to address this Finnish-Latvian Business Forum. Latvia is a country well known to us Finns. Latvia became a member of the European Union two years ago and since then our relations have deepened even further. The foundation for our bilateral relations was laid much earlier, of course.

I am happy to see that the economic cooperation between our two countries is developing very well. Finnish exports to Latvia increased by 22 per cent last year, and Finland was in fact Latvia’s sixth largest source of imports. This trade involves of course goods but Finns have invested actively in the Latvian service sector too, and not only in tourism. It is also positive that Finland has entered the top 10 list of Latvian export countries.

Finnish investments in Latvia reflect our close economic relations. About 270 Finnish companies have already been registered in Latvia. Latvia’s membership in the European Union has increased the confidence of Finnish companies in Latvia as a business environment.

Latvia’s determination to enter the European Monetary Union also affects the economic relations. The introduction of the common currency, the euro, in Latvia, would certainly be a positive step in our trade relations. As EU Member States, we share the same objectives on competitiveness and growth potential. But we also need to invest in education and in skilful labour force. Without skilful people no results can be achieved.

In the global context, the countries of Europe in general and the Nordic countries in particular are among the winners in globalization. Both Latvia and Finland have had to adapt to harder competition, but we have also benefited from a more open world economy in many ways. This has required structural changes and focusing on strengths.

Finland has chosen to retain its traditional welfare society model. In the Nordic welfare society model, stability is created through strong democracy and social fairness. The model combines the interests of the individual and the community. We have every reason to be pleased with how well we have done in various international comparisons. Promoting expertise and know-how is one key factor in Finland’s success story. Finland continues to invest relatively large amounts in education and training and in research and development, but we should continue to increase our efforts and encourage our EU partners to do the same. The Member States of the EU can only compete on quality, as correctly stated in the EU’s Lisbon Strategy.

Latvia and Finland have a shared interest in promoting the development of the Baltic Sea region. This region is a common market area for both Latvia and Finland. But we still have to work to use fully the potential of the area. We must develop the region as a regional growth centre in Europe, where the aims of competitiveness, dynamic economies, and investing in human resources and in innovation, as well as social welfare are combined. Energy issues will also be high on the agenda for the Baltic Sea countries.

Networks between cities and educational institutions, and joint research projects, have created valuable connections and contacts in this area. In the implementation of EU-funded projects, Finns can be active suppliers. Latvia’s advantage from Finland’s point of view is its geographical position and special know-how regarding the rapidly growing economies of Central and Eastern Europe.

I firmly believe that today’s event will help Finnish companies to positively evaluate those opportunities that cooperation with a close EU partner can offer. I would like to thank the organizers of this Forum (the Latvian Investment and Development Agency and FINPRO) for this excellent event, and I would like to wish every success for the cooperation between businesses in our two countries.