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, a Supreme Court, and a Supreme Administrative Court.
Administrative divisions. Finland consists of 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 1.3% 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 490,000 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. In March 2007 parliamentary elections, the Center Party (Keskusta), traditionally representing rural interests, kept its position as the largest party, getting 23.1% of the votes. The Conservative Party's support increased by 3.7 percentage points, the most of all parties, and it received 22.3% of all votes, making it the second largest political party in the country. The Social Democratic Party (SDP) suffered a defeat in these elections and fell to third position among the larger parties, receiving 21.4% of the votes. Of the other parties, the True Finns, the Green League, and the Swedish People's Party were able to gain seats in parliament. The Center then formed a four-party governing coalition with the Conservatives, the Swedish People's Party, and the Greens. The Conservative Party received the portfolios of foreign minister, finance minister, and defense minister, among others, and became an important participant again after a long absence.
Principal Government Officials
Prime Minister--Matti Vanhanen
Foreign Minister--Alexander Stubb
Ambassador to the United States--Pekka Lintu
Ambassador to the United Nations--Kirsti Lintonen
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 highly industrialized, free-market economy with a per capita output equal to that of other western economies such as France, Germany, Sweden, or the U.K. The largest sector of the economy is services (65.4%), followed by manufacturing and refining (31.6%). Primary production is at 3.0%.
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. Following a period of sustained and robust growth, the Finnish economy has suddenly slowed. As the downturn has worsened in the wake of the international financial crisis, the outlook for 2009 is exceptionally uncertain. GDP growth is estimated to slow from 1% in 2008 to -6.0% in 2009. Unemployment will begin to rise, from an estimated 6.4% in 2008 to 9.0% in 2009. A relatively inflexible labor market and high employer-paid social security taxes hamper growth in employment. Labor bottlenecks are becoming more common in certain sectors, and this will increasingly restrict growth in output in the future. The main constraint to medium-term economic growth will be the drop in the population of working age once the post-war baby boomers reach retirement age.
Exports of goods and services contribute over 40% 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 third most important trading partner outside of Europe. With a 3% share of imports in 2008, the United States was Finland's ninth-largest supplier. The total value of U.S. exports to Finland in 2008 was $2.6 billion. Major exports from the United States to Finland continue to be machinery, telecommunications equipment and parts, metalliferous ores, road vehicles and transport equipment, computers, peripherals and software, electronic components, chemicals, medical equipment, and some agricultural products. The primary competition for American companies comes from Russia, Germany, Sweden, and China. The main export items from Finland to the United States are electronics, machinery, ships and boats, paper and paperboard, refined petroleum products, telecommunications equipment and parts. In 2008, the United States was Finland's fourth-largest customer after Russia (11.6%), Sweden (10.0%), and Germany (10.0%), with an export share of 6.3%, or $6 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 2.0% 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 this sector.
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, although the subsequent dissolution of the Soviet Union led to the agreement's abrogation.
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 Partnership Council. As a NATO partner, Finland has 110 troops in Afghanistan serving with a Swedish-led Provincial Reconstruction Team in the province of Mazar-e-Sharif, working to create a secure environment for reconstruction in northern Afghanistan. It has temporarily doubled its forces to support the presidential elections in Afghanistan.
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. Finland chaired the OSCE in 2008 and is part of the Chairmanship Troika in 2009.
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 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 Western European Union.
Finland 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--Bruce J. Oreck
Deputy Chief of Mission--Michael A. Butler
Public Affairs Counselor--Nicole Conn
Political-Economic Section Chief--Scott Brandon
Labor Attaché (Pol)--Lisa Conesa
Management Counselor--Russell W. Jones
Commercial Officer--Niholas Kuchova (arrival September 2009)
Defense Attaché--David Royal
Consular Officer--Eric Meyer
Regional Security Officer--Bruce Warren
Agricultural Officer--Stephen Huete (resident in The Hague)
The U.S. Embassy in Finland is located at Itainen Puistotie 14, Helsinki 00140; tel: 358-9-616-250; fax: 358-9-174-681.