Minister for European Affairs and Ownership Steering Tytti Tuppurainen's Speech at the annual meeting of Heads of Mission , August 25th 2020
Distinguished Ambassadors, Dear Friends, Politics is a mixture of surprises and traditions. This is the second time I am speaking at this prestigious event. A year ago, Finland was beginning its Presidency of the Council of the EU. We faced a variety of challenging tasks, which we – in retrospect – handled well. Finland did what it promised.
A year ago, I said that careful planning for the Presidency is important, but it is also good to remember the golden rule of politics: “Events, my dear, events”, which means that even good plans rarely survive reality. In the early part of the year, this came true in Europe and throughout the world.
The pandemic has driven the world into a huge health crisis and plunged the global economy into the worst recession in 90 years. We do not yet know when an effective vaccine against the coronavirus will be available and how it can be distributed effectively around the world. Until then, we must prepare and adapt.
The situation has been difficult for EU cooperation. For the first part of the year, we tried to get used to the fact that we could not meet our European partners face-to-face. Even the best technology cannot replace hallway discussions or a warm handshake. However, we were able to agree on major deals, such as the enlargement of the EU and the recovery package of nearly two thousand billion euros, all without shaking hands.
The old adage about the EU evolving as a result of crises is proving to be true once again. Without the economic crisis brought about by the COVID-19 epidemic, the German Presidency would have likely been marked by a controversy over the multiannual financial framework, involving compromises on hundredths of a percent of GNI. The financial framework has now been agreed upon and, at the same time, we agreed on an aid package within the framework of the current treaties, which, together with the measures of the European Central Bank and the fiscal policies of the Member States, added weight to our ability to survive economic crisis. It also added weight to the Union’s capacity to act.
As a result, each Member State gained something and each compromised. The work of the Finnish Presidency in strengthening the rule of law was fruitful. Now, the use of EU funding is tied to the rule of law. Recovery funding will be linked to structural reforms based on country-specific recommendations that promote a carbon neutral economy and digitalisation, among other things. The EU will improve its competitiveness and foster its values. The measures necessary for the reform of the EU economy are moving forward.
Once again, a lively debate about Finland’s position in the European Union arose around the recovery package. We were asked why Finland did not join the frugal four – Sweden, Denmark, the Netherlands and Austria – in advocating the toughest possible stance in the negotiations. Instead, we took a Finnish approach in line with our strategy: Its starting point was to maximise Finland’s influence and funding from the EU budget, while acting as a constructive partner whose views will be sought after in the future.
The interests of the Netherlands or Austria are not directly in line with our interests. We are in the eurozone, unlike Sweden and Denmark. Our geographical location and economic structures also distinguish us from the frugal four. We will benefit more from the EU budget’s agricultural and cohesion funding than from a small correction to our EU membership fee. Now our net payment position improved slightly by 0.03 percentage points, despite the United Kingdom’s departure from the Union.
From Finland’s point of view, it is also sensible to oppose permanent blocs in the Union. It is not in Finland’s interest to deepen the EU’s dividing lines between the north and the south, or the west and the east, or between the old and new Member States. It is in our interest to have a strong, united and well-functioning EU with a capacity to respond to global challenges. A disintegrating Union will benefit its opponents, above all. A Union that wastes its energy on internal conflicts will lose its global influence, and Finland will lose its influence along with it.
The Government strongly outlines Finland’s position in its report on EU policy, the preparation of which will begin under my leadership this autumn. In football terms, I would describe Finland’s position in the European Union as a midfield player who actively seeks solutions. This will be the basis for our work on a document for the future, which will outline the Marin Government’s European policy in accordance with the priorities of the Government Programme.
An integral part of Finland’s European policy is the relationship with Russia. The Northern Dimension policy creates a framework for long-term cooperation in environmental protection, for example. More broadly, we must ensure that the EU maintains a common and consistent policy on Russia in accordance with the five principles now in effect.
The Government report on EU policy will strongly reflect the work on strengthening the fundamental values of the Union, the rule of law, democracy and human rights, which began during Finland’s Presidency. In accordance with the Government Programme, our aim is to make the Union the most competitive, socially integrated, low-carbon economy in the world.
We should also not overlook the lessons learned from the management of crises, including the coronavirus and Brexit. The coronavirus pandemic has highlighted the importance of reliable information and impact assessments. In addition, the report will address the reform of the EU and improvements to its effectiveness by making use of the possibilities offered by the current treaties, such as qualified majority decisions.
Parliament will receive the report at the end of the year.
We have a unique national EU decision-making system, in which Parliament plays a larger role than in many other countries. In addition, sub-committees on EU affairs, for example, are a unique part of the national machinery preparing EU decisions and linking stakeholders to EU affairs. Managing this entity will require seamless cooperation and an open flow of information. The Government Secretariat for EU Affairs and the Ministry for Foreign Affairs must play together, just like in an orchestra where every musician plays the same symphony.
The expertise of Finnish missions abroad and the grassroots understanding of the host countries’ internal politics is an extremely important part of Finland’s EU policy and influence. Although we work in different ministries and countries, our objectives are the same. Weak signals from the host countries may be key to the overall situation. We have a strong trust in your expertise. Act boldly on that basis and engage with us actively.
We should also take a look at the role of Europe in our changing world.
The weakening of the United States’ position on the international stage and the erosion of the foundation for rules-based international cooperation have created a demand for the EU to take on a stronger geopolitical role. The increased solidarity that has emerged as a result of the COVID-19 crisis, in the form of strengthened cohesion in the EU, suggests that the EU can meet this demand.
When European Commission President von der Leyen described the Commission as a geopolitical commission, she drew attention to trade policy. This is, of course, a natural starting point for the EU in general and for the Commission in particular, because trade policy has always been a core area for the community. We still have a long way to go from this understandable starting point to the final outcome, and the geopolitical application of the EU’s trade policy is still developing. However, there is an urgent need for development and for formulating common positions, as the world outside Europe is changing at a rapid pace.
The United States’ attitude towards China is shifting the foundations of the global economy. The process of integration of the world’s largest economies, which has been ongoing for four decades, is now turning in the opposite direction. The term Chimerica, launched a decade and a half ago to describe China and the United States growing together and complementing each other, has fallen by the wayside. Instead, we are now talking about the division of the world into two parts, with the United States on one side and China on the other.
This divide has already progressed to an advanced stage in technology, from Huawei to Bytedance. It can also be seen in the financial sector: The United States Senate unanimously approved stricter monitoring of Chinese companies listed on the US stock exchanges. New listings from Chinese companies are not expected on Wall Street. It is noteworthy that the Senate’s decision was unanimous, so a possible win by the Democrats would not necessarily lead to policy changes in this area.
In the interest of fairness, we should note that the division is not only about the actions of the United States. While the division of trade policy is distinctly American, China has tested the rules in other areas of international politics, such as in Hong Kong and the South China Sea.
This development is worrying for the EU. If the world splits in two, Europe will fall into the gap. If security policy becomes focused again on spheres of interest, the rules-based policy advocated by the EU will lose its foundation.
For a long time now, it has been clear that the integration of the global economy is facing increasing difficulties. Globalisation is being challenged by poisonous economic nationalism and the nationalistic populism built on its foundation. In this situation, it is even more important to show that it is in the European Union’s interests to protect, maintain and promote fair globalisation and economic integration. Economic nationalism and populism are detrimental to Finland and to Finland's wellbeing.
For a long time, there has been talk of the impact of globalisation on increasing income inequalities and moving jobs out of the West. Of course, we cannot deny the negative aspects of globalisation, but in my view, its benefits are many times greater. It would be a complete misstep for Finland to adopt a policy of regionalism, to question EU cooperation and to combat globalisation. Instead, our policy must focus on mitigating and combating negative trends and improving regulation of the global economy, even though it may seem difficult at times.
When assessing the benefits of globalisation, the perspective of the consumer is often forgotten: from this perspective, China’s rise from a developing country to the world’s second largest economy and largest industrialised country has meant increased wellbeing in developed market economies.
Jean Pisani-Ferry, a French economist, recently compiled assessments by various research institutes on the development of the purchasing power of US and EU consumers during China’s membership in the WTO. He came to the conclusion that the purchasing power of households had improved by about ten per cent. This figure is significant in itself. But it becomes even more significant when you consider its impact on people in different income brackets. Even without research data, it is quite clear that affordable Chinese products have improved purchasing power in households where a large share of consumption expenditure is spent on basic textiles, consumer goods and household appliances – coffee makers and hair dryers, mobile phones and washing machines.
The defence of openness must not be forgotten even in the midst of the COVID-19 crisis. In the EU, particular attention has been paid to those commodities that can be described as strategic – there is talk of the need to strengthen Europe’s strategic autonomy. For example, concerns have been expressed about the fact that many medicines and raw materials for medicines are produced outside Europe. This is, of course, a legitimate concern. That said, we must proceed with caution. Pharmaceutical companies often have to invest millions, sometimes hundreds of millions, in the development of new products. If the global pharmaceutical market becomes more fragmented, it will be more difficult to gain returns on these investments. It is one thing to make a new pharmaceutical for 450 million Europeans and another to make it for eight billion people on Earth. This is worth remembering even when discussing the growing concern about the vulnerability of international value and supply chains as a result of the COVID-19 crisis.
In times of corruption and turmoil in the world economy, we should be clear that Europe’s economic success has always been driven by a well-functioning single market and rules-based free trade. We should not scrap the single market on the pretext of the coronavirus or for any other reason. For a small, open economy such as Finland, this is critical. We have led the cooperation of around 15 single market-oriented EU Member States, and this cooperation still needs to be strengthened.
In dealing with the challenges posed by the coronavirus, temporary flexibilities, such as in the Union’s state aid system, are very much needed right now. However, from the point of view of the development of the European economy, we must make sure that under normal conditions, the rules on competition and state aid remain strict and effective. They must make it possible to intervene in anti-competitive practices and ensure a level playing field for all Member States.
The debate on the European strategic autonomy must not lead to protectionism. The EU must preserve its position as a champion of free trade, not an instigator of trade wars. It is in our interest to make every effort to combat divisiveness and polarisation, through which major players in world politics aim to exclude one another from cooperation.
The disintegration of the world’s security policy system into spheres of influence would be a threatening scenario for Europe. Europe itself was primarily responsible when such a breakdown took place in the early 1900s. Now, in the early 2000s, Europe would be at the receiving end. The great disaster of the 1900s, the world wars, was facilitated by the spread of poisonous nationalism, dissatisfaction and a lack of prospects among the peoples. Unfortunately, the same features are now re-emerging.
Even in Finland, defenders of international cooperation have been accused of unpatriotic behaviour. In the face of this kind of demagogy, one can only wish we had learned from our history. Improving international cooperation and strengthening peace and stability are in Finland’s interest. The spread of nationalism is dangerous. I am a patriot – that is why I am not a nationalist.