The Finnish statesman Juho Kusti Paasikivi was a leading proponent of the relationship between Finland and the Soviet Union that permitted Finland's postwar development. For decades, Paasikivi had been the leading noncommunist Finn advocating reconciliation with the Soviet Union. Before World War I, he had been on Old Finn and a Compliant (see The Era of Russification , this ch.), who advocated accommodation with Russification. In the negotiations over the Treaty of Dorpat in 1920, he had argued for drawing Finland's border farther away from Leningrad. In the fall of 1939, he had recommended giving in to some of the Soviet demands, because he considered the ensuing war avoidable. He had also opposed Finland's entry into the Continuation War. As a former prime minister under the Finnish White government of 1918 and as a member of the Conservative National Coalition Party (Kansallinen Kokoomuspuolve--KOK), Paasikivi was politically an anticommunist. His lifelong study of history, however, convinced him that Finland's policies toward the Soviet Union needed to be governed by pragmatism. By late 1944, Finland's previous policy of antagonism to the Soviet Union had been shown to be counterproductive, because it had nearly led to Finland's extinction as an independent state. Summoned out of private life to serve--first as prime minister from October 1944 to March 1946 and then as president from March 1946 to March 1956--Paasikivi established the policy of accommodation with the Soviet Union that, with time, became almost universally accepted among the Finns. The change in Finland's policy was so marked that some observers considered the post-1944 years to be the era of the "Second Republic."

The immediate postwar years of 1944 to 1948 were filled with uncertainty for Finland because it was in a weakened condition and the because new policy of reconciliation was still being formed. The Allied Control Commission, established by the 1944 armistice to oversee Finland's internal affairs until the final peace treaty was concluded in 1947, was dominated by the Soviets. Under the leadership of a Soviet, Marshal Andrei Zhdanov, the commission checked Finland's adherence to the terms of the preliminary peace of September 1944. The first test of Finland's new policy of reconciliation was thus to observe faithfully the treaty with the Soviets, including the punctual payment of reparations and the establishment of war crimes trials. Eight leading Finnish politicians were tried for war crimes in proceedings lasting from November 1945 to February 1946. Among the accused were ex-president Risto Ryti (served 1940-44), who, along with six other prominent Finnish politicians, was convicted of plotting aggressive war against the Soviet Union and was sentenced to prison.

The war crimes trials and other stipulations of the armistice were distasteful to the Finns, but their careful compliance led to the reestablishment of national sovereignty. Compliance may have been facilitated by Finland's having its national hero, Mannerheim 2000 m, as president to carry out these policies, until he resigned for health reasons in March 1946 and was succeeded by Paasikivi. The signing of the Treaty of Paris on February 10, 1947, led in September 1947 to the removal of the Allied Control Commission.

In their strict fulfillment of the Soviet terms of peace, the Finns faced other difficulties. The armistice agreement of September 1944 had legalized the SKP, which had been outlawed in 1930. In October 1944, the SKP led in the formation of the Finnish People's Democratic League (Suomen Kansan Demokraattinen Liitto--SKDL). Commonly referred to as the People's Democrats, the SKDL claimed to represent a broad spectrum of progressive forces. From its inception, however, the SKDL has been dominated by the SKP and has provided the electoral vehicle by which members of the SKP have been sent to the Eduskunta.

In March 1945, in the first parliamentary elections held after the war, the SKDL scored a major success by winning fifty- one seats and becoming the largest single party in the Eduskunta (the ML had forty-nine and the SDP had forty-eight). Several factors account for the success of the communists. A strong sympathy for communism among a large number of voters had persisted since the Finnish civil war. In addition, many Social Democratic voters were alienated from the SDP because of its ardent support of the recent war that had cost Finland so dearly. Many Finns who suffered under the depressed economic conditions of postwar Finland voted for the SKDL as a protest gesture. Finally, the SKDL proved adept at electoral politics, de- emphasizing its communist ties and emphasizing its devotion to democracy, to full employment, and to a peaceful foreign policy.

The SKDL played a large role in Finnish politics during the immediate postwar years. By November 1944, President Mannerheim recognized the growing power of the communists when he appointed to the cabinet the first communist, Yrjö Leino, ever to hold such a position. Following the election of March 1945, Leino was appointed to the important post of minister of interior, a position from which he controlled, among other things, the state security police and a large mobile police detachment. The power of the communists was at its greatest from 1946 to 1948, when the SKDL held, or shared, as many as eight of twelve cabinet posts. These included that of prime minister, which was held by Mauno Pekkala, who also served as co-minister of defense.

Pressures on Finland reached a peak in early 1948. In February the communists took Czechoslovakia by coup, an act that heightened international tensions considerably. The Soviets then requested that Finland sign a treaty nearly identical to those forced on some of their satellite states in Eastern Europe. By March there were rumors of a possible communist coup in Finland. Although it is not clear that a coup was imminent, President Paasikivi took precautionary measures. The Finnish armed forces were under his control, and he summoned them in strength to Helsinki, where they would have proved more than a match for the police units of the ministry of interior that were suspected of involvement in the coup.

In negotiating the requested treaty, meanwhile, the Soviets showed a willingness to accept a neutralized Finland. Paasikivi secured significant changes in the treaty that gave Finland substantially more independence with respect to the Soviet Union than was enjoyed by the East European states under Soviet domination. Paasikivi had served notice on the Soviets that they would not get their way through pressure, but rather would have to use military force. This they were reluctant to do in the tense international atmosphere of early 1948.

The Treaty of Friendship, Cooperation, and Mutual Assistance (FCMA--see Appendix B), which was signed on April 6, 1948, has since then provided the foundation for Soviet-Finnish relations. The key provision of the treaty, in Article 1, calls for military cooperation between Finland and the Soviet Union if Germany, or a country allied with it, attempts to invade Finland or the Soviet Union by way of Finnish territory. Article 2 of the treaty calls for military consultations to precede actual cooperation. Finland's sovereignty is safeguarded, however, because mutual assistance is not automatic but must be negotiated. The treaty helped to stabilize Soviet-Finnish relations by giving the Soviet Union guarantees that it would not face a military threat from the direction of Finland. The Soviets have been pleased with the treaty, and before expiration its original ten-year term has been extended to twenty years on three occasions--1955, 1970, and 1983.

When new elections were held in July 1948, the SKDL suffered a sharp drop in support, falling from fifty-one to thirty-eight seats in the Eduskunta. Communists were not included in the new government formed under the Social Democrat Karl-August Fagerholm, and there was no communist participation in Finland's government again until 1966.

The end of World War II had found Finland in a thoroughly weakened state economically. In addition to its human and physical losses, Finland had to deal with more than 400,000 refugees from the territories seized by the Soviets. In an attempt to resolve the refugee problem through a program of resettlement, the parliament adopted the Land Act of 1945. Through the program thus established, the state bought up farmland through compulsory purchases and redistributed it to refugees and to ex-servicemen, creating in the process 142,000 new holdings. Finland's large class of independent farmers was thereby expanded considerably. Although many of the resulting holdings were too small to be economically viable, they speeded the integration of the refugees into the social and economic fabric of the country.

Reparations were another burden for Finland. From the failure of the reparations demands imposed by the Treaty of Versailles, the Soviets had drawn the lesson that, to be effective, reparations should take the form of deliveries of goods in kind, rather than of financial payments. As a result, the Finns were obligated to make deliveries of products, mainly machine goods, cable products, merchant ships, paper, wood pulp, and other wood products. About one-third of the goods included as reparations came from Finland's traditionally strong forest industries, and the remainder came from the shipbuilding and the metallurgical industries, which were as yet only partially developed in Finland. The reparations paid from 1944 to 1952 amounted to an annual average of more than 2 percent of Finland's gross national product (GNP--see Glossary). The reparations were delivered according to a strict schedule, with penalties for late shipments. As the earnestness of the Finns in complying with the Soviet demands became apparent, the Soviets relented somewhat by extending the payment deadline from 1950 to 1952, but they still prevented Finland from participating in the Marshall Plan (European Recovery Program). The United States played an important role, nonetheless, by mediating the extension of financial credits of more than US$100 million from its Export- Import Bank to help Finland rebuild its economy and meet its reparations obligations punctually.

The Finns turned adversity into advantage by using the industrial capacities created to meet the reparations obligations as the basis for thriving export trades in those products. As a result, Finland's industrial base acquired greater balance than before, between, on the one hand, Finland's traditional industries of lumber, wood pulp, and paper products, and on the other hand, the relatively new industries of shipbuilding and machine production. Finland's growing integration into the world economy was demonstrated by its joining the General Agreement on Tariffs and Trade (GATT--see Glossary) in 1949.

Data as of December 1988