Prime Minister’s announcement to Parliament following the United Kingdom's EU referendum

Government Communications Department 1.7.2016 10.10
Prime Minister's Announcement

Honourable Speaker,

Last Friday many Finns, too, couldn't believe it when they read the result of the United Kingdom's EU referendum. The British people had voted to leave the EU. Few believed beforehand that this could really happen, although the situation was very close the whole time and criticism of the EU had already been strong.

The UK's referendum outcome was a disappointment for Finland and the entire European Union. The UK is an important partner for Finland both in terms of the economy and security. The UK, like Finland, has been taking the EU in a more transparent, more effective direction that also emphasises the Single Market. It is, nevertheless, beyond doubt that the referendum result will be respected.

The British Government is now expected to present an official notification of withdrawal. The aim is that this should be made as quickly as possible. Based on this week's meeting of the European Council, the notification will possibly be made in September. Negotiations about the withdrawal will not begin until this notification has been received.

Sufficiently quick progress is essential to dispel uncertainty. This will allow the parties to focus on the end result and on formulating the relationship between the EU and the UK. As we have seen, the markets have reacted strongly to the referendum result, and so clarity is sought particularly with this in mind. The period of uncertainty must be as short as possible.   

It currently looks possible that the withdrawal negotiations may take a couple of years. Special arrangements may be required if the withdrawal agreement and an agreement defining the new relationship do not come into effect simultaneously. The United Kingdom will remain a sovereign Member State with all the rights and obligations which that entails up to the day of withdrawal.

Many questions are still unanswered, as this is the first time that a Member State is withdrawing from the European Union. The EU was not shaped for this kind of event. The withdrawal process must be managed in a practical and businesslike manner. The EU and the United Kingdom will always need each other, and the relationship should be balanced and as close as possible.

The 27 Member States of the European Union this week declared that access to the EU's Single Market will require all four freedoms of movement (goods, services, capital and people). It was also decided that the European Commission will be in charge of the withdrawal negotiations, and that these will be based on the guidelines adopted by the European Council.

Finland will conduct a careful analysis to see which matters will be affected by the UK's new relationship with the EU and the points to be taken into account during the negotiation process to protect Finland's interests.

Honourable Speaker,

The European Union was created from the ruins of the Second World War for the purpose of safeguarding peace and stability in Europe. The Declaration presented on 9 May 1950 by French Foreign Minister Robert Schuman stated: "World peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it." The Declaration was the starting shot for the establishment of the European Coal and Steel Community. The intention was that this would prevent any further outbreak of war.

Europe must not forget the events of history. At the meeting of Heads of State or Government, a colleague of mine said: "Anyone who doesn't understand the purpose of the EU should visit some war graves."

For Finland, EU membership was a political choice that connected us more emphatically to the Western community of values. The most important task of the European Union is to safeguard peace, security, prosperity and the rule of law on our continent. The need to discharge these basic duties has not changed at all.

Honourable Speaker,

For the European Union and its Member States to function effectively, they must have the trust of citizens. Citizens in all parts of Europe have been disappointed in the EU's ability to respond to problems. The political culture also needs to be shaken up. The causes of problems are too often sought from afar, from Brussels, even where the problem is home grown.

The Leave side appealed to nationalism, independence and empire, which they would regain after leaving the EU. But the world has irreversibly changed in this respect. Globalisation and interdependence connect us all together in an unprecedented way and this clock cannot be turned back.  Europe, and Finland with it, is part of the global, competitive economic environment. In competition with giants like China and India, it is clear that Europe should act in a united manner. Europe's chilling history serves as a warning when it comes to invoking nationalist sentiment.

It is vital that we think carefully when talking about the European Union. There is a lot that needs fixing in the EU, but unfounded criticism should be avoided. Of course, EU jargon is not easy to understand. We should learn a lesson, humbly accept criticism and improve our ways. If someone feels unfairly treated, this should be taken seriously.

The EU sometimes gets involved with inessential matters and regulates in too much detail. This has been seen in the haulage sector and in agriculture. The particular characteristics and circumstances of Member States must be taken into account in decision making so that common legislation can be viewed as fair. Member States can also be at fault: national requirements are often added on top of the requirements set out in directives. 

Honourable Speaker,

The EU must be big in major issues and small in minor issues. In my view, this kind of turning point always brings with it an opportunity to improve our own actions. Just as it does now.

As stated in the Government Programme, the EU must be reformed and its functioning improved, but the Government does not consider the amendment of Treaties to be an issue at this time. It is important that we concentrate on the essential, put decisions into effect and reduce bureaucracy. Member States must comply with the common rules. We need less but better regulation, a deepening of the Single Market and the promotion of free trade. 

We must move forward on three levels if our economy is to grow and if the potential for our businesses to succeed in the tough competitive environment is to improve. In Finland, as in other Member States, it is important to find the courage and will to make decisions on reforms and to put these into effect. For Finland, the Competiveness Pact demonstrates that it is possible to decide on structural reforms, even major ones, although this is not always the quickest or easiest path to follow.

We must also look at what the EU has to offer us in the way of tools for promoting growth.  I believe that after peace, stability and security, the EU's biggest achievement is the Single Market – a common European market area where goods, services, people and capital move freely. The Single Market is not a finished article but must be developed further, and the EU must have a common view of the direction to take.

In terms of the free movement of goods, a lot of work has been done already, and we can see this on an everyday basis. Product selections are good, competition keeps prices down and works in the interests of consumers.

Digitalisation is opening up new opportunities for us. Before, when we would sell a paper machine to a customer the other end of Europe, we would first send a fitter and then a service technician after the machine itself. Now we offer the same services in real time online and we provide various high volume support services. This rapid development and the new business models must be visible in the Single Market. Careful thought must be given to what should be regulated and how. All regulations must be suitable for the digital environment, otherwise we will be unable to keep up and will be outdone by our competitors.

The regulatory burden must be reduced in all spheres. We must look to the future and think where the greatest added value lies and must secure this through common rules. This same consistent policy must also be put in place in national projects.

The EU also provides us with a common commercial policy, a tool for acting in global markets where demand is great. Forging agreements with, for instance, the United States and Canada is essential for competitiveness as well as growth and employment. Their significance for an export-led economy such as Finland's is especially marked.

Honourable Speaker,

EU membership is a political choice that connects Finland to the Western community of values. For Finland, it is also a security policy choice. This basic arrangement has not changed in the past two decades. On the contrary, there are challenges impinging on the security of Finland and Europe that need to be met not only through national arrangements but also greater cooperation with our partners.

In its Foreign and Security Policy Report, the Government set out Finland’s key foreign and security policy objectives. According to these, Finland has to make choices in its foreign and security policy that are based on the national interest and which further Finland’s security and wellbeing. Finland will actively promote security policy stability in its nearby regions. Finland cannot and does not wish to isolate itself. These Government policies can also withstand the effects of Brexit.

Finland has systematically sought to strengthen the EU's role as a security community. An example of our active approach was the joint declaration made with the French President, Monsieur Hollande, two weeks ago. We need closer defence cooperation among Member States, above all for developing European defence resources and defence material cooperation.

The EU's security and defence policy has so far been primarily about crisis management in the world's crisis hotspots. Now, attention is increasingly being given to strengthening the feeling of security among Europeans. In the future, there must be greater cooperation in areas such as the development of military resources, the defence industry, defence research and preparedness for hybrid threats.

It is clear that the United Kingdom’s EU referendum result will also have an impact on the EU’s foreign and security policy. Many of the effects will be in both directions. Full achievement of the objectives outlined in Finland’s Foreign and Security Policy Report will require an assessment of the longer term impact and careful consideration of our interests in different situations.

Honourable Speaker,

In the European Council we also discussed how we should move forward. The conclusion was that we do not need any new declarations or programmes as the Commission's present work programme is a good one. It includes creating jobs, promoting growth, better regulation, providing security and more effective external actions. We need unity, improved implementation and clearer communication.

I also challenged the EU leaders to adjust their thoughts from crisis mode to development mode. Brussels must do better, as must Finland. Finland will not, however, be holding a referendum on withdrawal from the EU. It is clear where we belong. Let's not focus on complaining, but on exerting our influence.