Finland, Relations with

   Finland was incorporated into the Romanov Empire during the early 19th century. Formerly subjugated to Sweden, the region enjoyed substantial autonomy under tsarist rule and witnessed a national awakening in the 19th century. Benefiting from the chaos of the Bolshevik Revolution, Finland seceded in late 1917 and established a presidential republic two years later. The nation fought two wars with the Union of Soviet Socialist Republics (USSR) during the 1940s, resulting in the loss of 10 percent of its territory and its access to the Arctic Ocean. After World War II, Finland adopted a liberal democratic political system, but coordinated its foreign policy with the Soviet Union, resulting in a form of political hegemony akin to the United States’ relationship with its Western European allies. Officially on neutral terms, Helsinki and Moscow signed the Agreement of Friendship, Cooperation, and Mutual Assistance (also known as the YYA Treaty) in 1948. This new relationship gave birth to the concept of “Finlandization,” whereby Moscow gained an ally against the Anglo-American alliance but generally refrained from meddling in the country’s foreign relations. The resulting arrangement resulted in Helsinki’s refusal of aid from the American-backed Marshall Plan.

   During the Cold War, Helsinki carefully avoided public criticism of the Soviet Union, even during its widely condemned interventions in East Germany, Hungary, and Czechoslovakia. Despite political deference to Moscow, Finland adopted a free-market system and developed strong economic relations with the members of the North Atlantic Treaty Organization (NATO), as well as Warsaw Pact countries. While eschewing full membership in the European Economic Community, the precursor to the European Union (EU), Finland did harmonize its economic system with European standards. This decision allowed the country to accede to the union in 1995, shortly after the dissolution of the Soviet Union removed concerns that EU membership would be a violation of neutrality. In 1992, Finland and Russia signed a new friendship treaty that overhauled the hegemonic relationship in place since 1948, effectively eliminating an oversight of Moscow on Finnish foreign policy. Overreliance on markets in the Eastern Bloc (particularly Russia) resulted in an economic shock to the country’s financial health in the early 1990s; however, Finland quickly rebounded and reassumed its role as an economic bridge linking Western and Eastern Europe. Under the overlapping presidencies of Tarja Halonen (2000–present) and Vladimir Putin (2000–2008), Helsinki has been particularly active in promoting economic integration between the Russian Federation and the European Union, including developing an improved customs infrastructure along the two countries’ common border.

   In 2006, Russia resumed its historic role as Finland’s leading trading partner (Finland ranks eighth among Russia’s partners). Joint projects in the Gulf of Finland and improved transportation infrastructure between Helsinki and St. Petersburg have been key areas of cooperation since the mid-1990s. Tourism is particularly important; nearly 1.5 million Russians visit Finland annually. Finland has invested extensive capital and resources in the Russian region of Kareliya, with which it has historic and ethnic ties. In 2004, Finland was joined by the Baltic States in sharing EU territorial borders with Russia, a development that somewhat lessened the diplomatic pressure Helsinki shouldered within the EU (especially in light of Finland’s steadfast refusal to join NATO).

   Areas of friction between the two countries include Finnish reticence over proposals for visa-free travel for Russians to the EU, a spy case in 1998 related to sensitive EU documents, and environmental concerns about Russia’s expansion of its oil exports via the Gulf of Finland. In 2007, Finland scrambled its fighter jets after Russian violations of its airspace. However, the imbroglio was seen as symptomatic of Russia’s more aggressive military posture around the globe, and not directed at Helsinki in particular.