Balttian satama-järjestön yleiskokous, Helsinki, 3.6.2004

Ladies and Gentlemen,

It is a great pleasure to me to address this General Assembly of the Baltic Ports Organization. Beginning from the early 1990s, a number of actors have engaged in the Baltic Sea cooperation. In addition to intergovernmental cooperation, regional and local authorities, non-governmental organisations and business communities have played a part in this cooperation. I regard this as an example of an endeavour motivated by common needs and opportunities.

In my opinion, this kind of broad-based participation of all parts of society is very welcome. The future cooperation will increasingly be based on work carried out at grassroots level without any interference of governmental bodies. I would like to mention that when Finland held the Presidency of the Council of the Baltic Sea States in 2002-2003, one of our priorities was enhancement of the working conditions of non-governmental organisations and dialogue between the social partners.

Sometimes when I encounter critical questions concerning the need for such organisations as the Arctic Council, the Barents Euro-Arctic Council or the Council of the Baltic Sea States, my answer is that governments could manage without these organisations but they provide valuable services to authorities and are for NGOs and local actors a useful channel for dialogue with governments.

I would like to go back to the days when we launched the idea of the Northern Dimension of the EU. In the discussions there was an in-built argument of a positive interdependency. One of the fundamental ideas was that it would be economically profitable for Russia to make use of the existing ports in the Baltic countries (Estonia, Latvia and Lithuania) instead of building new ones of their own.

Reference was made to the Germans’ use of the port of Rotterdam in a scale that made Rotterdam the main port for the German industries, above Hamburg and Bremen. Today, new ports are being built on the Russian coast of the Gulf of Finland. And at the same time some Baltic ports are suffering from a heavy decline of transit traffic.

We have recently witnessed a dramatic change in the geopolitical situation in Europe. Ten new Member States, among them four Baltic Sea States, joined the European Union a month ago. This historic event is a major step on the way to end the division of Europe. It will further strengthen democracy, stability and prosperity on the continent, inside the enlarged Union and even beyond.

What does this change mean? It has been evident for some time already that we are facing a new situation in the Baltic Sea Region. For example, the sea is now virtually an internal water within the European Union. The only Baltic territories outside the Union today are those of the Russian Federation at the bottom of the Gulf of Finland and the Kaliningrad region.

Certainly, enlargement has been a turning point in the European history. At the same time, I would like to stress that many of the challenges of Europe is facing remain unchanged. They include challenges related to combat of organised crime, control of communicable diseases and efforts to improve the state of our marine environment. We have our opportunities arising from the energy resources up in the north. And above all, the principal assets of our region lie in the highly educated people.

It is certainly true that the new Member States add to the cultural and historical diversity of the Union and deepen our common understanding of shared European values.

The enlarged EU will become a truly global player with both economic and political power. The fact that this Europe is on a more equal footing with the United States of America poses a particular challenge to the Union. It has to strengthen itself as a great power with policies of its own to influence the world and implement its global responsibilities as compared to the United States. Simultaneously it should maintain close transatlantic relations of partnership.

The real change in our region caused by the EU enlargement was expansion of the internal market. The sphere of free movement of people, goods, capital and services is now much larger. We need to engage in close and active cooperation to attract investments to this region and to make it competitive. We still have problems with infrastructure and border-crossing procedures and administrative bottlenecks. Some of the communities in our region are struggling with corruption, which must be rooted out.

The EU enlargement to the Baltic countries and Poland meant a profound change in the region in a time span of ten years, starting from 1993 when the Copenhagen criteria were adopted. It has been and still is a process with a considerable, positive impact on Finland as well. The Baltic Sea region consists of eight littoral Member States of the European Union and only one non-Member State. It is an area where not only people, services, goods and capital, but also new ideas flow and network naturally with as few barriers as possible.

Membership of the EU promotes economic integration between the Baltic Sea States, particularly between Finland and Estonia, with increasingly close contacts between Helsinki and Tallinn. Enlargement expands the internal market for goods and services and facilitates the establishment of businesses in the region.

For many companies, the Baltic Sea region has already become a genuine home market. I see that some of these companies are represented also in this Conference.

Although our experience of the argumentation on the positive interdependency has not turned out to be especially encouraging in every sense, we can still try to see advantages in joint solutions.

It is important to find the most appropriate forum for each issue. There will be issues that should be discussed by the EU Members States in our region. Some issues will be most likely suitable for discussion between the Nordic and Baltic States, either between all these countries or in the group of those belonging to the EU. And there will be an agenda for the traditional Nordic family, although the agenda items may not be exactly the same as before.

In addition to these groupings, we will have the opportunity to get the Russian Federation involved in our regional work. We have noted with interest that Russia has stressed the value of this unique cooperation in the Baltic Sea Region also in the new situation after the EU enlargement. I see this as one of the main areas of future regional cooperation.

In this connection, I would also like to draw your attention to the fact that Norway and Iceland are partners on an equal footing in the Baltic Sea cooperation. In addition, the participation of the European Commission is of major significance.

Some 70 per cent of the Finnish imports and 90 per cent of the Finnish exports are transported via the Baltic Sea. This means an extremely high dependency on functioning maritime transport and logistic systems.

For this audience, the meaning of the Motorways of the Baltic Sea is certainly clear. The basic idea of this concept has been the development of a maritime-based logistic chain. As a part of the Trans-European Transport Network, it includes shipping, ports, hinterland connections and related procedures. I am convinced that the advantages of this concept can be seen by all relevant actors and that it will be promoted on public-private basis. We include this concept in the EU’s Northern Dimension policies.

Joint solutions have been discussed for the energy sector. We have launched several regional cooperation projects in the energy sector – but the electricity markets of the region are still divided.

The development towards regional electricity markets remains to be seen. For example, connections between Poland and Lithuania or between Finland and Estonia exist in theory, but investors have not been found to date.

In the gas sector, developments have not followed the political guidelines either. Of the three gas-exporting countries in the region, two are major suppliers of Europe and several other countries that buy gas.

In the Baltic Sea region, there is an obvious need of a new gas connection from Russia to the European markets. This connection would become a common market place for sellers and buyers, a function that should be one of its main objectives.

Joint solutions are needed especially in environmental issues. It is a question of both the safety of maritime transport and the state of the Baltic Sea. In the Gulf of Finland, there has been a heavy increase in maritime traffic. The volume of transport via oil terminals on the Gulf of Finland in 2003 rose by about 80 million tons. Estimates concerning the future vary but figures such as 150 million tons in 2010 have been mentioned.

As a concrete step to upgrade the safety of maritime transport, we will have in the near future a Vessel Traffic Management and Information System (VTMIS), operational in the Gulf of Finland. We have also managed to establish unified rules for ice classification and arrangements for icebreaker services.

We are still working towards an early entry into force of the ban on single-hull tankers. Also some concrete measures are needed in order to make the Baltic Sea operational as a particularly sensitive sea area (PSSA). To be effective, the use of the measures calls for the Russians involvement. As to the agreement on the Baltic Sea region becoming a Kyoto testing ground, we would also like to have the Russians on board.

Finland has established a comprehensive programme of her own for the protection of the Baltic Sea. We also take steps to prevent oil spills and try to improve our oil spill response capabilities. We have to remember that we have our own courtyard to look after, too, as our agriculture still is a substantial source of pollution.

In the Northern Dimension context, the establishment of an Environmental Partnership is a success story. In this framework, Finland contributes to the building of a wastewater treatment plant in St Petersburg.

On the whole, our region is economically one of the fastest growing regions in Europe. That is mainly thanks to Russia. The annual growth of the GNP in Russia was almost seven per cent in 2000-2003. It appears to be rapid also in 2004. Of course we have to keep in mind the basis of this growth, that is the crash in 1998 and the increase in prices of oil and metals in the world markets.

The continuing growth and success of the region depends to a great extent on the full participation of Russia and especially St Petersburg. St Petersburg and the Leningrad region constitute overwhelmingly the biggest metropolitan area along the shores of the Baltic Sea.

We are counting on the impact of Russia’s economic growth. At the same time, our companies are complaining about the cumbersome customs procedures, problems related to the certification system and intellectual property rights in Russia. The question is still very much about the building of market economy elements to substitute those of the former centralised plan economy.

I believe that there are vast untapped opportunities in the Baltic Sea Region that, when used, can significantly enhance the competitiveness of our region. The improvement of the investment conditions is worth supporting, taking into account the social dimensions of the development.

Ladies and Gentlemen,

The development of the relations between the European Union and Russia is of utmost importance for our region. The EU-Russia Summit in May was a success. We took a major step on the path of Russia to membership of the WTO. The development of the four common spaces advanced one step further, as it was agreed that a common document on the spaces should be drafted by the November 2004 Summit.

In addition to the Russian Federation, new neighbours such as Ukraine, Moldova and Belarus are now bordering the EU in the east.

The development of relations with our neighbours will remain a top priority on the EU agenda. Enlargement gives new impetus especially to the relations between the EU and its new eastern neighbours.

Ladies and Gentlemen,

Among our neighbours, Russia is indeed a special case because of its huge territory, rich nature, large population and role in the European history. Our strategic partnership with Russia is based on respect for shared values. Enhancement of common interests goes beyond the concept of the ENP. The Joint Action Plan on the four common spaces will provide us with a new tool, not only to implement our policies towards Russia but, above all, to pursue common values, goals and interests on the basis of reciprocity and mutual commitment.

The EU’s Northern Dimension was born in the context of the Union’s previous enlargement in the 1990s. The idea was to develop the EU’s external and regional cooperation towards the then new neighbours, the Russian Federation, Estonia, Latvia and Lithuania. The underlying idea of this initiative was to address the threats and challenges and opportunities identified in the region.

The main focus of the Northern Dimension Action Plan and the concrete cooperation is now clearly in northwest Russia. This makes the Northern Dimension closely connected to the EU’s policy vis-à-vis Russia.

The early discussions between the EU and Russia on the four common spaces of intensified cooperation indicate that many of the objectives that will be set in this context coincide with the objectives of the Northern Dimension. The difference is, of course, that the Northern Dimension focuses on a limited geographical area. It is logical that there should be more synergy between the Northern Dimension and the EU-Russia mainstream cooperation. The Northern Dimension could be seen as a regional component of the EU-Russia relations.

Russia is not discussed in the context of the European Neighbourhood Policy. There are, however, some elements in the ENP that can benefit EU-Russia cooperation and especially the Northern Dimension. We expect that the new financial instrument, ”New Neighbourhood Instrument ”, which is now under development, will facilitate the implementation of projects in northwest Russia and even bring along additional financial resources.

I hope that you will have interesting and fruitful discussions here in Helsinki. Thank you.