Suomen ulkopolitiikan asiakirja-arkisto ja kronologia
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Speech by H.E. Mr. Paavo Väyrynen, Minister for Foreign Affairs of Finland in a luncheon hosted by the Federation of Korean Industries on 26th of October 1992 European Economic perspectives - A Finnish view

Mr. President, (Ladies and) Gentlemen,

Thank you very much for your kind words of introduction. I also like to use this opportunity to express my gratitude to the Federation of Korean Industries for hosting this luncheon and giving me a chance to address this prominent audience on the dramatic developments in Europe during the last few years from a Finnish perspective.

The profound change in Europe can be seen in two dimensions: integration in the West and disintegration in the East.

This overall division of Europe into two opposing ideological, political and military power blocks is gone. All nations in Europe share the same fundamental values of democracy, human rights, economic freedom and the rule of law.

Of course we all welcome this development. The danger of a large scale war between European powers is remote. Tension is diminished. Prospects for increased cooperation are good.

At the same time, Europe and in particular the Balkans and the newly independent nations of the former Soviet Union experience severe internal conflicts, even war, which is a horrifying reminder of Europe's tragic past.

Let us dwell briefly on the underlying economic and political phenomena.

In the western part of the European continent, the age-old rivalry between France and Germany was solved by engaging both nations into an ever closer cooperation between them and together with other European nations. Liberalization of trade, followed by wide-ranging cooperation in economy, has led to increased prosperity and growth.

The internal market programme, meaning free circulation of goods, services, capital and people is aimed at making of Europe, with
the recent agreement on the European Economic Area between the EC and the EFTA countries, a competitive market area of 380
million people.

The Maastricht Treaty aims at further deepening of the integration process. It creates a monetary and political union. Such goals seem correct and necessary. But difficulties with the Treaty's ratification demonstrate that electorates view the process towards the envisaged European union with anxiety. Increased democracy, more transparency of the community's activities as well as bringing the decision-making closer to the people are now seen as vital in order to make the integration idea continuously acceptable to the people.

Last March Finland applied for membership in the European Community. After careful analysis of the pros and cons of the accession, we concluded that Finland's national interests would be best served as a member of the EC.

Finland has already participated for a long time in close economic interaction in Europe as a member of the European Free Trade Association (EFTA). Three other EFTA countries, Austria, Sweden and Switzerland, have also applied for EC membership. Norway
may decide to do likewise. Many other countries are interested in EC membership.

At this moment it is difficult to forecast exactly when the formal negotiations concerning accession of the EFTA countries can begin. The community wants to decide first on its internal resources and get the Maastricht Treaty ratified. We expect, however, that informal talks will start shortly. Finland has naturally its own particular interests to safeguard in the forthcoming negotiations. Those relate, inter alia, to agriculture and regional policy, due to our special climatic and other conditions.

While Western Europe integrates, the Eastern parts of the continent are disintegrating. For the most part this reflects a welcome revival of national consciousness which for so many years was forcefully suppressed under Stalist rule. But in some instances, nationalism has led to ethnic hatred and intolerance, even to war as the tragic example of Yugoslavia demonstrates.

Political disintegration has been followed in many countries by an economic one. Command economy is gone and efforts to build a functioning market economy seem difficult and will require time. It is to be feared that if there is no tangible progress towards better economic future, the electorates become disillusioned. Europe would again be divided into two parts, separated by an economic gap, with all its potential consequences, even severeinstability. Therefore we need to jointly assist Eastern Europe and the countries of
former Soviet Union in their transition to market economy and be prepared to open our markets to increasing imports from them as
well as to encourage their full participation in the open multilateral trading system. Their gradual integration process at the pan-European level has already started. However, much remains to be done.

The economic development in Russia as well as in the other independent states will require vast investments. One promising method would be the use of raw material or resource concessions. Forest, oil and mining industries, for example, are such lines of industries that from our point of view could be handled through concessions. Scarcity of freely convertible currencies in Russia and the country's unstable liquidity position in general create problems for the prospects of trade. At the same time our room for manoeuvre in financing and guarantees is limited. During the transition period, various kinds of barter and compensation operations on the company level should be carried out.

The conversion of armed industries to civilian production is a major issue particularly in the CIS countries. Major concentration of arms industries is located very close to Finland, in the St. Petersburg area. We are willing to assist in this process and to cooperate with interested countries. I am happy to have learned that such an interest exists on the side of Korean enterprises.

Ladies and Gentlemen,

I do not see European integration leading to a Fortress Europe. Erecting fences and putting obstacles to freer exchanges of ideas and people is not a European tenet. The European single market and EEA will naturally stimulate trade between partners, as well as their economic growth. No new barriers will be raised and external customs tariffs will remain the same vis-a-vis third countries. The net effect of European integration will be trade-creative.

A similar development towards free trade and intensified economic cooperation is called for globally. To solve the huge problems of mankind and to promote sustainable development, we will need determined multilateral efforts, integration at the global level. Various international fora, the UN system and GATT particularly, will be needed to promote this fundamental cause.

Ladies and Gentlemen,

With so many high level Korean businessmen present here today, I would like to refer to the possibilities Finland can offer to the
Korean business world. Finland is relatively small country, but we have well-advanced technology in many fields. We would like to offer that to Korea. I believe that well-known operative strength of the Finnish export industry in such sectors as forestry and paper
technology, energy and telecommunications, can also serve the needs of this country. In addition, I would particularly like to mention environmental technology, which is developing to one of our new internationally strong areas.

We are not only interested in selling but also buying. Besides our own markets we can offer, due to our geographical position, a natural gateway between East and West. Flight connections from Asia to Europe are fastest through Helsinki. Finnair has two weekly direct flights between Helsinki and Beijing, as well as Helsinki and Tokyo. From Helsinki, in turn, the flight connections to all major European cities are frequent. Our national airline Finnair is very much interested in opening a flight connection to Seoul. Preliminary talks on such a project are being started. I am convinced that the opening of an air route between Helsinki and Seoul would serve the
economic and business interests of both countries.

In addition to flight connections, the Transsiberian Railway route has been used for more than two decades for container traffic between the Far East and Europe. Moreover, completely new opportunities for transportation are opening up in the northernmost part of the world: possibilities to use the Northern Sea Route for commercial traffic are currently being studied. This route would drastically shorten the distance between European and Asian Pacific ports. It would also facilitate the utilization of natural resources in the Arctic region.

Good traffic connections together with the market of 380 million people and 19 countries created by the European Economic Area as well as the future membership of Finland in the EC improve our position as a gateway to Western Europe. However, Finland can also serve as a gateway to Eastern Europe, especially to Russia and the Baltic states, where Finland has a lot of expertise and know-how, which could be of use of third countries as well. I would like to welcome Korean businessmen to come to Finland to look for opportunities to create further cooperation together with the Finnish companies.

As Korea is undergoing a thorough structural adjustment in her industry to make it more technology intensive, I see a wide scope for
cooperation between our two countries. Already more than half of our exports to Korea are machinery and equipment with a high technology content. As Korean enterprises are responding to the challenges and opportunities of the European integration they might also find Finnish enterprises with advanced technology attractive partners for cooperation or investment.

Mr. President,

Finally I would like to encourage Korean companies to further intensify their efforts to promote bilateral trade between Finland and Korea. We made excellent progress in the last few years, but even more can be done in both directions. Our economies are luckily very complementary. Let us make the best use of the opportunities created by this fact and by our good and from day to day closer relations.

Thank you very much for your attention.

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