FINLAND BETWEEN EAST AND WEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00904A000800010010-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 19, 2016
• Document Release Date: September 15, 2005
• Sequence Number: 10
• Publication Date: December 6, 1961
• Content Type: MF

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CONFIDENTIA
C E N T R 1 , L INT ELLIG N C E L.GEN0Y
6 December 1961
M1110i.Io NDUM FOR THE UNITED STATES INTi LIGENCE 13OAi~D
SUBJECT: Finland Between East and West
The attached memorandum for the Director$ "Finland
Between East and West" dated 30 November 1961 is forwarded
for your information.
NOTE: This cover memorandum is being forwarded for your
information. You have already received this
Memorandum for the Director on previous distri-
bution.
O/a D/NE
25X1
CHESTED: L. COOP.;:
Deputy Assistant Director
National Estimates
25X1
Distribution itil" Minus
12 JUN 1930
CONFIDENTIAL
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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
30 November 1961
MEMORANDUM FOR THE DIRECTOR
SUBJECT: Finland Between East and West
1. The recent relaxation of Soviet pressures on Finland
has reduced tensions in the area, at least temporarily, and a
period of sober assessment of the effects has begun. The Finns,
although relieved that the Soviets relented without extracting
critical concessions, are nevertheless grimly aware that the
recent episode emphasizad the fragility of Finnish independence
and narrowed Finnish freedom of maneuver in future dealings with
Moscow. Whether, over the longer term, Finland can retain its
national independence and its claim to neutrality will depend
largely on Soviet policies and its objectives in Scandinavia as
a whole. It will also depend upon Finnish skills in handling
its relationships not only with Moscow, but with its Western
neighbors.
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B. Background
2. Since World War II Finland has successfully retained
its national integrity and resisted Soviet domination by adept
use of its own neutrality policy, the so-called "Paasikivi Line."
This policy, named after Finland's highly respected postwar
President, (L946-1956) gave first priority to the necessity for
correct, friendly, and cooperative relations with the USSR while
at the same time affirming Finland's ties to the West, Within
this context the Finns re-established many traditional contacts
with the other Scandinavian nations, eliminated Communist ministers
from the government in 1948, joined the UN, and even became associ-
ated with the European Free Trade Area (EFTA), in 1960. Signifi-
cantly, this line of policy was developed during a period when
the Communist dominated Finnish Peoples' Party (SKDL) had estab-
lished itself as a major political force* and Finland was struggling
with severe social and economic problems resulting from wartime
In the last elections 1958, the SKDL obtained over 23 percent
of the popular vote and 50 of the 200 seats in the Finnish
Parliament making it the largest political bloc in Parliament.
The other parties have: Social Democrats (SD) 51; (now divided,
however, between 37 regular SD's and 14 dissident SD's);
Agrarian's 47; Conservatives 29; Swedish Party 14; Finnish
Liberals 8; and Small Peasant Party 1.
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losses, when the country was fulfilling onerous reparations
demands, and when it was heavily dependent on trade with the
Soviets.
3. This Finnish success story was due in large measure to
deliberate Soviet policy. Moscow clearly calculated that it had
much to gain by retaining Finland as a "show-case" to the world,
both as an example of Soviet magnanimity -- as when it voluntarily
withdrew from the Porkkala military base in 1955 -- and as an
example of how two countries with conflicting social systems and
disparate power can co-exist side by side. In part, the Soviets
have also been restrained from openly bullying the Finns in fear
that such moves would cause certain countries, particularly Sweden,
to move closer to the West.
4+. On the other hand, certain other developments were
tending to increase Finnish accommodation to the Soviet Union.
As early as 1948, at a time when the Finns reacted to the
Czechoslovakian demise by clearing their government of Communists,
Finland was obliged to sign a Mutual Assistance and Friendship
Pact with Moscow. This pact, dormant until recent weeks, has,
nevertheless, hung over Finland like a threatening
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sword.* The sense of growing isolation from the West, and of help-
lessness to protect Finland's neutrality against serious pressures,
has undercut Finnish morale, and helps explain Finnish willingness
to make a number of smaller concessions, and adjustments (e.g.,
annual trade agreements, political, cultural, and more recently
military exchanges). These in turn have further impressed the
Finns with their dependence upon the USSR and its policy.
5. Probably the most important single factor influencing
recent Finnish accommodation toward the USSR, however, has been
the role played by President U. Kekkonen. Building upon the dual
base of the powerful presidential office, and his personal
leadership of the strong Agrarian Party, Kekkonen has made him-
self Finland's most important political figure, particularly in
the realm of foreign policy. 25X6
I __J
1 Sharply aware of Finland's exposed
# Under this pact, Finland and the USSR agree to give mutual
support in the case of an attack on the USSR by West Germany
or any of its Allies, through Finland. It also provides that
the two nations shall consult in case of a threat of such at-
tack, but leaves unclear if such consultations require prior
agreement as to the existence of such a threat. The Pact,
originally valid for 10 years was extended in 1955 for an
additional 20 years.
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position, he has not hesitated to use his prestige and reputa-
tion to deal with Moscow to stifle the voices of outspokenly
anti-Soviet groups. At the same time that he has conducted a
vigorous domestic battle against his critics, he has worked to
obtain broadest possible international support for Finnish neu-
trality, a policy capped in recent months by formal endorsements
from the UK and US.
6. President Kekkonen's political position has greatly
improved since 1958, when a minority government based mainly on
his Agrarian Party was formed. Strengthened by a general econ-
omic upswing during this period, he also benefited from a split,
now definitive, in the principal opposition party, the SD's.
Moreover, he enjoyed support on foreign policy issues of the SD
minority group. Meanwhile the majority SD's have stubbornly
clung to the venerable V. Tanner as their leader, who because of
his outspoken anti-Soviet attitudes continues to lie a prime tar-
get of Soviet criticism. This has enabled Kekkonen to use Soviet
displeasure as justification for keeping the SD's out of the
government and thus weaken SD ties to the other bourgeois parties.
7. Kekkonen's increasing political stature did not, however,
remove a strong undercurrent of anti-Kekkonen feeling. With new
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presidential elections scheduled for early 1962, certain political
groups -- headed by the majority SD's -- set about to create a
political alliance which could defeat Kekkonen. They selected
Attorney General Honka, an apolitical figure with a reputation
for fairness, but with no real foreign policy experience, to be
their candidate. All parties, with the exception of the SKDL,
Agrarians, and minority SD's, gave their support to Honka, in
whole or in part. On paper, at least, there seemed to be a chance
for reversing the close electoral vote (151-i49), which Kekkonen
won by in 1956.
8. It was into this domestic situation that the Soviets
exploded their recent bombshell, calling for consultations under
the terms of the 1948 Mutual Assistance Pact, and asking for
assurances of a continued friendly Finnish policy toward Moscow.
The Finns did not panic; they were, however, clearly shocked and
dismayed, and uncertain as to what really underlay Soviet inten-
tions. Moreover, despite some isolated voices urging hard re-
sistance, the majority reaction was clearly that the Finns would
have to consult with the Soviets, and that some concessions, hope-
fully only minor, would have to be made. It also became rapidly
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evident that the Finns were overwhelmingly of the mind that
Kekkonen was the man to handle the job, As in the past, there-
fore, when Soviet pressures have been applied, the immediate
result has been to strengthen Kekkonen. In these circumstances,
Honka also withdrew from the race., thus virtually guaranteeing
Kekkonen's re-election as President.
9. The most important immediate consequence of the recent
flare-up in soviet/Finnish relations thus seems to be that
FiniAnd's foreign policy, more than ever, is now in the hands of
Kekkonen. No doubt his initial successes have strengthened his
conviction that his basic policies have been correct, that he is
indispensable, and that there is continued need for further isolat-
ing critics of his foreign policy.
10. But there are also some indications that the recent
Soviet moves with their implied threat of possible military de-
mands clearly violating Kekkonen's concept of neutrality -- have
seriously shaken Kekkonen. It may also have reduced his confidence
that Moscow would not push Finland too far if his line continued to
be followed. The fact that he was willing to announce publicly
prior to the meeting, that he would resign if he was unable to
avoid concessions which would seriously undercut Finnish neutrality,
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suggests the seriousness with which he views the situation. It
also suggests that he himself may be willing to go over to a line
of stiffer resistance. Kekkonen nay, therefore, prove a more
formidable negotiating antagonist for the Soviets than hitherto.
11. Where Kekkonen draws the line between acceptable and
unacceptable concessions is not easy to define. In general, how-
ever, we believe his positions in present circumstances are likely
to be roughly as follows:
a. Military -- Kekkonen is likely. to stubbornly oppose
making military concessions which would clearly violate the
neutrality concept. He will thus continue to resist strongly a
Soviet attempt to construe the alleged military threat from West
Germany in such a way as to bring the 1948 Assistance Pact into
play, or the stationing of Soviet forces or placing of military
facilities on Finnish soil. If pressed, however, he would prob-
ably be willing to accept increased quantities of Soviet equipment
for a buildup of Finnish forces.
b. Political -- Kekkonen would be willing to broaden
the base of government, and if strongly pressed, even to include
some Communists. He probably would not take such a step unless
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it was supported by other major bourgeois parties, and even then
only on the condition that the Cormunists were restricted to
relatively minor posts, and that he retained easertial control of
foreign policy. He will be increasingly disposed to bury the
hatchet with the leadership of the majority SD Party, and desirous
of a result in next February's election which will strengthen mcd-
crate parties against those of the far Left. However, he
will probably refuse admittance to the government of the majority
SD`s so long as Tanner remains the party leader.
c. International -- If strongly pressed, Kekkonen
would probably recognize East Germany. He would, however, at the
same time probably balance this move by recognizing West Germany.
At the recent Kekkonenjmeeting with Khrushchev, Finland accepted
i
the obligation to follow developments in Northern Europe and the
Baltic and, if it proves necessary, submit to the Soviet Union
its views on the necessary measures that should be taken." The
Soviets probably expect Finland to use what influence it has with
its Scandinavian neighbors to minimize their military arrangements
with West Germany and with NATO in general. Finland for its part,
and in pursuance of its own interest in minimizing the confronta-
tion of military blocs in Scandinavia, will almost certainly be
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willing to do this, though not to the extent of antagonizing its
Scandinavian neighbors.
d. Economic -- Kekkonen will probably continue to agree
to increases in Finnish/Soviet trade in such magnitude as to keep
the proportion of such trade at somewhere about 15-20 percent of
total Finnish trade, approximately the level that has obtained
most of the postwar years.* He will endeavor to avoid agreements
with the Soviets which would clearly preclude possible future
Finnish association with the larger European economic groups,
but he will take no dramatic independent steps which night affront
Moscow on this score.
12. The direction of Soviet policies remains decisive for
Finland's future. The recent Soviet move was clearly addressed
to a much larger audience than Finland, and was probably designed
to dramatize the issue of West German remilitarization and through
Finland, to bring pressure upon Sweden and the Scandinavian members
of NATO. The USSR's immediate objectives in Finland were probably
Finnish trade with the USSR has amounted to roughly 15-25 per-
ccnt of total Finnish trado during the postwar period. This
compares with less than 1 percent in the prewar years. Equiva-
lent figures for Finnish trade with the Sino-Soviet Bloc have
been roughly 20-33 percent. Since the mid-1950's the trend of
Finnish trade with the Communist area as a whole has been down-
ward in percentage terms. In 1960 the figure was 14 percent.
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satisfied when it was able to demonstrate its decisive influence
in the Finnish presidential race. Having emphasized their pref-
erence for Kekkonen and having eliminated Honka from the race,
they probably will exercise restraint in dealing with the Finns
over the next few months, largely out of respect for Kekkonen's
threat to resign if he is pushed too far. Similarly, they prob-
ably recognize the danger of creating counterproductive reactions
in Scandinavia if they press the Finns too hard for major military
concessions.
D. Conclusions and Longer Term Outlook
13. Regardless of Kekkonen's determination to protect what
he considers to be basic Finnish interests, we believe over the
short run he will be buying time through granting minor conces-
sions to the Soviets in a situation which the latter can upset
at any moment. In general, we believe that the design of Soviet
tactics will remain what it has been for some years; i.e., to
keep Finland moving gradually toward greater subservience to the
USSR, prodded only occasionally by overt Soviet intervention.
How long the Soviets will be satisfied to play this game before
making another major intervention will depend on considerations
having little to do with Finland, itself -- namely on the tempo
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and nature of cold war developments. In particular, the Soviets
will probably regard their leverage on Finland as providing them
a useful counter to Western policy in Germany. Thus any sig-
nificant change in the West German military position, particularly
in the matter of nuclear armament, might be used as justification
by the Soviets to extract major military concessions from the
Finns.
14. Moreover, there are broader developments on the horizon
which could produce another Soviet/Finnish crisis. For example,
in the not too distant future Finland could be faced with a de-
cision of how to achieve some link with the expanding European
economic grouping, the European Economic Community. For both econ-
omic and psychological reasons such a link is vital to the Finns
if they are to retain their basically Western character. It is
almost certain, however, that the Soviets will make serious efforts
to keep the Finns from such a step, or at least to extract a price
which would make such a deal -- on balance -- of questionable value
to them.
15. In these circumstances of increasing pessimism in re-
gard to Finland's ability to retain its independence, it is also
possible that the Finns -- and many Scandinavians -- may feel
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impelled to seek some dramatic alternative to save Finland.
Kekkonen has long evidenced general interest in some form of a
neutral Scandinavian grouping, and there are some indications
that exploratory efforts are underway to sound Scandinavian, and
Western, views on the matter. Faced with the present grim re-
alities, moreover, he may make a real effort to convince the
Scandinavians -- particularly the Swedes and Norwegians -- of the
necessity for such a step.
FOR THE BOARD OF NATIONAL ESTIMATES
25X1
SHERMAN KENT
Chairman
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