” I think that we are, as always, pragmatic idealists.”
Editor’s note: This interview has been lightly edited for length and clarity.
Nordic West Office. Dr. Penttilä is a former member of the Finnish parliament, CEO of Finland Chamber of Commerce, and Secretary-General of the European Business Leaders’ Convention. He received his B.A. at Yale University and earned his Ph.D. at the University of Oxford. During the conversation, Dr. Penttilä sheds light on Finland’s geopolitical situation as the Ukraine-Russia security crisis unfolds.n January 12th, Merion West‘s Henri Mattila was joined by Risto Penttilä, the CEO and co-founder of the premier global affairs consultancy and think tank
Finland is not in NATO, which many Americans find surprising since the country seems to tick all the right boxes for membership. Why is that?
The reason is that we missed the opportunity to join in the 1990s when the Soviet Union collapsed and Finland quickly joined the European Union. We’ve always been a Western country, but we were influenced by the Soviet Union quite a bit. And then, at that time, if Finland had decided to join NATO, nobody would have noticed because Yeltsin was busy doing other things, and, really, that was the way of the world. Yet we didn’t join then, probably because the political leaders at the time thought that this would be a bridge too far. Ever since, we’ve thought that for the sake of stability—in the Baltic region, where we, of course, are neighbored by Russia—the argument has been that Finland and Sweden should stay outside of NATO to keep NATO forces and Russian forces separated in order to create a zone of stability. That has been the argument.
You mentioned Sweden. So Sweden—just like Finland—one would expect that it is a member of NATO, just like Norway and Denmark. But like Finland, it is not. Is there some kind of pact or agreement between Finland and Sweden to decide to join or not to join in lockstep with one another?
There’s no agreement. But there has been a political discussion on a very high level over the years that both countries would keep each other informed about the idea of possible coordination. The background is that when European Union access was topical in the 1990s, Sweden suddenly decided to join the European Union without telling Finland, and that, of course, has been a constant cause of concern in Finland.
Could this happen again, that Sweden would decide to go and not tell Finland today? It’s generally understood that the two countries would seek to join together. However, personally, I’ve changed my mind on this. I think that it is very likely that Finland would decide on its own to join, regardless of whether Sweden would follow or not, but the general understanding of the situation is that they would probably do it together.
Just last month, Finland announced a purchase of nearly $10 billion worth of American-made military aircraft and weaponry, namely in the form of F-35 fighter jets. This news came to the dismay of European weapons manufacturers that were hoping that Finland would instead buy from them. This deal sparked international headlines—not only in Finland but in America as well. Why was this transaction such a big deal?
Well, for two reasons. One, when a country that has a 1,340-kilometer border with Russia decides to buy top-of-the-line American aircraft, it’s big news. But the second reason is that it really emphasizes and shows that Finland values its military relationship with the United States. So this was not interpreted as being only about technology and money; rather, it was interpreted as being a step toward closer military cooperation bilaterally between the United States and Finland. So that was the interpretation.
Finland says, of course, that the procurement was made entirely on technical and cost evaluations. And yes, there’s truth to that: If the F-35 were not top-of-the-line, then it probably wouldn’t be procured. But at the same time, it is noteworthy that Finland got it quite cheaply. So the calculation, perhaps, from the U.S. side was that it would be a good thing if Finland had very modern equipment. So I think it’s fair enough to say that this is a step toward closer bilateral military cooperation between the United States and Finland.
The biggest news coming from Europe concerns the agglomeration of nearly 100,000 Russian troops on the border of Ukraine. Combined with hostile rhetoric coming from President Putin, this amounts to a clear campaign of intimidation on the part of Russia. Do you think that NATO and Russia will be able to negotiate a peaceful outcome to this situation on the Ukraine border?
I don’t think there will be an outcome that looks perfect. I simply don’t see the two sides coming together and making a compromise that would be acceptable to both sides. However, what is possible is to find a face-saving way for Vladimir Putin to back off, and that is still possible. Nevertheless, my basic analysis is that we are likely to see Russia use military force in eastern Ukraine. So I don’t think that there’s going to be a breakthrough in the talks. I hope I’m wrong. I hope they will reach a compromise, but, at the moment, it looks highly unlikely.
So you’re saying that the situation will not resolve completely peacefully, in that Russia will pull out and leave Ukraine alone forever. Instead, there’s going to be some kind of situation short of a great war and more of an escalation of the type of proxy campaign waged by Russia similar to the “little green men” operating as unofficial Russian agents in the country. Or do you see Russian activity inside Ukraine taking on a more expansive role?
As you pointed out, the Russians are already there, or they are conducting a proxy war in the Donbas region of eastern Ukraine. So that’s been ongoing. But that has not been formally recognized as Russian intervention; what I think is likely to happen is that Russian troops will move into these areas that are already controlled by Russian-minded groups of people. So I do think that we will see both a very limited military conflict and possibly cyber attacks associated with it. That is entirely possible.
What I don’t think is likely is that there will be a great war in which other countries would get involved; that simply is not going to happen. Nobody in Europe has any intention to go and help Ukraine militarily. Neither does the United States.
How is Finland viewing the situation in Ukraine?
I think everyone’s worried. And that goes for most of Europe. At the same time, what’s noteworthy is that a very lively discussion about Finland’s potential membership in NATO has started. I am actually one of the culprits for this discussion in December. In a TV interview, I said that if the crisis in Ukraine becomes a major war, then Finland will be in a situation where it is asked or expected to make a decision concerning joining NATO because then the old arguments about maintaining stability and keeping good relations with Russia no longer hold.
So that discussion started in December, and then President of the Republic gave a New Year’s speech in which he reiterated Finland’s old position, which is that joining NATO is entirely up to Finland; Russia—or anyone else—cannot dictate whether Finland should join or not. And this was interpreted in Finland and elsewhere as quite a strong message to Moscow: If you start shaking the foundations of European security, you might actually see Finland and Sweden joining NATO, which, of course, would be entirely against the interests of Moscow at the moment.
So the reason for the President’s remarks in the New Year’s Address was because Russia had recently made statements that other countries like Finland, Ukraine, and Sweden should not be added to the NATO membership. Basically, NATO should not be growing, especially near the Russian border. Is that accurate?
Yes, I think you’re absolutely right. Of course, they haven’t really mentioned Finland or Sweden separately—but since the message was that there should be no more expansion of NATO—that has been interpreted as also pertaining to Finland and Sweden. And that was the reason why I think the President felt that it was important to re-emphasize those positions.
You mentioned that, in December, you helped to spark this conversation about Finland joining NATO. How has this conversation been going? I understand the Finnish electorate is the reason the country didn’t join in the 1990s; there was no mandate from the people. But, today, where do you think the Finnish people stand with regards to the question of joining NATO?
People in Finland are against joining NATO, but the percentages are changing very rapidly. Also, I earlier said that Finland missed an opportunity to join already in the 1990s, and, even then, the majority of people were against joining. But the interesting thing was that people were asked two questions. The first question asked whether Finland should join NATO. The people responded, “No, we are happy where we are.” But, at the same time, they were asked if the President and the government were to recommend joining NATO, would you then be ready to join? And everyone said yes.
So, in Finland, there’s still this very strong tradition that we trust our leaders when it comes to security policy and national security. Basically, in order for us to join NATO, two things would need to happen. The president and the prime minister would have to come out and say, “Yes, we do actually recommend this,” and that would change the public opinion overnight. The second way it could happen would be as a result of a military conflict in Ukraine; even if it is limited, that might change their minds. This might cause a sudden change in public opinion, and that could lead very rapidly to Finland joining.
Still, the majority of people are very reluctant; there’s this attitude of “If it ain’t broken, why fix it?” We have strong defense forces by European standards. We have mandatory service for men. So people feel we have this covered; we take security seriously, so we don’t need NATO at this point. However, that could change.
Switching gears here, there has been a lot of talk about a new cold war brewing. This time it is not between Russia and the United States but, rather, a new type of conflict that is between America or the West more broadly and the People’s Republic of China. As we speak, countries are starting to choose which side they’re going to favor in this burgeoning conflict. I’m not suggesting there will ever be a hot war, yet I see the markings of a long, drawn-out cold war not too different from the one Americans had with the Russians, but even on a grander scale due to economic factors playing a major role. Where do you envision Finland and the Nordic countries fitting in this new realigning world between China and America?
First of all, I do agree with you; I think we do already have a new cold war between China and the United States or, more broadly, the West. So I agree with the analysis. Then your question is, “Where do the Nordics (Finland, Sweden, Norway, Denmark, and also Iceland), stand with regard to this new cold war?” I think that we are, as always, pragmatic idealists. We speak for good relations between all; we speak for good relations because we are very dependent on being able to export to China. But, at the same time, there’s pragmatism, and I think that the position of the Nordics will be determined by two things: what Germany says and what the United States says.
At the moment, Germany still wants to keep good relations with China, mostly because of its auto industry and its exports. So we are sort of happy with that. However, the United States is pushing for a more aggressive stance. Yes, in terms of values, we support the United States. But this sort of situation is quite perfect for the Nordics. Yes, the United States is putting pressure on China. But Germany is keeping export channels open for European countries. So it is a bit of an opportunistic stance that all of Europe is taking, and the Nordics are a part of it. If and when we have to make a decision as to whether to do business with the United States and the West or with China, it’s obvious that the West is our home. But right now we are sort of taking in the benefits of the German stance. But what companies fear, especially in the Nordics, is a situation where you would have to choose whether you do business in China or in the United States; that would just be awfully difficult. There are a massive number of big multilateral companies based in the Nordics who have half of their sales in the United States and half of their sales in China.
But when an ultimate decision has to be made, we would align ourselves with the West.
“Pragmatic idealists” sounds like a great way to summarize Finland’s foreign policy. Thank you for your insights today, Risto.
Henri, it was a pleasure, and I hope that things work out better than I predicted in Ukraine.