Hoppa till innehåll
Media
Valtioneuvoston kanslia framsida

Prime Minister Katainen

Government Communications Department
Publication date 4.4.2013 15.11
Speech -

Unofficial transcript of Prime Minister Katainen’s speech on Europe 26 March

I am delighted to see so many people here today to discuss what kind of Europe we want and, in particular, what we should expect from it.

The speech that follows is a blueprint of my own, personal take on what I expect from Europe and how it should be developed.

I hope that this event helps to drive the domestic debate on Europe forward. In what will be an open and participatory process, the Finnish government is working on a white paper on EU policy.

The question is, what do we want from the EU and Europe’s regional integration?

Understandably, this debate has been overshadowed by the economic crisis. Managing the crisis has been difficult, but unavoidable. However, we should not allow this to colour our picture of what regional integration would mean for Europe.

First, let me share a few of thoughts on regional integration.

The economic crisis has dominated our picture of the EU and the euro zone. But, leaving the economic crisis aside, what else is Europe? And what might it become? Why have we been supporters of regional integration, and will we support it in the future?

The EU is a unique example of regional integration. It is not merely a free trade area, but also a value community: each member signed up to a set of common values when joining the union.

Of course, different people and states emphasise different values. But it is evident that the EU has a shared value base, which continues, at least in my mind, to form a key element of our regional integration.

Regional integration also seems to be popular elsewhere in the world. I visited Chile earlier this year. There, I spoke with several heads of government about regional integration. In that part of the world, a group of countries called the Pacific Alliance supports free trade and sound public finances. They aim to advance regional integration in more areas than just trade, because they see that such integration would benefit them.

Following the Syrian conflict, the Arab League has become stronger. Stability is a key motive for league membership. The African Union is also moving forward and there is talk of a Eurasian union, although this is still in its early stages.

We are surrounded by a willingness to drive regional integration forward, even if the related motives and starting points vary.

Although the EU has been a peace project, I do not view this as sufficient when we look towards developing the EU further.

Regional integration is based on the idea that working together brings countries together; it intensifies exchange, clarifies common goals, and saves time and money.

From a small country’s perspective, this is also a source of political influence. Countries like Finland can wield greater influence by sitting at the same table as others.

The current atmosphere of bailout fatigue is entirely understandable. The economic crisis has brought the extremes of the European debate to the surface and they are currently dominant.
Even serious contributors to this debate are, in some cases, resorting to language that is not only impolitic, but also raises questions about our respect for other people and countries.

Indeed, this is what worries me most. Even in Finland, statements have been made which reveal a patronising attitude towards the citizens of other states. This makes me wonder how those now being despised viewed us during our own crisis in the 1990s, when our failure to manage our affairs led to a banking crisis. Did they refer to us as Baltic buffoons?

Rather than surrendering the debate to shrill extremism, we should step up and state what we want from Europe.

Noisy extremism inhabits two camps – those who want no Europe at all, and those who want everything European, no matter the price.

Viable or not, a debate conducted in such stark terms will certainly have its supporters.

However, I think that Finland has something better to contribute to the debate on Europe’s future. We can offer a moderate, integration-friendly middle way, which would suit Finland from its own starting point, as well as Europe.

I will now go through ten points, ten developments that I expect from Europe and that I consider important and am prepared to work for. These ten points fall under the overarching theme of fair integration.

The citizens of Europe will only believe in the fairness of the project when they feel that their stake in it has been upheld.

1. Respecting the rules. In part, the current crisis is due to the failure of some to play by the rules to which we all signed up. This undermines faith in the fairness of the common currency.

Now that we have fundamentally overhauled the EU and monetary union, it is left to us to commit to the rules we have created and the promises we have made. These are not mere principles, but are the ground rules for deeply practical issues such as sound economics. Far from being objects of academic interest only, these rules represent the correction of the monetary union’s flaws. It is now imperative that we abide by them.

Last weekend, at our retreat in Lapland, I spoke about this with CNN reporter Richard Quest. When he asked me if I was a hardliner, I said that I am a “fair liner,” representing a fair deal. Is it now considered ‘hardline’ to value the rule of law? Following rules is the key to democracy, the democracy upon which European integration is built and at whose very core lies the rule of law. By flouting our own rules, we undermine the rule of law and the very foundation of democracy itself.

Conversely, by respecting the rules and the law, we uphold democracy. In turn, this will bolster people’s feeling that they are stakeholders in European integration.

To ask why some have flouted our common rules is hardly unfair. Neither in Finland nor in Europe should such behaviour be allowed. Respect for our common rules will automatically strengthen Europe: all member states could ultimately be triple-A countries.

2. I see no need for major institutional reforms. Some important reforms of the EU have already been carried out and, while we may need treaty changes at some point, at the moment this should not lead the debate on the future of the EU.

In this context, I would like to raise the issue of the role played by national parliaments. In Finland, this issue has been resolved, but this is not the case elsewhere.

3. A strong Europe needs strong member states and strong economies. No matter how deeply we integrate, we cannot escape the fact that each state is responsible for its own economy. Abrogation of such responsibility can only weaken the entire continent – we must all take care of our own back yard.

Competitiveness is a key area in which today’s Europe needs improvement. While this can be done at European level, particular responsibility lies with each nation state. The same is true of budget deficits –only national governments and parliaments can cut these.

A particular issue I want to raise here is youth unemployment. At national level, this problem has reached such proportions that it poses a risk to Europe’s future. We in Finland have experienced high youth unemployment, particularly in the early 1990s. I told the last European Council that unemployment is now being passed down to the next generation. This is something that needs our special attention.

We need European action to help us put our house in order. At the last Euro Summit, we watched a presentation by ECB President Mario Draghi on the differences in unit labour costs and productivity in our respective member states. Looking at these figures, it is little wonder Europe is not as strong as it might be. Although wages cannot be dealt with at European level, we need to achieve a situation in which labour costs are in line with productivity improvements.

Naming and shaming should be the order of the day in areas where European-level policies cannot play a decisive role, but we also need to coordinate our policy-making at national level.
Solidarity has been a buzzword in recent weeks and months. Although this means different things to different people in different countries, I feel that we are showing this much needed solidarity through instruments such as the EU budget. We have opted for solidarity instruments to make Europe stronger, realising that stronger regions will lead to a stronger Europe.

But solidarity cannot mean transferring our responsibilities to someone else, or that the EU should largely become a project based on joint liability. In each case, this would be an acknowledgement that, unable to handle our own affairs, we have had to hand over their management to someone else.

4. Next, I want to discuss the internal market. Although the internal market and free trade have been Europe’s bread and butter, the truth is that we have not gone far enough. The digital single market does not function as it should. When we look across the Atlantic, we see that a business entering the US gains access to a vast market with one set of regulations, whereas in Europe it would have to deal with 27 sets of regulations, soon to become 28. This shows that we still have much to do in order to improve these fundamental issues. A functional internal market would boost competition, productivity, growth and wealth.

5. My fifth point is the banking union. In Europe, we have already reached a decision in favour of banking supervision; the next step would involve setting up a European banking authority with primary responsibility for ailing banks. A fund for managing the costs of future bank crisis will probably also be required, gathered from the holders of banking licenses, or from the banks themselves. Such a banking union should include the idea of bail-ins, meaning that Europe moves to a normal market economy, in which owners and investors sustain losses when banks fail.

This would introduce a fair set of rules and sever the link between bank crises and sovereign debt.

6. Sixth, I consider it important that we conclude free trade agreements with, for example, the United States and Japan, as well as other countries. The EU could promote free competition by adopting a more active stance towards third parties. This would be highly important to countries such as Finland. We would obtain a level playing field, in which success is determined by one’s level of expertise.

7. My seventh point relates to deepening the European energy market. Regrettably, Europe’s energy policy is unfocussed. Expensive subsidies for renewals have distorted the markets. We need to focus on building an internal energy market, for which the Nordic model would provide a good basis. European energy networks are insufficient and not all countries have implemented internal market regulation. For example, when energy producers and distributors are one and the same company, others find it difficult to access distribution networks. Finland has much to offer in this respect, given that we are part of the Nordic energy network. In addition, we are or can become leaders in clean tech.

8. A European security and defence policy, and a common foreign policy – this, my eighth issue, requires thorough consideration and discussion. While each state is sure to retain its strategic capabilities, we can still do much together. For example, we need to consider how the role of the United States is changing in Europe and how we Europeans might take greater responsibility for our own security. A great deal could be done through material cooperation, based on our partnerships in crisis management operations, such as in Mali. Military capabilities are becoming more expensive. We should examine what can be achieved jointly, so that not everything has to be done individually.

9. The ninth issue concerns the rule of law and basic European values. As I said earlier, Europe is more than a free trade area; it is also a value community. This means that we cannot afford to compromise on our basic values.

The EU is a peace project. Besides preventing war, peace also means spreading stability, basic rights and values to new countries. In this respect, the EU has played a major role by sharing these boons with new member states. But this project is far from complete. There is still corruption within the EU itself, and the upholding of basic rights and values is not unproblematic in some areas. We must not become complacent about the promotion of the values and rights we cherish.

10. For my tenth point, I would like to refer to EU enlargement. Next summer, we will welcome a new family member, Croatia, the 28th member state. I also hope that, in the near future, we will be welcoming a newcomer, Latvia, to the currency union. While no more countries are expected to join the currency union any time soon, I still regard it as crucial that enlargement remains actively on the future integration agenda. Upholding European values within the Balkan states is important to their stability and economic welfare. Equally, Turkey’s progress in meeting the accession criteria can only be regarded as positive for the future of the entire continent.

In sum, I would like to be part of building a moderate, integration-friendly middle way, in line with the principle of fair integration, where member states manage their own affairs well and our common rules are held in high regard.

Because regional integration has so much to offer, we need to be active participants in this mutually beneficial process.

Where, in some areas we need deeper integration, in others the focus should now shift to implementation.

Much concrete action is required, while ensuring that European integration is based on common values and that the EU continues to be a value community.

Jyrki Katainen