(Translation)

ADDRESS OF GREETING BY PRESIDENT OF THE REPUBLIC OF FINLAND
MARTTI AHTISAARI AT A CELEBRATION OF THE 20^TH ANNIVERSARY
OF THE GERMAN-FINNISH CHAMBER OF COMMERCE IN ESSEN ON 26.9.1998

Attending the celebrations marking the 20^th anniversary of the German-Finnish Chamber of Commerce here in Essen is a pleasant task. Germany is an important country for us Finns: it is one of the sources of our cultural heritage and our most important trade partner. Membership of the European Union has raised relations between Germany and Finland to a new level. This has naturally affected also our trade, a point clearly highlighted in the contributions of earlier speakers.

Finland has built her prosperity on the foundation of an international division of labour, on foreign trade. Germany is the main destination for our exports and also our main source of imports. Our exports to Germany have more than doubled in the past ten years and today exceed 11 per cent of our total exports. The items that we have traditionally exported have been paper and other forest products, but these have now been joined by metal articles and new-technology products. Finland is by no means an insignificant customer for Germany, either; in fact, we are just behind China as an export market in the German trade statistics and ahead of, for example, Canada or Australia.

When the Chamber of Commerce was founded 20 years ago, we were living in the Cold War era. In those days, the distance between Finland and Germany was in many senses greater than it is today. The Chamber of Commerce had its own special role in bringing our countries closer together and creating contacts. The ending of the Cold War affected the immediate environment of our countries and especially the Baltic Sea region: that made it possible for Finland to join the European Union and increased the importance of the entire Baltic Sea region.

Finland’s accession to membership of the European Union made the traditionally-strong economic relations between Finland and Germany even closer. Now economic and monetary union means the dawning of a new phase in our relations. Soon we shall be united by a common currency. It lies in the interests of both countries - and of the whole of Europe - to ensure that EMU is stable and the new currency strong. Finland will be among the first wave of 11 countries entering the euro area. We have met the stability criteria required for membership. EMU will strengthen our companies’ price competitiveness. What is most important, however, is that it will give them predictable ground rules and a stable environment in which to operate.

It is a pleasure today to outline the state of the Finnish economy. The indicators point to a continuation of balanced growth. Gross domestic product is forecast to grow by 4 per cent next year. Although the rate of growth is tapering off slightly, domestic demand is now also gathering momentum. Exports have continued to increase vigorously and our trade surplus is bigger than its has been for a very long time. Thus we are in a position reduce our foreign debt rapidly. Our public finances are likewise in surplus and inflation has not been so low for ages. Our major problem, unemployment, has dropped below 10 per cent and the trend looks positive.

The recent economic difficulties in Russia have naturally created uncertainty in the region. Our exports to Russia have been developing favourably in recent years and now represent about 7 per cent of our total exports. Diversification of the structure of our exports will help our companies to redirect their exports if necessary. The situation in Russia has not affected our currency. That is one of the first consequences of Finland’s joining the euro area.

As a member of the euro club, Finland will continue to stabilise her economy and strengthen its base. The structure of our economy has diversified. The relative share of high technology is constantly growing. Today, Finland has more Internet connections and cellular phones relative to population than any other country on earth. Training and research are further strengthening our position in the forefront of development. In addition to its traditional supporting pillars, the forest products and metal industries, the Finnish economy now has a third in the form of high-technology industry, which already accounts for a fifth of our total exports.

For us Finns, globalisation is a fact. Investment flows and international corporate deals have taken their place alongside traditional visible trade. Many companies in Finland have acquired new international owners. European integration is having similar effects. Finnish companies made large investments abroad in recent years, also here in Germany. There has been investment in Finland as well. Yet there still remains a lot to be done in this sector. It is possible that in both countries investment objects have too easily been looked at from beyond the oceans. The German-Finnish Chamber of Commerce certainly has a significant role of its own when the advantages of Germany or of Finland also as investment locations are being assessed.

In 1999 it will be Germany’s and Finland’s turn to assume the Presidency of the EU. This responsibility will come at a time when important decisions on reforms of the Union fall due. At the same time, preparations for world-wide trade talks will be in progress. The EU is the most important promoter of liberalisation of world trade and investment and I hope that we shall be able to enhance its ability to act also more broadly in global questions. That lies in the interests of all member states.

The northern regions of Europe are potentially one of the most important growth areas. Russia’s recent economic difficulties do not alter the fact that trade in the Baltic Sea region is on a strong upswing. Dismantling barriers can enable trade to increase several-fold in the future. In the sectors of energy management, the environment and transport, matters of great importance to the Union are involved. In the next century Europe will be increasingly dependent on northern energy resources. Shared interests and mutual dependence will create stability in the region. Russia’s integration into European structures will be supported by improving the central trade channels between that country and its European neighbours. To be able to handle all of the opportunities - but also the threats - that the northern regions offer there is a need in the European Union for the Northern Dimension policy that Finland has proposed. What is involved here is a definition of the interests of the Union as a whole. Finland’s initiative has received widespread support not only in fellow member states, but also from other countries in the region - Russia, the Baltic States, Poland, Norway and Iceland.

Globalisation demands bigger and more competitive companies. Europe’s competitiveness is not the best possible. EMU is one means of making our continent more competitive. This presents a challenge to small and medium enterprises. I am glad that the German-Finnish Chamber of Commerce is helping precisely those companies to internationalise. For Finnish companies Germany is a natural place to begin internationalising.

I wish the German-Finnish Chamber of Commerce and its members the best of success.