U.S. Department of State 
Background Notes: Finland, April 1996 
Bureau of Public Affairs 
 
 
April 1996 
Official Name: Republic of Finland 
 
PROFILE 
 
Geography 
 
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. 525,000). Other cities--Tampere 
(182,700), Turku (164,700). 
Terrain: Low but hilly, more than 70% forested, with more than 60,000 
lakes. 
Climate: Northern temperate. 
 
People 
 
Nationality: Noun--Finn(s). Adjective--Finnish. 
Population: 5.7 million. 
Population growth rate: 0.3%. 
Ethnic groups: Finns, Swedes, Lapps, Gypsies, Tartars. 
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 72 
yrs., females 80 yrs. 
Work force (2.5 million; of which 2 million employed): Public 
services--32%. Industry--22%. Commerce--14%. Finance, insurance, 
and business services--10%. Agriculture and forestry--8%. Transport 
and communications--8%. Construction--6%. 
 
Government 
 
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: 12 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. 
 
Economy (1995) 
 
GDP: $124 billion. 
GDP growth rate: 4.4%. 
Per capita income: $18,500. 
Inflation rate: 1.1%. 
Natural resources: Forests, minerals (copper, zinc, iron), farmland. 
Agriculture (3% of GDP): Products--meat (pork and beef), grain 
(wheat, rye, barley, oats), dairy products, potatoes, rapeseed. 
Industry (31% of GDP): Types--metal and steel, forest products, 
chemicals, shipbuilding, foodstuffs, textiles and clothing. 
Trade: Exports--$40 billion. Major markets--EU 58%, U.S. 7%, Russia 
5%, Japan 2.5%. Imports--$29 billion. Major suppliers--EU 60%, U.S. 
7%, Russia 7%, Japan 6%. 
Official exchange rate (December 1995): 4.33 Finnish 
markkas=U.S.$1. 
 
U.S.-FINNISH RELATIONS 
 
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 Western 
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. 
 
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 European Union (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 and were bolstered by the F-18 purchase. U.S.-Finland trade 
totals almost $5 billion annually. The U.S. receives about 7% of 
Finland's exports--mainly pulp and paper, ships, and machinery--and 
provides about 7% 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--Derek Shearer 
Deputy Chief of Mission--Michael Cleverley 
Political Officer--Richard DeVillafranca 
Economic Officer--Michael Delaney 
Commercial Officer--Peter Frederick (resident in Stockholm, Sweden) 
Consular Officer--Charles Glatz 
Administrative Officer--Thomas Ryan 
Regional Security Officer--Jeremy Zeikel 
Agricultural Officer--Thomas Hamby (resident in Stockholm, Sweden) 
Public Affairs Officer (USIS)--Phillippe Duchateau 
Labor Attache--Kevin Johnson 
 
The U.S. embassy in Finland is at Itainen Puistotie 14, Helsinki 00140; 
tel: 358-0-171931; fax: 358-0-174681. 
 
======================================== 
HISTORICAL HIGHLIGHTS 
 
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). 
======================================== 
 
ECONOMY 
 
Finland has a dynamic 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. 
 
In 1991, Finland fell into a deep recession caused by economic 
overheating, depressed foreign markets, and the dismantling of the 
barter system between Finland and the former Soviet Union. The same 
year, Finland devalued the markka to promote export competitiveness. 
This helped stabilize the economy; the recession bottomed out in 1993, 
with continued growth through 1995. Unemployment continues to be a 
problem for Finland, and in early 1996 was around 17%. 
 
Exports of goods contribute more than 20% of Finland's GDP; 
combined exports of goods and services amount to at least 25% of 
GDP. Exports and imports of goods equal about 40% of GDP. Timber 
and metalworking are Finland's main industries, but other industries 
produce manufactured goods ranging from electronics to motor 
vehicles. 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, constituting about one-fifth of the 
national income, includes a variety of pension and assistance programs 
and a comprehensive health insurance program. Although free 
education through the university level also is available, only about one 
child in four receives a higher education in the highly competitive 
system. 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 (ammat-tikoulu) line. But most pursue 
vocational studies, since the number of openings in higher educational 
institutions is less than the demand. 
 
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 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 six-year term, the president: 
 
--  Handles foreign policy, except for certain international agreements 
and decisions of peace or war, which must be submitted to the 
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 four 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 pre-trial detention has 
been reduced to four days. The Finnish court system consists of local 
courts, regional appellate courts, and a Supreme Court. 
 
Administrative Divisions. Finland has 12 provinces. Below the 
provincial level, they are divided into cities, townships, and communes 
administered by municipal and communal councils elected by 
proportional representation once every four years. At the provincial 
level, the 11 mainland provinces are administered by provincial boards 
composed of civil servants, each headed by a presidentially appointed 
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 34,700 persons in uniform 
(27,300 army; 3,000 navy; and 4,400 air force); the country's defense 
budget equals about 2% of GDP. There is universal male conscription 
under which all men serve from eight to 11 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. 
 
The SDP won 28% of the vote in 1995, mainly among the urban 
working class but also with some support among small farmers, white-
collar workers, and professionals. The Leftist Alliance (LA)--the SDP's 
rival on the left-- gained 11% of the vote in 1995 and joined the SDP-
led government. 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 won nearly 20%, and 
the Conservatives 18%, of the vote in 1995. The Conservatives are the 
second-largest party in the SDP-led coalition, which is rounded out by 
the Swedish People's Party and the Green Party. The Center Party leads 
the opposition in parliament. 
 
Principal Government Officials 
 
President--Martti Ahtisaari 
Prime Minister--Paavo Lipponen 
Foreign Minister--Tarja Halonen 
Ambassador to the United States--Jaakko Laajava 
Ambassador to the United Nations--Wilhelm Breitenstein 
 
Finland's embassy in the United States is at 3301 Massachusetts 
Avenue, NW, Washington, DC 20008; tel: 202-298-5800; fax: 202-
298-6030. 
 
FOREIGN RELATIONS 
 
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. 
 
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 the EU in 
1995. As noted, the country also is a member of NATO's Partnership 
for Peace as well as an observer in the North Atlantic Cooperation 
Council and the Western European Union. 
 
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 is a 
member of the International Bank for Reconstruction and 
Development, the International Monetary Fund, the World Trade 
Organization, the International Finance Corporation, the International 
Development Association, the Bank for International Settlements, the 
Asian Development Bank, the Inter-American Development Bank, the 
Council of Europe, the Organization for Economic Cooperation and 
Development, and INTELSAT. 
 
TRAVEL AND BUSINESS INFORMATION 
 
The U.S. Department of State's Consular Information Program provides 
Travel Warnings and Consular Information Sheets. Travel Warnings 
are issued when the State Department recommends that Americans 
avoid travel to a certain country. Consular Information Sheets exist for 
all countries and include information on immigration practices, 
currency regulations, health conditions, areas of instability, crime and 
security, political disturbances, and the addresses of the U.S. posts in 
the subject country. They can be obtained by telephone at (202) 647-
5225 or by fax at (202) 647-3000. To access the Consular Affairs 
Bulletin Board by computer, dial (202) 647-9225, via a modem with 
standard settings. Bureau of Consular Affairs' publications on obtaining 
passports and planning a safe trip abroad are available from the 
Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402, tel. (202) 512-1800. 
 
Emergency information concerning Americans traveling abroad may 
be obtained from the Office of Overseas Citizens Services at (202) 
647-5225. 
 
Travelers can check the latest health information with the U.S. Centers 
for Disease Control and Prevention in Atlanta, Georgia. A hotline at 
(404) 332-4559 gives the most recent health advisories, immunization 
recommendations or requirements, and advice on food and drinking 
water safety for regions and countries. A booklet entitled Health 
Information for International Travel (HHS publication number CDC-
95-8280, price $14.00) is available from the U.S. Government Printing 
Office, Washington, DC 20402, tel. (202) 512-1800. 
 
Information on travel conditions, visa requirements, currency and 
customs regulations, legal holidays, and other items of interest to 
travelers also may be obtained before your departure from a country's 
embassy and/or consulates in the U.S. (for this country, see "Principal 
Government Officials" listing in this publication). 
 
Upon their arrival in a country, U.S. citizens are encouraged to 
register at the U.S. embassy (see "Principal U.S. Embassy Officials" 
listing in this publication). This may help family members contact you 
en route in case of an emergency. 
 
Further Electronic Information: 
 
Consular Affairs Bulletin Board (CABB). Available by modem, the 
CABB provides Consular Information Sheets, Travel Warnings, and 
helpful information for travelers. Access at (202) 647-9225 is free of 
charge to anyone with a personal computer, modem, 
telecommunications software, and a telephone line. 
 
Department of State Foreign Affairs Network. Available on the 
Internet, DOSFAN provides timely, global access to official U.S. 
foreign policy information. Updated daily, DOSFAN includes 
Background Notes; Dispatch, the official weekly magazine of U.S. 
foreign policy; daily press briefings; directories of key officers of 
foreign service posts; etc. DOSFAN is accessible three ways on the 
Internet: 
 
Gopher: dosfan.lib.uic.edu 
URL: gopher://dosfan.lib.uic.edu/ 
WWW: http://www.state.gov 
 
U.S. Foreign Affairs on CD-ROM (USFAC). Published on a quarterly 
basis by the U.S. Department of State, USFAC archives information on 
the Department of State Foreign Affairs Network, and includes an 
array of official foreign policy information from 1990 to the present. 
Priced at $80 ($100 foreign), one-year subscriptions include four discs 
(MSDOS and Macintosh compatible) and are available from the 
Superintendent of Documents, U.S. Government Printing Office, P.O. 
Box 37194, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 
or fax (202) 512-2250. 
 
Federal Bulletin Board (BBS). A broad range of foreign policy 
information also is carried on the BBS, operated by the U.S. 
Government Printing Office (GPO). By modem, dial (202) 512-1387. 
For general BBS information, call (202) 512-1530. 
 
National Trade Data Bank (NTDB). Operated by the U.S. Department 
of Commerce, the NTDB contains a wealth of trade-related 
information, including Country Commercial Guides. It is available on 
the Internet (www.stat-usa.gov) and on CD-ROM. Call the NTDB 
Help-Line at (202) 482-1986 for more information. 
 
======================================== 
Background Notes Series -- Published by the United States Department 
of State -- Bureau of Public Affairs -- Office of Public Communication 
-- Washington, DC -- Series Editor: Marilyn J. Bremner 
 
Finland -- Department of State Publication 8262 -- April 1996 
 
This material is in the public domain and may be reprinted without 
permission; citation of this source is appreciated.  For sale by the 
Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402. 
(###)
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