Finland Domestic Developments and Foreign Politics, 1948-66
Juho Kusti Paasikivi president of Finland, 1946-56
Courtesy Embassy of Finland, Washington
Urho Kekkonen, president of Finland, 1956-81
Courtesy Embassy of Finland, Washington
The underlying assumption of Paasikivi's foreign policy
was
that the Soviets could tolerate the existence of an
independent
Finland only because Finland was peripheral to the Soviet
Union's
main strategic interests in Central Europe. Paasikivi
sought to
reinforce that Soviet attitude by actively demonstrating
that
Finland would never again be a source of danger to the
Soviet
Union. The combination of traditional neutrality plus
friendly
measures toward the Soviets was known as the Paasikivi
Line.
Continued by Paasikivi's successor as president, Urho
Kekkonen
(in office 1956-81), the policy came to be known as the
so-called
Paasikivi-Kekkonen Line. It remained the foundation of
Finland's
foreign policy in the late 1980s.
Paasikivi's statesmanship was rewarded in 1955, when
the
Soviet Union returned the Porkkala Peninsula to Finland,
well
before the end of the fifty-year lease granted in 1944.
The
return of Porkkala ended the stationing of Soviet troops
on
Finnish soil, and it strengthened Finland's claim to
neutrality.
The Soviets also allowed Finland to take a more active
part on
the international scene. In December 1955, Finland was
admitted
to the United Nations (UN); in that same year Finland
joined the
Nordic Council
(see Foreign Relations
, ch. 4).
In the three parliamentary elections held during
Paasikivi's
presidency--those of 1948, 1951, and 1954--the SDP and the
ML
received the largest number of votes and provided the
basis for
several of the government coalitions. These so-called
Red-Earth
coalitions revived the prewar cooperation between these
parties
and laid the basis for their subsequent cooperation, which
was a
major feature of Finnish politics after World War II. The
communist-dominated SKDL retained some power because of
domestic
discontent; in the elections of 1951 and 1954, it won more
than
20 percent of the vote.
Domestic politics during Paasikivi's presidency were
characterized by conflict and instability. During those
ten
years, 1946 to 1956, there were nine government
coalitions,
nearly one per year. The issues that divided the parties
and
brought such frequent changes of government were primarily
economic, centering on the rising cost of living. One
early
attempt to solve conflicts among the various sectors of
the
economy was the so-called General Agreement made in 1946
between
the Confederation of Finnish Trade Unions (Suomen
Ammattiyhdistysten Keskusliitto--SAK) and the
Confederation of
Finnish Employers (Suomen Työnantajain Keskusliitto--STK).
The
General Agreement, which called for compulsory
negotiations
between labor and management, was used as a basis for
reconciling
industrial disputes. Another milestone was the Castle
Peace
Agreement of 1951 that brought together the main economic
interest groups for a wage and price freeze that helped to
establish a precedent for wage and price control.
Nevertheless,
throughout these years there were frequent strikes.
The intensity of the conflict over economic issues was
demonstrated by the general strike of 1956, the first
general
strike in Finland since November 1917. The cause of the
nineteen-
day general strike was an increase in food prices for
which the
trade unions demanded a wage increase as compensation.
When the
employers refused the wage increase, the trade unions
called the
general strike. More than 400,000 workers--about one-fifth
of the
total work force--participated, the flow of various vital
supplies was disrupted, and some violence occurred. The
strike
ended when the employers agreed to the wage increases
demanded by
the unions. These wage increases, however, were largely
cancelled
out by subsequent rises in consumer prices.
Paasikivi's successor, Kekkonen, assumed office in
March
1956, and he remained as president until 1981. A member of
the
ML, he had been one of only three members of the
parliament who
voted against the Peace of Moscow in 1940. The following
year, he
had been one of the most outspoken advocates of the
Continuation
War. By 1943, however, he had reversed himself totally in
calling
for reconciliation between Finland and the Soviet Union,
and he
remained a leading advocate of that policy for the
remainder of
his life. From 1944 to 1946, he served as minister of
justice, a
position from which he prosecuted Finnish war criminals.
Between
1950 and 1956, he served as prime minister in five
cabinets,
before being elected president in 1956.
Kekkonen demonstrated his mastery of politics by
bringing
Finland successfully through two major crises with the
Soviet
Union, the first in 1958 to 1959 (the Night Frost Crisis)
and the
second in 1961 (the Note Crisis). The Night Frost Crisis
received
its name from the Soviet leader, Nikita Khrushchev, who
declared
that Soviet-Finnish relations had undergone a "night
frost." The
immediate origins of the crisis lay in Finnish elections
of 1958,
in which the SKDL won the largest popular vote and the
largest
parliamentary representation of all Finnish parties but
was not
given a place in the Finnish government headed by the
Social
Democrat, Fagerholm. As a result, the Soviets recalled
their
ambassador from Helsinki and generally made known their
unhappiness with the Fagerholm government.
Two reasons are generally brought forward for this
instance
of Soviet interference in Finland's domestic politics. One
was
the Soviet dislike of certain Social Democrats, whom they
referred to as "Tannerites," after the long-time leader of
the
SDP, Vainö Tanner. The second reason may have been the
international crisis of the late 1950s that centered on
West
Berlin. Underlying the Soviet actions was the traditional
fear of
a German resurgence; the Soviets imagined a renewed German
military threat's developing through Germany's North
Atlantic
Treaty Organization (NATO) partners, Denmark and Norway.
Kekkonen defused the crisis by pulling the ML out of
the
government coalition, thereby toppling the SDP government
that
was objectionable to the Soviets. The alacrity with which
Kekkonen placated the Soviets resolved the crisis.
The Note Crisis of 1961, far more serious than the 1958
crisis, constituted the most severe strain in
Soviet-Finnish
relations since 1948. On October 30, 1961, the Soviet
government
sent a note to Finland that called for mutual military
consultations according to Article 2 of the 1948 FCMA
treaty. For
Finland, the note represented a real threat of Soviet
military
intervention. As during the 1958 crisis, a tense
international
situation coupled with Soviet fears of a German military
resurgence led to Soviet pressure on Finland. There was
also a
domestic side to the crisis; as in 1958, the Soviets
considered
certain elements on the Finnish political scene to be
objectionable. The Soviets were concerned about the SDP,
especially about the SDP nominee for president, Olavi
Honka.
Delivered only two and one-half months before the Finnish
presidential elections, the Soviet note demonstrated
clearly
which candidate the Soviets preferred. In response to the
note,
Kekkonen sought to placate Soviet fears by dissolving the
Finnish
parliament in November 1961. He then flew to Novosibirsk,
where
he met with Khrushchev and, after three days of personal
consultations, succeeded in winning Khrushchev's
confidence to
such a degree that the call for military consultations was
rescinded. The Note Crisis not only constituted a personal
diplomatic triumph for Kekkonen but also led to an era of
increased confidence-building measures between the two
governments.
For Kekkonen, the lesson of the Note Crisis was that
the
Soviets needed continual reassurance of Finnish
neutrality. He
pointed out that Soviet mistrust of Finnish declarations
of
neutrality in the 1930s had led to war. After 1961, the
Finns
took great pains to demonstrate their neutrality and to
prevent a
repetition of the Note Crisis. The effort to win the trust
of the
Soviets led Kekkonen in two directions--expanded trade and
cultural contacts between the two countries and a more
active
international political role in which Finland worked to
promote
peace in Northern Europe and around the world.
Kekkonen sought to create ever-wider zones of peace
around
Finland; thus, he became a determined advocate of an
entirely
neutral Northern Europe, a position he had enunciated as
early as
1952. The Danes and the Norwegians, however, generally did
not
accept neutrality because they would thereby lose the
military
protection of NATO. In 1963 Kekkonen also proposed a
Nordic
Nuclear-Weapons-Free Zone (Nordic NWFZ--see Neutrality,
ch. 4).
Kekkonen's advocacy of these peace issues helped him to
win the
virtually unquestioned confidence of the Soviets and
precluded a
repetition of the Note Crisis.
Conflict among Finnish political parties was so great
that,
during the twenty-five years of Kekkonen's tenure as
president,
there were twenty-six governments. Among these twenty-six
governments were six nonpartisan caretaker governments,
formed
when conflicts among the parties became too intense to
permit
their joining in coalition governments. As during the
years of
the Paasikivi presidency, there was greater agreement on
foreign
policy issues than on economic concerns. An especially
divisive
issue was whether or not to link agricultural income,
consumer
prices, and workers' wages, and thus to reconcile the
competing
aims of the main sectors of the economy--farming, capital,
and
labor.
The conflict over domestic policies was also evident in
the
consistent strength of the protest vote in elections. The
electoral vehicle of the communists, the SKDL, polled more
than
20 percent of the vote in the 1958, the 1962, and the 1966
parliamentary elections. That same discontent brought
about the
emergence of another protest party, the Social Democratic
Union
of Workers and Small Farmers (Työvaen ja Pienviljelijain
Sosialidemokraattinen Liitto--TPSL), which broke off from
the SDP
in 1959. The TPSL advocated both a friendlier stance
toward the
Soviet Union and more active measures to protect workers'
and
farmers' economic interests. In 1959 a breakaway group
from the
ML formed a party called the Finnish Small Farmers' Party;
in
1966 its name was changed to the Finnish Rural Party
(Suomen
Maaseudun Puolue--SMP). Led by Veikko Vennamo, the SMP
spoke for
the so-called Forgotten Finland, the small farmers, mainly
of
northern and eastern Finland, who lived a precarious
economic
existence. The SMP made a breakthrough into the ranks of
the
major parties in the parliamentary elections of 1970 by
winning
18 seats in the Eduskunta, but in following years its
power
fluctuated greatly.
Kekkonen's personal triumph in the Note Crisis led not
only
to his reelection as president in 1962, but also to the
dominance, for a short time, of his own party, the ML.
(From 1958
to 1966, the SDP was considered too anti-Soviet to be part
of a
government.) The ML provided the basis for the various
coalition
governments formed during those years. In its desire to be
at the
center of Finnish politics, the ML changed its name to the
Center
Party (Keskustapuolue--Kesk) in 1965. The presence of this
large
and important agrarian-based party at the center of the
political
spectrum has characterized the Finnish political system
since
independence. Fifty-four of sixty-four Finnish governments
(through 1988) included the Agrarian/Center Party,
compared with
thirty-three for the SDP, and twenty-six for the KOK;
furthermore, three of Finland's nine presidents, Relander,
Kallio, and Kekkonen have belonged to this party (see
table 3,
Appendix A).
Finland's economy underwent a major transformation in
the
1950s and the 1960s, shifting from a predominantly
agrarian
economy to an increasingly industrial one
(see Economic Development
, ch. 3). The number of workers engaged in
agriculture
and forestry dropped from about 50 percent to about 25
percent,
and the decline of this traditionally dominant sector of
the
economy continued into the late 1980s. After the Soviet
reparations were paid off in 1952, Soviet-Finnish trade
did not
decline, but rather it increased. In 1947 the Treaty of
Paris had
been followed by a Finnish-Soviet commercial treaty that
provided
the framework for expanded trade between the two countries
(see Regional Economic Integration
, ch. 3). The Five-Year
Framework
Agreement of 1951, which has been renewed repeatedly,
established
this trade on a highly regulated basis. To a large extent,
the
trade consisted of Finland's selling machine goods to the
Soviets
in exchange for crude oil. Finland benefited from the
arrangement
because Finnish products sold well in the Soviet market,
which
could be counted on regardless of fluctuations in the
Western
economic system. Increased trade between the two countries
also
strengthened the political relationship between them.
Throughout the postwar period, the Soviet Union has
been
Finland's single most important trading partner, generally
accounting for 20 percent to 25 percent of Finland's total
imports and exports. Nevertheless, Finland's goal has been
to
create a balanced trade system embracing both East and
West, and
more than 70 percent of Finland's trade has been with
noncommunist states. Finland's main trading partners,
after the
Soviet Union, have been Sweden, Britain, the Federal
Republic of
Germany (West Germany), and the United States, in order of
importance. This trade has consisted mainly of the export
of
timber, pulp, and paper products in exchange for other
countries'
manufactures, technology, and raw materials for Finland's
various
industries
(see Foreign Economic Relations
, ch. 3). In
maintaining good economic ties with these countries,
Finland has
had to overcome persistent Soviet suspicions; however,
Finland
was allowed to join the European Free Trade Association
(EFTA-- see Glossary)
as an associate member in 1961 in the
so-called
FINEFTA agreement. The members of EFTA, including Finland,
signed
free-trade agreements with the European Economic Community
(EEC-- see Glossary)
in 1973. Finland placated the Soviets for
these
initiatives by signing a trade agreement in 1973 with the
Council
for Mutual Economic Assistance
(CMEA, CEMA, or Comecon--see Glossary),
the Soviets' organization for trade and
cooperation
with its East European allies. Nevertheless, through the
trading
arrangements with EFTA and the EEC, Finland gained greater
economic independence from the Soviet Union.
The economic growth that Finland has experienced in
this
century has laid the foundation for its social welfare
state. The
benefits of economic prosperity have been spread around to
the
population as a whole, with the result that the Finns have
enjoyed a level of material security unsurpassed in their
history. Conceived not as a whole, but as a series of
responses
to specific needs, the social welfare system has become
strongly
rooted. Among its main components are several forms of
social
insurance: allowances for mothers and children, aimed at
encouraging people to have children; pensions; and
national
health insurance. By 1977 social welfare expenditures
accounted
for over 20 percent of GDP
(see Growth of the Social Welfare System
, ch. 2). The general effect of these measures has
been to
raise the standard of living of the average Finn and to
remove
the sources of discontent caused by material want.
Data as of December 1988
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