HS Column 13.1.2004 - A tale of two cities (and one EU authority)

By Unto Hämäläinen

"Finland is prepared to go to war for two causes: to fend off a Russian attack, or to get the European Food Authority", commented a British diplomat joshingly at the European Council summit arranged in Laeken in December 2001.

Finland had held the rotating EU Presidency in the second half of 1999, and during the six months a number of questions relating to food safety were very much in the news. The Finns' active approach to these matters was noted favourably, and thereafter Finland won widespread support for its demand that Helsinki should get the EU's planned new European Food Authority.

By the time the heads of state and government gathered in Laeken, during the Belgian Presidency, it was all supposed to be a done deal: of the fourteen other EU member states, thirteen backed Finland's claims to the Food Authority prize.

However... As a result of solitary Italian opposition to the move, the package of locations of new authorities was left on the table.

"Seems as though the poor have to push their case through in their own fashion", said a disappointed Prime Minister Paavo Lipponen, referring to the situation around the negotiating table.

Perhaps unwittingly, Lipponen forecast the way things were eventually to play out. Little Finland handled matters in its own fashion, while the big countries ultimately dictated what the outcome would be.

The stalemate situation remained much the same for more than a year. Then, in March 2003 - only a couple of days before the Parliamentary Elections here in Finland - the media reported an "agreement", or a "compromise proposal", or something else, between Lipponen and the Italian Prime Minister Silvio Berlusconi. The impression given from the published statements was that the European Food Authority, with responsibility for food safety issues, would be coming to Helsinki, and that it would not be going to Parma, which is where Berlusconi had wished it to be located.

It is probable that only Lipponen and Berlusconi themselves know what was really said. The agreement or the preliminary proposal to an agreement turned out later not to have been worth much more than the paper it was not actually written on.

Lipponen's successors Anneli Jäätteenmäki and Matti Vanhanen tried to beg Italy to abandon its opposition and allow the Food Authority to come to Finland. When Italy took over the EU Presidency in July of last year, a number of senior Finnish civil servants went to Rome to attempt to persuade Berlusconi's assistants.

It would have been in keeping with good European behaviour if the holder of the Presidency would have surrendered - albeit only momentarily - the pursuit of its national interests in favour of action that would benefit the Union as a whole. This is what the Finns had been taught in EU school.

Apparently the Italian civil servants had skipped these lessons or had not done their homework, for Italy in fact took quite the opposite course and demanded for itself not one but two EU authorities - the Food Authority for Parma and the European Chemicals Authority for Rome.

Nevertheless, by the end of October, Italy was prepared to soften its stance, and set about putting together a compromise.

In classified correspondence between the two sides, Finland initially rejected the Italian proposals. There are, however, many different ways of saying "No". The Italians interpreted the Finnish response to mean that Finland was no longer prepared for flat-out war, in other words to torpedo the entire authorities package when it came up for discussion at the December European Council summit.

As unfortunately happens sometimes in these cases, Prime Minister Vanhanen nonetheless made public statements to the effect that Finland was not giving up the ghost on the Food Authority. I have tried to determine from various sources whether Vanhanen was lying. The Prime Minister did not lie to us, if one accepts the guideline that in politics one sticks as close to the truth as is possible.

Right up to the Brussels summit in mid-December, the Finnish government upheld the illusion that the fight for the Food Authority was still "on". Meanwhile, the Italians held discussions to move forward their own compromise, in which Finland would be given the Chemicals Authority.

Gradually, Italy began to win support for its project. The German position was decisive. Prior to the summit, Chancellor Gerhard Schröder signalled to Helsinki that a resolution would have to be reached in Brussels. Things could not be put off any longer. Similar messages came from other capitals.

The government no longer had sufficient courage to reject the Italian proposal or to postpone the decision, and Finland contented itself with a reasonable compromise solution.

One must once again admire the Finns' innate ability to cope with setbacks. Our heads are not really that good at dealing with victories, but in defeat we have the ability to explain it away as a triumph. Vanhanen smiled broadly when giving the news about securing the Chemicals Authority, and thereafter a number of accounts appeared testifying to the excellence of the new body. This really would be a huge catch; at least as big and certainly more important than the Food Authority, just as long as a decision is taken at some point to establish the thing. This, of course, will all take time.

We believe you, we believe you - and we'd be even more fervent believers if these same principles had been expressed already back in the early autumn.

All the same, the Finns have no need for sackcloth and ashes. Italy won a Pyrrhic victory if ever there was one. When the Food Authority eventually moves from Brussels to Parma, its new home will be famous not only for the excellence of its air-cured ham, but the name will be seasoned by the Parmalat scandal, a humungous Enron-scale swindle involving the local dairy and foodstuffs group and billions of euros, and already described by the U.S. Securities and Exchange Commission as "one of the largest and most brazen corporate financial frauds in history".

The scandal exploded into the headlines only a couple of weeks after the EU summit. Immediately after the story broke, Berlusconi's government rushed through bankruptcy protection legislation to save Parmalat from its creditors. Well, waddaya know?

Helsingin Sanomat / First published in print 10.1.2004

Note: There have been countless stories on this subject in the International Edition; only a selection are linked here.