Honourable President of the Riigikogu, respected Riigikogu, esteemed ambassadors,
The time has come again to set the European Union aims. The European Union does not stand before a choice of whether “to be or not to be”. However, with increased frequency we are faced with the question whether the chosen road and the cooperation to date have been the right one. We must explain evermore persuasively to the public the choices and decisions made. After the Brexit referendum, we called to life the so-called “Bratislava process” to make choices between openness and isolation, between a global or protectionist Europe. It is a process for finding solutions to burning problems such as global security, internal security, the economy and employment. This does certainly not signify the beginning of a new non-liberal era or a distancing from the European values and policies that have been successful. Yet, at the same time we must face the fact that not everything has turned out as intended and not all problems can be resolved overnight or at the European level. The European Union – like all other political projects is constantly developing, it is not perfect, but it is the best supranational form of cooperation that we have.
The British decision to leave the European Union was indeed like a cold shower both to Europe as well as to the United Kingdom. The speech delivered on the 2nd of October at the Conservatives’ Annual Conference provided the first explanation of how the new British Prime Minister, Theresa May sees the future. Regardless of our hopes that the United Kingdom will seek a close as possible relationship with the European Union, there were very few encouraging messages for us in that speech. Even though there is still half a year left until the submission of the notification, and a lot can happen during that time, we must still operate on the premise that the United Kingdom is leaving the EU. It is also rather unlikely that the model of future relations is based on the current four fundamental freedoms or even on a customs union model similar to Turkey. Therefore, the future may contain something less than model of cooperation with Norway, Iceland, Switzerland and Turkey, but I believe that it will still be more than just a free trade agreement. We need more clarity in respect to the United Kingdom’s participation in other policies as well, such as justice and home affairs, and of course in the field of defence. Regardless, I am still an optimist and hope that the final result of the negotiations will be a balanced one and it will retain a relationship between us that is as close as possible. Yet, we can already draw some key conclusions.
First, I can say that for the near future the cooperation of the 27 Member States of the European Union, and the achievement of results is of utmost importance. Only then we shall deal with Brexit negotiations. Second, we must improve the cooperation with the United Kingdom both through multilateral organisations (such as NATO) as well as regionally, and in bilateral relations. Third, the Brits leaving the European Union brings about the exit of a very influential Member State that is like-minded with us, which in turn means that the cooperation between like-minded Member States without such an advocate will become even more important than it was before. The faster we accept that the referendum is irreversible, the sooner we can also find the necessary solutions.
One of the main topics of the upcoming European Council discussions is free trade. Over the past year, the free trade agreement discussions between the European Union and third countries have been grounded on several occasions. Even though the European Union is the world’s largest trading bloc the progress of the Ukrainian, US and Canadian agreements show that we must find a way to address some actual concerns and, unfortunately, counter untruths. The European Union has been a leader of globalisation, because free trade has meant the creation of welfare for its citizens, fighting poverty in the world and, through close economic relations it has also helped to ensure peace and stability.
Estonia has, due to low trade barriers gained a lot from free trade through an increased welfare. At the same time we must also understand those for whom globalisation has created anxiety and uncertainty, and who have now become easy targets for populists as a result. It is obvious that the entire population has not benefitted from globalisation in an equal measure and it is up to governments to help those who feel disenfranchised to cope with the changes brought about by globalisation and technological progress.
The President of the European Council, Donald Tusk, said fittingly in Tallinn that we must offer our citizens an additional sense of protection in order to remain as open as we have been thus far. Therefore, it is important that growth reaches everyone. The welfare “pie” and economic opportunities do not become greater due to nativism nor do they help to create additional welfare – our future must consist of the capability to create, produce and export research-intensive services and products.
I would here, quote a recent Economist article, Why They’re Wrong (1.10): “Protectionism, by contrast, hurts consumers and does little for workers. The worst-off benefit far more from trade than the rich. A study of 40 countries found that the richest consumers would lose 28% of their purchasing power if cross-border trade ended; but those in the bottom tenth would lose 63%.”
Freedom or free trade does not denote licentiousness or anarchy. On the contrary, we must be at the forefront of ensuring that global trade both professes the rules and follows them all the while respecting fair competition. Therefore, it is important that Europe continues to conclude agreements with likeminded countries – which above all are developed industrial countries. These agreements must promote a rules-based world trade and be economically balanced.
Honourable Riigikogu, dear Members of Parliament,
In the world, Europe’s weight is largely determined by the health and strength of its economy. It is unlikely that anyone would doubt that a large single market is necessary for all European countries to remain competitive and to successfully participate in the world economy. The reforms of the goods, capital and services markets must continue also in order for Europe to participate in the digital economy. Different sectoral market regulations restrict opportunities to create economies of scale, which the e-commerce solutions support and have been successfully achieved, for example in the US. Although we can lead by an example being the world’s best national market can not enough.
I am delighted that as a result of years of diligent work Estonia has gained an image of a successful and established digital country. Many would want to be a little bit more “like Estonia” – and in addition to everything else positive, also be a little “cooler”. The unconventionality of Estonia is in part fed by the somewhat crazy dream to join the Estonian and Finnish e-states, and our value proposition by way of virtual residency – concepts that both have already attracted widespread interest. The Riigikogu has also had a very important role in creating Estonia’s progressive digital image, above all as a leader in the field of collaborative economy. We have chosen the right path by quickly adopting new technologies and finding solutions that support their development.
I believe that through our own example we have, among other things, managed to achieve the outcome that the creation of a digital single market, as a short-term priority of the European Union, did not create any significant arguments when drawing up the Bratislava declaration. A majority have adopted the word ”digital” as a part of their vocabulary, regardless of the fact that some countries still also have a very strong accent.
Honourable Members of Parliament,
As we know very well, noblesse oblige. As a digital country, it has been us who have suggested that in the future, free flow of data should be a separate fundamental freedom of the European Union. According to the Solow productivity paradox every ground-breaking technology – such as the Internet – takes time to yield its entire economic effect in the form of increased productivity and welfare. No one doubts that the Internet affects a systematic change on economies and societies. To achieve this goal, in the near future we must create a legal and investment-friendly environment that supports building a modern digital infrastructure, including in the Nordics. We must also ensure a regulative environment in Europe, which supports the data economy and is not held back by location restrictions or other hindrances. This must take place in a manner that does not call into question the individual’s right to privacy or create a situation, which firewalls the European digital single market from the rest of the world.
The free flow of data as a fifth fundamental freedom allows it to be considered as an enabler for all the other fundamental freedoms as well as be an aim in itself. The latter was nicely summed up, figuratively, last week by a large Swedish telecommunications company, wording it as “the creation of a gigabit society in a terabyte territory”.
Another topic, which I would definitely like to touch upon in the context of economy and internal market, is connectivity. As border controls inside Europe hinder opportunities for economic activity, our isolation is similarly one of the most pressing glass ceilings of our economy. It does not necessarily have to be so, but changing the situation requires consistent effort and staying determined. I mentioned above the cooperation between Estonia and Finland in developing digital governance, which may lead to entirely unique solutions for many countries. As a result of very determined work, the signing ceremony of the financing agreement of the gas interconnection BalticConnector, ensuring energy security for Estonia and Finland shall take place on the 21st of October. It is quite exceptional that the European Commission finances 75% of the project.
Our next energy security project is the creation of a regional electricity market, which functions in a fully synchronised manner in terms of the market as well as the infrastructure. Explaining this took a significant part of my visit to Sweden and Denmark last week. The first step is carrying out a study and mapping the technical and financial means for creating the interconnections, and I hope that this project will be feasible either through Poland or the Nordic Countries already in the next EU budget period. For this, however, we must of course carry out technical work, design the multi-annual financial framework of the European Union, and find the solutions with the concerned countries.
An equally important long-term project is the railroad connection Rail Baltic. It has again recently created much controversy. I still believe that the writers of the project have acted in good faith and that at the end such a comprehensive consideration of the project will benefit from it. Although, achieving full consensus in the case of such a large-scale infrastructure project is difficult. The current additional cost-benefit study will help to seek answers to several questions that have been highlighted, such as the choice of route, cost-benefit presumptions and the expected trade flows. I want to hereby display some of the more prominent aspects concerning Rail Baltic that have been questioned thus far:
First, regional cooperation. It is the largest cooperative project in the history of three or four countries. I would say that it is even a historical opportunity for connecting the area with Western Europe. Although Estonia has, to a large extent, been the leader in the project - reminiscent of the taming of the shrew at times - there is noticeable interest towards the project from Finland and other countries. It has reanimated the Tallinn-Helsinki tunnel dream and also encouraged the Finnish business sector. Currently the three Baltic States and Finland are connected by an imperial railroad with a Russian track gauge. Unfortunately the hope that Russia would be interested in something more than directing raw material flowing through its own infrastructure and implementing the “divide and conquer” principle in different East-West corridors and projects has materialised.
Therefore, it is easy to create a situation where the Baltic States are rather competitors than cooperating partners, seeing problems instead of opportunities. We need Rail Baltic to connect ourselves with Western Europe strategically, politically and economically. In 10 years, the saying that the Baltic States are an anomaly in Europe where you can only travel East by train should no longer be true. The Rail Baltic route is strategically important for Europe as a missing link, and it is self-evident that Europe does not prioritise or fund the East to West direction.
Second, cost-effectiveness and economic opportunities. Of course, construction itself creates new opportunities and may bring infrastructure investments of strategic importance into the region. Yet this is not a key aspect, even though we have reached this result through difficult compromises. Western Europe it the key partner in terms of trade and cooperation for Estonia. Rail Baltic’s key to success will be its ability to contribute significantly to the international trade of the Baltic States and their neighbouring countries. In addition, Rail Baltic will create new and fast travel options for passengers and carriage of goods. To achieve this, it is necessary to choose an optimum route, ensure good service quality, high operating reliability, modern rolling stock and equipment both in the transhipment stations, and ports as well as at various logistics centres in order to ensure speed of operation.
The future infrastructure charges system will support the use of the railway, and the main monetary benefit will not be received from the charges of the railroad itself but from investments flowing into industry and infrastructure. Even if the project seems cost-effective already on the basis of the single region, additional opportunities go beyond just our region, because, for example, China is also actively looking for new opportunities for container transport into Europe.
Regional cooperation, connecting Europe and economic cost-effectiveness are just a few main arguments. I believe that the exaggerations about splitting Estonia, potential stunting of our gen pool etc., that have been voiced in public to sow fear, will also all be addressed at a suitable level. The Riigikogu has had a very significant role in considering this topic in the previous term, insofar as we are shortly sending a transnational agreement into this hall for deliberations, which shall put the future of Rail Baltic on as sound a footing as politically and legally possible.
Last year, the focus of my speech in front of you was on European security and various crises related to it, which in total had effectively taken the dimension of an existential crisis. Not only due to the Russian aggression in Ukraine, which is ongoing. The refugee crisis that had been triggered as a result of the Syrian conflict was starting to take on epic proportions, and the acts of terror in Belgium and France, very painfully, reached Estonians as well. The unity and decisiveness of the West were proved to be of key importance. The migration crisis made us directly aware of the fact that the security of European countries is very closely intertwined. All Member States are, quite literally, responsible for the high-quality of guarding the common border, and thereby also responsible for each other’s daily security.
The heightened political attention, the change of gear in the migration crisis and its derivative actions have, in comparison with the same period last year, reduced the migration flows between Turkey and Greece by as much as 98%. The border is guarded from both sides of the boundary line and its effectiveness depends on the level of security and will to cooperate on both sides. The period of 2015-2016 brought about breakthrough changes. Cooperation and agreements with third countries, as well as a change of attitude in the European Union – allowing for the implementation of all political measures and means for the management of the migration crisis, are especially important in this context. It stands as an excellent example of what can be achieved in a short period of time by acting together in the framework of a truly Common Security and Foreign Policy.
Last week the European Border and Coast Guard Agency started work on the Bulgarian-Turkish border. The Agency will help to control of European external borders even better than before. Although the Agency shall start resolving the crisis as a supporting structure, in the future a comprehensive European border and coast guard should not be precluded.
We can take delight in the creation of the European Union’s entry/exit system, which in turn is supplemented by the future implementation of a travel authorisation system and improved opportunities to impact the migration originating from visa-free countries. In the summary of the topic, I wish to very much thank the Estonian law enforcement agencies, which have contributed extensively to the European Union’s joint operations and have also seamlessly implemented the aims of the migration plan. The result of our joint action could lead to the removal of control everywhere on Schengen internal borders.
Respected Members of the Riigikogu,
Regrettably, I am unable to report that the Minsk II agreement has been fulfilled. It has not. Ukraine does not have control over the entirety of its territory, as the ceasefire is rather fictitious. With relentless force Russia continues to wage war in Europe’s Eastern and Southern neighbourhoods, and in truth, in part in Europe itself, too, if we take into account all manners of warfare. Our Eastern neighbour is using conventional as well as hybrid methods for moving forward, such as the hybrid car uses different fuels for propulsion. Intervening in presidential elections with cyber means, financing extremist parties in Europe and their indoctrination in Crimea, undermining the independent investigation of an aircraft crash, and spreading propaganda and lies all come under this description. It seems that, like a bully, they have started looking for a fight everywhere it might be found.
Therefore, the situation has again begun to be described as the new cold war, even though Edward Lucas described its manifestations quite expressively in his book by the same title a good few years ago. If according to the Russian leadership the West is an existential threat, then in reality no-one ought to be surprised in the slightest that the ends justify the means.
What has in fact changed is the attitude of public opinion of the West. This is not only reflected by the evaluation contained in the fresh Global Strategy of the European Union, that “Russia’s violation of international law and the destabilisation of Ukraine, on top of protracted conflicts in the wider Black Sea region, have challenged the European security order at its core”. The continuing cynical conflict of Ukraine and Syria, and also the investigation of the recent Malaysia Airlines flight 17 aircraft accident and many more incidents have opened more eyes and forced Western public opinion to pay closer attention to what is going on. The refugee crisis is in fact, a direct consequence of the Syrian crisis. The view that opens from Aleppo is simply appalling. Therefore, at the upcoming European Council it will most likely take less convincing of our colleagues that we must stay on the course with sanctions, be united, determined and approach the issues with the long view in mind.
Even though the European Union is not a defence alliance, it has, since inception been a security project as much as a project for ensuring the welfare of its citizens.
The fresh developments in the field of defence are well in line with Estonia’s intents so far. I will say upfront, that in my opinion, the creation of a European army is not on the table right now and we should not spend time on shadow boxing. I remind you that NATO does not have an army either, the Member States do. To begin a meaningful discussion over European defence for the first time by wording a task that is too difficult may create an opposite effect. At the same time, a greater contribution to defence is no longer a taboo, but rather an area where there is willingness for enhanced cooperation. Estonia should not be allergic to the development of the topic of European defence, restricting itself to the opinion that it “should not duplicate NATO”. It is true that we should not diffuse our efforts, but we should still view it as an opportunity, because it is possible to find places where the European Union could create added value. Need for more cooperation in defence matters is definitely also one of the important corollaries of Brexit.
Let me also remind you, that soon three out of the four NATO framework countries will not be the members of the European Union. Encouraging developments over the reunification of Cyprus will soon remove a significant obstacle to cooperation. Based on the example of the Paris terrorist attacks, we know, that the EU solidarity clause offers additional opportunities. The command of the European Union’s military and civilian operations could also be streamlined, – such as to relieve NATO of the burden of external operations and allow the latter to focus on its main tasks.
There are further areas where cooperation could be improved, for example the defence procurements, research, development and innovation, but also the application of the EU’s civilian solutions for defence forces (for example, maritime surveillance, sea rescue, satellite navigation etc.). The European Union’s strategy on hybrid threats must be implemented and in our opinion, a comprehensive cyber strategy could also be renewed where the European Union also has an important role.
It is an important and even a critical time for Europe during which Estonia takes upthe Presidency of the Council of the European Union. Our Presidency shall go beyond the “political equator” of the institutions. Foremost, this means time pressure to finish negotiations and conclude important political agreements. I believe that earlier I sufficiently opened the curtain on the content of the Estonian Presidency, because it is the economy, security and Brexit, among many other topics that we will deal with during the Estonian Presidency. Topics that are important for Estonia are well reflected in the working plans of the institutions, in the Strategic Agenda of the European Council as well as the Work Program of the Commission. Very important draft legislation from the position of European development is also before Riigikogu, such as the Paris climate agreement and the free trade agreement with Canada. However, the time to present our priorities in more detail at the plenary session of Riigikogu will come late spring of next year, when the Maltese Presidency has well progressed.
We know the majority of the topics and draft legislation, which is why I am hoping for meaningful discussions of the Presidency programme in the European Union Affairs Committee and the relevant field committees. Estonia should have a single Presidency programme, reflecting topics that are important both for the Government and the Parliament. A jointly created programme helps to achieve the goals and to reach a consensus in order to highlight our Presidency role in the second half of the year. In cooperation with Riigikogu, we hope to also find a suitable working method for the duration of our Presidency in the near future.
On the basis of the recent report, the Cohesion Monitor, of the think tank ECFR - we can boldly claim that in the time period of 2007 to 2014, we have progressed the furthest in readiness for cooperation in Europe; and that we are one of the most cooperative Member States; after the founding countries of Belgium and Luxembourg. The Presidency is definitely the most important leadership challenge for the Estonian public sector so far. Its success depends mainly on the ability to strike deals and advance the common agenda.
The European Union is therefore like a coalition government with 28 members, which cannot be led in an efficient manner by scrabbling and pounding fists. Patience, wisdom, the gift of diplomacy, presence and empathy are the qualities towards which each Minister and every official should strive. The fact that Estonia was ready to pick up the baton of the Presidency dropped by the British is a very good example of readiness for cooperation and leadership. It is also recognition, in retrospect, that we started the preparations early enough. Therefore it did not seize up, we were able to forward to Riigikogu the necessary draft legislation concerning the Presidency and adjusted our activities. I, therefore, highly commend Riigikogu’s stamina, as your burden essentially doubled.
I hope that this quality will also be in ample supply despite of next year’s local elections, so that the Presidency will be, foremost, accompanied by amity and unity. A successful Presidency is our common aim.
Let us make Estonia greater together.