Speech by Secretary of State Torstila at Foreign Correspondence Club of Thailand

Secretary of State Pertti Torstila held a speech on European Union at The Foreign Correspondence Club of Thailand in Bangkok on June 4.

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Distinguished Guests, Ladies and Gentlemen,

It is a pleasure to be here today at the Foreign Correspondence Club of Thailand among such a distinguished audience. Thank you for this opportunity to speak about Europe and the European Union and how we are responding to the well-known challenges.

The economic crisis has dominated the overall picture of the EU and the euro zone for the last four years. The European Union has been tormented by the worst crisis in its history. The difficulties are not yet over, the situation in many countries is still vulnerable but since the beginning of this year financial markets in the euro area have shown some improvement. We are working hard to keep this course. We have agreed on temporary and permanent financing mechanisms and started the work towards creating a banking union so that similar situations could be avoided in the future.

Financial crises do not go away without political and social aftereffects. Mismanaged economies spur social unrest. Youth unemployment is alarming and causes concern. Even national particularities are on the rise. According to some, dividing line inside the eurozone goes between the northern “creditors” and the southern “debtors”. Winning back public opinion, while fighting a tide of growing populism, is challenging at a time when painful decisions have to be taken to face the crisis. In my own country Finland, opinions are split between two opposing camps, one blaming the EU for the economic crisis and the other asking for deeper integration as a remedy to the problems.

The European Union is arguably the most successful peace project in world history. It defines itself in terms of values and upholds and promotes these values in its relations to the wider world. The Union has united a continent torn down by disastrous wars, to build over adversities and divisions and to create a common future based on shared sovereignty and common institutions. For all this the Nobel Peace Prize was accorded to the European Union, and I think rightly so. At the moment much attention is given to handling the economic crisis but the EU is much more. During the past 60 years European integration has created unprecedented peace and stability in our continent. Finland has gained greatly from being part of it and we are deeply committed to the European integration and euro. Our stake in the euro is both economic and political.

During the Cold War – in a bi-polar world - Finland’s international position was closely linked to the East-West division. In that context Finland’s neutrality served us and others well. Neutrality did not prevent the Finns from being an initiator and central policymaker in the Conference on Security and Cooperation in Europe (CSCE) which brought about historical changes. The CSCE Helsinki Accords played an important role in the evolution of relations across the Iron Curtain and contributed greatly to its demise. The Iron Curtain fell, the Soviet Union disintegrated and communism vanished. Finland’s contribution to these immense changes was pivotal. The world is no longer bi-polar, it is multi-polar and in 1995 Finland distanced itself from the policy of neutrality by joining the European Union, a political union.

I wanted to give you this example of an important contribution by the Finnish diplomacy and pointing out that we are still there. The European Union is the most important frame for Finland’s foreign policy today and we will not let if fail.

Moody’s announced last week that Finland’s AAA rating and stable outlook reflect a track record of successive governments’ achievements in fiscal reform. Finland is the only country in the European Union that has never breached any of the Maastricht fiscal criteria. It is also the only AAA-rated euro area country with a stable rating outlook, Moody’s concludes. Everything in the Finnish economy is not in order but for us budgetary discipline has been and is key to strengthening the Economic and Monetary Union. To ensure that all member states abide by the rules is essential. We also believe that every country is responsible for its own economy. We must strike a balance between solidarity and responsibility. Solidarity cannot mean handing over responsibility to someone else. Or that the EU should become a project of joint liability in larger scope. Only national governments and parliaments can cut deficits.

The debt crisis of the last years has had a negative impact on the public opinion of the EU. Obviously, we have to get Europe back to the path of economic growth but we have to do more. We have to get Europe on the move again. We have to convince the Europeans and the young people in particular about the importance of our historic peace project, and the unique achievements of the European integration. Populist and nationalistic sentiments are on the rise but we hope that in the end the present crisis provides an opportunity to strengthen the European Union. Financial austerity may give an impetus for intensified cooperation, deepening integration and better pooling and sharing of resources.

It would be wrong to reduce the European unification to economics alone. Huge benefits stretch across national frontiers. Europeans can live, work, travel and study across Europe. Enlargement of the EU has consolidated democracy and created a zone of peace and prosperity for nations which still a few years ago went through difficult times. Our citizens may be dismayed with the current economic situation but they are – and I have seen it – proud to be part of the unique European project with its free movement of goods, services, people and capital. They will not let the Union unravel.

Containing the crisis in Europe is our responsibility but beyond that our ambition is to ensure that Europe plays a global role that corresponds to its economic power. The EU wants to be open to the world even in times of crisis. We need to nurture our ties with our strategic partners, be they in Asia, Latin America or Africa not forgetting that an important key partner is right in Finland’s neighbourhood: Russia. When the economy stands still the temptation to close in and resort to protectionism is looming. Nothing would serve us worse than to give in to such pressures. A healthy European Union is far more stable and potent partner for the world than a panoply of individual nation states. This I believe is in the interest of all our partners around the world. Therefore continuous work is needed in EU’s external relations, to build and sustain strong partnerships.

Relations with Asian countries are constantly growing in importance. Asian economies deserve to be thanked for supporting the growth of global economy. In Asia, the growth momentum was solid at the end of 2012, and economists are confident that 2013 will be even stronger than last year. Increased confidence, domestic spending and intra-regional trade supports this growth. Asia is clearly outperforming the world as well as other emerging regions.

The world is keenly watching if the leaders of the 10-member ASEAN manage the ambitious goal to eliminate barriers to free movement of goods, services and workers by 2015.

Thailand plays an important role in the ASEAN. EU and ASEAN have agreed on an Action Plan to strengthen their partnership and to support ASEAN’s goals of regional integration and community building. There are also other trade pacts in Asia currently under negotiations.

The EU leaders meet the Asian leaders biannually at the ASEM meeting to discuss security and economic issues, education and culture. During Finland’s EU presidency in 2006 we organized the ASEM meeting in Helsinki, gathering the leaders of 47 Asian and European countries and the President of the European Commission.

Economic issues have been very much in focus of this process, especially after the ASEM in Beijing 2008. In addition to this, the ASEM has made considerable contribution to the promotion of mutual understanding, peace and stability of Asia and Europe. Last year’s theme “Friends for Peace, Partners for Prosperity” highlights the importance of cooperation in the mediation field. Finland supports ASEAN to establish its own mediation support unit the “ASEAN Institute of Peace and Reconciliation” and is interested to cooperate in the future in the field of mediation.

Activity on this theme is natural for Finland, as reconciliation and mediation are and have been hallmarks of the Finnish foreign policy. Nobel Prize winner, President Martti Ahtisaari’s legacy is remembered and the Government established the Group of Friends of Mediation together with Turkey in 2010.The Group consists of 34 member countries, 7 international organizations including ASEAN, and the UN.

Economic growth however is not the only issue in Asia, or globally. Global warming, loss of biodiversity, depletion of natural resources and other problems require joint efforts. Finland has been a frontrunner with the principle of sustainable development – with a society that is increasingly based on knowledge.

Access to energy plays a vital role in poverty reduction and in decreasing inequality. As climate change and food security are closely linked with energy issues we need a holistic approach. Burning fossil fuels does not solve the problem of energy access.
The European Union has actively been advocating the concept of “green economy”. For us the green economy means low-carbon, resource-efficient and socially inclusive solutions. We consider them to be prerequisites for sustained, balanced growth and creation of productive capacities.

Renewable energy is not without cost, but it can be done in developing countries too. Energy security requires an energy mix instead of relying on one or two energy sources. Countries have their strengths and solutions. Finland has a lot of forests, and about 80 % of our renewable energy is based on forest biomass. Over the years, we have invested in biomass research, and today we are known to have state of the art technological expertise in this field.

Education is another future priority for all nations, and a good entry point for EU-Asia cooperation. Finland can have something to offer here as we are known for the high standard in education, topping year after year in international comparisons. Finland has a unified school system and the comprehensive school is intended for the whole age group. Our education system guarantees equal opportunities for all children in basic education, irrespective of their social and ethnic background and gender. Education is free and our teachers are trained and motivated. They are required to hold a Master’s degree and getting into teacher education is competitive. Teachers in Finland are highly valued and respected.

Ladies and Gentlemen,

Thailand offers us interesting and valuable lessons.

Thailand has recovered remarkably fast from the 2011 flooding which in its magnitude harmed economic activities and posed a severe threat to investors’ interests in Thailand. The recovery tells something about your resilience under the friendly smile the Finnish tourists here have learnt to know and love.

Thailand’s cooperation with two regional economic giants, China and India, in large infrastructure projects promotes regional development. European enterprises could learn a lot from Thailand on how to do business in Asia.

The EU and Thailand are about to enter a new level in their relations. The Partnership and Cooperation Agreement (PCA) will be completed soon and negotiations for the Free Trade Agreement (FTA) have started. The PCA will enhance cooperation in business and investments, macroeconomic policies, industrial policies, ICT, energy, environment and natural resources, migration, illegal drugs and money laundering.

Finland is a staunch backer of free trade and the EU’s current comprehensive and ambitious FTA agenda. The multilateral trade negotiations are moving very slowly. The EU must build strong free trade relationships with our important partners. A FTA with the United States would strengthen the most important economic link in the world. The FTA with Thailand can bring many mutual benefits for both Thai and the EU companies and our business relations are expected to grow. Now, the EU is Thailand’s fourth largest trading partner after ASEAN, Japan and China. The Free Trade Agreement can enhance market access for goods, services and investment from Thailand and the EU.

Dear Friends,

For Finns, Thailand is one of the favourite holiday destinations. There are more than 160 000 Finnish people travelling to Thailand every year, and the numbers are growing. Finland with its pure nature, quietness, rich cultural life, design, architecture and a direct flight connection from Bangkok to Helsinki is an attractive tourist destination for Thais as well. Finns are happy to share their experiences with Thais.

Thank you!