21 July 1999                                 

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This article was originally published in the Finn-Niche magazine No 2, 1999 * Email finn-niche@finn-niche.com

Northern Dimension brought to centre stage in EU

Finland’s EU Presidency will draw Europe’s attention to the questions of the Baltic area in an unprecedented way. They are problems which have hitherto largely escaped the attention of European media.

The need for this new focus became apparent by listening to many expert analyses in a seminar on Finnish EU Presidency, held recently at the London School of Economics and organised by the Nordic Policy Studies Centre of the University of Aberdeen in conjunction with the Finnish Embassy in London and LSE’s European Institute.

The Baltic area was last in the news when the EU decided that only Estonia of the three applicant countries in the region will be among the next round of new members – a decision supported by Finland, to the irritation of Latvia and Lithuania.

Dr. Teija Tiilikainen from the University of Helsinki said that the Finnish policy "was based upon a willingness to guarantee that at least one of the Baltic states would be included in the first group of negotiators". She added: "Next autumn Finland will be given a chance to reformulate its position when the EU’s policy towards the continuation of the enlargement project will take shape under the Finnish leadership".

Tiilikainen emphasised that in spite of their geographical vicinity, Finland and the Baltic countries have very different attitudes to a European security system.

"Both Finland and the Baltic states want to tie themselves firmly to the European security structures, but when Finland wishes to do it through its membership in the EU, the Baltic countries put their trust in the first place in Nato."

According to Tiilikainen, this has created concern in the present EU member countries about the willingness of the future new non-Nato EU members to cooperate in the development of the Common Foreign and Security Policy. There are worries that the Baltic countries see the CFSP only as a transitional stage on the road to Nato.

Matters are not helped by the fact that Russia sees Nato as a relic from the Cold War. This fact, together with border disputes and disagreements about the status of Russian minorities in the Baltic will become headaches for the EU when the Baltic countries eventually join the Union. Tiilikainen thinks it is clear that "relations between the Baltic states and Russia will form a potential area of tension between the EU and a third state".

Baltic interdependence

Another complication arises from the fact that there is a vocal opinion in the Baltic countries which calls for less trade with Russia. There is a mutual problem in accepting facts of interdependence between the Baltic and Russia. These questions are being tackled by the Finnish idea of Northern Dimension in the EU.

According to Dr. Pekka Sutela, the director of the Institute for Economies in Transition (Bank of Finland), "interdependence is indeed the premise of the Northern Dimension". As an example of this interdependence, he reminded that some forty per cent of Russia’s exports goes through the Baltic harbours. As a symptom of a reluctance to accept interdependence, Russia, however, does not like the fact that it has to use harbours in the Baltic countries.

Sutela told of Russian plans to build a number of harbours in the eastern end of the Gulf of Finland.

"Fortunately, they do not have the money to build them. This is fortunate, as the duplication of existing facilities would be a waste of resources". Sutela mused.

He said that in selling the idea of the Northern Dimension, much emphasis has been put on "the possibilities which Russia’s famous potentials offer". But he warned that in a case of Russia’s failure "to generate the welfare and stability", the Northern Dimension "would become a vehicle for crisis alleviation".

Sutela warned that the EU’s failure to address problems with Russia’s development would ensure that the Common Foreign and Security Policy will remain a chimera.

"Such is the relation between Russia and Europe, the innermost contents of the Northern Dimension", Sutela concluded, although he also reminded listeners that Northern Dimension is not only about Russia, but about "a geographical area where Russia is a major actor".

Finland’s agenda during EU Presidency

Jukka Valtasaari, Secretary of State at the Finnish Ministry of Foreign Affairs, put the idea of Northern Dimension in the context of the agenda of Finland’s EU Presidency. He emphasised the need to determine "the common interests that might serve as a basis for the integration of Russia into Europe and into the Euro-Atlantic world". As examples of these common interests, Valtasaari mentioned nuclear energy and the rule of law.

He emphasised that Russia is not just another item that is increasingly difficult to deal with in view of recent events.

"Developments in Russia have been a defining factor in many an international issue in the past years and there is no reason to conclude that things would be different in the future even if they are conceptionally difficult to understand", Valtasaari said.

The first item, however, on Finland’s agenda during the Presidency is the enlargement of the Union.

"It is a task of historic proportions, and it needs to be done if we want to be true to what we have systematically professed and worked for over the past decades: a unified Europe without political and economic fault lines", Valtasaari said.

In this process, the Balkans tragedy has created a new test case in EU’s ability to create a unified Europe without former political divisions being replaced by economic ones. According to Valtasaari, the re-establishment of stability in the Balkans and the reconstruction of the economies of the region will be the first test.

Secondly, during its Presidency, Finland wants to achieve significant progress in justice and home affairs. In view of modern forms of crimes, such as trafficking in drugs and people, the EU has to "show our citizens that they are better off and safer with and inside the Union than they would be without and outside it".

Valtasaari said that one of Finland’s priorities is to "promote the international trade agenda on the grounds of its potential for growth and stability, not only in transatlantic relations but globally in the WTO as well".

In comparison with the horrors and consequent economic devastation of the Balkans or dangers of instability in Russia, the EU countries seem like havens of tranquility. But worries about social tensions are never far below the surface in the wealthier counties of Europe either.

Finland and the Euro

Some of the questions about Europe’s economic stability were tackled by Dr. Erkki Tuomioja, who had recently been appointed as the Minister of Trade and Industry in Paavo Lipponen’s "Rainbow Coalition II".

Speaking about Finland and the Euro, Tuomioja noted that the EU does not have a federal government "with the competence to collect taxes and distribute income transfers".

He continued: "In the absence of such economic union, a mere monetary union will entail bigger risks for a country like Finland and demand more domestic flexibility to ensure that adjustment does not happen through unacceptably high unemployment and loss of production potential."

Tuomioja acknowledged citizens’ worries about the Euro. They have no love for it but, prior to the decision about Finland joining the EMU, seemed resigned to a feeling that the decision would be taken "irrespective of their own opinion".

"It would be a mistake for any government to take this as a sign that it does not have to take into account what the people think. Rather it shoud be read as a disquieting indication of how little trust people have in the will of our democratic institutions to act according to the popular will."

In Tuomioja’s view, it is clear that the introduction of the Euro has irrevocably put political union with particular reference to finance and economic policy on the European agenda. And, he added, "we must start tackling the new agenda for Europe which the EMU has brought forth".

Tuomioja welcomed proposals such as the one put forward by the Swedish Prime Minister Göran Persson "that the EMU should be complemented by some kind of community funding mechanism to even out possible asymmetrical external shocks which countries in the EMU no longer can use currency realignments to help their adjustment".

As an example of a possible economic disaster Tuomioja mentioned a theoretical "mad pine disease" which might hit the Nordic forests.

"Such a funding mechanism could not, of course, be a free lunch, but rather an insurance policy the costs of which would be born solidarily by all member states", Tuomioja said.

Finnish political model

Where Tuomioja touched on questions of democratic deficit in the European Union, Professor David Arter from the Nordic Policy Studies Centre (University of Aberdeen) looked at related problems in Finnish domestic politics.

He noted the steadily declining levels of electoral turnout and cited a recent study which concluded that only 48% of Finns had confidence in their politicians.

Arter suggested a remedy: "The task ahead seems to be to increase the participatory element in the Finnish model – the ‘by’ element in Abe Lincoln’s classical formulation of democracy – without undermining the overarching co-operation at the elite level."

Finnish model was something Arter elaborated at length. He described it as an exemplar of consensual democracy.

To start with, "Finland has witnessed a succession of notably large coalitions". Paavo Lipponen’s first government "boasted the support of well over two-thirds of members in the 200-seat Eduskunta", Arter explained. The new Lipponen coalition formed in April, is backed by no less than 70% of Eduskunta members.

"Every Finnish government since 1983, moreover, has gone the full four-year distance", he added.

Arter’s second point was "the exceptionally broad composition of Finnish governments which has mocked conventional theories of coalition-building".

"Third, there has been the changing nature and alignment of the party system and an apparent convergence between its two polar points."

Indeed, the Conservatives and the former communists are both represented in the cabinet.

A fourth feature of the Finnish model, according to Arter, is "the development of a distinctive policy style characterised by close working relations between the red-blue governments and the main sectoral interest groups in the management of the economy".

The five main labour-market organisations, both employers and trade unions issued a declaration of support for the new government.

The final point Arter made was the fact that there has been "cross-party support for constitutional change and in particular the shift from a somewhat idiosyncratic semi-presidential system to a more conventional parliamentary democracy and an increasingly ceremonial head of state".

Arter noted that in the new constitution due to take force on 1 March 2000, for example, the president will have little or no role in the formation of the new government.

Finland’s step to EU centre stage

As Finland takes over the EU Presidency for the first time, there has been some excitement about the prospect. Sometimes it seems like a distant echo from the early years of Finnish independence when the Finns looked around in amazement, realising that their country was a new member of a community of nations.

Any excitement about being an EU country, however, is checked by the fact that the population is still deeply divided in its attitude towards the EU. People will be watching closely the comings and goings between Helsinki, Brussels and other EU capitals. The many forthcoming European meetings and summits will bring the world of the EU unusually close to Finnish public.

In his lecture at the LSE seminar, Jukka Valtasaari talked about Finnish pragmatism.

"My thoughts and suggestions will be traditionally Finnish, which means they are pretty much down-to-earth and stem necessarily from our own experience. I presume that the point of the rotating Presidency is to provide an opportunity for EU members to take a fresh look at the Union’s traditional agenda at regular intervals."

Valtasaari concluded his lecture by noting that small steps have been the Union’s way of approaching issues.

"No doubt this will continue and offer even small countries a good opportunity to lead, provided they get the big picture right."

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