Speech by President of the Republic of Finland Sauli Niinistö at Elte University on 4 September 2012

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Speech by President of the Republic of Finland Sauli Niinistö at Elte University on 4 September 2012

It is a great pleasure and honour for me to address you today, here in the Aula Magna of ELTE University. I am most grateful for the Honorary Doctorate conferred upon me. As the President of Finland, it is particularly pleasing to receive such an honour from this university. After all, Finnish has been taught here since the 1860s. Over the decades, your university has made an enormous contribution to the promotion of cultural ties between Finland and Hungary.

Finland and Hungary have much in common. In terms of our languages, we are 'cousins' with a close, living connection to each other. Although our peoples live in different corners of Europe, we in Finland have a strong awareness of Hungary as a sister nation. You are perhaps aware of the old story about our mutual wanderings. While migrating west from the Urals, our ancestors came across a road sign indicating the ways south and north. Those who could read went south. We who turned north learned that education is worth investing in.

Nowadays, our two countries are also united by EU membership. Finland joined the EU almost 18 years ago, in 1995. Hungary's membership came nine years later, in 2004. Membership is nothing new to either of us. Hungary too has seen its first Presidency of the EU, which is widely regarded as a success. I would like to congratulate you on this. Both of us are also looking ahead to the future of the EU, which is critically important to our countries.

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Finland joined the EU as a fairly straightforward consequence of the end of the Cold War, which had previously divided Europe. EU membership had not been possible for Finland during the Cold War. Then, like other neutral countries, we formed part of the European Free Trade Association. However, when Europe's political landscape changed, seeking EU membership was natural.

Nevertheless, a basis was formed for our EU membership in the Cold War period. In academic discourse, Finland's integration policy was explained from the 'wait and see' perspective. From this point of view, while Finland's economy drew it towards integration with the West, politics - in practice, Finno-Soviet relations - acted as a brake on this. Whenever it had the room to do so, step-by-step Finland sought deeper European integration. First came associate membership of EFTA, then the free trade agreement with the EEC, then full membership of EFTA, followed by the European Economic Area and the final step of full EU membership. Then, Finland's integration policy involved taking small steps, but towards a clear goal.

There were certainly alternatives to EU membership - Finland was a member of the European Economic Area alongside Sweden, Austria and Norway. While this provided access to internal markets, it did not provide a seat at the decision-making table. If trade had been our only concern, then the EEA would probably have sufficed. However, Finland quickly came to the conclusion that EU membership was the only genuine route to influencing matters. This argument also proved forceful in the national debate on membership. As a smallish country reliant on exports, Finland is under any circumstances dependent on the European Union as its main market. Only through membership did we gain involvement in decision-making within the Union. We were not interested in a role as a 'silent partner.'

Membership of the EU was primarily a political choice for Finland, despite the weightiness of economic considerations. It was also a security policy decision - we sought membership of a broader political community. Values too were important: we share the Union's European basic values. Influence was also at stake - the EU forms Finland's best channel for influencing world politics. These principles remain valid.

In Finland, referendums have been reserved for what are truly the biggest issues. This might be said to apply to the abolition of the Prohibition Act in the 1930s. In turn, a referendum on EU membership was held in the autumn of 1994. Despite its many opponents, membership was supported by the majority of Finns.

As a member state, Finland has pursued a policy aimed at strengthening the European Union. We have lent our support to strengthening the Union's foreign and security policy capacity. Finland has put its weight behind the development of crisis management, building the Northern Dimension and bolstering the EU's justice and home affairs policy. After all, the latter was originally known as the Tampere Programme. In turn, the EU's internal markets have been deepened to embrace services. The union's development in the 90s and 2000s includes several important steps forward.

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The single-most important step towards integration has been the Economic and Monetary Union, in which Finland has been involved from the very beginning. For Finland, the common currency, the euro, was a natural choice. It is logical that a common currency should complement a common market. In a globalising world, Europe needs a major currency of its own, in the same league as the US dollar.

From Finland's perspective, the euro has provided economic stability. The Finnish economy has been very sensitive to economic cycles. Since the introduction of the common currency, interest rates have remained reasonable, while exchange risks have been eliminated in relation to our main market area. Chronic deflation and inflation cycles have become history. Finnish citizens too have taken to the euro.

However, the euro zone is now in a deep crisis, which has become Europe's overwhelming policy issue. There are no fast or simple solutions to this: all of the available models require difficult decisions. The crisis is primarily a crisis of over-borrowing. This same crisis also takes other forms: a banking crisis, a crisis of European growth and, in part, a crisis of competitiveness. Signs can also be seen of a social and political crisis.

To solve the immediate crisis, at least three main elements must be resolved - how to balance the public finances, place firm ground under the financial markets and kick start European economic growth. With our arsenal of stimulus measures having been depleted by debt, this will not be easy. No magic solutions are at hand, nor should we seek any. We have no choice but to move forward through a tough, but unavoidable, structural transformation. In Finland, we have first-hand experience of what this means. At the beginning of the 1990s, we experienced an economic crisis of the utmost severity. Emerging from that crisis required both reforms and spending cuts. In many cases, we had to choose the least unpalatable solution from a range of unpleasant options.

The euro zone's debt crisis and its aftermath have led to a period of self-examination in Finland. Both long before and since EU membership, Finland has firmly believed in abiding by the rules. We assume that when rules of play are agreed, they should be adhered to. Rules are made to be obeyed, not flouted. After all, failure to abide by common rules lies at the basis of the euro zone crisis. The consequences are there for all to see. Hopefully, the crisis has finally taught us that strict rules are needed and, above all, must be followed. Now, at least, agreement has been reached on tighter rules. Excessive deficits will trigger sanctions.

Managing the debt crisis is also associated with a notion of solidarity. We should remind ourselves of the original meaning of this notion, which dates back to the founding of the euro zone. Solidarity meant - and for me still means - responsible policies that cause no harm to others or the entire system. It means sound management of one's own affairs. Over-borrowing is not an unavoidable force of nature or a natural disaster, but a consequence of one's own actions.

Europe's uncertain outlook is affecting everyone. European countries, including Finland and Hungary, are dependent on one another. Mutual dependency sets powerful, genuine limitations on the sovereignty of states. The history of the European Economic Community's birth itself was affected by the experience that nation states could no longer perform their tasks alone. Issues had to be either handled together or not at all. This is one of the abiding, founding ideas behind the European Union. We must therefore seek solutions together.

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Since the European economic crisis is also giving rise to social and political pressures, we must consider this aspect. How can European democracy cope in a situation in which its economic basis is subject to change and competition? Is democracy in retreat on our own continent? To be frank, I am concerned. But I am also relatively optimistic.

We are all aware that successful countries have various starting points. Long-term, strong growth is possible without democracy. But high-quality public administration and enlightened decision-making are generally what lie behind sustainable success. A predictable and fair operating environment is created by a rule of law, good administration and open and democratic institutions. These also enable social changes without sacrificing stability. Europe has so far shown ability to withstand crisis - this would scarcely be possible without an open political system.

In many historical situations, the urge to concentrate power in times of crisis is a familiar modus operandi. However, European countries must avoid applying false cures. This will only worsen the disease. Dismantling the constitutional state, or the checks and balances within political systems, will open the floodgates to new kinds of problems. There are plenty of examples of such cases. Authoritarian progress often turns out to be illusory. A democratic setback is precisely that - a movement backwards.

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For Finland, European integration was about more than politics or economics. In fact, it is an international expression of the principle of a rule of law. Countries and their mutual affairs are tied to a common value base and rules. Many of my predecessors as Finnish presidents lived in a world in which there was no such system. But it was just such a system that they dreamed of: a world in which rules are not based entirely on force, but on right as well; and in which the rules apply to the large, as well as the small such as Finland and Hungary. It is the task of our current generation to ensure that the European community, which was so painstakingly built, survives and finds its way back to a brighter path ahead.

Dear guests, it is a great pleasure to be in your company today. I would like to thank ELTE University once again for the recognition it has accorded me today. I wish you the greatest success in your noble tasks in science, research and teaching.

Thank you, Köszönöm.