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Finns are the happiest people on the planet, according to the World Happiness Report. (They were also the happiest last year.)
When asked about the ranking, Finnish Ambassador Kirsti Kauppi smiled, as apparently any proper Finn should.
“They must have taken that survey in the summer,” Kauppi laughed, modestly shrugging off Finland’s latest accolade. “Or perhaps they mixed us up with Sweden.”
That may well be true, given that many Americans tend to lump the Nordic countries together (all five of which also placed in the top 10), because they consistently rank high for their strong social safety nets, emphasis on work-life balance, transparent governments, universal health care, long life expectancies and unrivaled education systems.
But even the happiest people on earth have their problems.
Generous social benefits aren’t free and with an aging population, Finland must figure out how to keep paying for its cradle-to-grave welfare system. Meanwhile, anti-immigrant, anti-establishment populist parties have gained a foothold in the country of 5.5 million, challenging Finland’s longstanding – and long-cherished – assumptions about the state’s role in its citizens’ lives.
Historically, Finland has had to balance its relations with the West and Russia, a fine line it continues to walk today as it contends with a revanchist Russian president and an isolationist American president.
And when it comes to Donald Trump, Finland, like much of Europe, is struggling to manage the yawning chasm in policy differences with the White House on issues such as free trade, human rights, Iran, multilateralism and climate change.
Arctic Heats Up
On the latter, those differences were laid bare in May at a meeting of the Arctic Council, a grouping of eight nations that border the polar region. The council, which has been chaired by Finland for the last two years, largely focuses on scientific collaboration and environmental issues, which are especially critical because the Arctic is warming twice as fast as any other part of the planet. That warming accelerates the effects of climate change elsewhere, from brutal heat waves and cold snaps to flooding and droughts.
Yet Secretary of State Mike Pompeo pointedly fought to leave out any reference to climate change or the Paris accord in the final declaration. Instead, he condemned Russia and China (which has observer status in the council) for “aggressive” actions in the Arctic while touting the economic opportunities that retreating ice has opened up, including new shipping routes and the potential to extract untapped reserves of oil, gas, fish, diamonds, gold and rare-earth minerals.
The fact that Pompeo talked about the opportunities created by melting ice while adamantly refusing to even mention climate change was more than ironic considering that climate change is precisely the reason why that ice is melting.
Kauppi said that despite the disagreement, the council was ultimately able to produce a declaration, although she admitted it was weaker than what members had hoped for.
“The fact that we couldn’t agree on a substantive declaration was obviously a disappointment. [But] it was not totally unexpected in the sense that we of course have known what the U.S. administration’s climate policies are,” she told us during an interview at the Finnish Embassy, a contemporary, glass-enclosed structure on Observatory Circle whose eco-friendly design evokes the Finns’ love of nature.
Kauppi conceded that access to new shipping lanes and natural resources is an inevitable reality of climate change, but she stressed that governments must capitalize on those opportunities in a sustainable manner, both in terms of preserving the Arctic’s fragile ecosystem and respecting the indigenous people who live there.
“For us, the environmental and climate aspect is the primary lens through which we look at the Arctic,” she said, adding that “when the Arctic changes, it catalyzes climate change elsewhere.”
But Pompeo suggested the U.S. might want to expand the council’s mandate to encompass security issues, alarming the seven other members when he said the region could become the next frontier in “global power and competition.”
“Do we want the Arctic Ocean to transform into a new South China Sea, fraught with militarization and competing territorial claims?” Pompeo asked in a speech prior to the council meeting. “We know Russian territorial ambitions can turn violent,” he added, referring to Russian meddling in Ukraine. “Just because the Arctic is a place of wilderness does not mean it should become a place of lawlessness.”
Pompeo’s warnings of a military buildup in the Arctic were again somewhat ironic given that the U.S. has deployed its own assets to the region, launching new military exercises and expanding Coast Guard and icebreaker operations. Indeed, a June report released by the Defense Department says the U.S. “must be able to deter, and if necessary, defeat great power aggression,” erode China and Russia’s competitive edge, and develop “a more lethal, resilient, agile, and ready” strategy to ensure “our military sustains its competitive advantages.”
Still, the U.S. has yet to commit significant money or resources to the region. And despite the saber-rattling, Kauppi said that, “We believe it is still possible to keep the Arctic very much a region of low tension,” emphasizing that dialogue, transparency and confidence-building measures are key to keeping those tensions in check.
In the meantime, “the concrete work of the Arctic Council will continue as is,” she said.
That includes practical areas of cooperation such as “search and rescue and oil spills and so on that are absolutely within the purview of the Arctic Council.”
But the mandate “states explicitly that the Arctic Council doesn’t include military issues,” added Kauppi, whose previous postings include Austria, Germany, Thailand and Brussels, where she was head of the EU’s common foreign and security policy coordination with Helsinki.
But the ambassador acknowledged the reality that various actors are fortifying their military presence in the hotly contested region. That includes not only the Americans, but also the Russians, whose assets such as submarines and reopened bases far outweigh America’s presence.
While Kauppi called Russia’s Arctic expansion concerning, “I would say that to some extent the Russian buildup is understandable because there are going to be more and more actors in the region…. They have a long Arctic coastline that they want to protect,” she told us, noting that Russia’s biggest nuclear weapons arsenal is located in the Arctic.
The Russia Tightrope
The ambassador’s conciliatory words about Russia, which stand in stark contrast to Pompeo’s rhetoric, in part reflects Finland’s complex and closely intertwined history with its much larger neighbor.
After Finland declared its independence in 1917 (with help from Soviet Bolsheviks) following the abdication of Russia’s last czar, the fledging state descended into a brief civil war. During World War II, Finland managed to retain its independence while resisting repeated invasions by the Soviet Union, although it did lose some territory to the Soviets.
Finland then joined the United Nations in 1955 and established an official policy of neutrality, although the Soviet Union still wielded influence in the country. In 1995, Finland joined the European Union and became the first Nordic country to adopt the euro in 1999.
Today, Finland walks a precarious tightrope between the EU, NATO and U.S. on one hand, and Russia on the other. Kauppi said Finland is a strong supporter of NATO but has no desire to join the security bloc, a move that would antagonize Moscow.
“There is no strong feeling that we are somehow in a bad place as far as our security is concerned. I think it is a very natural reaction for people to think that if you are OK, why change the situation,” Kauppi said. “So that’s why the public opinion is not keen on NATO membership. But the public opinion is very much supportive of a robust national defense, which we have, and very strong partnerships with NATO, with the EU, with the U.S. and with the Nordic countries.”
Kauppi said that Finland’s “posture vis-à-vis Russia is the same as the rest of Europe and [the U.S.], and that is you have to be strong yourself, resilient, know what you want, defend your interests and in some senses show strength.”
She noted for example that even though Western sanctions against Russia for its annexation of Crimea have hurt Finland economically, the country continues to support those sanctions because the “annexation of a friendly country by Russia was such a breach of international law that there had to be very clear consequences.”
At the same time, “Finns also want to have a well-functioning relationship with Russia, who is our immediate neighbor. We have the longest border of any EU or NATO country with Russia. However, we formulate our Russia policies together with the other EU countries. But since we are neighbors, we have quite a lot of dialogue with Russia and we have to take care of many concrete, practical issues, like that the border functions well.”
EU Presidency
Finland’s emphasis on practical cooperation is an overriding theme as it takes over the rotating six-month presidency of the European Union this month for the third time.
The EU presidency is no longer as powerful as it once was, and because coalitions in the newly elected EU Parliament are still in flux, Finland’s presidency won’t be introducing any splashy new initiatives.
But Kauppi said the country’s presidency will emphasize three general areas: growth, security and climate.
Under growth, she said Finland will continue the EU’s work on a “rules-based multilateral trading system,” which includes new free trade agreements (the bloc just inked one with Singapore).
“The other big area under growth is the single market, which is I would say the beating heart of the European Union. And it’s a work in progress,” Kauppi said, noting that the bloc still needs to establish “a real European single market on the digital side.”
The EU has already made progress on that front with its pioneering General Data Protection Regulation (GDPR) to regulate data privacy, but Kauppi said the bloc needs to go further in creating common rules to regulate digital trade between American and EU companies.
Under security, the goal is to enhance defense cooperation among EU member states without overlapping the work of NATO, but rather complementing it.
Then there’s climate, Finland’s area of expertise. Kauppi admitted that President Trump’s withdrawal from the landmark Paris climate accord threw a wrench in the global effort to curb greenhouse gas emissions.
“We of course regretted the decision of the U.S. to withdraw because we do think that agreements like the Paris agreement, even if it is not very strong in the sense that it [lacks] binding obligations, are very important in building up the momentum for action against climate change,” she told us. “And with the U.S. withdrawing, it of course weakens that international push and pull toward more ambitious action.”
On the flip side, “there might be a silver lining in the sense that the withdrawal has also resulted in more determined action by some other actors,” she said, citing large cities and small states that have teamed up to tackle the issue.
“I know that people feel very frustrated because it’s difficult to see how you can make an impact, but there is the personal level, there is the community level, the national level, for us there is the EU level and then the global level. When these add up, the impact is there.”
Kauppi pointed out for example that international cooperation with U.S. cities and states has continued despite the U.S. withdrawal, especially when it comes to sharing new eco-friendly technologies.
On that note, she cited the example of black carbon in the Arctic caused by soot, which lands on the ice and accelerates melting because instead of reflecting sunlight, the ice absorbs heat. Soot comes from coal-fired power plants, gas-flaring and other sources that “would be relatively easy to stop,” Kauppi explained, because it involves replacing old-fashioned technologies, which would ultimately result in cost savings. “The beauty … is that it would have an almost immediate impact and it would also improve the health conditions of the people living in the Arctic.”
The ambassador said such actions are important to show that bolstering economic growth and fighting climate change are not antithetical, but rather mutually reinforcing.
“I think what we have shown, in the Nordic countries especially, is that you can combine a very strong focus and real improvement in the environmental and climate conditions of your society — really reducing emissions, reducing pollution, reducing harmful activities — and at the same time have growth and a very vibrant economy. So it is not only environmentally beneficial but also economically beneficial to invest in the green economy,” she said. “It brings a lot of other benefits — basically a better quality of life in many senses.”
Mixed Emotions
And when it comes to quality of life, the Finns know what they’re talking about, consistently ranking at the top of many well-being indexes, along with their Nordic counterparts.
“I don’t think Finns would say that we are the happiest country in the world, but we certainly have all the reasons to be very, very happy,” Kauppi said. “We are a stable country, prosperous, with a very high level of equality. We are very close to nature, and we have a secure and good everyday life. I think equality is a big part of it, and I think also the environmental piece of it.”
But not everyone in Finland is satisfied.
As elsewhere on the continent, the rise of populism has inspired many Finns to question the country’s long tradition of tolerance and progressivism.
Those doubts exploded during the 2015 refugee crisis that saw over 1 million asylum-seekers swamp Europe.
“We normally get about 3,000 to 5,000 asylum applications a year, and in 2015, in about four months, we got about 33,000. So if you take that proportionately to the U.S., it would have meant that the U.S. would have gotten in four months I think 1.6 million asylum applications,” said Kauppi, who, before coming to Washington, served at the Ministry of Foreign Affairs as director general for Africa and the Middle East from 2009 to 2012 and political director from 2012 to 2015.
“At that time, it was a huge challenge simply to provide beds and infrastructure and then to start to vet the applications, and that is still going on” — as are integration efforts, she said. “It’s a huge task.”
But tensions have cooled since then. “People were worried at the time because there was no end in sight,” Kauppi said. “But we are back to the old numbers now as far as asylum-seekers are concerned.”
The ambassador said that while the EU failed in many respects — for example in convincing member states to share the refugee burden — the crisis showed that people wanted “more robust EU action,” not less, and that since the refugee crisis and Brexit, “support for the European Union has actually gone up.”
A Populist Challenge
But euro-skeptic parties continue to gain traction, even in pro-EU countries like Finland.
In elections this past April, the Finns, a right-wing populist party, just narrowly lost to the center-left Social Democrats, coming in a close second.
Like many other populist parties, the Finns campaigned on an anti-immigrant platform, but notably, it also denounced Finland’s ambitious climate policies, arguing that they were costly, unnecessary and hurting the working class.
Kauppi said that while the election revealed sharp differences among the electorate, she cautioned that it did signify a major shift in priorities.
“We have to remember that the [Finns] Party gained less than 18 percent of the vote, so I wouldn’t say that on the climate issues there is any big change in the public opinion,” she told us.
“I think one of the main points of the party … was that whatever action Finland takes is not going to solve the climate issue at large and therefore we shouldn’t take action that hurts the Finnish economy,” Kauppi said. “However, our experience is that actually our very progressive environmental policy has benefited the Finnish economy. In other words, we have been at the forefront of green technologies and we have gained new markets and new opportunities through investing in climate-friendly technologies and actions.”
And while the upstart populist party gained a significant foothold, Finland’s center held together, with the winning Social Democrats cobbling together a coalition with four other smaller parties. That means a Social Democrat is set to become Finland’s first leftist prime minister in 20 years.
The previous center-right government fell in part because it proposed austerity measures such as benefit cuts and pension freezes to curb the national debt and spur investment.
Under the new government, the pendulum will swing the other way, with the Social Democrats reportedly planning to hike taxes to increase social spending in a bid to strengthen Finland’s expansive welfare system.
But Kauppi said the country is still committed to “sticking to EU rules” by keeping its debt under control.
She admitted, however, that preserving generous social benefits for an aging population while maintaining low levels of debt and a competitive economy is “a very tricky equation” — one that is perplexing many developed nations.
She suggested that one possible solution to preserve Finland’s social safety net would be to “find a system that makes it more incentivizing. That is one of the big efforts, and actually our experiment with basic universal income was related to that objective.”
Innovative Experiments And Interesting Times
That two-year experiment gave about 2,000 unemployed Finns a guaranteed monthly income of about $600, which they kept even if they found work. The goal was to give the unemployed time to learn new skills or apply for jobs they might not normally consider without fear of losing their benefits.
The results of the experiment, released earlier this year, showed that while recipients reported feeling happier and less stressed, employment levels did not rise, disappointing some proponents of the plan.
Kauppi said her government is still analyzing the results, but she pointed out that the experiment did illustrate the importance of being mobile and flexible in today’s fast-paced work environment — one in which the gig economy and automation are upending many industries.
“Everybody will have to change professions and jobs many more times than we are used to, and sometimes those new jobs don’t provide you with a living wage,” Kauppi said, “so somehow the society has to make sure that people have the chance to go forward with new opportunities without losing basic security.”
Finland, which is the first European country to test out the increasingly popular idea of a universal basic income, takes a novel approach to ensure the well-being of its citizens.
And one of the more unusual ways that the country establishes trust among its citizens is by revealing what everyone pays in taxes during an idiosyncratic annual ritual known as National Jealousy Day.
One day each year, everyone in Finland can scour a massive data dump to see what every single one of their countrymen paid in income tax — regardless whether that person is a janitor, CEO or celebrity.
The idea is not to foster jealousy, but rather temper it by demonstrating that everyone, including the wealthy, are paying their fair share — “so there’s total transparency,” Kauppi said.
“Now, the jealousy aspect of it, I think it’s a little bit of a joke. Traditionally there was this dimension in Finnish society that wealth, especially inherited wealth, because of our strong emphasis on equality, was looked at as not necessarily a positive thing,” she said, noting that while times have changed, the public disclosure of everyone’s income taxes reinforces the importance Finns place on equality. “And of course people are curious,” the ambassador smiled wryly.
The concept of exposing what everyone paid in income taxes certainly wouldn’t go down so well here in the U.S. — and especially not with this current administration, which has fought tooth and nail to keep President Trump’s tax records from the public eye.
The fact that in the past, U.S. presidents routinely disclosed their tax forms is just one of the many ways this presidency has shattered all political norms and conventions.
Kauppi — who’s been ambassador to the U.S. since 2015 and served here during a prior stint in the late 1990s — admits that we’re living through some interesting times in Washington. And while she describes this posting as the privilege of a lifetime, she says that she could “be happy with a little bit less interesting times.”
But as she thinks about wherever her next posting might be, “I really realize that we have very turbulent times everywhere. It’s very exceptional and a little bit too interesting times everywhere.”
About the Author
Anna Gawel (@diplomatnews) is the managing editor of The Washington Diplomat.
