Finland (Finnish Suomi), republic in northern Europe, bounded on the north by Norway, on the east by Russia, on the south by Russia and the Gulf of Finland, on the southwest by the Baltic Sea, and on the west by the Gulf of Bothnia and Sweden. Nearly one-third of the country lies north of the Arctic Circle. The area of Finland, including 33,551 sq km (12,954 sq mi) of inland water, totals 338,145 sq km (130,559 sq mi). Helsinki is the capital and largest city of Finland.

Finland is a country of some 60,000 lakes, the largest of which are Saimaa, Inarijärvi, and Päijänne. Projecting southwest into the Baltic Sea is the Ahvenanmaa archipelago (Åland Islands), which consists of some 6,500 islands. Among the principal rivers are the Torneälven (Tornio), Muonio, Kemijoki, and Oulu. Only the Oulu is navigable by large craft. The country consists mostly of tableland, with average heights of about 120 to 180 m (about 400 to 600 ft) above sea level. The terrain is generally level; hilly areas are more prominent in the north, and mountains are found in the extreme northwest. Haltiatunturi (1,328 m/4,357 ft) in the northwest near the Norwegian border is the highest point. The northernmost part of Finland, which lies above the Arctic Circle, is known as Saamiland.

Some 72 percent of Finland is forested. Except in the extreme south, where aspen, alder, maple, and elm trees are found, the forests are chiefly coniferous, dominated by spruce and pine trees. Finland has nearly 1,200 species of plants and ferns and some 1,000 varieties of lichens. Wildlife includes bear, wolf, lynx, and arctic fox, all found mainly in the less populated northern regions. Reindeer, domesticated by the Saami, are becoming extinct in the wild. Wild goose, swan, ptarmigan, snow bunting, and golden plover nest throughout northern Finland. Freshwater fish include perch, salmon, trout, and pike. The leading saltwater fish are cod, herring, and haddock. Seals are found along the coast.

Gray mountain soils predominate in inland regions. The northern third of Finland is covered by peat bogs. The most fertile soils are on the southern coastal plains, which are composed of marine clay.

Because of the moderating influence of the surrounding water bodies, the climate of Finland is considerably less severe than might be expected. The average July temperature along the southern coast is 16�C (60�F); in February the average is about -9�C (about 16�F). Precipitation (including snow and rain) averages about 460 mm (about 18 in) in the north and 710 mm (28 in) in the south. Light snow covers the ground for four or five months a year in the south and about seven months in the north.

Productive forestland is the most valuable natural resource of Finland. Spruce, pine, and silver birch are the principal trees. The only natural fuels in the country are wood and peat. Finland also has some rich deposits of metallic ores from which copper, zinc, iron, and nickel are extracted. Lead, vanadium, silver, and gold are also mined commercially. Granite and limestone are the most abundant nonmetallic minerals.

In 1998, 20 percent of Finland�s annual electric-power production was supplied by hydroelectric plants. Some 75.8 billion kilowatt-hours of electricity was produced annually.

Acid rain, which damages buildings, soils, forests, and fish and other wildlife, is one of the major environmental issues facing Finland. The country�s emissions have fallen steadily in the late 20th century since the implementation of the United Nations (UN) Economic Commission for Europe (ECE) Sulphur Protocols, but Finland continues to receive sulfur dioxide and other acid-rain-causing pollutants from beyond its borders.

Air quality in Finland is generally better than in many other European countries, although substantial problems do exist as a result of emissions from motor vehicles and industrial sources. The vast majority of the population�and, consequently, the sources of air pollution�is concentrated in urban areas in the southwest part of the country.

Finland protects 6 percent (1997) of its total land area in parks and other reserves�less than most other western European countries. Forest covers 65.8 percent (1995) of the country, however, making Finland the most densely forested European country. The government has long played a role in regulating the timber industry to maintain the country�s valuable forest resources, and Finland sustains a remarkably low rate of deforestation�just 0.10 percent (1990-1996) each year.

With more than 60,000 lakes, Finland has a large proportion of wetlands, which provide critical habitat for many bird and animal species. During the 20th century these wetlands diminished considerably, in part as a result of peat mining and of draining for agriculture. Most of Finland�s lakes are shallow, making them particularly susceptible to damage from acid rain.

Finland is party to international treaties concerning air pollution, biodiversity, climate change, desertification, endangered species, hazardous wastes, marine dumping, marine life conservation, ship pollution, wetlands, and whaling.

Finns constitute more than 93 percent of the population and persons of Swedish descent about 6 percent. The far north is inhabited by about 2,500 Saami; other minority groups make up less than 1 percent. Although the size of the Swedish minority is declining, Swedes in Finland have their own political party, some of their own schools, and other separate institutions.

Some 65 percent of the population is urban. Finnish and Swedish are the official languages. More than 93 percent of the population speaks Finnish, a Finno-Ugric language (see Finnish Language). About 6 percent of the people, concentrated largely in the Ahvenanmaa archipelago, speak Swedish. The Saami speak Saami, a dialect of Finnish. The Evangelical Lutheran Church of Finland is the principal national church, and its members make up 89 percent of the population; freedom of worship is, however, guaranteed to all faiths. The Orthodox Church, still a national church, has sharply decreased in numbers since World War II (1939-1945).

The population of Finland is 5,175,783 (2001 estimate). A density of 15 persons per sq km (40 per sq mi) makes Finland one of the most sparsely inhabited countries in Europe. More than two-thirds of the population reside in the southern third of the country.

Finland is divided into 6 provinces, each administered by a governor appointed by the president. The provinces are Ahvenanmaa, Itä-Suomi, Länsi-Suomi, Etalä-Suomi, Oulu, and Lappi. Ahvenanmaa has considerable autonomy.

Helsinki has a population of 551,123 (2000 estimate). It is the intellectual, manufacturing, and trade center of Finland. The next three largest cities, Espoo (209,667), Tampere (193,174), and Åbo (Turku) (172,107), are also industrial centers of the country.

Schooling is free and compulsory in Finland between the ages of 7 and 16. Virtually no illiteracy exists. In addition to regular primary and secondary schools, Finland has an extensive adult education program consisting of folk high schools, folk academies, and workers� institutes. The adult education schools are operated privately or by municipalities or provinces and receive state subsidies.

Compulsory education consists of six years of primary schooling and three years of secondary schooling. In the 1995 school year 384,400 children attended 3,851 primary schools, and 469,900 students went to secondary schools. Finland maintains a system of secondary vocational education with schools of commerce, arts and crafts, domestic science, trade, agriculture, and technology.

The Finnish institutes of higher learning, which include 13 universities and several colleges and teacher-training schools, had a total annual enrollment of about 205,000 students in the 1994-95 academic year. The largest of the universities is the University of Helsinki. Originally established at Åbo in 1640, the university was moved to Helsinki in 1828. Among the other major institutions of higher learning are the University of Turku (1920), the Helsinki School of Economics and Business Administration (1911), the University of Tampere (1966), and the University of Oulu (1958).

After the conquest of the Finnish tribes by Sweden beginning in the 12th century (see History, below), the indigenous culture was to a great extent dominated by Swedish influences, which endure to the present. Among the peasants, traditional epic poems continued to be sung to the accompaniment of the zither-like kantele, and wood carvings and rugs were still decorated with the traditional polychromy and spiral, swastika (an ancient symbol), and similar simple, geometric designs. Among the educated, however, Swedish culture predominated. Swedish was spoken and, with rare exceptions, was the language of literature. Because the styles of Swedish art and architecture were largely derivative, many Finnish buildings and works of art reflected Italian, Flemish, German, and other European influences. In the 19th century, however, educated Finns began to revive the folk traditions of their country. At the same time, a national literature in the Finnish language emerged, and Finnish styles appeared increasingly in art and architecture. The sauna, a steam bath produced by pouring water over heated rocks, is a Finnish invention.

The Finns are a book-loving people, and libraries and museums are an integral part of their culture. The Helsinki City Library (1860) has nearly 2.1 million volumes. The Helsinki University Library, with about 2.6 million volumes, serves as a national library. Altogether Finland has more than 1,500 libraries throughout the country. Since World War II, the number of museums has grown to more than 300. The National Museum of Finland (1893), at Helsinki, contains Finnish, Finno-Ugrian, and comparative ethnographical collections, as well as an archaeological department. Other museums include the Mannerheim, the Municipal, and the Athenaeum at Helsinki and the Art Museum at Åbo.

See Finnish Literature.

Finland possesses a wealth of folk music and a large body of church music, the former amassed since ancient times and the latter developed since the acceptance of Christianity by the Finns in the 12th century. During the Reformation, Gregorian chant and other existing vocal church music, previously composed to Latin texts, was adapted to the Finnish language.

The cultivation of secular music began in the 17th century. An amateur orchestra was formed in the former Finnish capital, Turku, and in 1640 music was made part of the curriculum of the university at Åbo.

The development of Finnish art music began about the middle of the 19th century, mainly as a result of the works and teaching of two German-born musicians, composer Fredrik Pacius and conductor and collector of Finnish folk songs Richard Friedrich Faltin. Martin Wegelius, the first important native-born composer, also significantly influenced the development of Finnish art music as director of the Helsinki Conservatory. His contemporary, the Finnish composer Robert Kajanus, introduced Finnish music to Western European audiences as conductor of the Helsinki Municipal Orchestra.

Until the late 19th century the dominant influence on Finnish composers was that of German music. Pacius, Faltin, Wegelius, and Kajanus all cultivated Finnish folk music in their work, but it was Jean Sibelius, the student of Kajanus, who created a truly national musical style and won international recognition for Finnish music.

In December 1993 the new, 1,385-seat Finnish National Opera House opened in Helsinki; it is the home of the Finnish National Opera and the Finnish National Ballet. Finland has produced many operas of distinction in recent years by composers such as Aulis Sallinen, Einojuhani Rautavaara, Erik Bergman, and Joonas Kookonen. After Finland became independent in 1917, modern Finnish composers grew increasingly interested in a variety of modern trends. See also Folk Music.

World War II left Finland with towering economic problems, including high inflation, unemployment, and an unfavorable balance of trade. Since then the industrial sector has expanded�by the late 1960s more persons were employed in manufacturing than in both agriculture and forestry�and the trade balance has improved. Except for public utilities, industry and business are privately owned. The government, however, exercises considerable control over the economy by means of numerous regulations. The national budget in 1998 anticipated $41.3 billion in revenues and $43.1 billion in expenses. Finland�s gross domestic product (GDP) in 1999 was $129.7 billion.

Farming in Finland is limited chiefly to the fertile coastal regions, and only 7 percent of the total land area of Finland is under cultivation. The large majority of the farms are less than 20 hectares (49 acres) in size. Not more than 20 percent of the farmers employ paid labor regularly. In 2000 principal crops were cereals such as barley, oats, and wheat (yielding 4 million metric tons); and root crops such as potatoes and sugar beets (816,000 metric tons). Livestock included 5.5 million poultry, 1.1 million cattle, 1.5 million pigs, and 128,300 sheep. Finland has an estimated 414,000 domesticated reindeer.

About 60 percent of the forest in Finland is privately owned. The central government controls about one-fourth, and corporations and municipalities own most of the remainder. Some 53.9 million cubic meters (1.90 billion cubic feet) of roundwood were cut in 1999. The fish catch totaled 196,513 metric tons in 1997; more than one-third of the catch usually comes from inland waters. Concerns about environmental issues have resulted from controversial plans to accelerate the country�s timber harvest rate, and pollution problems in Baltic coastal waters.

Finland is a significant source of copper, producing 10,000 metric tons in 1999. Zinc production was 30,000 metric tons. Silver mines yielded 30 metric tons. Chromite, lead, nickel, and gold are also mined.

The pulp, paper, and woodworking industries account for a significant share of the Finnish manufacturing output. In the early 1990s about 1.3 million metric tons of newsprint were produced annually. Production of other wood and paper products totaled about 7.9 million cubic meters (about 282 million cubic feet) a year. Other manufactures include heavy machinery, basic metals, ships, engineering products, printing and publishing, food products and beverages, textiles and clothing, chemicals, glass, and ceramics.

The monetary unit of Finland is the single currency of the European Union (EU), the euro (1.07 euros equal U.S. $1; 1999 average). The euro was introduced on January 1, 1999, for electronic transfers and accounting purposes only, and Finland�s national currency, the markka, was used for other purposes. On January 1, 2002, euro-denominated coins and bills went into circulation, and the markka ceased to be legal tender.

As a participant in the single currency, Finland must follow economic policies established by the European Central Bank (ECB). The ECB is located in Frankfurt, Germany, and is responsible for all EU monetary policies, which include setting interest rates and regulating the money supply. On January 1, 1999, control over Finnish monetary policy was transferred from the Bank of Finland to the ECB. After the transfer, the Bank of Finland joined the national banks of the other EU countries that adopted the euro as part of the European System of Central Banks (ESCB).

The paper, pulp, newsprint, and wood industries account for nearly 40 percent of yearly Finnish exports. Imports include petroleum, chemicals, machinery and transport equipment, iron and steel products, food, and textiles. Considerable commerce is conducted with Germany, the United Kingdom, Sweden, and other countries of the European Union (formerly the European Community). Other leading trade partners are Japan, Norway, Russia, and the United States. In 1999 the country�s imports were $30.7 billion and exports $40.7 billion. Finland became an associate member of the European Free Trade Association in 1961, and a full member in 1986. In January 1995 Finland joined the European Union (EU).

A system of canals, connecting Finland�s lakes with one another and with the Gulf of Finland, provides cheap and efficient transport for the forest industry; about 6,600 km (about 4,100 mi) of inland waterways are navigable. Railroad lines have a combined length of 5,865 km (3,644 mi), owned and operated by the state. Finland has about 77,900 km (48,405 mi) of roads, 65 percent of them paved. Finnair provides domestic and international flights; Karair and Finnaviation serve a number of Finnish cities.

The government controls domestic telegraph services and operates the Finnish Broadcasting Company, which broadcasts most of the radio and television programs of Finland. A privately owned television station offers about 20 hours a week of commercial programs. Approximately one-third of the telephone service is state-owned. In 1999 there were 552 telephone mainlines for every 1,000 people in Finland. The country had 1,498 radio receivers and 622 television sets per 1,000 residents in 1997. Daily newspapers number 56, and numerous periodicals are published.

The Finnish labor force numbered 2.6 million people in 1999. Employees are represented by labor unions, which are grouped in two large federations: the Central Organization of Finnish Trade Unions and the Confederation of Salaried Employees.

Finland is a republic, with a democratic and parliamentary form of government. The country is governed under a constitution that was adopted on July 17, 1919.

Finland is headed by a president, who is elected to a six-year term by direct popular vote. The Council of State (cabinet) is appointed by the president, subject to the approval of parliament, and is headed by the prime minister. The minimum voting age is 18.

The Finnish parliament is a unicameral body known as the Eduskunta. Its 200 members are popularly elected on a proportional basis for a term of up to four years.

Among the most active political parties are the Finnish Social Democratic Party (SDP, 1899), advocating state ownership of certain essential industries; the Center Party (KESK, 1906), which derives its support from the small farmers and advocates free enterprise; the Left-Wing Alliance (VL, 1990), formed by the 1990 merger of the Finnish People�s Democratic League (1944) and the Communist Party of Finland (1918); the National Coalition Party (KOK, 1918), an advocate of private enterprise; and the Swedish People�s Party (SFP, 1906), representing the Swedish-speaking minority in Finland. The current ruling coalition, first elected in 1995 and reelected in 1999, consists of the SDP, the Left-Wing Alliance, the Conservative Party, the Green League, and the SFP.

Executive power in the Finnish provinces is exercised by a prefect or governor, who is appointed by the country�s president. In Ahvenanmaa, which has been granted considerable autonomy, a provincial council is elected by the residents; the provincial council in turn chooses an executive council that shares governing power with the governor.

The local court system of Finland is divided into municipal courts in towns and district courts in rural areas. Appellate courts are located in Åbo, Vaasa, Kuopio, Kuovila, Rovaniemi, and Helsinki. The supreme court, which sits at Helsinki, is the final court of appeal for all civil and criminal cases.

The Finnish social-welfare system provides unemployment, sickness, disability, and old-age insurance; family and child allowances; and war-invalid compensation. Medical coverage has often been dispensed through a person�s place of employment, but the National Health Act of 1972 provided for the establishment of health centers in all municipalities, and also provided for the elimination of doctor�s fees.

Military service for up to 11 months is compulsory for all males 17 years of age or over. Finland has an army, a navy, and an air force, but the armed forces are restricted by the Paris peace treaty of 1947 to maximum personnel of 41,900; in 1999 about 31,700 people were in the armed services. Reserves total about 500,000. In 1994 Finland joined the Partnership for Peace program as a first step toward full membership in the North Atlantic Treaty Organization (NATO).

The earliest traces of human habitation in Finland date from about 8000 bc, when the most recent of the Ice Ages was retreating. These primitive hunters and gatherers probably arrived from the east. Pottery making characterized another type of Stone Age culture (starting 3000? bc) known as the Comb-Ceramic; its practitioners were of a different origin. The succeeding Battle-Ax culture (1800-1600 bc) may have been brought to Finland by an Indo-European people from a more southerly Baltic region; these people were able navigators and also introduced agriculture. A merger of the Battle-Ax people and the previous dwellers resulted in the so-called Kiukainen culture (1600-1200 bc).

The Bronze Age began in Finland about 1300 bc. During the first part of the pre-Christian era and the following centuries, people speaking one of the Finno-Ugric languages migrated in from the east and from Estonia in the south. This period marks the introduction of the Iron Age in Finland.

During the age of the Vikings the Finns became exposed to both eastern and western influences. Vikings from Sweden used the Åland Islands (colonized by Swedes in the 6th century ad) as a base for their journeys of pillage and trade into Russia as far south as the Black Sea. Although they did not actually participate in these Viking expeditions, the Finns benefited by the growing contact and the establishment of trading colonies in their country by merchants from Sweden and Gotland. At the end of the 11th century three Finnish tribes had spread as far north as the 62nd parallel: the Finns proper in the southwest, the Tavastians in the interior lake district, and the Karelians to the east. Saami were also living in the wilderness to the north. No unified government or state existed.

The conversion of the Finnish tribes to Christianity was initiated both from the Orthodox East and Roman Catholic Sweden. It proceeded for more than two centuries, from 1050 to about 1300. The Saami became Christians at an even later date.

According to tradition, Nicholas Breakspear, an English cardinal who became Pope Adrian IV, encouraged the Swedish king Eric to cross the Baltic with a strong force in 1155. His goal was not only to convert the heathen but also to gain economic and political ends. King Eric defeated the Finnish tribes but was not able to make his conquest permanent. An English clergyman, Henry, who had been bishop of Uppsala in Sweden, remained in Finland. He was slain within the year and subsequently became the patron saint of the city of Åbo and of all the Finns.

A papal bull of 1172 (or 1171) proposed that the Swedes hold Finland in subjection by building fortresses with permanent garrisons; in time, the Swedes subdued the Finns and the Tavastians, achieved control of Finland�s foreign trade, and established the Christian religion. The church was placed on a firm foundation when an episcopal see was established at Åbo in 1209 (a monastery of the Dominicans was founded there in 1249). In 1216 the pope confirmed Swedish title to those parts of Finland that were already conquered and also to mission territories in the east and north. A solid basis for Swedish rule was laid by the Earl Birger, who dispatched a �crusade� in 1249 and built a fortress in Tavastia in central Finland as a protection against Russian incursions. When the ruler of Novgorod in Russia invaded Tavastia again in 1292, the Swedes sent a force into Karelia as far as the Neva River. A treaty of 1323 divided Karelia between Sweden and Novgorod.

In 1362 the Finnish people were given the same rights within the monarchy as the people of Sweden. When Queen Margaret I established the Kalmar Union in 1397, Finland was drawn into the dynastic politics of the Scandinavian countries. All during the 15th and 16th centuries most of Finland was administered as fiefs by Swedish noblemen, who levied heavy taxes on the people. Numerous Swedes�farmers, fishers, and merchants�settled in Finland at this time.

King Gustav I Vasa attempted to institute economic and administrative reforms. At the Diet of Västerås in 1527 the Swedes essentially broke with Rome, although they did not formally accept the doctrines of Martin Luther until several years later. During this time much land and property in Finland was taken over by the Crown. During a war (1555-1557) against Ivan of Russia, Finland was made a Swedish duchy and given as a fief to the future John III. In the 25 years between 1570 and 1595 Finland was involved in constant warfare between Sweden and Russia.

Under Charles IX the entire administration of Finland was concentrated in Stockholm, and a basis was laid for further material progress. Under Charles�s successor, Gustav II Adolph, protracted wars were fought against Denmark, Poland, and Russia. War with Russia ended with the Peace of Stolbova (1617), which pushed Finnish boundaries farther east into Ingria.

Great numbers of Finnish soldiers fought for the Swedes in the Thirty Years� War (1618-1648), which also resulted in heavy taxation on the populace. Another war with Russia (1656-1661) exacted great suffering but ended with a territorial status quo. The �reduction� (reversion to the Crown of lands that had been given to nobles as compensation for services rendered) of Charles XI benefited Finnish farmers to some extent, but crop failures in 1695 through 1697 caused the death of one-fourth of the population. This was followed by the tragic years of the Great Northern War (1700-1721), during which the Russians occupied Finland; at the Peace of Nystadt (1721) it lost large areas in the east. During another war with Russia (1741-1743) more territory was ceded; yet one more conflict in 1788 to 1790 left the situation unchanged. The idea of Finnish independence from Sweden, however, began to take hold.

A year after his agreement with Napoleon at Tilsit (see Tilsit, Treaty of) in 1807, Tsar Alexander I attacked and occupied Finland. In March 1809 he proclaimed it a grand duchy of the Russian Empire but granted his new subjects all their old rights and privileges. In the Peace of Hamina (Swedish Fredrikshamn) in September, Sweden formally ceded all Finland and the Åland Islands to Russia; at the same time, however, the Karelian areas ceded to Russia before 1809 were returned to Finland.

The country was henceforth ruled by a Russian governor-general, with a so-called senate, which sat in the new capital of Helsinki, acting as a cabinet. In spite of despotic rule by some governors-general, much material and cultural progress was made during the middle decades of the century. After 1820 a nationalist awakening took place among the population, centered mainly on a resurgence of the Finnish language. In 1863 the Lantdag (parliament), which had not met since 1809, was reconstituted, and in the same year the Finnish language was granted equal status with Swedish.

Toward the end of the century a shift in Russian policy was manifest. In 1894 the use of the Russian language was introduced in some government business, and five years later all legislation was placed in Russian hands. During the following years the citizens of Finland lost many of their constitutional rights. The Russo-Japanese War of 1904-1905 slowed the process of Russification somewhat. In 1906 a new parliamentary system was adopted, a one-chamber Eduskunta (parliament) created, and the right to vote given to all men and women over the age of 25. Another wave of Russification swept Finland in 1908, culminating in the Equal Rights Law of 1912, which gave Russians the same rights in Finland as the country�s own population.

Finland was not directly involved in World War I (1914-1918), although Russian troops were garrisoned in the country. During the turmoil of the Russian Revolution in 1917, a newly elected Finnish parliament took advantage of the situation and on November 15 assumed �all powers formerly held by the Tsar-Grand Duke.� Three weeks later, on December 6, it voted in favor of an independent republic. The nascent Soviet government had no choice but to recognize Finnish sovereignty.

Many problems faced the new republic, among them famine, widespread unemployment, and a stagnant economy. Moreover, the population was now sharply polarized between the radical socialists and the nonsocialists, and two armies, the Red Guards and the White Guards, were being formed in the country.

The mounting friction soon erupted in violence. On January 28, 1918, the Red Guards, reacting to a government order to expel all Russian troops, spread a �Red revolution� across Finland, plundering and killing civilians. The government fled to Vaasa, and resistance to the Reds was organized by General Carl G. Mannerheim. He headed the White Guards, who, assisted by German troops, captured Helsinki and, in turn, instituted a wave of terror against the Red revolutionaries. After the country had been pacified, the parliament in July 1919 adopted a new republican constitution. Kaarlo J. Ståhlberg, a liberal, was elected first president of Finland.

The 1920s and 1930s were characterized by the rule of various coalition cabinets made up of nonsocialist parties. The Communist Party was declared illegal, but Social Democrats made some progress. A nonaggression treaty was concluded with the Soviet Union in 1932, and after 1935 the Scandinavian orientation of Finnish foreign policy was confirmed.

At the outbreak of World War II in 1939, Finland declared its neutrality. The USSR, however, anxious to secure the approaches to Leningrad, demanded that Finland cede certain territory in return for parts of Soviet-controlled Karelia. When the Finns refused, Soviet armies invaded Finland on November 30, 1939, initiating the Winter War. The Finns, under Mannerheim, fought back and won some astounding victories, but superior Soviet power was decisive, and the Finns were forced to sue for peace. See Russo-Finnish War.

When Germany attacked the USSR in June 1941, the Finns again proclaimed their neutrality, although 75,000 German troops were operating from northern Finland. German use of Finnish territory led the Russians to bomb Finnish cities. Finland then declared war against the USSR, emphasizing that the Finns were not allies of Germany but merely co-belligerents. Nevertheless, Britain declared war on Finland in December 1941, and the United States broke relations. After a prolonged standstill, Marshal Mannerheim was installed as president in August 1944, with a mandate to secure peace. An armistice was signed on September 19, 1944. Finland ceded the Petsamo area in the north and had to lease its Porkkala Peninsula in the Gulf of Finland to the USSR. Reparations were set at $300 million.

The final peace treaty with the USSR was signed in 1947. Reparations, in the form of commodities, were fully paid by 1952, and three years later the Porkkala Peninsula was returned to Finland. The new relationship with the USSR necessitated the legalization of the Communist Party and a Treaty of Friendship, Cooperation, and Mutual Assistance (1948; voided in January 1992).

The main thrust of Finnish foreign policy until the collapse of Soviet hegemony in Eastern Europe in the early 1990s was strict international neutrality and friendly relations with the USSR, yet without any reduction in Finland�s independent status. This policy, the so-called Paasikivi-Kekkonen Line, was named for the postwar president Juho K. Paasikivi, who initiated it, and his successor, Urho Kekkonen, who broadened it.

Perhaps more than any other person, Urho Kekkonen put his stamp on Finnish postwar politics. As prime minister from 1950 to 1956 (with two brief intervals) and president from 1956 to 1981, he assuaged Soviet fears of an unfriendly Finland and displayed a finely tuned sensitivity to Soviet wishes that Finns not engage in activities deemed detrimental to USSR interests. This relationship was derogatorily labeled �Finlandization� by many Western observers. Finland�s position, however, was not as subservient to the USSR as often envisioned; indeed, the country remained firmly oriented toward Scandinavia and the West. After the dissolution of the USSR, Finland began restructuring its economic orientation and developing relationships with the former Soviet republics.

None of Finland�s political parties enjoys majority support, and coalition cabinets are therefore the rule. This has greatly contributed to governmental instability, as coalition, minority, and caretaker administrations have come and gone in rapid succession. Most postwar cabinets have been headed by Social Democrats or Center Party leaders. In January 1982 Mauno Koivisto, a Social Democrat, was elected to succeed Urho Kekkonen. The Social Democrats scored gains in 1983 parliamentary voting, but the elections of March 1987 brought to power a coalition government made up of Conservatives and Social Democrats. It was the first time Conservatives found themselves in government in more than 20 years, and their leader, Harry Holkeri, became prime minister. President Koivisto easily won reelection in February 1988 to a second six-year term.

Holkeri�s coalition suffered losses at the polls in the March 1991 elections, when the Center Party edged out the Social Democrats as the single largest party in the Eduskunta. The Social Democrats chose to go into opposition, and Center Party leader Esko Aho formed a majority nonsocialist coalition government.

In March 1992 Finland formally applied for membership in the European Community (now called the European Union). In February 1994 Martti Ahtisaari of the Finnish Social Democratic Party was elected president. In May the European Parliament endorsed Finland for EU membership and in November Finnish voters approved their country�s inclusion in the EU. Also in May, Finland joined the Partnership for Peace program as a first step toward full membership in NATO, abandoning a longtime policy of strict neutrality. On January 1, 1995, Finland, along with Austria and Sweden, officially joined the EU. In March elections the Finnish Social Democratic Party (SDP) emerged as the strongest party in parliament, winning 63 of the 200 seats. The SDP then formed a coalition with four other parties. In April the SDP chairman, Paavo Lipponen, was named premier. Finland took another step toward integration with Europe in May 1998, when it officially agreed to replace its national currency with a new single European currency, the euro. The euro was introduced in 1999 and will entirely replace the Finnish currency, along with the currencies of other European nations participating in the single currency, in 2002.