"The EU is now expected to assume leadership to solve global problems"

3.2.1 Policy on Europe

Current situation

Support for the European Union among citizens has increased across Europe. The EU has been able to emerge from crises, and it is now expected to assume leadership to solve global problems. The EU is committed to implementing the Paris Agreement, especially to limiting climate warming to 1.5 degrees Celsius, and putting the 2030 Agenda for Sustainable Development into effect.

The EU is facing both internal and external pressures that put its unity and ability to function to the test. The United Kingdom is in the process of leaving the EU. The EU has been challenged by the weak commitment of certain Member States to the Union’s basic values and to the rule of law in particular. Uncertainty has increased due to insecurity and economic and social inequality, and this situation has been exploited by populist and nationalist movements. In its external relations, the EU is challenged by growing tensions between big powers, regional conflicts in its neighbouring areas and difficulties in presenting itself as a strong advocate for human rights.

To safeguard the favourable economic growth of recent years, we need EU reforms that can boost competitiveness, consistency in trade policy, single market development,
a stronger social pillar, and the ability to undertake investments that promote sustainable growth. To prepare for future crises, the EU has created mechanisms for fiscal consolidation and systems for improved crisis preparedness. Moreover, there is mounting pressure to reduce harmful tax competition and prevent tax evasion.

Enlargement and neighbourhood policy have a significant role in promoting peace, wellbeing, security and stability within Europe.

Objective 1

A strong, united and well-functioning EU with a capacity to respond to global challenges

The global environment in which the European Union operates has become increasingly complex and unpredictable. In its external relations, the EU has failed to act in a way that is sufficiently unified and swift.

Membership of the EU entails commitment to the EU's basic values.

Measures

Finland is strongly committed to EU membership and to further develop the EU, as well as to the pursuit of policies that accord with the EU's basic values. A Government report on EU policy will be submitted to Parliament at the end of Finland's Presidency of the Council of the European Union.

In a more closely united EU, decision-making will primarily be based on the Community method. Finland must be at the forefront of the EU to be able to secure its own interests. It must assume an active role in shaping the EU’s future and help to build a stronger Europe. In decision-making at EU level, attention will be drawn to Finland's special circumstances. Our European cooperation will focus on a number of core tasks that bring European added value, including climate policy, trade policy, the single market, social rights, and internal and external security.

The EU follows the principles of subsidiarity and proportionality. Decisions are made as openly and as democratically as feasible and as closely as possible to citizens. Finland is willing to examine, on a case-by-case basis, the feasibility of expanding the use of qualified majority decision-making in the Council. The EU pays attention to gender equality and the diversity of the Union across its activities, especially when filling management positions.

The EU defends the international rules-based multilateral system. The EU promotes peace, stability and a responsible market economy.

The rule of law is to be reinforced. The role of the European Court of Justice and national courts is being strengthened to reinforce the rule of law. An effective mechanism to address breaches of the rule of law is also under preparation in the EU. Civil society will be given support in an effort to consolidate rule of law. Access to EU funding can be made conditional on compliance with rule of law.

The future relationship between the United Kingdom and the EU will be built on the premise that cooperation in different policy areas should continue to be as close as possible. The unity of the EU, the interests of all parties and the rules of fair play will be defended.

A growth strategy will be drawn up for the EU with the aim of building it into the world's most competitive and socially inclusive low-carbon economy. In this transformation, social justice should be highlighted as a cross-cutting feature in all climate action. At the same time, it is important to realise that an ambitious climate policy, consisting of cleantech, circular economy and resource wisdom, will generate sustainable growth and create jobs.

One of the core responsibilities of the EU is to create wellbeing for its citizens. The EU will deliver on this by creating wellbeing and prosperity that is socially, economically and ecologically sustainable.

The EU should be equipped with an appropriate budget to secure its current activities and enable the establishment of new priorities in a flexible way. Finland’s contribution will be maintained at reasonable levels and the money spent is expected to yield returns both nationally and as European added value. An adequate level of funding for agriculture and rural development will be secured. A further goal is to secure the level of regional development funding needed and safeguard the special status of the sparsely populated Eastern and Northern Finland. Investing in research, development and innovation (RDI) is important for Finland.

The goals of the Paris Agreement will be furthered through the multiannual financial framework (MFF) and the programmes funded under it. EU funding will facilitate a socially just transition towards carbon neutrality. Finland supports the idea of raising the importance of climate-related action to a level of 25 per cent of the EU budget in the next MFF period. Gender equality will be promoted within the EU budget, and the mechanisms for monitoring funding will be made more effective.

Finland is ready to take a look at how the EU’s own resources system can be further developed. When developing the system, the best interests of countries like Finland will be taken into account and efforts will be taken to avoid disproportionate cost impacts for these countries. Decisions concerning revenue-raising will be made by the Member States.

EU asylum and migration policies are grounded in common rules, jointly agreed  burden sharing and principles of action at EU level, such as a revised Dublin system and cooperation with the UNHCR. The human rights-based asylum and migration policies are rooted in international treaties and conventions, cooperation between public authorities, effective control of the EU’s external borders and appropriate asylum processes that are swift and of high quality in terms of legal protection. The EU is determined to eradicate migrant smuggling and other criminality. A system of legal entry routes is being developed.

Finland will promote the EU's Global Strategy, which will strengthen the Union's role as a global leader. Coordination between the EU and its Member States will be enhanced in regard to the EU’s external influence. Decision-making by qualified majority can be increased in limited areas, which is one way of enabling rapid action in the external relations of the Union.

Within the EU, Finland will promote a policy that respects the need to protect the Arctic region’s stability and its particularly sensitive nature and secure economic opportunities and employment in that region. Mitigation of climate change must be at the heart of our Arctic policy. Northern livelihoods and the rights of indigenous peoples living in the north must be ensured, and all major projects regarding the Arctic region will be subject to detailed impact assessments. We will advance the connection of Finland's transport network to the core network corridors of the Trans-European Transport Network (TEN-T). The objective of the Trans-European Transport Network is to establish a safe and sustainable transport system that boosts economic vitality.

The EU strategy for the Baltic Sea Region (EUSBSR) will be renewed, and adequate resources will be provided for its implementation.

Partnerships and cooperation between the EU and African countries will be intensified. The ties between the EU and Africa will be grounded in equality, with the goal of bringing about ecologically, economically and socially sustainable changes by focusing on areas such as education and training, sustainable economic growth and dignified work.

The EU’s enlargement is based on jointly agreed criteria. Countries aspiring to become members of the EU will be supported in their efforts to fulfil the criteria.

Objective 2

An ecologically sustainable EU as a global climate leader

Measures

The EU’s climate policy will be updated to make it more ambitious, through agreeing on the 2050 carbon neutrality target and raising the 2030 emissions reduction target to at least 55 per cent.

Further measures to tighten the EU’s emissions reduction targets will be focused on the emissions trading sector to enable energy production and industry to progress towards a low-carbon goal in all Member States. Finland will work actively to develop the EU emissions trading scheme in such a way that the price of emission allowances rises and guides operators towards emissions reduction quickly and efficiently. At the same time, the competitiveness of European industry must remain a top priority.

Emission allowances on the market will be reduced on an annual basis from the current 2.2 per cent decrease to a significantly larger level. Unused emission allowances will be cancelled and emissions trading expanded to cover property-specific heating and cooling costs, for instance. EU emissions trading will be developed in the longer term by adapting the quantity of emission allowances to the EU’s share of the remaining 1.5-degree carbon budget.

Finland is in favour of expanding emissions trading to all aviation emissions with a climate impact. Alternatively, a Europe-wide introduction of a tax on aviation fuel or an aviation fee could be examined.

To improve emissions trading, agreement will be sought on a common EU or Nordic carbon price floor for emission allowances. This will help to ensure that the price does not sink to a level at which its impact becomes significantly weaker.

With a view to enhancing climate impact and economic efficiency, the Government is in favour of a harmonisation of the emissions trading schemes currently in operation in the world. Finland and the EU should strive for an effective implementation of the Paris Agreement and promote the pricing of carbon dioxide emissions and carbon footprint accounting globally. Climate funding will be increased in the field of development policy for reducing greenhouse gas emissions, adapting to climate change and strengthening carbon sinks.

The feasibility of building additional mechanisms, such as border carbon adjustments (BCA), for the trade between the EU and third countries will be examined to ensure that the price for carbon dioxide emissions will apply equally to products manufactured both within and outside the EU.

Higher EU funding allocations for R&D will be supported to further the development of climate solutions.

The EU is strongly committed to implementing the UN Convention on Biological Diversity. The EU is combating biodiversity loss, and is also giving careful attention to the condition of waters. Initiatives such as the European Commission's Action Plan against Antimicrobial Resistance (AMR) will be worked on to respond to wide-ranging challenges.

The need to further and attain the objectives of the Paris Agreement is also apparent in the MFF and the programmes funded under it. EU funding will facilitate a socially just transition towards carbon neutrality. Finland supports the idea of raising the importance of climate-related action to a level of 25 per cent of the EU budget in the next MFF period.

Objective 3

A socially sustainable and egalitarian EU

Measures

Reducing inequalities is essential in all EU cooperation. The social dimension is a key area for the EU. An up-to-date minimum regulation of social rights and working life, together with more effective implementation, is vital for strengthening the social dimension of the EU. Regional equality in Europe will be respected, and so too will the particular characteristics of Finland's social and employment policies, including a labour market system based on collective agreements.

The EU budget will promote gender equality.

The EU will step up its work to counter all violence against women. The Istanbul Convention, or the Council of Europe Convention on preventing and combating violence against women and domestic violence, will be fully implemented in all the activities of the European Union. The Finnish Government will enhance its equality work at EU level. A gender equality strategy will be drawn up within the EU.

Decision-making within the EU will underscore the importance of measures against age discrimination and promote greater inclusiveness among older people and the notion of dignified old age. Accessibility in the living environment, in services and in digitalisation, as well as lifelong learning and age-friendly work will be promoted within the EU.

The EU Youth Strategy will be taken into account in EU decision-making. Young people must genuinely be able to participate in the discussion on matters concerning them. The EU action for youth will be advanced in cooperation with the Council of Europe, which reaches out to all young people across Europe. The youth guarantee will be promoted in all the Member States, and it will also contribute to preventing youth unemployment.

Objective 4

An economically sustainable EU as the world's most competitive economic area

Measures

The EU pays close attention to both its internal and external competitiveness. A well- functioning internal market benefits the EU as a whole and serves the interests of an export-driven country like Finland in particular. European industrial and competition policy will be taken forward in a way that secures equal opportunities for Finnish companies in both the internal and external market of the EU. It is essential to ensure a predictable business environment. The potential for growth in the single market will be supported by facilitating the free movement of goods and especially of services and by creating better opportunities for SMEs to operate in the single market.

Regulation at EU level should be appropriate and of a high standard. When drafting new legislation, existing regulatory measures should be reviewed critically and simplified where necessary. Unnecessary administrative burden will be avoided.

Finland will remain committed to its membership of the euro area and to the Stability and Growth Pact (SGP). Finland will participate actively and with an open mind in the development of the EMU. It underlines, however, that each Member State must bear primary responsibility for its own economy. Coordination of the economic policies of euro area countries will be improved and the functioning of the European Semester will be enhanced. The European Semester for economic policy coordination is the main tool for evening out disparities between Member States and for promoting social cohesion and maintaining stability in the euro area.

Finland considers it important that the EU countries pursue a responsible economic and financial policy that respects the Stability and Growth Pact. The regulatory framework must enable the Member States to pursue a judicious counter-cyclical economic policy.

Finland will work actively towards the completion of the banking union, with due regard to the risk levels of banks.

The EU fosters a rules-based multilateral trade policy. Rules-based free trade is in the interests of an export-driven country like Finland. The binding nature of the sustainable development goals (SDGs) contained in the trade agreements signed by the EU will be reinforced and their implementation will be monitored. Trade and investment agreements must not undermine the right of Member States to enact, on a non-discriminatory basis, legislation on e.g. health protection, consumer protection, social protection, labour protection or environmental protection.

Finland will promote a digitalisation policy for the EU that will regulate transnational platform services on a sustainable basis, consolidate the digital single market, bolster competitiveness within the Union, improve the data protection of citizens and businesses and ensure them a level digital playing field. Finland will contribute to the drafting of an ethically, economically and socially sustainable regulatory framework for data and AI policy. The opportunity of establishing a European regulatory agency with a mandate to address decision-making based on AI and algorithms will be investigated.

The EU should set itself the strategic goal that European education and research will rank number one in the world. The EU invests in research, development and innovations to maintain its global competitiveness. Finland is in favour of a considerable increase in the level of funding for the Horizon Europe and Erasmus+ programmes to enhance and consolidate them. SMEs will be afforded better opportunities for involvement in RDI programmes. The possibility of establishing a European networking super-university will be investigated.

Close cooperation at EU level will help to eradicate aggressive tax planning, fight tax evasion and reduce harmful tax competition. Finland actively promotes the updating of the EU list of tax havens. The EU will introduce public country-by-country reporting.

Clearly defined joint measures against aggressive tax planning and tax evasion are in everyone's interests and will also improve the operating environment for businesses. The measures under this chapter will be discussed in the forthcoming Government report on EU policy, if not before.

The possibility to legislate at European level on corporate social responsibility based on due diligence, which takes into account companies of different sizes and international value chains, will be investigated.

Objective 5

Safe and secure EU

Measures

Finland will contribute actively to the development of defence cooperation within the EU. Permanent structured cooperation (PESCO) will be a key project for the defence dimension of the EU. Participation in individual projects under PESCO will be based on case-by-case consideration. Account will be taken of the specific development needs of Finland’s own defence capability, among other things. PESCO will also facilitate regional cooperation. Cooperation within the framework of the European Defence Fund (EDF) will serve to improve national capabilities and support development of the national defence industry and defence technologies.

There will be an emphasis on the strengthening of EU capabilities for countering hybrid threats at EU level and in Member States. To increase crisis resilience, focus will also be placed on cooperation between the EU and the European Centre of Excellence for Countering Hybrid Threats (Hybrid CoE).

When improving the EU's external border control, attention should be given to its effectiveness, humanitarian aspects and particular national characteristics. The efficiency and effectiveness of Frontex will be promoted. Freedom of movement within the Schengen area will be secured.