Prime Minister Paavo Lipponen at the European University Institute, Florence April 9, 2001
The Future of the European Union After Nice
It is a great pleasure and honour for me to speak at the European University Institute. Your institution has for a long time been in the forefront in the debate on the development of the European Union. The Institute has published valuable contributions that have given food for thought in the process of developing and reforming the Union. I'm convinced that the work done by the Institute on the simplification of the Treaties will prove valuable when we are preparing ourselves for the next Intergovernmental Conference.
Few European meetings have gained as much publicity and commentary as the Nice European Council of last December. And an important meeting it was. The Treaty of Nice adjusts the decision-making system and key institutions of the Union. Most importantly, it completes the historical decisions of the Helsinki European Council in December 1999 and makes enlargement of the Union possible. After the new Treaty has been ratified, which is expected to take place in the course of year 2002, the Union is ready to accept new members.
The Treaty of Nice is a result of difficult political negotiations - a compromise between 15 Member States, large and small. It remains to beseen whether it secures efficient decision-making in an enlarging Union. Some aspects of the Treaty call for continuous follow-up of its implications. The decision-making mechanism in the Council is somewhat complicated with many criteria to take into account. Furthermore, the Treaty is not as ambitious in extending qualified majority voting (QMV) as Finland would have considered necessary for the efficient functioning of the Union. Some key areas like environmental taxes and coordination of social security were still left to be decided unanimously.
As the number of Member States nearly doubles within a decade we might see not only a greater variation in interests and political goals, but also a growing burden on the decision-making capacity of the Union. If the Union is to remain an effective and responsive political actor, we must continuously trim its decision-making.
I trust that institutions like the European University Institute will provide us with good academic guidance on the different options of keeping the Union institutions and decision-making rules in shape.
Like previous Intergovernmental Conferences Nice ended up with an agenda for further reforms. A Declaration annexed to the Treaty calls for a deeper and wider debate about the future of the European Union. An IGC will be convened to address, inter alia, the delimitation of powers between the Union and Member States, the status of the Charter of Fundamental Rights, a simplification of the Treaties and the role of national parliaments in the European architecture.
Before making some remarks on how to proceed with the preparations for the IGC 2004, I would like to underline some issues that are of crucial importance for the Union in the coming years.
The agenda in the run-up to IGC 2004 consist of three major processes: enlargement, internal policy reforms aiming at deeper integration and the debate on the future of the Union leading up to the next Treaty reform. By 2004 we will also be preparing thenext financial framework for the Union, including anticipated reforms in the Common Agricultural Policy and the structural funds.
Enlargement is the key priority for the Union. Incorporating Central and East European countries into the Union will be a decisive step in the post Cold War integration of Europe. The process of political change that started over ten years ago created opportunities that the Union should now seize upon fully through enlargement. The continent will gradually be unified around the European Union. Enlargement will add a hundred million consumers to the internal market. Increasing competition and economic growth will inject fresh dynamism into efforts to reform Europe.
The pace of the accession talks must be sustained, to ensure that the first candidate countries can become members and take part in the European Parliament elections by 2004. This means that the final stretch of the talks should take place during Denmark's Presidency in the second half of 2002.
The political significance of enlargement is so great that it must be managed with great care. I would prefer a first next accession by most of the candidate states. Those unable to meet the criteria for membership in the next few years because of their less advanced starting point must be given continued support and an indication of when the next round of enlargement could take place.
The momentum of the enlargement process must not be lost. The Swedish Presidency has been working in an effective manner and is now taking up one of the most sensitive issues: the free movement of labour. This is politically difficult both for many of the present Member States and the candidates. Most studies indicate that changes in migration patterns will be marginal. Free movement of labour is therefore not going to give the boost in mobility that the Union needs.
Due to some uncertainties in the studies Finland prefers flexible transitory measures for the free movement of labour. The Member States should try to negotiate with the candidates a political agreement on this chapter during the Swedish Presidency. This would make it possible to concentrate on negotiations on other major chapters like environment, agriculture and the structural funds.
During the last two years the Union has embarked on ambitious processes of reform and intensified co-operation. I'm referring especially to the extraordinary European Councils on Justice and Home Affairs at Tampere in October 1999 and on economic and social reform at Lisbon in March 2000.
At Tampere, during the Finnish Presidency, we decided to put in practice the Amsterdam treaty obligation to create an area of freedom, security and justice. The Tampere European Council approved political guidelines and concrete measures in order to develop a common EU policy on asylum and immigration, a genuine European area of justice and joint action to reinforce the fight against crime.
The Tampere summit serves as a good example on how the Union should be working. The agenda answered concerns common to citizens all over the Union. There was a clear need for union wide policies and cross-border cooperation. Common ground was identified despite major differences in national legislation and practices. And last but not least, Tampere built on universal values. We confirmed at Tampere that the foundation of the Union's co-operation in justice and home affairs rests solidly on principles of international human rights conventions, civil liberties and the rule of law. We stressed the need to step up action against racism and xenophobia and to improve the rights of third country nationals residing legally in the Union.
Equally important is to use the Union as a tool to strengthen internal security and to protect citizens from the consequences of organized crime. The four freedoms we all cherish should not be abused. Cross-border crime such as trafficking in human beings, particularly the exploitation of women and children as well as illegal drugs and arms trafficking constitutes a serious threat.
The political message from Tampere was clear, and implementation of the decisions started immediately. In some areas progress has been too slow, and we must give fresh impetus to Tampere during the follow-up that will take place under the Belgian Presidency. During next autumn we need results in the setting up of a Common European Asylum System. We must step up our efforts in combating smuggling and trafficking of human beings. The comprehensive approach to migration that we approved in Tampere needs to be developed into a policy and concrete measures.
At the Lisbon European Council a year ago we adopted a strategy aiming at making Europe the most competitive and dynamic knowledge-based economy in the world. The internal market has produced good results for Europe and the Lisbon strategy is a logical continuation to that project. The idea is to find a strategy that takes into account the changes that are taking place in our economic environment both in Europe and globally. It is about creating new and better jobs and making sure that the European social model has a sound financial base also in the future.
The Lisbon strategy was successfully followed-up at the Stockholm European Council in March. At Stockholm we set up intermediate targets for employment rates across the Union, urged Member States to speed up the transposition of all internal market directives into national law and discussed common approaches to modernise the European social model. It is now up to the Member States to achieve concrete results before the next follow-up European Council in 2002. The European Council should focus more on political decision-making and less on indicators, reports and evaluations. The open method of coordination should not be a substitute for EU legislation, where EU regulation is called for.
It is now 266 days until the euro is introduced. The benefits of having a common currency willbecome even more tangible to our citizens. But the euro has also brought about a need to strengthen economic policy coordination. The development of euro economic governance has to take into account the independence of the European Central Bank and the informal nature of the Eurogroup. As the Stockholm European Council noted, the Broad Economic Policy Guidelines have a central role and provide a framework for overall policy orientations. Strengthening of the euro economic governance should not aim at fine-tuning of the euro-area economies, but should focus instead on long-term sustainability of fiscal positions and on consistent policy assessment followed by appropriate recommendations to Member States.
At Stockholm we addressed the demographic challenge lurking round the corner. The general ageing of population will create a labour shortage affecting the whole of Europe. Europe's population is expected to start decreasing as early as 2003. Immigration alone will not solve the problem of adjusting to this scenario. We must also make people stay at work up to pension age, increase the time spent at work during their working lives, and ultimately adjust our pension benefits and social services to a situation in which the dependency ratio is far less favourable than before. The European Union needs to link up the debate on a common immigration policy with the strategy for economic and social reform.
The enlarging Union has to take an increasingly active role globally. As a major economic actor the Union shoulders responsibility for the openness of the world economy and for conditions that will contribute to positive economic and social development globally. A new round of talks at the World Trade Organisation should be agreed on during this year. We need further liberalisation, but also a dialogue on the social and environmental aspects of trade. This broad agenda can only be achieved if developing countries are also seeing real benefits - instead of new kind of protectionism - inthe strengthening of the international trade regime.
The Union continues to be a leading force in global environmental policy. Sadly, this is partly due to the fact that some others are lagging further behind. I find it extremely important that the Union now concentrates on efforts to save the Kyoto Protocol on climate change. Having no agreement on the measures to combat climate change would be a major setback to all multilateral efforts to solve global environmental problems.
The last few years have been a period of rapid development for the Union's external policies. The Helsinki decisions on developing the Union's crisis management capability are being implemented both on the military and civilian side. The Union now has both a Southern dimension - its Mediterranean policy - as well as a Northern Dimension, which contributes to the reinforcement of positive interdependence between the European Union, Russia and other states in the Baltic Sea region. Finland sees these policies as mutually supportive - stability and cooperation on its northern borders will also strengthen the Union in the South.
At the same time as the Union is taking on the challenges of today, we shall continue debating the future. It is a debate with a concrete aim: how to make the enlarging Union better in achieving its goals and in responding to the expectations of our citizens. Many themes of the debate point to a need to develop the constitutional framework of the Union. This calls for an open and analytical debate, with a broad participation of the civil society.
Before the Nice European Council Italy and Germany presented a useful non-paper on the post-Nice process. At the summit the Member States agreed to start preparations for the debate under the Swedish Presidency with an interim report to be presented to the Gothenburg European Council in June. Under the Belgian Presidency at the end of the year in Laeken, a declaration will be issued on the initiatives for the continuationof this process.
How then to prepare the next Treaty reform? Before Nice, in a speech at the College of Europe in Bruges, I proposed that a convention be set up for the preparatory phase. The process leading up to Nice and the final negotiations that lasted for more than four days convinced probably most of us that the present way of preparing reforms is deficient. A convention might serve a purpose as a forum bringing together representatives of governments and parliaments from the present Member States and accession countries together with the Union institutions. With open sessions, fully accessible documentation and hearings with representatives and organisations of the civil society a convention would also bring much needed transparency to the process.
The convention is no substitute for the intergovernmental negotiations that we need in order to approve Treaty changes. However, it is an absolutely essential element in a process where we need to have a broad involvement, a real debate and fresh new ideas. The convention should start its work as soon as possible after the December European Council in Laeken. A report from the convention presenting concrete proposals and options should be available by mid-2003. The agenda for the debate on the future of Europe should obviously be left open-ended. Four topics for the IGC 2004 were already outlined in Nice.
It is easy to understand that fundamental rights are included on the agenda. The Charter of Fundamental Rights adopted in Nice outlines the key principles on which our societies and the European Union are based. The drafting process and the work of the Convention drew a lot of attention from the civil society. We are dealing with issues that are normally judged as a cornerstone in any national constitutional set-up and which are safeguarded by means of various international treaties.
The Charter was accepted as a political declaration, not as a legally binding document. Nevertheless, in all likelihood the European Courtof Justice will take the Charter into account in its decisions and thereby the document will gain legal relevance.
It is not necessarily an easy task to try to include the Charter as it stands into the Treaties and to treat it as a legally binding document in its present form. As the Charter clearly has a central role among the documents defining the purpose and goals of the Union, we should find a proper way of reflecting this also in the Treaties. The IGC 2004 should also amend the Treaty so as to make it possible for the European Community to accede to the European Convention on Human Rights.
The question of a delimitation of powers or a clearer definition of competences between the Member States and the Union comes particularly close to the debate on what the Union is all about and what the Union should be doing. I would not like to offer any definitive answers. Instead I would like to point out that the Union is not so much about clearly divided competences - it is more about sharing competences between the Member States and the Union institutions.
In a Union that consists of several decision-making institutions on the community level, in Member States and in regions and on the local level, it is not always easy to identify or agree on the ones that should be in charge and accountable for a particular decision. We need an institutional structure that produces decisions in a democratic, efficient and transparent way. Community competencies could be more clearly defined, but I don't think a catalogue of competences is the right answer. I'm afraid that if we are aiming at solving the problem through too detailed Treaty provisions - only to be changed by IGC's - we might embark upon an impossible project. Even more, we might do harm to the Union's ability to keep up dynamism and to respond to new demands in a rapidly changing environment. Clarity is good for the Union, but so has also proved to be the degree of flexibility that we currently have.
It is not always clear what the proponents of delimitation of competences are actually looking for. Whatever changes we are debating to the current system, I would stress that Finland considers strong community institutions as crucial for the functioning of the Union. Equality between the Member States should be safeguarded. I would not like to see a rolling back of integration and our common policies. For instance, an effective competition policy, enforced by the Commission is a key part of the internal market.
The role of national parliaments requires careful consideration when one tries to fit it in to the institutional framework. Creating new layers in the Union's institutional structure might not be the best solution if the aim is to enhance democracy, bring the Union closer to its citizens and maintain efficient decision-making in the enlarged Union. I fully agree with the aim of linking parliaments more closely to the development of the Union and I hope that the convention is able to present proposals to this end.
Maybe we should concentrate on the ways and means how the Member States could strengthen their own systems of informing and involving the national parliaments in EU-policy. National systems based on real interaction, transparency and efficient ways of consulting the parliaments would do a great deal to enhance democracy and the acceptance of the Union's common policies. Finland has an advanced system of extensive consultation with the parliament, but probably not without flaws either. The amount of EU-legislation sometimes makes it difficult to separate the politically most important issues from the piles of proposals filled with technical details.
The same can be said about the basic treaties of the Union. Today they are a nearly incomprehensible compilation of articles, protocols and declarations. The treaties need to be simplified and codified. This is something where the European University Institute has already made a valuable contribution.
The work on reshaping the Union takesplace against the background of an increasingly sceptical public opinion, in most if not all Member States. Our citizens must be made better aware of the usefulness, the added value of the Union. For this we need concrete results in the economic and social field, in guaranteeing a sustainable development and in strengthening the internal and external security of the Union. But our citizens must also be directly engaged in the debate on what the Union should do and how it should be organized to that end. How to stimulate and support a genuine public debate without restrictions or spoon-feeding is an urgent task for our governments. We need strong political will to take integration forward in an enlarged Union. At the same time we must ensure that there always is a link between political will and public opinion, even when sometimes the one moves ahead of the other.
The inclusion of candidate countries in the process of preparing the next IGC brings a new kind of dynamism into the discussion. For the candidates this is a timely step inside the institutional debate. And I don't agree with those who fear a dilution of the Union as a result of a dozen new members. A new kind of a Union it will be, but an enlarged community based on common principles, integrated policies and efficient institutions could prove to be a stronger political actor than it is today.
A strong Union can only be built with the community method. Unfortunately, we have lately seen a tendency towards intergovernmentalism: the role of the Commission has been weakened and Member States resort to bilateral agreements instead of using and developing the institutional structure of the Union. This trend towards treating the European Union as just another international institution should be rejected. We can meet the goals of European integration and achieve results only with a Union that is based on a community approach in setting targets and developing policies, and has an efficient and transparent decision-making system respecting the institutional balance and the equality of the Member States.
Dear Rector, ladies and gentlemen,
During the six years of our membership Finland has participated in two IGC's. We are now engaged in developing our own thoughts for the next one, while the Union is facing its biggest enlargement ever. The main feature of our European policy has been active participation with own initiatives. We defend our national interests by looking for the common good and by making the Union a stronger actor both internally and in it's external policies. This policy has benefited us and made Finland's international position stronger than it has ever been since independence in 1917.
I'm pleased to have been able to share some thoughts on the immediate tasks of the Union with you. I want to express my gratitude for the Institute for offering me this platform. I wish all success for your future activities.