Prime Minister Vanhanen's mid-term review on Finnish EU Presidency

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Honourable Members of Parliament,
Dear Friends,

It is a great pleasure and an honour to be here among you today. The Finnish Parliament is my own political home, where I have worked since 1991. My parliamentary office is in this very same building, a few floors up. I feel that I am on familiar ground.

Ladies and Gentlemen,

Parliamentary accountability in EU affairs is a strong constitutional obligation – and living practice – in the Finnish political system. Parliamentary scrutiny is an inseparable part of all Finnish EU policy. Not an add-on, not a sideshow nor a going-through-the-motions ritual, but a meaningful discourse between government and parliament about the practical decisions to be made. This close scrutiny applies to all areas, including foreign and security policy, hence our close contacts with our Foreign Affairs Committee, ably chaired by MP Liisa Jaakonsaari, your host.

For example, as Prime Minister, I have to appear in person at least 8 times a year before the Foreign Affairs Committee, before and after each European Council. Our Foreign Minister is an even more frequent visitor: he has to appear before and after each General Affairs and External Relations Council, at the very least. We have always felt that close parliamentary scrutiny is a strength for our EU policy. Taking account of Parliament’s views is an integral part of our policy-making process, from the early stages on.

Therefore, as President of the European Council, I feel that I owe you a report on how our Presidency is progressing, what we have accomplished, and what remains to be done. Our Presidency reaches its midpoint in a few days, so this could be called a mid-term review of our EU Presidency. I feel privileged to have you as my distinguished audience for this review.

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My first observation is that all Presidencies are shaped by unexpected events. Ours is no exception. No one had foreseen or planned for the crisis in Lebanon, but it was the first big test of our Presidency. I think that the EU performed well. First of all, we agreed on a firm, common EU position. This is a big contrast to the bitter divisions over the conflict in Iraq in 2003.

I am not hiding the fact that there were real differences of opinion between member states about this more recent conflict too, for instance about the need to deal with Syria, the urgency and nature of the cease-fire or the degree of criticism aimed at Israel. But a solid common position was nevertheless forged, in a constructive manner, and EU member states played a decisive role in shaping the UN Security Council resolution, allowing for a robust UNIFIL operation to effectively end the conflict.

And secondly, the EU was able to pledge a major military contribution to the reinforced UNIFIL-operation in Southern Lebanon. I have no hesitation in saying that the operation could not have been accomplished without the EU, its member states contributing the backbone of military forces on the ground.

So I think that the EU has done well in Lebanon. I know it has been claimed on many previous occasions that Europe’s hour has finally come, all to no avail, but I still feel that the EU can now have a stronger role in the Middle East, in re-launching the peace process between Israel and Palestine, making progress with the roadmap. I have great respect for the role of the United States and its earlier attempts to find a permanent solution to the conflict between Israel and Palestine. At present its attention and resources are unfortunately preoccupied with Iraq – a conflict that seems to be much tougher and more prolonged than was commonly anticipated. The actual war ended three years ago, but there seems to be no end in sight to the bitter conflict still raging on the ground.

It seems natural, perhaps even obvious, to conclude that, because of the unresolved conflict in Iraq, the United States will unfortunately, for the time being, be a passive player in efforts to settle the future of Palestine. Europe must step in. However, whatever the level of the American engagement, I think that the EU’s influence in the Middle-East has steadily grown and it has a real chance of exerting a decisive influence in the peace process. I think that both Israel and the Palestinian Authority realise that the EU, with its wide-ranging capabilities, has much to offer, be it in trade or aid. The EU is their number-one partner in peace.

I am convinced that, as Europeans, we must recognise the fact that the region is in our immediate neighbourhood. We must engage with greater determination.

Stabilising Southern Lebanon is only a first step that must be followed by measures encouraging both Israel and the Palestinian Authority to make further progress towards peace. The formation of a stable coalition government between Hamas and Fatah, with a firm commitment to the basic elements of the peace process - Israel’s right to existence, renunciation of violence, respecting agreements - and strong backing for President Abbas, are an essential basis for further progress. The EU is firmly resolved to help that government on the road to peace.

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I know that you are debating crisis management at length during your meeting. This is a crucial topic and much more attention needs to be given to the question of how to combine civilian and military crisis management effectively. For a successful transition from conflict to reconstruction, strong civilian intervention is required early on. I am afraid that Afghanistan may be turning into a warning for future international operations, an example of how things can go wrong when military crisis management has not been accompanied by a sufficiently robust civilian effort. Although Nato deserves praise for including a civilian dimension in its operations in Afghanistan, in the form of Provincial Reconstruction Teams for instance, this civilian dimension has not been strong enough. After three years of crisis management, we now see ever growing signs that hostilities are actually worsening. We need to have a close look at what is happening in Afghanistan and learn the tough lessons. That is what you are doing here, today.

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Ladies and Gentlemen,

The European Union has the potential – in terms of population, output, wealth, trade, development aid – to be a leader in the world. However, the EU consistently punches below its weight. The influence it has on international affairs is clearly not commensurate with its underlying capabilities. The efficient management of external relations is a real challenge for the EU. The EU needs to derive greater strength from greater unity.

The paradox is that the EU is uniquely equipped as a comprehensive international actor: its policy arsenal includes both civilian and military instruments, and its policies – be it on trade, agriculture or competition – carry real weight in the world. The EU has great potential. It needs to use this potential to the full. The EU’s effectiveness is clearly diminished by the fact that its foreign policy is divided into two distinct spheres – Community external relations, which actually has very good resources at its disposal, and inter-governmental cooperation on foreign policy issues. We need to find ways to combine these Community resources with our foreign policy objectives. The function of the High Representative, Javier Solana, is a good example of how a more unified mode of operation can bring substantial benefits and cohesion to the EU’s effectiveness on the international stage. We need to go further.

The Constitutional Treaty contains many improvements to the management of the Union’s external relations – the most striking being the creation of a Union Minister for Foreign Affairs and the fusion of Community external relations and the common foreign and security policy into a single framework, under a single operating framework. Unfortunately, The Constitutional Treaty is not yet in place. However, this does not mean that nothing can be done to improve the Union’s external cohesion and effectiveness.

That is our position, and the Finnish EU Presidency has been actively pursuing this goal and is seeking practical measures that will improve management of the Union’s external relations. For instance, we organised the first ever High-Level External Relations Meeting a few weeks ago, just before the ASEM Summit. The idea is to have the Commission, the Presidency and the High Representative around the same table to discuss and agree on horizontal objectives for the EU at the third-country summits held during a Presidency, and to discuss overall challenges for the Union’s external action.

The Finnish Presidency alone is chairing six third-country summits, with key partners like Korea, China, India, the Ukraine, Russia and Canada. At our coordination meeting on 9 September, we agreed for instance that energy needs to feature prominently at all our meetings with these external partners. We also agreed that we should give more attention to India in our external relations. India is a rapidly rising economic and political power, which is sometimes overshadowed by China in terms of focus and attention. We also had a lessons-learned discussion about the conflict in Lebanon.

This coordination meeting between the Union’s high-level troika is a fairly simple step, but much needed. It is a very practical way to improve the Union’s effectiveness. I must confess that I am amazed that this hasn’t been done before. This new practice is a useful legacy for the German Presidency.

We have also instituted preparatory meetings between the Presidency, the Commission and the High Representative before all General Affairs and External Relations Councils. We have also made efforts for the better coordination of EU positions in international organisations and plan to have a discussion on best practices.

These are all practical steps that actually work well. I think that the EU needs to make the most of all its resources and this requires better coordination along the lines that we have been pursuing. We will report to the General Affairs and External Relations Council on these measures and make recommendations for future practice.

Margaret Thatcher once said that the EU sometimes feels like a bus driven by the Marx Brothers. I think that Mrs Thatcher was being unfair, but we do need to work on more efficient coordination, with or without the Constitutional Treaty.

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Dear Parliamentary Colleagues,

I promised you a mid-term review, but I’m afraid my words should be taken with a pinch of salt. True, the Presidency has used up half of its time, three months, but all Presidencies, especially those in the second half of the year, are lopsided: there is a build-up that is designed to bear fruit at the end of the Presidency. Most of the things we set our minds on remain to be done.

We have two summits ahead – an Informal European Council in Lahti in October and the December European Council in Brussels.

The Informal European Council in Lahti, on 20 October, will be one of the main highlights of the Finnish EU Presidency – an informal meeting along the lines of Hampton Court, designed to build consensus and political will on a few key issues. The meeting in Lahti is about innovation and energy.

On innovation, we need to recognise that economic growth in the EU, our very competitiveness in relation to the rest of the world, relies on innovation. Innovation receives the praise it deserves, but we need to move beyond declarations. The EU is not innovation-poor, but we have a real problem in transforming innovations into products, world-class companies, global market share and good jobs.

The meeting in Lahti needs to focus on transforming our mind-set on innovation. The Lisbon strategy concentrates too heavily on indicators and resources – in reality, we need to understand that innovation relies above all on a good market environment that is conducive to innovation. Then we must boldly identify what policies need to be implemented to make the EU more innovation-friendly. If we get this market environment right, then the desired indicators will follow. This is what the meeting in Lahti is about.

On energy, we plan to have a debate that will focus on the external aspects of our energy policy. How to make better use of our political contacts to strengthen the EU’s own energy objectives: openness, transfer, energy security. And above all, how best to link our neighbours – like Norway, Algeria and Russia – to the EU’s internal market on energy. The EU energy market works better if its main producers cooperate closely with it.

EU leaders will also have a meeting with President Putin in Lahti. This will be a chance to discuss how to develop the strategic partnership between the EU and Russia. The aim of the Finnish Presidency is to agree this autumn on a negotiating mandate for a new and modern agreement with Russia that will replace the old Partnership and Cooperation Agreement (PCA).

We want to hear how President Putin sees the development of Russia’s energy sector and the relationship between the EU and Russia in this field. I think that Russia and the EU complement each other – the EU is the major market for Russian energy and Russia is a natural supplier to the EU. However, Russia needs to be clear about the principles that govern its energy policy. Companies – Russian and foreign – need a level-playing field. The energy relationship between the EU and Russia needs to be built on openness, reciprocity and fair-play. A strong commitment to these principles would also encourage the foreign investment that is needed to develop the Russian energy sector.

Initially, the Presidency had intended the meeting in Lahti to focus on these few key issues. However, we also need to react to other pressing needs and therefore we are also going to discuss illegal immigration, a pressing concern for many member states. We need to demonstrate solidarity with our southern member states in dealing with the problem. At the same time this is an important reminder of the importance of external action. We cannot look at the problem of illegal immigration purely as a matter of border security and immigration control. The real root cause of this problem is insufficient development. These migratory pressures are caused by a serious failure in development in Sub-Saharan Africa and other areas. We need to do more for Africa. We need to work harder on development. Building better fences is only a short-term solution.

Ladies and Gentlemen,

The December European Council will debate enlargement policy. This debate is called for in the Conclusions of the June European Council. One of the key phrases in this debate will be absorption capacity. We are all aware that the Union’s absorption capacity is a consideration, in addition to the Copenhagen criteria which set the objective conditions for membership.

However, the Presidency strongly feels that this debate cannot and should not lead to further conditions being set for enlargement. We already have one reflection period, for the Constitution. It would be a huge set-back for Europe to launch another one for enlargement. In practice this would mean shutting the door in Croatia’s face, even though it is a deserving candidate.

It is important to remember that enlargement is part of European reconstruction and renewal. For instance, countries in the Western Balkans have a strong European vocation that needs to be recognised by practical deeds. This area has a tragic past, still fresh in people’s minds. It is important that the European perspective for this area remains a tangible reality. The future of Kosovo remains undecided. Montenegro has just gained its independence. Serbia needs to find a new future with Europe. The Former Yugoslav Republic of Macedonia, Bosnia-Hercegovina and Albania are all natural European partners. The consequences of closing the door to these countries would be serious.

We need to maintain a policy that keeps the EU open to countries that are willing and able. If we set further conditions – conditions internal to the EU that potential candidate countries cannot influence – we risk demoralising deserving candidates, for whom the prospect of EU membership, however distant, is a strong incentive to reform and live up to European standards.

The current EU enlargement policy, based on objective criteria, is a success and I believe that Europe will benefit from carrying on with it. I hope that the December debate on enlargement will cement our common understanding on this policy and strengthen the consensus on enlargement.

Ladies and Gentlemen,

Opening accession negotiations with Turkey was a major achievement during the UK Presidency, less than a year ago. The Finnish Presidency is actively working to reach a solution which would enable direct trade between the EU and Northern Cyprus. Our aim is a solution that would also ensure that Turkey proceeds with the opening of ports to Cypriot vessels. A positive outcome would help us to avert difficulties with Turkey's EU accession negotiations.

We continue to hold intensive and constructive talks with the Republic of Cyprus and Turkey to see whether a solution can be found. The following weeks will be crucially important for these efforts as the European Commission has announced that it will issue its progress report on Turkey on 8 November.

This brings me to my last point, which is that enlargement – and the European Union at large – is not really about geography but values. These values are the corner-stone of the Union. They may be neglected by close neighbours, like Belarus, but well respected by other partners like Ukraine. We have usually seen European values – democracy, the rule of law, human rights – as universal. An open EU is the best testimony of these values.

Thank you.