SPEECH BY MR. MARTTI AHTISAARI, PRESIDENT OF THE REPUBLIC OF FINLAND IN INDUSTRIEHALLE;

Vienna, March 7, 1995

FINLAND - A NEW MEMBER OF THE EUROPEAN UNION

Europe is in transition. Finland and Austria have made historic decisions to accommodate to this change by joining the European Union. Let me share with you some thoughts about how we Finns see this challenging situation.

The European Union represents a unique effort to replace national rivalries with economic and political integration. It provides us with new means to promote national and European goals.

The Finnish people - like the Austrians - endorsed Union membership in a referendum. A clear majority, 57 per cent, of the Finns who went to the polls supported membership. That was not quite as overwhelming as the margin here in Austria. However, the will of the people came through loud and clear.

At the same time, the Finnish result duly reflected the concerns of parts of the population, particularly those living in the rural areas of the eastern and northern parts of the country. Some of the main concerns of Finnish citizens had to do with agriculture, the environment and social security.

It is now the task of our representatives on Union bodies to duly reflect these concerns and aspirations. The broadest possible national support is essential for a successful Union policy.

The Union should be developed by the people and for the people. We will give particular emphasis to the principle of subsidiary as it may be applied to our special circumstances.

Maintaining and strengthening democratic legitimacy in the European Union is one of our main preoccupations. In anything we do in the Union, the confidence of citizens is essential. Openness and transparency in decision-making are therefore of paramount importance.

National parliaments must be kept closely involved in Union affairs. A crucial aspect of democracy, sometimes overlooked, is the accountability of ministers to national parliaments when they take decisions in the Council.

Finland brings to the Union an economy that is currently recovering from its deepest recession in the postwar period. We start our membership as a net recipient from the Union's budget. Our economy is still burdened by a heavy public deficit and an intolerable rate of unemployment. Fortunately, positive trends in the economy are beginning to prevail.

Industrial production and overall growth are rapidly picking up; inflation is low; the balance of trade and the current account are in healthy surplus; and the Finnish markka, though floating, has regained stability and has been slowly appreciating in recent months. We support progress towards the third phase of the European Monetary Union (EMU), which will promote economic stability.

Finland can add considerably to the technological and industrial strength of the Union.

The recession has been a heavy burden on people and the economy. It has, however, also facilitated an inevitable structural change in the economy. It has trimmed many companies into a more competitive shape.

Consumers naturally have many expectations about the positive economic effects of Union membership. The final balance sheet can be seen only later.

Finland and Sweden bring a pronounced northern dimension to the Union, extending its land area by about one third. We have unfavourable natural conditions, the density of population is low and distances are long. Northern ecology is fragile and sensitive. We are committed to protecting it and to seeking environmentally sound solutions.

New members bring positive incentives to develop the Union. For example, our Nordic concept of a welfare society emphasizes equal participation, social justice and equality.

Union membership gives us a stronger say in European affairs that directly affect us. Membership clarifies our international position and thus strengthens our security.

We need a dynamic concept of security. Strengthening stability and security in Europe is the Union's central task. The common foreign and security policy will offer new instruments which can be put to work. Much remains to be done, though. Next year's inter-governmental conference will be crucial in these efforts.

Finland joined the Union with a policy of military non-alliance based on an independent and credible defence. We consider this policy a major contribution to stability and security of northern Europe.

Europe's security architecture keeps evolving. Finland intends to participate actively in this process.

In the conduct of its common foreign and security policy, the Union needs credibility. It is in the interest of smaller member states that jointly formulated policies be transformed into effective action. Finland will support ideas aimed at developing and improving the Union's capacities in this field.

We favour the accession to membership of the Union of Central European countries and the Baltic states as soon as their economic and social development allows it. Further enlargement will inevitably cause major changes in the Union. This must be kept in mind when we prepare for the 1996 Intergovernmental Conference. However, the fundamental character of the Union as a community of independent and sovereign member states should be preserved.

Enhancing stability also signifies a deepening of the relationship between the Union and Russia. A partnership with the Union will facilitate progress towards building stable democratic structures and a viable market economy in Russia.

For obvious reasons, cooperation around the Baltic Sea has been close to our hearts. But no less important for the future of Europe is cooperation in the Mediterranean basin.

Collective security will be generated through preventive diplomacy, peacekeeping and crisis management. The key fora are well known. The Organization for Security and Cooperation in Europe (OSCE) is adopting a more operational approach to its tasks.

NATO, through it Cooperation Council, NACC, and its innovative Partnership for Peace Programme, PfP, has a key role to play. The Western European Union, WEU, has assumed growing importance in areas such as crisis management, especially humanitarian, rescue and peace- keeping missions. Finland, together with Austria and Sweden, has recently assumed observer status in the WEU. We see it as an important forum for elaborating approaches towards new, dynamic security structures in Europe.

But security in Europe cannot be sustained without economic stability. There is still a dividing economic line in Europe. We can witness its existence at our eastern border. Problems of this nature can only be solved through cooperation. Both Austria and Finland have extensive experience in economic cooperation with our eastern neighbours. I believe this experience can greatly benefit the European Union in its efforts.

Finnish industry and trade have been revising their strategies, and, after a decline, trade with Russia is once more picking up. Finland has a lot to offer as a gateway to the Russian market.

We are developing our ability to provide services for foreign companies aiming at the eastern markets of Europe or Arctic region. This includes developing transit routes and distribution centres, providing advice and bases of support for international companies and building partnerships with them.

Membership of the Union does not automatically bring about a miracle cure. It does, however, give a broader selection of tools to operate in this field. The Trans-European network projects are one example of this.

The concept of security includes also the security of our citizens in their everyday lives. Illegal and uncontrolled migration is among the present uncertainties. Co-operation in justice and home affairs - the so-called third pillar of the Maastricht Treaty - is important in order to fight international crime and various other sources of potential instability.

The evolving concept of security must also encompose environmental aspects. We are particularly concerned for our northern ecology. Improving the safety of nuclear installations and refurbishing old industrial plants immediately to our east - the Murmansk region and the Kola Peninsula, Karelia as well as St. Petersburg and areas around this big city - are particularly relevant to us.

Two months into Union membership is not too much. But new members like Austria and Finland can inject new life into the Union.

The 1996 Intergovernmental Conference will be an important occasion for the Union. It is of crucial importance that the Conference be prepared well. We should also define clearly in advance what we really expect from it - also in order to avoid possible disappointments caused by excessive ambitions.

Finland has views of the future of the Europe. It will be a Europe which is undivided, secure and open. It will also be a Europe that has respect for its citizens and is capable of action. And it will be a Europe that carries its responsibility for our common globe.