A very special relationship
Date: 28.01.2011
A very special relationship
Last year, right after a festive 200-th anniversary of Finnish autonomy, Russia and Finland celebrated the 90 years of diplomatic relations. The Consulate General of Finland has again reported of a record number of visas granted to Russians. In December, the long-expected high-speed passenger rail joining St. Petersburg with Helsinki was officially inaugurated (see Finland trips in Allegro tempo). The railway project became “a crown for the diplomacy” [1], according to Heikki Talvitie, former ambassador of Finland in Russia. An official position of Finland's Ministry for Foreign Affairs excludes any “provocatives” in its formal dialogue with Russia (except for Russian timber export duties) [2]. Multiple view analysis of Russian-Finnish relations in 2010 shows enormous prospects for strengthening good neighbourly relations.
2010 was rich in diplomatic summits. In July, Russian President Dmitry Medvedev arrived to Finland with a working visit. The President of Finland, Tarjia Halonen, paid three visits to Russia in 2010: a working visit to St. Petersburg in March, a formal state visit to Moscow in November, and a journey with first passengers of the high-speed Allegro train along with Russian Prime Minister Vladimir Putin in December. Vladimir Putin paid two official visits to Finland: to Baltic Sea Action Summit in February and to EU–Russia Investment Forum in May. New Finnish Prime Minister Mari Kiviniemi visited Russia twice in her new position. She met with the Governor of St. Petersburg Valentina Matvienko in November and with Vladimir Putin in December.
The vector of strategic aspects characteristic of the bilateral diplomacy (Nord Stream project and timber custom duties) has preserved its positive dynamics in 2010. The moratorium for raising custom duties has been prolonged up to December 31, 2011. Now the issue is linked up with Russia’s joining the WTO. In February, the Regional State Administrative Agency for Southern Finland granted Nord Stream AG the permit to build its gas pipeline through Finland’s Exclusive Economic Zone in the Baltic Sea region[3].
Russian-Finnish cooperation in innovative spheres is also closer to positive. Esko Aho, executive vice-president of Nokia telecommunication giant (also the former Finland’s Prime Minister and board member of OAO “Russian Venture Company”), became a board member of Skolkovo Fund. According to the memorandum of understanding signed by Esko Aho and Skolkovo Fund President Viktor Vekselberg, Nokia committed to open a research and development facility in Skolkovo next year with total investment volume to amount to tens of millions of dollars.
After a depressive 2009, economic bilateral cooperation of the two countries recovers gradually. In 2010, the transport industry got an impressive series of spurs:
- in March, Torfyanovka customs crossing point was reopened for cars;
- in April, the ferry line between St. Petersburg and Helsinki started its work again; with Cyprian St. Peter Line as an operator and Princess Maria ferry, its passenger traffic constituted 150 thousand passengers during April–November 2010[4];
- in May, the Saimaan Canal lease was prolonged for 50 years, according to the terms of a new agreement;
- in December, a high speed railway linked Helsinki with St. Petersburg with the traffic flow having reached 23 thousand during the first month;
- in December, United Shipbuilding Corporation and STX Finland, a Finnish division of STX from South Korea, formed a 50/50 joint venture Arctech Helsinki Shipyard Oy. The newly formed company is meant to become a center of Artic shipbuilding. It has already won a $200 million tender of OAO Sovcomflot for two icebreaking replenishment ships.
According to local sources, Finland-based enterprises invested more than 6 million euro in Russia during 2010. The main investor is the Finnish energy company Fortrum managing power plants of TGK-10 and controlling 25% shares of TGK-1. Fortrum is ready to invest another 1.7 billion euros in Russia as a part of its investment program launched in autumn 2010 and aimed at increasing its local electricity capacity.
After the government of Finland had turned down corporate plans for adding another power unit at Loviisa nuclear power plant, the company together with French technological consultancy Altran expressed the desire the join Rosatom preparing for the construction of the 6 billion euro Belene nuclear power plant in Bulgaria. However, the final decision on the project is not ready yet. The right-wing Blue Coalition of Bulgarian parliament insists that Fortum is not an independent European participant but a protégé and a Trojan horse of Russian Rosatom longing to increase its share up to 25% (for now, the share of Altran and Fortum makes 1% for each of the companies). As a result, Rosatom will be able to get the nuclear power plant under its own control (so far its share is 25%).
While the downturn consists to prevail in the building and construction industry, Finland-based Betset Oy entered the market of St. Petersburg. In January, the company opened a new facility in Pargolovo producing 100 thousand sq. m. of interior wall panels a year. The second 25 million euro factory of concrete products is being constructed near the Kiev highway, with the annual capacity of 300 thousand sq. m. of wall panels.
In November, the Stockmann concern from Finland opened its first 98 000 sq. m. department store in the city. The group's total investment is approximately 185 million euro. The company has already got six shopping centres in Moscow and plans to launch a mall in Yekaterinburg in 2011. A construction project in St. Petersburg was heavily criticised by several non-governmental organizations. “Zhivoi Gorod” (A Living City) movement declared Jussi Kuutsa, head of international development at Stockmann, “an unhonorary St. Petersburg freeman-2010”. The All-Russian Society for Protection of Historical and Cultural Monuments continues to dispute the legitimacy of the agreed building height.
The last year again beat the record in the number of visas granted for Russian citizens, which exceeded one million (see the table).
| Consulates | 2009 | 2010 | Annual growth, % |
| St. Petersburg | 542000 | >750000 | 39% |
| Moscow | 122000 | >160000 | 31% |
| Petrozavodsk | 46000 | >60000 | 30% |
| Murmansk | 19000 | >28000 | 47% |
| Total | 730000 | 1000000 | 37% |
Pointing out the inability to process a constantly increasing number of visa applications from Russian citizens, the Consulate General of Finland in St. Petersburg invited VFS Global agency for primary processing of requests. On February 11, the new visa centre was opened at Stremyannaya St. The Consulate General in Petrozavodsk has found another way to solve the problem. After having moved into new premises, it expanded its staff.
Family relationships and issues demanded repeated diplomatic consultations and elucidations between Russia and Finland during 2010. Several cases drew a wide public response including elderly Irina Antonova who was expelled from Finland and children from interethnic marriages, Anton Salonen, Robert Rantal and Julia Putkonen. The Russian side found a proposition of Mari Kiviniemi who called for a new minister for families' and children's affairs in the government of Finland to be a step towards solving future disputes with interethnic marriages. Russia also insists on creating a bilateral commission for solving disputable cases which involve children from such marriages.
Food question became another stumbling block of 2010. Starting from July, Rosselkhoznadzor banned the export of dairy and meat products from 14 Finnish food producing plants of Atria, Ruokatalo, Snellman, Saarioinen, Ingman Ice Cream и Valio after having inspected 23 Finnish enterprises in May. In August, dairy and meat products from Saarioinen and Snellman enterprises reentered the Russian market together with products from a Ruokatalo plant. In December, the green light was given to the second Ruokatalo enterprise and to one of Atria’s manufacturers. Meat products from another Atria unit and the ice-cream of Ingman Ice Cream are still under prohibition. Meanwhile, the sword of Damocles continues to threaten Valio processed cheeses. There destiny is still under question according to Gennady Onishchenko, the head of Rosselkhoznadzor. While the share of food products from Finland is relatively low at the market of Russia, the country remains the largest importer of agricultural products from the region.
With the number of tourists from Russia growing steadily, Finland now discusses the possibility to choose Russian as the second foreign language for schools of Eastern Finland. For now, according to state laws it is an obligatory Sweden (pakkoruotsi). For bilingual Finland, the educational question immediately became a political issue. Six municipalities wait for a go-ahead from the Ministry of Education to introduce pilot projects in their schools. As Finland is preparing for elections now, one can expect for the linguistic issue to become a hot topic at election disputes.
In his speech in the Parliament of Finland given during celebration of the 90 years of Finnish-Russian diplomatic relations, Foreign Minister Alexander Stubb remarked that there is no need for “resetting” the relations with Finland. He noted at the same time that the 2010s “offer an opportunity to refresh relations.” The review of the bilateral relationship in 2010 shows that in spite of the very special relations between the two countries, many directions of the bilateral cooperation are in a clear demand for such “refreshment”.
[1]A speech of Heikki Talvitie in the Consulate General of Finland in St. Petersburg, December 16
[2]An interview of Alexander Stubb published in Kommersant newspaper, November 12, 2010
[3]The decision was challenged by Estonian non-governmental organizations, together with the Finnish Association of Nature Conservation in Uusimaa. Finland’s Vaasa Administrative Court rejected the appeals. The court admitted certain ecological risks associated with the project but stated that its economic advantages exceed the risks.
[4]St. Peter Line faced a discrimination policy from the Finnish port. The company planned to transport roll-on cargos during the low season. But the management of Helsinki port stood up against it while other operators were not subject to this ban. Valentina Matvienko supported the company and even sent a letter to Mari Kiviniemi.
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