Speech by President of the Republic of Finland Tarja Halonen at the Finnish - Ukrainian Business Round Table hosted by the confederation of Finnish industries, EK on 26 October 2006

(check against delivery)

This event is another concrete indication of the way that business opportunities in both countries are attracting Finnish and Ukrainian companies, and can be seen as a follow-up to earlier similar gatherings.

A globalizing economy and growing interdependency in the world have convinced us Finns that a transparent and well-functioning set of rules and clear procedures make it easier to achieve both political and economic goals. It is important that in economic decision-making, too, we are committed to respect the common European values – respect for democracy, human rights and the rule of law.

Increasing efficiency does not mean only clear administrative structures but also transparency and keeping people informed. When there is better provision of information about matters that concern us all, it is easier to put decisions into effect. Companies, too, should have their own social responsibility, which they must show both in their own countries and abroad.

* * *

I understand that you Ukrainians would be interested in hearing about our experiences with regard to European integration. Before joining the European Union, Finland was a member of EFTA and a signatory to the EEA Agreement. I know that you, too, are aiming at EU membership.

During the past few years, economic and employment development in Finland has been positive. There are of course many factors behind this success, but at least one specific factor can be highlighted – the Nordic welfare state model. It is interesting to note that several international surveys examining competitiveness and sustainable development have given all five Nordic countries top marks. These five countries have assumed a slightly different approach to European integration. Denmark, Finland and Sweden are EU Member States; Iceland and Norway are members of EFTA and parties to the EEA Agreement. Of the three EU Member States, only Finland is a member of the euro zone. But all five countries base their systems on the Nordic welfare state model.

We in Finland believe that the approach we have taken provides the best opportunities for extensive participation in working life and also more broadly in society. With regard to Finland’s success, the key word is education. Providing the whole age group with equal educational opportunities is a fundamental value of the welfare state model. The pace of globalisation calls for education to be brushed up. The level of education of elderly people is not the same as for younger ones. Our population is ageing so we must invest even more in lifelong learning. At the same time, Finland must also be prepared for a growing number of immigrants who want to live and work here as fully-fledged citizens.

Opening our markets to international competition is another important factor behind our economic success. It has forced our businesses to embrace structural change, which has been both necessary and, at times, painful. But working for reforms in a fair and committed manner does pay back. And I am happy to say that we have very little corruption in Finland. Good governance and the lack of corruption are mutually supportive. Transparent administration that speaks a language that citizens understand is also easier to monitor.

The way Finland handles its external economic relations is largely determined by our EU membership. Finland wants the European Union to be competitive and to have a strong social dimension. A socially conscious Europe – Social Europe – is the fairest option for its citizens and would also enable the EU to make maximum use of the opportunities provided by globalization. To achieve this, the EU must further develop its internal market, improve the operating environment for industry and the service sector and increase investments in research and development.

* * *

We in Finland are satisfied that the Member States have become aware of the need to develop a common approach to energy policy issues. The Union has to deal with the challenges of safeguarding its energy supplies, a continuous rise in energy prices, and issues related to climate change. During its Presidency, Finland is focusing on developing external energy relations. Building mutual trust with the most important third countries, especially Russia, is crucial for ensuring a secure energy supply for the EU. We can be satisfied with the discussions held during the informal EU summit in Lahti last Friday. The EU proved able to present a common front on energy issues and we are happy that Germany, the next holder of the EU Presidency, is committed to taking the energy agenda forward.

Energy cooperation with Ukraine is based on the Memorandum of Understanding signed at the EU-Ukraine summit last December. In the future, the emphasis will be on a gradual harmonization of the energy markets in the EU and Ukraine, development of energy efficiency and renewable energy sources, and nuclear safety. We hope that Ukraine will commit herself to the common rules that are essential for energy trade in such areas as investments, transit shipments and transport.

* * *

Ukrainian companies are increasingly important players on European and international markets. In the future, membership of the World Trade Organization will be a major step for Ukraine on its path towards the Union’s internal market. The EU has already promised Ukraine that negotiations on a mutual free trade area can start as soon as Ukraine has met the requirements for World Trade Organization membership. The elements of the free trade area will be a major part of the new co-operation agreement, the so-called Enhanced Agreement.

One important aim of the new agreement is to encourage closer cooperation between the European Union and Ukraine, and at the same time to strengthen the social system in Ukraine and to help the country to make progress towards a market economy. The EU wants to support the development of a strong civil society and good governance and to help in the fight against corruption.

Though Finland is much smaller than Ukraine in terms of both area and population, we nevertheless believe that we have much to offer in both economic and trade relations. Finland offers Ukrainian investors the advantages of the European internal market and, because it is a member of the euro zone, a stable currency. Finland also provides good and cost-effective transport links with growing markets in the Far East and elsewhere in Asia. I warmly welcome Ukrainian companies to the Finnish market.

Ukraine is undergoing political and economic change. The EU, international organizations and financial institutions – the latest being the Nordic Investment Bank – are all encouraging internal processes of change in Ukraine. The free and fair parliamentary elections held in March this year were another sign that Ukraine is on the right road in her democratic development. The positive impression of this on the country’s social progress and stability is also helping Finland and Ukraine to work towards closer economic relations.

I know that I do not need to stress the mutual benefits before this audience. This meeting is clear evidence of the interest towards each other that already exists. But the future can be even better. I wish you every success in your future work.