Speech by President of the Republic Tarja Halonen at the Svenska Dagbladet Executive Club in Stockholm on 19 October 2005

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It is always a great pleasure and honour for me to speak in Sweden. It is almost like being at home. Our nations are perhaps not twins, but we are certainly like siblings. It is especially pleasant to be here at the Svenska Dagbladet Executive Club. Such occasions are an indication of this leading Swedish newspaper's desire to maintain pluralistic discussion about current issues. This is an essential part of democracy. I applaud you for your valuable work.

Globalization is today's mega-phenomenon. Globalization is something that people are afraid of and want to protect themselves against, but at the same time it is regarded as a chance for a better life for everyone. In short, some people view globalization as the source of all that is evil, while others see in it the potential for all that is good.

Like many others I believe that globalization offers great opportunities, but today those opportunities are not being fully realized. The benefits and costs of globalization are divided unequally between and within countries. I am a reformer in this respect as well: we need a better globalization. A fair globalization. A globalization that takes people's needs into consideration better in both the industrialized and the developing countries.

Nation states are still the main actors in globalization. People's possibility to take advantage of globalization or avoid its negative effects depend largely on what kind of state they live in. A democratic state that respects human rights and is based on the rule of law is a good starting point. In addition to a democratic political system we need a lively civil society, including the social partners, and naturally a free and responsible business community so that we can have sustainable economic development.

This starting point is quite familiar to Nordic citizens. The Nordic countries and Nordic cooperation are a success story in our global world. The Nordic countries do exceedingly well in international surveys, whether these concern education, competitiveness, sustainable development or equality. Nordic cooperation has also given our citizens opportunities for cross-border rights which people in other parts of the world can only dream of and which have been introduced in the European Union much later than in the Nordic countries.

It would certainly be wrong to say that the development of Nordic cooperation began as a response to the challenges of globalization. No, this cooperation began long before globalization. Nordic cooperation has always been, above all, a means to make our citizens' life easier and to improve citizens' welfare. A passport union, a common labour market and the right to live in any of the Nordic countries are examples of excellent international cooperation that has been more clearly present in people's daily lives than any other international cooperation. Of course the EU is now implementing the same principles that we have applied in the Nordic countries for decades.

The Nordic countries' integration policies differ from each other. Norway and Iceland have remained outside the Union. Denmark, Norway and Iceland are members in NATO. On the other hand Denmark does not participate in the EU's defence cooperation and Finland is the only Nordic countries that has adopted the euro as its national currency. Differences in national integration policies are also visible within the Union, but the fact is that Finland, Sweden and Denmark are often in the same camp in the EU.

Nordic cooperation is strong regardless of Union membership. This is particularly visible in Schengen cooperation on borders controls. Finland and Sweden thought always that it was crucial to keep Norway and Iceland involved in this deep EU cooperation, in which by no means all the EU countries participate. Another timely example of this type of cooperation is the forming of a Nordic battle group by Sweden, Finland, Norway and Estonia. And it is perhaps good to remember that the origins of EU’s crisis management was laid in negotiations leading to the Amsterdam treaty by a joint proposal by then Foreign Minister of Sweden Lena Hjelm-Wallén and myself.

Economic interactions are a key part of Nordic cooperation. Trade between our countries is extensive and investments from one country to another are on a high level. The number one country for Finnish companies' direct investments is Sweden. Similarly Swedish companies' direct foreign investments quite often go to Finland. The names Stora-Enso and Telia-Sonera are examples of "marriages of reason".

Nordic cooperation has not lost its timeliness or necessity. The needs and forms of cooperation change and cooperation must develop along with needs. The best preconditions for developing Nordic cooperation are created by Sweden's and Finland's joint efforts both within and outside the EU.

European integration has reached a point at which serious discussion is needed. European integration can only proceed if citizens want it to. This should be a genuine democratic process.

We have deferred the ratification of the Constitutional Treaty. This is the right decision for the simple reason that the Treaty requires unanimity and we cannot expect France or the Netherlands to change their mind and approve the treaty any time soon.

Despite the Union's difficulties at the moment, there is no reason to doubt the European project. We must remember all the benefits the European integration has provided for the nations and people it unites. The EU can provide security in a global world and can help us make globalization fairer.

The European Union is already much more than a free trade area – though free trade in the EU does not always function well. From the very start the EU has been intended as a political project. The EU is a community with a common goal and shared values and principles. In order for confidence in the Union to grow, it must be more democratic, more open and more effective.

There are many matters in which we can achieve better results together than if each Member State acts alone. This is the added value of the Union, and this added value must be real. But when matters are decided at the EU level, we must take responsibility for decisions and not say that "Brussels" has decided. I hope this attitude will be taken at the informal meeting of heads of state and government next week.

During the latter half of next year, Finland will hold the EU Presidency for the second time. Our experience of Union membership has increased, but we are preparing for this Presidency just as carefully as we did last time in 1999. We know that our own possibilities to influence the agenda during our Presidency are limited, but one focus will be developing relations between the EU and Russia.

The EU views Russia as a strategic partner with whom we wish to engage in broad and comprehensive cooperation. For the Union this cooperation is especially important in issues concerning the environment, energy, cross-border movement, public health, fighting crime, research and other areas that involve the security, stability and general welfare of Europe.

Russia, on the other hand, has many wishes with regard to growing economic interdependence between the Union and Russia as well as the development of the Union's foreign, security and defence policy.

During the past year and a half relations between the EU and Russia have developed favourably. The Partnership and Cooperation Agreement was expanded to cover the Union's new Member States, the EU and Russia signed a bilateral agreement on Russia's accession to the World Trade Organization, and Russia ratified the Kyoto Protocol. Last spring an agreement was reached to deepen cooperation in the economic sphere, justice and home affairs, external security and research and education. The EU-Russia summit that was held two weeks ago was quite successful and the result was an understanding on visa facilitation and a readmission agreement.

The idea of partnership and common interests is Finland's most important point of departure in developing relations between the EU and Russia. Both parties must see and feel that cooperation is beneficial. The Southwest Wastewater Treatment Plant in St Petersburg is a concrete example of this kind of cooperation. I had the pleasure of attending the commissioning of this plant together with President Vladimir Putin, Prime Minister Göran Persson, Governor Valentina Matvienko and many others. This project, which was conducted with the help of the Northern Dimension Environmental Partnership, will significantly reduce the environmental load on the Gulf of Finland and the Baltic Sea, to the advantage of everyone living on the Baltic's shores.

Finland has a special interest in Russia's development. We share a long border and Russia has become Finland's biggest trading partner. Like the other EU countries we want Russia to have democracy, the rule of law and a market economy. We want a stable and prosperous Russia.

Russia still has some way to go in developing human rights, the rule of law and a market economy, however. The country's party system is fairly undeveloped, media pluralism leaves something to be desired, the predictability of administration could be improved and businesses' equal operating conditions could be enhanced. The list could be much longer, but we should also remember that there is room for improvement in every country and cooperation cannot be based on nagging.

This year we are celebrating the 60th anniversary of the United Nations. I am very glad that Sweden is serving as the President of the 60th session of the UN General Assembly. Sweden, if any country, deserves this special honour. It was thrilling and heart-warming to see and hear Prime Minister Göran Persson preside over the World Summit in September.

Sweden has a great responsibility to advance the resolutions that were made at the World Summit. This task is demanding. We have confidence in Sweden and trust that you will succeed in this task. Finland will support Sweden in any way it can in this important work.