Relations With the Soviet Union and With Russia
The principal architect of the post-1944 foreign policy of neutrality was J.K. Paasikivi, who was President from 1946 to 1956. Urho Kekkonen, President from 1956 until 1981, further developed this policy, stressing that Finland should be an active rather than a passive neutral. This policy is now popularly known as the "Paasikivi-Kekkonen Line."
Finland and the U.S.S.R. signed a peace treaty at Paris in February 1947 limiting the size of Finland's defense forces and providing for the cession to the Soviet Union of the Petsamo area on the Arctic coast, the Karelian Isthmus in southeastern Finland, and other territory along the former eastern border. Another provision, terminated in 1956, leased the Porkkala area near Helsinki to the U.S.S.R. for use as a naval base and gave free access to this area across Finnish territory.
The 1947 treaty also called for Finland to pay to the Soviet Union reparations of 300 million gold dollars (amounting to an estimated $570 million in 1952, the year the payments ended). Although an ally of the Soviet Union in World War II, the United States was not a signatory to this treaty because it had not been at war with Finland.
In April 1948, Finland signed an Agreement of Friendship, Cooperation, and Mutual Assistance with the Soviet Union. Under this mutual assistance pact, Finland was obligated -- with the aid of the Soviet Union, if necessary -- to resist armed attacks by Germany or its allies against Finland or against the U.S.S.R. through Finland. At the same time, the agreement recognized Finland's desire to remain outside great-power conflicts. This agreement was renewed for 20 years in 1955, in 1970, and again in 1983 to the year 2003.
The Finns responded cautiously in 1990-91 to the decline of Soviet power and the U.S.S.R.'s subsequent dissolution. They unilaterally abrogated restrictions imposed by the 1947 and 1948 treaties, joined in voicing Nordic concern over the coup against Soviet leader Mikhail Gorbachev, and gave increasing unofficial encouragement to Baltic independence.
At the same time, by replacing the Soviet-Finnish mutual assistance pact with treaties on general cooperation and trade, Finns put themselves on an equal footing while retaining a friendly bilateral relationship. Finland now is boosting cross-border commercial ties and touting its potential as a commercial gateway to Russia. It has reassured Russia that it will not raise claims for Finnish territory seized by the U.S.S.R., and continues to reaffirm the importance of good bilateral relations.
Finnish foreign policy emphasizes its participation in multilateral organizations. Finland joined the United Nations in 1955 and the EU in 1995. As noted, the country also is a member of NATO's Partnership for Peace as well as an observer in the North Atlantic Cooperation Council and the Western European Union.
Finland is well represented in the UN civil service in proportion to its population and belongs to several of its specialized and related agencies. Finnish troops have participated in UN peacekeeping activities since 1956, and the Finns continue to be one of the largest per capita contributors of peacekeepers in the world. Finland is an active participant in the Organization for Security and Cooperation in Europe (OSCE) and in early 1995 assumed the co-chairmanship of the OSCE's Minsk Group on the Nagorno-Karabakh conflict.
Cooperation with the other Scandinavian countries also is important to Finland, and it has been a member of the Nordic Council since 1955. Under the council's auspices, the Nordic countries have created a common labor market and have abolished immigration controls among themselves. The council also serves to coordinate social and cultural policies of the participating countries and has promoted increased cooperation in many fields.
In addition to the organizations already mentioned, Finland is a member of the International Bank for Reconstruction and Development, the International Monetary Fund, the World Trade Organization, the International Finance Corporation, the International Development Association, the Bank for International Settlements, the Asian Development Bank, the Inter-American Development Bank, the Council of Europe, the Organization for Economic Cooperation and Development, and INTELSAT.
Relations between the United States and Finland are warm. Some 200,000 U.S. citizens visit Finland annually, and about 3,000 U.S. citizens are resident there. The U.S. has an educational exchange program in Finland which is comparatively large for a Western European country of Finland's size. It is financed in part from a trust fund established in 1976 from Finland's final repayment of a U.S. loan made in the aftermath of World War I.
Finland is bordered on the east by Russia and, as one of the former Soviet Union's neighbors, has been of particular interest and importance to the U.S. both during the Cold War and in its aftermath. Before the U.S.S.R. dissolved in 1991, longstanding U.S. policy was to support Finnish neutrality while maintaining and reinforcing Finland's historic, cultural, and economic ties with the West. The U.S. has welcomed Finland's increased participation since 1991 in Western economic and political structures.
Following the dissolution of the Soviet Union, Finland has moved steadily toward integration into Western institutions and abandoned its formal policy of neutrality, which has been recast as a policy of military nonalliance coupled with the maintenance of a credible, independent defense. Finland's 1994 decision to buy 64 F-18 fighter planes from the United States signaled the abandonment of the country's policy of balanced arms purchases from East and West.
In 1994, Finland joined NATO's Partnership for Peace[?]; the country also is an observer in the North Atlantic Cooperation Council. Finland became a full member of the European Union (EU) in January 1995, at the same time acquiring observer status in the EU's defense arm, the Western European Union.
Economic and trade relations between Finland and the United States are active and were bolstered by the F-18 purchase. U.S.-Finland trade totals almost $5 billion annually. The U.S. receives about 7% of Finland's exports--mainly pulp and paper, ships, and machinery --and provides about 7% of its imports--principally computers, semiconductors, aircraft, and machinery.
Disputes - international: none