The cornerstone of our security and well-being is our membership in the European Union and NATO. We received another tragic reminder of the importance of our membership in these organisations on 24 February 2022. That was the day Russia launched a full-scale military offensive against one of its sovereign neighbors. Russia chose Ukraine as the target of the attack, because Ukraine is not a member of the European Union or NATO. Yet Ukraine is not alone. Here Russia miscalculated, and the military attack, which was planned to last only for a few days, has already lasted for close to two years.
The attack on Ukraine was an attack on Europe, an ultimatum to the post-Cold War order in Europe, an ultimatum against freedom, democracy, the rule of law and human dignity.
In my speech last year, I stated that the day of the beginning of the war, 24 February, will forever unite the aspirations of the people of Estonia and Ukraine for freedom and independence, and that on the same day, Russia left the civilized world.
W in Estonia are not suffering under bomb or missile attacks, but we are very directly involved in this war. Ukraine continues to fight every day for our freedom. If we do not want to think about war now or in the future, we must think about Ukraine right now. If there is anything else Europe can do or provide, it must be done right now and immediately. I want to believe that we will be able to agree during this week's European Council on sanctions, the use of frozen assets, economic and military assistance, and on inviting Ukraine to accession negotiations, and thereby encourage all the other countries in the world. Putin must understand that time is against him, not in his favour.
Dear Riigikogu
In order to increase the production capacity of the European military industry, we launched the initiative of one million artillery shells. The aim is to produce essential ammunition for Ukraine and, at the same time, raise Europe's production capacity. On the initiative presented and agreed on in record time, European Commission President Ursula von der Leyen recently said that almost half of the work is now done. According to Ursula von der Leyen, the forecasts show that we will be able to produce at least one million units a year in the future. Of course, more defence industrial capabilities are needed for war and deterrence, and many countries in Europe, including Estonia, are also developing their own production capacity. One of the priorities of the Estonian government's European Union policy is the increase of Europe's defence readiness, which has now been included in the final conclusions of this year's June European Council meeting. For us, this objective means, in the short term, above all, that the defence plans approved at the NATO Vilnius Summit must be implemented.
The Zeitenvende formulated by German Chancellor Olaf Scholz must bring about a change of heart throughout the European Union. If we have any serious goal to feel safe, to have a stabilising effect in the neighbourhood and to be a prominent geopolitical player at least on our continent, the entire European Union must understand that the security situation on our continent is no longer the same as it was before 24 February 2022.
The approach of broad-based national defence, which is widely applied in Finland and Estonia, must also be applied in Europe. Without it, it is difficult to see positive developments across Europe, where hybrid attacks on infrastructure, disinformation attacks on free speech, hate attacks on minorities and migratory attacks on the democratic system seem to be commonplace.
Dear Riigikogu
In addition to the night of 24 February, there is probably a picture in all of our minds, when, on the fourth day of the war, the President of Ukraine, Volodymyr Zelensky, signed an application for Ukraine to become a member of the European Union. To be honest, Ukrainians fought for this right already on Maidan during the Orange Revolution, and also when Ukraine made the choice in Vilnius to conclude an association agreement with the European Union and foster a deep economic partnership. Only a few months after the Vilnius Summit, Russia attacked the clear choice made by the Ukrainian people. Faith in the Budapest and Minsk Agreements has proven to be an expression of geopolitical illiteracy, and security guarantees can only serve as temporary support and not as a substitute for membership in NATO and the European Union.
Unfortunately, the promise made to the Western Balkans 20 years ago to become a member of the European Union has remained largely a promise on paper. To paraphrase an old saying, paradoxically they have rather pretended to meet the conditions, and we, in turn, have pretended accepting them as members. The Versailles Summit on the war and the post-war situation in Europe last year changed the situation so much that we granted Ukraine and Moldova the status of candidate countries for EU membership. Georgia will also receive the same status if the conditions are met, as this is the firm will of the people. In order to ensure that the promises of the Thessaloniki and Versailles Summits do not become empty promises, it must be decided in December to invite Ukraine and Moldova to accession negotiations and to open negotiations if the conditions are met. It is no exaggeration to use the Ukrainian Foreign Minister's expression that these conditions are met with the blood of Ukrainians.
But integration and enlargement are not just about the European Union's relationship with other European countries. I am particularly pleased that Croatia became the 20th member of the euro area on January 1, and Finland became a member of NATO in April. Bulgaria and Romania have earned their Schengen membership, and we keenly look forward to Sweden joining NATO. The subsequent major accession must not turn Europe into a club along the borders of the euro area, Schengen, or defence co-operation.
At the same time, membership cannot become an "everything or nothing" relationship. Europe with members who pursue politics at different speeds and values at the expense of neighbours are definitely not in Estonia's interest, this is not our goal. Experience has shown that geopolitical and value-based grey areas within Europe create unnecessary tensions between Member States.
Dear Members of Riigikogu
Nothing would prove our credibility and commitment more than stating when we are prepared to accept up to ten new members ourselves. It is true that we cannot offer an accession deadline as the countries still have to do their own homework. This call does not mean naivety about the need for change in policies, power relations and fundamental values of the rule of law, but encouragement to get started.
In all these discussions, we should also not underestimate the need to reform the policies of the European Union. Some of them, in turn, are also important prerequisites for budgetary adjustments, as we clearly need reforms and changes in agricultural policy and also in cohesion policy. Already today's budget has tied national reforms to investments, and in the future they could also be more closely linked to common policies such as the internal market, the euro, Schengen, digital and green reforms, as well as the establishment of European energy, transport and communication networks that suffer from chronic funding shortages. Of course, solidarity and everyone's chance to survive in a competitive internal market is also important. Reforms are necessary and changes will happen anyway, and the European Union itself will also continue to develop internally, and future members will have to take this into account.
However, as regards the amendment of the Treaties, the position of the Government has not changed here – planned enlargement can also be carried out within the framework of the current Treaties. Thus, we do not consider it justified that enlargement itself necessitates a switch to majority voting. We do not support the wish expressed by the current European Parliament to open a comprehensive reform process of the Treaties, because we do not see a link between enlargement and a large number of issues raised by Parliament. Nor do we see a link between enlargement and a move from unanimity to majority voting in the areas of Foreign and Security Policy and Tax Policy. To take into account the EU budget revenue, it is still possible to consider the calculation methodology for the EU budget revenue base – as we can see it with plastic packaging volume - without harmonizing it as a tax.
The debate on what is the future of the Common Foreign and Security Policy, the Defence Policy or what aspects of Tax Policy should or should not be harmonised should still take place regarding the substance and seen separately from enlargement. The speed, content and enforcement of decisions are not divisible from each other, and problems cannot be simplified or solely reduced to the issue of unanimity.
As the analysis points out, it will indeed be more difficult to find unanimity, but today the main question is what we would like to create with this change. I will only ask one important question as an example today - will a majority vote lead all Member States to invest at least 2% of GDP in national defence? In order to use majority voting, it is not necessary to use the so-called transitional provisions, because today's Treaty also provides for the possibility that unanimous decisions of the European Council are implemented by majority voting in the field of Foreign and Security Policy. There are two very important issues in relation to enlargement that are clear, and these are that Member States should not abuse unanimity voting for blackmail on other issues. It is also important that what has been agreed also has to be implemented by the new Member States, in particular, we intend to emphasise this during the accession negotiations, especially in the field of Foreign Policy.
As I said at the beginning of this point, for our part, we could consider a commitment to a timeline to be ready for a bigger enlargement. Year 2030 would be very reasonable, as it is then that the new long-term EU budget could actually be implemented and the new post-election institutions of year 2029 would be established.
Dear Riigikogu
It is no wonder that, when moving from one crisis to another, the European Union's internal market and the European competitiveness gap have finally come into sharp focus in comparison to our global competitors. We have seen that in every crisis, the internal market suffers first, as new and creative justifications emerge for implementing exemptions and solving problems through state intervention.
It is therefore crucial for Europe's competitiveness that countries implement the national reforms promised in the reform plans and that investments are used to improve competitiveness and productivity. At the same time, there are some low-hanging fruit, because in order to achieve some important things, all you have to do is end the exceptions and start following the rules, for example, to end the exemptions for public debt and state aid. The European economy and internal market cannot function in the hope of public intervention, which more and more often requires state aid or protectionism as a distortion of competition, and the constant expectations that the public purse will come to the rescue. A competitive advantage bought with the help of a taxpayer is like a wood chip fire, it doesn't last very long.
That is why we need to go back to the basics – it is a liberal, fair and equitable market economy. Digital and green reforms must also increase our competitiveness and help to maintain the necessary resource base for the functioning of the economy.
Dear Riigikogu
The Government's European Union policy is to make the most of the investments made available by Europe. I am pleased to say that only Estonia and Lithuania were able to make full use of the funds for the 2014-2020 budget period, which has just ended. This autumn we finally received the first payment from the new generation of budget funds (NGEU), so today, together with the advance payment, EUR 364 million (38%) of NGEU funds has already been injected and is reaching the Estonian economy. In retrospect, we can say that while the recession feared due to the health crisis was not as steep, the NGEU funds intended to alleviate it and carry out reforms, have proved to be an important tool for economic recovery in the current situation caused by the war. I note that the level of investment of the Estonian government sector compared to GDP is one of the highest in the European Union, and it will remain so during the entire period of the state budget strategy for the next four years.
While the average level of investment compared to GDP in the EU is within three per cent, in Estonia it is over five per cent. We will do our best to ensure that the investments of this period will also reach the people of Estonia.
When it comes to the previous year, I am also pleased to recall the difficult agreement reached between the Baltic States to move up the synchronisation project of electricity grids by a year. In this context, I also welcome the fact that the second Polish-Lithuanian connection will be established, and this will be done in our preferred Rail Baltic land corridor. I would also add that during this year we have also eliminated the risks related to the cooling of the Narva power plants. Thanks to the common market and the infrastructure connecting the Baltic States, gas supply to Estonia is guaranteed, and the Baltic Connector gas pipeline, which is important for Europe, will also be repaired by spring 2024. In December, all Estonian important infrastructure sites were added to the list of pan-European infrastructure in need of development, and thus they are a priority in terms of investments both in the current and the next period. Of course, in the new period, we expect the new European Commission to pay even more attention to monitoring and securing European infrastructure, but also to ensure that the communications infrastructure connecting European countries to each other and to the outside world receives the same strategic attention as is currently the case with energy and transport.
As for the Rail Baltic railway project, I am pleased to say that it is now turning from a paper railway into a real railway. In addition to the existing single sites, the work will also begin in 2024 on a railway with a completely new European track gauge. I believe that, given the experience of the war, there is no need to convince anyone of the importance of our connections with Europe. Considering that compared to the previous 2017 forecast, we predict that the cost of Rail Baltic will double by 2030, all the Baltic States together face an important task in thinking about how to prioritise the completion of the main line of the railway by 2030. Yes, it means some painful choices need to be made and the completion of the perfect railway with all side tracks will take place much later. It is true, of course, that the longer it drags on, the more expensive this project will become, but this is the only way to secure European support and funding. However, the most important thing is the completion of the main line by the deadline.
As an entire cycle is once again passing in the European Union in year 2024, then towards the end of the overview it is important to recall that the European Union has never before had to face a pandemic and the consequent global lock-down, as well as a military conflict comparable to a world war, and the wave of refugees triggered by it. With all the possibilities, limitations, experiences and global changes, today's European leaders have handled the crisis excellently. I am justified in saying that this is the kind of capable and determined Europe we wanted.
We do all these things together. We are European the same way as France or Germany. Although the world around us shows no signs of calming down and we have no reason to believe that crises will recede in the near future, I am confident that the European Union will come through these challenges stronger than it has ever been. Thank you all for your determination, and I wish both Estonia and the entire European Union success and an unwavering sense of unity also in the future.
Thank you for your attention.
