Prime Minister Matti Vanhanen's statement on the results of the IGC

Mr Speaker,

The Intergovernmental Conference that aimed at the reform of the Treaties of the European Union was concluded last week in Lisbon in conjunction with the Informal meeting of the EU Heads of State or Government. The EU Heads of State or Government reached a political agreement on the contents of the EU Reform Treaty that amends the current Treaties of the European Union. We have now taken an important step in the history of the EU: the Reform ends the institutional standstill and turns a new leaf for the future of the Union.

As after the previous Intergovernmental Conference, the Government presents a Prime Minister’s statement on the issue The Reform Treaty is to be signed in Lisbon on 13 December 2007.

Next, the Treaty is to be ratified by all Member States. The Finnish Government will present the ratification of the Treaty to Parliament during the following spring term. The Government expects Finland to ratify the Treaty. The aim is that all EU Member States complete the ratification process and implement the reforms at the beginning of 2009.

The new Treaty will almost fully implement the reforms included in the Constitutional Treaty that Finland considered important. Some amendments agreed on at the June European Council have been made: the name of the Treaty was changed, symbols defined in the Constitutional Treaty like the anthem and flag of the Union omitted and current names of provisions maintained. In addition, it was decided to implement the reforms on the basis of the current Treaty.

The most significant difference between the Constitutional Treaty and the Reform Treaty is that the objectives set for the reform process to streamline the structure of the Treaty had to be dropped for the most part. The key point, however, is that central reform objectives for Finland, such as improving the effectiveness of the Union’s decision making and its international capabilities will be achieved regardless of the structure of the Treaty.

Main reforms in relation to the current Treaties

With the new Treaty, the Union will have single legal personality. The new Union will replace the current European Community and the European Union by simplifying the Union’s - now complex - basic structure.

The division of competences between the Union and its Member States will be clarified. The underlying principle in the division of competences is that the EU will act within the limits of the competences conferred upon it by the Member States and that competences not conferred upon the Union will remain with the Member States. This principle of conferred power will be specified in the Reform Treaty. There were no major substantive changes to the delimitation of competences in the treaty reform.

The Union’s legislative procedures will be simplified. This means that the role of the European Parliament as legislator will be strengthened. As a rule, the Council is to adopt its decisions by qualified majority voting. The reform will considerably clarify the Union's decision making.

Judicial cooperation in criminal matters and police cooperation, which currently fall under the third pillar, in other words under intergovernmental cooperation, will be transferred within the scope of the Union’s overall legal and judicial framework. They will become subject to the Union's general decision making procedures and provisions. Institutions may also exercise their competence in these sectors. Certain opt-out arrangements will continue to apply for the United Kingdom and Ireland.

In comparison with the Constitutional Treaty, the provisions concerning the ‘emergency break’ arrangement and closer cooperation in Justice and Home Affairs were strengthened. Finland considered it important that, in principle, all Constitutional Treaty’s reforms concerning the EU’s fundamental rights dimension were maintained.

The turning of the Union’s Charter of Fundamental Rights into a legally binding document is the most important reform with regard to citizens’ legal protection. An opt-out arrangement was agreed for the United Kingdom and Poland. According to this opt-out courts of law cannot assess compliance with the provisions of the Charter of Fundamental Rights in these Member States. The Reform Treaty will also fulfil another Finland’s long-term objective – the EU’s accession to the European Convention on Human Rights.

With the new Treaty, the meeting of EU Heads of State or Government, the European Council, which makes decisions on the Union's broad policy guidelines and meets four times a year, will be transformed into an official Union institution. The European Council will have a permanent President elected for a term of two and a half years.

The most important reform with regard to the Council is the move to the system of dual majority which will contribute to the clarity and effectiveness of decision making. When the Council makes decisions in areas subject to qualified majority decision making, a qualified majority will be defined as at least 55% of the Member States comprising at least 65% of the population of the Union. The relative weight of the Member States that are comparable to Finland in size will remain unchanged.

It was decided at the June European Council to postpone the introduction of new voting rules until 2014 after which date a member of the Council has the right to request that the current voting rules be applied till spring 2017.

The EU Heads of State or Government agreed also to facilitate the ‘Ioannina procedure’ as of 2017 and to add a protocol which, in practice, requires consensus in any change to the Ioannina mechanism. The mechanism calls for a wider consensus in the Council if 55% of the population necessary for the formation of a blocking minority, i.e. some 20% of the entire EU population, opposes a qualified majority decision.

The powers of the European Parliament will increase, especially as a legislator, but also in the exercise of budgetary power. The total number of seats in the European Parliament will be 750 plus the President. Each Member State will have at least six seats but no more than 96 seats.

With effect from 2014, the composition of the European Commission will be reduced in size and consist of a number of members corresponding to two-thirds of the number of Member States. In future, members of the Commission will be selected according to a system of equal rotation among Member States regardless of their size.

One of the aims of the Constitutional Treaty was to strengthen the EU’s international role. The Treaty reinforces the consistency of the Union’s external relations in many ways. In contrast with the Constitutional Treaty, the Common Foreign and Security Policy (CFSP) will be kept separate from other EU policies in the Reform Treaty. In June, the EU Heads of State or Government decided to emphasise the special characteristics of the CFSP by issuing declarations. The contents of the CFSP reforms implied in the Constitutional Treaty will be maintained. These reforms that Finland considered important will ensure a stronger foreign policy role for the Union.

The EU will have a High Representative of the Union for Foreign Affairs and Security Policy who will bear responsibility for the Union’s external relations and representation in international fora. The High Representative will serve at the Commission and at the Council as they both have a role in the conduct of the Union’s external relations. The aim of the reform is, in line with Finland’s aspirations, to improve consistency and enhance the Union’s external actions.

As regards national Parliaments, the most important reform relates to their duty to ensure compliance with the subsidiarity principle. The procedure was strengthened somewhat at the June European Council.

The Reform Treaty emphasises the importance of transparent decision making and good governance, in line with Finland’s long-term objectives, by extending the obligation of Union institutions and agencies to provide information on their activities and provide access to information. The transparency of legislative work will be increased at the Council.

The Reform Treaty strengthens in a number of ways the Union’s principles on democracy, transparency and good governance. The Treaty simplifies and clarifies the Union’s complex decision-making procedures and the judicial system. The institutions’ roles, tasks and compositions will be changed to meet the challenges posed by the enlarged Union.

If the ratification of the Treaty proceeds according to the plans, it will be ready for full implementation in 2017. The Union can then put the treaty process aside and concentrate all its strength on its primary functions. The EU can now focus its attention on concrete measures that improve our competitiveness, employment, security of citizens and on meeting the challenges set by ageing population and climate change.

Finnish approach

Finland has been one of the supporters of treaty reforms. For six years, we have systematically pursued amendments to Union rules to intensify decision making and to ensure that the EU can more efficiently carry out its functions also in the enlarged Union.

During the past year it has been equally important for Finland that the re-opening of the institutional package agreed in June 2004 is avoided. As a result, the Union’s operations will be intensified according to our aims.

During Finland’s Presidency, we also managed to pave the way for the reforms as the negotiations then came to a halt. At the December 2006 European Council, I presented my assessment of all the discussions held with the Member States and separately also to Federal Chancellor Merkel. Thinking back, it seems that the Reform Treaty process is progressing in close accordance with our general assessment presented then. After our preparatory work Germany continued to pursue the Treaty process and was able to achieve a political compromise on the most difficult issues. After that Portugal subtly completed the technical negotiations of the Treaty and reconciled solutions to the last-minute questions.

The Treaty was negotiated between 27 Member States and last week consensus was reached on every single detail. Reaching this agreement was vital to the European Union and to Finland as one of its members.

With this background in mind, I have not supported the idea that Finland should have brought up in connection with this long-term objective of ours the fate of the Finnish 141 farm subsidy which is to be deliberated by the Commission.

Had we linked these issues, we would have harmed the cause and torpedoed the Treaty that we have ourselves considered necessary. Last week, the Government discussed this with the Parliamentary Foreign Affairs Committee and the Grand Committee and presumably nothing remained unclear.

Secondly, such linking of unrelated issues, some of which were negotiated between Member States and others that belong to the competence of the Commission, will not generate hoped results. Everyone understands that if that kind of procedure was approved within the Union, the situation would become unbearable. Progress of any matter would be impossible. Because the negotiations concerning Article 141 are held between Finland and the Commission, it was not sure at all that presenting the matter in the IGC would have advanced it. We can be tough in the Union as necessary without upsetting strategies and obscuring key issues.

Thirdly, the 141 negotiations proceed as normal. The technical part of the negotiations has been completed and a model integrating the 141 subsidy and the general lines of agricultural policy has been found. The Union is more and more changing over to the single farm payment scheme.

The negotiations have now entered a political phase which focuses, in particular, on the acceptability and duration of the subsidy and the pace of lowering the amount of support. We know that the Commission’s general position now, as previously too, is that the subsidy is considered a temporary one. Finland is of the opinion that support is needed until the EU’s common agricultural policy takes sufficiently into account our different environmental conditions.

The Commissioner for Agriculture and Rural Development represents the Commission in the actual negotiations. I have also discussed the matter with the President of the European Commission. On the basis of that discussion, preparation of a solution is in the similar state as it was last time in the corresponding phase. I will visit Brussels again if necessary. I personally believe that our arguments are sufficient and that the Commission should be able to recognise Finland’s special needs in a manner conforming to the Union’s general principles.

The 141 negotiations are a priority to which the Government of Finland is expressly committed. The Commission is well aware of the immense political importance of the issue. At this stage of the process, we have no reason to doubt that this time we can again achieve a negotiation result with which we can agree.

All in all, Finland has a reputation of a Member State that finds its own advantages in the common interests of the EU but also sees to it that our own special needs are taken into account in decisions. This has been a successful approach, for example in the broad-based negotiations on the EU's financial perspectives in 2005. Finland and a few other Member States then held off decision making in order to achieve a good result.

A clear and constructive strategy will generate best possible long-term results in relation to our overall interests. Past years as one of the Union’s Member States have proved it. Nevertheless, the reputation of a coherent and reliable partner can easily be lost and, as a result, possibilities to exert influence crucially diminished.

I would sum up the strategy of a Member State like Finland to exert influence in the EU in the long run in three words: activeness, consistency and defending own interests.

If this strategy is unclear, it is good to discuss it here in Parliament.