Foreign Minister Erkki Tuomioja: The European Union after Nice

The Paasikivi Society, Tampere, 23 January 2001

Long before the summit in Nice, I estimated that it would be lengthy, difficult and boring and that it would finally end in a Treaty at five o'clock in the morning, after a few confused days and a bad night's rest. The following weeks would then be spent trying to find out what the summit had actually agreed.

My biggest mistake was that the summit in fact ended as early as half past four. My prediction did not require any clairvoyance — I made it by directly applying my experience of prior decision-making in the EU. In fact, it is depressing rather than gratifying to have hit the nail on the head.

I also estimated that the way of achieving the Treaty and the style points given for the negotiations would not be the most important factors. The Treaty itself would. The most important criterion for evaluating the Treaty is how well it enables the Union's enlargement to Eastern Europe to continue. However, the experience gained in Nice convinces me that it is necessary to revise also the way in which Treaty amendments are prepared at the intergovernmental conference.

But let me first discuss the Treaty of Nice. The Treaty has to make it possible for new members to join the EU and for the Union to grow into a community of as many as 27 Member States before it becomes necessary to make new amendments, concerning EU institutions, to the Union's basic instruments. Conservatively estimated, it will take from 15 to 20 years before a Union of 27 countries exists. This means that very few of today's decision-makers need prepare for new Treaty negotiations after that time has elapsed.

I do not, however, believe in such a development, and I suspect that many of the other people who were negotiating the Treaty of Nice share my disbelief. I believe that for keeping the enlargement process on the rails it will be sufficient that the Treaty enables new Member States to join the Union in one or two groups, starting in 2003 and continuing during the five subsequent years.

It was not clear in advance that the Treaty would even make such an enlargement possible. If the summit had not managed to amend those points in the French presidency's proposal that discriminated against the new Member States most blatantly, the entire enlargement process would have plunged into a deep crisis. Even now it was clearly shown that in some old Member States there is a feeling that all Union members are by no means equal. Instead, these old members — the founder members in particular — consider that they should have a higher status and more authority than future new Member States, and that these privileges should also be enshrined in the Treaties.

What I have said concerns, quite specifically, the definition of the future Europe and its so-called political finalities - finalités politiques. Even Finland and Sweden met with suspicion and doubts concerning their commitment to Europe. Candidate countries from Central and Eastern Europe meet with even stronger prejudice and suspicion among those EU members who believe that they themselves are more endowed with special knowledge and have a better right than others to define the targets of European integration. This was a strong reason for giving flexibility, in other words enhanced co-operation, such high priority on the agenda of the intergovernmental conference.

The decisions concerning flexibility made at the Nice summit were satisfactory. As they stand, they cannot be considered a particularly useful instrument for establishing some kind of inner circle or hard core within the EU. The avant-garde thinking, which was promoted in certain contexts last year, fortunately met with a strong negative reaction. The Nice summit wanted to ensure that flexibility remains an instrument for promoting the overall integration process of the Union and not for drawing new demarcation lines.

The fact that defence was left outside flexibility cannot be considered regrettable from Finland's point of view, even though the option of flexibility in defence industry co-operation would have been in our inte-rest.

The summit's decisions on the future composition of the Commission are satisfactory. They mean that the Commission will remain a sufficiently strong and representative institution until the end of the foreseeable enlargement period.

On qualified majority voting, the outcome of the Nice summit was meagre. It is particularly regrettable that there was no progress in taxation issues, to which Finland gave high priority, especially regarding environmental taxes. Article 133 concerning commercial policy was amended so as to extend the recourse to qualified majority voting in commercial policy issues. This achievement has been considered a victory for Finland, but ironically it is the only decision which has been criticised at the level of non-governmental organisations in Finland and elsewhere.

Commercial policy: progress, no threats

In respect of commercial policy one should be careful concerning questions of national competence, keeping on mind the disputes surrounding the World Trade Organization and the draft Multilateral Agreement on Investment. In my opinion, the Nice summit did not, however, reach questionable decisions in this regard.

During the preparation of Finland's positions on the revision of common commercial policy we examined in detail what limits should be set for extending recourse to qualified majority voting. In this respect, the final outcome was successful: those sectors which are delicate from Finland's viewpoint — such as culture, education, public health and social security — remain entirely covered by shared competence and the requirement of unanimity.

The summit also accepted Finland's proposal for consistency between external and internal activities. This is significant, because it ensures that decisions concerning external relations cannot erode the level of internal regulation, for instance in environmental issues.

It is true that questions of competence in commercial policy are complicated and open to various interpretations. Therefore, it is necessary to monitor that the revised provisions cannot be misused. Still, it is Finland's understanding that the agreed amendments cannot be interpreted so as to make possible, for instance, deciding the patenting of life or human genome sequences as a commercial issue, as has been claimed. There is also no reason to equate the commercial aspects of industrial property rights and copyrights with the TRIPS Agreement negotiated within the World Trade Organization.

On the whole, we should remember that Article 133 concerns expressly and only commercial policy. It does not allow changing the division of competence between the Community and the Member States, or national practices, in issues outside common commercial policy. There have been occasional misconceptions in public also about this question.

Decision-making must be reviewed

While extending qualified majority voting to some extent in less crucial issues, the Nice summit also agreed on other provisions which will render decision-making more difficult than before. The threshold for attaining a qualified majority was slightly raised. At the same time, the summit introduced an entirely new provision, which will — at least potentially — hamper decision-making. According to this provision, a decision requires the backing of at least 62 per cent of the population.

As anticipated, the weighting of votes in the Council was the most difficult issue at the Nice summit. Regarding the delicate balance between smaller and larger Member States, the outcome is not unreasonable - otherwise no agreement on the Treaty would have been possible. The larger Member States were given a stronger position, but this was, on the one hand, compensation for their loss of a second member of the Commission. On the other hand, it was a reasonable solution, because most future Member States will be small countries. The revision was needed in order to ensure that EU decisions are always backed by the majority of the population.

However, the way in which the weighting of votes was adjusted and the final outcome are not sustainable. Considering the future of the Union it is, in my opinion, necessary to review this decision-making structure at the latest after 2005, when enlargement is under way.

The Finnish Government has accepted the Treaty of Nice, also in the form in which it was finalised in the negotiations that continued after the summit.

There is no logic in the weighting of votes agreed in Nice. The lack of all logic and the whole issue naturally culminate in the case of Germany. Germany has 22 million people more than France and the other larger Member States. Still, it has an equal number of votes in the Council with those other countries, and only two votes more than Spain, which has 40 million fewer inhabitants.

Moreover, the system is extremely complicated. An example of this is the compromise made on the vote threshold for qualified majority decisions. According to this compromise, the percentage of votes required for a qualified majority decision will be lowered from the current 71.3 per cent when the first new Member State joins the Union. Thereafter, the percentage will rise gradually, as agreed separately each time, to the maximum of 73.4 per cent in a Union of 26 members. When the last one of the current candidate countries joins the Union, the vote threshold will rise to 73.91 per cent.

The so-called simple double majority would be the clearest and most logical decision-making model. It would also be the most compatible one with the Union's nature as a community of both sovereign Member States and citizens. In this model, decisions have to be backed by both the majority of Member States and a group of countries representing the majority of EU citizens, calculated directly on the basis of their populations.

In fact, all countries except France were ready to accept this model in Nice. However, the other countries did not push France up against a wall. The reason for this was that Germany, at the end of the day, did not press the issue and was content only to complain about the treatment it had met with, without proposing any alternative method that would take account of its population in the weighting of votes as a number of votes exceeding that of the other countries.

Since the Nice summit, it has been suggested with growing frequency that intergovernmental conferences have outlived their purpose. In this context it is usually suggested that any future amendments of the basic instruments should be prepared by, for instance, the same convention method by which the Charter of Fundamental Rights was drafted for Nice. The summit agreed that also the revision of the Union's basic instruments in 2004 and the related work to clarify competence issues would be prepared by a similar method.

The Charter of Fundamental Rights was drafted jointly by the representatives of national parliaments, the European Parliament and governments. This method was well suited for the work. A similar drafting method — extended, perhaps, still further into civil society — might serve reasonably well for recasting the basic instruments into a comprehensible and clear form, when the underlying principle is to keep the existing institutions, decision-making structures and division of competence unchanged.

Such preparation is acceptable and functions well. Although some people want to call the final outcome the Constitution of the Union, the basic instruments are not drafted by a legislative constitutional assembly with independent competence, but by a convention responding to a mandate given by the Member States. The intention of clarifying the basic instruments and improving their comprehensibility is praiseworthy. The same holds true for the intention to clarify the division of competence between the Member States and the Union - although one cannot realistically expect that a basic instrument can or even should be made so unambiguous that it ends all disputes over competence.

The determination of the Union's competence rests with its Member States and only with its Member States. Therefore, the intergovernmental conference, which is an agreement among the EU members and which they all have to rati-fy in accordance with their national constitutions, remains the only acceptable way of revising the basic instruments and amending the division of competence.

The EU is not a federation

The Union differs from a federation in that its competence is determined by sovereign Member States. They agree mutually which issues are to be dealt with jointly, and which are to remain under national competence, and how. The Union would no longer be legiti-mate in most countries if its institutions could meddle with the constitutional competence of Member States. If the division of competence is not satisfactory, neither Finns nor other EU citizens are willing to accept that their national parliaments have no power to improve it.

In this context it is appropriate to quote a statement by Manuel Castells, who recently visited Finland, which he addressed a year ago to the holder of the EU presidency.

"Any attempt to make the Commission the center of power and sponsor of new identity will ultimately provoke the revolt of national and local identities, thus jeopardising the European Union. The European Union is not, and will not be, a classical federal state. It is a new form of state. And in this new form of state, the connection to societies, is in the various nodes that assume direct political representation. The construction of European identity, if it ever happens, will be the fact of European societies, under the strategic impulse of the Council of Ministers, relecting a common project shared across the political spectrum by the countries participating in it."

About the political identity of Europe, Castells says the following:

"It cannot be built through allegiance to an unlikely European federal state. In this sense, the European democratic deficit does not come from the powerlessness of the European Parliament. The strengthening of the Parliament would lead to true supranationality and federalism, something that most public opinions, and most political parties would not tolerate. The European Commission does not have to be submitted to the European Parliament, but to the European governments, to the Council of Ministers. The key democratic issue is the transparency for citizens of what the Council of Ministers does, and the explicit inclusion of European policies in the political platforms of parties in the national, regional, and local elections. European democracy is not accomplished by removing institutions from their roots of representation, but by bringing European institutions down to where citizens live and feel."

It is questionable whether the situation will change even in 30 to 50 years so much that federal structures can gain the necessary legitimacy. It is possible, but highly improbable. In any case, a decision on this issue can only be made by future European generations and the decision-makers elected by them. That is why I have warned people about elitist and undemocratic thinking which would now bind the hands of future generations with a vision of how Europe should look after 2020.

Nevertheless, it is both necessary and possible to improve the working methods of the intergovernmental confe-rence. At present, the outcome of its work is much too dependent on the capabilities and desires of each incumbent presidency holder.

Enlargement one of Sweden's priorities

We in Finland have full confidence in the capabilities and aspirations of Sweden, which has recently started its presidency. Sweden's priorities - employment, the environment and enlargement - are well in step with our own. We expect that Sweden will also make a strong contribution to civil crisis management and the Northern Dimension.

Sweden hopes to advance enlargement by opening as many new chapters as possible in the negotiations with the candidate countries. But the presidency alone cannot influence the timetable of enlargement too much. What is most important is to make steady progress in the negotiations and stick to objective criteria. Still, the most difficult issues are only now coming up in the enlargement negotiations.

These difficult issues include free movement of labour, which many EU countries find a problem. Germany has proposed a transitional period of up to seven years before extending the principle of free movement of labour to the new Member States, although the principle is one of the cornerstones of the Union's internal market. In my estimation the proposal is not based on real needs but on fears felt by citizens of EU countries. Even when those fears are groundless, they have to be taken into account as a political reality.

Such fears are not unknown in Finland, either. They may have been aroused by sensational reports surrounding a rather questionable survey according to which nearly 40 per cent of all Estonians are only waiting for their country to join the EU so that they can emigrate to Finland. In reality, the percentage applied to those Estonians who might consider working in Finland. And even most of those people preferred other countries to Finland.

I am convinced that, with time, such fears will prove as groundless as those that were connected to the free movement of labour when Finland was preparing for the EEA Agreement prior to its EU membership. Nevertheless, enlargement may have many social and labour market implications. To minimise the potential problems, the EU has to require that its future Member States observe, right from the beginning, social rights and principles concerning occupational safety and labour market practices in accord with the Union's social dimension. They also have to strengthen the position of trade unions. These aspects of enlargement have to be promoted both in the negotiations and in separate projects. A good example of the latter are development projects in the Baltic States based on the experience of Finnish labour market organisations.

If the free movement of labour, looked at from a wider perspective, involves any threat at all, it may here in Finland be fear of emigration of our own citizens, who would enrich others, abroad, through their skills.

Today, we in Finland consider it a self-evident and important right that more and more Finns can travel abroad to study, gain work experience or seek refuge from the northern climate. The development of our own economy and culture here in this distant corner of Europe is similarly dependent on foreigners entering our country to study or work.

What proportion of immigrants are refugees is a different matter. That depends on our ability to prevent large-scale movements of refugees through actions of the international community and crisis management measures taken by the EU.

Moreover, the enlargement of the Union may have a positive effect on the situation. For instance, eliminating discrimination against Roma people and other minorities and improving their position are among the criteria for EU membership. In the Baltic states, meeting these criteria requires adoption and implementation of appropriate language and nationality legislation.

Defence policy unchanged after Nice

Security and defence policy did not cause any disputes in Nice. The summit approved with satisfaction and without discussion the work done last year to implement the crisis management decisions taken at the Cologne and Helsinki summits. What is most important now is to concentrate on implementing these decisions so that the crisis management forces promised by the Member States really will be available for deployment two years from now.

We can always speculate about whether the development of defence co-operation will continue in the future, and if so, how. The Treaties of Maastricht and Amsterdam already opened up such a prospect. However, it is not possible today to make progress in defence co-operation without questioning, at the same time, the present status and role of NATO in one way or another. But a clear majority of EU countries is not ready to consider changes in those.

The present situation is good for Finland and the basic strategy of our security policy, which is military non-alliance. Neither can we see any reasons connected with the development of the EU or NATO that would make us want to change our course.