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Minister of Defence Antti Häkkänen's speech at the Wood from Finland Conference on 6 February 2025

Finnish Ministry of Defence

06.02.2025

Ladies and gentlemen,

It is a great honor to address you today at the International Conference on Sawmill Industry. As the Finnish Minister of Defence, I am often immersed in matters of national security and defense strategies.

However, I recognize that the strength of our nation extends beyond our armed forces to include the economic vitality and sustainability of our industries, such as the sawmill industry, which plays a remarkable role in our nation's infrastructure and economy.

It's a vital part of our comprehensive security model that harnesses every sector and every part of society to play their part in making this country safe and resilient.

Our forests are a precious resource, providing not only the raw materials necessary for the sawmill industry and many other industries - but also contributing to the ecological balance and environmental sustainability.

More or less everything we see around us especially in our cultural environment has been made possible using products of sawmill industry.

Today, I will share a couple of thoughts on some current issues of international security and their profound impact on the European economy. The times we are facing are quite turbulent, so it is crucial to understand the interconnectedness of global security and economic stability.

The international security landscape is currently marked by significant challenges and conflicts. The ongoing war in Ukraine has not only caused immense human suffering but it has also disrupted global supply chains and energy markets.

Europe has been forced to re-evaluate its energy policies and seek alternative sources to reduce dependency on Russian energy. The implications of this conflict extend far beyond the immediate region, affecting the entire European economy.

In the Middle East, the volatile situation continues to pose risks to global stability. This instability can impact global markets and worsen economic uncertainty. There have been some encouraging signs of things getting better, but the fundamental tensions have gone nowhere. A lasting peace between Israel and other parties in the Middle East is far from certain.

In the United States, the beginning of the second term of president Donald Trump has been quite intense. He has many promises to fulfill, and from the economic point of view some recent actions have been quite worrying.

Something we Europeans really wouldn't want to see right now a wall of tariffs between us and our most important partner, the United States. President Trump has already shown that he doesn't hesitate to use American economic power to achieve political goals.

Europe is being taught some very harsh but maybe also necessary lessons right now. We have been taught that we must stand on our own two feet, especially in the field of defense. The United States is increasingly tied to the Indo-Pacific region. The USA is facing a growing challenge of China, and it must prioritize.

So, in the following months we Europeans will have to have a serious discussion about how we can better take care of the defense of our own region in the future. It means increasing our own production and security of supply for example in critical military materials.

As an example I can mention that last week I announced a project to build Europe's largest TNT factory in Western Finland in near future. It also means investing more in our overall capacity in Europe.

More equipment, more troops, better technology, more training.

So, when it comes to military national defense, more is more.

On this topic, my message to President Trump is: we hear you. On the other hand, my message to all of us is: this is not something we need to do for president Trump. This is for our own future.

At the same time, we (by which I mean the EU) have learned that being a regulatory superpower may not be the most winning strategy after all. The United States and China are competing for global leadership in technology and the economy, and Europe is falling behind badly.

I'm glad to hear that the new commission has recognized the need to increase the overall competitiveness of Europe as a business environment. We have so much work to do to reduce the regulatory and administrative burden.

The cumulative effect of all current geopolitical tensions is a heightened sense of uncertainty and risk. Geopolitical risk can adversely affect the economy by impacting real GDP growth, inflation, trade, investment, consumption, and savings. Financial institutions and markets are exposed to rapid shifts in market sentiment and increased uncertainty, which can lead to reduced economic growth.

In conclusion, the international security situation presents significant long-term challenges for Europe. Right now, the biggest and most acute factor is of course the Russian war of aggression against Ukraine.

For Finland, standing with Ukraine has been a crystal clear choice. Last week, we decided on 27th package or military aid to Ukraine, worth almost 200 million euros. The total value of military assistance provided by Finland is already over 2.5 billion.

Supporting Ukraine should be seen throughout Europe as an investment in a safer tomorrow on our continent. But it's a wider issue than just helping our friends in their fight for freedom - which of course is a matter of great importance. Still, there's more. Supporting Ukraine militarily is crucial for the European economy. There are several reasons, and I'll highlight some of them:

1) Military support for Ukraine helps prevent Russia from controlling energy needs and markets in Europe. This reduces dependency on Russian energy and improves energy security across Europe.

It's crucial for Europe to continue building up our own sources of energy, especially carbon-free electricity. This includes also nuclear power. We need more reliable and resilient production of electricity and power grid.

2) Military support for Ukraine mitigates military and economic risks that could affect the entire European economy. It helps prevent broader conflicts that could lead to economic crises. Russian aggression must be contained and fended off. Russia must not be let achieve its goals and thus encouraged to try something similar with its other neighbours.

3) Supporting Ukraine strengthens cooperation between Europe and Ukraine, enhancing economic and political collaboration between the two regions. Ukraine is an inseparable part of Europe, and we need each other.

Integrating the Ukrainian defense industry with that of Europe's will lead the way to a broader integration in other fields, too. Ukraine is already becoming a European powerhouse of defense industry, and cooperating especially in this sector is highly beneficial for both sides in a long term.

4) Military support for Ukraine reduces uncertainty and risk in international markets, helping to maintain economic stability and confidence. It's a strong signal stating that Europe will keep up the rule of law and rules-based order. A prevailing Ukraine means a stronger Europe, and a stronger Europe is also a safer Europe to invest and prosper in.

5) One more point on this issue: Supporting Ukraine helps prevent a humanitarian crisis that could impact the entire European economy and society. We must show that war crimes and atrocities will not pay off. We must show that we are not going to let this continent decline to chaos and weakness. Essentially, it's still up to us.

It is unfortunate that these times, and with them my speech, are somewhat overshadowed by dark clouds. But above all, I want to be realistic. Former Finnish President Paasikivi said: The beginning of all wisdom is the recognition of facts. To continue this, it is appropriate: If we want to get somewhere, we must first know where we are now.

Second, we must have the perspective that with our own actions and sensible choices, we have a path ahead of us towards a better future. And third, we must have the determination to take the steps that will put us on the right path.

Quite big steps have already been taken. The government of Finland has already carried out historic reforms that will improve the efficiency and flexibility of the labor market. Major steps have also been taken to balance the economy, and attention will now turn to measures to boost business activity and growth. Finland's economy is already recovering from recession, and the direction is starting to change for the better.

In recent years, we in Finland have shown ourselves and a little bit others that taking action can bring about change. The worst thing we could do is give up. Finland is a great country, and Europe is a great continent. There is still plenty to do for a better tomorrow, both in the defense administration and in the sawmill industry.

Thank you all, and have a great conference.