For the most current version of this Note, see Background Notes A-Z.


Republic of Finland

Area: 337,113 sq. km. (130,160 sq. mi.); about the size of New England, New Jersey, and New York combined.
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: 0.3%.
Ethnic groups: Finns, Swedes, Lapps, Roma, Tatars.
Religions: Lutheran 89%, Orthodox 1%.
Languages: Finnish 93%, Swedish 6% (both official); small Lapp- and Russian-speaking minorities.
Education: Years compulsory--9. Attendance--almost 100%. Literacy--almost 100%.
Health: Infant mortality rate--3.8/1,000. Life expectancy--males 74 yrs., females 81 yrs.
Work force (2.6 million; of which 2.3 million are employed): Public services--32%; industry--21%; commerce--15%; finance, insurance, and business services--13%; agriculture and forestry--6%. transport and communications--7%; construction--6.%.

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, Green Party.
Suffrage: Universal at 18.

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Flag: flag of finland

Economy (2001)
GDP: $120.4 billion.
GDP growth rate: 0.7%.
Per capita income: $23,207.
Inflation rate: 2.6%.
Natural resources: Forests, minerals (copper, zinc, iron), farmland.
Agriculture (1.4% of GDP): Products--meat (pork and beef), grain (wheat, rye, barley, oats), dairy products, potatoes, rapeseed.
Industry (28.3% of GDP): Types--metal (including electronics and electrical equipment) and engineering, forest products, chemicals, shipbuilding, foodstuffs, textiles.
Trade: Exports--$42.7 billion. Major markets--EU 54%, U.S. 9.7%, Russia 5.9%, Japan 1.7%. Imports--$31.9 billion. Major suppliers--EU 55.7%, U.S. 6.9%, Russia 9.6%, Japan 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 family.

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 America.

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 Relations).

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 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.

Finns enjoy individual and political freedoms, and suffrage is universal at 18. The country's population is ethnically homogeneous with no sizable immigrant population. 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;
  • Is commander in chief of the armed forces and has wide decree and appointive powers;
  • 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 ex-officio member, the Chancellor of Justice. Ministers are not obliged to be members of the Eduskunta and need not be formally identified with any political party.

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 Eduskunta members.

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 Supreme Court.

Administrative divisions. Finland has six provinces and the self-ruled province of the Aland Islands. Below the provincial level, they are 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 six 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 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 500,000 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 Social Democratic Party (SDP) gained a plurality in Finland's parliament in the general election of March 1995. But it won far less than an overall majority and so formed a five-party governing coalition. Virtually the same five-party coalition continued in 1999. The SDP, the Center and the Conservative Party respectively received 22.9, 22.4 and 21.0% of the vote. The Left Alliance, the Greens and the Swedish People's Party joined forces with the SDP and the Conservatives to form the government. The Green party withdrew from the government in spring 2002 in protest to the government decision to approve building a fifth nuclear reactor. The LA was formed in May 1990 and replaced the People's Democratic League, the group that represented the Finnish Communist Party in the Eduskunta.

Finland's two other major parties are the Center Party, traditionally representing rural interests, and the National Coalition--or Conservative--Party, which draws its major support from the business community and urban professionals. The Center Party leads the opposition in Parliament.

Principal Government Officials
President--Tarja Halonen
Prime Minister--Paavo Lipponen
Foreign Minister--Erkki Tuomioja
Ambassador to the United States--Jukka Valtasaari
Ambassador to the United Nations--Marjatta Rasi

Finland's embassy in the United States is located at 3301 Massachusetts Avenue, NW, Washington, DC 20008; tel: 202-298-5800; fax: 202-298-6030.

Finland has a industrial economy based on abundant forest resources, capital investments, and technology. Traditionally, Finland has been a net importer of capital to finance industrial growth. In the 1980s, Finland's economic growth rate was one of the highest of industrialized countries.

Finland has been among the fastest-growing economies in the European Union (EU) for several years, with GDP reaching 5.6% in 2000, fueled by the booming Nokia-led electronics industry. With an export-led recovery from a severe recession triggered by the collapse of the Soviet market in early 1990s, GDP has grown at an annual average rate of 4.8% since 1994. Unemployment has decreased significantly since 1994, however the current 9.1% unemployment rate (2001) remains above the EU average. Finland's membership in the EU (Finland joined on January 1, 1995) has helped spur structural changes in key economic sectors. However, total output grew only marginally in 2001, when GDP growth amounted to 0.7%. The last time output increased as little was in 1993, at the end of the last recession. The growth in 2001 was stalled by a reduction in worldwide consumption demand, with exports, the traditional growth motor, struggling.

Exports of goods contribute 42% of Finland's GDP. Metals and engineering--including electronics--and timber--including pulp and paper--are Finland's main industries. Finnish-designed consumer products such as textiles, porcelain, and glassware are world-famous.

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 sizable timber stands 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 this sector.

An extensive social welfare system includes a variety of pension and assistance programs and a comprehensive health insurance program. Currently, Finland spends 6.2% of GDP on health care. Free education through the university level also is available. According to a recent OECD report, from December 2001, Finnish teenagers were rated as having the best reading literacy among OECD countries. In the mid-1970s, the educational system was reformed with the goal of equalizing educational opportunities. Beginning at age seven, all Finnish children are required to attend a "basic school" of nine grade levels. After this, they may elect to continue along an academic (lukio) or vocational (ammattikoulu) line. But most pursue vocational studies, since the number of openings in higher educational institutions is less than the demand.

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 Russia
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.

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.

Multilateral Relations
Finnish foreign policy emphasizes its participation in multilateral organizations. Finland joined the United Nations in 1955 and as mentioned above, the EU in 1995. As noted, the country also is a member of NATO's Partnership for Peace as well as a member in the Euro-Atlantic Partnership Council.

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 Nagorno-Karabakh conflict.

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 Bank for International Settlements in 1930, the International Monetary Fund in 1948, International Bank for Reconstruction and Development in 1948, GATT in 1950, the International Finance Corporation in1956, the International Development Association in 1960, European Free Trade Association in 1961, the Asian Development Bank in 1966, the Organization for Economic Cooperation and Development in 1969, the Inter-American Development Bank in 1977, the African Development Bank in 1982, the Multilateral Investment Guarantee Agency in 1988, the Council of Europe in 1989, the European bank for Reconstruction and Development in Central and Eastern Europe in 1991, the World Trade Organization in 1995 and INTELSAT in 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 3,000 U.S. citizens are resident there. The U.S. 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 U.S. 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 U.S. has welcomed Finland's increased participation since 1991 in Western economic and political structures.

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 EU's defense arm, the Western European Union.

Economic and trade relations between Finland and the United States are active. U.S.-Finland trade totals $6.3 billion annually. In 2001, the U.S. receives 9.7% of Finland's exports--mainly pulp and paper, ships, and machinery--and provides 6.9% of its imports--principally computers, semiconductors, aircraft, and machinery.

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
Ambassador--Bonnie McElveen-Hunter
Deputy Chief of Mission--Robert Weisberg
Political Officer--Stephen Cristina
Economic Officer--Ingrid Kollist
Commercial Officer--Thomas Kelsey (resident in Stockholm, Sweden)
Consular Officer--Constance Anderson
Administrative Officer--Teresa Leech
Regional Security Officer--Kurt Rice
Agricultural Officer--Lana Bennett (resident in Stockholm, Sweden)
Public Affairs Officer--Stacy White
Labor Attache--David Burger

The U.S. Embassy in Finland is at Itainen Puistotie 14, Helsinki 00140; tel: 358-9-171931; fax: 358-9-174681.

[This is a mobile copy of Finland (06/02)]

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