Speech by Minister for European Affairs Tytti Tuppurainen at Europe Forum Turku 30 August 2019
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Strong and united EU capable of solving global challenges
Ladies and Gentlemen,
The objective of Prime Minister Antti Rinne's Government is a strong and united EU that is capable of solving global challenges. Finland’s place is at the forefront of the European Union, in a role that is active and influential. Today, I will focus on three main themes: Common value base of the EU, the EU’s role in foreign and security policy, and the EU as an economic actor.
A while ago I saw the musical film Cabaret, released in 1972, which tells about liberal life in Berlin in the 1930s, just before the rise of national socialism. People did not know about tomorrow.
Our generation should also ask the question: Tomorrow belongs to – whom?
Heikki Anttikoski, a distinguished journalist working for Helsingin Sanomat, has spoken and written wisely, and with a touch of sadness, about the past era of liberalism and progress. Perhaps the times were at their best in the 1990s, but the triumph of progress still continued in the present century. Poor nations grew more prosperous, democratic systems became increasingly common, new members joined the EU, while cooperation within the Union was also improving. ”Towards an even closer Union”.
In retrospect, it is easy for all of us to say that the faith in progress and optimism were excessive. In recent years, liberal democracy has given way to other trends. Competition between superpowers and strong unilateralism are on the rise, and the international rule-based system with its norms and principles has been challenged. We can quote the US historian Robert Kagan in many contexts: the system based on peace and order is like a fragile garden. If it is not tended, the jungle grows back. We are back with the law of the jungle: superpower spheres of interest, wars, and authoritative societies.
One of the recent trends is that people have started to look for ideological alternatives to liberal democracy. The authoritative model is presented as an efficient and sensible option to liberalism, which is considered to lead to a decline in moral standards.
There is good cause to believe that pessimism with regard to enlightenment and liberal democracy is now also going too far. The alternatives have shown little evidence of success. The risk is that pessimism will become self-fulfilling.
To protect liberal democracy and globalisation, we must be optimistic and have faith in the future. For Europe, this means understanding that the virtues of liberal democracy are political necessities. In other words: the EU must defend European values in order to ensure the safety, security and wellbeing of European citizens.
Rule of law in the nations of Europe
Ladies and Gentlemen,
Defending European values starts from respect for the rule of law within the Union and, above all, in its Member States. The responsibilities of the courts of law and public authorities of the Member States are clear, established by the commonly agreed and ratified Treaty on European Union. The decision of the EU Court of Justice on the organisation of the judicial system in Poland shows this very clearly: Courts of the law of a Member State – public officials of that Member State – are also courts of law of the EU and its public officials – serving all Europeans.
Rule of law is not a political declaration but a legal norm. Article 2 of the Treaty on European Union concerning the rule of law will not stay in force by itself. It requires supervision and controls, and sanctions for breaching it.
During the Presidency, Finland will meet its obligation to see that the rule of law prevails. The mandate to move forward with the procedure under Article 7 came from the European Parliament, which represents all Europeans. We are not alone in this mission, but we are working for all EU countries and citizens. We are also working for all Member States by preparing a multiannual financial framework that supports the rule of law and promoting dialogue on this. This applies equally to all Member States.
The work on this is being done in a rational, diplomatic manner. To underline the fact that the same rules apply to everyone, we obviously do not blame individual countries and governments without due cause.
All in all, singling out the most recent EU Member States is misleading. Even long traditions in democracy may not be self-evident. Great Britain has relied on parliamentarism and sovereign power of Parliament for more than 330 years. A single referendum led to a turmoil that is now being called a constitutional crisis. The Government has decided to suspend Parliament’s work, which very likely would prevent Parliament from voting against a no-deal Brexit. “Take back control” would not mean that representatives elected by the people would be allowed to make the decision.
Europe must be united: no Member State, new or old, should be in the second class within the EU. Brexit also shows that opt-outs and selective cooperation will not keep the Member States on board and the Union as a whole.
European Union must adopt a global role on security
Ladies and Gentlemen
Europe is not a fortress, separate from the rest of the world. We are part of a system that is based on global interaction. If the global system does not work, this will have direct impacts on Europe.
EU security policy that responds to global challenges must set comprehensive security as the target. Comprehensive security is best guaranteed by promoting economic wellbeing and social justice. Promoting comprehensive security must be based on respect for human rights, democracy and rule of law. It goes without saying that environmental protection in general, and climate policy in particular, are important elements of comprehensive security.
The pursuit of comprehensive security has been criticised from the perspective of a realistic international policy. Because of its Programme and actions so far, the Government of Prime Minister Rinne, which has been in office for a couple of months, has been criticised of replacing Finland's long-term foreign policy with idealistic global projects. People are saying that there is too much focus on Africa.
According to the “realistic” school of thought, states that cold-bloodedly pursue their own interests are the only relevant stakeholders; there is no international community or international justice above them. According to this view, ideologies are irrelevant; all that matters is power and the self-preservation instinct of nations.
The problem with this realism is that it does not explain the real world well enough. It does not help us understand history, which is why it also does not show us the way to the future. Let me give you an example: In the early part of the past century Germany sought to defend its own “national interest” in Europe and the world. The consequences to Germany and the Germans were catastrophic. In the latter half of the century – and even today – Germany is focused on promoting a world of collaboration and European integration. Measured by all sensible indicators, the latter has produced better results.
States are not monoliths, mythical commonwealths that fight against each other. Policies that aim to promote the so-called national interest may promote the interests of certain political groups. Behind political groups there are always ideologies, and behind ideologies there are value choices. Ultimately, value choices have an important role in the real world.
One example of a sustainable value choice is the EU’s position on the Ukrainian conflict. At times there is criticism that compliance with the EU sanctions against Russia is naive and that it would be clever to circumvent them. However, the sanctions send a strong message that Russian’s actions in Ukraine will not be accepted and escalation of violence will lead to the escalation of sanctions. The freezing of the Ukrainian conflict cannot be regarded as a good outcome, but there is good cause to assume that the sanctions have helped to avoid the worst.
Means to guarantee common security
Ladies and Gentlemen,
The means to ensuring security must also comply with the values of comprehensive security. Multilateral agreements are the key to ensuring security. All states have the responsibility to work towards globalisation and to recognise interdependence as a key premise.
In world history, however, there is a long-term trend of conflicts and combat. The formation of superpower spheres of interest and wars are part of this long-term trend. Times of order and peace are an exception. Everybody wants peace, but it is difficult to maintain.
Just an idea, or even education, is not enough to maintain peace and support comprehensive security. After World War Two, a system based on rules and peaceful cooperation was considered the best option. The idea was just as good in the early part of the past century, yet the era was characterised by superpower competition, spheres of interest and world wars. What is needed besides the idea is determination and power to keep it up.
After World War Two, the rule-based system was mainly based on the network of allies built around the United States. Now the future of this network is quite uncertain. There are many crisis hotspots in the world. Their numbers may not be greater than before, but there is the difference that no efforts are made to resolve them. The Ukrainian conflict has frozen. There are no attempts to find peace in Middle East. North Korea continues its nuclear armament, India and Pakistan are preparing for the worst.
The EU must have more influence in security policy. This is an absolute necessity, partly to fill the void that emerges as the United States is withdrawing.
It is not realistic to assume that within the next few years the Union would have the means and capacity required to maintain global security. Yet, we must go forward, because it is a well-known fact that world order that is based on peace and rules is at risk. The role of the EU in global security stems from a real need, not from ambition that is hungry for power.
The Programme of Prime Minister Rinne’s Government has set its targets within the framework of comprehensive security. The particular aim is to support multilateral, agreement- and rule-based cooperation and comprehensive security.
The Programme also presents means by which the EU will strengthen its capacity to promote comprehensive security. Among the set of tools is the development of the EU’s defence cooperation. The initiative of the President of the Republic Sauli Niinistö to strengthen Europe’s role in security policy – where he considers EU cooperation to be more important than the President’s role in foreign policy – makes it even easier for Finland to adopt a positive attitude towards security cooperation.
In the European context, the actions by President Emmanuel Macron serve as concrete proof of what the EU can achieve. Macron’s actions fall well within the concept of comprehensive security: taking the initiative to help find a solution in terms Iran's nuclear technology and to combat forest damages in the Amazon region are much more than just rhetoric. Global initiatives that are particularly well suited for Finland include promoting cooperation and peace in the Arctic region.
Future of the economy
Ladies and Gentlemen,
Finland’s aim within the EU is to promote a global rule-based system, both in security policy and in the economy. The EU must have sufficient and widely recognised resources to have an impact on where the international economy is going. Besides the US Central Bank, the European Central Bank is among the most important fiscal policy actors: its decisions impact on the balance of the whole world economy. The EU also has the position it well deserves in the International Monetary Fund, and both the EU and its largest Member States have a role in G7 and G20 deliberations.
In building its global position, the strength of the EU lies in its economic resources. At the moment, however, the economic situation within the EU is quite worrying, both in the short and long term. Germany is already assumed to be falling into a recession, and in the first half of this year the Italian economy has in practice not grown at all.
There are booms in the economy when we can enjoy the growing prosperity, but then there are downturns that we just have to sustain. This time, however, we should find the means to prevent an economic recession. The financial crisis ten year ago and the euro crisis that followed undermined the citizens’ trust in financial policy experts and decision-makers. The fact that the so-called elite did not seem to know what they were doing and where not able to maintain growth in wellbeing called the very foundation of the social contract into question. Declarations by populist extremists started to sound just as good as knowledge-based argumentation.
A new economic downturn and rise in unemployment would be an unbearable political risk.
It is easy to agree on economic policy objectives, but it is not so easy to agree on the means to achieve them. This is particularly difficult in the EU that is composed of several nation states.
The European Central Bank had a key role in resolving the euro crisis in the beginning of the decade. Lowering the interest rates and increasing the amount of money in circulation by means of bond purchases helped the euro area and Europe as a whole to get over the worst. But the ECB was not alone in taking these actions: similar measures were also used by other major central banks.
The European Central Bank will certainly also prepare for measures to alleviate the next recession, but the means it has at its disposal may not be sufficient. There is little room to lower the interest rates, and there is also a limit to how much the amount of money can be increased.
In monetary policy, the times are not normal: central government debts and even the debts of the best companies are being traded at negative interest rates. If money is available almost or fully free of charge, lowering the credit costs will no longer significantly stimulate the economy.
We must take bold steps to reassess the fiscal policy perspectives in the European macroeconomic context. It may well be that, in the long term, not worrying enough about the growth of public debt is not sustainable. But inaction in the face of an economic downturn may mean that Europe no longer has a future to worry about. Ninety years ago, German decision-makers were concerned about the hyperinflation in the early 1920s and allowed unemployment to rise. We all know what came of this. In Cabaret there is a memorable, creepy scene where a young boy wearing the swastika inspires people with his song: “Tomorrow belongs to me.” Today we are already hearing the same nationalistic bluster.
Today, while respecting the agreements, we are concerned about the debt limits of the Growth and Stability Pact, even though the risk of over-indebtedness is lower than the risk of rising unemployment. In the light of history, we may ask whether we are worried about the wrong thing.
For the fiscal policy to succeed, it must cover the whole EU. If Finland revives the economy with debt, the share of it that roughly corresponds to imports will leak to reviving our trading partners. Similar leakage occurs even in large EU countries. What we need is a well-coordinated fiscal policy, implemented together. Fiscal policy coordination must move from talks and planning to measures.
For Finland such a change is politically very demanding. We have developed an attitude according to which good financial management means keeping an eye on other EU countries, a zero-sum game within the EU. However, we must understand that, as the next recession is spreading across the world, it is going to hit us as well. If the economies of major importers of investment goods such as China are in difficulty, Finland will be hit particularly hard. Efficient, jointly coordinated fiscal policy is an absolute necessity for us.
Joint coordination of fiscal policy does not alter the key principle according to which each country is responsible for its own debts. This principle is also being enforced within the United States that is a federation so, of course, it must also apply in the EU, which is a league of independent states.
According to the Programme of Prime Minister Rinne’s Government, we will strengthen the European Semester, which means closer fiscal policy cooperation and even better coordination. This cooperation is truly needed if the threat of an economic recession turns into a reality.
At the same time, we must improve our preparedness for future crises and further develop the EMU. The list of measures includes completing the Banking Union and finalising the Capital Markets Union.
Immigration and free trade support the European economy
Ladies and Gentlemen,
It is important to assess the European macroeconomic policy, but it is even more important to take action at the microeconomic level. It seems that European economies feature structural factors that slow down growth in the long term, across economic cycles. Perhaps Europe, like Japan, will face decades of stagnation. This phenomenon is already causing concern in the United States, where the American economist and former Minister of Finance Lawrence Summers named it “secular stagnation”.
One of the reasons for the slowdown in economic growth in Europe and elsewhere is the deceleration in productivity growth. In recent years, no all-purpose technology has become available that would reduce the need for labour. Another reason is the supply of labour. There has always been a universal connection between rapid economic growth and growth of the working-age population. Not a single economic miracle has been achieved without an increase in the number of the working population.
Stable population growth is the most important factor for the balanced development of the European population. Replacing our continent's population with immigrants is such an impractical idea that it makes no sense to neither hope for it or fear it. Our native population needs to be employed. Nevertheless, Europe indisputably needs work-related immigration. Populist politicians claim that immigration is a major problem when actually the shrinking population is the real problem. What I find particularly strange is that immigration is purported to be a problem in those EU countries where emigration is, in fact, a genuine concern.
Ladies and Gentlemen,
The free movement of people is essential for the economic development of Europe. It is equally necessary to safeguard the free trade of goods and services; the free global economy.
It is currently the responsibility of the European Union to support free trade and the institutions that maintain it. The EU has successfully promoted its work through regional economic and trade agreements with Canada, Japan and some Latin American countries. When and if the UK withdraws from the EU, an agreement needs to be concluded with it – once the British can decide what it is they want. However, despite effective regional agreements, it is still necessary to maintain and comply with global rules. Instead of making free trade a privilege to members of trade blocs, participation in the global economy should be open to all.
Maintaining a free global economy is very much in the interest of Finland because foreign trade is our lifeline. The internal market – let alone the domestic market – is not large enough to ensure wellbeing. Even after UK’s withdrawal, Finland will continue to have close partners in the EU that support its policy of promoting free trade. Like-minded countries include Germany, the Netherlands, and the Nordic EU member states. However, Finland’s policy on Europe does not involve a single-handed commitment to Hanseatic Leagues or any other blocs; instead, we collaborate with everyone and foster the unity of the EU.
To achieve a stable demographic trend, we need to improve the European social model. This means safeguarding employment, fair terms of employment and adequate income. We will invest in education and competence, and raise the level of science and research by promoting the network of European Universities advocated by Prime Minister Rinne.
The integrity and fairness of societies are also prerequisites for a successful immigration policy. A well-functioning labour market is essential: we must be able to offer jobs to immigrants. The same principle applies to free trade. It is no coincidence that globalisation and free trade easily win the support of citizens in the Nordic welfare states.
Europe needs a growth strategy aimed at making EU the world’s most competitive and socially inclusive low-carbon economy.
A common future for Europe
Ladies and Gentlemen,
My themes today have included a common European value base, strengthening the EU's foreign and security policy, and an economy aiming at sustainable growth. We must defend the rule of law. In terms of security policy, the EU must assume the responsibility befalling it. As far as economy is concerned, we must have the courage to support a common financial policy and a strategy for sustainable growth.
They say history repeats itself, but of course it doesn’t. Instead, societies tend to be on long-term development paths, which they only temporarily leave. When they return to their existing paths, history seems to repeat itself.
What is the long-term development path of Europe? Are democracy and the rule of law the normal state of development in Europe? Has the objective of building a common Europe been firmly established over these decades? Or are we seeing a return to the era of superpowers and their spheres of interest, to authoritarian regimes, and to mutually distrusting nation states?
The authoritarian model, emerging as an opposing force to the liberal society, has not yet proven rewarding enough to warrant discarding democracy and the rule of law. If you think about the world’s most advanced economies, you will not find many that rely on authoritarianism and the infallibility of their great leaders. Admittedly, many of them have been able to leave extreme poverty behind, but so far they remain average economies.
But we should not succumb to pessimism. Citizens around the world are vocally supporting liberal values. In Europe, integration has benefited so many generations that it is no longer easy to return to the past. For example, people will not readily exchange the possibility to study and travel freely for new walls.
The European Union is built on democratic institutions, human rights and the principle of the rule of law. It is fair to call the Union a success story since membership in it continues to attract many countries. During Finland's Presidency, EU integration in the Western Balkans is moving forward and, if the criteria are met, the Union will decide on opening accession negotiations with North Macedonia and Albania. The EU still has appeal.
To respond to the expectations of the citizens of existing and future Member States, the EU shows strength and determination in bolstering integration. Globally influential Finland plays a powerful role in the decision-making structures of the European Union.
Respect for the rule of law, democracy and human rights represent key values not just for Europe or the western countries, but for all of humanity. These values are enshrined in the UN human rights conventions. By supporting these values, Europe does not foster Western hegemony; instead, it supports the common values and interests of all people.
When we adhere to this principle, tomorrow will belong to us, and tomorrow will belong to Europe.