Esko Ollila, May 18, 2004, at the Finnish Institute in London: Finland and Estonia in the EU

The greatest living Estonian author, Jaan Kross, once said that Estonia has no other country like Finland. Accordingly, I could say that Finland has no other country like Estonia.

Unique bonds unite the countries.

The most important bond between the two countries is the linguistic kinship. Finns and Estonians can sometimes feel isolated in the Indo-European sea of languages. Therefore it makes us feel safe to hear our neighbour’s language, it sounds familiar even though we do not always understand it. Misunderstandings are commonplace.

Geographical proximity has resulted in many cultural and political links between our countries. We have both spent years governed by Swedish kings and Russian czars. The Lutheran church is one of the most obvious common links.

Both authors and politicians have dreamt of a political union, a Finnish-Estonian state. The number of these dreamers has been greater in Estonia than in Finland. The great Estonian poet Lydia Koidula wrote in 1881 in one of her poems called Soome sild (the Finnish Bridge): Finland, Finland! You won’t disappear/ from hearts or minds! / Our hearts are united: / The Lord rewards us, / so that our roads are forever joined.

Estonia’s president, Konstantin Päts, made a much more detailed suggestion in 1940. His idea was to establish a federal state that would have a head of state, a common defence policy, foreign policy and currency. He presented this idea only a few months before he was imprisoned and transported to Russia whilst Estonia was annexed to the Soviet Union. Others too have yearned for a federal state before and after Mr. Päts.

This dream or question of a Finnish Estonian state is no longer relevant, because since 1st of May both Finland and Estonia are in the same political union, that is the European Union. The economies of the countries have already been extensively integrated.

The Finnish Prime Minister, Paavo Lipponen, paid a visit to his Estonian counterpart, Siim Kallas, in the autumn of 2002. The prime ministers decided to set up a two-person working group to provide an overview of relations between their two countries, as Estonia was to become a full member of the EU. Prime minister Lipponen invited me to join the working group as Finland’s representative. Jaak Jöerüüt, former Ambassador to Finland, was appointed as the Estonian representative.

Our task was not so much to find new fields for co-operation, but rather to choose a few ideas from the hundreds that already exist, for our governments to concentrate on. In other words, what are the issues that should take priority in inter-governmental co-operation? Naturally we could come up with new ideas and we did.

I have had an active interest in Estonia for decades now. Therefore I thought I knew the relations between the two countries quite well. At the very outset, it became quite clear to me that the relationship between the states, counties, communities, non-governmental organisations, parishes and corporations were much deeper and extensive that we had realised. This doesn’t even include all those close relationships between individuals that flourished even when the official Finland in the Soviet era had all but forgotten our southern neighbour.

The work of seven months culminated in forty-three recommendations that are currently under review by both governments and those that are considered appropriate will be implemented. Some recommendations have been adopted and progress has been made with many of them. The present Estonian Prime Minister Juhan Parts has estimated that thirty recommendations out of forty-three have been acted upon in Estonia. The number is similar in Finland. Even though the report is extensive, we have barely scratched the surface with our recommendations. Many fields were left out and many ideas were not prepared sufficiently due to the lack of time. After we presented our report, I received messages from people who were disappointed that important questions had been omitted. For example, why aren’t gender related issues, regional differences or minorities discussed?

We interviewed a great number of civil servants, representatives from organisations and corporations. The enthusiasm showed by the Finns and Estonians who took part in this report was a great factor in making our work a success. Our recommendations are joint, but due to practical reasons we also prepared separate memos.

The first theme that we deal with is the political co-operation between Finland and Estonia in the European Union and the links between various societies of both countries. The basic presumption was that in the EU, both countries would have more than an average number of common causes to drive forward. On the other hand, we must be realistic and understand that the bases for co-operation are always dependent on the particular case in question. In the EU, issues are not moved forward on the basis of permanent alliances or so-called blocks.

A lot was expected of the co-operation between Finland and Sweden before we joined the EU. The everyday reality has shown that the themes and emphases of our policies have been a bit different. These differences are likely to manifest themselves between Finland and Estonia as well. However, recent discussion concerning the EU constitution and various institutional questions, for example, indicate the potential for co-operation, since Finland´s and Estonia’s views are very similar. Both are small countries that want to emphasise the equal status of all member states as well as efficiency and transparency.

EU membership involves making a gigantic effort for a country as small as Estonia, where resources for the civil service and other areas are limited. Co-operation with Finnish civil servants is still needed, if Estonia is to take full advantage of EU´s structural and cohesion funds, for example. This is a genuine concern, since despite better resources, initially Finland was unable to exploit fully all the possibilities offered by the EU.

Therefore we suggested in our report, that in addition to high-level political meetings, the networks and contacts between ordinary civil servants must be enhanced and temporary job opportunities in the neighbouring country should be created.

Environmental issues were a key consideration in the report. Estonia and Finland have two major concerns: one is the Baltic Sea and in particular the situation in the Gulf of Finland which is being threatened by the increasing number of Russian oil shipments. A build-up of sewage pollution is also creating an environmental hazard. But Estonia and Finland are not alone in this as the worst offender is of course St Petersburg. That is why it is vital for Russia to work with us.

The second major worry is air pollution. Over 90% of Estonia’s electricity is produced by burning oil shale in the Narva power plants. The resulting emissions are also a threat to the forests of southern Finland.

The compilers of the report recommended that the authorities in Finland and Estonia step up co-operation in international organisations in order to have the Baltic Sea declared a Particularly Sensitive Sea Area – PSSA and to prohibit the operation of single hull tankers. Last winter progress was made, but the fact that Russia is still trying to hold back, is cause for concern.

Due to the vulnerability of the Gulf of Finland, we also propose a joint programme that would replace the separate agreements signed between individual countries and act as a master-plan for future environmental co-operation. The Estonian and Finnish Prime Ministers expressed their support for the idea when the report was officially released. Preparations are now well under way.

The free movement of people is one of the cornerstones of the European Union. The free movement of labour, in particular, has aroused strong feelings, not only in Finland and in Estonia but in all the old and new member countries. The trade union movement has scared people with so-called surveys according to which tens of thousands or even hundreds of thousands of Estonians are going to be moving to Finland. By contrast, it is thought that hundreds of thousands of Finnish pensioners will be attracted to Estonia by cheaper housing and the lower cost of living.

Both estimates are without doubt wrong. At the moment there are around 12,000 Estonians living in Finland. As things stand, it is scarcely likely that the numbers will even have doubled by the end of the decade. The Finnish Parliament has passed a law that allows restrictions on the movement of labour from the new EU countries following the two-year transition period In exceptional circumstances, the transition period can be extended twice to total a maximum period of seven years.

The authors of the report are against the imposition of a transition period and its extension. At the same time as Finland is creating obstacles to the movement of labour from Estonia to Finland, representatives of hospitals throughout Finland are going round Estonia recruiting Estonian doctors and nurses. I believe the morality of this is at best questionable.

Estonians and Finns face one common challenge in the next few years: the population of both countries is ageing rapidly, even moreso in Estonia than in Finland. For this reason Estonia needs its own healthcare workers. Estonia’s population trend is not helping matters there either. In absolute terms the population is decreasing as the death rate is higher than the birth rate.

The border between Finland and Estonia is crossed around 6 million times a year, 3 million journeys in both directions. At the moment, tourism accounts for most of this movement but more and more people are travelling between the two countries to work or study. Obviously this is a good thing for both countries but at the same time it creates a number of challenges and problems. The report recommends clarification of the rather confusing rules and regulations governing the welfare and healthcare sectors.

Not all visitors are well-intentioned. Most of the hard drugs arriving in Finland come via Estonia. Estonia has the worst record in the EU for HIV/AIDS cases. For the moment, infection is mostly restricted to drug addicts and prostitutes. But 60% of the clients visiting Tallinn’s countless brothels are Finns. Consequently, there is a risk of the disease spreading to the general population in both countries. The report recommends the adoption of new forward-thinking methods by the authorities in the fight against the aids epidemic.

As a result of the enlargement of the EU, the border between the EU and Russia has been greatly extended. Policing this border is a real challenge for the border guards, the police and the customs authorities. The report proposes a further strengthening of the already close co-operation between these bodies and puts forward five recommendations. Most of them have already been implemented. After the Second World War Finland established extremely effective border controls on the Russian border. This system is now being replicated on the border between the new EU countries and Russia.

In education, culture and research, relations would not have developed so positively without a common linguistic background. The authors of the report regard it as paramount that there are always people in both countries who know the language of their neighbour. Following on from our report a study was conducted in Finland of how clearly Estonia’s geography, culture, history and current situation was presented in text books. The survey concluded that the situation was satisfactory.

Both the Finnish and the Estonian government aim to transform their countries into knowledge-based societies whose future success is based on high tecnology and expertise. This provides a natural framework for research co-operation between universities and research institutes designed to create more educational opportunities for researchers and to help them take better advantage of the expensive equipment that is available to them. We made numerous recommendations concerning both this and the increase of researcher and student exchanges. These are due to be discussed in a couple of weeks this spring by key people in the field.


In my memo, I have given substantial consideration to the significance of Estonia’s EU membership for the economies of both countries. Estonia’s economic performance already ranks among the best of the new member states and the rapid growth continues. Estonia’s membership offers new opportunities for both Finland and Estonia. In order to fully appreciate these opportunities, reforms have to be continued and administration further developed. Corporate activity in Estonia has developed favourably. The 1000+ Finnish companies that operate in Estonia are viewed both as competitors and partners. Our economies have been integrated to a large extent. Estonia already ranks as our 12th biggest trading partner, roughly in the same category as Denmark and Japan, but slightly bigger than than Belgium or Norway It goes without saying, that Finland is by far the most important trading partner for Estonia.

Our understanding is that general support for business development is not needed. We made seven recommendations with regard to the economy. The survey of the North-South railway track from Tallinn to Berlin and its ferry link should be continued. The second investment phase for the Via Baltica -project (the higway from Tallinn to the German border in Poland) should be implemented. After a difficult beginning, the project proved to be a success. Also we have proposed that our governments should quickly remove bureaucratic obstacles preventing the building of an electricity cable link between our countries. Construction work is still on hold, even though all permits should be in order.

Estonia, Latvia and Lithuania have been approved as members of the Nordic Investment Bank - our recommendation may well have played a part in the Finnish government’s actions in this matter.

We recommended co-operation in the creation of new high-tech companies. Of particular importance in our view was the funding of new high technology companies at the seed and preseed stage. This was received positively. The Estonian Development fund (Eesti Arengufond) is expected to be launched later this year.

What has been the result of our recommendations? First of all, the recommendations received a lot of coverage in both countries. Reviewing the relationship between the two countries in this way was regarded as interesting and novel. Both governments quickly circulated the recommendations for comment. The recommendations were mostly reviewed positively. As I have already mentioned, some of the recommendations have been implemented, many of the rest have also moved forward. The recommendations have been on the agenda at both ministerial and prime ministerial -level meetings.

A distinguished expert on Estonia’s history, Professor Seppo Zetterberg from the University of Helsinki has said that the relationship between Finland and Estonia has never been as close as it is at the moment. The fact that Estonia became a full-fledged member of the EU two weeks ago opens up a whole host of new opportunities for the dawning of a new era in the relationship between the two neighbours.

The poet Lydia Koidula´s dream that Finland´s and Estonia´s roads would be forever joined has not materialised, but they are pretty close now.