183. Telegram From the Embassy in Finland to the Department of State0

93. Prime Minister-Designate Fagerholm announced formation majority five-party coalition government August 29. New 15-man Cabinet composed as follows; five Social Democrats Fagerholm, Social Affairs Vaino Leskinen, Trade Onni Hiltunen, Associate Communications (Labor) Olavi Lindblom, Associate Social Affairs Rafael Paasio; five Agrarians Deputy Prime Minister and Foreign Minister Johannes Virolainen, Interior Atte Pakkanen, Agriculture Martti Miettunen, Communications Kusti Eskola, Associate Finance Mauno Jussila; three Conservatives Finance Paivio Hetemaki, Defense and Associate Trade Toivo Wiherheimo, Associate Agriculture Niilo Kosola; one Swede Justice Sven Hogstrum; one Liberal Education Kaarlo Kajatsalo.

Of 15 ministers, all are Diet members and only three have never participated in previous Cabinets (Lindblom, Kosolam, Kajatsalo). New Foreign Minister is 43 year old Virolainen who has served in numerous Cabinets, several times as Foreign Minister (most recently 1957). Labor interests represented by Lindblom while employers have spokesman in Hetemaki. This is first political Cabinet since Sukselainen resigned October 1957 and was preceded by two professional caretaker governments, Von Fieand’s (five months) and Kuuskoski’s (four months). New government commands 137 of Diet 200 votes, with only Communists and SD opposition (Skogists) in opposition. Fagerholm is middle-of-road Social Democrat twice before Prime Minister. Very fact he is not considered strong or forceful politician and has avoided too close identification with Leskinen–Tanner faction of SD probably accounts for his success in rallying majority government. Inclusion outspoken and tough Leskinen is surprising and reportedly almost kept Agrarians from participating. Presence of Lindblom (fired 1957 from position SAK Secretary General) likely further antagonize trade union confederation. Except Virolainen Agrarian Ministers belong to Conservative wing of party and dominant radical wing may therefore be anticipating its failure. Conservatives have not been in political Cabinet since war.

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Most urgent job new government is to face up to pressing economic problems and generally restore confidence in Parliamentary Government. Conservative control of finance indicative of concern over holding down expenditures. Questionable how effective new government will be and how long such precarious alliance can withstand internal strains sure to develop. Communists and Skogists claim represent bulk of labor strength and government can expect trouble from this quarter when expected severe winter unemployment starts, particularly as most labor contracts expire shortly.

  1. Source: Department of State, Central Files, 760E.13/8–3058. Confidential; Priority. Repeated to Stockholm, Moscow, Copenhagen, and Oslo.