Kimmo Sasi, Minister of Foreign Trade: A strong, responsible and globally active Union - prospect for the European economic and political integration and EU enlargement

Europe-Asia Forum Berlin 5 May 2001

Ladies and gentlemen, dear friends

I am honoured to have been given the chance to address this distinguished Forum bringing together wisdom and experience from Europe and Asia. Many of the challenges we are facing are the same, and I very much appreciate the possibility to hear your views and comments on the topics under discussion.

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Only 230 days and 300 million European citizens will do their shopping in the same notes and coins. Border controls have not hindered moving between the EU Member States for a long time and soon there will no longer be a need to stop to change money, either.

The economic history does not have a precedent of this magnitude or effect. The introduction of a common currency proves the fact that the EU is a unique project. A group of independent nations are ready and willing to surrender much of their national sovereignty in order to use it jointly where joint actions give better results than solitary labouring.

The common currency is an enormous achievement and a clear indication that the 50 years of common integration efforts is a process turning into reality and concrete measures affecting all Europeans and – to an increasing extent – people outside Europe, too.

And we intend to continue on this path. At the same time, there is reason to ask where we are heading. Let me try to cast some light on our planned itinerary.

The European integration process rests on a much more solid and coherent basis than what it might appear when eyed from the outside.

I would like to start by pointing out some of the challenges I see as the most important for the EU in the near future, and how we should respond to them.

· A successful enlargement
· the completion of the single market and the openness of the world economy
· strengthening the EU as a global player


Enlargement tops the Union's political agenda at present. The EU of 15 today will become a Union of 27 members in a few years time. I would like to underline that enlargement is not a small project. The enlarged union will have 470 million citizens benefiting from free movement of goods, services, persons and capital within its borders.

Enlargement is essential for the stability of Europe. New members will also strengthen the Union as a global actor. The countries of the Central and Eastern Europe share the same history, culture and values with the rest us. Soon they will also share the same markets and coordinate their policies with us, providing grounds for stronger economic growth in Europe. This is a unique opportunity that must not be wasted, and we are all working actively towards this goal.

The GDP growth in Eastern Europe rose strongly in year 2000. It is estimated that most of the candidate countries will cope relatively well this year, too. In other words, the prospect of an EU membership increases both the stability and dynamism of the countries in the Central and Eastern Europe.

The benefits of enlargement will also be felt globally. The increased single market means greater economic potential and new business opportunities world wide. In addition to new emerging markets, foreign companies will also benefit from less and better legislation: the same rules and regulations apply throughout the Union.

The EU will be ready to welcome new members at the end of 2002, and the goal is to have as many new members as possible participating in the elections of the European Parliament in 2004. Of course, the accession to EU will ultimately depend on the capability of the individual candidate countries to take over the obligations of the EU membership. Those unable to meet the criteria in the next few years must be given continued support in order to help them to fulfil them soon.

The accession negotiations with the 12 candidate countries are progressing well and there is a commitment to conclude the negotiations effectively and speedily.

At this very moment the union is intensively preparing its negotiation position on the free movement of persons. It would be very important to decide on the union's position already during the Swedish presidency. I am convinced that the solution will be found on the basis of the flexible model proposed by the Commission.

When we make decisions on the free movement of goods, persons, services and capital, we need to bear in mind the importance of a well-functioning European single market also in the enlarged union. Therefore, the starting point should be that all four freedoms would be realised upon accession. However, I am well aware of different sensitivities and fears which easily start to dominate in the discussion. They have to be taken seriously but the "big picture" must not be forgotten. The way forward is to find solutions that are balanced for both the present and acceding member states.


The completion of the single market means to me the success of the euro and the deepening of economic policy co-ordination within the EU. With a single currency, the euro area Member States are very much in the same boat. Economic policy decisions in one Member State will affect development in others. Peer pressure to maintain sound fiscal policies is intense. This pressure has already resulted in a remarkable stabilisation of public finances during the last few years.

EU Member State public sectors are now much stronger than only a few years ago and hence in a better position to confront unstable global environments as well as longer term challenges. The convergence criteria for EMU played a decisive role to that aim.

In parallel with economic policy co-ordination, the Member States have put much effort into improving the structures of the European economies. With the introduction of the Cardiff process, certain structures and procedures have been implemented with view to improving the functioning of labour, service and utilities markets. Yearly reviews highlighting best practises and the challenges ahead have been prepared. These efforts have already born fruit in form of real economic benefits.

Deepening economic policy co-ordination and the efforts to improve economic structures have transformed the EU into a more unified and stable economic area. It is therefore in a better position to confront the increasing demands of competitiveness. Indeed, we have set our target high in this regard.

At the Lisbon summit a year ago, we agreed to become the most competitive, knowledge-based economy in 10 years' time. This involves, among other efforts, opening more markets for EU-wide competition and injecting new resources into research and development. The so-called Lisbon strategy will be followed up in annual spring summits, the first of which was held in Stockholm this March.

The openness of the world economy and further trade liberalization clearly benefit both Europe and Asia. The European Union strongly supports developments towards further concrete liberalisation within the World Trade Organisation (WTO). I am convinced that this is best achieved by a new round of trade liberalisation negotiations. Therefore, a decision to this effect should be taken at the WTO ministerial meeting in Qatar in November.

Promotion of free trade through the WTO is in everyone's interest. One proof of the attractiveness of an international trading system is that the number of members in the WTO is steadily increasing. I am especially encouraged by the news that the accession negotiations with China seem to be coming to a successful end soon, and that the negotiations with Russia have started well.

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During six years of EU membership, Finland has learned that the best way to defend national interests is to look for the common good and to support efforts to make the Union stronger both internally and in its external policies.

The real value of integration is not putting up new barriers or creating exclusionary clubs but responding together to common problems.

By working closely together, Europe has already been able to turn post-war division and destruction into unity and stability. The single market has played a crucial role in this achievement. We will now have to concentrate on political co-operation and learn to speak with one voice. We have to be ambitious.

The European union is inherently a political project which aims at creating peace, stability and prosperity. The EU is currently building its capacity for crisis management in order to further enhance the EU's contribution to global stability and well-being.

I strongly believe that the more unified and stronger the Union, the greater the advantages in responding to global challenges. A unified Europe has adequate "weight" to count as a global actor.

The EU has a wide range of options for external action. This is one of its strengths. It is very important that the Union can agree on and to implement its policy coherently and efficiently.


The starting point is this: when striving to find common solutions to common problems, our interests are best served by deepening integration. We need to take full use of the European potential.

I think we have enough "muscle" to do this, but the "brain", our decision-making structure, merits some careful thinking. This applies to the Commission, the Council and the European parliament alike.

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Firstly, we have to continue, openly, to reflect on our future institutional structure. There have recently been many good contributions to this debate, and I hope that the discussion continues freely and widely.

We need to discuss both what to do and how to do it. European potential, the dynamism of integration, should be put to best possible use. In my opinion, the question of subsidiarity is of outmost importance; the EU should concentrate on issues where it can bring tangible results for the benefit of our citizens.

We need a decision-making structure which is simple, efficient, democratic and transparent. Equality of member states needs to be respected. The results achieved in Nice were sufficient for the forthcoming enlargement, but barely enough in the long run.

When considering how to develop the framework further, attention should also be paid to the role of national parliaments. By better involving them in the shaping of the EU policies we can enhance democracy and the general acceptance of the Union's common policies. It is also a way to bring the EU closer to the citizens.

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This brings me to my second point.

We need to better engage our citizens in this reflection.

Whether we are talking about the enlargement of the EU or the liberalisation of world trade, many of the current developments may appear distant, even hostile to the public. But, we really do not have a choice. We have to both think and act globally and keep our vision clear in mind. Finding the right means to anchor this vision in the public or even get them to contribute to its formation is a huge challenge that brings along a whole new range of responsibilities.

In the EU, we have launched a wide-ranging debate on the future of the Union. The aim is to make every citizen to stop for a moment to think: "What kind of an EU would I like to see"? How should it work and what kind of tasks should it fulfil in the economic and social fields, in strengthening the internal and external security and in environmental policy, and so on.

I do not claim that this will be an easy exercise, nor do I promise that it will lead to results everyone will be happy with. But I think it is important that we try to get as many people as possible on board. Not to mention the importance of choosing and staying on the right course.

By this I mean that we need to show to our citizens that the EU can provide answers to their worries. We need to address issues they care about, including globalisation, environmental problems and cross-border crime.

When considering the tools to use, we do not need to reinvent the wheel. The community method has proved its efficiency.

Single Member States tend to interpret common interests from a narrow and often purely national viewpoint. Strong institutions – particularly a strong Commission – are a means to guarantee the objectivity and predictability of actions. The Commission is in the best position to make proposals that work for the whole of Europe. Joint preparation and implementation secure that everyone is on board.

Were the integration process to take place outside the institutional framework, on the basis of an intergovernmental method, the process would lack transparency and would lead to some Member States dominating over the others. I believe this would not lead to lasting results, and could prove crucial for the whole European project. This would not be in the interest of our Partners either.

The European Council should also adopt and show decisive leadership that is based on the respect of the balance between institutions.

If efficiency calls for radical adjustments in the functioning of the Council, we must be ready to do so. The further development of the horizontal composition of the General Affairs Council, for example, should be seriously considered. The General Affairs Council must also prepare more effectively the meetings of the European Council and take more responsibility of the horizontal issues dealt with other Council formations.


The EU has never been economically or politically as strong and unified as today. In only 8 months' time, European citizens will carry a common European currency in their pockets. There is full agreement on that enlargement is the most important political goal for the Union at present.

The political project will be further strengthened through the increased involvement of the citizens of Europe in the planning of the future of our Union. Because of the nature of the topics on the agenda, it is important that the next intergovernmental conference is prepared openly and on a broad basis. It is also important that the agenda remains truly open, so that the debate on what issues to address is meaningful.

I am convinced that the EU of today is fully capable of both pursuing its ambitious objectives for deeper integration and, at the same time, welcoming new members to adhere to this important process. We share a common ideal. Our interests are common and we have also created common tools to achieve these ends. Now we must harness them to serve the implementation of common policies in an efficient manner.

For our Asian partners, a united Europe should be seen as a real opportunity. By this I mean both increased business opportunities arising from a larger and unified market and a factor providing vitality to the global economy. With sound economic fundament, a single market and a single currency, the EU is poised to weather relatively well the current downturn in economic conditions. Our economy is a stabilising factor in the current economic situation.

I am therefore looking forward to an increased cooperation between the EU and Asia in the future – this seminar is another decisive step in this direction.