Report Finland and the Future of the EU Ville Ylikahri Final

7/28/2019 Report Finland and the Future of the EU Ville Ylikahri Final

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The current raise in nationalismand euro-scepticism in thecontext of the current crisis inthe euro-zone has been nostranger to Finland, atraditionally pro-Europeancountry.

How has this impacted on the Green positions onfurther European integration and the vision for thefuture development of the EU? This article offers anoverview of the political approaches in Finlandtowards the future of the European project, startingfrom the discussions in a GEF and Visio's seminar onthe topic (Helsinki, 23 November 2013). The articlepoints to the main parties in Finland and theirstances on the EU and the euro-zone, as well as tothe key debates inside the Greens on these topics.

The author of this article, Ville Ylikahri, is secretarygeneral of the Finnish Green educational centreVisio, organisation that is represented in the GEFGeneral Assembly.

Finland and the Future of Europe:Make it or Brake it?

Finland has been a member of EU since 1995 andmember of euro zone since its beginning. Finnishpolitical parties have been traditionally very positivetowards EU.

Finlands strategy towards the European Union has been

to be in the core of the EU. That strategy has been seenas a road away from the influence of the Soviet Union. EUmembership has also changed the cooperation betweenNordic countries where Finland has previously been seenas some kind of a poor little brother. After EU

membership Finland has been in contact with theWestern World and European markets via Brussels, notvia Stockholm. At the same time, in the 90s, the Finnish

economy boomed with Nokia and other high techindustry.

Political and economic background

Things have changed in recent years. The EU-scepticparty Perussuomalaiset (that calls itself the True Finnsparty in English) has been criticising the EU very strongly.They have been blaming EU for being too bureaucratic

and too expensive for Finland. After the economicproblems of Ireland, Portugal and Greece, the True Finnsparty has argued strongly that they were right in theiropposition to the EU. In a context where all the otherparties were to different extents pro-EU, this is oneexplanation for the True Finns landslide victory of the

parliamentary elections in 2011, which made them thethird biggest party in the Finnish parliament (see pictureof the parliamentary groups). At the same time one hasto remember that there are many other reasons behindthe popularity of the True Finns: corruption of theestablished parties, anti-immigration tendencies and the

economic downturn.The True Finns didnt want to be part of the coalition

government that gives money or debt guarantees to othereuro zone countries. Although the party is now inopposition it has influenced Finnish politics very strongly.All other parties have copied their rhetoric. Thegovernment has had a very hard time explaining whyFinland has to give more and more money to Greecewithout any real guarantees that it will get the moneyback.

The coalition government consists of the NationalCoalition Party, the Social Democrats, the Left Alliance,

the Greens, the Swedish Peoples Party and the ChristianDemocrats. One could argue that the only thing thatkeeps the coalition together is the fear of the True Finns.

Government CoalitionNational Coalition (44)Social Democratic (42)Left Alliance (12)Green League (10)Swedish People's Partyand MP for land (10)Christian Democrats (6)

Opposition PartiesTrue Finns (39)Centre Party (35)

Left Group (Left Alliancedissenters) (2)
http://en.wikipedia.org/wiki/Coalition_governmenthttp://en.wikipedia.org/wiki/Coalition_governmenthttp://en.wikipedia.org/wiki/National_Coalition_Partyhttp://en.wikipedia.org/wiki/Social_Democratic_Party_of_Finlandhttp://en.wikipedia.org/wiki/Left_Alliance_%28Finland%29http://en.wikipedia.org/wiki/Green_Leaguehttp://en.wikipedia.org/wiki/Swedish_People%27s_Party_of_Finlandhttp://en.wikipedia.org/wiki/Swedish_People%27s_Party_of_Finlandhttp://en.wikipedia.org/wiki/Elisabeth_Naucl%C3%A9rhttp://en.wikipedia.org/wiki/Christian_Democrats_%28Finland%29http://en.wikipedia.org/wiki/Opposition_%28politics%29http://en.wikipedia.org/wiki/Opposition_%28politics%29http://en.wikipedia.org/wiki/True_Finnshttp://en.wikipedia.org/wiki/Centre_Party_%28Finland%29http://en.wikipedia.org/wiki/Centre_Party_%28Finland%29http://en.wikipedia.org/wiki/True_Finnshttp://en.wikipedia.org/wiki/Opposition_%28politics%29http://en.wikipedia.org/wiki/Christian_Democrats_%28Finland%29http://en.wikipedia.org/wiki/Elisabeth_Naucl%C3%A9rhttp://en.wikipedia.org/wiki/Swedish_People%27s_Party_of_Finlandhttp://en.wikipedia.org/wiki/Green_Leaguehttp://en.wikipedia.org/wiki/Left_Alliance_%28Finland%29http://en.wikipedia.org/wiki/Social_Democratic_Party_of_Finlandhttp://en.wikipedia.org/wiki/National_Coalition_Partyhttp://en.wikipedia.org/wiki/Coalition_government


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2Finland and the Future of EU: Make it or Break it?

The National Coalition Party is a member of EPP. Theyare very pro-EU, and very strongly demanding harshausterity policies. The Social Democrats, in a defensivereaction to the True Finns have used stronger rhetoricagainst the rescue packages for Greece, but at the sametime they are ready to spend more money for economicstimulus especially in Finland.

Of all coalition parties, the Left Alliance had the hardesttime. The Partys parliamentary group broke and two

MPs are now in opposition. In the coalition however,

smaller parties follow the lines of the bigger parties on

EU questions.The Greens, perhaps the most pro-EU party within thecoalition government, have been supporting solidaritywithin the EU. However, also within the Greens the toneof the discussion has changed. In speeches in parliamentGreen MPs have questioned the reason behind therescue packages. Pekka Haavisto was very cautious to bepro-EU in his presidential campaign.

The economic situation in Finland is quite difficult. Bigpaper companies and major economic actors such asNokia are making losses and moving their factories

abroad. Although Finland doesnt have unemploymentrates as high as many other EU countries and Finland isstill an AAA rated country, the Finnish public sector ishowever in deep trouble with the growing public debt.

Key issues discussedHeidi Hautala: The financial sector is a realfree rider in the EU

Finnish International Development Minister and co-chairof GEF Heidi Hautala opened the seminar by saying thatthe Finnish Greens are not in the easy situation being in acoalition government that is very strongly emphasisingnational sovereignty. The Finnish Green party hastraditionally been very positive towards the EU and that iswhy the strong views of the government towards many ofthe proposed EU instruments to tackle the debt crisis(European Financial Stability Facility EFSF, EuropeanFinancial Stabilisation Mechanism EFSM, and EuropeanStability Mechanism ESM) have been sometimes difficultto accept.

Heidi Hautala wanted to clarify the different political

positions towards EU. It is not only a question of beingpro-EU or EU-sceptic, but parties can also be divided bytheir positions towards market-driven solutions. In thiscurrent crisis it is important to identify these lines, as

parties can be pro European, but at the same timeoppose market solutions.

Heidi Hautala herself is quite sceptical when it comes tomarket solutions. We should find new ways to give moreroom to political decision making. We need to take somemeasures to harmonise taxes within the member statesand see how we could diminish tax competition. Still atthe moment one member state can prevent any reformsin tax policies. That's why we can't tackle tax havens. Weneed more transparency in tax policies. At the momentthe financial sector is a real free rider in the EU and at

global level, while it should be the one financing ourwelfare system.

At the end of her opening speech she linked the rise ofthe populist parties to the economic crisis.

Tuija Brax: There is a race to the bottombetween EU Member States

Member of Parliament and Chair of the Audit Committeeof the Finnish Parliament Tuija Brax represented theFinnish greens parliamentary group and looked at theEuro crisis from that perspective. She started byremaking on the for the economic crisis, there is light atthe end of the tunnel - but we don't know yet whether it isdaylight or the lights of a coming train.

Tuija Brax stated that the Finnish Government gave too

soft reports to parliament regarding the economiccrisis. She demanded from the government more fact -based reports, clear analyses of worst case scenarios.There are too many open questions in all the reportspresented by either the European Commission or theFinnish government so that MPs cannot really know howmuch of the Finnish tax payers money is at risk in the

different EU mechanisms (a concrete example being theincorrect report on the risks Finland is taking upon itsnational budget in the creation of the EFSM). There wereno comparative studies on the alternatives for Greece inthe communications of the Finnish government to thenational parliament. Therefore, Greens have to dare totalk about the facts, show the figures and discuss all theproblems openly.

The main argument of Tuija Brax was that also Finlandwill be deeply in debt no matter whether it lends moremoney to Greece or not. The whole of Europe is in the

longer run in deep trouble. Finland is not in such a goodshape one might think. The interest rate is the crucialpoint, because if interest rates go up, Finland will have topay a lot extra. To add to the pain, the EU's austerity


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regulations, such as frame budgeting will mean thatwhen interest rates go up, states have to dig into otherbudgetary pockets (e.g. social welfare) to balance thedeficit.

The key question for the Greens is how much growth, andwhat kind of growth, is needed, when we talk about theGreen New Deal. What is the Green position on growth?

She ended her speech with a very realistic vision onFinlands position in Europe and in the open marketcompetition. Great Britain and especially Sweden are

extremely important countries to the Finnish economy.Finland cannot idealistically make new tax legislation(like the financial transaction tax, bank taxes) if Swedenis not applying the same taxes too. There is a race to the

bottom going on all the time, and this is realism and a

fact according to Tuja Brax. As long as all EU memberstates dont play by the same rules, Finland cannot afford

to take actions that could push Finnish companies andbanks away from Finland.

Juan Lopez de Uralde The Spanish

government and the Troika are turningprivate debt into public debtChair Chair of Spanish Greens EQUO Juan Lopez deUraldelooked at the debt crisis from a different point ofview. First, he explained the background of EQUO, a newpolitical party that gathers together different greenmovements. It is not easy being green in Spain in asituation where people are mostly concerned by dramaticeconomic realities.

From the Spanish point of view, the euro crisis is not astruggle between Northern and Southern Europe. It is astruggle between the rich and the poor. The people ofSpain are angry and on the move. People are on thestreets protesting against the austerity measuresimposed by the conservative government and the Troika.

Juan Lopez de Uralde strongly argued that the crisis iscaused by wrong politics and an irresponsible bankingsector. It is not caused by the lazy Spanish people whoare having fun with Northern European money.

80% of Spanish debt is private debt. 75% of private debt iscoming from companies, of which 95% from big

companies, mainly banks. The problems started whenthe conservative government changed the law of the landownership in 1997 and all land was changed intopotential building land. This caused a real estate bubble

never seen before, with huge investments in buildingsespecially on the coast. The problem of Spain is not thedebt of the Spanish state (Spains public debt is actually

lower than Germanys), but it is the private debt of thebanks, which is now being made public. The Spanishgovernment is injecting money in the banks via austeritypolicies; the government is therefore buying the debt ofthe banks at the expense of social services.

The real problem in Spain, de Uralde argued, is that taxincome as percentage of the GDP is lower than the EUaverage. Therefore, there is a clear need for tax increase.

The austerity measures that the conservativeGovernment and the Troika are demanding havedecreased public investments very fast. Especially thecuts in the education sector are very serious. Reforms ofthe labour law implied decreasing salaries costs and

decreasing unemployment benefits; reforms of thehealth care system equates to its privitasing: costs arebeing cut by turning public hospitals into private ones.Budget cuts, privatising and other austerity measureswill push Spain closer to the American model, not theEuropean social welfare model. The reform of the energysector, through which the Government cut all the

subsidies to the renewable energy sector, has basicallydestroyed the renewables sector in Spain. That's why theCO2 emissions in Spain are raising at the same time withthe economic downhill and the rise in the poverty rate.Above all, there is a growing repression of social protestswith laws prohibiting demonstrations in front of theSpanish parliament (Congreso).

One consequence of the austerity measures is that angertowards the EU is growing and people are ready to votefor populist and racist parties anti-EU rhetoric. That is avery worrying prospect. Juan Lopez de Uralde demanded

that the Greens offer an alternative to these devastatingausterity measures. The Green message has to be thatthe EU means more welfare, democracy and equality. Wehave to stop giving money to the financial sector, we haveto stop cutting social welfare, we have to raise corporateand wealth taxes and we have to take care of theenvironment.

The Greens have to change the course of Europe,because some anti-EU feelings are taking forms evenresembling neo-fascism. We have to fight togetheragainst racism and populism, for the poor and theenvironment!


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Monica Frassoni: What wed lose without theEU is enormous

Co-Chair of the European Green Party Monica Frassonipointed out in her speech the need for united action ofthe Greens. Finland has been one of the most activemembers of the EU, but the tone of the discourse haschanged. We should not say one thing at home andanother in EU level debates.

Monica Frassoni reminded the meeting of the manybenefits the EU has brought about: stricter

environmental legislation and higher democracystandards. Slowing down the process towards an evencloser union would not solve the current problems.Greens have to base their arguments on facts and indeedadmit that there have not been any big transfers ofrichness between Northern and Southern Europe.However, what we do need to admit is that all EUmember states benefitted more from the EU than theywould have if they hadnt joined. What wed lose without

the EU is enormous.

We need common actions and discussions and this iswhat the EGP is striving for. We need to go beyondnational discourses, to European ones. At the moment,Italian newspapers are telling the story that in the EUbudget negotiations Finland and Germany are trying toreduce the EU funds allocated to the earthquake victimsin Northern Italy. These are no premises for creatingsolidarity.

Monica Frassoni wanted to remind the meeting that theEGP has just published in its council in Athens aresolutionentitled Whats more for Europe? More unionfor the EU. There are many good points for a betterEurope in the paper, that are uniting points for the

Greens, including green alternatives to austerity, theadvantages of a banking union and a discussion on thequality of European expenditure.

Tarja Cronberg: Five different scenarios arepossible for Europe, from disintegration to

federalism

MEP Tarja Cronberg explained that she has not alwaysbeen favorable towards the EU, but after having workedin the European Parliament for two years, she feels more

optimistic about the European project. She argued thatGreens have to find allies with all the parties who wantmore Europe. There are powers that are ready to build a

common Europe, but they have to unite. We have toremember the role of the EU as a peace project.

Tarja Cronberg projected five different roads for Europeto take: disintegration, Europe la carte (pick up whatyou want), Europe at two levels (North-South, rich poor;permanent divisions building tensions), Europe at twospeeds (common objectives, with the long term goal ofthe EU and eurozone completely overlapping) andfederalism. Greens are situated somewhere between thelast two scenarios, but the road to choose is still open.

Teija Tiilikainen: European parties have tomove beyond federations of national parties

Director of the Finnish Institute of International AffairsTeija Tiilikainen talked about the democracy of the EU.She argued that the EU was built as an aspiring federalproject in a time when there was neither a European-level public space nor a European level civil society.That's why the problems are still very acute.

At the moment, the EU is tackling big decisions that can

develop its democracy, but there is a risk that the resultis not more democracy. There are so many questions onthe table: Parliamentary system or a stronger EUpresident? One suggestion is that the president ofCouncil and Commission should be one person. Shouldthe new president be elected directly in European levelelections? That would lead to a similar system as the onein USA, which would politicise the European Commission,and from a democratic perspective this is not a goodthing. Stronger parliamentarism is the better alternative.

We need real European level parties, but to build them is

a long term process. National parties and European levelparties can co-exist, but European parties have to movebeyond federations of national parties if they are toaddress a truly European citizenry.

Beyond austerity?The subsequent discussion with the audience focusedmostly on the reasons behind the austerity measures.Juan Lopez de Uralde asked why is Finland (andimplicitly the Greens in government) supporting policiesthat actually uphold and save the banking and financialsystems, at the expense of social and environmentalrights?
http://europeangreens.eu/athens2012/whats_next_for_europehttp://europeangreens.eu/athens2012/whats_next_for_europehttp://europeangreens.eu/athens2012/whats_next_for_europe


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Tuija Brax answered that austerity is a policy that Finnishgovernment and implicitly the Greens are legally boundto via the fiscal compact. But these legally bindingtreaties don't give enough answers about the way theyshould help the European economy. Tuija Brax also saidthe banks cannot be allowed to go down before there is astrong banking union that is a de facto mechanismagainst too big to fail banks. To be in the heart of theEurope could be dangerous for Finland, if other Nordiccountries are not joining the same path. Finland cannotbe in a totally different place to Sweden, with Swedishand Finnish economic interests as interconnected as they

currently are. That is why we cannot be too idealisticabout a Europe integrating at two speeds.

Juan Lopez responded that concept of saving the banks isnot working, and should be replaced with that of savingthe citizens. This would be much cheaper than bailing outthe banks, as it is clear that austerity policies are notworking.

Monica Frassoni reminded as a conclusion that AltieroSpinelli wrote about a federation of European states in1942. If he could see that dream in the middle of war -ridden Europe, we, the Greens, can certainly have this

kind of dreams today. Cut cut cut is not a realistic path.Sticking to the facts, we must admit that austerity doesn'twork. Europe is now in weaker state than it was threeyears ago. Nowadays it is so easy to be euro-sceptic.Greens have to be bold to say YES to Europe. We have theEuropean parliament and many NGO's that understandthe importance of EU. We have to find other alliances aswell. And we need more debates like this.

SummaryIn conclusion, economic challenges are high throughoutEurope, even in the stable North. The debt crisis Europeis facing at the moment is not caused only by SouthernEuropean banks or governments. Also in NorthernEurope people are getting older and the industry ismoving to other pars of the world, where labour costs arecheaper. Our economic resources will thus be muchsmaller than what we have been used to.

The European Greens should continue to discuss and

debate the solutions to the crisis in Europe in order tounderstand each other and our positions better.

Juan Lopez argued that this crisis is not pitching northagainst south, but rich against poor. What should beadded is that this crisis is also opposing our consumeristgeneration to future generations and natures limits.

We have to find credible alternatives to austerity policies,but at the same time we have to understand that -European solidarity needs to be matched by solidity.

The most important thing is to demand democracy andopenness in every level of the decision making process.Currently, the EU resembles a closed system that onlylistens to what the markets say. We cant defeat the

populists without a democratic EU.

The article was written by Ville Ylikahri, is secretary general of the Finnish Green educational centreVisio.

Green European Foundation

The views expressed in this article are those of the authors alone.

They do not necessarily reflect the views of the Green European Foundation.With support of the European Parliament.

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Report Finland and the Future of the EU Ville Ylikahri Final

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