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The strategic consequences of Brexit

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Though with a knife-edge majority, Great Britain has relinquished its economic and political relationship with the EU. Obviously account shall be taken of the many people who voted in favour of Bremain, since they will not disappear all of a sudden, but also the strategic, military and geopolitical effects of this new UK position shall be assessed.

A position which today seems to be mainly economic and commercial, but which will soon herald wider choices than the mere give-and-take between Great Britain and the European Union.

For sure the British people have never liked the European Union.

In 1975 Margaret Thatcher put strong pressures for the United Kingdom to adhere to the European Union, but the idea of the Iron Lady was to become member with a view to controlling a powerful entity, such as the EU, thus avoiding the creation of an axis between France and Germany to isolate Great Britain – as, indeed, later happened. Also from the commercial viewpoint.

Prime Minister Thatcher decided to adhere to the EU as some businessmen do with potentially dangerous companies of which they buy a significant shareholding so as to better manage them from inside.

It is worth recalling that there was still the Cold War that Great Britain was fighting with great care and intelligence wisdom.

At the time, both Prime Minister Thatcher and the other EU statesmen viewed the European bloc as an economic agreement preventing the USSR from extending its economic, if not military, influence over what the French philosopher, Raymond Aron, called “the great Central European plain.”

The plain that the Warsaw Pact planned to quickly conquer so as to reach the Atlantic and seal the UK into its North Sea.

Without Great Britain, there would be no European nuclear arsenal and the French one would fall immediately into Russian hands.

Furthermore, in her book of 2003, Statecraft: Strategies for a Changing World, Margaret Thatcher did not dismiss the possibility of Brexit as “unthinkable”, but thought that the issue had to be analyzed very carefully.

It had to be assessed in terms of strategic and commercial routes and in terms of UK influence over the EU decision- making process, as well as for assessing the balance between the euro and the pound sterling.

These are the decisive factors of the EU-UK matrix, not others.

Currently the European framework is obviously much more complex than in the 1970s.

It is not true, however, that the Union rescued Europe from the fratricidal wars which scarred it as from Napoleon I onwards. The European Civil War, as the German historian and philosopher Ernst Nolte called it.

Conversely peace in Europe was preserved by the military balance between NATO and the Warsaw Pact.

The “economic basis of the war” between Germany and France, from Alsace-Lorraine to the Ruhr region, was an old strategic concept which had already been solved with the European Coal and Steel Community (ECSC) in 1951.

Nevertheless, as from 1980 onwards, it was precisely Margaret Thatcher who put pressures on the EU to “get her money back,” by considering the agreements between the EU and the UK unnecessarily too burdensome for her country.

In her speech delivered in Bruges in 1988, the Conservative Prime Minister spoke clearly against “a European super-State exercising a new dominance from Brussels”.

This is the core of the issue: the British people have never wished to turn the economic “contract” among the European Member States into a specifically political contract. They wanted and still want to have a free hand in the global financial framework. Finally they intend to avoid the geopolitical effects of the economic and trade ties established in Brussels.

Great Britain is a State, a great nation, which needs overall global autonomy which, on the contrary, the EU manages according to covertly Franco-German interests that are potentially opposite to the UK ones.

It is not the British leaders’ perception, it is the truth and, however, in politics, perception counts as reality, if not even more.

As is in A Midsummer Night’s Dream by William Shakespeare.

With this choice, Great Britain, which still has the “imperial dominance spirit of Lawrence of Arabia” – as the former Italian President Francesco Cossiga who, however, was a close friend of Margaret Thatcher, called it – is trying to play some cards which, despite the “mists of tomorrow”, are potentially valid.

Firstly, the relationship with the United States, also at economic level, comes back to the fore.

When in 1976 the United States celebrated the bicentennial of their independence (from Great Britain, by the way), a British sailor arrived in the New York port holding a banner with the inscription: “Come back home, guys, we have forgiven you.”

Hence Great Britain still considers itself an empire – currently a British empire of finance and technology, but anyway still an empire.

With a view to becoming again “what it is” – along the lines of Friedrich Nietzsche’s journey of becoming a free spirit – Great Britain just needs to revive and revitalize its special relationship with the United States.

As early as 1958, a Mutual Defense Agreement was signed between the United States and Great Britain regarding the two nuclear arsenals while in 2010, thanks to a subsequent bilateral treaty with the United States, Great Britain had the opportunity of overcoming many of the controls and limits imposed by the Americans on its advanced defense technologies – limits imposed also on NATO members.

Great Britain is the second largest economy of the English-speaking world and the sixth largest world economy. It is the largest US trading partner and a member of the UN Security Council. It hosts the highest number of US military bases abroad and, above all, it is the global financial hub which periodically rescues US banks from their insolvency crises.

Hence it is clear that Brexit can be seen as a major US strategic success and outlines the end of the “third pole” between East and West which sometimes the EU has dreamt of being.

The dollar zone has never liked the euro. Quite the reverse, it has fought it harshly.

For the United States, the European single currency was and still is a strong competitor, as well as a threat to their role as hegemonic global financial power – an insane “Napoleon’s dream”.

Moreover, the idea of bringing the euro to an often forced parity with the US dollar has undermined EU exports, by compelling them to be carried out with a currency having a too “high” value which has restricted the end-markets.

Not to mention the many temptations generated by the euro on world commodity markets: it is true that – among many other assessments and considerations – the United States attacked Saddam Hussein for his still secret choice of trading most of his oil and petroleum products in euros.

It is also true that, in the phases characterized by great international tensions, Iran traded part of its oil and petroleum products in euros, especially on the “stock exchanges” in Kish and in the other islands of the Persian Gulf.

The Brexit effects, however, increase the volatility of the pound sterling against the dollar, with a spread of approximately 15% compared to the pre-referendum values.

Financial analysts’ imbalances which, by now, are mainly trolls, namely IT automatisms.

Certainly Great Britain will not be granted a preferential treatment by the United States in the framework of the TTIP negotiations.

US President Obama has explicitly warned that the UK would be at the “back of the queue” in any trade deal with his country if it chose to leave the EU and would have the same treatment and the same barriers to entry as countries like China, Brazil or India.

Nevertheless Barack Obama is about to leave the US Presidency and, if Donald Trump were to be the next President, he will have every interest in dividing the European competitors and favoring them against the aggressive practices of countries like China and, in the future, India.

Also Hillary Clinton cannot avoid using this leverage offered by Great Britain for the TTIP negotiations.

The British TTIP is a bet on the future which, however, the UK could win by relying on its great financial strength.

Bilateral trade between the United States and the UK is very significant: America is the first destination of UK exports and the United States are the third generator of imports for the UK, after Germany and China.

North America and Great Britain are the largest mutual foreign investors.

A situation which cannot change all of a sudden, in spite of the US discontent and dissatisfaction with Brexit.

Furthermore the British government stated that TTIP could provide to the British economy a surplus of approximately 10 billion pounds a year.

There is the need to recover much of the Brexit cost and rebuild a strategic and military relationship with the United States which the UK sees as the only bulwark against two EU and NATO structural dangers: the EU decision-making weakness in the Middle East and the explicit German polemic against the Atlantic Alliance’s anti-Russian posture, which has been mounting in recent months.

Two dangers that the UK wants to avert: the recovery of German geopolitical autonomy tending to Eurasia and the EU structural weakness faced with Middle East tensions.

In Great Britain’s mind, Germany is always the country of the old definition by Lord Ismay, who was NATO Secretary General from 1952 to 1957: “The Atlantic Alliance’s purpose is to keep the Americans in, the Russians out and the Germans down”.

Great Britain does not want the strategic and economic exchange between France and Germany, in which Germans buy French government bonds massively and, in return, are entitled to the “enhanced and extended protection” of the French military nuclear power.

Great Britain does not even want a euro which, as “a German mark in disguise”, penetrates the major British export expansion areas.

Moreover, considering the EU strategic inanity, Great Britain fears for its corridors to and fro its Asian Commonwealth.

With its operations in Crimea and Ukraine, the Russian Federation blocks and distorts the direct line between Great Britain and India, besides changing the balance of power in Central Asia, where the UK has still strong interests.

Since 2001 to date, Great Britain has deployed its military units in Afghanistan, in the framework of the US Enduring Freedom operation, not only for mere “Atlantic loyalty” as other countries (including Italy) have done, but to still afford the regional strategic viability and role which are essential for it to keep Northern India, the central Asian countries and the routes from Southern China.

Those who think globally, as the decision makers of what was once a great Empire, do not stop doing so all of a sudden.

Unfortunately the EU’s mistakes are known to everybody: an artificially overvalued currency – maybe to compete with the dollar; an insane disconnection between EU foreign and economic policy; the idea of simultaneously controlling 29 countries which are all competing one another, with different tax systems and public spending mechanisms, not to mention the autonomous and conflicting public debt securities markets.

The EU could certainly reform itself by establishing, within the ECB, a single market of government bonds, possibly managed (and not tiered and capped) with the issuance of “European debt securities”.

That Germany does not want, and with good reason.

Moreover the Union could also make the various Member States develop an export plan, with a view to analytically protecting one commodity or the other, without dangerous generalizations (even for us).

From chocolate to wine, up to the hilarious theory of the ”Polish plumber” – popularized by Philippe de Villiers as a symbol of cheap labor coming from Central Europe as a result of the Directive on Services in the Internal Market during the EU Constitution referendum in France in 2005 – in the field of exports, so far Italy has lost and has hence paid for its mistakes related to its “scarce incisiveness” in Europe.

It is worth recalling that the Polish plumber. was supposed to come and work in the EU at the same rates he charged in Krakow. However, the cost of living in this Polish town is very different from the cost of living in the center of Munich.

Abstract free-trade and liberal theories, typical of a bad macroeconomics handbook, mixed with archaic protectionism – this is exactly what the EU has often been.

Hence, following the ideas of General de Gaulle, another great “Eurosceptic”, the issue lies in returning to a Europe of Nations and States where only what is already in common is decided jointly – and it could not be otherwise…

This means European protection from asymmetric shocks, selective penetration of new foreign markets and domestic liberalization of goods and services.

The idea of making the EU be the comptroller of the Member States’ public budgets, with abstract and binding rules, paves the way for a number of exceptions which inhibit the rule, or for a covert economic struggle between EU rich and poor countries.

We have already experienced it in Greece and this could also happen in Italy and Spain.

Furthermore, the EU has insisted on implementing a common “foreign, security and defense policy”, with the obligation to “make the Member States’ civilian and military capacities available to the EU”.

Shall this be done in agreement with NATO? Where is the chain of command of this 29-Member State army? Who develops its plans and sets its goals?

All this is for stabilization, humanitarian and conflict prevention missions, disarmament or military assistance and advice.

And what is the role played by the United Nations, despite all its limits?

In short, as from a certain phase onwards, which we could identify with the 2001 crisis, the European Union has believed to be what it was not and had not been conceived and meant to be.

After all, even the old anti-Soviet dissident Vladimir Bukovsky, was not entirely wrong when, from his new English homeland, equated the European Union with his old USSR.

Hence if the EU is able to reform itself not only at organizational, but also at domestic financial level, it will be in a position to keep on selling its merchandise: protection against asymmetric shocks, a strong currency widespread in the world, as well as a free internal market.

Conversely, if it continues to pursue its Napoleon’s dream of “uniting Europe”, it will have to face “one, a hundred, a thousand Brexit” – just to paraphrase Che Guevara’s words.

Furthermore, the issue does not lie in asking – as the Italian politicians do – for “greater budget flexibility” in exchange for abstract reforms which may be suitable for the Finnish people, but not for the Flemish population.

The problem is completely different: to have the possibility of drafting autonomous budgets so as to subsequently check their effects over a period of two years, without prior diktats.

Briefly, a more modest EU will survive very well – even after Brexit.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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European Union Could Share its Solid Economic Benefits with Moldova, Ukraine and Georgia

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European Union has, at least by territory and population, expanded as the European Council overwhelmingly decided to grant Moldova and Ukraine, with the possibility of Georgia, candidates’ status to join the bloc. Current, the European Union consists of 27 members and has an estimated total population of about 447 million. Moldova, Ukraine and Georgia, all former Soviet republics, will together add approximately 50.8 million to the current population of the European Union.

As former Soviet republics, the three attained their political independence and within the international laws, must be considered with respect based on the principles of their territorial integrity and national sovereignty. While the granting them their new status after official requests from them, it has indeed sparked debates especially in the Russian Federation. 

European Union leaders have formally agreed to grant candidate status to Ukraine, as well as Moldova, although the two former Soviet republics face a long path before joining the bloc. Ukraine applied to join the bloc just days after the Russian invasion on 24 February, and the process from application to candidacy has gone through at record speed.

Undoubtedly the new status has opened wide, most possibly, better doors and a platform to spring up with economic development through integration into European Union. President of the European Council, Charles Michel, noted: “it is a historic moment, today marks a crucial step on your path towards the European Union. Our future is together.”

The official congratulated the leaders of Ukraine and Moldova. Regarding Georgia, the European Council “decided to recognize the European perspective of Georgia and is ready to grant candidate status once the outstanding priorities are addressed,” Michel said. “Congratulations to the Georgian people,” he said. “A historic moment in EU-Georgia relations: Georgia’s future lies within the EU.”

The European Commission on June 17 recommended that the summit grant a candidate status to Ukraine and Moldova. It is a “symbol of hope” to support the Ukrainians while the country had a long way to go before actual accession. A few days later, Speaker of Moldova Parliament, Igor Grosu, announced that Moldova ready to join new sanctions, mostly in finance and banking, against Russia.

“We will show solidarity with the EU, as our status and European aspirations oblige us. Of course, we will join [any new sanctions] meant to stop the military operation. We are seeking to contribute to this goal by any diplomatic means,” Grosu said following a decision by the EU.

Moldova’s Deputy Prime Minister and Minister of Foreign Affairs, Nicu Popescu earlier said the East European nation could not fully join anti-Russian sanctions due to its weak economy. European Union candidate status now provides Moldova with access to world’s most developed market. It offers similar new economic opportunities to bothe Ukraine and Georgia.

In one of her warm-hearted illuminating speeches at a media briefing, President Maia Sandu emphasized: “Candidate country status gives us a clear direction of our development, support on this path, and most importantly, hope. We are a small and vulnerable country, which would feel more secure when it becomes part of the European family, in which we could count on support from all members and institutions. Belonging to the EU also means access to the richest and the most developed market in the world.” 

Moldova, however, expects more support from the European Union to improve the wellbeing of its people and provide preconditions for developing the business environment. “The situation will not change overnight after candidate status has been granted, as a lot of hard work is still ahead,” Sandu said, attributing the current hardships in Moldova to the conflict in Ukraine that began late February.

Ukraine’s President Volodymyr Zelensky hailed the news as “a unique and historic moment”, adding “Ukraine’s future is within the EU” while the French President Emmanuel Macron said that the decision by EU leaders sent a “very strong signal” to Russia that Europeans support Ukraine’s pro-Western aspirations.

At least, they have joined the ‘European family’ that offers practical warmth for sustainable development. Ukraine has already signed an agreement with the European Union on joining its LIFE Program, an international funding instrument for the environment and climate action, whose budget on environment protection projects for 2021-2027 amounts to €5.43 billion, Ukrainian media reported with reference to the Environment Protection and Natural Resources Ministry.

Ukrainian Environment Protection Minister Ruslan Strilets and European Commissioner for Environment, Oceans, and Fisheries Virginijus Sinkevicius signed the agreement.The ministry has over 15 concrete proposals to be transformed into relevant projects to be presented for consideration under LIFE Program.

“Ukraine has received great support and colossal capabilities from the European Union for restoring not only the environment but also live nature in Ukraine. This is something for which there has always been a lack of funding. LIFE is a powerful financial tool of the participating countries. This means great confidence in Ukraine,” Strilets said. “This should help us develop more new projects which local businesses could be engaged with. Therefore, we’ve made a very important step today.”

In the near future Moldova, Ukraine and Georgia have the possibility to access the benefits from the Global Gateway, a new European strategy directed at boosting smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world.

It is in line with the commitment of the G-7 leaders from June 2021 to launch a values-driven, high-standard and transparent infrastructure partnership to meet global infrastructure development needs. The Global Gateway is also fully aligned with the UN’s Agenda 2030 and its Sustainable Development Goals, as well as the Paris Agreement.

In addition, late June the he Group of Seven economic powers – the U.S., Germany, France, the U.K., Italy, Canada and Japan – made some progress in bringing their counterparts from their five guest countries closer to Western views on sanctions against Russia. The G-7 is committing  themselves to support the new members especially Ukraine. 

Ahead of his trip, Biden authorized another US$450 million in weaponry to be sent to Ukraine, bringing the total U.S. commitment to US$6.1 billion since the start of the war. Offering a concrete template, the G-7 combined are aiming to invest US$600 billion in public and private capital for infrastructure projects over the next five years, with US$200 billion of that total coming from the United States.

According to European lawmakers interviewed by local Russian media Izvestia, this step has broad support from the EU. Meanwhile, Russia views the move ambiguously. On the one hand, it sees EU membership as tantamount to striving for NATO, on the other hand, European integration is a purely economic issue and does not raise any concerns.

“We’ll see, we’ll analyze the consequences,” former Deputy Foreign Minister Grigory Karasin told Izvestia. “The context is important; it is not as harmless as it might have seemed three years ago. Decisions are being made amid a sanctions offensive and against everything Russian,” he added.

That being said, the European Union noted that obtaining candidate status is only the first step towards membership. Engin Eroglu, a member of the Committee on Foreign Affairs in the European Parliament, in an interview with Izvestia said that the process of gaining membership to the EU does not mean automatic entry, but it means that the country has started pro-European processes and reforms, which are partially financed by Brussels.

The granting of candidate status to Ukraine and Moldova has angered other countries that have been striving to join the European Union for several years now. For example, the European Commission has so far denied this status to Georgia, the newspaper writes.

“Tbilisi, to put it mildly, was not happy about the refusal, but this will not be a reason for any deterioration in relations between the European Union and Georgia,” Head of the Department of Integration Studies at Moscow State University of International Relations (MGIMO) Nikolay Kaveshnikov told Izvestia.

Russia consistently expresses fierce opposition to this European membership over the past several years. President Vladimir Putin had declared Ukraine to be part of Moscow’s sphere and insisted he was acting due to attempts to bring the country into NATO, the Western alliance that comes with security guarantees.

Granting Ukraine and Moldova candidate status to join the European Union looks like nothing more than a scam by the West, according to Russian Foreign Ministry Spokeswoman Maria Zakharova. “Scam is such a wonderful word, seeing that the numerous decisions taken by the West are more like combination of a destructive, provocative nature, rather than well-thought-out steps,” the diplomat said, speaking to the Sputnik Radio.

“I think that’s certainly their case,” she added, “Given these maneuvers, these zigzags that we now are witnessing from the West with regards to Moldova, Ukraine, and Georgia, it is no longer necessary to prove anything in terms of market conditions. There is a direct link between economics and politics. And this is exactly what they have always stood against.” She described the actions by the European Union as infringement of Russia’s territorial integrity, and as encroachment on former Soviet space and territory.

On the distinctive opposite side, Russia sees no risks for itself in the fact that Ukraine and Moldova have been granted EU candidate status, Russian Foreign Minister Sergey Lavrov said at a press conference following talks with his Azerbaijani counterpart Jeyhun Bayramov on June 24 in Baku.

“Our position has always been that the European Union is not a political bloc, unlike NATO. The development of its relations with any countries that wish to do so does not create any threats and risks for us,” Lavrov said in reply to a media question. “Of course, we will realistically consider the European Union’s behavior and monitor the real steps it takes and how the candidate countries act: whether they comply with these requirements or still try to show their independence.”

These new European Union members have some strategic significance. Moldova is a landlocked country in Eastern Europe. It shares borders with Romania to the west and Ukraine to the north. Ukraine, with a coastline along the Black Sea and the Sea of Azov to the south and southeast, respectively could be used for economic benefits by the European Union.

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EU-Australia Relations: Strategic Security Cooperation

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Over the last decade, security cooperation between Australia and the EU has grown. Increasing security and defence cooperation with governments outside the EU is something that the EU has looked into. Third-country participation in the “Common Security and Defence Policy” CSDP civilian and military crisis management missions and operations, as well as the exchange of sensitive information, are all examples of this.

Australia participates in CSDP missions and exchanges classified information with the EU. This emphasis on ties with other countries is a key aspect of EU Global Strategy, which asks its allies to assist promote the rule-based global order. “External partnerships” must be restructured and the EU must “engage with key partners, likeminded countries, and regional groupings” in order to share this responsibility.

Australia stated that it would work with “like-minded” friends like the European Union to address global concerns. The EU’s security mandate relies heavily on crisis management. For the EU to be seen and effective in managing crises, it must be able to draw in non-EU countries and establish links with them. Third-country participation in CSDP missions and the signing of Framework Participation Agreements on crisis management show how actors outside the EU regard the EU as a crisis management actor and validate the EU’s crisis management function.

The EU’s external measures to safeguard freedom, democracy, equality, the rule of law, and human rights must have this external validation if they are to gain “credibility and normative significance.” To “strengthen its own ability to bear responsibility and share the cost with security and defence partners,” the EU needs the support of third countries. European Union “strategic autonomy” refers to the EU’s ability to act and collaborate with international and regional partners but also working independently when necessary, according to the EU’s Security and Defence Implementation Plan, published in November 2016. EU credibility is bolstered as a result.

Ad hoc agreements, which took a long time to draft, are now the preferred method of enabling participation, instead of the time-consuming ad hoc agreements that were previously used. Australian Foreign Minister Julie Bishop announced the beginning of FPA negotiations with EU counterparts, Catherine Ashton, saying that “North Africa & Middle East have highlighted the value in Australia & EU cooperating closely to react to international crises” at the time of the announcement.

The EU and Australia, according to the FPA, share a common understanding of the threats they face and the objectives they should focus on. Australian participation in two CSDP missions has been made possible by this convergence. Some argue whether or not the European Union and Australia see each other as strategic or priority partners in the fight against global and interconnected security threats, as well as whether or not their geographical domains of interests and aims align.

In two CSDP missions, Australia’s involvement has been capped (and duration as with EUCAP Nestor). CSDP military operations are not permitted. EU crisis management will take a new step forward with participation by Australia in a CSDP military mission. The EU CSDP’s military efforts have primarily focused on developing military capabilities or deploying naval forces. As long as EU member states are unwilling to engage in large-scale military operations, this pattern will continue.

A naval operation in the Strait of Hormuz has been proposed recently by the EU as a means of protecting freedom of navigation and calming tensions between Iran and the United States. We could see Australia participating in an EU military operation as this occurs. As seen by its August 2019 decision to join the US-led mission in the Strait of Hormuz, Australia has a strategic interest in maintaining marine flow.

The EU-Australia security partnership is strengthened because to FPA. European Union and Australian cooperation will have a solid foundation thanks to the FPA, which recognizes common interests in international peace and security. Both EUCAP Nestor and EUAM Iraq have involved Australia in crisis management, but more effort is required. Both parties must agree that Australia will be invited to more than just these two missions. The EU’s CSDP missions are strengthened by its partners, who help the EU to be a responsible global actor. However, it also makes it necessary for Australia and the EU to work together more closely to identify common interests on a variety of issues.

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Finnish Plans for an Arctic Railway  –  Geopolitics Are Intervening

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Authors: Juho Kähkönen and Soili Nystén-Haarala*

NATO Applicant Finland is an Arctic Country with No Access to the Arctic Ocean.

Finland, with a land border with Norway, Sweden, and Russia, is sometimes described as an island because it is located on the northern coast of the Gulf of Finland and the eastern coast of the Gulf of Bothnia of the Baltic Sea. The 832-mile border with Russia has gained plenty of attention in the present geopolitical situation. The lifeline from the Baltic Sea to the North Sea goes through the narrow Danish Straits. Finnish cargo is mainly transported to and from the ports of the Baltic Sea. Before the war on Ukraine, Finnish trains ran to the east up to China through Russia.

Access to the Arctic Ocean is limited to the narrow roads through Norway, which are not qualified for the Trans-European Transport Network (TEN-T), the major European transport corridors. The closest European TEN-T corridor turns west to Sweden at the bottom of the Gulf of Bothnia. Knowing this, it is no wonder that dreams of access to the Arctic Ocean emerge every now and then.

Map of existing infrastructure

Most recently, the idea was embraced  when the government of Juha Sipilä, with Anne Berner as the Minister of Transportation and Communications, was in power (May 2015 – June 2019). Anne Berner negotiated the future of transportation infrastructure and the Arctic Ocean railway with her Nordic colleagues in Norway and Sweden. In the early phases, the regional politicians in Finnish Lapland mostly either supported or adopted a positively curious attitude towards the proposed railway.

Nevertheless, the plan was later buried with both Norwegian and Finnish reports for their respective ministries in 2018. The reports found the plan lacked feasibility because of excessive costs. However, the Regional Council of Lapland still wanted to maintain the option for a railway in their regional plan. This attempt finally failed in 2021, and the plan was officially buried also in Lapland. The discussion on the plan was strongly polarized between the supporters and the opponents.

Vision of Arctic Railway

The way the prospects of the plan were presented reflected the ideas of economic connectivity and interdependence between Europe, Russia, and China – dreams, which after the Russian brutal attack on Ukraine turned out to be built on false perceptions of an economically dependent Russian Bear and an everlasting peace in Europe. Even after the Russian occupation of Crimea in 2014, the future was full of expectations for economic prosperity; the opening of the Northeast Passage shortening the distance between Rotterdam and Shanghai by 26 percent and between Rotterdam and Yokohama by 37 percent. In addition to the railway, there is a plan to build a tunnel from Helsinki to Tallinn under the seabed. The Arctic railway, together with the tunnel, would connect the Asian and European markets through Finland and the melting Northeast Passage.

Chinese funding was sought for both of these mega infrastructure investments in railroad transportation. Chinese investments in Finland, however, have almost all failed, either because of financial difficulties of the Chinese investors or reservations of the Finnish Military and the Ministry of Defense. For some reason, both Chinese and Russian investments in land property often happened to target areas of strategic military importance. Additionally, one of the five options for the Arctic Ocean railway presented in the reports from 2018 was building a connection across the border to the Murman railway connecting Murmansk and St. Petersburg. The connection was not considered dangerous because rails are easy to dismantle, and cyberwar is a more likely prospect than traditional land warfare. However, Russia’s attack on Ukraine has shown that land warfare in Europe has not disappeared, and Russian military forces might arrogantly try to invade the country across the whole 832-mile-long border.

However, the actual opening of the Northeast Passage is, under any circumstances, still far in the future. It is not yet possible to navigate those dangerous waters without the expensive aid of Russian ice-breakers. Furthermore, European politicians turned a blind eye to the growing geopolitical tensions,  for instance, the increasing threat of nuclear weapons in the Kola Peninsula next to Finnish and Norwegian borders. Nevertheless, it is common knowledge that the Arctic and its raw materials are of highly strategic military and economic importance for Russia. Even after the occupation of Crimea in 2014, Arctic cooperation was in the Arctic Council maintained as “the separate island of cooperation” while political tensions between superpowers increased. The Russian attack on Ukraine underlines the political risks associated with the transportation routes through the Russian economic zone. It is no wonder Finland is now applying for NATO membership, and developing the eastern transportation connection is forgotten.

National Interests Suppress Indigenous Rights

The Arctic Railway plan met strong resistance from the Sámi people, the only Indigenous people in Europe. As the supreme political body of the Sámi in Finland, the Sámi Parliament saw the railway as a threat to their culture and the reindeer herding in the heart of their culture. Oddly enough, the resistance and support from such allies as the Greenpeace seemed to come as a surprise to the supporters of the railway in Helsinki.

The region itself has a long history of ignoring the Sámi and seeing them as troublemakers resisting plans to develop the region. The Sámi are a small nation (77 00 – 103 00 depending on calculations) living in the northern areas of Norway, Sweden, Finland, and the Kola Peninsula in Russia. In Finland there are slightly more than 10 000 registered Sámi who vote in the elections of the Sámi Parliament.

Reindeer herding is a livelihood that requires much space as pastureland; reindeer can move freely in forests, which mainly belong to the State in the Finnish Lapland. Reindeers migrate and live with lichen, plants, and mushrooms. These half-tame animals are the property of reindeer herders, which as a profession is not ethnicity-based in Finland. Reindeer herding increasingly competes with other industries and infrastructure building. Reindeer herding is not just a traditional livelihood but also an industry in the market economy. Although the Sámi lives in a modern way in mixed communities, they still have strong kinship ties and an awareness of their own culture, which is distinct from the mainstream culture. The railway building option (Rovaniemi – Kirkenes) the Finnish Government preferred would have crossed the area of several Sámi reindeer herding cooperatives and disconnected the reindeer migration routes. It would have weakened the profitability of reindeer herding, a livelihood that has kept the remote areas of Lapland inhabited.

Throughout history, the Sámi have experienced racism and contempt from the main population. Their languages were not taught at schools before the 1970s. Just like Indigenous children in North America, they were sent to boarding schools, far away from home, to study in Finnish. Their voices were not heard, and their rights were not respected, for example, when the rivers in Lapland were harnessed for waterpower and forests were cut because of national interest after the World War II. Bad treatment has left scars and a considerable mistrust of the state power. The Sámi have fought for their rights in Norway, Sweden, and Finland, however, and have managed to make the state power recognize their rights.

In the new Finnish Constitution of 1994, the Sámi were granted cultural autonomy. A special Homeland Area was established in Upper Lapland. Within this area, the Sámi have the right to education in their own languages and the right to deal with authorities and in courts in their languages. They also have a Sámi Parliament, the representative self-government body, which plans and implements the cultural self-government guaranteed to the Sámi as an Indigenous people. The Sámi Parliament must be consulted when any project in the Homeland might affect their culture.

Reindeer herding and, for example, fishing are recognized as a part of Sámi culture. The duty to negotiation was drafted based on the Free, Prior, and Informed Consent (FPIC) principle of the ILO Indigenous and Tribal Peoples Convention, 1989 (No. 169). However, the Sámi Parliament and the Finnish government interpret the duty to consult differently way. The Sámi interpret the FPIC as a duty to ask for permission from the Indigenous population. The authorities, who should consult the Sámi, see it as a duty to consult and strive for a jointly agreed decision. If a joint agreement cannot be reached, the authorities can continue with the project. An even bigger problem is that authorities do not always remember to consult the Sámi. The existence of this duty is still relatively unknown, and if we add the earlier ways of conduct to ignorance, it is no wonder that the Sámi are suspicious of the Finnish state.

The Arctic railway plan is a typical example of conflicted relations between the Sámi and Finnish authorities. The sudden appearance of the plan astonished the Sámi and caused anxiety among reindeer herders about the future of their business and livelihood. The state authorities were also surprised by the strong Sámi reactions and emphasized that there was no project yet, only a discussion. The Sámi brought their position to international awareness through various media channels, while the supporters of the railway in Lapland boosted the idea to the EU and in Asia. The plan highlighted a conflict in the four municipalities of the Sámi Homeland Area, where the Sámi, with one exception, form only a minority of the population. The burial of the plan at the governmental level was mainly due to economic reasons, but abolishing the railway from the long-term regional plan can be seen as the victory of the Sámi and reindeer herding.

Is the Plan Actually Buried?

Following the Russian war on Ukraine, the multiple times buried attempt to build a railway from Finland to Norway has gained interest again. Member of Parliament from Lapland Mikko Kärnä brought the Arctic Railway back to the discussion by stressing that Finland would face significant challenges if transportation on the Baltic Sea were disturbed. This viewpoint reflects the understanding of Finland as an “island.” In practice, 80 percent of Finnish foreign trade goes through the Baltic Sea and as the transportation connection in northern Finland is poor, a railway to Norway would strengthen Finnish security of supply.

Soon after this comment, the Parliamentarian Committee on Transportation and Communication organized a visit to northernmost Finland, where the Arctic railway had been planned. The committee chair, MP Suna Kymäläinen explained the reason for the visit telling that Finland had to prepare for the scenario that traffic on the Baltic Sea would decline and analyzed how the export and import would be organized in such a situation. Currently, the roads connecting Finland to Norway are narrow and in poor condition.

The ongoing war reveals how the planned Arctic Railway is not tied only to the melting Arctic Ocean and shipping through the Northeast Passage. Instead, northern connections show how Finland is not an island but how the infrastructure development has focused on southern Finland around the capital for decades. The situation should not surprise anyone in Helsinki, as the authorities and politicians from the north have underlined for decades how weak the infrastructure in the north is and criticized how resources have been mainly used to develop southern infrastructure.

There is only one short rail track on the Finnish side still to be electrified, but the Arctic Ore Railway as well as the port of Narvik already operate at the limit of their capacity. The fact that the Swedish state mining company LKAB is already talking about strengthening the railway might indicate that the state is on board. Renovating the overloaded railway is, however, going to be a long and expensive project. Sweden has gradually built and electrified the railway from Southern Sweden to the Finnish border. The main driver of this project was the needs of the highly developed industry in northern Sweden – at least up till the port of Luleå.

The connection from Luleå to the Finnish border, however, could also have connected Sweden to the Russian market across Finland. Whereas for Finland, this track through Sweden to Narvik harbor, suddenly turned out to be a strategic corridor to the west in case the Baltic Sea corridor would close. As Sweden applied for NATO membership together with Finland, northern connections have a robust defense interest. In case of war, the Norwegian port of Narvik would be a priority to supply resources to the European Arctic. In Norway, a long-time NATO member country, the transport connections to Finland have re-emerged in the defense debate. The new geopolitical reality reveals how the northern connections would be essential for the national security of supply. However, we should not forget the rights of the Sámi people.

Geopolitics Amplify the Clash between National Interest and Sámi Rights

The discussion about the Arctic Railway reflects the polarized relationship between the Sámi and the Finnish authorities. The Sámi feel that they are never safe and that this time, their rights might be sacrificed at the shrine of national safety. Despite the new concerns about the security of supply, the state authorities now seem to take smaller, more realistic steps to improve transportation connections. A connection through the Swedish Ore Railway to Narvik in Norway is now a realistic option.

Perhaps a quicker way to improve access to the Arctic Ocean is to renovate national road 21 (E8) from Tornio to Tromsø harbor in Norway along the Swedish border. The demands to invest in the road, which is in a dangerously poor condition, had not been noticed in Helsinki before the Russian attack on Ukraine. Strengthening the existing infrastructure to the Arctic Ocean is supported in northern Finland. Improving existing roads and railways does not considerably increase the damage to reindeer herding either. The increased needs for security of supply, however, indicate that the rights of the Sámi are not the first priority in national transportation development. The Arctic Railway across the Sámi Homeland is on the agenda again. Strengthening democracy and taking the minorities’ differing worldviews seriously would be a more civilized way of coexisting in the western world and something the Nordic countries could be expected to do better.

*Soili Nystén-Haarala, Professor of Commercial Law, Dean, Faculty of Law, University of Lapland.

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