Prime Minister Juha Sipilä’s speech at the Meeting of Finnish Heads of Mission 24 August 2015
(subject to changes)
Distinguished Ambassadors,
Our Representatives around the world,
I’m delighted to meet you all today; some of you, of course, I have had already met in connection with my first trips abroad.
Ladies and Gentlemen,
This year, I have again continued my interest in flying. Flying has strict rules. Depending on training, aircraft equipment level and the weather, either VFR (visual flight rules) or IFR (instrument flight rules) rules are adhered to.
Conditions, therefore, influence flying in a major way. When the weather is clear, one can fly in visual flight conditions based on the human senses. But if one continues to fly relying on the human senses when flying from clear weather into cloud or fog, one loses in a few seconds one’s situational awareness. To be able to fly in a cloud, one has to learn to trust in instruments.
An aircraft has dozens of instruments, which are used to determine the aircraft’s orientation and direction. An aircraft’s destination, direction and orientation must also be controllable when flying in fog.
Distinguished Ambassadors,
We are now living in a foggy world. In our aircraft, we must therefore monitor closely all instruments, and on the flight deck there must be close cooperation between the crew.
You also are closely linked with our range of instruments. You, our nearly one hundred ambassadors and foreign missions, are a network which must function as highly tuned sensors to ensure that our perception of the situation is correct. If the perception is wrong, we can easily lose our situational awareness. And if it is lost, our aircraft may make a fatal control error.
Unfortunately, there are more people who have lost their situational awareness and who do not trust in instruments when flying in fog than I could have imagined.
Ladies and Gentlemen,
Many of Finland’s instruments are still in the correct position, but some of them are in the red. Let’s begin with the economy.
We are currently experiencing one of the weakest periods of Finland’s economic history. If the forecasts for this year’s economic growth are realised, at the end of this year our economy will be around five per cent smaller than before the start of the international financial crisis in 2008. Our debt is growing every day.
Our economic development has been clearly weaker than in the rest of the euro area or in our peer countries Sweden and Germany. Our competitiveness has eroded and is up to fifteen per cent weaker compared with our main competitor countries, and our export performance is subdued. As a result, industrial production has declined by a quarter. This is a structural crisis for the Finnish economy, not a temporary setback or economic cycle.
As a consequence of poor competitiveness, unemployment rose in June to ten per cent. Compared with June the previous year, unemployment growth in Finland was the fastest in the euro area. Employment also continues to decline in manufacturing industry, which faces tough international competition every day. We must therefore find new ways to adapt to the challenge created by international competition as part of the euro area.
Our bad situation shows that we have not learned to live in the euro area. Conventional tools are not enough, and the competitiveness of Finnish work has deteriorated.
Finland has a ten billion euro challenge. Four billion will be addressed by savings, four billion by reforms and the remainder by preparing the ground for growth. The competitiveness gap will be bridged by changes in working life, moderate pay settlements and improved productivity.
The social contract was an effort to find a solution to changes in working life through a sharp increase in competitiveness and by improving employees’ change security. Growth will not happen by itself and we cannot afford to wait for it – we must create conditions for growth ourselves. They are entirely in our own hands. Following the failure of negotiations, the road to that goal is much more difficult, but the Government cannot abandon the objectives of the Government Programme. Safeguarding – or actually saving – the Finnish welfare society alone is justification enough.
In the early autumn, the Government will present alternative ways to improve competitiveness. If we succeed in this now more difficult task, we will be able to avoid further cuts and tax increases, and to ease taxation on earned income where possible. The checkpoint for these measures is spring 2017.
Ladies and Gentlemen,
It is also appropriate to examine the overall atmosphere in the Finnish society.. I have noticed that foreign observers have also evaluated it from different perspectives since the spring parliamentary elections and the formation of the Government.
The philosopher Maija-Riitta Ollila reflected on the atmosphere in our society a few days ago in the Helsingin Sanomat newspaper, stating that we in Finland have failed to cultivate a crisis consciousness. I quote: “The intention was to prepare the ground for change. But instead, a self-fulfilling prophecy arose: the nation turned inward and switched off the lights.” There might be a lot of truth in that assessment. There are at least symptoms of turning inward and switching off lights.
Acceptance of such thinking would lead to Finland’s intellectual closure. This would be fatal for us.
It must be said in plain Finnish that we do not accept racism, we do not accept hate speech nor political violence in any form, neither on the level of deeds or words. The vision of the Government Programme clearly states that Finland is an open and international country, rich in languages and cultures.
We certainly have much room for improvement in how we take care of those who wish for various reasons to come to Finland. Some come to study, some to work, some are fleeing for their lives from war and persecution. Every one of them must be treated as a unique human being, as an individual.
According to Philosopher Ollila, Finland needs positive goals that we can strive to achieve. Again, I agree with her view and I understand that the Government’s official objectives, such as curbing indebtedness and improving competitiveness, do not inspire the people.
Continuing to live on debt would mean curling up inward into a state of no alternatives. Some of us oppose savings, some the reform of working life to improve competitiveness, and some the reform of public finances. By opposing these, one also approves at the same time the irresponsible continuation of living on debt and the transfer of problems for future generations to solve. For me, that is a repugnant idea.
We are now in a very difficult situation, in a crisis even. In a business, the principles of crisis management are balancing finances, caring for people and investing in the future. This is also suitable for the management of Finland. Balance must be restored to public finances, and living on debt must be brought to an end. People must be cared for with a fair policy. It is easy to criticise lists of cuts, but doing nothing is not an option. We must also be able to create more inspiring visions of the future for the whole nation. We need economic growth, jobs and investments in the future. The Government’s key projects are part of these investments in the future.
We now have a unique opportunity to reform Finland. In workplaces, we have to see how things can be done better together. We, the politicians and civil servants, must change fundamentally the old-world solution model in which we try to solve problems with new laws and regulations for whose implementation and supervision new authorities are required. Instead, we need to remove unnecessary regulation and encourage both businesses and authorities to find and adopt creative solutions. Finland will rise only by renewing itself and by doing work.
My passion is solving problems, and now there seems to be more in front of me that I could have wished for.
Distinguished Ambassadors,
Finland’s EU policy is based on activity, initiative and pragmatism. We jointly and actively find solutions to common problems. Even though, particularly in the handling of the euro crisis, Finland has taken a tight line, we are always part of the solution, not part of the problem.
The European Union must be big in big issues, and small matters should be left to the Member States. The EU must focus on the major economic, employment and security issues.
Of the EU countries, our economy is growing the most slowly, even slower than Greece. At the same time as we demand action from Greece, we must also reform ourselves. The needle of our performance indicator is severely in the red, whereas many countries who experienced the crisis are at least in the yellow, rising even into the green zone. Our economic performance also affects the credibility of our EU policy. We cannot demand of others what we are unable to do ourselves.
The situation of Greece was critical during the summer. Greece’s second adjustment programme expired at the end of June and time was running out. The heads of state and government met exceptionally three times at euro summits to seek a sustainable exit path. We considered initially that the reform programme submitted by Greece did not at all correspond to what was required. Greece’s original proposal did not constitute a sufficient basis for a decision in principle to initiate ESM programme negotiations.
Finland considered that the most sustainable solution would be found in the option where Greece would temporarily leave the Economic and Monetary Union. Even in that scenario, Greece would have needed outside assistance. Even though, in the early stage of the negotiations, we were not prepared to accept the start of negotiations on a new ESM programme, we were not, however alone in preventing the start of negotiations. Finland was ready to examine different ways forward. Our line was strict, but not unreasonable nor unconditional. A small member state must choose its position of influence carefully. Being completely obstructive does not serve Finland’s interests. We made it quite clear that the lack of commitment to jointly made agreements and reforms cannot continue.
Finland is committed as a member of the Economic and Monetary Union to promote the stability of the euro area. We respond negatively to increasing Finland’s liabilities in the handling of the euro crisis, but if the European Stability Mechanism has to be used, it can be done within the framework of the mechanism’s present capacity and capital structure.
Finland considers that the negotiated ESM programme of Greece and its conditionality create the conditions for rehabilitating the Greek economy and restoring it to a growth path as well as, in time, returning it to the sphere of market funding. Achieving debt sustainability will be challenging, and it will require from Greece a full commitment to the new programme as well as its rigorous implementation. The new financial support programme is also, due to the regional security policy situation, a better option from the standpoint of Finland’s national interests and responsibilities than Greek drifting into insolvency.
Discussion on the development of the Economic and Monetary Union will continue. Our Economic and Monetary Union has shortcomings that need to be addressed, but the EMU must not be developed through a deepening of economic coordination that would lead to an expansion of joint responsibility. To strengthen compliance with rules, economic policy coordination should be simplified, and Member States’ ownership of economic policy must be ensured. Jointly agreed rules must be adhered to.
A basis for discussion is the Five Presidents’ Report, which contains both short and longer term proposals. The European discussion of the issue and the decisions made on the basis of it will steer the development of the EU and the euro area in a significant way. We will prepare our own position on the issue carefully, based on accurate analysis and open discussion.
The European Union is above all a union of peace and a political project. We must not forget the post-Second World War period and the reasons why the EU was founded. The Union must also be able to promote peace and stability better outside its borders. Internal challenges cannot be allowed to make Europe into an onlooker from the sidelines of world politics.
The Union’s external capacity to act is challenged every day. In Syria, in Ukraine and in relations between the West and Russia, the instrument indicators have been in the red zone for a couple of years now. The stabilisation and sustainable development of Europe’s neighbouring areas require the effective utilisation of the Union’s broad mix of tools. In relation to its available tools, the Union has been too weak in solving global problems and their causes.
The streams of refugees flowing into Europe indicate that we, for our part, have been very late to act. The problems of the countries of origin have accumulated, and now we all have problems in managing this migration flow. If there is no prospect of hope at home, it is clear that desperate solutions will follow from this. Human distress of these migrants is seen by us every day. It is not so many decades since we experienced a similar fate. Humanity and a sense of responsibility are now required from us.
In the crisis between Ukraine and Russia, indicators have not improved. Rather, the situation is again a cause for concern. An improvement in relations between the EU and Russia would strengthen the security and economy of the whole of Europe. This cooperation must, however, be based on respect for international law and international commitments. We cannot accept Russia’s actions in Ukraine. It is clear that Finland adheres to the European Union’s common policy outlines on Russia. Right now, it is even more important that the EU is part of a solution to the crisis in the Ukraine, not part of the problem.
At the same time, Russia is for Finland an important neighbour with which we maintain diverse bilateral relations. This is natural due to our long common border and the extensive cooperation networks that affect the daily life of citizens. It is important to maintain these everyday contacts, even in difficult times.
Our geopolitical location next door to Russia and our participation in Arctic cooperation will continue to provide opportunities. Our upcoming Chair of the Arctic Council also provides an opportunity to discuss crises. We must not waste our expert knowledge of Russia, and we must try and look after operating conditions for Finnish companies in Russia.
It is clear that Finland is part of the West. A country possessing good self-esteem can make its own correct choices, even in difficult situations.
Ladies and Gentlemen,
Let’s turn our gaze to outside Finland and the European Union. This is particularly important to remember now as the challenges of Finland and Europe are consuming much of our time and energy. Right now, it is particularly important that we as Europeans do not turn inwards but dare to face outwards and look ahead. The Americas, Asia and Africa offer us countless opportunities, if we can only grasp them.
In years past, when I worked in international business and travelled the world, I thought a lot about the unique special expertise of Finns that distinguishes us from others. That special expertise that may also be our competitive asset, open up to us new markets and help boost our exports.
To my mind, this factor is – as was also mentioned in a country brand working group report a few years ago – our ability to resolve tricky problems. We have the talent, the education and skills, even the creative madness required for this.
This problem-solving ability is now obviously being put to the test in Finland itself. But this is all the more reason why we must now ensure that we do not ourselves build unnecessary barriers to our problem-solving ability, that we do not ourselves clip the wings required to fly.
We must go boldly out into the world, also outside our comfort zones. For Finland to prosper, it is of paramount importance that we find new markets for our exports, work in export promotion with the ever-closer Team Finland-spirit of cooperation, and transmit a memorable message about Finland. This applies to both Finnish businesses and to you ambassadors, ours sensors throughout the world. You all have a job to do, a mission in the world.
After the Government’s many difficult cost-cutting decisions, it has been asked in many quarters whether Finland no longer bears responsibility for global development challenges, humanitarian crises and crisis management.
My response is: yes, it absolutely does. Our monetary resources will be more limited than before, so it will be even more important that they are carefully allocated. Managing with the available resources is also a question of attitude. We must focus on doing the right things. When monetary resources decline, it puts the creativity of all actors to the test. I challenge you and all of us to find new ways of achieving with a smaller sum of money the same or preferably even better effectiveness than before.
And the bearing of responsibility can not only be measured in monetary terms.
A week ago, I visited the UNIFIL peacekeeping mission in Lebanon together with my colleague, the Prime Minister of Estonia, Taavi Rõivas. On that trip, I was very impressed by the appreciative feedback I received from both the Prime Minister of Lebanon and the leaders of the UNIFIL mission about how good and trusting a relationship our peacekeepers have built with the local population through everyday encounters and human interaction. This trust is very important for the long-term implementation and success of the mission. It cannot be built, nor measured, in euros.
You should, and must, get into the field and do footwork. And while doing that, you must throw in your own knowledge and expertise.
Distinguished Ambassadors,
I would like to thank you all for the work you do in different parts of the world, and I wish you, as Finland’s sensors, a busy autumn wherever you are stationed – while at the same time promoting Finland’s case and bearing Finland’s international responsibility.
My message to you is that Finland will not close itself off. We will not turn inward nor switch off the lights. On the contrary, we will continue to look outward, innovate and believe in the future, and be the world’s best country, as measured by many indicators.