Your Excellency, Mr. Ambassador, let me first of all welcome you on behalf of the Russian European Centre for Economic Policy (RECEP). May I ask you a few questions bearing on development of bilateral relations between Russia and Finland in the context of problems regarding the expanding European Union and the common European economic area that is currently taking shape between the Russian Federation and the EC?
1. Finland and the European Union.What benefits did Finland reap by joining the European Union? As the time has lapsed, what difficulties do you see today in integrating Finish economy into the EU economic infrastructure?
Joining the EU was a natural step in our integration to the European and global economy. This integration proceeded as follows: membership in the UN in 1955, the Council of the Nordic States in 1956, associate membership in EFTA (European Free Trade Association) in 1961 (full membership in 1986), a free trade agreement with the EEC (later EU) in 1973 and finally membership in the EU in 1995. Finland has always been depending on its exports and the European countries have been important partners of Finnish foreign trade. Joining meant joining the internal EU-market where a number of our biggest trading partners were gathered. One could also say that we finally joined the European community or family, whose values we always shared.
We have participated in the very close co-operation between the Nordic countries for a long time. It was therefore natural also from this point of view to join the EU as Denmark already was a member and Sweden and Norway were about to join. Norway then decided otherwise.
Membership in the EU posed some difficulties for us but the positive effects have outweighed these. It was clear from the start that Finland would end up being a net payer in the Union but it was not considered a major dilemma. Joining the CAP, Common Agricultural Policy of the EU, meant a difficult adaptation to the Finnish agriculture and farmers. It still causes concern, as we do have much more difficult conditions for agriculture than most other members of the Union . On the positive side, the citizens' purchasing power rose by appr. 9 %. Some products or services became more expensive, but the majority became cheaper as trade barriers disappeared.
Finland is integrated in the European economy including the euro zone. The euro has not made Finland immune to fluctuations in the international economy but as a part of the euro zone we are enjoying a higher degree of stability. This includes lower rate of inflation as well as lower rate of interest. The difficulties we may still have stem from the fact that we are situated geographically at the northern edge of Europe far from the centre. This results in higher cost of logistics. The membership cannot be said to have played any significant role in our efforts to fight unemployment even if some people expected that membership would have a beneficial influence. All in all the Finnish economy has been praised to be one of the best in the Union .
2. Finland and Russia. Finland has long been known to have close economic ties with our country already back in the days of the former Soviet Union and COMECON. In what way has, in your opinion, Finland ’s joining the EU influenced the Russian-Finish bilateral relations? Are there areas of cooperation to have benefited (or, maybe, lost) as a result?
The fact, that Finland became a member in the Union , has added a new dimension to the Finnish-Russian relations. There are of course a lot of issues that for the EU members still lie in the competence of the member states themselves, but the scope of the competence of the Union is growing - i.e. matters that are decided upon on the Union level rather than the national level. I would say that contacts between Finland and Russia after our membership have even grown in quantity as we look together at the possibilities offered to us by the development of Russia-EU cooperation.
Finland had a good neighbourly relationship with the Soviet Union , and has after the dissolution of the Soviet state developed a problem-free, good relationship with the Russian Federation . Our traditions and geographical situation is advantageous to both of our countries.
The economic ties and trade between our countries has fluctuated strongly since 1991. Economic relations and trade have been growing strongly during the last five years as a result of Russia 's impressive economic performance. Last year the trade exchange between our countries reached a new level - ˆ 10 billion. Russia is in the third position (measured in value) of our trading partners, and could with this rate of growth soon be our most important trading partner. Finland is not that insignificant for Russia either. Amongst the EU members we are the fourth biggest trading partner of Russia .
When Finland joined the EU, there were concerns in Russia that especially the Russian exports to Finland would suffer. These concerns were proven to be groundless, our trade continued to grow strongly with the exception of a slowdown after Russia 's default in 1998. I am convinced Russia will experience the same phenomenon in trade with the new members of the EU.
As a member of the Union , Finland , of course, is very actively developing the Union 's constructive policy towards Russia . We have initiated the Northern Dimension, we were the first member to implement the Union 's Common Strategy on Russia , and we have strongly supported Russian membership in the WTO. We are convinced that Russia 's integration in the global economy is beneficial to Russia itself and to her partners. And we have had a significant role in the technical co-operation between the Union and Russia . It is difficult to single out an area of co-operation that would have suffered from our EU-membership.
3. Concerning cooperation of frontier regions. As is known, the EU countries are striving to develop regional cooperation, including with the neighbouring countries. What problems, if any, currently exist in the Finland-Russia cooperation at a regional level? How do you assess the prospects of promoting this type of economic cooperation?
On bilateral level we have since 1992 a governmental agreement on Co-operation in the Neighbouring areas that regulates the co-operation between Finland and the regions of Murmansk , Karelia , Leningrad and St. Petersburg . During the years, there have been hundreds of projects in basically all imaginable sectors from environmental protection and nuclear safety to health, social welfare and agriculture, just to mention a few. We can say that the big majority of these projects have had concrete results. For 2005 the financing frame of this co-operation on the Finnish side is ˆ 31.2 million.
The EU would like to substantially upgrade cross-border co-operation, both qualitatively and quantitatively. The idea is to create a new "single instrument" which would be able to work on both sides of our shared frontier, and which would provide for single and shared programming, identification, selection and implementation. In parallel with this, there has been a need to renew and upgrade the Tacis programme, bringing it in line with real needs in the coming years, permitting us to address appropriately the real priorities rising in connection with our strategic partnership with Russia.
4. Finland and “new neighbours” of the EU. Will Finland in the coming years take an active part in the EU-sponsored programs of cooperation with “new neighbours”, in particular, with Belarus which economically is gravitating towards the Baltic region countries, immediate neighbours of Finland ?
Finland has played, and most certainly will continue to play a very active role in the programmes of co-operation with the neighbours of the EU.
We have a long experience of co-operation with our non-member neighbours, notably Russia and - before their membership - Estonia , Latvia and Lithuania . Finland has been especially active in co-operation on development of border crossings on the outer frontier of the EU. Here I would like to mention that the excellent co-operation between the Finnish and Russian Frontier Guard Services as well as the Customs Authorities has set a benchmark for further co-operation between the EU and its neighbours.
Regarding Belarus , the EU and Belarus have not always been in agreement on the terms of co-operation. However, the EU would like to support the economic development, the development of democracy, the rule of law and the civic society in Belarus as well.
Without going to the birth history of the European Union in detail, I would like to say that it is our strong conviction that in the long run, we can secure peace in Europe only when all nations can enjoy democracy, the rule of law and a strong civic society. They are also the prerequisites for a sustainable development of the economy.
5. Finland – Baltic countries – Russia – “common area of freedom”. Russia ’s relations with the Baltic States which joined the European Union and NATO on May 1, 2004 have been far from idyllic in recent years. As is known, Russia , Latvia , Estonia and Lithuania put their common history and solutions to the problem of Russian speaking population in different perspective, which is especially true of Estonia and Latvia . In what way may Finland , which has established traditionally friendly, good neighbouring relations with our country, help optimize relations between the Russian Federation and the Baltic states ? Is there any possibility from the technicalities’ perspective to envision and include special initiatives capable of alleviating the above contradictions into the roadmaps of four common areas currently under discussion between the EU and the RF? In our opinion this problem needs to be considered in the map of a road towards “common area of freedom, safety and justice”.
The Baltic Sea area is one of the fastest growing economic areas in Europe . There is a great potential for deeper EU-Russia cooperation within the Baltic Sea area which includes the North West of Russia, an area with great potential. The normalization of political situation within the Baltic Sea would significantly help us to fully exploit the potential of cooperation between the EU and Russia .
At the EU-Russia Summit in The Hague last November, President Putin announced that Russia is ready to sign the border agreements with Estonia and Latvia . We welcome this step and hope that an agreement on the practical and political arrangements can be found soon.
The large issue of developing EU-Russia relations by agreeing on the roadmaps concerns of course all EU-members, as well as Russia . Finland has actively contributed to the working out of an acceptable and forward-looking policy with our friends in the union. This includes of course also the new member states in the Baltic Sea area - Poland , Estonia , Latvia and Lithuania . With the positive development of the border issue and the roadmaps, by now almost finalized, I feel optimistic about the future.
6. Concerning special form of cooperation with regions populated by Finno-Ugric peoples. There are regions in our country largely populated by peoples speaking languages of the Finno-Ugric group; some of them even enjoy autonomous status as subject entities of the Russian Federation . These are Republic of Karelia , Mordovia, Mari El, Khanty-Mansi Autonomous Region. Are there any current or planned forms of cooperation between Finland and the above Russian regions, and not only in the field of culture but the economy as well?
Finland has centuries old traditions in contacts with the Finno-Ugric peoples in Russia. These began in the 19 th century and have continued with short breaks during the 20 th. Today we cooperate in this work with Hungary and Estonia .
The Government of Finland is funding various cultural projects in the Finno-Ugric regions of Russia, for example, printing and translating schoolbooks and other literature in Finno-Ugric languages, supporting magazines and radio programmes, assisting in the collecting and saving cultural heritage, to mention just a few of all the ongoing activities.
This wide co-operation in the field of culture helps us to tighten the contacts also in the economical field. The commercial co-operation should happen on the basis of modern interaction, which benefits the both sides. The language relationship is the special feature, which helps interested Finnish enterprises to distinguish the Finno-Ugric regions from other Russian regions. The possibility of the Finno-Ugric peoples to study and use their own mother tongue is an essential feature in developing this relationship. Without it the special relationship looses its meaning.
