The good news is that the European Union is not about to fall apart because of the debt crisis, or for any other reason. If that were the case, why would a dozen or so countries still be queuing up to join? The EU is arguably the most successful peace project in world history and has brought stability and democracy as well as some prosperity to its members. This makes it more than attractive enough for others to want to be part of it.

A breakup of the euro is not necessarily unavoidable. Even though some headlines would suggest otherwise, Finland is deeply committed to the euro. A good maxim in any crisis is to hope for the best and prepare for the worst. The euro has grave problems – a federal currency without a federation – but the cost of returning to national currencies is still estimated to be greater than saving the euro.

 This said, the EU could and should be doing much better than is the case. To begin with, the Eurozone crisis, despite the cautious optimism now being shown, it is still too early to declare victory. We Europeans will be paying for a long time for mistakes committed first of all in the setting up of the euro and then in dealing with the sovereign debt crisis. We in the EU will surely have to pay for a long time to come the price for having failed to do the right thing at the outset and arrange an orderly debt when the Greek crisis erupted more than two years ago.

It is clear that the euro was, and still is, a good solid idea, but that our wish to make it into the flagship for European unity and integration was premature – it could only succeed with a high degree of economic integration and convergence which was not and still is not there, and as part of a much further reaching financial and political integration.

The euro’s crisis has generated a long list of both temporary and permanent legislation, along with mechanisms aimed at dealing with it now and preventing a repetition in years to come. Some, like the six-pack of legislation to strengthen economic policy co-ordination and set up the European Stability Mechanism permanently, are eminently reasonable and necessary measures. If these had been in place at the outset it is possible that the crisis could have been averted, and would certainly not have reached these proportions. However, further measures are needed to remedy the present one.

So we need to do more. One step is building a credible system for European banking supervision. Irresponsible lending is a major root cause of the euro area crisis and fear of banking collapses is the number one economic concern in the euro area. The financial sector needs stronger controls. Mervyn King has said that if a bank is too big to fail, it is too big. Another quote worth repeating from him is: banks are global in life, but national in death.      

We need solid European banking supervision covering all banks. Supervision based on a national focus does not work with the closely integrated financial market we have today. One lesson from the current financial crisis is that problems in one country can easily spread to others. Home loans in Arizona or Ohio can have a global impact. 

Concentrating European bank supervision on only the bigger financial institutions would pose a two-fold problem. First – we know from experience that financial contagion easily spreads from small to large institutions. Size doesn’t matter. I believe that many of the banks that are at present a cause for grave concern would have fallen under the threshold of larger systemic institutions. Second, wouldn’t a two-tier supervision – European and national – encourage savings to concentrate to bigger banks, perceived as better regulated. Thus encouraging the opposite of what should happen – the growth of banks into entities that are too big to fail.

I also believe that supervision should cover the whole union and not just the euro area. Many banks operate across the euro and non-euro divide. 

Reforming financial markets is crucial. Our financial system has, in a sense, become too dynamic. Better European bank supervision is one step. Taxing financial transactions is another important tool in making a healthier financial system. Financial institutions should also be made to pay for their mistakes – investor responsibility for losses and collecting funds from the financial sector itself to deal with bad bank banks and solid deposit guarantee schemes. They should not be taxpayer liabilities, but financed by the banks themselves. Restructuring banks should be made possible – otherwise we will end with a large number of zombie banks, unviable but kept afloat with public money.

We have all seen what moral hazards have been created by making states the rescuers of first resort. Thus proposals for a Banking Union are right and necessary.

Perhaps one of the underlying tensions within the union has been the fact that the four freedoms underpinning the internal market are in fact at very different stages of integration – people, goods, services and capital are all supposed to move freely, but this is not really the case. In fact only capital has achieved unhindered movement to an unhealthy degree, while the internal market in goods and services is incomplete.

Therefore an important further – long-term – dimension in rebalancing the European economy is addressing an imbalance in the internal market – more should be done to develop the internal market in goods and services and promoting mobility.

The mobility of people and labour has been very modest. People don’t move with jobs, they stay put. The difference with the Unites States – another big internal market – is striking. We can lament this from a theoretical point of view, but we should not underestimate or disparage people’s attachment to their language, culture and established networks – why else would we continue with regional policies in all our members states?

Another essential step in mending the European economy is macroeconomic rebalancing within the euro area – in practice: Germany has to pay higher wages and consume more. The German wage settlements are a good step in this direction. The euro area periphery will not recover without strong demand from the centre. Euro area demand is mainly generated from the euro area.

The European Central Bank also needs to take an active role in maintaining healthy demand by regulating the supply of money – as sound currency is a core mission, then combating deflation is as important as combating inflation.

The story of the eurocrisis is not only one of too little too late, it is also one of deliberate bad choices. I am thinking particularly of some more questionable measures like the Treaty on Economic Union, which is at best irrelevant for dealing with the present crisis and at worst has the potential to impose unworkable austerity policies while delegitimizing perfectly sensible Keynesian policies in the future at a huge cost to growth and employment. Furthermore it is yet one more measure that it adds to the confusion that increasingly surrounds the EU’s institutional framework.

The euro-crisis has to be dealt with the means available in the present treaties, which are flexible enough to allow us to take the necessary steps now needed – if we only knew what they were, one could also add. So talking about treaty changes is not going to help us deal with the crisis. They can only be agreed and implemented after a lengthy and complex procedure, and the answer to this is not to try to circumvent them at the cost of further eroding the democratic legitimacy of the European project.

The damage done to democracy in Europe is no less than the harm being caused by poor economic governance. Even by the EU’s modest standards for respecting its own rules and the democratic elements they contain, the EU’s answer to the crisis has been dismal. The reality is that all the normal procedures for preparing and taking decisions at EU level have been bypassed.

The European Commission has been shunted to the sidelines and the permanent president of the European Council has become no more than a front man for decisions prepared in a very opaque manner and public debate by the ’duopoly’ of Berlin and Paris that seeks to impose its own solutions on everyone else. In short, other EU governments are today expected to come to European Council and euro group meetings with little if any advance knowledge of what it is they are expected to sign up to. It can be argued, of course, that Berlin and Paris have merely filled the leadership vacuum left by others. This is true to a degree, but cannot excuse the high-handed way it has been done.

The larger framework for the way the sovereign debt crisis has been managed within the EU has also contributed to the Union’s crisis of democracy. The Finnish Parliament has through its Grand Committee been among the best informed of national parliaments in the EU, meeting when necessary at 7.30 AM on Monday mornings to go through the proposals for the second Greek rescue package. But even if our own national system of parliamentary scrutiny of EU affairs has functioned between government and parliament more or less as our constitution requires, it has on occasion meant that the government has had to openly share with parliament its own ignorance and information of what would be proposed to our prime minister or finance minister at a forthcoming Council meeting.

The role of Europe’s national parliaments in the EU decision making process cannot be stressed too much. With all due respect to the European Parliament, it does not enjoy the same democratic legitimacy as does a national parliament, and clearly can have no say at all in how national budgetary resources should be used to deal with the debt crisis. Not, I should add, that the EP has itself been adequately informed or consulted on those issues where under the treaties it has real powers and responsibilities.

It is important however, to move ahead from what has happened and what has gone wrong to focus instead on what needs to be done at a global level to rectify past mistakes and avoid future crises. Meeting during the depths of the 2008 financial crisis when the world’s financial markets and architecture seemed threatened with meltdown, international leaders adopted a far-reaching statement on reforming of the international financial system. Looking back at what has been achieved since then, one must sadly conclude that most of that fine sounding programme has either been watered down or is still awaiting implementation.

To be fair, the EU has done more than most to introduce more orderly regulation and transparency to chaotic financial markets. The European Commission has adopted a more proactive role in trying to close tax havens, some of which are to be found within the EU. The Commission has even proposed the introduction of a Financial Transaction Tax, whose title is more impressive than its contents but which can and should be improved. At least the Eurozone governments should stand ready to adopt it, since the UK government’s opposition makes it so far impossible to do so at EU level.

In conclusion I want to stress, that we should not be too pessimistic – history has been on the side of European integration. It had a crucial role in cementing peace after the Second World War. It assumed a central role in reuniting a divided Europe after the Cold War by enlarging east. European integration is also an important tool in dealing with globalisation – the central problems of the world cannot be addressed in the confines of the nation state. We need a supranational approach.

Many visions about building a genuine economic and monetary union are quite detailed on integrated financial, budgetary and economic policy frameworks but vague on strengthening democratic legitimacy and accountability. This is a serious, maybe even fatal mistake – we should start with strengthening our democratic framework and opening a genuine debate on the development of economic and monetary union rather than jumping straight to the conclusions.

Our aim in Finland is to start this process by joint deliberations between government and parliament and I would encourage others to follow suit. Then we need an open process, where outcomes reflect member state views, rather than technocratic preference.    

Ladies and gentlemen,

First of all I would like on behalf of Finland to express our gratitude to our Estonian colleagues and friends for all their hard work in order to make this seminar a reality and for their hospitality here in Tallinn. 

It is an honor for me to address you today on the important topics on the agenda of this seminar.

This year we celebrate the tenth anniversary of the entry into force of the Rome Statute establishing the International Criminal Court. The ICC has come a long way since its establishment in 2002. The number of States Parties to the Statute is currently 121, Guatemala being the most recent addition. The number of country situations has grown to seven and the number of judicial proceedings is rapidly increasing. The UN Security Council has twice referred a situation to the Court. This indicates that the ICC has become a permanent institution of international criminal law and an important tool in fighting impunity for the most serious international crimes.

This year has also been without precedent in the history of the Court.

In March, the Court decided in its first ever judgment that Thomas Lubanga is guilty of the war crime of conscripting and enlisting children under the age of 15 and using them to participate actively in hostilities. Just last month, the Court also issued its first ever decision on reparations for victims in the same case. Both these decisions mark significant milestones in the functioning of the Court. They are also long-awaited by the victims of these crimes and the affected communities.

The International Criminal Court is and it should be an instance of last resort. The primary responsibility to investigate and to prosecute for the Rome Statute crimes lies with states themselves. There are persuasive arguments for enhancing national capacities to try the alleged perpetrators. It is of great significance for the victims and their communities to see that those perpetrating on them are brought to justice in their own country.   In cases where national trials are not possible for various reasons, the ICC is an indispensable vehicle in ensuring justice and accountability.

One of the great novelties of the Rome Statute system is indeed the role and rights it provides for victims of crimes within its jurisdiction. The Rome Statute adopted in 1998 includes several provisions relevant to victims, such as participatory rights of the victims, right to legal representation, protection of safety of victims and reparations. It can be said that the ICC does not only have a punitive but also a restorative function. Enabling the victims of the Rome Statute crimes to effectively participate in the proceedings and to engage with the Court can have a positive impact on how the victims experience justice.

The Trust Fund for Victims of the ICC is in the heart of the restorative function of the Court. In addition to implementing Court ordered reparations, the Trust Fund provides general assistance to victims of crimes which fall within the jurisdiction of the ICC but have no link to ongoing judicial proceedings. For example, as we all know, so far no accused has been brought before the ICC in the Uganda situation. Nevertheless, the Trust Fund has been providing assistance to victims in Northern Uganda since 2008. Before the Lubanga judgment, the Trust Fund has for many years provided support for victims in the Democratic Republic of Congo as well.

In the Lubanga case, the ICC for the first time gave effect to the provisions of the Rome Statute on reparations. The Court formulated principles on reparations that are to be applied to reparations for victims in this particular case and mandated the implementation of its decision in this case to the Trust Fund for Victims.

The Court accepted that the right to reparations is a well-established and basic human right enshrined in universal and regional human rights treaties and in other international instruments. The Court highlighted that it is of paramount importance that the victims, together with their families and communities, can participate in the reparations process, and that they should be able to express their particular points of view and communicate their priorities. It is difficult to argue against this starting point for the implementation of reparations. Effective implementation of the Court’s decision on reparations in cooperation with the victims themselves is essential in order for the Court’s decision to have a real impact on and meaning for the victims and affected communities. To this end, we welcome the role given to the Trust Fund for Victims in the implementation of the decision on reparations. The Trust Fund has already gained a lot of valuable expertise on the needs of the victims in the Democratic Republic of Congo through its previous engagement in the country.

Finland has for long been a strong supporter of the Trust Fund. The Trust Fund has a central role in the efforts to bring justice to the victims, and I want to express Finland´s gratitude to the Board and Secretariat of the Trust Fund for their hard work and dedication. In recent years, there has been a significant increase in voluntary donations to the Trust Fund which we very much welcome. At the same time we recognize that the Trust Fund will also in the future, and not least when implementing the decision on reparations in the Lubanga case, be largely dependent on voluntary donations in order to effectively fulfill its mandate. For her part Finland pledges to continue its financial as well as political support to the Trust Fund for Victims of the ICC.

At the same time it must be underlined that those found guilty of ICC crimes should as a main rule  provide for the reparations. The resources of the Trust Fund should be resorted to only when those found guilty do not have any or sufficient assets for this purpose. To achieve this, it is also for the States to cooperate more efficiently in tracing and freezing the assets of the accused.

Beyond the issue of reparations, Finland continues to recall that relevant and focused outreach is an essential component of Court’s activities. The ICC is an international court which needs to ensure that its processes are understood by the most affected communities, or else the proceedings threaten to become irrelevant. In addition, without effective outreach and access to information the victims will not be able to enjoy their right to participate.

The number of victims participating in the proceedings is rising. There may be a need to reflect the role of victims in the ICC process, and whether the current process fully meets the expectations of efficiency and effective participation. In addition, there still remains a number of questions on the implementation of court-ordered reparations, which will need to be addressed. It is therefore vital that the victims remain high on the agenda in the ICC discussions.

Thank you.