Baltic Development Forum: Speech by Secretary of State, Mr. Pertti Torstila

Baltic Development Forum
Helsinki, 29-31 October 2006

Mr Pertti Torstila
Secretary of State, Ministry for Foreign Affairs of Finland

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The New Northern Dimension - Fully Integrated Partnership with Russia

Mr Chairman, Ladies and Gentlemen,

When Finland and Sweden joined Denmark as northern members of the European Union in the mid 90's the Union got a Northern Dimension (ND). The concept made its breakthrough on the EU agenda during the first Finnish Presidency in autumn 1999. Between the two Finnish Presidencies Estonia, Latvia and Lithuania joined the Union and the EU became even more "northern". To nobody's surprise the renewal of the Northern Dimension policy is one of the priorities of the Finnish 2006 EU Presidency. The present Northern Dimension Action Plan is due to expire at the end of this year and we will not leave the Presidency without having expanded and enriched EU's Northern Dimension further.

When planning for the Presidency, we had in-depth brainstorming in Finland on how to continue with the Northern Dimension. There were three options on the table: a new action plan, a renewed policy or no policy at all. The Government analyzed the options carefully and the conclusion was clear: the Northern Dimension will continue to be needed. Cooperation between the EU and Russia – the EU and North-West Russia, in particular – is even more important today than before for both parties. The challenges in the north are too big for individual countries to handle alone. Opening up the Northern Dimension in fields such as trade, investments, transport and energy would benefit not only the northern areas but also the economy and well-being of the whole of Europe.

Another conclusion drawn from the deliberations was that the policy for the Northern Dimension should be updated to better reflect the changing operational environment. This led to a series of discussions within the EU and with the ND partners - Russia, Norway and Iceland - on how to renew and strengthen the policy. It became clear that strengthening the commitment of all partners would require a transformation into a genuinely common policy involving the EU and the other countries of the region, Russia, Norway and Iceland. A new policy document should be negotiated and approved jointly. Negotiations on the roadmap of the Four Common Spaces that were concluded between the EU and Russia in May 2005 became the model for our work.

The EU Northern Dimension Ministerial Meeting in November 2005 agreed on the guidelines for the new policy. The meeting decided that the future ND would be a common policy involving the EU, Russia, Norway and Iceland.

Another important decision was to accommodate the Northern Dimension to the EU-Russia cooperation framework. The Northern Dimension would be seen as a regional expression of the implementation of the Four Common Spaces: economic cooperation; freedom, security and justice; external security; and research, education and culture.

Negotiations involving the EU, Russia, Norway and Iceland on the new ND policy documents (known as the framework document and a political declaration) started in spring 2006. The negotiations were conducted in a good and constructive atmosphere. The renewal work was done in close cooperation with Russia, Norway and Iceland. Many Russian working papers were used as the basis for negotiations and Russia introduced initiatives. This was highly appreciated on the EU side.

A preliminary agreement on the framework document was reached at the end of September and the negotiations on the final declaration are close to completion. The adoption of the framework document and the political declaration by the EU, Russia, Norway and Iceland is planned to take place at a high-level meeting back-to-back with the EU-Russia Summit in Helsinki at the end of November.

We are confident that this joint policy document will increase the ownership and commitment of the partners to the Northern Dimension and enhance practical cooperation between the EU and Russia on the basis of equal partnership and co-financing. We are equally sure that the new policy will facilitate cooperation among different actors on sub-regional and local levels and between the private sector and NGOs.

Ladies and Gentlemen,

The Northern Dimension will continue to cover a broad area comprising the Baltic Sea, Kaliningrad, North-West Russia and the Arctic areas. The Baltic Sea forms a particularly important part in the Northern Dimension. The EU's internal policies and cooperation in the Baltic Sea region are necessary, and many aspects of the Baltic Sea cooperation require close collaboration with Russia. The marine environment, transport safety, cross-border crime, infectious diseases, transportation and logistics are examples of issues in which exchanges of views and concrete cooperation with Russia are vital.

The cooperation within the framework of the Northern Dimension has already led to the establishment of two practical partnerships, the Environmental Partnership (NDEP) and the Partnership in Public Health and Social Well-being (NDPHS). The partnership model has proved its strength and value. Combining human and financial resources in addressing common challenges enhances well-being in our region. We hope that the new common Northern Dimension policy will give impetus to further strengthening and development of the current partnerships.

The St Petersburg waste water treatment plant was the first big project implemented via the ND Environmental Partnership. Other important projects in North West Russia are under implementation or being planned. The financial resources of the Environmental Partnership must be ensured in order to make possible the realisation of these projects, many of which are of major importance to the state of the Baltic Sea. Finland is preparing its own additional contribution to the support fund of the Environmental Partnership. We urge other countries to do the same. The disbursements from the fund are only seed money, which set the projects in motion. The bulk of financing comes from loans taken out by the Russian partners from international financing institutions, such as the EBRD, the Nordic Investment Bank and the European Investment Bank. The brilliance of the partnership and its support fund lies in the leverage effect. A small input gives a big output, small seed money leads to big projects. Today we have around 225 million euros in the support fund, received as donations from EU countries, the Commission, Russia, Norway and Canada. With this money projects to the value of 2 billion euros can be completed. Thus the leverage effect is tenfold. The partnership model shows that together we can reach more than we can alone. One plus one is twenty.

In addition to large environmental investments, there is also demand for small and medium-sized environmental and energy efficiency projects in North-West Russia, particularly in the municipal services sector. Such investments in North-West Russia would produce energy savings, raise the quality of life of the people and improve the state of the environment. The investments would contribute to strengthened cooperation and increased trade in energy technology between the EU member states and the Russian Federation. The Environmental Partnership could also provide a structure for the implementation of such projects.

Finland would like to see the establishment of new partnerships. The next one could be in the field of transport and logistics. Well-functioning transport and logistical routes are a key to the competitiveness and economic development of the region. A transport and logistics partnership could focus on the northern main axes and cross-border infrastructure, on the motorways of the Baltic region and the development of requisite ports and inland navigation, on efficient logistical chains and on trade facilitation and customs procedures. Moreover, security in transport as well as interoperability of railways could be additional themes for such a partnership.

When considering the competitiveness of the Baltic Sea region, we should not forget the importance of well-functioning educational and research structures. Research interaction and student exchange are issues which can be addressed within the framework of the Northern Dimension. The ND should also facilitate cooperation at the sub-regional and local levels involving universities, the private sector, NGOs and other non-governmental actors. They all play significant roles in practical regional and cross-border cooperation and in the enhancement of people-to-people contacts.

Ladies and gentlemen,

The Baltic Sea is a central pillar of the new Northern Dimension policy and the Northern Dimension is a most useful tool in enhancing the prosperity of the Baltic Sea region. This is what unites us who have gathered here in Helsinki for the Baltic Development Forum Summit. The north of Europe remains politically, economically and socially one of the most dynamic regions of Europe and beyond. Our objective is to maintain it as such amongst ourselves and together with our partners.