EUROPEAN INTEGRATION AND DISINTEGRATION: CHALLENGES AND OPPORTUNITIES FROM A FINNISH PERSPECTIVE
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 Hong Kong General Chamber of Commerce and The Finnish Business Council for co-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.
The overall division of Europe into two opposing ideological, political and military power blocks is gone. All nations in Europe now 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 stalinist 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 severe instability. Therefore we need to jointly assist Eastern Europe and the countries of the 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.
I do not see European integration leading to a Fortress Europe. Erectinq fences and putting obstacles to freer exchanges of ideas and people is not a European tenet. Europeans do not want to build restrictive trading blocks but instead promote trade, prosperity and stability in the whole world.
To solve the huge problems of mankind and to promote sustainable development, we will need determined international cooperation and integration at the universal level.
Ladies and Gentlemen,
With so many high level Hong Kong businessmen present here today, I would like to refer to the possibilities Finland can offer to the Hong Kong businessworld.
Finland is a relatively small country, but we have well-advanced technology in many fields. We would like to offer that to Hong Kong and its neighbouring regions. I believe that the well-known operative strength of the Finnish export industry in such sectors as forestry and paper technology, energy and telecommunications, can also serve the development needs of this region. In addition, I would particularly like to mention environment 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, Bangkok, Singapore and Tokyo. From Helsinki, in turn, the flight connections to all major European cities are frequent. 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 or 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 Fastern 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 Hong Kong businessmen to come to Finland to look for opportunities to create further cooperation together with the Finnish companies.
Ladies and Gentlemen,
a visitor to Hong Kong can only be deeply impressed by her energy and vitality. As Governor Patten noted in his address to the Legislative Council two weeks ago, the economic success has made Hong Kong one of the wonders of the world. It is not for me to repeat to this prominent audience the facts of Hong Kong's impressive economic performance, which has made it the 10th largest international trading entity. It is important, however, to recognize the formula behind Hong Kong's prosperity, which serves as an example for other countries worldwide to follow: hard workinq people, market economy with minimum Government interference in business but maximum support for entrepreneurship and, last but not least, free trade. They form the bedrock for Hong Kong's prosperity and stability also from 1997 onwards as a special Administrative Region of China. By just looking at the various large construction and other infrastructure projects underway in Hong Kong today, one can clearly sense the confidence and self-reliance with which people in Hong Kong are facing that historic transition.
As a reflection of Finland's growinq interest in Hong Kong's enormous potential, we upgraded our mission here a year ago to a consulate-General. This was our vote of confidence on Hong Kong's continuing role as Asia's business and finance center.
Finally, Mr. Chairman, Ladies and Gentlemen, I wish Hong Kong a prosperous and stable future. I also hope that the cooperation between Hong Kong and Finland can be further strengthened in the years to come.
Thank you very much for your attention.