SOVIET PRESSURE ON FINLAND

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00904A000400030016-0
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 23, 2016
• Document Release Date: June 13, 2013
• Sequence Number: 16
• Publication Date: October 17, 1958
• Content Type: MEMO

Declassified and Approved For Release 2013/06/13: CIA-RDP79R00904A000400030016-0
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C E N T R A L I N T E L L I G E N C E A G E N C Y
OFFICE OF NATIONAL ESTIMATES
17 October 1958
1. The formation in late August of the Fagerholn government
in Finland, the most conservative and nationalist in coloration of
any since 1945, has evidently created considerable distress in Moscow.
Judging froze Soviet broadcasts and the Finnish Conunist press, the
Soviet leadership believes that the new goverm.ent, because of its
political complexion, night atterT., t to lead Finland into closer
relations with the West. In particular, the USSR r. y be concerned over
Finland's application for substantial loans from western sources to
be used for uodernization of the econoty and over Finnish consideration
of membership in the OEEC.
2. In addition to critical press conent, the USSR has
expressed its annoyance at the situation in Finland by recalling
its ambassador without observation of the usual amenities. It has
also stalled on talks to arrange for future trade.and on the
- Declassified and Approved For Release 2013/06/13: CIA-RDP79R00904A000400030016-0 --
 Declassified and Approved For Release 2013/06/13: CIA-RDP79R00904A000400030016-0
implementation of other econoac natters worked out with the
previous Finnish governuent. The Finnish goverment.. with its
eye on current loan negotiations with the West, tends to nagnify
the extent of Soviet pressure.
3. The Finnish econor.iy could be severely disrupted by Soviet
econouic pressure, since approximately 30 per cent of Finnish foreign
trade is conducted with the Bloc. The economy is already in difficulty:
nearly 30,000 persons are out of work and by next Merch the figure
may reach 100,000, out of a labor force 2 million strong. This
unemployment is a reflection of the fact that the competitive position
of Finnish products in Western markets has deteriorated. If the USSR
chose to break off economic relations with Finland it. could greatly
aggravate the present difficult situation.
4. It is possible that the USSR is now prepared to apply
heavy pressure on Finland in an effort to reduce its ties with the
West and to bring it closer to the Soviet orbit. Such an objective
would be consistent with the tougher line which Moscow has been taking
in the European satellites, and with the greater confidence and
aggressiveness which the Soviet leadership has recently displayed.
5. However, the Soviet leadership must be well aware how
stubborn and deter: .ned the Finns can be once they are aroused. Moscow
Declassified and Approved For Release 2013/06/13: CIA-RDP79R00904A000400030016-0
 Declassified and Approved For Release 2013/06/13: CIA-RDP79R00904A000400030016-0
probably believes that the Fagerhoim government would not hesitate,
in case economic sanctions were applied, to seek direct assistance
frog. -the West. Furthermore., a Soviet-Finnish quarrel of serious
proportions would adversely affect Soviet prestige among neutralist
and uncommitted peoples.
6. Thus., we expect a continuation for some time of the
present level of harassment. By these means the USSR will hope
to deter the Finns from any drift toward closer association with
Western Europe.
7. If the Fagerholrn government should collapse because of
the unsatisfactory economic situation and Soviet harassment.* Finland
would face a serious parliamentary crisis. The Couuunists have
largest single bloc of deputies in the parliament and have made
r...uch capital of the worsening economic situation. It would be
difficult to form a new government without the participation of the
Co,:n,unista.
FOR TIIE BOARD OF NATIONAL ESTIMATES:
SIfERNA N ED, NT
Assistant Director
National Estimates
(j4-
Declassified and Approved For Release 2013/06/13: CIA-RDP79R00904A000400030016-0