Speech by Minister for Foreign Affairs of Estonia Urmas Paet "Europe, thinking forward" in the Institute of European Affairs in Dublin

Excellencies,

Ladies and gentlemen,

It is a real honour to be here with you at the Institute of European Affairs and to speak to such a distinguished audience about Europe's future. Let me begin by thanking the organisers of today's event.

It always feels good to be back in Ireland. My previous visit to Ireland took place during your country’s EU presidency in May 2004 when Estonia became a member of the European Union. It was truly an historic day and we celebrated it in Galway and Dublin with joy and festivity.

Now, two and a half years later, I can say that Estonia is developing even further and that we are enthusiastic about the EU. In fact, support for the EU has never been as high in Estonia as it is now – 78% of Estonians support EU membership, at the referendum the support was 67%. We have undertaken dramatic reforms and have been able to make use of various opportunities, but we have also had the advantage of being able to utilise the valuable experiences of our European partners.

Ireland, and your experiences in the European Union, has been a source of inspiration and in many ways a role model for Estonia. We are both closely connected to the sea and, we have always been open to external influences. To the extent that the seasons, curiosity, luck and politics have, of course, permitted them to be so. Our size – the fact that Estonia and Ireland are not exactly the biggest countries in Europe – allows us to make decisions swiftly and effectively. Perhaps it is the unusual charm and spirit of Irish literature and your sense of humour that have added to your popularity in Estonia. Our strategies – a liberal taxation system as well as attractive trade and investment laws – have been analogous and, undoubtedly, keys to success. And the results are visible – we have witnessed the emergence of an Irish miracle and Estonia is experiencing a real economic boom, with the GDP growth rate this year at close to 12%.

Today, however, I would like to speak not about how well Estonia is doing. And not about the EU’s current internal difficulties, which some attribute to a democratic deficit, others to overall fatigue. As Robert Schuman, in his declaration of May 9 1950, phrased it: “Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity.” I agree – I am happy that Europe was not made in one day and that among the first achievements of the European Union was the building of a sense of solidarity.

Joining the EU was not to safely land in a nice peaceful club and start enjoying benefits, special offers and «happy hours». It was not a happy ending to a fairy tale, but the continuation of a journey, where we take responsibility for « building Europe through concrete achievements ». I support those who argue that the focus should remain on delivering for the citizens.

Therefore, I would like to share with you today my ideas on Europe’s future in the current international context, and Estonia’s positions on some concrete issues.

Ladies and gentlemen,

The world around us is in constant change. People change spiritually, countries change economically and politically. One could call the constant changes in the international situation an international agenda of change.

The EU itself is a story of successful changes. Conflicts and wars between the EU countries have long become unimaginable. Not just regimes, but whole political systems have changed in Europe. We are free and wealthy, offering an attractive example to the aspiring states in our common neighbourhood. But when we look at the wider discussions about the European Union or the world today, we see that changes often tend to be perceived rather negatively.

Globalisation and its challenges – energy, climate change, terrorism, and mass migration – are among the most widely discussed topics currently in the EU. The world is interdependent in an economical, cultural, ecological and technological sense. The silhouettes of Shanghai and Kuala Lumpur dominate the modern skyline along with London, Tokyo or New York. Europeans are concerned about their comparative advantages in an increasingly competitive world.

It is true, that interdependence is changing the nature of the world. But globalisation is not uniform; its complex impact varies across countries, and time. We need to be open-minded about its sometimes contradictory and unexpected consequences. Our success in competing in the world depends mostly on our own attitudes and actions, and to a lesser extent on the circumstances around us.

The current concept of globalisation is the result of the opening of the emerging economies to trade, investment and technology in the late 20th century. This time around, national markets are fused transnationally rather than linked across borders. It was clear in the 1990s, that Europe needed renewal if it was to compete in this changing world. As the free trade advocates claim – competition is the result of universal free trade, not its precondition. And Europe’s answer to universal competition was ambitious: enlargement, the euro, the Lisbon agenda and coordinated foreign policy. But the EU has to be even braver and to press for a much liberal agenda on economic issues.

Regarding the internal market – the EU has achieved a lot in making it liberal and operational. But we have to further strengthen it through integration and enlargement. We need to carry through the liberalisation of all basic freedoms in the EU: the free movement of goods, capital, persons and services. Ireland has been a prominent example of opening up to outside influences, and Estonia is grateful to Ireland for opening up its labour market to Estonians when we became members of the EU. The EU countries should realise the advantages of overcoming the remaining protectionist reflexes – we should create a true internal market for services.

Openness and a liberal economy have been the cornerstones of Estonia’s economic success. The Index of Economic Freedom ranks Estonia as one of the freest economies in the World – 7th out of 157 countries. Membership in the European Union has broadened our outlook and has enabled us to open up to a diversity of expertise and to shared values. We are opening our labour market without any restrictions regarding Romania and Bulgaria when they become members of the European Union next January.

The Lisbon agenda for economic reform raises issues that need to be implemented in order to make Europe a competitive and dynamic knowledge-driven economy. But reforms are not simply a matter of drafting the new agendas and revising existing mechanisms. Europe could be a driving force for pushing for open trade, and must take a more activist approach to the opening up of markets. The European Union is seeking to build a new generation of bilateral free trade agreements with key growing markets. But we also need to ensure that trade continues to serve development, including through partnership agreements between the EU and the African, Caribbean and Pacific countries.

The euro is the backbone of the EU’s economy. In terms of monetary stability, the single currency has been a success story, and the international use of euro is growing. But economic development of the Euro zone is yet lagging behing the dynamism of growing Asia or the United States. Estonia wishes to join the Euro as soon as possible. Estonia respects the accession criteria established by the Maastricht Treaty, but they place small countries with open economies and rapid economic growth in a disadvantaged situation. The current interpretation of the inflation criterion should not become a long-term impediment to the further enlargement of the European Union monetary union.

Today we are witnessing the expansion of the universal markets of not only information and knowledge, but also reaserach and development. Innovation is among those challenges where the national action is limited and where we can cooperate. Unfortunately the EU’s innovation policy is still too inefficient, and our markets could function better. The current Finnish EU presidency summed up its three most important priorities as: innovation, innovation and innovation. Estonia supports the development of innovation policy through the improvement of the functioning of the markets, the simplification of regulations concerning the registration of enterprises, the mobility of researchers and the promotion of cooperation between universities and business sector.

As for enlargement, Estonia sees the future of Europe as being free from drawing lines. Europe was divided into “us and them” too much and for too long. Every new member state produces security and stability just by fulfilling the accession criteria. This is the very reason why Estonia supports enlargement. After the World War II, Estonia was subjected to the status of a small province in a closed totalitarian society. Much of Eastern Europe lived under oppressive regimes, some countries of the European Union emerged earlier from a period of dictatorship. But the European Union assisted us in changing our destiny. But we have all regained our dignity and we should not close doors to others who struggle with their own challenges. Estonia supports Croatia and other South-East European countries, as well as Turkey in their endeavours to become EU members once they are ready and fulfil the Copenhagen criteria. We should not add for the candidates any new criteria, such as the absorption capacity of the EU.

Ladies and gentlemen,

Allow me now to bring up the second issue of my address, namely Europe’s foreign policy. While the economies are becoming global, the international politics tend to remain essentially national. In my view, we could implement more truly common policies, where member states agree.

Over the past decade the EU has successfully projected stability and helped to consolidate democracy across much of the Eastern part of the European continent. As a result, Europe today is more democratic, secure and prosperous than at any other time in history. Peace is now taken for granted. However, let us not forget that Europe has generated many catastrophes before, and that peace is an asset we have been investing in. In fact, peace is one of the major comparative advantages Europe has in international relations.

One of Estonia’s foreign policy priorities remains peace and stability in the Balkans. Events in Croatia and Bosnia in the 1990ies remind us, that the pacifying aura of the European Union can easily be lost. Estonia participates in the efforts to help secure a peaceful and prosperous future for the Balkans. We take part in the EU’s military mission in Bosnia, as well as in civil activities there. We will contribute to the upcoming EU border control mission in Kosovo.

There are also other parts of Europe where stability and democracy should be enhanced: Moldova, Ukraine, South-Caucasus and Russia. We are already laying the foundation for genuine integration in Europe – a Europe that runs from Belarus to the Black Sea region. Estonia strongly supports the enhancing and renewing of the European Neighbourhood Policy, which aims at supporting the development of democracy and a market economy in the EU’s neighbourhood. We implement projects supporting the development of democracy and the reduction of poverty in Ukraine, Moldova and Georgia.

We also support the continuation of the double-track policy towards Belarus, including the increasing of finances to promote civil society.

Within the European Security and Defence Policy, Estonia participates in the EU border assistance mission on the Moldovan-Ukrainian border. We think that the EU has an important role in contributing to the efforts to solve the so-called frozen conflicts, which are a major obstacle to stability and progress in some countries of our Eastern neighbourhood.

We should attach great importance to the potential benefit of the increased application of the "four freedoms" in our relations with the neighbourhood countries. The liberalisation of trade, capital flows and labour with the neighbouring countries will have beneficial effects on the EU as well.

One of the issues in current international politics is the re-emergence of a stronger and more active Russia. Estonia's objective is to enhance a strategic partnership between the EU and Russia based on common values, through uniform implementation of all the aims agreed upon according to the roadmaps. We look forward to the full implementation of visa facilitation and readmission agreements with Russia and in this connection, the simplification of the registration of foreigners in Russia. We are currently preparing a mandate to start negotiations between the EU and Russia over a new comprehensive framework agreement to replace the current Partnership and Cooperation Agreement. We welcome the consensus both within the EU and between the EU and Russia, that the new agreement should be a solid, legally binding comprehensive document, and that the current PCA will remain in force while the new agreement is prepared.

Energy is a sphere in which cooperation between states is needed to a greater, rather than a lesser degree. Various trends, like the depletion of resources, environmental problems, and the use of energy as a political weapon, are becoming more apparent. We would like to see more vigorous steps towards developing a joint EU approach to the energy issues. For instance, we need a common position for dealing with OPEC and other suppliers. We need the economy to be regulated in a manner that would orient us towards a new energy era. One of the major trends in the global world has been a power shift from states to markets. But this has not happened in the energy market. So, let’s imagine a theoretical situation – a liberal market for energy resources, which would serve not the suppliers, but the users...

Those who deal with energy questions also see to it that a much clearer attempt should be made to explain the connection between energy and security, as is done in the United States. The European Union is much too modest in addressing political and security questions in connection with energy. It must be reminded, time and again, that in the energy sphere, a long time, 8 – 10 years, lapses between the making of a decision, and the actual launching of a project. Today, we must already consider what situation the world’s energy will be during the years 2014-2016. Estonia is one of the motors that drive the European Union towards the creation of a common energy policy.

The modern agenda also includes the developments taking place well beyond the EU’s borders. The situation in the Middle East, Afghanistan, frozen conflicts, threats of terrorism, illegal immigration, ecology – these are all real topics. We are considerably more active than before in issues and regions outside of our traditional fields of interest. In one such activity, the Estonian government supports the Border Assistance Mission at Rafah and is willing to participate in the EU mission supporting the police reform of the Palestinian Authority.

Thinking forward – the world in 20 years will probably be quite different from today. Along with growing more interdependent we can also observe that the world is becoming more diverse and divided. Current evidence also indicates that there is more inequality across countries today than 100 or even 20 years ago. In fact, the gap between rich and developing countries has grown drastically. One of our main challenges is a world of failed states, which can provide a base for drug and terrorist groups.

I think that our policies should not be driven by theories of where the EU should be heading. Europe's vocation is to be engaged in enhancing peace and stability. We can say that EU’s power derives from its readiness to offer others a seat at the decision making table. Europe should demonstrate that it wants to be a partner with the United States, not a rival. We should be more responsible for making international solutions to work. Combining coherence with expertise and resources could make the EU in the international arena greater than the sum of its individual parts.

Ladies and gentlemen,

Sometimes we do not notice even our greatest achievements, such as enlargement and the spread of democracy. I am sure that most of us would agree that Europe looked very different a mere 15 years ago, not to even mention 50 years ago. Those fundamental democratic values that form the basis of the EU were absent in large parts of, what we have come to call, the European Union. For example, it is very unfortunate that Romania and Bulgaria are often seen in the international press as slipping into the EU «through the back door», while actually they are our equal partners and enlargement is a shared gain for all current member countries. In my view, we should not only translate our grand ideas into action but we should also be proud of our grand actions. In fact, it is truly amazing what we all have been through in such a short period of time.

There is also another issue I need to address – keeping our promises. If we wish to not be ignored by our people then we should not miss our dates. I mean here the regrettable fact that the plans to expand the Schengen visa system beyond the current 15 countries have been delayed until at least mid-2008 or even to 2009, due to technical problems on the EU side. This means a delay for the newest members in joining the area, which would end border control procedures on internal borders.

Finally, I would like to stress that the European Union is, of course, far from being perfect. A pastor in Estonia once told me the story of a man looking for a perfect congregation. He knocked on many doors in search of the right place. Finally, he came to the last congregation and wondered – are you the perfect congregation so that I could join you? The chaplain replied: « If you join us we will certainly not be perfect! » Europe’s future is very much in our hands.

Thank you.