Republic of Finland
Area: 337,113 sq. km. (130,160 sq. mi.); about
the size of New England, New Jersey, and New
Cities: Capital--Helsinki (pop. 560,500).
Other cities--Espoo (213,000), Tampere
(195,500), Vantaa (178,500), Turku (173,000).
Terrain: Low but hilly, more than 70% forested,
with more than 60,000 lakes.
Climate: Northern temperate.
Nationality: Noun--Finn(s). Adjective--Finnish.
Population: 5.2 million.
Population growth rate: 0.16%.
Ethnic groups: Finns, Swedes, Lapps, Sami, Roma,
Religions: Lutheran 89%, Orthodox 1%.
Languages: Finnish 93%, Swedish 6% (both
official); small Lapp- and Russian-speaking
Education: Years compulsory--9.
Attendance--almost 100%. Literacy--almost
Health: Infant mortality rate--3.8/1,000.
Life expectancy--males 74 yrs., females
Work force (2.6 million; of which 2.3 million
are employed): Public services--32%;
finance, insurance, and business services--13%;
agriculture and forestry--6%;
transport and communications--7%;
Type: Constitutional republic.
Constitution: July 17, 1919.
Independence: December 6, 1917.
Branches: Executive--president (chief of
state), prime minister (head of government),
Council of State (cabinet). Legislative--unicameral
parliament. Judicial--Supreme Court,
regional appellate courts, local courts.
Subdivisions: Six provinces, provincial
self-rule for the Aland Islands.
Political parties: Social Democratic Party,
Center Party, National Coalition (Conservative)
Party, Leftist Alliance, Swedish People's Party,
Suffrage: Universal at 18.
GDP: $171.6 billion (EUR 142.7 billion).
GDP growth rate: 3.0%.
Per capita income: $29,000.
Inflation rate: 0.7%.
Natural resources: Forests, minerals (copper,
zinc, iron), farmland.
Agriculture, forestry, fishing and hunting (3.5%
of GDP): Products--meat (pork and beef),
grain (wheat, rye, barley, oats), dairy
products, potatoes, rapeseed.
Industry (25.7% of GDP): Types--metal
(including electronics and electrical equipment)
and engineering, forest products, chemicals,
shipbuilding, foodstuffs, textiles.
Trade: Exports--$61.04 billion. Major
markets--EU 53%, U.S. 6.4%, Russia 8.9%,
China 4.1%. Imports--$45.17 billion.
Major suppliers--EU 55%, Russia 12.8%, U.S.
4.7%, China 4.3%.
The origins of the Finnish people are still a
matter of conjecture, although many scholars
argue that their original home was in what is
now west-central Siberia. The Finns arrived in
their present territory thousands of years ago,
pushing the indigenous Lapps into the more
remote northern regions. Finnish and
Lappish--the language of Finland's small Lapp
minority--both are Finno-Ugric languages and are
in the Uralic rather than the Indo-European
Finland's nearly 700-year association with
the Kingdom of Sweden began in 1154 with the
introduction of Christianity by Sweden's King
Eric. During the ensuing centuries, Finland
played an important role in the political life
of the Swedish-Finnish realm, and Finnish
soldiers often predominated in Swedish armies.
Finns also formed a significant proportion of
the first "Swedish" settlers in 17th-century
Following Finland's incorporation into Sweden
in the 12th century, Swedish became the dominant
language, although Finnish recovered its
predominance after a 19th-century resurgence of
Finnish nationalism. Publication in 1835 of the
Finnish national epic, The Kalevala--a
collection of traditional myths and
legends--first stirred the nationalism that
later led to Finland's independence from Russia.
In 1809, Finland was conquered by the armies
of Czar Alexander I and thereafter remained an
autonomous grand duchy connected with the
Russian Empire until the end of 1917. On
December 6, 1917, shortly after the Bolshevik
Revolution in Russia, Finland declared its
independence. In 1918, the country experienced a
brief but bitter civil war that colored domestic
politics for many years. During World War II,
Finland fought the Soviet Union twice--in the
Winter War of 1939-40 and again in the
Continuation War of 1941-44. This was followed
by the Lapland War of 1944-45, when Finland
fought against the Germans as they withdrew
their forces from northern Finland.
Treaties signed in 1947 and 1948 with the
Soviet Union included obligations and restraints
on Finland vis-a-vis the U.S.S.R. as well as
territorial concessions by Finland; both have
been abrogated by Finland since the 1991
dissolution of the Soviet Union (see Foreign
GOVERNMENT AND POLITICAL CONDITIONS
Finland has a mixed presidential/parliamentary
system with executive powers divided between the
president, who has primary responsibility for
national security and foreign affairs, and the
prime minister, who has primary responsibility
for all other areas. Constitutional changes made
in the late 1980s strengthened the prime
minister--who must enjoy the confidence of the
parliament (Eduskunta)--at the expense of the
president. Finland's 1995 accession to the
European Union (EU) has blurred the line between
foreign and domestic policy; the respective
roles of the president and prime minister are
evolving, and plans are under consideration to
rewrite the constitution to clarify these and
other issues. For instance, the prime minister
has now been given responsibility for EU
Finns enjoy individual and political
freedoms, and suffrage is universal at 18. The
country's population is relatively ethnically
homogeneous. Immigration to Finland has
significantly increased over the past decade,
although the foreign-born population, estimated
at only 2% of the total population, is still
much lower than in any other EU country. Few
tensions exist between the Finnish-speaking
majority and the Swedish-speaking minority.
President and cabinet.
Elected for a 6-year term, the president:
- Handles foreign policy, except for
certain international agreements and
decisions of peace or war, which must be
submitted to parliament, and EU relations,
which are handled by the prime minister;
- Is commander in chief of the armed
forces and has wide decree and appointive
- May initiate legislation, block
legislation by pocket veto, and call
extraordinary parliamentary sessions; and
- Appoints the prime minister and the rest
of the cabinet (Council of State). The
Council of State is made up of the prime
minister and ministers for the various
departments of the central government as
well as an exofficio member, the Chancellor
of Justice. Ministers are not obliged to be
members of the Eduskunta and need not be
formally identified with any political
Parliament. Constitutionally, the
200-member, unicameral Eduskunta is the supreme
authority in Finland. It may alter the
constitution, bring about the resignation of the
Council of State, and override presidential
vetoes; its acts are not subject to judicial
review. Legislation may be initiated by the
president, the Council of State, or one of the
The Eduskunta is elected on the basis of
proportional representation. All persons 18 or
older, except military personnel on active duty
and a few high judicial officials, are eligible
for election. The regular parliamentary term is
4 years; however, the president may dissolve the
Eduskunta and order new elections at the request
of the prime minister and after consulting the
speaker of parliament.
Judicial system. The judicial system
is divided between courts with regular civil and
criminal jurisdiction and special courts with
responsibility for litigation between the public
and the administrative organs of the state.
Finnish law is codified. Although there is no
writ of habeas corpus or bail, the maximum
period of pretrial detention has been reduced to
4 days. The Finnish court system consists of
local courts, regional appellate courts, and a
Administrative divisions. Finland has
five provinces and the self-ruled province of
the Aland Islands. Below the provincial level,
the country is divided into cities, townships,
and communes administered by municipal and
communal councils elected by proportional
representation once every 4 years. At the
provincial level, the five mainland provinces
are administered by provincial boards composed
of civil servants, each headed by a governor.
The boards are responsible to the Ministry of
the Interior and play a supervisory and
coordinating role within the provinces.
The island province of Aland is located near
the 60th parallel between Sweden and Finland. It
enjoys local autonomy and demilitarized status
by virtue of an international convention of
1921, implemented most recently by the Act on
Aland Self-Government of 1951. The islands are
further distinguished by the fact that they are
entirely Swedish-speaking. Government is vested
in the provincial council, which consists of 30
delegates elected directly by Aland's citizens.
Military. Finland's defense forces
consist of 35,000 persons in uniform (26,000
army; 5,000 navy; and 4,000 air force); the
country's defense budget equals about 1.6% of
GDP. There is universal male conscription under
which all men serve from six to 12 months. As of
1995, women were permitted to serve as
volunteers. A reserve force ensures that Finland
can field 400,000 trained military personnel in
case of need.
Political parties. Finland's
proportional representation system encourages a
multitude of political parties and has resulted
in many coalition governments. Political
activity by communists was legalized in 1944,
and although four major parties have dominated
the postwar political arena, none now has a
majority position. The Center Party (Keskusta),
traditionally representing rural interests,
gained a slight plurality in Finland's
parliament in the general election of March
2003, narrowly defeating the ruling Social
Democratic Party (SDP) by a 24.7% to 24.5%
margin. The Center then formed a three-party
governing coalition with the SDP and the Swedish
People's Party. The Green Party, which had
withdrawn from the government in spring 2002 in
protest to the government decision to approve
building a fifth nuclear reactor, remained in
the opposition, as did the National Coalition
Party (conservatives). The National Coalition
leads the opposition in parliament. The Left
Alliance, a combination of socialists left of
the SDP and a number of former communists,
maintains representation in parliament but is
not a significant factor in most policy
The Center Party's leader, Anneli
Jäätteenmäki, became Finland's first female
prime minister in April 2003. However, she
resigned amid a scandal over the leak of
classified materials 2 months after taking
office. She was replaced as prime minister by
the Center Party's new chairman, Matti Vanhanen.
Principal Government Officials
Prime Minister--Matti Vanhanen
Foreign Minister--Erkki Tuomioja
Ambassador to the United States--Jukka
Ambassador to the United Nations--Marjatta Rasi
in the United States is located at 3301
Massachusetts Avenue, NW, Washington, DC 20008;
tel: 202-298-5800; fax: 202-298-6030.
Finland has an industrial economy based on
abundant forest resources, capital investments,
and high technology. Traditionally, Finland has
been a net importer of capital to finance
industrial growth; in recent years it has become
a net exporter of capital. Finland has one of
the best performing economies in the EU and
The Finnish economy has made enormous strides
since the severe recession of the early 1990s.
Finland successfully joined the euro zone and
has outperformed euro-area partners in terms of
economic growth and public finance. Even under
the difficult circumstances of the last few
years, the Finnish economy has performed
reasonably well--though the pace of activity has
slowed considerably and remains subject to
volatility. Finnish GDP growth slowed sharply
from 5.1% in 2000 to 1.2% in 2001, largely as a
result of a collapse in exports. The economy
picked up slightly in 2002, when GDP growth
amounted to 2.2% and hovered around 2.0% in
2003. In 2004, the government cut taxes and
tempered inflation in order to incite private
consumption to prompt a growth in GDP. This
successfully raised GDP by 3.7%. However, growth
was predicted to slow to 2.2% for 2005.
Unemployment has decreased significantly
since 1994, although the 8.9% unemployment rate
for 2004 remained above the EU average. A
relatively inflexible labor market and high
employer-paid social security taxes hamper
growth in employment. However, the government
expected unemployment to drop to 8.5% for 2005.
Exports of goods and services contribute 33%
of Finland's GDP. Metals and engineering
(including electronics) and timber (including
pulp and paper) are Finland's main industries.
The United States is Finland's most important
trading partner outside of Europe. With a 4.7%
share of imports in 2003, the United States was
Finland's sixth-largest supplier after Germany,
Russia, Sweden, the United Kingdom, and France.
The total value of U.S. exports to Finland in
2003 was $2.1 billion. Major exports from the
United States to Finland continue to be
machinery, telecommunications equipment and
parts, aircraft and aircraft parts, computers,
peripherals and software, electronic components,
chemicals, medical equipment, and some
agricultural products. The primary competition
for American companies comes from European
suppliers, especially German, Swedish, and
British. The main export items from Finland to
the United States are ships and boats, paper and
paperboard, refined petroleum products,
telecommunications equipment and parts, and
automobiles. In 2003, the United States was
Finland's fourth-largest customer after Germany
(11.8%) and Sweden (9.9%) with an export share
of 8.1%, or $4.7 billion. However, trade is only
part of the totality: the 10 biggest Finnish
companies in the United States have a combined
turnover that is three times the value of
Finland's total exports to the United States.
About 2% of the Finnish GDP comes from exports
to the United States.
Except for timber and several minerals,
Finland depends on imported raw materials,
energy, and some components for its manufactured
products. Farms tend to be small, but farmers
own sizable timber stands that are harvested for
supplementary income in winter. The country's
main agricultural products are dairy, meat, and
grains. Finland's EU accession has accelerated
the process of restructuring and downsizing of
Finland's basic foreign policy goal from the end
of the Continuation War with the U.S.S.R. in
1944 until 1991 was to avoid great-power
conflicts and to build mutual confidence with
the Soviet Union. Although the country was
culturally, socially, and politically Western,
Finns realized they must live in peace with the
U.S.S.R. and take no action that might be
interpreted as a security threat. The
dissolution of the Soviet Union in 1991 opened
up dramatic new possibilities for Finland and
has resulted in the Finns actively seeking
greater participation in Western political and
economic structures. Finland joined the European
Union in 1995.
Relations With the Soviet Union and With
The principal architect of the post-1944 foreign
policy of neutrality was J.K. Paasikivi, who was
President from 1946 to 1956. Urho Kekkonen,
President from 1956 until 1981, further
developed this policy, stressing that Finland
should be an active rather than a passive
neutral. This policy is now popularly known as
the "Paasikivi-Kekkonen Line."
Finland and the U.S.S.R. signed a peace
treaty at Paris in February 1947 limiting the
size of Finland's defense forces and providing
for the cession to the Soviet Union of the
Petsamo area on the Arctic coast, the Karelian
Isthmus in southeastern Finland, and other
territory along the former eastern border.
Another provision, terminated in 1956, leased
the Porkkala area near Helsinki to the U.S.S.R.
for use as a naval base and gave free access to
this area across Finnish territory.
The 1947 treaty also called for Finland to
pay to the Soviet Union reparations of 300
million gold dollars (amounting to an estimated
$570 million in 1952, the year the payments
ended). Although an ally of the Soviet Union in
World War II, the United States was not a
signatory to this treaty because it had not been
at war with Finland.
In April 1948, Finland signed an Agreement of
Friendship, Cooperation, and Mutual Assistance
with the Soviet Union. Under this mutual
assistance pact, Finland was obligated--with the
aid of the Soviet Union, if necessary--to resist
armed attacks by Germany or its allies against
Finland or against the U.S.S.R. through Finland.
At the same time, the agreement recognized
Finland's desire to remain outside great-power
conflicts. This agreement was renewed for 20
years in 1955, in 1970, and again in 1983 to the
year 2003, although the subsequent dissolution
of the Soviet Union led to the agreement's
The Finns responded cautiously in 1990-91 to
the decline of Soviet power and the U.S.S.R.'s
subsequent dissolution. They unilaterally
abrogated restrictions imposed by the 1947 and
1948 treaties, joined in voicing Nordic concern
over the coup against Soviet leader Mikhail
Gorbachev, and gave increasing unofficial
encouragement to Baltic independence.
At the same time, by replacing the
Soviet-Finnish mutual assistance pact with
treaties on general cooperation and trade, Finns
put themselves on an equal footing while
retaining a friendly bilateral relationship.
Finland now is boosting cross-border commercial
ties and touting its potential as a commercial
gateway to Russia. It has reassured Russia that
it will not raise claims for Finnish territory
seized by the U.S.S.R. and continues to reaffirm
the importance of good bilateral relations.
Finnish foreign policy emphasizes its
participation in multilateral organizations.
Finland joined the United Nations in 1955 and
the EU in 1995. As noted, the country also is a
member of the North Atlantic Treaty
Organization's (NATO) Partnership for Peace as
well as a member in the Euro-Atlantic
Finland is well represented in the UN civil
service in proportion to its population and
belongs to several of its specialized and
related agencies. Finnish troops have
participated in UN peacekeeping activities since
1956, and the Finns continue to be one of the
largest per capita contributors of peacekeepers
in the world. Finland is an active participant
in the Organization for Security and Cooperation
in Europe (OSCE) and in early 1995 assumed the
co-chairmanship of the OSCE's Minsk Group on the
Cooperation with the other Scandinavian
countries also is important to Finland, and it
has been a member of the Nordic Council since
1955. Under the council's auspices, the Nordic
countries have created a common labor market and
have abolished immigration controls among
themselves. The council also serves to
coordinate social and cultural policies of the
participating countries and has promoted
increased cooperation in many fields.
In addition to the organizations already
mentioned, Finland became a member of the
following organizations: Bank for International
Settlements, 1930; International Monetary Fund,
1948; International Bank for Reconstruction and
Development, 1948; General Agreement on Tariffs
and Trade (GATT), 1950; International Finance
Corporation, 1956; International Development
Association, 1960; European Free Trade
Association, 1961; Asian Development Bank, 1966;
Organization for Economic Cooperation and
Development, 1969; Inter-American Development
Bank, 1977; African Development Bank, 1982;
Multilateral Investment Guarantee Agency, 1988;
the Council of Europe, 1989; European Bank for
Reconstruction and Development in Central and
Eastern Europe, 1991; World Trade Organization,
1995; and INTELSAT, 1999. Finland entered Stage
Three of EMU (the European Monetary Union) in
1999. All the Nordic countries, including
Finland, joined the Schengen area in March 2001.
Relations between the United States and Finland
are warm. Some 200,000 U.S. citizens visit
Finland annually, and about 5,000 U.S. citizens
are resident there. The United States has an
educational exchange program in Finland which is
comparatively large for a west European country
of Finland's size. It is financed in part from a
trust fund established in 1976 from Finland's
final repayment of a U.S. loan made in the
aftermath of World War I.
Finland is bordered on the east by Russia
and, as one of the former Soviet Union's
neighbors, has been of particular interest and
importance to the United States both during the
Cold War and in its aftermath. Before the
U.S.S.R. dissolved in 1991, longstanding U.S.
policy was to support Finnish neutrality while
maintaining and reinforcing Finland's historic,
cultural, and economic ties with the West. The
United States has welcomed Finland's increased
participation since 1991 in Western economic and
Following the dissolution of the Soviet
Union, Finland has moved steadily toward
integration into Western institutions and
abandoned its formal policy of neutrality, which
has been recast as a policy of military
nonalliance coupled with the maintenance of a
credible, independent defense. Finland's 1994
decision to buy 64 F-18 fighter planes from the
United States signaled the abandonment of the
country's policy of balanced arms purchases from
East and West. The final aircraft rolled off the
assembly line in August 2000.
In 1994, Finland joined NATO's Partnership
for Peace; the country also is an observer in
the North Atlantic Cooperation Council. Finland
became a full member of the EU in January 1995,
at the same time acquiring observer status in
the Western European Union.
Finland generally welcomes foreign
investment. Areas of particular interest for
U.S. investors are specialized high-tech
companies and investments that take advantage of
Finland's position as a gateway to Russia and
the Baltic countries.
Principal U.S. Embassy Officials
Deputy Chief of Mission--Amy Hyatt
Public Affairs Counselor--Bill Davnie
Political Section Chief--Greg Thome
Labor Attache (Pol)--David Allen Schlaefer
Economic Section Chief--John Clarkson
Management Officer--Charles F. Werderman
Commercial Officer--Robert Peaslee
Defense Attache--Robert Byrd
Consular Officer--Pirkko Urli
Regional Security Officer--Gerry Oman
Agricultural Officer--Peg Thursland (resident in
U.S. Embassy in Finland is at Itainen
Puistotie 14, Helsinki 00140; tel:
358-9-616-250; fax: 358-9-174-681.