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Finland-The Cold War and the Treaty of 1948
Finland
Index
The Finnish statesman Juho Kusti Paasikivi was a
leading
proponent of the relationship between Finland and the
Soviet
Union that permitted Finland's postwar development. For
decades,
Paasikivi had been the leading noncommunist Finn
advocating
reconciliation with the Soviet Union. Before World War I,
he had
been on Old Finn and a Compliant
(see The Era of Russification
, this ch.), who advocated accommodation with Russification.
In the
negotiations over the Treaty of Dorpat in 1920, he had
argued for
drawing Finland's border farther away from Leningrad. In
the fall
of 1939, he had recommended giving in to some of the
Soviet
demands, because he considered the ensuing war avoidable.
He had
also opposed Finland's entry into the Continuation War. As
a
former prime minister under the Finnish White government
of 1918
and as a member of the Conservative National Coalition
Party
(Kansallinen Kokoomuspuolve--KOK), Paasikivi was
politically an
anticommunist. His lifelong study of history, however,
convinced
him that Finland's policies toward the Soviet Union needed
to be
governed by pragmatism. By late 1944, Finland's previous
policy
of antagonism to the Soviet Union had been shown to be
counterproductive, because it had nearly led to Finland's
extinction as an independent state. Summoned out of
private life
to serve--first as prime minister from October 1944 to
March 1946
and then as president from March 1946 to March
1956--Paasikivi
established the policy of accommodation with the Soviet
Union
that, with time, became almost universally accepted among
the
Finns. The change in Finland's policy was so marked that
some
observers considered the post-1944 years to be the era of
the
"Second Republic."
The immediate postwar years of 1944 to 1948 were filled
with
uncertainty for Finland because it was in a weakened
condition
and the because new policy of reconciliation was still
being
formed. The Allied Control Commission, established by the
1944
armistice to oversee Finland's internal affairs until the
final
peace treaty was concluded in 1947, was dominated by the
Soviets.
Under the leadership of a Soviet, Marshal Andrei Zhdanov,
the
commission checked Finland's adherence to the terms of the
preliminary peace of September 1944. The first test of
Finland's
new policy of reconciliation was thus to observe
faithfully the
treaty with the Soviets, including the punctual payment of
reparations and the establishment of war crimes trials.
Eight
leading Finnish politicians were tried for war crimes in
proceedings lasting from November 1945 to February 1946.
Among
the accused were ex-president Risto Ryti (served 1940-44),
who,
along with six other prominent Finnish politicians, was
convicted
of plotting aggressive war against the Soviet Union and
was
sentenced to prison.
The war crimes trials and other stipulations of the
armistice
were distasteful to the Finns, but their careful
compliance led
to the reestablishment of national sovereignty. Compliance
may
have been facilitated by Finland's having its national
hero,
Mannerheim, as president to carry out these policies,
until he
resigned for health reasons in March 1946 and was
succeeded by
Paasikivi. The signing of the Treaty of Paris on February
10,
1947, led in September 1947 to the removal of the Allied
Control
Commission.
In their strict fulfillment of the Soviet terms of
peace, the
Finns faced other difficulties. The armistice agreement of
September 1944 had legalized the SKP, which had been
outlawed in
1930. In October 1944, the SKP led in the formation of the
Finnish People's Democratic League (Suomen Kansan
Demokraattinen
Liitto--SKDL). Commonly referred to as the People's
Democrats,
the SKDL claimed to represent a broad spectrum of
progressive
forces. From its inception, however, the SKDL has been
dominated
by the SKP and has provided the electoral vehicle by which
members of the SKP have been sent to the Eduskunta.
In March 1945, in the first parliamentary elections
held
after the war, the SKDL scored a major success by winning
fifty-
one seats and becoming the largest single party in the
Eduskunta
(the ML had forty-nine and the SDP had forty-eight).
Several
factors account for the success of the communists. A
strong
sympathy for communism among a large number of voters had
persisted since the Finnish civil war. In addition, many
Social
Democratic voters were alienated from the SDP because of
its
ardent support of the recent war that had cost Finland so
dearly.
Many Finns who suffered under the depressed economic
conditions
of postwar Finland voted for the SKDL as a protest
gesture.
Finally, the SKDL proved adept at electoral politics, de-
emphasizing its communist ties and emphasizing its
devotion to
democracy, to full employment, and to a peaceful foreign
policy.
The SKDL played a large role in Finnish politics during
the
immediate postwar years. By November 1944, President
Mannerheim
recognized the growing power of the communists when he
appointed
to the cabinet the first communist, Yrjö Leino, ever to
hold such
a position. Following the election of March 1945, Leino
was
appointed to the important post of minister of interior, a
position from which he controlled, among other things, the
state
security police and a large mobile police detachment. The
power
of the communists was at its greatest from 1946 to 1948,
when the
SKDL held, or shared, as many as eight of twelve cabinet
posts.
These included that of prime minister, which was held by
Mauno
Pekkala, who also served as co-minister of defense.
Pressures on Finland reached a peak in early 1948. In
February the communists took Czechoslovakia by coup, an
act that
heightened international tensions considerably. The
Soviets then
requested that Finland sign a treaty nearly identical to
those
forced on some of their satellite states in Eastern
Europe. By
March there were rumors of a possible communist coup in
Finland.
Although it is not clear that a coup was imminent,
President
Paasikivi took precautionary measures. The Finnish armed
forces
were under his control, and he summoned them in strength
to
Helsinki, where they would have proved more than a match
for the
police units of the ministry of interior that were
suspected of
involvement in the coup.
In negotiating the requested treaty, meanwhile, the
Soviets
showed a willingness to accept a neutralized Finland.
Paasikivi
secured significant changes in the treaty that gave
Finland
substantially more independence with respect to the Soviet
Union
than was enjoyed by the East European states under Soviet
domination. Paasikivi had served notice on the Soviets
that they
would not get their way through pressure, but rather would
have
to use military force. This they were reluctant to do in
the
tense international atmosphere of early 1948.
The Treaty of Friendship, Cooperation, and Mutual
Assistance
(FCMA--see Appendix B), which was signed on April 6, 1948,
has
since then provided the foundation for Soviet-Finnish
relations.
The key provision of the treaty, in Article 1, calls for
military
cooperation between Finland and the Soviet Union if
Germany, or a
country allied with it, attempts to invade Finland or the
Soviet
Union by way of Finnish territory. Article 2 of the treaty
calls
for military consultations to precede actual cooperation.
Finland's sovereignty is safeguarded, however, because
mutual
assistance is not automatic but must be negotiated. The
treaty
helped to stabilize Soviet-Finnish relations by giving the
Soviet
Union guarantees that it would not face a military threat
from
the direction of Finland. The Soviets have been pleased
with the
treaty, and before expiration its original ten-year term
has been
extended to twenty years on three occasions--1955, 1970,
and
1983.
When new elections were held in July 1948, the SKDL
suffered
a sharp drop in support, falling from fifty-one to
thirty-eight
seats in the Eduskunta. Communists were not included in
the new
government formed under the Social Democrat Karl-August
Fagerholm, and there was no communist participation in
Finland's
government again until 1966.
The end of World War II had found Finland in a
thoroughly
weakened state economically. In addition to its human and
physical losses, Finland had to deal with more than
400,000
refugees from the territories seized by the Soviets. In an
attempt to resolve the refugee problem through a program
of
resettlement, the parliament adopted the Land Act of 1945.
Through the program thus established, the state bought up
farmland through compulsory purchases and redistributed it
to
refugees and to ex-servicemen, creating in the process
142,000
new holdings. Finland's large class of independent farmers
was
thereby expanded considerably. Although many of the
resulting
holdings were too small to be economically viable, they
speeded
the integration of the refugees into the social and
economic
fabric of the country.
Reparations were another burden for Finland. From the
failure
of the reparations demands imposed by the Treaty of
Versailles,
the Soviets had drawn the lesson that, to be effective,
reparations should take the form of deliveries of goods in
kind,
rather than of financial payments. As a result, the Finns
were
obligated to make deliveries of products, mainly machine
goods,
cable products, merchant ships, paper, wood pulp, and
other wood
products. About one-third of the goods included as
reparations
came from Finland's traditionally strong forest
industries, and
the remainder came from the shipbuilding and the
metallurgical
industries, which were as yet only partially developed in
Finland. The reparations paid from 1944 to 1952 amounted
to an
annual average of more than 2 percent of Finland's gross
national product
(GNP--see Glossary).
The reparations were
delivered
according to a strict schedule, with penalties for late
shipments. As the earnestness of the Finns in complying
with the
Soviet demands became apparent, the Soviets relented
somewhat by
extending the payment deadline from 1950 to 1952, but they
still
prevented Finland from participating in the Marshall Plan
(European Recovery Program). The United States played an
important role, nonetheless, by mediating the extension of
financial credits of more than US$100 million from its
Export-
Import Bank to help Finland rebuild its economy and meet
its
reparations obligations punctually.
The Finns turned adversity into advantage by using the
industrial capacities created to meet the reparations
obligations
as the basis for thriving export trades in those products.
As a
result, Finland's industrial base acquired greater balance
than
before, between, on the one hand, Finland's traditional
industries of lumber, wood pulp, and paper products, and
on the
other hand, the relatively new industries of shipbuilding
and
machine production. Finland's growing integration into the
world
economy was demonstrated by its joining the General
Agreement on Tariffs and Trade
(GATT--see Glossary)
in 1949.
Data as of December 1988
- Finland-Chapter 4 - Government and Politics
- Finland-Transport Equipment
- Finland-Principles of Criminal Justice
- Finland-Orthodox Church of Finland
- Finland-Revivalist Movements Within the Lutheran Church
- Finland-Lapps
- Finland-Banking and Finance
- Finland-The Rise of Finnish Nationalism
- Finland-Economic Development
- Finland-Forestry
- Finland-Energy
- Finland-The Winter War WORLD WAR II, 1939-45
- Finland-The Establishment of Finnish Democracy
- Finland-Civil Service
- Finland-THE ARMED FORCES
- Finland-Aland Islands
- Finland-Macroeconomic Policy
- Finland-Mobile Police
- Finland-Tourism
- Finland-Fisheries
- Finland-DEFENSE SPENDING
- Finland-Chapter 1 - Historical Setting
- Finland-CONSTITUTIONAL FRAMEWORK
- Finland-Industrial Policy
- Finland-AGRICULTURE, FORESTRY, AND FISHERIES
- Finland -Country Profile
- Finland-Sentencing and Punishment
- Finland-Medieval Society and Economy
- Finland-Class Structure
- Finland-Local Administration
- Finland-Conscription and Reserve Duty
- Finland-The Constitution
- Finland-Health Problems
- Finland-Security Police
- Finland-United States
- Finland-Finnish-Soviet Cooperation
- Finland-Primary and Secondary Education
- Finland-Family Aid
- Finland-FOREIGN RELATIONS
- Finland-Machine Building
- Finland-Income Security Classified as Welfare
- Finland-Police Training
- Finland-ECONOMY
- Finland-ROLE OF GOVERNMENT
- Finland-Balance of Payments
- Finland-Agricultural Policy
- Finland-President
- Finland-GEOSTRATEGIC SITUATION
- Finland-Finnish Security Policy Between the Wars
- Finland-Navy
- Finland-Employee Pension Plans
- Finland-DEMOGRAPHY
- Finland-Chapter 3 - The Economy
- Finland-Child-Care Services
- Finland-Command Structure
- Finland-Finland
- Finland-The Parliamentary Election of 1983
- Finland-CRIMINAL JUSTICE SYSTEM
- Finland-Chapter 2 - The Society and Its Environment
- Finland-The Presidential Election of 1988
- Finland-Employment
- Finland-Legal System
- Finland-Army
- Finland-The Effects of the War
- Finland-MINORITY GROUPS
- Finland-Structure of the Economy
- Finland-Finland in the Era of Consensus, 1966-81
- Finland-The Lapland War
- Finland-NATIONAL SECURITY
- Finland-Domestic Arms Production
- Finland-THE POSTWAR ERA
- Finland-Protection of the Environment
- Finland-Farms and Farmers
- Finland-Metal Industries
- Finland-Landform Regions
- Finland-Social and Economic Developments
- Finland-Unemployment Insurance
- Finland-The Kalmar Union
- Finland-Minerals
- Finland-Services for the Disabled
- Finland-Organization of the Health System
- Finland-TREATY COMMITMENTS AFFECTING NATIONAL SECURITY
- Finland-Industrial Relations
- Finland-Agriculture
- Finland-The Continuation War
- Finland-Transportation and Communications
- Finland-FOREIGN ECONOMIC RELATIONS
- Finland-Mass Media
- Finland-Status of Women
- Finland-Adult Education
- Finland-Health System
- Finland-PUBLIC WELFARE
- Finland-Sickness Insurance
- Finland-Organization of the Welfare System
- Finland-Size, External Boundaries, and Geology
- Finland-THE RUSSIAN GRAND DUCHY OF FINLAND, 1809-1917
- Finland-Drug Enforcement
- Finland-The Parliamentary Election of 1987
- Finland-SOURCES OF EQUIPMENT
- Finland-Income Security Programs Classified as Social Insurance
- Finland-Soviet Union
- Finland-SOCIAL STRUCTURE
- Finland-The Communist Party of Finland
- Finland-Climate
- Finland-The Swedish People's Party
- Finland-Foreword
- Finland-Acknowledgments
- Finland-THE ARMED FORCES IN NATIONAL LIFE
- Finland-Housing
- Finland-Training and Education
- Finland-POLITICAL DYNAMICS
- Finland-Air Force
- Finland-Central Criminal Police
- Finland-Council of State
- Finland-Legislature
- Finland-Finnish Direct Investment Abroad
- Finland-Ties to West European Markets
- Finland-Electoral System
- Finland-The Reformation
- Finland-Basic Metals
- Finland-Welfare Services
- Finland-The Finnish Civil War
- Finland-Constitutional Development
- Finland-National Pension Plan
- Finland-MILITARY HERITAGE
- Finland-Other Industries
- Finland-Public Finance
- Finland-ENERGY AND MINERAL RESOURCES
- Finland-INDEPENDENCE AND THE INTERWAR ERA, 1917-39
- Finland
- Finland-GEOGRAPHY
- Finland-Higher Education
- Finland-Domestic Developments and Foreign Politics, 1948-66
- Finland-Arms Acquisitions from Foreign Suppliers
- Finland-Smaller Parties and the Greens
- Finland-GEOGRAPHY
- Finland-Jewish and Muslim Communities
- Finland-TRANSPORTATION AND COMMUNICATIONS
- Finland-Foreign Trade
- Finland-The Cold War and the Treaty of 1948
- Finland-Urbanization
- Finland-Regional Economic Integration
- Finland-Interest Groups
- Finland
- Finland-Wood-Processing Industries
- Finland-CIVIL DEFENSE
- Finland-Growth of the Social Welfare System
- Finland-LIVING CONDITIONS
- Finland-Farm Production Patterns
- Finland-ORIGINS OF THE FINNS
- Finland-EDUCATION
- Finland-FAMILY LIFE
- Finland-GROWTH AND STRUCTURE OF THE ECONOMY
- Finland-Role of Religion
- Finland-The Center Party
- Finland-Chapter 5 - National Security
- Finland-The Social Democratic Party
- Finland-Internal Migration
- Finland-Frontier Guard
- Finland-Uniforms and Insignia
- Finland-Preface
- Finland
- Finland-Marriage
- Finland-THE ERA OF SWEDISH RULE, c - 1150-1809
- Finland-Incidence of Crime
- Finland
- Finland-The National Coalition Party
- Finland-Provincial Administration
- Finland-Police Organization
- Finland-External Migration
- Finland
- Finland-Conditions of Service
- Finland-Neutrality
- Finland-CONCEPTS OF NATIONAL SECURITY
- Finland
- Finland
- Finland
- Finland-RELIGION
- Finland-The Presidential Election of 1982 and Koivisto's Presidency
- Finland
- Finland-UNITED NATIONS PEACEKEEPING ACTIVITIES
- Finland-Swedish-speaking Finns
- Finland-SOCIETY
- Finland-Occupational and Wage Structure
- Finland-Western Europe
- Finland-Organization and Duties of the Lutheran Church
- Finland-SERVICES
- Finland
- Finland-Workmen's Compensation
- Finland-Development of the Health System
- Finland-INDUSTRY
- Finland-Electrical Equipment and High Technology
- Finland-Services for Substance Abusers
- Finland-United Nations and Third World
- Finland-HUMAN RESOURCES
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Background | | Finland was a province and then a grand duchy under Sweden from the 12th to the 19th centuries, and an autonomous grand duchy of Russia after 1809. It won its complete independence in 1917. During World War II, it was able to successfully defend its freedom and resist invasions by the Soviet Union - albeit with some loss of territory. In the subsequent half century, the Finns made a remarkable transformation from a farm/forest economy to a diversified modern industrial economy; per capita income is now among the highest in Western Europe. A member of the European Union since 1995, Finland was the only Nordic state to join the euro system at its initiation in January 1999.
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Location | | Northern Europe, bordering the Baltic Sea, Gulf of Bothnia, and Gulf of Finland, between Sweden and Russia
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Area(sq km) | | total: 338,145 sq km land: 303,815 sq km water: 34,330 sq km
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Geographic coordinates | | 64 00 N, 26 00 E
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Land boundaries(km) | | total: 2,654 km border countries: Norway 727 km, Sweden 614 km, Russia 1,313 km
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Coastline(km) | | 1,250 km
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Climate | | cold temperate; potentially subarctic but comparatively mild because of moderating influence of the North Atlantic Current, Baltic Sea, and more than 60,000 lakes
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Elevation extremes(m) | | lowest point: Baltic Sea 0 m highest point: Haltiatunturi 1,328 m
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Natural resources | | timber, iron ore, copper, lead, zinc, chromite, nickel, gold, silver, limestone
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Land use(%) | | arable land: 6.54% permanent crops: 0.02% other: 93.44% (2005)
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Irrigated land(sq km) | | 640 sq km (2003)
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Total renewable water resources(cu km) | | 110 cu km (2005)
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Freshwater withdrawal (domestic/industrial/agricultural) | | total: 2.33 cu km/yr (14%/84%/3%) per capita: 444 cu m/yr (1999)
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Natural hazards | | NA
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Environment - current issues | | air pollution from manufacturing and power plants contributing to acid rain; water pollution from industrial wastes, agricultural chemicals; habitat loss threatens wildlife populations
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Environment - international agreements | | party to: Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 85, Air Pollution-Sulfur 94, Air Pollution-Volatile Organic Compounds, Antarctic-Environmental Protocol, Antarctic-Marine Living Resources, Antarctic Treaty, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling signed, but not ratified: none of the selected agreements
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Geography - note | | long boundary with Russia; Helsinki is northernmost national capital on European continent; population concentrated on small southwestern coastal plain
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Population | | 5,250,275 (July 2009 est.)
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Age structure(%) | | 0-14 years: 16.4% (male 438,425/female 422,777) 15-64 years: 66.8% (male 1,773,495/female 1,732,792) 65 years and over: 16.8% (male 357,811/female 524,975) (2009 est.)
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Median age(years) | | total: 42.1 years male: 40.5 years female: 43.7 years (2009 est.)
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Population growth rate(%) | | 0.098% (2009 est.)
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Birth rate(births/1,000 population) | | 10.38 births/1,000 population (2009 est.)
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Death rate(deaths/1,000 population) | | 10.07 deaths/1,000 population (July 2009 est.)
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Net migration rate(migrant(s)/1,000 population) | | 0.68 migrant(s)/1,000 population (2009 est.)
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Urbanization(%) | | urban population: 63% of total population (2008) rate of urbanization: 0.8% annual rate of change (2005-10 est.)
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Sex ratio(male(s)/female) | | at birth: 1.04 male(s)/female under 15 years: 1.04 male(s)/female 15-64 years: 1.02 male(s)/female 65 years and over: 0.68 male(s)/female total population: 0.96 male(s)/female (2009 est.)
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Infant mortality rate(deaths/1,000 live births) | | total: 3.47 deaths/1,000 live births male: 3.78 deaths/1,000 live births female: 3.15 deaths/1,000 live births (2009 est.)
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Life expectancy at birth(years) | | total population: 78.97 years male: 75.48 years female: 82.61 years (2009 est.)
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Total fertility rate(children born/woman) | | 1.73 children born/woman (2009 est.)
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Nationality | | noun: Finn(s) adjective: Finnish
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Ethnic groups(%) | | Finn 93.4%, Swede 5.6%, Russian 0.5%, Estonian 0.3%, Roma (Gypsy) 0.1%, Sami 0.1% (2006)
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Religions(%) | | Lutheran Church of Finland 82.5%, Orthodox Church 1.1%, other Christian 1.1%, other 0.1%, none 15.1% (2006)
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Languages(%) | | Finnish 91.2% (official), Swedish 5.5% (official), other 3.3% (small Sami- and Russian-speaking minorities) (2007)
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Country name | | conventional long form: Republic of Finland conventional short form: Finland local long form: Suomen tasavalta/Republiken Finland local short form: Suomi/Finland
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Government type | | republic
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Capital | | name: Helsinki geographic coordinates: 60 10 N, 24 56 E time difference: UTC+2 (7 hours ahead of Washington, DC during Standard Time) daylight saving time: +1hr, begins last Sunday in March; ends last Sunday in October
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Administrative divisions | | 6 provinces (laanit, singular - laani); Ahvenanmaan Laani (Aland), Etela-Suomen Laani (Southern Finland), Ita-Suomen Laani (Eastern Finland), Lansi-Suomen Laani (Western Finland), Lapin Laani (Lapland), Oulun Laani
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Constitution | | 1-Mar-00
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Legal system | | civil law system based on Swedish law; the president may request the Supreme Court to review laws; accepts compulsory ICJ jurisdiction with reservations
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Suffrage | | 18 years of age; universal
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Executive branch | | chief of state: President Tarja HALONEN (since 1 March 2000) head of government: Prime Minister Matti VANHANEN (since 24 June 2003); Deputy Prime Minister Jyrki KATAINEN (since 19 April 2007) cabinet: Council of State or Valtioneuvosto appointed by the president, responsible to parliament elections: president elected by popular vote for a six-year term (eligible for a second term); election last held 15 January 2006 (next to be held in January 2012); the president appoints the prime minister and deputy prime minister from the majority party or the majority coalition after parliamentary elections and the parliament must approve the appointment; Prime Minister VANHANEN reelected 17 April 2007 election results: percent of vote - Tarja HALONEN (SDP) 46.3%, Sauli NIINISTO (Kok) 24.1%, Matti VANHANEN (Kesk) 18.6%, Heidi HAUTALA (VIHR) 3.5%; a runoff election between HALONEN and NIINISTO was held 29 January 2006 - HALONEN 51.8%, NIINISTO 48.2%; Matti VANHANEN reelected prime minister; election results 121-71 note: government coalition - Kesk, KOK, VIHR, and SFP
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Legislative branch | | unicameral Parliament or Eduskunta (200 seats; members are elected by popular vote on a proportional basis to serve four-year terms) elections: last held 18 March 2007 (next to be held March 2011) election results: percent of vote by party - Kesk 23.1%, Kok 22.3%, SDP 21.4%, VAS 8.8%, VIHR 8.5%, KD 4.9%, SFP 4.5%, True Finns 4.1%, other 3.4%; seats by party - Kesk 51, Kok 50, SDP 45, VAS 17, VIHR 15, SFP 9, KD 7, True Finns 5, other 1
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Judicial branch | | Supreme Court or Korkein Oikeus (judges appointed by the president)
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International organization participation | | ADB (nonregional member), AfDB (nonregional member), Arctic Council, Australia Group, BIS, CBSS, CE, CERN, EAPC, EBRD, EIB, EMU, ESA, EU, FAO, G-9, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA, IEA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, MIGA, MINURCAT, NC, NEA, NIB, NSG, OAS (observer), OECD, OPCW, OSCE, Paris Club, PCA, PFP, Schengen Convention, UN, UNCTAD, UNESCO, UNHCR, UNIDO, UNMIL, UNMIS, UNMOGIP, UNTSO, UPU, WCO, WEU (observer), WFTU, WHO, WIPO, WMO, WTO, ZC
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Flag description | | white with a blue cross extending to the edges of the flag; the vertical part of the cross is shifted to the hoist side in the style of the Dannebrog (Danish flag); the blue represents the thousands of lakes scattered across the country, while the white is for the snow that covers the land in winter
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Economy - overview | | Finland has a highly industrialized, largely free-market economy with per capita output roughly that of the UK, France, Germany, and Italy. Its key economic sector is manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Trade is important; Finland's ratio of exports to GDP has risen from a quarter to 37% over the past 15 years. Finland excels in high-tech exports such as mobile phones. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export earner, provides a secondary occupation for the rural population. Although Finland has been one of the best performing economies within the EU in recent years and its banks and financial markets have avoided the worst of global financial crisis, the world slowdown has hit export growth and domestic demand and will serve as a brake on economic growth in 2009 and 2010. The slowdown of construction, other investment, and exports will cause unemployment to rise. During 2009, unemployment will climb to over 8% of the labor force. Long-term challenges include the need to address a rapidly aging population and decreasing productivity that threaten competitiveness, fiscal sustainability, and economic growth.
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GDP (purchasing power parity) | | $194 billion (2008 est.) $192.4 billion (2007 est.) $184.8 billion (2006 est.) note: data are in 2008 US dollars
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GDP (official exchange rate) | | $271.9 billion (2008 est.)
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GDP - real growth rate(%) | | 0.8% (2008 est.) 4.1% (2007 est.) 4.9% (2006 est.)
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GDP - per capita (PPP) | | $37,000 (2008 est.) $36,700 (2007 est.) $35,300 (2006 est.) note: data are in 2008 US dollars
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GDP - composition by sector(%) | | agriculture: 2.8% industry: 32.4% services: 64.9% (2008 est.)
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Labor force | | 2.703 million (2008 est.)
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Labor force - by occupation(%) | | agriculture and forestry 4.5%, industry 18.3%, construction 7.3%, commerce 16%, finance, insurance, and business services 14.5%, transport and communications 7%, public services 32.4% (2008)
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Unemployment rate(%) | | 6.4% (2008 est.) 6.9% (2007 est.)
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Population below poverty line(%) | | NA%
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Household income or consumption by percentage share(%) | | lowest 10%: 3.6% highest 10%: 24.7% (2007)
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Distribution of family income - Gini index | | 29.5 (2007) 25.6 (1991)
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Investment (gross fixed)(% of GDP) | | 20.6% of GDP (2008 est.)
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Budget | | revenues: $143.8 billion expenditures: $132.3 billion (2008 est.)
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Inflation rate (consumer prices)(%) | | 4.1% (2008 est.) 2.5% (2007 est.)
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Stock of money | | $NA (31December 2008) $NA (31 December 2007) note: see entry for the European Union for money supply in the euro area; the European Central Bank (ECB) controls monetary policy for the 16 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money and quasi money circulating within their own borders
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Stock of quasi money | | $NA (31 December 2008) $NA (31 December 2007)
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Stock of domestic credit | | $241.1 billion (31 December 2008) $225.4 billion (31 December 2007)
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Market value of publicly traded shares | | $NA (31 December 2008) $369.2 billion (31 December 2007) $265.5 billion (31 December 2006)
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Public debt(% of GDP) | | 33.7% of GDP (2008 est.) 46.8% of GDP (2004 est.)
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Agriculture - products | | barley, wheat, sugar beets, potatoes; dairy cattle; fish
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Industries | | metals and metal products, electronics, machinery and scientific instruments, shipbuilding, pulp and paper, foodstuffs, chemicals, textiles, clothing
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Industrial production growth rate(%) | | 0.4% (2008 est.)
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Current account balance | | $5.518 billion (2008 est.) $10.12 billion (2007 est.)
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Exports | | $96.62 billion (2008 est.) $90.2 billion (2007 est.)
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Exports - commodities(%) | | electrical and optical equipment, machinery, transport equipment, paper and pulp, chemicals, basic metals; timber
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Exports - partners(%) | | Russia 11.6%, Sweden 10%, Germany 10%, US 6.4%, UK 5.5%, Netherlands 5.1% (2008)
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Imports | | $87.51 billion (2008 est.) $78.22 billion (2007 est.)
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Imports - commodities(%) | | foodstuffs, petroleum and petroleum products, chemicals, transport equipment, iron and steel, machinery, textile yarn and fabrics, grains
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Imports - partners(%) | | Russia 16.3%, Germany 15.7%, Sweden 13.6%, Netherlands 6.3%, China 5.1%, UK 4.2% (2008)
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Reserves of foreign exchange and gold | | $8.346 billion (31 December 2008 est.) $8.385 billion (31 December 2007 est.)
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Debt - external | | $339.5 billion (31 December 2008) $314.1 billion (31 December 2007)
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Stock of direct foreign investment - at home | | $84.44 billion (31 December 2008 est.) $88.69 billion (31 December 2007 est.)
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Stock of direct foreign investment - abroad | | $116 billion (31 December 2008 est.) $114.2 billion (31 December 2007 est.)
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Exchange rates | | euros (EUR) per US dollar - 0.6827 (2008 est.), 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004)
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Currency (code) | | euro (EUR)
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Telephones - main lines in use | | 1.65 million (2008)
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Telephones - mobile cellular | | 6.83 million (2008)
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Telephone system | | general assessment: modern system with excellent service domestic: digital fiber-optic fixed-line network and an extensive cellular network provide domestic needs international: country code - 358; submarine cables provide links to Estonia and Sweden; satellite earth stations - access to Intelsat transmission service via a Swedish satellite earth station, 1 Inmarsat (Atlantic and Indian Ocean regions); note - Finland shares the Inmarsat earth station with the other Nordic countries (Denmark, Iceland, Norway, and Sweden)
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Internet country code | | .fi; note - Aland Islands assigned .ax
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Internet users | | 4.383 million (2008)
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Airports | | 148 (2009)
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Pipelines(km) | | gas 694 km (2008)
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Roadways(km) | | total: 78,141 km paved: 50,914 km (includes 700 km of expressways) unpaved: 27,227 km (2009)
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Ports and terminals | | Hamina, Helsinki, Kokkola, Kotka, Naantali, Pori, Raahe, Rauma, Turku
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Military branches | | Finnish Defense Forces (FDF): Army, Navy (includes Coastal Defense Forces), Air Force (Suomen Ilmavoimat) (2007)
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Military service age and obligation(years of age) | | 18 years of age for male voluntary and compulsory - and female voluntary - national military and nonmilitary service; service obligation 6-12 months; mandatory retirement at age 60 (2008)
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Manpower available for military service | | males age 16-49: 1,169,910 females age 16-49: 1,121,187 (2008 est.)
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Manpower fit for military service | | males age 16-49: 962,479 females age 16-49: 920,297 (2009 est.)
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Manpower reaching militarily significant age annually | | male: 33,784 female: 32,621 (2009 est.)
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Military expenditures(% of GDP) | | 2% of GDP (2005 est.)
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Disputes - international | | various groups in Finland advocate restoration of Karelia and other areas ceded to the Soviet Union, but the Finnish Government asserts no territorial demands
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Electricity - production(kWh) | | 77.24 billion kWh (2007 est.)
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Electricity - production by source(%) | | fossil fuel: 39% hydro: 18.7% nuclear: 30.4% other: 11.8% (2001)
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Electricity - consumption(kWh) | | 86.9 billion kWh (2008)
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Electricity - exports(kWh) | | 3.335 billion kWh (2008 est.)
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Electricity - imports(kWh) | | 16.11 billion kWh (2008 est.)
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Oil - production(bbl/day) | | 9,789 bbl/day (2008 est.)
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Oil - consumption(bbl/day) | | 215,600 bbl/day (2008 est.)
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Oil - exports(bbl/day) | | 133,000 bbl/day (2008 est.)
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Oil - imports(bbl/day) | | 347,400 bbl/day (2008 est.)
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Economic aid - donor | | ODA, $1.023 billion (2007)
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Oil - proved reserves(bbl) | | 0 bbl
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Natural gas - production(cu m) | | 0 cu m (2008 est.)
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Natural gas - consumption(cu m) | | 4.735 billion cu m (2008 est.)
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Natural gas - exports(cu m) | | 0 cu m (2008)
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Natural gas - proved reserves(cu m) | | 0 cu m (1 January 2009 est.)
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HIV/AIDS - adult prevalence rate(%) | | less than 0.1% (2007 est.)
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HIV/AIDS - people living with HIV/AIDS | | 2,400 (2007 est.)
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HIV/AIDS - deaths | | fewer than 100 (2003 est.)
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Literacy(%) | | definition: age 15 and over can read and write total population: 100% male: 100% female: 100% (2000 est.)
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School life expectancy (primary to tertiary education)(years) | | total: 17 years male: 17 years female: 18 years (2006)
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Education expenditures(% of GDP) | | 6.4% of GDP (2005)
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