FINLAND: PRESIDENT'S NEW YEAR ADDRESS

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SUBJECT: FINLAND: PRESIDENT'S NEW YEAR ADDRESS



1. (U) President Tarja Halonen's New Year's Day speech--
which also serves as Finland's de facto state of the union
address-- focused on what she termed the "increasing
disparity in income levels in Finland." Halonen said that
Finland has been a winner in the emerging global economy, and
that the country's wealth has increased correspondingly;
however, this newfound affluence is not being distributed
evenly among all sectors of society. Citing continued
unemployment and a wider gap between haves and have-nots,
Halonen cautioned Finns that "We must take better care of
social justice." She also expressed hope that Finnish
companies transferring jobs and operations abroad would
"remember that they are Finnish and ...maintain close ties
with Finland." Despite such globalization-related concerns,
Halonen asserted that the fundamental structure of Finland's
social welfare state was sound.


2. (U) Halonen restated her strong support for the United
Nations, emphasizing the UN's role as one of the cornerstones
of Finnish foreign policy. She also said that relations with
Russia, the EU and U.S. were strong, further commenting that
Finnish-U.S. relations were "running smoothly." Looking
ahead to Finland's second-term 2006 EU Presidency, she said
that Finland hoped to promote international security,
economic growth, employment, social justice, and the
environment.


3. (U) Comment: Halonen's address, doubling as campaign
speech with a presidential election only two weeks away, hit
on familiar themes: concern over social inequality, the
necessity of ameliorating globalization's negative
ramifications, and the health of Finland's external
relations. The income disparity issue, which was also raised
during recent televised presidential debates, highlights the
unique perspective of the Nordic welfare states. By most
international measures, income distribution in Finland is one
of the most egalitarian in the developed world, and the
oft-mentioned "disparities" involve increases in real income
across the board, but with larger increases in the top income
brackets. However, social equality issues have real
resonance in Finland where social support is beginning to
falter, the taxpayer is at maximum stress and there is no
real revenue source for additional spending. Also, in social
democratic Finland, individual displays of wealth are likely
to provoke disapproving frowns unlike the envious or
appreciative smiles it might elicit elsewhere. Halonen's
remarks about strong relations with the U.S. were clearly
calibrated to answer foreign policy critics who frequently
cite less than optimal Finnish-U.S. ties (in their view) as
one of her chief shortcomings.
HYATT