Part II: Empirical Results
6.3 Historical Dynamism Increased Opposition to EMU
The general form of the hypothesis on historical dynamism states that historical themes related to national experiences influence the EMU policy of a political party. More specifically, the greater the number of unsupportive historical references, the stronger is the tendency to oppose supranational policy. The findings suggest that this particular hypothesis was of marginal relevance, although as Figure 39 shows, in the Centre’s case the proposition holds. The Centre strongly emphasised negative historical experiences when they formed their unsupportive EMU stand in 1998. Apparently, there had been historical and cultural experiences that had tended to increase opposition in the party. In contrast, the NCP debated historical issues slightly more frequently than the SDP during 1996–1999, the exception being in 1995 when there were more favourable historical themes on the agenda. There seem to have been historical and cultural experiences that had the effect of increasing support for EMU in these two major parties.
381 The protocol of the party executive committee of the Centre 22.9.1994. The protocol of the working group of the party executive committee of the Centre 26.1.1995 and 6.4.1995. The parliamentary group speech of the Centre; The Government Report on EU in Parliament 15.2.1995.
382 The protocol of the working group of the party executive committee of the Centre 6.4.1999.
383 The protocol of the party executive committee of the SDP 6.–9.6.1996. The position of the party congress of the SDP 6.–9.6.1996. The parliamentary group speech of the SDP; The Prime Minister’s Announcement on ERM in Parliament 24.10.1996.
384 The parliamentary group speech of the NCP; The Government Statement on EMU in Parliament 14.4.1998.
385 The position of the party congress of the Centre 14.–16.6.1996. The protocol of the working group of the party executive committee of the Centre 7.12.1995 and 8.8.1996. The parliamentary group speech of the Centre; The Government Report on EMU in Parliament 20.5.1997. The parliamentary group speech of the Centre; The Government Report on EMU in Parliament 17.6.1997. The parliamentary group speech of the Centre; The Government Statement on EMU in Parliament 14.4.1998.
Figure 39: Average Emphasis on the Historical Context in the Party Documents, 1994–
1999
-3 -2 -1 0 1 2 3 4
1994 1995 1996 1997 1998 1999
Centre NCP SDP
Favourable references to historical experiences
Unfavourable references to historical experiences
% Year
Note: The historical-context index was compiled by subtracting the sum of the historical experiences and cultural integration: positive (601) percentages from the sum of the historical experiences and cultural integration: negative (602) percentages.
In terms of historical experiences, the main policy of the Centre Party was to highlight the historical momentum behind the EMU decision, past experiences of disturbed business cycles and exchange rates, and the convergent economies of the Nordic countries. At the extraordinary congress of 28 September 1997, the party leader Esko Aho emphasised the historical significance of the decision to join the EMU using expressions such as: “EMU is a historic decision, and therefore a referendum is vital in order to assess public opinion”.386 Later on, during the Parliamentary debate on the Government Statement on EMU on 19 February 1998, Aho, the speaker of the Centre parliamentary group, stated that it was essential to involve citizens in the decision-making process because EMU had historic significance.387
The party executive committee pursued a policy emphasising general disturbances in business cycles in the past, and the similar kind of economic structure and flexibility in the Nordic countries and the United Kingdom.388 Mauri Pekkarinen, a Centre Party member of Parliament, alluding to previous business cycles, said that economic development in the Nordic countries was in same direction. For instance, devaluation cycles were very common, especially in the forest industry.389 The party secretary Eero Lankia claimed that there was a lack of national monetary measures in the common currency area, such as devaluation, that would safeguard export competitiveness. In contrast, many
386 The speech by the chairman of the Centre at the party congress 28.9.1997. The parliamentary group speech of the Centre; The Government Statement on EMU in Parliament 14.4.1998.
387 The parliamentary group speech of the Centre; The Government Report on EMU in Parliament 17.6.1997. The parliamentary group speech of the Centre; The Government Statement on EMU in Parliament 19.2.1998. The parliamentary group speech of the Centre; The Government Statement on EMU in Parliament 14.4.1998.
388 The protocol of the party executive committee of the Centre 27.9.1997.
389 Interview with Mauri Pekkarinen 15.6.2007.
EMU supporters argued that, eventually, we would get rid of the inflation-devaluation cycle.390 Esko Aho said that the interests of the forest industry were of paramount importance due to its past significance in the Finnish economy.391 Therefore, the core party supporters were afraid that as members of an EMU state, foresters would be faced with higher costs and, eventually, higher prices due to external shocks.392
The central policy was to emphasise what the countries belonging to the same reference group as Finland were going to decide. During the Parliamentary debate on the Government Statement on EMU on 14 April 1998, Aho, the speaker of the Centre parliamentary group, said that Finns should be aware of the forthcoming disturbances in economic life if the country became an EMU member state.393 For instance, the policy of a strong Finnish markka based on a fixed currency system was a failure during the early 1990s.394 According to the interview data, historical experiences concerning relations with Russia, the neighbouring country to the east, were irrelevant to the position-taking process of the Centre.395
The central policy of the NCP was to highlight the need for closer single-market relations, the cycles of devaluation in the past, and security policy. For much of the 1995–1998 period it had pursued a policy promoting close single-market relations with other EU member states. Therefore, EMU would be a logical step to strengthen integration with other core member states.396 In contrast to the Centre, historical themes such as devaluation cycles and currency value tended to increase support for EMU among the core supporters of the NCP and the SDP. On several occasions the speakers of the parliamentary groups highlighted the role of devaluation cycles in the past when emphasising the need for a stable currency.397 The NCP leader Sauli Niinistö said that the core party supporters were afraid of speculation with regard to the currency of a small country such as Finland, mentioning George Soros as a potential threat.398 He noted that the party’s EMU stand had become more supportive by the end of the 1990s due to painful historical events early in the decade, using expressions such as:
“EMU membership began to be self-evident after the experiences of recession and devaluation, and when the Finnish markka was left to float”.399 Most surprisingly, he believed that it was imperative to argue in favour of EMU because the common currency area also seemed to be a security solution.400
390 Interview with Eero Lankia 4.6.2007.
391 Interview with Esko Aho 30.8.2007.
392 Interview with Esko Aho 30.8.2007.
393 The parliamentary group speech of the Centre; The Government Statement on EMU in Parliament 14.4.1998.
394 The parliamentary group speech of the Centre; The Government Statement on EMU in Parliament 14.4.1998.
395 Interview with Esko Aho 30.8.2007, Eero Lankia 4.6.2007, Mauri Pekkarinen 15.6.2007 and Paavo Väyrynen 13.6.2007.
396 The protocol of the ministry group of the NCP 5.4.1995. The speech by the chairman of the NCP at the party congress 9.6.1998 and 8.6.1997. The parliamentary group speech of the NCP; The Government Statement on EMU in Parliament 19.2.1998.
397 The parliamentary group speech of the NCP; The Government Report on EMU in Parliament 17.6.1997. The parliamentary group speech of the NCP; The Government Statement on EMU in Parliament 19.2.1998. The parliamentary group speech of the NCP; The Government Statement on EMU in Parliament 14.4.1998.
398 Interview with Sauli Niinistö 14.6.2007.
399 Interview with Sauli Niinistö 14.6.2007.
400 Interview with Sauli Niinistö 14.6.2007.
Relations with Russia, the neighbour on the eastern border, did play a role during the position-taking process.
With regard to the relationship between EMU policies and historical experiences, the central themes of the SDP and the NCP were almost identical. The most significant ones covered the need for closer single-market relations with other EU member states and the cycles of devaluation and fluctuating currency. For much of the 1997–1998 period the SDP had pursued a policy emphasising the importance of EMU as an opportunity to deepen integration with other core EU member states.401 During the Parliamentary debate on the Government Report on EMU on 17 June 1997 the speaker of the parliamentary group, Johannes Koskinen, stated that there was an urgent need to get rid of devaluation cycles and move to a more stable currency system.402 The party leader Paavo Lipponen claimed in the interview that past experience of economic cycles was the most decisive factor.403 It was therefore essential to stabilise the economy.404 According to the party secretary Markku Hyvärinen, historical experiences were insignificant during the position-taking process.405 He used expressions such as: “None of us are free from history” and ”EMU was more of an analysis of the future than a looking back at historical experiences”.406 Lipponen stated in his speech to the party council meeting on 24 September 1997 that EMU was a responsible decision, and that the party was looking ahead to the coming years in its responsibilities to Finnish citizens.407 Disagreeing with the NCP party leader Sauli Niinistö, Lipponen said that past experience concerning relations with Russia was an insignificant factor.408
It is worth noting that the NCP’s and the SDP’s EMU policies promoted a vision of closer single-market relations with other EU member states. In practice, this reflected the ideology President Urho Kekkonen had followed since the early 1950s, and a commitment not to allow Finland to be left behind tariff walls. Moreover, Sweden should not have a stronger position, especially in the forest industry, than Finland.409 This commitment to EMU disengaged Finland from the post-war thinking allying it with the Soviet Union. It was seen as a natural step in the country’s post-war trade policy of securing the conditions of Finnish economic life: the first step was the signing of the EFTA and EEC agreements, which eventually resulted in Finland’s joining the EU and the EMU.410
401 The speech by the chairman at the party council of the SDP 24.9.1997. The protocol of the party executive committee of the SDP 10.4.1997. The parliamentary group speech of the SDP; The Government Report on EMU in Parliament 17.6.1997. The parliamentary group speech of the SDP; The Government Statement on EMU in Parliament 19.2.1998.
402 The protocol of the party council of the SDP 23.11.1995. The parliamentary group speech of the SDP; The Government Report on EMU in Parliament 17.6.1997.
403 Interview with Paavo Lipponen 14.6.2007.
404 Interview with Paavo Lipponen 14.6.2007.
405 Interview with Markku Hyvärinen 5.6.2007.
406 Interview with Markku Hyvärinen 5.6.2007.
407 The speech by the chairman at the party council of the SDP 24.9.1997.
408 Interview with Paavo Lipponen 14.6.2007.
409 Interview with Raimo Sailas 18.6.2007.
410 Interview with Raimo Sailas 18.6.2007.
In sum, the findings of the present study do no support the core argument on the influence of historical dynamism on EMU policies. In particular, historical themes had marginal relevance given the light emphasis compared to other policy issues covered in this study. However, in the Centre’s case, historical lack of support seemed to increase opposition to a supranational policy. This was only evidenced in 1998 when the party emphasised negative historical experiences when it formed its EMU stand. The criticism was partly based on the fact that economic integration would limit the sovereignty of the nation-state. The main policy of the Centre was to emphasise the historical significance of an EMU decision, to refer to past experiences of disturbed business cycles and fluctuating exchange rates, and to show the convergent economies of the Nordic countries. The NCP, in turn, focused on the need for closer single-market relations, the cycles of devaluation and currency fluctuation in the past, and security. The central policy themes of the SDP seem to have been almost identical to those of the NCP. The most significant historical themes included the need for closer single-market relations with other EU member states and the cycles of devaluation and currency fluctuation.
The Centre focused on the interests of the forest industry, having in the past used devaluation in order to increase competitiveness. Past experiences regarding relations with Russia on the eastern border played an insignificant role. Nevertheless, the NCP leader Sauli Niinistö maintained in his interview that it was crucial to argue in favour of EMU because it seemed to represent a security solution.411 This suggests that relations with the eastern neighbour played a role during the position-taking process. It is worth noting that the NCP’s and the SDP’s EMU policies included a vision of closer single-market relations with other EU member states, which was seen as a natural step in the post-war trade policy aimed at securing the conditions of Finnish economic life: the first step was the signing of the EFTA and EEC agreements as a result which Finland eventually joined the EU and the EMU.412
411 Interview with Sauli Niinistö 14.6.2007.
412 Interview with Raimo Sailas 18.6.2007.