Working for the stability and prosperity of the European Union

Prime Minister of Finland Paavo Lipponen, Chair of the Finnish Social Democratic Party, writes about the Finnish presidency of the European Union

Issue 2, Volume 48, 1999

Finland holds the Presidency of the European Union, EU, as the new millennium approaches and brings with it formidable challenges for the whole of Europe. Issues related to the long-term stability and prosperity of Europe and to enlargement will occupy a prominent place in the Union's activities during the Finnish Presidency. The Union is dealing with deepening economic cooperation and the need to adapt to global changes. We are working for more effective common foreign and security policy with a particular emphasis on building up a capacity for crisis prevention and management. And, most importantly, we are preparing the new phase of enlargement of the Union.

In recent decades, the structure and competitiveness of the European economy has not developed favourably. Productivity in the United States is still approximately 20 per cent higher than in Europe and the growth of gross domestic product, GDP, in EU countries is slower than in the USA. If the direction does not change, Europe's resources will not be fully utilised and the long-term outlook for our economy will deteriorate. Europe has so far not been able to take full advantage of the new opportunities opened up by globalisation.

With the Economic and Monetary Union we have been able to create a better and a more balanced framework for the sustainable development of our national economies. We must maintain the stability of the public economy and continue to make sure that wage increases go hand in hand with increases in productivity. Encouraging investment in research and development and improving the education system, including adult education, are central challenges with respect to the future success of European economies and our employment policies.

The European Union is facing a completely new situation where deepening integration, and especially the implementation of the single currency, makes it increasingly clear that responsibility for Europe's success is something we share.

Therefore, the increased coordination of economic policies, cooperation on tax policy matters and the building of a common European employment strategy will occupy a prominent position in the Union's policy formulation. We should increase confidence in the stable long-term development of the European economy with reforms that prepare our societies for future challenges like that of an ageing population. More attention should also be paid to the functioning of labour, commodities and capital markets in Europe.

The European Union must also work actively to increase the openness of the world economy and to encourage positive economic and social development. Europe has a great interest to start a broad and balanced WTO negotiation round. Continuing the liberalisation of trade, strengthening the international trade system and integrating developing countries within the world markets are the main goals of these negotiations.

The Finnish Presidency has a particularly heavy agenda with foreign and security policy issues and external relations matters. Finland has consistently supported a more efficient foreign and security policy for the Union. Economic and political integration in Europe must be complemented with similar developments in security and defence, bearing in mind - as has been the case with economic and political relations - the importance of transatlantic cooperation.

The most urgent need is for a credible crisis management capacity for the Union. The Cologne European Council in June 1999 gave the Presidency the task of dealing thoroughly with all aspects of security. What we need is an integrated civilian and military approach to conflict prevention.

On the non-military side, there is already a well-built capacity and considerable expertise among individual member states. But there is a need for better coordination, so that the Union can use this capacity as a tool in crisis management.

In strengthening the military crisis management capability of the Union, the Finnish Presidency will concentrate on developing the necessary decision-making mechanisms. An important task is to make NATO assets readily available to the Union. At the same time, there is a need to develop member states' military capacity in crisis management. Without this emphasis on resource building, European crisis management will remain an elusive task.

As a basis for decision-making, the Union needs reliable common analysis and joint proposals for Union action. In this respect, one of the main tasks of the Finnish Presidency is to establish good cooperation with the High Representative, Javier Solana. One of the first tasks pending is to start the operations of the new Policy Planning and Early Warning Unit.

As an instrument for strengthening the Union's policies for the northern regions and for building a closer relationship with Russia, Finland has been promoting the Northern Dimension of the Union. The Northern Dimension contributes to the reinforcement of positive interdependence between the European Union, Russia and the other states in the Baltic Sea region, thus enhancing security, stability and sustainable development in Northern Europe. In this way, it will support the EU enlargement process and help to integrate Russia into European and international structures. One of the objectives of the Northern Dimension is to create favourable conditions for EU enlargement in the Baltic Sea region, without creating new dividing lines.

The strategic interests of the Union are manifold. The Northern Dimension aims to forge cross-border links and create networks between actors at both the national and the regional level in order to enhance stability in the region. It also seeks to encourage joint efforts to solve long-term problems created by adverse social and economic conditions, especially in neighbouring regions of Russia. It is clear that in the end these conditions will change for the better only as Russia itself develops. It is, however, in the interest of Russia's neighbours to initiate cooperation in order to help with the difficult process of transforming society.

We should also look at the huge potential for increasing trade in energy from northern regions. It is estimated that in 2020 the Union will be importing about 70 per cent of its natural gas and nearly all of its oil. European energy networks will strengthen the positive interdependence between the enlarging Union and Russia.

The Northern Dimension will build on a partner-oriented approach which encourages consultative dialogue between the Union and the Northern Dimension partner countries, for example, Poland, Estonia, Latvia and Lithuania, the Russian Federation and the European Economic Area countries, Norway and Iceland.

However, the Northern Dimension should not be seen as only a regional initiative. It forms part of EU policies on external relations and it is based on the interests of the whole Union. Nor is the Northern Dimension a unique invention: the Union has a 'Southern Dimension', too - its Mediterranean policy - and also a 'Western Dimension', its Transatlantic Agenda.

The Union's northern and southern policies are mutually supportive. Stability on its northern borders will also strengthen the Union in the south. In the south-east, the Union is preparing a common strategy on Ukraine and on the Western Balkans. The Barcelona process will be complemented with a comprehensive common strategy on the Mediterranean region.

Enlargement is the single most important goal for the Union at the beginning of the new millennium. The crisis in the Balkan region has highlighted the importance of unifying the continent with the European Union. The inclusion of all European states willing to take part in intensifying cooperation within the European Union is the best guarantee for the creation of a peaceful Europe. The process of enlargement is therefore a priority for the Finnish Presidency.

Union membership is bound to bring economic benefits for the whole of Europe. However, this requires timely adaptation from many sectors of the economy and production in applicant countries. No time should be wasted in beginning, for example, the reforms urgently needed in the agricultural sector.

Each applicant country is expected to be able to uphold democracy, human rights and the rule of law. These are the core values on which the Union was founded. Violations against human rights and lack of respect for the rights of minorities are the main reasons for instability and conflicts. When we are discussing the importance of these rights, we are also discussing the fundamentals of security in Europe.

At the Helsinki European Council in December, the Union will decide how to deal with those applicant states from Central and Eastern Europe and Malta with which the Union has not yet started accession negotiations. At the same time, the Member States will elaborate the relationship between the Union and Turkey.

Enlargement can only take place if both the Union and the applicants are prepared for accession. Decision-making in EU institutions and the Union's capability to act should not be diminished by the very process that should make Europe stronger and better equipped to face global challenges.

Finland will be preparing a report on the necessary institutional reforms to be adopted at an Intergovernmental Conference organised during the year 2000. Apart from finding a permanent solution to the composition of the Commission and re-weighting of the votes in the Council, we should also decide on a major extension of qualified majority voting.

One of the great challenges of the European Union is maintaining contact with its citizens and ensuring the acceptability of its own actions in the process of constant development. One answer to this is the transparency and openness of the Union activities. As the Presidency, Finland has increased the openness of the work of the Council and promotes access to documents for example with the efficient use of the internet. Finland has also initiated reform of the Council working methods in order to improve efficiency. Reforming the Union is a task for all the Union's institutions - not only for the Commission.

Another important way for the Union to ensure acceptability is to strengthen the close cooperation between the Union and non-governmental organisations. The social partners, for example, have become increasingly important for the Union through the development of a common policy on employment and the introduction of a macro-economic dialogue.

A more transparent and efficient Union, open to cooperation with different actors is well-equipped to face the challenges in the new Europe and in the globalising world. The Union has more potential than we have so far been able to use. As the new millennium approaches, it is high time to use the full potential of this unique cooperation to the benefit of Europe and the whole world.



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