Towards a new European Union

Towards a new European Union

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Contents 1 A vision towards a new EU

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2 Three options for the future EU

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3 How to create a strong EU

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4 Sample figures for a growth strategy

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5 Remodelling measures for the EU

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6 Finland and the EU in the future

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Background analysis on the EU

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Many achievements, some mistakes

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The current EU: difficulties and strengths

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Future issues to resolve

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Author: Markus Penttinen, Head of International Affairs, Akava Confederation of Unions for Professional and Managerial Staff in Finland The text is based on Akava’s policies and administrative decisions.

This document does not replace Akava’s publication “Enemmän, mutta parempaa EU:ta” (More but better EU) ISBN: 978-952-5628-87-6

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LEHTIKUVA

1 A vision towards a new EU The European Union is currently in an unprecedented cross-swell. It is facing various challenges and pressures. On the other hand, there is a clear demand for the operations of the EU and it has many strengths. In his New Year’s speech on 1 January 2017, President of the Republic of Finland, Sauli Niinistö stated that “the European Union is needed more than in decades, but it is now weaker and more fragmented than ever”.

The leaders of the EU member states have launched a discussion on reforming the EU, culminating in 2017. This year is by no means a final destination for the discussion on the future of the EU, which must engage the civil society as well.

Do we wish to maintain free mobility? How do we get the EU states back onto a path to growth and employment? How does Europe retain its position at the forefront of civilisation and democracy? What kind of a Europe do we wish to see in, say, 2030?

These and many other questions call for answers, and the roadmaps for the future cannot be laid out at summits alone.

Akava (the Confederation of Unions for Professionals and Managerial Staff in Finland) has supported Finland’s EU membership from the beginning and, consequently, taken an active role within the EU through co-operation with European organisations.

Whenever deemed necessary, Akava has suggested improvements to the operations of the EU and exerted influence through directive initiatives.

The EU has become like health: you only see its value when it is threatened.

By publishing this document on the future of the EU, Akava wants to contribute to the current ongoing discussion concerning the future of the EU with a focus on reaching feasible solutions. The document contributes to the creation of a roadmap and vision of a new European Union.

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EUROPEAN PARLIAMENT

2 Three options for the future EU The future options for the European Union can be outlined on the basis of Akava’s background analysis, which was intended to assess the strengths and challenges of the EU (see p. 11). The following three options must be considered when assessing the future.

A crumbling EU Just a few years ago, the idea of the EU breaking down was generally considered to be impossible. Still, it is not the most probable scenario, but it can no longer be ruled out. There would hardly be any single reason that would lead to the fall of the EU, but rather, it would be the result of several concurrent factors and both internal and external pressures.

The breakdown of the EU would have dramatic consequences for a country like Finland, a country that depends on exports and is tied to the Union in terms of its foreign relations. Finland would then face a total re-positioning both politically and economically. The disintegration of the EU’s internal market would lead to a decline in our exports, with a subsequent drop in the standard of living and a very likely downsizing of welfare services. Depriving employees and entrepreneurs of the freedom of mobility and establishment would be a major change. The significant European research cooperation and student exchange programmes would diminish. We do not know what kind of political leaders would rise from the ruins of the falling EU. In Akava’s opinion, it is necessary to prevent the EU from crumbling by taking any measures required. A crumbling Europe is not in the interest of anybody, especially not us in Finland.

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In a crumbling EU, Finland would have to completely reposition itself.

An ineffective EU An ineffective EU is the most likely option in the near future. As it is now, the EU is a functional and productive entity that has proven to be more tenacious than expected in the face of crises. Owing to the multiple pressures, however, it is not operating to its full potential. The EU could create much higher added value than it currently does.

In Akava’s opinion, it is in the interest of both the EU citizens and member states that the EU gradually moves beyond from this state. The EU could do much more and much better, if given opportunities. There is no reason to settle for an ineffective or underperforming EU, even though it, as such, is beneficial.

A new EU The seed of a new EU lies hidden in the current situation. As the Union’s fundamental achievements are being questioned, and in the face of Brexit, we have come to understand how much would be lost as a result of the fall of the whole, and how much can be achieved through cross-border co-operation. The difficulties encourage and also force us to work for the development of the EU. Without the existing problems, it is likely that many of the beneficial reforms would not have a chance.

The new EU should be able to maximise the advantages offered by the Union, its problem-solving capabilities and the added value of co-operation across borders. It would advance sustainable growth, create more jobs, foster the value community, provide better opportunities for mobility and entrepreneurial activities and also offer channels to impact on the operations of a democratic European Union. In terms of globalisation, we would assume the trendsetter role instead of playing the adapter’s role.

Akava is in favour of the creation of a new EU: the current difficulties spur on evolution.

Akava is absolutely in favour of the creation of a new EU. It would be the most beneficial option for Finland and individual citizens.

3 How to create a strong EU Akava’s document on the future of the European Union is a contribution to the discussion concerning the future and evolution of the EU. Akava advocates for a strong Europe. We would like to see a competent and educated Europe with strong economic growth as well as mobility and a functional internal market. We want a Europe that invests heavily in science and research.

The development of the new EU shall not focus on federalisation or competence debates but on finding the best practical solutions for the creation of a better and more efficient EU. How to create an EU that provides the greatest everyday benefits for its citizens?

There is no need for a total change of course for the EU. Many aspects of the EU are already functioning well and its present strengths should be fully exploited. However, in order to prevent us from drifting towards a crumbling EU or finding ourselves stuck within an underperforming Union, we need to take determined and goal-oriented measures on multiple fronts.

An extensive growth strategy for the EU is necessary There is no magic trick that would turn the EU back towards a growth track. The evolution calls for years of work in various areas. To put it simply, the EU needs an extensive growth strategy and a vision of the directions in which the community should be steered. In Akava’s opinion, the main directions should include the following.

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Knowledge growth: The Lisbon Strategy, which was launched at the start of the millennium, set as the overall goal for the EU to become the most competitive region in the world based on knowledge and competence. Today, this goal is an even more essential objective for the future. The EU must become a global competence hub. In practice, this means that the EU must pursue for global leadership, a position which is now held by the United States.

Inclusive growth: In order to maintain the EU, its internal market and the European social model, it is necessary to cut the unemployment trend, significantly increase the employment rate and strongly reduce the number of persons lacking education.

Economic growth: There is no chance for an inclusive Europe without economic growth and productivity, both of which must be raised to a new level. The strong decline in the EU/Europe's share of global GNP need not be an inevitable trend.

Growth of competitiveness: Competitive employees, entrepreneurs and companies are the key success factors for the EU in terms of globalisation and ever accelerating changes, including the technological revolution.

The EU can develop into a global competence hub as the USA is closing its borders.

Sustainable growth: Our current consumption and production exceed the limits of long-term sustainability many times over. In addition to causing environmental damage, they will also increasingly become a limitation to economic activities. Global leadership, in this matter, would offer countless new jobs.

Democratic growth: Europe is the cradle and hopefully also the future of democracy.

The EU must be an example to its member states in terms of transparency. Authoritarian alternatives must not be allowed to expand, especially not within the EU. Growth of values and rights: The EU is founded on values and fundamental rights, and in this respect, it shall maintain and strengthen its leading position. Equality and equal rights are among the shared values.

4 Sample figures for a growth strategy

The EU's vision for 2030 can be presented through a set of sample figures:

Current EU (Finland)

Target EU in 2030

Share of global GNP

22 (0,4) %

22 %

Employment rate, 20–64 yrs.

70 (73) %

80 %

Unemployment

8,2 (8,7) %

5 %

2 (3) %

4 %

0 (0)

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11 (9,2) %

5 %

Research and innovation in proportion to GNP Universities among the global Top 20 (EU-27, The Times ranking) Youth without qualification/degree after compulsory education* Climate warming

* 18-24-year-old persons who are outside the sphere of education/training 6 

Max. 1,5 oC

*18–24 vuotias henkilö, joka ei ole koulutuksessa

EUROPEAN PARLIAMENT

measures for 5 Remodelling the EU In addition to the visions and general goals, a number of practical actions, or remodelling measures, are needed to develop the European Union further. Akava suggests, among other things, the following: •• The structures of the EU budget must be modernised and the share of own resources must be increased from the current level. Instead of conserving subsidy policies, it is vital to support growth and the creation of new jobs. The proportion of EU budget funding allocated to research and education should, as a minimum, be doubled for the next 7-year period 2021–2028. It is possible to turn the EU into a global competence hub as the United States is starting to close its borders and resume a state of protectionism.

The EU budget: from conserving subsidies to the generation of growth.

•• The initiatives concerning the digital single market, investment plan, energy union, capital market, future transport infrastructure and other similar projects shall be implemented with determination and ambitious goals. The EU internal market is by no means complete.

•• The EU shall enter into new trade agreements that support growth, job creation and rule-based globalisation. They must, however, be negotiated in an open manner and any failure to comply with the labour issues that are governed by agreements shall be followed by sanctions in line with the US model.

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•• It is necessary to intensify the EU’s trade agreements with suitable partners by gradually expanding the co-operation to include the four freedoms (movement of goods, services, people and capital) and more extensive collaboration in the field of education and research. As an example, Canada could be a country with which the EU might, in the future, negotiate a sort of ‘super-CETA’ agreement to serve as a model for other corresponding agreements (possibly followed by Japan).

•• The Economic and Monetary Union (EMU) shall focus on reforming the economies of the member states. Additionally, a set of reforms concerning the system itself are required (including, for example, the EU’s Minister of Finance, a rainy-day fund, simplified surveillance of fiscal policies and similar proposals). Also, a system should be created that would enable for more clear-cut market responses in case a member state should fail to renew its economy.

•• The EU aims for an immigration society similar to Canada through the reform of the Blue Card immigration directive. This calls for the successful integration and understanding of mobility as ‘brain exchange’ instead of ‘brain drain’.

•• It is necessary to revise the EMU by creating a system that would enable any member state to leave the Euro zone in an organised manner. Correspondingly, a procedure should be established that would facilitate the dismissal of a member state if it seriously neglects its obligations or fails to implement reforms.

Finland and the Nordic countries could serve as a model region for globalisation.

•• A tax union must be established that makes cross-border tax evasion, tax paradise operations and aggressive tax planning impossible. Minimum levels need to be determined for those forms of taxation that are linked with internal market operations, and the methods provided by the EU’s competition policy should be applied systematically to harness ‘tax doping’.

IDA PIMENOFF

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•• The granting of funding from the structural funds to individual member states must be tied to the relevant countries’ progress in terms of their development related to rule of law and democracy, anti-corruption operations and compliance with basic rights. The EU shall sign the European Convention on Human Rights of the Council of Europe.

•• The future Brexit arrangement must neither become a punishment nor a reward for a decision to leave the European Union. Nevertheless, only the member states shall enjoy full benefits. Membership in the Euro zone should not be considered ‘sacred’ or ‘off limits’, nor should EU membership, but rather, a procedure should be established that would allow for the dismissal of a member state that seriously and repeatedly violates the EU’s basic rules and rights.

•• The European pillar of social rights initiative shall lead to practical initiatives in the field of working life, occupational safety and equality. In particular, this should concern the new economy, new forms of work and work in digitalised society. The self-employed need to be provided with minimum security as well.

The Finnish labour market organisations jointly support the TTIP agreement.

This is almost unique in Europe.

•• In addition to an inclusive EU, we need a sustainable EU, which is a pioneer in circular economy, climate solutions, energy saving and similar initiatives.

•• The EU decision-making shall be efficient, transparent and anchored in democracy. The EU Commissioners and President shall be elected through a direct election, or from among the Members of the European Parliament. The decision-making of the Council of the European Union must be based on a qualified majority. The democratic anchorage of EU decision-making will be advanced by reinforcing the status of the European Parliament.

•• The Nordic co-operation might see a renaissance if Norway and Iceland decided to join the EU. A Nordic union as such would not serve to replace the EU. •• To fill the void resulting from the disengagement of the USA, the EU must contribute to globalisation issues by lending support to the UN as well as the international development aid and multilateral systems, while also resisting protectionism and by acting, at the global level, in compliance with its values concerning democracy and human rights. Investments in security must be increased within the EU as well.

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6 Finland and the EU in the The decisions concerning the future will be done jointly at the EU level, but with the world in turmoil and the EU in a cross-swell, it is essential that we take a moment and reflect on Finland’s position in the EU. In Akava’s opinion, the following ideas should serve as the starting point.

•• In Finland, EU membership is widely supported and leaving the Euro zone is not seen as an attractive option.

•• Finland should not remain at the outer edges of EU activities if we wish to maximise the benefits and opportunities to influence. This is best implemented at the core of the decision-making, which, however, does not mean taking an always non-critical approach or approving everything.

•• Finland should play a solution-oriented role. Especially in the long term, one’s own interests are best served through a shared interest. Individual interests and shared interests are not opposing or a case of a zero-sum game.

•• It is in the interest of Finland to support a functional and operational EU. The more influential the EU, the greater Finland’s sovereignty. A disintegrated and crumbled European Union would leave Finland with a one-sided role as an adapter and pseudo-independence.

The more influential the EU, the greater Finland’s sovereignty.

•• Within the EU, Finland could serve as a model country for globalisation, together with the Nordic countries. Nations that have created open economies and inclusive growth will benefit from international co-operation.

•• Finland’s ability to discuss and deal with issues together and in an engaging manner (for example, through the strong role of the Finnish Parliament and the involvement of EU sections within the Ministries) is a good model, one that is free of any masterly attitude.

•• While a pragmatic role is well-suited to Finland, it must, however, not mean that we only concentrate on implementing decisions that have already been made. For instance, the failure to make decisions concerning the development of the EMU is already threatening the economic and monetary union as a whole.

IDA PIMENOFF

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EUROPEAN PARLIAMENT

Background analysis on the EU Many achievements, some mistakes During its 60-year existence, the European community, today known as the European Union, has achieved a lot. Never in history has Europe experienced a similar period of peace in which citizens can move and work freely throughout the continent, and the cross-border co-operation has expanded to unforeseen dimensions.

The internal market has facilitated business and generated growth. Without this development, the gross national product within the EU area might be as much as 5 per cent lower than it is today. The elimination of the Schengen area alone would result in billions of euro as additional annual costs. Also, the common agricultural policy has resulted in a greater selection for consumers, increased export opportunities for producers (totalling 130 billion euro in 2016) and a strong position in negotiations at the global level. Especially for smaller countries like Finland, the European Union has opened a significant channel for making a difference in global development.

The EU accounts for 40% of the global social security expenditure: a solid economy is a necessity.

All in all, the Union is essentially doing much better than is suggested by public debate. Film director Aki Kaurismäki has commented the situation by stating that “the EU is a devil’s invention”. This ‘devil’s invention’ has made it possible for him to settle in Portugal as a part-time resident, to benefit from free mobility and to draw advantage of easier travel. Many of the Union’s achievements are currently being taken for granted so that we no longer pay any attention to them. The EU has become like health: you only see its value when it is threatened.

Yet, mistakes have also been made. EU scepticism gained strength within many trade unions when practically all of the activities related to social dimension were frozen under the Commission led by José Barroso. Citizens’ trust in the system as a whole was weakened by the secrecy surrounding the negotiations related to the EU-USA-TTIP

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and EU-Canada-CETA treaties. While drastic reforms were a necessity in the member states that were most severely affected by the Euro crisis, the process made the EU with its Troika system come off looking like a commandant.

Regardless of certain errors or mistakes, the root cause of many problems does not necessarily lie in the European Union itself, but is attributable to the member states.

For example, due to the attitudes of some governments, the activities to harness international tax evasion were for long slowed down. The decentralisation of the sessions of the European Parliament in two different countries is expensive for the taxpayers and environmentally harmful, and the system would have been abolished long ago if it were up to the Parliament itself to decide, instead of the member states. Nor are Brussels or the EU economic policies to blame for many countries drifting towards a state of weakened competitiveness or excessive indebtedness.

The Brexit debate in Britain is a symptomatic example. The former Prime Minister, David Cameron claimed that the EU immigration was “unbearable” and yet the net immigration to the British Isles was not much greater than that seen in Finland. In Finland, a referendum and demand for the exit from the EU could have taken place on similar grounds and because of immigration from Estonia. Even if each member state is a part of and included in the Union, the accusations tend to be vaguely directed at the EU, and facts can be replaced by ‘alternative truths’ even in Europe.

The current EU: difficulties and strengths A holistic assessment of the current state of the EU gives a multifaceted picture of where we stand right now. The European community is characterised by many difficulties and challenges, but the system also has many strengths. One may say that the EU is in a cross-swell caused by forces pulling in opposite directions.

The challenges are numerous: •• Europe is still facing significant economic problems and a major investment deficit. Up to every fourth EU citizen is at risk of poverty or marginalisation.

•• Conflicts and disagreement have repeatedly labelled the progress of many i nitiatives that are important in terms of employment and the global competitiveness of the EU (for example, a sharing economy). The unified support from the Finnish Government and labour market organisations for the TTIP agreement is almost a unique phenomenon within the European framework.

•• The EMU and Euro zone are still not functioning properly, and even if the acute crisis is over, there seems to be an inability to make decisions regarding their development.

•• Anti-EU movements and populism are challenging the traditional political decision-making and the mere existence of the European Union. In many member states, there are political parties of significant size that would like their country to exit the EU or, at least, the Euro zone.

•• Britain is about to leave the EU, and other corresponding referendums may be on their way.

•• In some member states, a majority of population view globalisation as a threat and the EU as a contributor thereto.

•• Although the wave of refugees has slightly calmed, the southern immigration pressure may increase drastically in the future and, again, create additional tensions between member states.

•• External relations are facing greater challenges than ever in terms of, among others, Russia, the USA and China.

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In Finland, a referendum and exit from the EU could have been demanded due to immigration from Estonia., if Brexit way of thinking would apply.

•• The traditional fundamental functions of the EU are being questioned, such as the free mobility of workers.

•• As a community with common values, the EU is suffering from the developments in Poland and Hungary, in particular. The value community reflects, however, the unifying spirit of the Union. Some of the current member states might, perhaps, not be accepted if they were to apply for membership today.

Europe has many strengths. Positive development is visible on various fronts: •• The member state economies have resumed a renewal track in which the economy and employment are no longer sinking. Crisis economies, such as Ireland or Spain, are now growing steadily.

•• The EU continues to be a major internal market with a high level of knowledge and expertise, and from many different perspectives, one of the most attractive regions in the world. For example, in recent comparisons, many European countries came out on top in terms of innovation.

Brussels or the EU policies cannot be blamed if some countries have drifted towards a state of weakened competitiveness.

•• Along with Brexit and similar events, the civic support for EU membership and Euro currency have either increased or at least remained stable in different surveys.

The EMU is supported by 78 per cent of people in Finland. An attempt to initiate the exit process did not succeed because of the failure to gather the 50,000 signatories required for a citizens’ initiative.

•• Despite the difficult situation, the EU is capable of carrying out its normal legislative work and producing added value on a daily basis for citizens, entrepreneurs and member states. The European pillar of social rights and the skills agenda are examples of new initiatives that are underway. The education programme, Erasmus, and research programme, Horizon, represent European success stories.

•• In recent years, transparency in the EU has clearly improved and, along with the reinforced status of the European Parliament, democratic anchorage has also been enhanced. Since 1972, a total of 56 referendums on various EU themes have been arranged, and a majority of these have resulted in a positive outcome. The Internet has fundamentally improved everyone’s possibilities to follow the activities of the EU. •• The current Commission and Parliamentary term have signified a clear change of the course for the EU activities. According to a survey, the citizens in the member states (including Finland) do not trust the EU any more than they trust their own governments. The argument about the politics being in a crisis cannot be targeted solely at the European Union.

•• The understanding of the EU’s value in terms of keeping peace in Europe has again reached public awareness. Two thirds of the citizens in the EU member states view peace as the most important achievement of the EU. •• The demand for the activities or ‘services’ provided by the EU has not weakened.

The desire is for the EU to be active in many new areas, including, for example, the digital single market, energy union, tax haven issues and whistleblower protection.

•• Regardless of its difficulties, the EU has remained attractive and is currently negotiating with dozens of countries either on membership or other co-operation agreements.

•• Not many functional alternatives to the EU have been presented, and Brexit will show what it means to leave the Union. Opinion surveys indicate support for a Nordic union, but do its supporters truly see it as a realistic option?

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IDA PIMENOFF

Future issues to resolve In addition to its daily work on directives, the European Union is facing plenty of questions that call for strategic policies and long-term work. Let's take some examples:

Return of power?

From time to time in EU related discussions, it is demanded that power be taken back from Brussels. This was seen, for example, at the time of the Brexit vote in Britain.

Economist Oliver Hart, who, together with Professor Bengt Holmström, received the Nobel Prize in Economic Science in 2016, has argued that the EU’s decision-making power should not cover trade policies or employee mobility.'

In citizens’ opinion, the freedom of movement is precisely one of the greatest achievements and benefits of the EU. In a recent Euro barometer, 81 per cent of EU citizens are in support of free mobility, and in Finland, the rate is as high as 88 per cent. Trade policies are considered as one of the most important EU tools for promoting growth and employment.

These reflections on the EU’s decision-making power, or the competence debates as they say in the Brussels slang, are endless, but they have not resulted in any generally approved proposals to reduce the power of Brussels. There have been critical surveys (for example, by the Dutch government in 2013), but not even they have proposed that the Union’s competence be reduced, and in fact, the EU is constantly expanding into new areas of operation. Recently, some states east of Central Europe have demanded the return of power to the capitals, but what would it mean in practice?

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Inclusion of all citizens is a prerequisite, not just a social policy issue, for continued integration within the EU.

Economy, labour market, knowledge and sustainability: the keys to the future of the EU The lack of prospects, the feeling of becoming "a loser" and the weak outlook for the labour market had a powerful effect on, for example, the outcomes of the Brexit vote.

The number of marginalised and low-educated individuals and their share of the population in the EU member states is significant, which, in part, nurtures growing populism and alternative truths. Resistance to the internal market and trade agreements originates partly from the same sources. In Finland, the proportion of young people aged 20–24 who are outside of the sphere of education and training has doubled since the financial crisis in 2008.

Inclusion of all citizens is a prerequisite for continued integration within the EU and for the maintenance of the internal market; it is not just a social policy issue. From this perspective, the most important topical EU initiative is the European pillar of social rights and, in general, participatory growth.

IDA PIMENOFF

According to the EU Treaty, the Union has the duty to promote the minimum working conditions and fundamental rights. The shared labour market and freedom of movement also call for common rules. In addition, by means of the European Social Fund and the sharing of experiences, the EU can have an impact on activities intended to combat unemployment and marginalisation. Finally, the social dimension of the EU plays a vital role in the context of the EMU, through the assessment of the sustainability of, among others, the pension schemes and similar systems.

On the other hand, for the sake of global competition alone, it is necessary that the EU invest in high-level knowledge and expertise, while also establishing a position at the forefront of changes related to artificial intelligence, platform economy, digitalisation and robotisation. A solid economy is required to safeguard the current European form of society; for example, the EU accounts for 40 per cent of the social security expenditure in the world. The forward looking attitude should also concern fundamental rights in relation to new forms of work and economy, so that the majority of the energy would be used to advance ideas rather than to solve disputes. Ongoing debates on ‘uberisation’ are an example of the wrong direction for development.

Sustainable economy and consumption are in the early stages.

There is demand for the EU to play an active role.

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Sustainable consumption and production are a necessity. Weakening the biodiversity is a threat not only for the environment, but also for the economy. Circular economy, climate-related activities, energy saving and other measures are only in their initial stages, and they offer opportunities for creating plenty of new jobs. Many of these issues also have a cross-border dimension, which again calls for the EU to take a more active role.

The Euro zone waits fixing The financial market crisis and subsequent economic difficulties in the member states resulted in one of the most feverish debates within the EU. Reforms versus expansive stimulus have been the core issues in the struggle concerning the EU economic and fiscal policies. The current situation is a mix of savings, reforms and vigorous stimulus. The European Central Bank (ECB) has played an essential role as the expansive force, and in Finland, for example, the State debt has increased by 1,000 euro per capita each year. The EU regulations for economic governance (the ‘six-pack’) and budget coordination (the ‘two-pack’) were intended to strengthen compliance with the Stability and Growth Pact, but once again, they are being interpreted rather freely and by stretching the limits. This has eased Finland’s position in terms of the EU’s fiscal policy procedures, but once again, weakened the credibility and steering capability of the system.

Even if the popularity of the common currency is stable and the economy seems to have turned in a better direction, the EMU is still an incomplete structure and it will not survive without the strengthening of the member state economies and their competitiveness. This is a primary issue for the survival of the EMU. On the other hand, there are several EU level issues that must be resolved. For example, should the tasks of the ECB also include employment, as is the case in the USA? How should the inflation target be determined? Would it be better to play by open rules and appoint an EU Minister of Finance, as opposed to the current situation in which a Minister from one member state (=Germany) is acting as a de facto Minister for the Euro zone? Are new fund solutions needed for problem situations, as has been proposed by the International Monetary Fund? Must Euro zone membership be considered as ‘sacred’ or ‘off-limits’, as it is now, with no rules in place regarding the possibilities to leave or dismiss a member?

There are numerous other issues like these. They cannot be responded to by simple turning down individual proposals.

The budget reform of all time The EU budget is facing the greatest challenges of all time, because Brexit will cut the budget by up to 10 billion euro on an annual basis. The situation is made more difficult by the fact that the EU budget income relies more clearly on direct contributions from the member states, while the proportion of the so-called own resources is diminishing. As a result, budget discussions are being carried out using a one-sided member state-specific net formula.

Already at the start of the millennium, a fundamental reform of the EU budget was presented by a high-level EU task group led by Belgian Professor André Sapir. The Sapir report, An agenda for growing Europe, encouraged the EU to give up subsidy-based thinking and promote growth and competence. These ideas have only been implemented to a limited degree. Recently, a task group led by Italian Professor Mario Monti brought up ideas on how to increase the proportion of own resources in the EU budget. In addition to the post-Brexit adjustments, the EU budget would need major structural reforms.

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The EU aims to achieve an immigration society like Canada.

Will it succeed in integration?

Pressures on outer borders The EU is struggling with many internal challenges, but the greatest pressure may, however, come from the outside. Russia has not moved towards democracy and rule of law, but rather has continued to violate international law in Ukraine. From the viewpoint of the EU, it is problematic that the Eastern neighbour sees ‘co-operation’ as some sort of zero-sum game. Nevertheless, the country is and will remain our bordering neighbour, one that also provides many opportunities.

The Unites States has taken an inward turn long with its new administration. The planned leadership of the EU and USA, in terms of managing globalisation with the help of the TTIP agreement, is being replaced by uncertainty. On the other hand, there will be another change of power some day. The US public opinion is that one half of the most important allies of the USA come from the EU. The co-operation between the EU and USA will undoubtedly continue, but it will take a new hue.

China has already openly declared its willingness to assume a leading position in the world. It is, of course, possible for the EU to co-operate with the Asian giant in, for example, climate and trade issues, but the views concerning democracy and fundamental rights are far apart. Of all the EU states, Finland is the second most dependent on China in terms of added value in exports, so for this reason, the EU policies with China should be one of the main targets for engagement for us.

Last but not least, the EU external borders are challenged by the situation in the Middle East and Africa. It is anticipated that the population in Africa will grow by more than 100,000 persons per day. Many of them will view Europe as the beacon of opportunities and a land of dreams. The refugee wave due to the Syrian war might have been just an overture for the future.

The population in Africa in anticipated to grow by more than 100,000 persons per day. Many of them will view Europe as a beacon of opportunity.

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