Speech by President of the Republic Tarja Halonen at the French Institute of International Relations (IFRI) on 1 March 2005

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It is a great honour for me to speak today in this prestigious forum. Ifri's work is well known around the world. Well known is also the French interest in international affairs.

My visit to France has gone very well. Earlier today President Jacques Chirac and I had interesting and rewarding talks. Among other things we discussed the future of Europe, which is my subject this evening.

To begin with, let me say a few words about how Finland has reached its present position in Europe, since this still influences our perspective today.

European integration has been the answer to the experiences of the Second World War. The Finnish approach to integration must also be seen against the background of events that took place over six decades ago.

In late summer 1939 Germany and the Soviet Union agreed on a division of Europe into spheres of influence. The following winter Finland had to fight off an attack by the Red Army in order to preserve her independence and avoid being occupied by the Soviet Union. We had to do this alone, without significant outside help.

Five years later, in the summer of 1944, we again managed to stop the Red Army's attempts to conquer Finland. Our country was not occupied at any stage, during or after the war. We lost part of our territory, but we achieved a defensive victory. We held on to our independence as well as our democratic political system and our economic system.

For us the world war meant a separate war against the Soviet Union and we did not incur any debt of gratitude to others. The post-war period was difficult in Finland, as it was all over Europe. We were nevertheless able to follow a different path from the other countries on the western border of the Soviet Union. The Cold War was not always easy for our nation, but it was not a traumatic time.
We went about building our country. It was important for us to be able to join in Western European economic integration in the early 1960s. We were involved in the opening of markets that took place in the 1960s and 70s. This allowed Finland to change from an agrarian to an industrial society and to build a Nordic welfare state.

We waited until the late 80s to apply for full membership in the Council of Europe, although we had taken an active part in the organization for many years. What is probably remembered most is our initiative to arrange the Conference on Security and Cooperation in Europe. All in all we took a pragmatic approach to European integration and did what we could in a world divided into blocs.

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Finland and the other EFTA countries remained outside the European Economic Community until the final years of the Cold War. Keeping the distance was not entirely up to us but was also influenced by EC policy. In the late 80s, the establishment of the single market made it necessary for the EFTA countries to rethink their relations with the EC. At the time, we were not offered full membership. Instead we were offered a third way that was conceived by Commission President Jacques Delors: the European Economic Area. Finland and the other EFTA countries were able to participate in the single market and related EU policies, but that was all.

The creation of this third way ultimately remained only a footnote in the history of European integration when changes swept over Europe. The European Economic Area became a kind of safetynet for those EFTA countries that in the end did not want to join the EU. However the European Economic Area was not offered as an alternative to the most recent new members. For them the goal was from the start a full membership.

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Finland's own experience of participation in European integration has influenced our positive attitude towards further enlargement. We want to offer the same opportunity to others. I believe that it will also bring stability and prosperity to Europe. It can create a new common Europe. Successful enlargement will also strengthen the European Union as an international actor.

The latest enlargement appears to have gone quite well. It has also clearly increased the attractiveness of Union membership among countries that are still outside. It appears that only the goal of full membership is sufficient to get reforms under way. So clear criteria must be set for membership and they must be met before accession comes into question.

The Copenhagen criteria are still valid and necessary. It would be harmful for both the Union and applicants to allow deviations from these criteria. Particularly the basics - democracy, human rights and the rule of law - must be in order. Enacting legislation is not enough; it must also be implemented.

The Union must apply the same principles to all applicants, and each applicant must proceed towards membership on its own merits. We must also remember that the criteria do not include culture or religion. On the contrary, cultural diversity makes Europe richer. The Union must be open to every European nation that measures up to the criteria. The question concerns the timetable: when each applicant will be ready to join and how well the EU can integrate new members.

Now that the new Commission is in place and the new Parliament has gone to work, we start to see more clearly what challenges 25 member states place on decision-making. Our own answer has been to devote more attention to European affairs. We also trust that the constitutional treaty, when enters into force, will ensure possibilities to develop the Union in a way that benefits all the member states and their citizens. In our view, the most important thing for the Union is to be able to carry out its tasks and that member states remain on an equal footing. It is essential to develop the Union as a whole, with the participation of all the member states.

All in all enlargement has proved important for the Union and indispensable for Europe. Integration needs to be deepened in all three of the Union's main objectives: prosperity, peace and freedom.

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In Finland we have high expectations for the single market and the Lisbon Strategy. Improving competitiveness should strengthen growth and employment. Only in this way can we afford to maintain the welfare state.

When Finland's economy slumped in the 1990s, we had to go through deep structural changes. But at the same time we built a foundation on which our strong economy and competitiveness are based. Opening markets has been important. For instance, the deregulation of telecommunications led to the strong growth of this sector in the Nordic countries. We have also invested heavily in research and development. Finland has also done very well in international surveys of competitiveness.

In addition to strengthening our competitiveness, we have focused on ensuring that economic growth has been ecologically and socially sustainable. We have taken good care of our environment, our education system has been evaluated the best in the OECD and the level of social protection in Finland is high. In our opinion this shows that open markets and strong competitiveness need not be in conflict with social justice. Furthermore we have not been so concerned as the other Nordic countries that joining the EU or the common currency would in itself pose a threat to our welfare system.

We are aware of our shortcomings and economic challenges, including the rapid ageing of our population. For the most part making reforms is up to each member state. I have keenly followed France's experience with regard to the 35-hour working week. However and in addition to the measures taken by each member state, we still need measures at the European level. Unfair barriers to the single market must be removed and competition-distorting measures must be relinquished. At the same time the Union's social dimension and environmental legislation need to be further developed. Labour and social legislation needs to be improved insofar as it comes within the Union's competence.

These are things that interest citizens. If the EU has remained distant to Europeans, to repair this situation they must be shown that the Union can respond to the challenge of globalization as well as promote sustainable growth and ensure citizens' prosperity. My opinion is that social protection, safeguarding the rights of workers and agreements between labour-market organizations are also a means to compete in the global economy. And let me point out that in Finland, where 80% of workers are organized, the trade union movement has supported European integration.

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Negotiations have been under way for some time concerning the Union's future financial framework. I consider it a threat that prolonged negotiations will cause uncertainty among citizens about what the Union's primary objectives are. Twenty years ago budget matters seemed to be the Union's main concern. There is no point in going back to that. We hope that Luxembourg will succeed in bringing the negotiations to a balanced conclusion during her presidency.

Another EU issue that no doubt causes some confusion in people's minds is the stability and growth pact. Finland has strived to comply fully with the obligations in the pact and takes a negative view of exceptions in the case of individual countries. The problems encountered may have weakened the Union's credibility and created suspicions that the rules are different for large members and small members. For this reason the issue should be resolved in the coming weeks by confirming how the pact should be interpreted, without compromising on the key objectives.

One long-term issue is the future of the Common Agricultural Policy. Finland, like France, considers it important to ensure agriculture in every European country. In our own membership negotiations, adjusting to the Union's agriculture policy was the most difficult issue. The Common Agricultural Policy did not - and even now does not - take into account the northern conditions in which our farmers work in Finland.

Today we can say that our agriculture has adjusted reasonably well to the European Union. Now the challenge is to adapt the EU's agricultural policy to globalization. Pressure for reform is created by the need to focus on environmental factors, to maintain food production in different parts of the world as well as the WTO talks, the enlargement of the Union and consumers' demands. Changes must be made in a way that is fair both globally and within the European Union.

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When Finns voted in 1994 in favour of joining the European Union, membership was viewed as an element of our security.

Last year the President, the Government and Parliament reconfirmed Finland's security and defence policy. We agreed not to change our basic security policy solution. As far as NATO is concerned, membership is not a timely issue for us but remains a possibility. This policy has the backing of a large majority of Finns. There is also a consensus that we must keep a credible national defence, and we will continue to base our Defence Forces on conscription and a well-trained reserve.

When we joined the Union we accepted the provisions in the Maastricht Treaty concerning defence policy and a common defence. Since then the world has changed rapidly and so have security threats. At the Intergovernmental Conference in Amsterdam I presented together with the Swedish foreign minister an initiative to develop the European Union's crisis management capacity. That initiative produced results and we are now in the process of building an effective crisis management capacity in the Union.

Finland will continue to participate fully in European security and defence policy and will be active in developing it. In the future we must focus on improving Union’s capabilities in this sector and develop cooperation between the EU and NATO.

The Union's role in crisis management must be comprehensive and coherent extending from crisis prevention to post-crisis nation building. If necessary we must be prepared to intervene militarily in the early stage of a crisis to prevent greater human suffering later on. Finland has decided to participate in two rapid reaction battle groups - one with Sweden, Norway and Estonia and the other with Germany and the Netherlands. We are satisfied that these new EU units will be truly multinational.

It is equally important to improve the Union's civilian crisis management. In addition, we must be prepared for natural disasters, as the Asian tsunami showed.

We must also deal more effectively with the causes behind crises. We must take into account threats that are caused by poverty. The EU must pay more attention to governing globalization in trade policy and development cooperation. We also need more coherent cooperation on the part of international organisations, including close links with the actors in the private sector and civil society. I myself have had the pleasure of working with President Chirac to promote the implementation of the UN Millennium Declaration. But we must also strengthen the EU as an international actor and strengthen coherence in its different sectors.

We must work harder to create a common foreign policy, whether this concerns the United States, Russia or China or our other cooperation partners. For Finland, which shares a border with Russia, the Northern Dimension and regional cooperation are an important part of the EU's external relations. I think we have an optimistic feeling in Europe after President Bush’s recent visit, that there is a growing understanding between us.

Finland will hold the presidency of the EU in the second half of next year. One of our priorities will be to make the EU's foreign and security policy and international relations more effective and strengthen the Union's international position. We must make sure that the transition to the new institutions and arrangements under the constitutional treaty takes place smoothly in the field of international relations as well.

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The EU is becoming more and more a community of values. Fundamental rights have been made part of the new constitutional treaty, the Union is helping to anchor the rule of law in the new member states, and the EU is globally active to implement human rights in third countries.

The goal of the EU is to form a region of freedom, security and justice. Freedom in this connection cannot be just the freedom of the strong, but it must be combined with fraternity and equality.

The EU legislation and closer cooperation in justice and home affairs are also a challenge. Citizens are greatly interested in the free movement of persons, but they know that this also involves problems. How can we keep terrorism from spreading or fight cross-border crime while strictly respecting everyone’s fundamental rights? We must constantly go back to the basics in order to find a balance between freedom, security and fundamental rights.

The European Union must genuinely view the Council of Europe and the Organization for Security and Cooperation in Europe as partners and not rivals. In this context, I want to say how much I appreciate the cooperation between our two countries, which has led to good results. The European Roma and Travelers Forum established in connection with the Council of Europe is a concrete way to improve the position of this European minority within the EU and outside it.

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In Finland we assume that Finland and the EU are part of a global world. Strengthening European integration is good for us but it can also be an interesting and useful example for others when it comes to building regional cooperation and global partnership.

The ratification of the constitutional treaty is well under way. I hope that the outcome of the referendum in France will also be positive. In autumn of next year, halfway through the Finnish presidency, the constitutional treaty will hopefully be in force. Then the Union can concentrate on promoting economic growth and prosperity, increasing international stability, proceeding gradually with enlargement and strengthening citizens' security and rights.

It is important that we shift the emphasis from organizations to substance. The tools exist. What we need is the political will to use them. Everyone must look beyond short-term national interests. This way we can achieve results that will be visible in our citizens' lives.