Speech by President of the Republic of Finland Sauli Niinistö at the Stockholm School of Economics on Tuesday, 17 April 2012

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Northern European Perspectives

It is a great privilege to speak to you today. I very much appreciate this opportunity to address this distinguished audience here in Stockholm. I want to thank our kind hosts for making this possible.

I want to make a few remarks from a Northern European Perspective. My aim is reflect on our common history – looking at the past Finland and Sweden share a rich history. Then I will look forward and seek to develop some ideas where Finland and Sweden can work together. Perhaps by further developing Nordic cooperation and finding common approaches with the Arctic.

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A first visit to Sweden is a natural choice and pleasant duty for all Finnish Presidents.

Finland and Sweden were parts of the same Kingdom for some 600 years – perhaps two people, but one nation. Finland was not a lesser part of Sweden, but eastern regions of the kingdom participating fully to the economic and political life. Finns rose to high positions in society. Stockholm and Turku – or Åbo in Swedish – was the core area of this great kingdom of the north. Already in those days the sea was a connecting element, not a dividing one.

Finland and Sweden owe much to each other. Western European civilization came to Finland with the Swedish crown and church. From those early days, the Swedish language has been a fundamental part of Finnish life. From a linguistic point of view Finland is both Finnish and Swedish. The Swedish language is not an alien element to Finland, but an integral part of the Finnish way of life and society, an asset we want to maintain and cherish.

The loss of Finland to Russia in the Napoleonic wars was a great blow. But even as an autonomous part of the Russian empire Finland maintained close and privileged links with Sweden. Swedish law and institutions remained even after the separation and constituted the basis for Finland’s strong development as a distinct entity.

The Finnish economy developed strongly during that period. Autonomy meant that a customs border existed between Finland and Russia, but Finnish companies had access to the big Russian market. Finland also benefited greatly from the autonomous position it had within the Russian empire.

In the course of 19th century strong national institutions were built in Finland – our own currency was established in 1860. The Swedish central bank is the oldest one in the world, but the Bank of Finland comes a good fourth. A unicameral Finnish parliament was established in 1906 and women were given political rights as the first country in the world.

With independence in 1917 Finland had to define its place among nation-states. Was it the northernmost extension of the Baltic countries or the easternmost member of a Nordic family? With our strong cultural and historical links to Sweden the answer was self-evident.

The Finnish will for independence was tested in the Second World War. Finland fought hard. Quite uniquely, Soviet expansion stopped at our borders while its other inroads extended to the heart of Europe. Many Swedes participated in our struggle and fought in the Finnish army.

The Cold war was a traumatic time for Europe. A sharp, unnatural dividing line separated Europe. The Baltic Sea was an extension of the iron curtain. Neutrality was a natural solution for both Finland and Sweden. Perhaps neutrality had different flavors – the Finnish way was unforgiving realism in the shadow of the Soviet Union, contrasting the Swedish foreign policy with more global ambitions. The Nordic family was the most important reference for us Finns in the global context. Nordic institutions were immensely valuable in building our modern state after the war.

The Nordics pioneered many important freedoms as a community – passport free travel, the right to work and participate in political life. A great number of my compatriots took that opportunity by migrating to Sweden in the 1960s and 1970s. Sweden offered work, when possibilities in Finland were limited. This sizeable Finnish minority has made a great contribution to Swedish society.

Membership in the European Union opened a new page for both Finland and Sweden. As EU members we are similar in many ways representing open and innovative Nordic economies. One major difference exists – membership of the euro. Finland joined the Eurozone from day one, while Sweden remains still outside. Finland had a clear ambition that it wanted to participate in all policy areas of the European Union.

The eurozone is in crisis, but one should not forget the sound economic logic behind the common currency. The euro has brought stability to the Finnish economy. Its rescue operations have also shielded the European and even global financial system. I am convinced that the short-comings of the eurozone will be overcome, but this will require political determination and firm discipline. Also here Finland and Sweden can work closely together – we need more growth in the EU and these policies are the business of all member states. Sweden is not in the euro, but it is as dependent on the European economy as Finland.

The well known diplomat and historian of Swedish-Finnish relations, Dr Christer Wahlbäck, has characterized Finnish and Swedish paths within the EU as two ships that do not always take an identical route, but are sailing in the same direction. This coins it well.

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Our northern corner of Europe has enjoyed a long period of prosperity and stability. But the world is changing at an astonishing pace. Emerging economies are changing the global landscape. The world’s centre of gravity is shifting from the Atlantic to the Pacific.

We need to address and seek to influence challenges around us – Europe is facing a relative decline. Its economic performance is weakening and demographics are against us. At the same time we have grave global transnational threats – climate change and its unforeseen consequences, contagious diseases, terrorism, organised crime. Borders are easy to cross and distances matter less in a globalised world.

The world I was born into had less than 3 billion people. Last year we passed the 7 billion mile-stone. This is a huge change and perhaps the dominant driver of global change.

Sweden and Finland can respond to these global challenges only by sticking to our shared values. We need to continue promoting democracy, human rights and the rule of law. They are basic universal values that belong to everyone.

Finland and Sweden align themselves in foreign policy in general. We both stress the central importance of the United Nations. I am very proud of the close cooperation Nordic nations have in the United Nations, where we hope to see Finland as a Nordic member of the Security Council in 2013 and 2014.

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In security policy Finland and Sweden have a strong interest to go hand in hand. A dividing line between Sweden and Finland would be unimaginable. Both countries are active partners of Nato. A relationship many qualify as being as close to Nato as possible without actual membership.

With a changing alliance, also partners need to deepen and develop our relationship with Nato in new ways and in flexible formats. From the Chicago summit we hope to achieve concrete commitments on deepening the political dialogue between Nato and its partners and enhancing cooperation in planning and managing crisis management operations.

In Nato we are not passive spectators, but active participants. We are together in Afghanistan. We cooperate with Nato as important and valued partners. We are committed to do our share in enhancing global peace and stability. Finland is breaking new ground in participating in the NRF reserve forces pool.

Sweden and Finland are also active contributors to EU crisis management. It was a joint Finnish-Swedish initiative in the late 1990s that launched the concept in the Amsterdam Treaty. Since then we have participated in most operations. We have also been joint leaders in building a strong civilian crisis management capability for the EU.

The Swedish-led EU battle group is a further excellent example of our joint efforts. Finland is ready to participate also in the next cycle.

One could say that Swedish and Finnish approach to security is identical.

What counts in the end is a sense of solidarity among countries and real capabilities. One thing is certain – Europe will have to bear a greater responsibility for its own security.

The American commitment to European security has been immensely valuable and remains of central importance. But we have to recognize changes in its global geopolitical priorities, which point to Asia. Europe needs to do its fair share in terms of defense and capabilities. Europe needs to emerge stronger in security policy and defense.

How do we respond to this challenge in the current circumstances? Our military budgets are under immense strain. A new generation of military hardware is substantially more expensive. The obvious answer is that we need to do more together, by pooling and sharing military capabilities. No one can manage just on its own. We have developed a successful Nordic model in Nordic Defence Cooperation (NORDEFCO). It could serve as a model in the EU and Nato.

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The Nordic nations took a new step quite recently with a common statement of solidarity aiming at joint responses to different kinds of potential risks and disasters. It is obvious that no Nordic country would remain passive if its close neighbors were facing major difficulties.

This being said, more could be done in building real Nordic capabilities for dealing with practical crises that threaten the key functions of our modern complex societies. Sectors such as electricity, communications, medical facilities, transport, security of supply are vulnerable to multitude of threats. Dealing with these modern challenges requires a capacity to cooperate and exercise between a great number of civilian authorities, not just the military. With transnational challenges, we need more transnational responses.

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There are several major issues where Finland and Sweden can work together. An evident one is the Arctic. In my view, it will become s serious regional dimension in our cooperation, in addition to the ever important Baltic Sea.

The importance of the Arctic is growing fast. Global warming means that new sea lanes may open an arctic highway to Asia. Mineral resources are abundant, both off-shore and on dry land. Northern Finland is already experiencing a mining boom, greatly benefiting the local economy. The demand for arctic technology and know-how is growing. At the same time the fragile arctic environment has to be preserved.

Sweden and Finland are both Arctic countries. We may not own the oil and the gas, but we have much of the Arctic technology and know-how needed to exploit these giant economic opportunities. For instance half of the world’s existing icebreakers have been built in Finland.

Arctic opportunities can only be exploited in cooperation. This is why we attach so much importance to the Arctic Council as the central platform for the region. I very much would like to thank Sweden for its efforts in chairing the Arctic Council and making progress on many key items. But I believe we could also be ambitious on a bilateral level, developing joint understanding and projects linking our northern regions even further. The potential is there.

Of course, there is no Arctic without Russia. There is no Arctic without the United States and Canada. This is a unique field where Europe, Russia and North America work together. The arctic is hot, as the current saying goes

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Our Nordic model evokes many positive images: our countries have stable and inclusive societies and well-managed economies. We can be proud of these achievements. However, past achievements become worthless if we do not pay close attention to how we will be able to maintain them.

The essential question is how to renew the economic performance underpinning our social model. Finland and Sweden have similar economies. Both our countries are highly dependent on exports and we share a common interest in the well-being of the global economy. In fact, Finnish and Swedish economies are a single entity.

That is why we also share similar economic challenges. For instance, youth unemployment is intolerably high in both countries. Recently Sweden has shown strong leadership in promoting policies that are conducive to work. In addition to these policies we must modernize our Nordic economic model to succeed in an age of unprecedented global economic competition. This will not be possible by shielding our economies to global competition, but embracing it.

We need to think how Nordic cooperation could help us meet these common challenges? We all know that our cooperation has strong roots and fine traditions. But its practice has traditionally been rather inward looking. “Family reunions”, designed to make us feel good about ourselves. This isn´t enough.

I believe that as we look to the future Nordic cooperation should look more towards the outside world and adopt a more strategic approach. What are our strengths and weaknesses? How to succeed better together? How can our cooperation structures support us in an optimal way? How do we use our Nordic brand more actively in the global context? How do we better integrate the Baltic states into our cooperation? These are the questions we should be addressing among us. As a result we should define a common Nordic vision which would go beyond mere coordination and discussion to allow us to really innovate and shape our policies.

Finland and Sweden are connected by their geography, history, political model, language and people. In global comparison we, together with our other Nordic friends, have been winners. Our joint task is to harness our common bonds, turn them into a useful tool for the modern world and shape our fortunes so that our Nordic past will also be our Nordic future.