Prime Minister Paavo Lipponen's speech at the Atlantic Council of Finland December 12, 2000

Negotiations about the Treaty of Nice were difficult and the ensuing treaty can be considered to be satisfactory under the circumstances. Finland would have been prepared to expand the scope of qualified majority voting to a far greater number of articles than the political will finally yielded to. Commercial policy is one of the most important issues where progress was made. Based on Finland's initiative, the scope of the common commercial policy was broadened to include trade in services along with commercial aspects of intellectual property.

The Treaty of Nice also concludes that the Commission will be represented by a national from each Member State and that the larger Member States will give up their secondseat in the Commission at the first stage of the enlargement. Once the number of Member States in the Union reaches 27, the Commission is then going to be downsized to accommodate less than 27 commissioners by unanimous decision. At that time a rotational system based on the complete equality of the Member States will be adopted.

The numbers of votes of the Member States in Council were modified so as to compensate the larger States for renouncing their second seat. After prolonged negotiations and an important discussion involving the status of smaller States this issue, too, was successfully solved, a solution which can be considered satisfactory to all concerned.

In all it can be stated that once the Treaty on Nice is ratified, the Union will be ready to enlarge, whereas the efficiency of the decision-making was not improved by the solutions now agreed upon. As the number of Member States grows, an increase in the use of the qualified majority vote in the Union's operations will be particularly essential. Similarly, the voting system of the Council must be eventually reformed.

Closer co-operation, i.e. flexibility - regarded as one of the most difficult issues of the Intergovernmental Conference - took a step forward in Nice. Closer co-operation has now been enabled also in the field of the Common Foreign and Security Policy. The Community policies and common strategies will remain the policies shared by the Union in its entirety but the implementation thereof may, as required, allow for the more rapid progress of a smaller group of Member States - no less than eight by number. However, no decision was made in Nice about closer co-operation in the area of the European Security and Defence Policy.

In my view, the fact that an agreement on the launch of the Community's future development could be reached is highly important. On the foundation of a broadly based preparatory work, the Member States will - in a manner and within a schedule to be agreed upon at a later stage- aim at the simplification of the Treaties, the status of fundamental rights and the clarification of division of competence.

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In Nice significant decisions were also made about the development of the European Union's common security and defence policy. One year after the essential decision was made at the historical Helsinki Summit Conference, the European Union has laid the foundation for its own military crisis management capability.

Hereby, the European Union has taken a significant step forward in the field in which Europe's credibility has been tested most during the last decade. At the same time the Union has developed its common foreign and security policy and complemented its unique strengths as a comprehensive player in policies related to stability, conflict prevention and crisis management.

The EU crisis management reform is based on the principles expressed in the UN Charters and on the primary responsibility of the UN Security Council concerning the maintenance of international peace and security. The Union's role in the crisis management is independent. However, any implementation of major operations then requires the co-operation of NATO. The Union's crisis management operation is open to other States that are willing and able to contribute to it.

An agreement was made in Nice concerning the structure and tasks of the EU's permanent crisis management bodies, i.e. the Political Committee, the Security Committee, the Military Committee and the Military Staff. These organs, having operated on an interim basis since last March, will start their work as permanent agencies in the coming year. In keeping with decisions made in Nice, the objective for the European Union is to establish a rapidly operational crisis management facility. The Union will make a decision on this as soon as possible in 2001 and no later than December in the European Council in Laeken. Sweden will give an account of the issues concerned at the Gothenburg European Council taking place in June.

In Nice, the Union's Treaty was amended so as better to suit the current requirements of the crisis management organisation. The Treaty on Nice concludes that the Council can assign to the Political and Security Committees a crisis management operation for the implementation thereof as well as authorise decision-making concerning the political control and strategic steering of the operation. This authorisation clarifies the decision-making related to the operation management. According to the Treaty of Nice, a High Representative for the Common Foreign and Security Policy can act as chairman of the Political and Security Committees in a crisis situation. In addition, the Treaty of Nice deleted references made to the Western European Union, WEU for short.

The Union also reached an agreement on the kind of assistance that might be required from NATO and on the ways in which the Union wishes to communicate with the Alliance. This issue remains to be subject to negotiations between the Union, NATO and the non-EU Member States of the Alliance.

Moreover, a settlement was reached concerning the way in which the non-Member States can participate in an EU crisis management operation. This is an essential point as, for instance, the NATO-led KFOR in Kosovo involved more than 30 States. Particularly close ties will be established with the non-EU European NATO States as well as with the non-NATO EU candidate States. Similarly, the Union is ready for co-operation with other third countries such as Canada, Ukraine and Russia.

Several non-EU partners have already offered to make troops available to complement the European Union Headline Force Catalogue. Obligations involved in the common European security and defence policy present the EU candidate States with a new challenge, involving both the development and reform of their own defence policies.

The EU crisis management reform has been included in the co-operation agenda between the Union and Russia. Initial contacts have been constructive, hereby reflecting Russia's ever increasing interest in the Union and its role as a foreign and security political player. In the future, co-operation between the EU and Russia will further gain in significance in terms of stability and security in Europe.

Offers made by the Member States have been compiled into a Headline Force Catalogue including 100 000 troops, 400 aircraft and 100 strong fleet. Based on this force, the Union intends to create a readiness for deploying a crisis management force of no more than 50 - 60 000 troops, backed by the required air and marine forces.

In terms of numbers, the target set in Helsinki has been well fulfilled. Room for improvement remains, however, on the qualitative side. The Union aims at correcting these shortcomings by 2003 and will continue on even after that.

The Nice Summit also reached an agreement on a preliminary mechanism for monitoring the realisation of the EU crisis management resource objective in co-operation with the NATO counterpart mechanism. As far as Finland is concerned the so-called PARP mechanism, geared for NATO's partnership States, is the appropriate platform. This is a framework within which Finland has developed its own readiness capability in recent years.

Finland has confirmed its own contribution consisting of approximately 1 500 troops to be placed at the EU's disposal. Offers given by Finland and Sweden are also part of the Nordic NORDCAPS ready pool. Offers presented by Finland and Sweden as well as Norway complement one another so that the troops held in reserve allow for the formation of Nordic troop configurations up to brigade level. Finland's offer is based on resources that we create and maintain, in any case, for crisis management purposes and which we are also prepared to engage in UN or NATO peacekeeping operations, as required.

Civilian crisis management will have a prominent role in reforming the Union in the future. Here, serious flaws have become apparent. Kosovo provides a good case in point as in spite of world-wide recruitment efforts, the UN has failed to mobilise a sufficient number of police forces. This is why last June in Feira the Union decided to create a police force of 5 000 members so that forces could be sent off, either to the Union's own policing assignments or to be employed as part of more wide-ranging projects being executed by international organisations.

The development of other civil sector focus areas such as expertise required for the strengthening of the rule of law is equally important. Finland has promoted the development of the EU civilian crisis management facilities intensively and looks forward to the Swedish Presidency with great expectations. We support Swedish aspirations for the development of the EU civilian crisis management capability.

The European Union will continue to be, first and foremost, an economical and political entity. The main objective with Community operations is the prevention of conflicts and crises. Creating a military crisis management readiness will further complement the already wide and notable range of means that the Union has had at its disposal.

Even in the case of a crisis situation, military operations will only be engaged in as a last possible resort. However, in view of the Union's credibility, once a crisis management operation is undertaken, its execution will have to be efficient, determined and professional. This calls for a new approach as well as for new resources.

The troops created for the NATO Partnership for Peace and for UN operations will be used in the EU managed operations. Decisions taken in Nice will not lead to the creation of a European army. The Union will not establish a military command structure of its own. Instead, national or multinational command systems, assigned by NATO or the Member States, will be employed. Participation in these operations is up to each Member State.

Development of the EU's crisis management capability will proceed in step with NATO's corresponding operations. NATO, in which the United States has a leading position, has a prominent role in crisis management and it has gained experience in the notable operations within Bosnia and Kosovo.

In the arena of international peace efforts, developments in the Balkans have highlighted the significance of the longstanding connection between Europe and the United States. Simultaneously it has become evident for all to see, that the transatlantic relationship requires both development and balancing, including the field of military crisis management. Although the United States has been involved in the settlement of the most difficult European crises of the 1990s, European countries will have to do their bit more efficiently in the future.

In the ever-changing international situations, we cannot take it for granted that the United States and NATO will be available for the settlement of every conflict occurring in our continent.

No indication is in sight that the United States would be withdrawing from its responsibility for security and pull its military presence out of Europe. However, they are faced with an increasingly growing number of security concerns outside Europe, which call out for prioritisation. What the United States expects from Europe is an increased involvement in the challenges presented by international security; not just in Europe but also outside of it.

Creating an EU crisis management capability arises from the need of the Union to be able to implement tasks of a smaller magnitude independently of NATO support, drawing on the national or multinational forces provided by the Member States. Resorting to NATO resources would then be appropriate should the Union undertake to execute a larger operation. The Nice Summit designed an approach, which the Union will now propose as the basis for an agreement to be drawn up with NATO.

A number of good reasons nonetheless still exist for resorting to NATO resources. These include their planning facilities, command structure and other military resources, not least their airborne capacity. This will provide the EU crisis management operation with a strong edge. At the same time the existing mechanisms are made use of whilst the creation of any overlapping and expensive military structures in Europe will be avoided. We do not need another NATO, something we could not afford anyway, for that matter.

Seen from Finland's point of view, the development of co-operation practices between the Union and NATO is necessary and we like to adopt a practical approach to it. Our co-operation with NATO in the field of crisis management goes back a long time: we are engaged in two NATO-led peacekeeping operations in the Balkans whilst simultaneously developing our own crisis management facilities within the framework of NATO's Partnership Programme. Finland is well-versed in NATO and its crisis management operation since, after all, we are participating in it.

Co-operation between the EU and NATO will not bind Finland to any security policy solutions. Finland remains solely in charge of her own security policy position. In the EU, Finland, as any other Member State, will decide independently on whether or not to employ peacekeeping forces in any conceivable operation led by the EU. In this respect, the functionality now being prepared is no different from the military crisis management operations as already led by the UN or NATO.

When making preparations for any EU-led operations, it is important for Finland to ensure that we, as a non-aligned EU Member State, will be well informed and can participate in the operation, which NATO would undertake on request by the EU in the areas of planning and command systems.

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In recent years Finland has modernised her defence forces and improved her preparedness to participate in international crisis management co-operative ventures. In 1997, the Government provided the Parliament with the first security anddefence policy report. This report presented an extensive account concerning Finland's changed security political position. The report confirmed the already existing Finnish security policy and laid down the guidelines for its further development. The Government noted the changed situation in European security policy and that general developments, having taken place in the armed forces, had created an opportunity and a need for a significant reform in the Finnish Defence Forces.

The defence reform was implemented soon after the parliamentary proceedings. The objective with the renewed training and defence materiel procurements was to downsize the Defence Forces whilst improving their efficiency. In addition to the internal reform of the Defence Forces, the development of our defence policy includes the dimension of international co-operation. The current defence policy has both a national and international dimension. Both of these aspects have been designed to strengthen Finland's security.

The specified report is currently under review. By means of this reporting procedure, the Government wishes to emphasise the role of the parliamentary system in the political decision-making process concerning the development of defence policy and the Defence Forces. The review deals with the implementation of structural changes in defence and the adequacy of available resources.

In spite of the increased significance of international operations, the fundamentals of Finnish national defence remain unchanged. Our defence is still based on non-alignment, credible defence capability, nation-wide defence and general conscription. The Government intends to provide the Parliament with a report on security and defence policy in the spring of 2001.

European defence materiel co-operation, too, is in a state of flux. In the field of defence materiel, the EU security and defence policy creates a new opportunity for co-operation between the Member States. The Western European Armaments Group, initially founded by European NATO countries, has a wealth of expertise in joint research and development projects. Finnish membership of WEAG promotes co-operation in the field of defence materiel while improving the operational environment and competitive edge of our domestic defence industry. The WEAG membership provides an opportunity to fully participate in European multinational materiel and technology projects.

We seek to take advantage of European co-operative opportunities in the context of Finnish defence materiel procurements. In the context of co-operation there is good cause to favour countries that provide the possibility of entering into agreements concerning the security of supplies based on procurements, the division of labour and contractual arrangements. In the first place, industrial co-operation in procurements and in creating the security of supplies should be developed with the EU Member States and the Nordic countries. We have reached a high international level by developing our domestic defence industry and our objective is to establish even closer links to the European projects taking place in the defence industry.

In view of developing the Finnish Defence Forces, commitment to the EU crisis management operation complements the efforts in which Finland has been involved for a long time, both in UN and NATO circles. While our operation in these organisations continues, our contribution can strengthen the EU capability in responding to crises and can promote the role of the Union as an international player.

The crisis management operation provides a new indication of the Union's concrete work towards the improvement of international security and stability. Finland has adopted an active role in the development of EU preparedness and we are determined to continue this work. An active and credible European Union is in the interest of smaller Member States like Finland. The Treaty of Nice strengthens the Union where this strengthening has been required. The crisis management facilities render the Union stronger, which makes it better equipped to serve the Member States in continental security co-operation.