FINLAND BETWEEN EAST AND WEST (INTERNAL ONE WORKING PAPER-CIA DISTRIBUTION ONLY)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R002000190039-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 19, 2016
• Document Release Date: June 10, 2005
• Sequence Number: 39
• Publication Date: November 28, 1961
• Content Type: MEMO

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CIII
CENTRAL INTELLIGENCE AGENCY
Of7]:CE OF NATIONAL ESTIMATES
28 November 1961
ST I- MINORANDUM NO. 71-61
SUDJECT: Finland Between East and West (Internal ONE Working
Paper - CIA Disti ibution Only)
I. INTRODUCTION
1. The 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 emphasized the fragility of Finnish independence
and narrowed Finnish freedom of r~,-~neuvur in future donlinge
with Moscow. Whether, over the longer term, Finland can retain
its national independence and its neutral position will depend
largely on Soviet policies and its objectives in Scandinavia as
a whole, but also to a degree on Finnish attitudes and skills
in handling its relationships not only with Moscow, but with its
Western neigh')ors.
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2. Since World War II if:i.rla.rd nns successfully retni.nod
its national integrity and resisted Soviet domin?ition by adopt
use cC. its own neutrality policy, the so-called "Paasi.kivi Line".
This policy, named after Finland's highly respected first post-
war president, placed first priority on the necessity for correct,
friendly, and cooperative relations with the USSR while at the
same time affirming Finland's essentially Western character,
Within this context the Finns ro-established many traditional
contacts with the other Scandinavian nations, eliminated
Communist ministers from the government in 1948, joined the
UN, and even became associated with the European Free Trade
Lrca EFTA). Significantly, these moves were taken during a period
when the Conmiun:iot party (SKDL) had established itself as a major
politic,-3. force* and Finland was struggling with severe social and
economic problems resulting from war time losses, when the
# Ir, the last elections 1958, the SKDL obtained over 25%
of the popular veto and 51 of the 200 seats in tiie
Finnish parliament making it the largest political bloc
in parliament. The other parties received: Social
Democrats 52; (now divided, however, uiotwoon 39 regular
SD's and 13 dissident SD's); Agrarians 43; Conservatives
29; Swedish Party 15; Finnish Liberals 9; and Small
Peasant Party 1.
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country was Culf:il.linj, a lnri,,(j numbor of onerous ropartiL on;: ;Imposed
by tho USSR and the '.1K, rind when It was heavily dupondunt on trade
with the Soviets.
3. This Finnish suc. co ' )ry was duo in larj~o measure to
doliborntu Soviet policy. ow clearly calculated that It
had much to rain by rotnin.i.ng Finland as a "show-case." to the
world, both as an example of Soviet ncal;uanimity -- ,as when it
voluntarily withdrew from the Porkkala military bnsa in 1955 --
and as an example of how two countries with conflicting; social
systems snd disparate power car co-exist side by side. :'n
part also, the Soviets may have been restrained from openly
bullying the Finns out of a roluctanco to flaunt the
Scandinavi,,ns deep respect for Fi.nalnd.
4. On the other hand, despite impressive Finnish accomp?-
lishmonts in the post-war years other dovolopm-nts wore
contributing to increasing 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. This Pact, dormant until recent weeks,
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has, novurthel~:~ss bun A r `L~Iyy qI i ~a
r ~~J Yrtr.I L j -LkVj4.. ~threntoninf' swn,,-I.
Moreover, the number of smaller coneasadons,and adjustment;;
(e.g. annual trd) agreements, political, cultural, and m,l,re
recently military oxchnni;ns) connected with the growing i;.i;Or-
course between the two countries, nc doubt eroded sornowh,0-,
Finland's pro-West irn orientation and imparted a sense o+
increasing Finnish :isolation, particularly since the Hur,,;arian
debacle of 1956.
5. Probably tho most important single factor inA"!uuncing
recent Finnish accommodation toward the USSR, however,, has
boon the role played by President U. Kekkonen. Builr9ing upon
the dual base of the powerful presidential office, and his
personal leadership of the strong Agrarian Party, Kekkonen
has made himself FinLindrs most important political figure,
parts aularly in the realm of foreign policy.
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 attack, but leaves uncle'r if such consultations
require prior agreement as to the existence of such a throat.
The Pact, originally va=lid for ten years was extended in
1955 for an additional 20 years.
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In short, a small country's Adonauor. Sharply awaro of
Finland's exposed position vis-a-vis Moscow, he has not
hocitat,;d to use his position and foreign policy arguments to
stiflo the voices of outspokenly anti-Soviet groups. At
the came time that he has conducted a vigorous domestic battle
against his critics, he has worked to obtain broadest possible
international support for Finnish neutrality, o policy capped
in recent months by formal endorsements frr,m the UK and U.S.
6. President Kekkonon's political position has improved
sharply since 1958 when a
minority government composed largely
of his Agrarian party was formed. Strengthened by a general
economic upswing during this period, he also benefited from a
widening split in the principal opposition party, the Social
Democrats (SDIs). Moreover, he enjoyed the support on foreign
policy issues of the minority dissident element of the SD's.
Meanwhile the majority SD's have stubbornly clung to the
venerable A. Tanner as their leader, who because of his out-
spoken anti-Soviet attitudes continues to he a prime target 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 tics to the other bourgeois parties.
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7. Kokkonon'3 increasing political. stature did not,
howr var, remove a strong undercurrent of anti-Kokkonen fooling.
With now prosidontial elections scheduled for early 1962,
certain political. groups -- headed by the majority SD's --
sot, about to create a political alliance which cou?.d defeat
Kokkonen. They selected Attorney General Honka, an apolitical
typo with a reputation for fairness, but with no real foreign
policy experience, to be their candidate. All parties, with thr
exception of the SKDL, Agrarians and dissident SDers, (gave their
support to Honka, in whole or in part. On papeer, at least,
there seemed to be a chance for reversing tho close 151-1119
victory ooked out by Kokkonen in 1956.
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III CURRENT SITUATION AND SHORTIR-TERM 01Y.PLOOIC
8. It was into this domestic situation that the Soviet
exploded their recent bombshell, calling for discussion under
the terms of the '118 Mutual. Assistance Pact, and asking for
assurances of a continued friendly Finnish policy toward
Moscow, Keldconen style. The Finns did not panic; they were,
however, clearly shocked and dismayed, and uncertain as to what
really underlay Soviet intentions. Moreover, despite some isolated
voices urging hard resistance, the majority reaction was
clearly that the Finns would have to consult with the Soviets,
and that some concessions, hopefully only minor, would have to
be made. It also become rapidly evident that the Finns were
overwhelmingly of the mind that Keldconen was the man to handle
the job.. As in the past, therefore, when Soviet pressures have
been applied, the immediate result has been to strengthen
Kekkonen. Moreover, since Honks has now withdrawn from the
race, Kekkonen's roa-election as president is virtually F'uaranteed.
9. The most important immediate consequence of the recent
flare-up in Soviet/Finnish relations thus seems to be that
Finlandi'a foreign :policy, more than ever, is now in the hands of
Keldconen, and the influence of these developments upon his basic
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views. No doubt his initial successes have strengthened his
conviction that his basic policies have been correct, that he
is 1,nc!ioponaablo and that there is continued need for further
isolating critics of his foreign policy.
10. There are also some indications that the recent Soviet
moves - with their implied threat of possible military con-
cessions which would cl ear,y have breached Keldconen'c concept
of neutrality -- have seriously shaken Kokkonen and. reduced
his confidence in the willingness of Moscow to hold off, provided.
Kekkonen kept the Finnish house in order. The fact that he was
willing to publicly announce prior to the meeting, that he would
resign if he was unable to avoid concessions which would seriously
undercut Finnish neutrality, suggests not only the seriousness
with which he views the situation but also a turn to a harder
line. Kekkonen may, therefore, prove a more formidable nego-
tiating antagonist for the Soviet than hitherto.
11. Where Kekkonen draws the line between acceptable and
unacceptable concessions is obviously not easy to define. In
general, however, we believe his positions in the near future
'are likely to be roughly as follows:
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a. Military -- ICekkonen is likely to- stubbornly oppose
making military concessions which would clearly violate the
neutrality concept. He will thus continue to resist strongly
Soviet assertions that the West Germany constitute a present
threat to Finland which would bring the 1948 Assistance Pact
into play, or permit stationing of Soviet forces on Finnish
soil. If pressed, however, he would be willing to accept in-
creased quantities of Soviet equipment for a build-up of Finnish
forces, and try to gain agreement from USSR and UK for a
lifting of the ceiling of 41,000 men, the limit written into
the Peace Treaty of 1947.
b. Political -- Keldconen will be agreeable to broaden the
base of government, and if strongly pressed, even to include
some Communists. He probably would not take such a step unless
it were supported by other major bourgeois parties, and in such
a way that he retains essential control of foreign policy in his
own hands, and that the Communists were restricted to relatively
minor posts. He will probably refuse admittance to the govern-
ment of the majority SDs so long as Tanner remains the party
leader. However, he will be increasingly disposed to bury the
hatchet with the leadership of the majority SD party, and
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desirous of an election result in next February's election
which will. strengthen moderate parties ngn.inst those of the
far Left.
c. International -- If strongly pressed, Kekkonen would
probably recognize East Germany. He would, however, at the sane
time probably balance this move by recognizing West Ger any.
In the UN Finland's position will continue to be one of extreme
caution, but involv:..ng possibly somewhat greater activity and
futher commitments to Scandinavian initiatives.
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 20 percent
of total Finnish trade, approximately the level that has obtained
most of the post-war years-. He will endeavor to avoid agree-
ments with the Soviets which would clearly preclude possible
future Finnish association to the larger European economic
Finnish trade with the USSR has amounted to roughly 15-25
percent of total Finnish trade during the post-war period.
This acnpares with less, than 1 percent in the pre-war years.
Equivalent figures for Finnish trade with the Gino-Soviet
Bloc have been roughly 20-30 percent. Since the aid-1950'c
the natural trend of Finnish trade with the Communist area
as a whole has been downward.
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groups, but he will, tnkc no Oramatic independent steps which
night affront Moscow on thitJ score.
12. The direction of Soviet policies r,.nains 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. The
Soviet immediate objectives in Finland were probably satisfied
when they were able to demonstrate their critical im'luence in
the Finnish presidential race. Having emphasized their pre-
ference for Keldtonen and having eliminated Honlca iron the race,
they probably will exercise restraint in dealing with the
Finn's over the next few months largely out of respect for
Kekkonen's threat to resign if he is pushed too far. Similarly,
they probably recognize the danger of creating counter-productive
reactions in Scandinavia if they press the Finns too hard for
major military concessions, and will probably not do so in
present circumstances. 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 inter-
vention.
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IV CONCLUSIONS AND LONGER-TERM OUTLOOK
13. Regardless of Keldtonen'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
concessions to the Soviets in a situation which the latter can
upset at any moment. How long the Soviets will be satisfied to
play the game before melting another major intervention will
depend on considerations having little to do with Finland,
itself -- namely on the tempo and nature of cold war develop-
ments. In addition, the Soviets will probably regard their
leverage on Finland as providing them a useful counter to
Western moves in the Berlin situation. Thus any significant
change in the West German military position, particularly in the
matter of nuclear arnnrnent, might be used as justification by the
Soviets to extract sweeping military concessions from the Finns.
14. Moreover, there are broader developments on the horizon
which could produce another Soviet/Finnish crisis. In the not too
distant future Finland could be faced with a decision of how to
achieve some link with the expanding European economic grouping,
the EEC. For both economic and psychological reasons such a
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link ir, vital. t:, the Fi.nnn if tlre~-Mrlrq! banically
,till..l
Western character. It is aluL,at certain, however, that the
;soviets will mnlco serious efforts to keep the Rims from such a
step, or rd; leant to extract a price which would matte such a
deal -- on balance -- of questionable value to t}cm.
1.5. In these circumstances on increasing pesseriism in
regard Finland's ability to retain its independence, it is also
possible that the Finns -- and many Scandinavians -- may feel
impelled to seek some dramatic alternative to save Finland.
ICekltoncn has long been an advocate of cone form of neutral
Scandinavian defense and economic grouping, but has not pushed
such plans because of the many major obstacles involved. Faced
with the present grix.r realities, however, he may make a real
effort to convince the Scandinavians -- particularly the
Swedes and Norwegians -- of the necessity for such a step.
Moreover, if net by signs of Western e.icouragenent he would
probably be willing to risk consiuerable Soviet diicpicasure
see that such a plan could be realized.
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