FINLAND REAFFIRMS ITS BASIC DOMESTIC AND FOREIGN POLICIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001100090040-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 20, 2016
• Document Release Date: April 25, 2006
• Sequence Number: 40
• Publication Date: August 10, 1970
• Content Type: IM

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DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Finland Reaffirms its Basic Domestic
and Foreign Policies
Secret
8~
10 August 1970
No. 0533/70
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WARNING
"This dorumcnt contains in!?ormation a[fecting the national
defense of the United States, within the meaning of 'T'itle
18, sections 793 and 794, of the tiS Cndc, us amended.
Its transmission or rarcaation of its contents to or re-
ceipt l.>y an iuiautLori~ed person is prohibited by law,
GROUP t
xxcl.unxn e?IwN Au?rowATlc
[1UWNUIIAUI N[I ANTI
UF.(:I,A N:)IYICA'r1UY
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
10 August 1970
INTELLIGENCE MEMORANDUM
Finland Reaffirms Its Basic Domestic
and Foreign Policies
Introduction
The past several months have been active and
significant ones for Finland. National elections
in March produced a sharp shift to the right in
voter sentiment ar:u a rebuff to the coalition of
center and leftist parties that had dominated Fin-
nish politics since 1966. Nevertheless, after
four months of wrangling, another center-left coa-
lition has been installed in Helsinki, though this
time with a Center Party man instead of a Social
Democrat as prime minister. Establishment of a
majority government cleared the way for important
diplomatic activity involving visits by President
Kekkonen to Moscow and Washington. During the
USSR trip, an agreement was signed extending the
1948 Finnish-Soviet Friendship Treaty for another
20 years. Somme judgments about these developmen~s
are found in Paragraphs 23-27.
Note: This rner..orandum ryas produced soZeZr~ bra CIA.
It ryas prepared bz~ the Office of Current InteZZi-
genee and coordinated ruith the Office of National
Estimates.
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Back round
1. In the national election held last March
the opposition Conservative and Rural Pa~?ties made
major gains, while all five coalition parties suf-
fered losses.* The heaviest setbacks were suffered
by the Center Party and the Communist-dominated
Paop].e's Democratic Leagile (SKDL), both of which
f.~~?..'_ below 20 percent of the vote for the first
time since World War TI. The losses of the Social
Democrats were more moderate, and they remained
the largest single element in the parliament.
2. The dramatic gain by the radical right
Rural Party from only one to 18 seats--the greatest
support ever garnered by afar-right group in Fin-
land--signaled a surprisingly strong upsurge of
protest sentiment among rural e~ements and so-called
"forgotten men" who have not shared in the country's
general rise in prosperity.
3. The center-le:'t coalition has dominated
Finnish politics since 1966, with one reshuffle in
1968: In the 1966 elections the Social Democrats
made major gains while the Communists and left So-
cialists lost ground. Soviet leaders manifested
their uneasiness over signs of instability in Fin-
nish politics and made known their desire to cee
Communists included in the cabinet. President Kek-
konen also wished to end the years of isolation of
both the Social Democrats and the Communists from
active involvement in the government. Therefore,
a center-left government emerged in which the So-
cial Democrats were given six portfolios, the Com-
munist-dominated People's Democrats, three, and the
left Socialists, one. The Communists' portfolios,
however, were relatively minor, and their influAnce
was carefully contained.
4. Although the center-left government was
regarded as reasonably successful by many people,
*(See Annex A)
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it did not overcome all of Finland,'s economic dif-
ficulties, and there was some popular dissatisfac-
tion with the inclusion of Comm!~nists. Communist
party .fortunes did not prosper i~rom inclusion in
the government. A revolt of conservative ("Stalin-
ist") elements against the party's moderate majority
severely weakened the party, for a time producing
an open sp3.it in party ranks. At Moscow's strong
urging, the liberals managed to raper over their.
differences with the conservatives before the March
elections, but internal divisions and antagonisms
remain. The new Soviet Ambassador, Aleksey Belyakov,
has long been a supporter of the moderate reforrt-
minded majority. Moscow's clear preference, how-
ever, reflected in financial supports has gone to
the conservative fac%ion.
The New Government
5. The election results in March seemed to
point to the formation of a right-center or right-
Socialist government. Half-hearted attempts by the
leader of the conservative National Coalition Party
to put together a coalition excluding the. Communists
foundered, and initial efforts to re-establish the
center-left arrangement were further stymied by the
excessive demands put forward by the parties. By
mid-May, two months after the elections,I:ekkonen
sought to impose a terr~porary solution by naming a
non-partisan government headed by Helsinki Mayor
Teuvo Aura. It was anticipated that this stop-gap
arrangement would serve until after the summer par-
t'amentary recess when anot.'Zer attempt to form a
rr',?., j on ty government would be made .
6. In early June, however, Kekkonen suddenly
called on the parties to make a fresh try at form-
ing a center-left government, and as an added prod,
he raised the prospect of new elections unless a
majority government could be formed. Kekkonen's
intervention was apparently partly motivated by
his desire to Y:ave a fully functioning government
in power before he visited Moscow and Washington
later in July. But the circumstances and timing
of his intervention also suggest that he was under
25X1
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pressure r"rom the USSR to re-establish a center-left
arrangement that Moscow favored. This action serves
as afresh reminder of the USSR's self-appointed role
as judge of the acceptability of Finnish governments.
7. Still, it was not an easy task to bring the
parties arc..und. Both the Communists and Centrists
were reluctant to participate again in a coalition
that, they believed, had cost them heavily in popular
support. The Communists, however, decided to enter
government negotiations once Moscow's preferences
were made known. Though the Center Party dragged its
heels a while longer, it too eventually reversed it-
self rathex than face the prospect of new elections
in which it might suffer additional losses.
8. The riew government, formally installed on
15 July, differs very little from the coalition in
power prior to the election. The chief changes are
that the new prime minister, Ahti Karjalainen, is
from the Center rather than the Social Democratic
Party, and that the distribution of ministries has
been arranged to give the non-Socialist ministers a
majority of one . Of the total 17 portfolios , the
Center Party and the Social Democratic Party each
hold five, the Communist-dominated People's Democratic
League three, and the Liberal Party and Swedish Peo-
ple's Party two each.
9. The Soviet dislike for the Conservative and
Rural parties--the big gainers in the election--was
a factor in their exclusion from the last stages of
the negotiations for a new government. The: leader
of the Rural Party, Veikko Vennamo, probably is rea-
sonably content with this outcome. He stands a bet-
ter chance of maintaining his popular support by
remaining in the opposition, where re is free to
attack the government at will. Indeed, both oppo-
sition parties will be in an excellent position to
exploit fully differences over domestic economic
policy that are likely to arise as a result of the
division oaf responsibilities between the Socialist
and non-Socialist parties.
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10. In addition to attesting again to the
strong hand of Moscow in Finnish domestic affairs,
the coalition maneuverings confirm the continuing
commanding role of Kekkonen. This stems not only
from the inherent powers of his office, but also
from the strong personality and will power that he
brings to bear in the exercise of his duties. He
appears increasingly to regard himself as the in-
dispensable man, and as he has grown older, he has
become more dogmatic and impatient with those who
disagree with him. F:is impatience extends to the
Finnish people, whom he recently chided for com-
plicating the political situation by giving such
a large vote to the right-wing parties.
Policies and Problems
11. The new government is likely to adhere to
the lines set by earlier center-left governments.
Prime Minister Kdrjalainen, who was foreign minister
from 1964 until last May, will maintain Finland's
well-established policy of neutrality and close re-
lations with the USSP.. There is some concern, how-
ever, that Foreign Minister Leskinen--a pro-Soviet
Social Democrat--will, in his eagerness to curry
favor with the Soviets, be inclined to value good
relations with Moscow more highly than strict neu-
trality.
12. The government is expected to hold to the
traditional Finnish position of non-recognition of
divided states, ignoring persistent pressure from
the left for recognizing North Vietnam and East Ger-
many, In July a representative of the Vietnamese
National Liberation Front was permitted to open a
"private" information office in Helsinki.
13. The domestic program of th P new government
includes increased aid to medium-sized and small in-
dustries and special attention to retraining Finnish
workers so that emigration to Sweden will not be so
tempting. The net loss of some 19,000 workers to
Sweden during the first five months of this year has
aggravated a s:~ortage of labor. Other proposed
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measures deal with environmental pollution and de-
vel~pment assistance to the poorer northern and
eastern areas of Finland, the traditional voter
strongholds of the Center:.Party. There are also
promises to increase benefits to ~~ar veterans, to
include dental care under the national health in-
surance system, and to reform universities.
14. It is expected that Karjalainen will run
into difficulty, however, when he tries to hold his
coalition together. In the frenetic efforts to
piece a government together before Kekkonen's trip
to Moscow, the prime minister was forced to concen-
Irate on dividing up ministerial posts and failed
to obtain full commitment of the coalition partners
to his basic program. Alth~~ugh one Center Party
minister is calling the program "the best since
1954," a Social Democratic minister has already
publicly criticized the program as "ill-defined."
Foreign Relations Problems
15. Most Finns agree that the preservation of
their political independence requires them to remain
on good t~:rms with their overwhelmingly powerful
neighbor, the USSR. Since he became president in
1956 Kekkonen has consistently believed that in or-
der to have good relat9ons with Moscow, there had
to be basic, personal trust and confidence between
himself and the top Soviet leaders, whoever they
might be. This in turn, he has insisted, was best
ensured by frequent direct contacts with the Sova.et
leaders. During his most recent trip to ~1~e USSR
last month the 1948 Soviet-Finnish TrEa~,~ of Friend-
ship, Cooperation, and Mutual Assistance was renewed
for another 20 years or until 1990. The treaty had
already been extended once previously, in 1955, also
for a 20-year period.
16. The reasons for the treaty's early renewal--
five years prior to its expiration--are not entirely
clear, but the evidence indicates that the Finns
acted at Soviet behest. Foreign Minister Leskinen
stated publicly on 15 July that the initiative on
renewal had been taken by Party Chief Brezhnev during
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a visiic by Kekkonen to Moscow last February. Soviet
leaders apparently view the treaty as the essential
foundation for their especially close relationship
with Finland and wanted to waste no time in extend-
ing it, but these factors alone do not adequately
explain their haste . Perhaps they wanted to get
the matter resolved before the accommodating
Kekkonen was removed from the scene by death or
retirement. Also, Kekkonen perhaps reflected So-
viet as well as Finnish sentiments when he observed
that the extension was important as an example of
the implementation of peaceful coexistence between
countries of different political, economic, and so-
cial systems.
17. Another explanation is that the Soviets
took the initiative at this time because they wanted
to put their relations with their neighboring states
in order prior to the conclusion, of a Soviet - West
German agreement or the convenin;~ of a Conference on
European Security. The first e:e~;;~nsion of the Soviet-
Finnish treaty in 1955, was directly linked to the
closing of the Soviet base at Porkkala near Helsinki.
Finland's gains this time are not obvious. Neverthe-
less,an official spokesman and the press have pro-
claimed Kekkonen's visit a great success, even in-
timating that the initiative for renewal came from
Finland. Kekkonen himself said on 20 July that re-
newal occurred at this time because of Finland's
desire to "stabilize she situation" by removing its
forai;n policy from any speculation. Of course,
once Soviet interest in early renewal was manifest,
Kekkonen undoubtedly resolved to make the best of
the situation.
18. Publicly, the Finns are proclaiming that
the treaty renewal provided significant new confirma-
tion of the country's policy of neutrality. It ap-
pears, however, that they fell short of their aim of
obtaining explicit recognition of their neutrality
in the treaty preamble. Instead, the Finns had
to settle for a joint communique stating that Fin-
land's policy of neutrality contributes in a valu-
able way to international peace.
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19. Tt is also possible that the Finns decided
not to press too hard for a formal revision of the
original treaty lest Moscow be provided with an
opening to propose changes not desired by Helsinki.
For example, the Finns and the Soviets are in open
disagreement over the interpretation of the treaty's
consultation provisions. Iri Helsinki's view, the
initiative for consultation in the event of a threat
of aggression belongs to them and not to the So-
viets, as contended by Moscow. Perhaps rather than
risk coming under pressure to accept the Soviet
view, the Finns decided to let well enough alone by
not tampering with the document.
20. An endorsement in the communique of Finn-
ish initiatives on behalf of a conference on Euro-
pean security--which the Finns have offered to host--
was another small gain for them. The Finnish press
has speculated that new initiatives on arrangements
relating to European security issues may be forth-
comin3 from Finland beyond the soundings taken by
Finnish Ambassador Enckell on the attitudes of var-
ious governments. Finnish endeavors in this field
stem from a sincere desire to promote detente and
to attain an influence in international relations
larger t:zan Finland's size might warrant. The in-
itiative taken by the Finns at the United Nations
to establish periodic meetings of the Security
Council a~t the foreign ministers level and its suc-
cessful campaign to get acceptance of Helsinki as
one of tYie sites for SALT are examples of Finland's
enterprise. Furthermore, activity of this kind :~s
certain to please tree Soviets and thus helps to
deflect their interest in other matters, such as
recognition of North Vietnam and East Germazly.
21. The most crucial question in F~_nnish-
Soviet relations iri the months and possibly years
ahead is that of Finl,and's future commercial rela-
tions with Western Europe, and especially with the
European Communities (EC) . The Finns admit that
they touched on this 3uestion during Kekkonen's
visit, but have not co~~:~nented ublicl on an os-
sible understanding.
sEC~T
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T roughout 6 an into 1 Moscow a owe t o
Finns to commit themselves to full pari:icipation
in the proposed Nordic Economic Union (NORDEC),
and then virtually on the eve of signature, forced
them to withdraw. Thus, although an indication
of Soviet acquiescence would surely encourage the
Finns, they undoubtedly are well aware of the need
to proceed cautiously, especially in view of Mos-
cow's unfla in hostilit to the EC.
ey are eterm~ne to avoid a repe-
tition o e on-again, off-again experience with
NORDEC.
Conclusions
23. The es tablishn~ent of another center-left
government and the agreement extending the Finnish-
Soviet Friendship Treaty for another 20 years sig-
nal a reaffirmation and stabilization of Finland's
basic policies at home and abroad. At home, this
means continuation of a government made up of mod-
erate bourgeois and socialist parties and the ex-
clusion of the conservative and radical right ele-
ments. Abroad, it means maintenance of the coun-
try's neutrality, modified by a need to take into
account the interests of the USSR.
24. .Internally, the prospects for Karjal-
ainen's government are not particularly bright.
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There is likely to be considerable friction over
various aspects of economic policy, especially
over proposals for increased state participation
in the economy at a time when there is increasing
worry about inflation. There is bound to be at
least some latent public reserztn~ent toward what is
regarded as a "government of losers and second-
string politicians." On the other hand, the absence
of any ready alternative--demonstrated by the long
crisis this spring--favors governmental stability.
25. Finland's future commercial rei.ations
with the EC is the issue holding the greatest poten-
tial trouble with Moscow. In view of the extreme
importance to Finland of maintaining access to
Western markets , * there ~is no gues~'ion that the
Finns will do their utmost to overcome Soviet oppo-
sition. Despite the Soviet disapproval of. NORDEC,
the Finns believe they have a good ch~?nce of con-
cludin5 an agreement with the EC that is acceptable
to the USSR. They stress that their goal is limited
to arranging a commercial agreement and not forma].
"associate membership" or any kind of political
relationship. They also point out that they were,
after all, able to forge links with the European
Free Trade Association (EFTA).
26. The Finns realize that they must convince
Moscow that its basic interests will not suffer.
Thus, they have made a special effort to react pos-
itively to Soviet proposals cn such matters as
natural gas, nuclear reactors and other economic
questions, even when the deals are not tY~e most
economically profitable to Helsinki.
27. The Finns may have misjudged both the
degree of Soviet opposition and the wi 1lingness of
the EC to make allowances for Finland's special
problems . The road ahead on this important ques-
tion is likely to b e long and bumpy at best. Still,
Helsi:-iki appears to have no choice but to continue
pressing ahead in the hope that skillful negotia-
tions and a certain amount of luck will see them
through .
*(See Annex B)
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/1NR1EX A
Parliamentary Election Results, 196 - 1970
1962
Party
Social Democratic Party
19,5
Center Party
23.0
People's Democratic League
22.0
National Coalition
(Conservative) Party
15.0
Rural Party
2.2
Swedish People's Party
6.4
Liberal Party
6.8
Social Democratic League
4.4
(Left Socialist}
1966
Seats
%
Seats
38
27.2
55
53
21.2
49
47
21.2
41
32
13.8
26
-
1.0
1
14
6.0
12
14
6.5
9
2
2.6
7
Christian League ~ 0 7 - 0.5 -
Other - ~ * -
1970
Seats
23.4
52
17.1
36
16.6
36
18.0
37
10.5
18
5.7
'12
6.0
8
1.4
-
U.9
1
0.4
-
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p s
Imports
1969
Jan-Apr
1970
1969
Jan-Apr
1970
EEC countries,
23 8
23 2
27 9
29 1
EFTA countries
41.6
45.2
44.7
45
0
of which
United Kingdom
(18.5)
(17.3)
(16.4)
.
(15
2)
Nordic countries
(20.1 J
(24.7)
(23.2)
.
(24
1)
Other OECD countries
10.11
8.5
6'6
.
5
9
USSR
14.0
11.7
12.8
.
13
4
Other Communist countries
~.5
a,1
3.7
.
7
2
Rest of world
T
t
I
7.1
7.3
4.3
.
3.9
o
a
100.0
100.0
100.0
100.0
ANNEX B
Finnish Foreign Trade (By Percent)
Ex ort
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