Heady days for Finland's EU affair


While the Irish love affair with Europe appears to be cooling, these are heady days for Finland's relationship with the EU. The country may only have joined the Union less than three years ago but an enthusiasm for all things European has swept through the Finnish political establishment. Arrangements for Finland's first presidency scheduled to begin in June of next year have been planned with a precise military precision; Finnish officials were seconded to the Department of Foreign Affairs during the 1996 Irish presidency to keep a watching brief. Every morsel of advice from Ireland or elsewhere is accepted graciously. Finland regards the presidency as a prestige event, an opportunity to beat the chest and to fly a flag. Most importantly, the presidency will underpin how Finland is now firmly anchored in the New Europe. Finland acceded to the EU in January 1995; some 57 per cent of the population voted in favour of membership. For the people of Finland, the EU's primary importance, perhaps, is the kind of security blanket it provides. The EU may not have a common defence policy; it may still have an underdeveloped common foreign and security policy, but for most Finns membership of the Union provides a kind of psychological comfort; a sense that they are not alone .

That Finland should need such reassurance is scarcely surprising. Finland shares a 800-mile land border with Russia and its relationship with Moscow still dominates foreign policy. Indeed, President Martti Ahtisaari was born in the territory lost to the Soviet Union during the second World War, when Finland fought alone against Moscow in the Winter War of 1939-40.

Traditionally, Helsinki has sought to counter the influence of the Soviet Union by establishing close links with the West. Finland kept its distance from any military alliances during the Cold War placing a commendable emphasis, instead, on the need for co-operation in the security sphere. It took a leading role in the establishment of the Conference on Security and Co-operation in Europe (CSCE) - now the Organisation for Security and Co-operation in Europe (OSCE) - in the mid-seventies.

These days, the government prefers to describe itself as non-aligned rather than neutral. There is a pragmatic, practical approach to the changing security environment and little of the paranoia that can inform Irish attitudes. "We are non-aligned but not neutral," said one official. "We have a natural solidarity with the interests of the Union. We don't see the EU developing into a military alliance; but the immediate task is to reinforce the Union's role in crisis management and in building stability."

Finland is an enthusiastic member of NATO's Partnership of Peace (PfP) - which it views primarily as a peace-keeping unit - and it has observer status with NATO's European pillar, the Western European Union (WEU). Ireland, by contrast, has stayed aloof from both the PfP and the WEU because of the political risks involved in being seen to undermine Irish neutrality.

In other respects, there are striking similarities between Ireland and Finland. Both see EU membership as a means of liberating themselves from the once-dominant influence of powerful neighbours be they Britain - or in Finland's case, Russia and Sweden. (Finland was an integral part of Sweden until 1809 when it became an autonomous Grand Duchy under the Russian Tsar.) Both can point to the clear economic benefits that have flowed from EU membership.

For Finland, with its sturdy tradition of independence, this sense of community with the EU represents a remarkable transformation. Only a decade ago, Finland was wrapped in a kind of Nordic comfort zone. The Nordic social model had brought a remarkable growth in living standards, an enviable level of social equality and political stability. Since then, this Finnish independence was jolted by the collapse of the Soviet Union and the recession in western Europe.

The end of the Cold War had a devastating impact on the economy; the well-developed trade links with Moscow, which accounted for some 25 per cent of GDP, suddenly disintegrated. And the recession sweeping across western Europe earlier this decade compounded the misery. Unemployment doubled and the Finnish mark was devalued by 20 per cent.

These events were to act as a catalyst for far-reaching economic, political and social change in Finland. Its economy was transformed to reflect the increasing inter-dependence of the global economy. Finland developed a sophisticated multi-national industrial base in sectors like telecommunications and high technology, forestry, mining and engineering. There has been a strong emphasis on consolidation and rationalisation in the leading industries.

As in Ireland, the priority given to wage restraint and to education has yielded tangible benefits. Today, unemployment remains high at 14 per cent but Finland's growth rate is second only to Ireland in the EU. Finnish GDP increased last year by about 5 per cent and industrial production grew by 7 per cent.

For most ordinary Finns, the economic revival is not unrelated to the country's closer relationship with the EU. There is still a strong and proud tradition of scepticism about the EU in the rural, agricultural and fishing areas beyond the Helsinki suburbs. But for the political and business class - and most young people - the strong performance of the economy makes a compelling case for ever-closer relations with Brussels.

Finland is now poised to be in the first wave of monetary union next January. Like Ireland - which must plan for EMU without Britain - it will face the challenges and opportunities of EMU without its Nordic neighbours. There is a distinct lack of nervousness in business and political circles about this. Rather, it is viewed as a source of pride that Helsinki is eligible for EMU while Sweden - with which most Finns have a competitive relationship - remains outside. Business leaders appear buoyed up by the prospect of exchange rate stability and low inflation. "EMU is a very sound and very good economic project, there are few risks," said one industrialist. It might sound like propaganda for the EU; but in Finland these days euro-scepticism is a minority creed.