Speech by Mr Kimmo Sasi, Minister for Foreign Trade, Berlin 16th November 2001

Speech by Mr Kimmo Sasi, Minister for Foreign Trade at the 7th European Forum, Berlin "Europe in the Global Competition", 16th November 2001.

The Finnish View on European Integration

Ladies and gentlemen,

It is a great honour to have the chance to address this distinguished European Forum Berlin round-table conference that brings together key political figures, business life, researchers and representatives of the media. I am delighted by the excellent opportunity that the Forum offers to hold a lively discussion and exchange views on the most topical European economic and political issues.

Finland has been a member of the European Union for seven years now. Even if a fairly recent Member State, I think we have acted with energy and enthusiasm. Our years of membership have, I believe, been characterized by pragmatism and active membership.

In Finland, we are well aware of the Union’s strengths - that is why, after all, we chose to join - and we appreciate the importance of spreading those benefits to the rest of our continent. Yet, we are by no means blind to the weaknesses in the construction of the European Union - the imminent risk that its structures may come to a halt if we are not ready to reform the Union. These issues need to be tackled with if the EU is to continue as a force promoting peace, security and prosperity.

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Enlargement tops the Union's political agenda at present. The Union’s political commitment to enlargement dates back to the conclusion of the Treaty of Amsterdam. The required policy reforms and financial framework up till the year 2006 were agreed upon at Berlin in 1999.

At Nice, agreement was reached on the Treaty changes regarding the institutions and the decision-making system of an enlarged Union. The Treaty of Nice, however, still remains to be ratified in a number of Member States. The Finnish parliament is expected to ratify the Treaty of Nice before Christmas.

Now the Union stands ready to accept the first new members as soon as the candidate countries themselves are ready and the accession negotiations have been brought to a successful completion.

The EU of 15 today will become a Union of 27 members in a few years time. The enlarged Union will have 470 million citizens benefiting from the free movement of goods, services, persons and capital within its borders.

Enlargement is crucial for the stability of Europe. The advantages of the very process of enlargement are clear if we look at the experiences of the present candidate countries. The prospects of EU membership have already contributed greatly to their political stability and economic progress.

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

As the Commission’s Regular Progress Reports, which were published on Tuesday, show, the candidate countries have made impressive progress in meeting the accession criteria. The accession negotiations have proceeded swiftly. More than two thirds of the negotiating chapters have been provisionally closed with a number of candidate countries. The road map has proved to be an ambitious, but a realistic framework for the negotiations.

The road map, the agreed timetable and the principles of advancing on the basis of one’s own merits, differentiation and catch-up, are the best means to successfully complete the negotiations. It is also important that the enlargement process continue to proceed independent of decisions relating to the financing of the EU after 2006 and the internal process of re-examining the common agricultural and regional policies.

Provided that the progress towards meeting the accession criteria continues at the same pace, the road map should make it possible for those candidate countries that fulfil the conditions to complete negotiations by the end of 2002. The objective is to have as many new members as possible participating in the elections of the European Parliament in 2004.

Ladies and gentlemen,

Let me now turn to a subject closely related to enlargement - the debate on the future of the European Union. We all agree that Europe needs new visions for its future. What kind of a European Union do we actually want? What kind of a Union to face the challenges of enlargement? How can we answer the European citizens’ expectations, when they find the EU bureaucratic and remote as regards their daily lives? How can we advance the competitiveness of the European enterprises? How could we best strengthen the EU´s role as a global actor? These are some of the questions we should be able to answer.

In addition to paving the way for enlargement with necessary institutional reforms, the Nice European Council decided to convene a new Intergovernmental Conference in 2004. The idea of a new IGC was put forward by Germans. Although Finland was not originally among the countries requesting a new IGC, we have nothing against it – in fact, quite the opposite.

The work on the future of the EU, which is to be given a more formal framework at the Laeken European Council in December, and the IGC in 2004 provide a valuable opportunity to examine the basic nature and development of the Union. It also offers a possibility to patch up some of the decisions made at Nice, in particular with a view to improving the efficiency and legitimacy of the EU decision-making.

The Finnish Government has just submitted a report on the future of the European Union to the national parliament. The report is based on the view that the European Union should also in the future be developed as a close-knit community of independent Member States and European peoples. The EU must act efficiently and democratically in matters in which the Member States have transferred competence to the EU.

All four themes included in the Nice declaration - the division of competence between the EU and the Member States, the status of the Charter of Fundamental Rights, the simplification of Treaties and the role of national parliaments - have a strong constitutional flavor about them. These elements could form a basis for a European Constitution or a constitutional treaty, as some of my colleagues have suggested.

In our view, we should aim at a simple and clear basic treaty or "constitution" that defines the goals, tasks and competences in each field of the Union policy. More important than naming the Treaty is to assure that the exclusive right to amend the Treaty will remain within the Member States.

Moreover, we are prepared to consider giving the Council the right to decide on changes concerning the less fundamental Treaty provisions. However, this would also require unanimous decision by the Member States.

Although the simplification of the Treaties could in principle be carried out without changing their meaning, this is not a very realistic goal. Particularly, as the Nice declaration instructs the next IGC to clarify the division of competences on the basis of the principle of subsidiarity. It is, indeed, impossible to make an omelet without breaking the eggs…

Although the Member States have transferred competence to the Union with care and consideration, we have to admit that the sphere of the Union's competence is often defined in an ambiguous manner. In practice, its competence rests on non-systematic Treaty provisions, those being results of political compromises, as well as on the Union’s general objectives. The Union’s competence has been gradually expanded by legal and regulatory practices beyond what the Treaty provisions appear to define.

The simplification of the Treaties provides an opportunity to consider if some elements of the jurisprudence of the European Court of Justice could be included into the Treaties. In this connection it is also possible to consider whether the legal and regulatory practices that have attained the status of Community law in the course of years really correspond with the Member States’ present views on the division of competences.

Finland is in favour of clarifying competences between the Union and the Member States. The competencies should be defined more precisely in different policy sectors of the Union. We would, however, respond with caution to the idea of compiling a detailed and exhaustive catalogue of exclusive competences of the Union, on the one hand, and those of the Member States, on the other hand. This would not be realistic - not even desirable.

As the dynamic nature of the Union is fundamental to the EU’s action, we have to accept that most of the Union competence is to remain shared with the Member States. In the end, the real test lies in the use of shared competences while genuinely respecting the principles of subsidiarity and proportionality.

These principles have to remain our guidelines in the attempts to define and establish a proper level and manner of regulation. We need to ensure, at every stage, that the EU-level measures provide the Member States, their citizens and businesses with true added value. The same requirement applies to the use of the open method of coordination in the policy areas in which the competence mainly lies within the Member States.

The principle of subsidiarity requires adequate prior monitoring. The protocol adopted in Amsterdam provides for a subsidiarity check to be carried out before a legislative proposal is considered. This system should now be enforced and possibly completed with an arrangement linking national parliaments more closely to the monitoring of the subsidiarity principle.

The ways in which national parliaments can influence the EU policy should be strengthened primarily by improving the national EU policy-making processes and not by creating new institutions. In my opinion, the establishment of new institutions might just weaken the decision-making capacity of the Union and blur the system of checks and balances.

We might also consider ways to improve the participation of regional and local authorities in the national EU policy-making processes. In Finland, for example, the participation of the Province of Åland is guaranteed through the constitution-level act on island's autonomy.

As part of this ambitious project for a better Union, we should openly consider ways to increase the democracy and legitimacy of the Union. The European citizens must have trust in the EU decision-making system. They have to feel that the European Union is there for them. Openness, transparency, as well as political and legal responsibility are key elements in gaining the citizens' trust and appreciation.

It is particularly important that the EU institutions remain committed to the rules and principles of good governance. This requirement is also encompassed in the EU Charter of Fundamental Rights. It is of utmost importance to the general acceptability of the Union.

The Charter of Fundamental Rights and the accession of the EU to the European Convention on Human Rights are parallel and complementary ways to enforce the protection of human rights and fundamental rights in the Union. It is clear, however, that making the Charter legally binding may significantly influence the division of competences between the EU and its Member States. The different possibilities regarding the status of the Charter should therefore be carefully considered in order to avoid unwanted transfers of competence.

Enlargement and globalisation pose enormous challenges to the functioning and decision-making capacity of the Union, which, unfortunately, was not made strong enough at Nice. The European Union has to be able to make decisions in an efficient and democratic manner in the matters in which the Member States have transferred competence to the EU.

In 2004, we need to re-open the question regarding the extension of qualified majority voting as well as to consider possibilities to clarify and improve the decision-making mode agreed upon at Nice. This could be achieved by adopting an alternative rejected at Nice - advocated by, among many others, Finland - the so-called simple dual majority system where you need both the majority of the Members States and majority of the population for a decision to be adopted. In my view, this would offer a clear and logical solution.

It is in our, and the whole Europe’s, interest to have an economically sound and dynamic, as well as socially and ecologically responsible European Union, which forms a genuine area of freedom, security and justice. The EU must be able to act efficiently to promote its common goals in Europe and worldwide.

Ladies and gentlemen,

This autumn, the Finnish EU-Presidency has been remembered mainly because of the Tampere European Council where we agreed on ten milestones to establish a common area of freedom, security and justice. Just after the tragic events of 11 September the special European Council in Ghent restated the importance of the Tampere programme to combat terrorism and crime as well as to agree on common policies on asylum, immigration and external borders and to create an area of justice.

Without the Tampere guidelines we could not have achieved results so rapidly in the fight against terrorism. On the basis of common objectives and principles we have been able to work out new legal instruments without unnecessary delays. And we do not see any real obstacles in reaching an agreement on the proposed framework decisions on terrorism and arrest warrant as well as a new directive on money laundering in due time.

The implementation of the Tampere conclusions has proceeded quite well in general. Unfortunately, the progress achieved in the field of asylum and immigration has been very modest even though the Tampere European Council gave very precise instructions to be followed.

The Laeken European Council will take stock of the progress made so far and is supposed to give further guidance to the work in the field of justice and home affairs. We should have a comprehensive approach in implementing all the agreed objectives – not only in fight against terrorism and organised crime. There is no true security without freedom and justice.

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A unified Europe has adequate weight to count as a global actor. It is very important that we learn to speak with one voice. The European Union carries greater weight in external relations when it acts in a concerted way. Trade, aid and CFSP are all instruments of a comprehensive EU policy.

The latest reform of the EU’s external action began in 2000. The aim is to improve the coherence of EU’s external action by setting clear priorities annually and by intensifying focus on results and performance. I fully support this reform and hope for its successful continuation.

In the orientation debate early this year in the General Affairs Council, the neighbouring areas were set as one of the main priorities of our external action. The EU has created particular policies to this end. The aim should be a consistent approach as all these policies – for instance the Barcelona Process for the Mediterranean and the Northern Dimension – benefit the Union as a whole.

Cooperation with our neighbouring areas plays an increasingly important role in promoting stability and security not only at a regional level but also on a global scale. The EU is developing as a transnational network.

Lately more attention has been given to the specific characteristics of the Northern Europe. The importance of Russia is better understood than before. I believe that the region’ssignificance will continue to increase. Particularly, since Russia participating in regional initiatives is a useful channel for further integration into Europe. This is a long-term but also an open-ended process.

Ladies and gentlemen,

Finally, I would like to touch upon the European trade policy that forms an important part of the Union’s external action. It is based on a tested and clear set of rules and principles. I am convinced that the EU can combine and act as the principal advocate of both trade liberalisation and development.

The launch of an ambitious and balanced new round of multilateral trade negotiations in Doha in November was our objective. Now, in the light of the outcome from Doha, I can note that the result is more than satisfactory. I believe that the Doha conference will be remembered as a positive turning point in a number of ways.

First of all, the decisions taken in Doha restored the credibility of the relatively young World Trade Organization. The decisions made in Doha also give a strong positive signal to the world economy, the development of which is currently uncertain. Most notably the “Doha Round” will be a genuine Development Round, which will address the special needs of the developing countries in order to truly integrate them to the multilateral trading system.

From the EU’s perspective the ministerial conference can also be considered - considering the apparent contradiction between the difficult circumstances and ambitious aims - a success in many aspects.

Firstly, the EU acted in a unified manner, recognised its responsibility and was able to show necessary flexibility at the most critical stage of the conference.

Secondly, not least due to the Commission’s tireless and consequent efforts, a fair share of the EU’s substantial aims were achieved. For instance negotiations on certain aspects related to trade and environment will now be launched – a truly progressive decision. A comparable step in the direction of starting negotiations in the fields of investment and competition was also taken.

Thirdly, and particularly important in the long run, the EU’s role in guiding the globalisation process and dealing with its adverse effects was strengthened.

Ladies and gentlemen,

The future of the European Union is in our hands. The challenges we are facing are real, and demand a common response. We can give speeches. We can plan great strategies. But without concerted action all these speeches and strategies will be of no real value.

Thank you for your attention.