Speech by President of the Republic of Finland Tarja Halonen at the University of Ljubljana, Faculty of Law, on 12 October 2005

Finland's experience of the EU in a globalizing world

Globalization is a mega-phenomenon that strongly affects development and people's lives around the world. The globalization debate has a tendency to focusing on economic factors. Opening markets or other financial and business issues take the main role and social aspects are forgotten. A narrow, business-oriented approach is not an adequate response to the challenge of globalization. I am glad that the outcome document of the UN Summit – that was held a few weeks ago – emphasizes the importance of fair globalization.

Globalization in its present form must and can be reformed so that the benefits and costs are distributed more fairly among people and countries. I have done a lot of work on globalization in recent years. The UN's position is based on the report of the ILO World Commission on the Social Dimension of Globalization, which I co-chaired with President of Tanzania Benjamin Mkapa. But there has also been plenty of work to do as the President of Finland, since while globalization must be reformed, we must seek means to survive in globalization.

Nation states are still the main actors in governing 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 an active civil society, including the labour market institutions, so that we can have sustainable economic development.

* * *

Finland has been able to keep its competitiveness high, like the other Nordic countries, without having to give up our traditional welfare state model. In addition to democracy, strong respect for human rights, the rule of law and good governance, the Nordic welfare state is based on social justice. All the Nordic countries invest in employment, in social services and health care, and – extensively – in education. Women's active participation in all sectors of society and emphasis on various other equality issues are also typical of these countries.

To get out of the recession in the early 1990s, Finland had to make structural changes aiming at building a foundation for economic growth and the strengthening of her competitiveness. For example decisions concerning opening markets and investing strongly in research and development have proved to be good decisions. Even in difficult times a common view in Finland was that economic development cannot be sustainable without ecologically and socially sustainable development and the safeguarding of workers' rights.

Nowadays many respected international surveys repeatedly rank Finland among the top countries when it comes to competitiveness, balancing public finances, the state of the environment, the education system, gender equality, reducing poverty and preventing corruption. The Nordic welfare state model is not only just to the individual; it also appears to make a society more competitive in a globalizing world.

* * *

Finland has done its best, but we do not imagine that we can succeed in globalization all by ourselves. Finland joined the European Union over ten years ago. As a small Nordic country we have always understood the importance of international trade and cooperation. We joined the EMU from the start and have lived strictly by the rules. The European Union is our new domestic market area.

Five years ago in Lisbon the EU outlined ambitious goals and plans to make Europe "the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion". The practical implementation of the Lisbon Strategy has not lived up to expectations. We are badly behind schedule. Implementing decisions supporting growth and employment, the social dimension and sustainable development is primarily up to the Member States, but the European Commission for its part must support the effective implementation of the Lisbon Strategy. I strongly believe that the Lisbon Strategy is the best model for regional cooperation that can promote fair globalization. Implementing this strategy is in our own interests and can also show the way and provide a model for others.

Despite the Union's difficulties at the moment, there is no reason to doubt the European project. We must remember everything the EU has given the countries and people it unites. The Union can provide security in a global world and can help us make globalization fairer. What has been achieved up to now should not be thrown away, but we must strongly grasp the opportunities that the future presents.

The European Union is already much more than a free trade area and its scope is larger than the economy. 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 transparent and more effective. This is in our own interests and is important in building a better world. We need a greater willingness to make compromises and more solidarity.

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 the added value must be real. 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 a few weeks from now.

* * *

The international role of the European Union has strengthened considerably in recent years. The EU is a visible and respected actor in everything from development issues to crisis management. The citizens of the EU countries expect the Union to take the initiative in resolving global problems as well as problems that are closer to home. The Member States face many similar threats. International security threats are increasingly of a non-military nature. Climate change, pollution, natural catastrophes, contagious diseases and economic insecurity are threats that we can prepare for best by working together.

A strong Union can meet the challenges of a changing operating environment. The better the Union can speak with one voice, the more influence and authority it will have. Environmental policy has been a good example of this, and particularly the commitment to the Kyoto Protocol.

To ensure the Union's capacity to act, we must take special care that the enlarged Union works efficiently and coherently. The added value brought by integration and enlargement is not yet reflected in the EU's international competitiveness and political position. Strengthening further the EU's international role is now a key goal. The Constitutional Treaty would be helpful in this, but we can do a lot with the present legislative framework. Strengthening the global role of the EU will be a priority during the Finnish Presidency next year.

Discussion concerning the EU affairs has remained lively in Finland throughout our membership. This discussion includes not only professionals, but also the social partners, civil society and individual citizens. An important role is also played by the European Information Offices that operate around our country. Through a dense library network they inform people on timely issues and arrange discussions in different parts of Finland. Although some Finns still take a negative or indifferent stance towards the Union, the population has not split sharply into those who are for and those who are against. So far, our membership has been undramatic. The Union cannot grow stronger or develop without citizens' support and cooperation. Citizens' support is essential in all Member States.

The European Union is not only cooperation between Brussels and the Member States. Cooperation among the Member States has also increased in the south as well as the north. The importance of bilateral relations between the Member States has also grown. It is important to know partners well and engage in close cooperation. I am glad to note that Finland and Slovenia share similar social and economic structures and values. Both countries also have an active and influential civil society, which takes part in discussion and the preparation of EU positions.

I am truly happy and proud to have this opportunity to take part in this public discussion at your university's Faculty of Law.