Prime Minister Paavo Lipponen at the Northern Dimension Forum in Lappeenranta, 22 October 2001

Madame Speaker, Dear Guests, Ladies and Gentlemen,

Over the past month, the world that we all live in has undergone a series of unforeseen events. Terrorism has become a global threat. This has united us and set in motion processes of change which have immediate repercussions in Europe, too. The Cold War is now definitely behind us.

Through multilateral cooperation and economic integration the European Union has been building peace in Europe. Similar cooperation is now required worldwide more than ever.

When I launched the initiative on Northern Dimension of the European Union in the autumn 1997, I was convinced that the next few decades would bring increasing welfare to our region. The Baltic Sea region has been one of the most dynamic areas of growth in Europe during the past years. The Russian economy is recovering fast. However, there is still much to do.

The purpose of the Northern Dimension is to stimulate economic growth and to increase welfare. The most effective tool is to strengthen contacts and cooperation between states, enterprises and citizens. This will gradually lead to positive interdependence which is the best guarantee for peace and stability.

Estonia, Latvia, Lithuania and Poland have made good progress in their accession negotiations. As future member states of the Union, these countries will bring an important contribution to the relations between the Union and Russia. As they all share a common border with Russia the physical contact with Russia and the Union will increase considerably. Union's share of Russia's foreign trade will rise to 50 percent. A major part of this trade takes place in the Baltic Sea region.

The Union and Russia are getting closer in many ways. The Partnership and Cooperation Agreement (PCA) constitutes the foundation for the relations. It maps out future development and defines common institutions. At the recent EU-Russia Summit it was agreed to set up a high level working group to prepare a European Economic Space and to give substance to EU-Russia energy cooperation. The summit also agreed on regular dialogue on foreign and security policy. I want to thank Deputy Prime Minister Viktor Hristenko for his important contribution in achieving these results.

In Russia the Northern Dimension is considered to be a vital part of its relations with Europe. In his book entitled "New Russian Diplomacy", released in September, Foreign Minister Igor Ivanov says as follows: "The northern parts of our continent have also gained a unique experience of broad-based and equal interaction between states. They share a common geographical location and history, a common aspiration to improve their relations and to find common solutions to contemporary challenges. Russia considers this as the most significant political objective of the 'Northern Dimension', endorsed by the EU at Feira European Council."

Due to its horizontal nature the Northern Dimension has been a challenge to the European Commission. The Commission has succeeded very well in the implementation of the Action Plan. Its active contribution is needed in order to advance the Northern Dimension further.

The Northern Dimension is no more just an initiative or concept. It is rapidly developing into practical projects. The Swedish Presidency made significant progress with the most tangible results being achieved in environmental cooperation. Commissioner Margot Wallström has played a key role in this work, and her participation in EU-Russia Northern Dimension seminar on the environment, held in Moscow in the spring, was of major significance. I want to thank Ms Wallström for her important contribution.

Any programmes and projects - no matter how good they are - need financing. I am pleased to note that international financial institutions have accepted the challenge. The Nordic Investment Bank (NIB), Finland, Sweden and the Commission have put together a financing package to complete the construction of the south-west wastewater treatment plant in St.Petersburg. This is the largest single investment in improving the condition of the Baltic Sea during this decade. The Finnish government has allocated 10 million euros for the project.

The Stockholm European Council made a positive decision on extending European Investment Bank (EIB) financing to cover environment-related projects in Russia. We in Finland have been working for this decision for a long time. It would be important now that the Russian authorities take the necessary decisions enabling EIB to start its work.

The European Bank for Reconstruction and Development (EBRD) and the Nordic Investment Bank (NIB) have developed Northern Dimension Environmental Partnership. We highly appreciate the contribution of the Banks and their Directors-General Jean Lemierre and Jon Sigurdsson. Finland will contribute 7 million euros to the fund. Sweden is contributing an equal amount. I hope that the other Baltic Sea states will join us.

I welcome that EBRD is committed to support economic reforms in Russia. EBRD financing is a key component in many projects in north-west Russia.

Energy cooperation is a priority of the Northern Dimension. Finland considers the energy dialogue between the EU and Russia very important. We have provided this process with our best expertise.

Energy cooperation in the Baltic Sea region creates a framework for the coordination of energy networks and markets. Estlink, which will connect the electricity networks of Finland and Estonia and which will be an important part of the Baltic Ring is about to materialize. The final decision depends on changes in the Estonian energy legislation.

Negotiations between the companies interested in building a gas pipeline from Russia to western Europe via the Baltic Sea are advancing. When I met the Russian Prime Minister Mihail Kasyanov in July in Savonlinna, he estimated that the construction of the North Trans Gas pipeline could start already 2005-2006. Once completed, this pipeline will make it possible to utilize the vast gas resources in the Barents Sea.

Due to present economic development the European Council in Ghent last Friday encouraged the EIB to contribute more to infrastructure projects. In this context the projects linking the Union with candidate countries and Russia should also be considered.

Northern Dimension is not only big infrastructure projects. It is good to bear in mind another fundamental objective of the Northern Dimension: enhancement of welfare, health and security of our citizens. Tuberculosis, HIV/AIDS and other contagious communicable diseases do not respect national borders. These major health risks call for joint action from us all. A task force founded by the Baltic Sea Prime ministers has achieved significant results under Norwegian leadership. I believe that a concept similar to the Northern Dimension Environmental Partnership might be useful when combating diseases and other threats to our health.

In the cooperation with our neighboring regions Finland is going to increase the resourcesavailable to non-governmental organizations. Particularly in the social and health care sectors, these organizations could play a larger role and at the same time make an important contribution in building civic societies. During the Finnish presidency in the Council of the Baltic Sea States (CBSS) in 2003 we will host a meeting of non-governmental organizations. The aim is to enhance NGO?s participation in the Northern Dimension.

Private business and companies should take the responsibility in many of the priority sectors of the Northern Dimension. The share of private financing is crucial when, for example, energy and telecommunication networks are developed.

The Business community has actively participated in Business Fora organized in Helsinki and Tallinn. We hope that these Forums will have a follow-up during the next presidencies of the European Union. The active interest of the business circles is evident here in Lappeenranta today.

The relative significance of forests is nowhere else as important as in the north of Europe. However, especially in north-west Russia there are still enormous underutilized resources. Forest issues have featured prominently in the Barents area cooperation and forestry is an important topic in Finnish-Russian relations.

When I last met Prime Minister Kasyanov, we agreed to have a "Forest Summit" in Russia in connection with our next in the beginning of next year. The main themes of this Summit will be sustainable forestry, trade in timber and investment in the forest sector.

The Northern Dimension concerns not only the northern Member States of the EU. The initiative was launched during Luxembourg's Presidency in autumn 1997. The Action Plan was endorsed during the Portuguese Presidency in June 2000. The Belgian Presidency continues the implementation of the Northern Dimension in the field of information technology.

The IT-ministers of the Baltic Sea region adopted an action plan for the Northern eDimension for the years 2001-04 at their meeting in Riga few weeks ago. Commissioner Erkki Liikanen has played a central role in this work. A so-called kick-off seminar in Tampere three weeks from today, will start implementation of the Northern eDimension.

Major projects, such as gas pipelines and transport corridors, represent the most visible side of the Northern Dimension. But we should not forget smaller projects, which may be of great regional and local significance. Many questions are same for both major companies and small local producers.

Transparent governance and predictable legislation are of paramount importance to all enterprises. The candidate countries of the Union have made significant progress in this respect. Fast economic growth and inflow of investments to Estonia, Latvia, Lithuania and Poland are signs of successful transformation.

Important achievements have been made also in Russia. The government of the Russian Federation has launched tax and other economic legislation reforms. Adoption of a land code is the latest concrete evidence of these efforts. It is important that, in addition to the federal level, also regional administrations do their best in order to create a good investment climate.

Trade between Finland and Russia is growing rapidly. Here in South-East Finland - In South Karelia and Kymenlaakso - people have quickly grasped the opportunities arising from the changes in Russia. The results can be seen in traditional export of goods and also in services related to logistics and tourism. The present situation gives a good basis for future activities.

The government of Finland has, together with Russia and the EU, tried to facilitate traffic flows and improve border crossing facilities. Cooperation between Finnish and Russian border authorities could serve as a model when developing border controls along the Union's new external borders. I hope that the Imatra-Svetogorsk and Salla-Kelloselkä border crossing points will be opened for international traffic as soon as possible. A well functioning border is a common interest of all of us.

Ladies and Gentlemen,

The Swedish Presidency emphasized the need for more intensified cooperation between various actors in Northern Europe. On the basis of Finnish initiatives some streamlining has already been done in the work of the different regional councils. Further work along these lines might make it easier for the European Commission to effectively participate in their activities.

I hope, that the Commission will take a more active role in the Arctic Council. The Commission has a significant role to play in environmental and research cooperation in the Arctic region.

Denmark has announced that the Northern Dimension will be one of the priorities during its EU Presidency. Prime Minister Poul Nyrup Rasmussen has emphasized that Denmark will also actively promote Arctic cooperation.

Arctic cooperation ties the United States and Canada to cooperation in the north. The challenges involved are global, and trans-Atlantic cooperation is required. It is therefore important that dialogue is conducted with the United States and Canada. The US have said that they will continue the Northern European Initiative - NEI - which was launched already by the previous government. This is very encouraging.

Denmark has also informed that they will arrange a top-level meeting on Arctic issues in Greenland in July and a Foreign Ministers meeting on the Northern Dimension in the autumn 2002. That will be the time to consider the content of a new Action Plan.

It is not possible to develop the north of Europe without sufficient resources. We need to join our forces and ensure that necessary financial resources are made available. The enlargement of the Union will further emphasize this.

Enlargement will also mean that the Northern Dimension will be increasingly focused on EU-Russia relations. The Northern Dimension should become a regular item on the EU-Russia agenda. I will discuss this with the leaders of the European Commission, the Member States of the Union as well as with the countries in the region.

Both Kaliningrad and Murmansk regions have attracted increasing interest. Swedish Foreign Minister Anna Lindh paid attention to the development of Murmansk and other northern areas when she visited Murmansk a couple of weeks ago. The Chair of today's Forum, Rector Esko Riepula, is also in charge of the so-called Murmansk Process which highlights the special problems of this region. A whole range of good ideas are being prepared. I want to thank Mr Riepula for an invaluable contribution in developing the Northern Dimension.

I would like to thank Mr Markku Andersson, Mayor of Lappeenranta and the whole City for the cordial hospitality accorded to us during this Forum.

Lappeenranta has given an example on how to put the Northern Dimension into practice. A strategy for the Northern Dimension of south-east Finland has been prepared. This strategy aims at promoting cooperation between regions in South Karelia and Kymenlaakso and international actors.

I am pleased to note that the strategy strongly highlights the role of private enterprises, the Lappeenranta University of Technology, and also important ports in the region. South-east Finland has an ambition to become a model for regional cooperation between the European Union and Russia. I am convinced that these plans will be successful.

The first Forum on Northern Dimension in Oulu was a success. After Oulu remarkable progress has been achieved in IT, environment, coordination of financial resources and the social and health sector. Today's programme is a clear proof of this.

I welcome offers from a number of cities in Finland to host future national Northern Dimension Forums. We plan to organize at least two forums: one in Kajaani in the spring and another in Pori in the autumn. I believe that these Forums will further intensify the practical implementation of the Northern Dimension.