Foreign Relations of the United States, 1958–1960, Eastern Europe; Finland; Greece; Turkey, Volume X, Part 2

222. Operations Coordinating Board Report⁰

Washington, April 27, 1960.

OPERATIONS PLAN FOR FINLAND

Objective and General Guidance

Objective

1. An independent, democratic, and Western-oriented Finland, as free as possible from vulnerability to Soviet pressures.

General Guidance

2. The U.S. is interested in seeing Finland acquire the status of a true neutral and maintain a position as a democratic country, with predominantly Western cultural and economic ties. These western ties can be strengthened, but there is little chance under existing circumstances of bringing Finland into direct political or military alignment with the West. It must also be recognized that Finland’s geographical situation, economic structure, and treaty obligations make unavoidable a special degree of political accommodation to and economic intercourse with the USSR and other Soviet Bloc countries.

3. In the event of a serious crisis endangering Finland’s continued independence, the U.S. should be prepared to take all necessary and appropriate measures to increase the will, strength, and ability of Finland to maintain its independence. While the possibility of outright Soviet aggression against Finland cannot be completely ruled out, the much more likely danger is that Finland will slide gradually into a position of political subordination, economic dependence, or military tutelage vis-à-vis the USSR. The trend of events in Finland indicates that Finland’s determination to resist becoming a Soviet satellite is deteriorating and that Finland might take a less firm stand against possible Soviet pressure now than 18 months ago. U.S. attention should be directed toward means of counteracting the factors contributing to this trend—viz., undue dependence upon Soviet markets and fuel resources with resulting economic and political pressure, appeasement and opportunist tendencies, neutralist and co-existence sentiment, a general feeling of isolation and helplessness, lack of confidence in Western power and readiness to help Finland, internal Communist influence, and, last, but not least, chronic dissension among democratic elements.

4. Major emphasis should be on increasing Finland’s ties with the West and on strengthening democratic elements in Finland, particularly those with pro-Western orientation. In doing so, however, the U.S. should avoid weakening its general influence by appearing to play favorites among the democratic parties. Cultural and economic fields should be thoroughly developed and exploited on both private and official levels. The U.S. should be prepared to act promptly in seizing opportunities to advance its aims regarding Finland. Every effort should be made to stimulate a greater sense of responsibility among Western European nations, particularly the Scandinavian countries, for assisting Finland.

5. In promoting firmer resistance to the USSR and encouraging anti-Communist sentiments the U.S. must act with discretion and caution in Finland. The USSR is extremely sensitive to what occurs in Finland and might easily be prodded into action inimical to Finnish independence. The Finns themselves are aware of this danger, and can be expected to make every effort to avoid becoming a major pawn in the Free World-Communist conflict even if it involves concessions to the USSR. The U.S. should avoid (1) conducting or becoming publicly identified with overt anti-Communist and anti-Soviet activities, (2) encouraging democratic elements to engage in political activities of such outright anti-Soviet nature as to compromise their future usefulness, and (3) relying unduly on well-known anti-Soviet elements whose extreme views limit their effectiveness.

6. The U.S. should also bear in mind the possibilities of influencing Finland indirectly through West Europeans liked and respected in Finland.

Operational Guidance

A Sound and Western Oriented Economy

7. As a result of improvement in the Finnish economy over the past year, Finland’s trade with the West has grown and unemployment has declined. It is desirable that this trend be continued as a means of creating conditions more conducive to social and political harmony and lessening somewhat Finland’s vulnerability to Soviet economic pressures.

Guidance

8. Favor Finland’s association with the European Free Trade Association (EFTA) and encourage countries participating in Western economic cooperation movements, and European regional trade arrangements, particularly the members of the EFTA, to make whatever arrangements are necessary and feasible, consistent with the GATT, to protect Finland’s trade with them. Be prepared to provide limited economic assistance if necessary to insure some form of association or accommodation between Finland and West European economic cooperation movements.

9. Encourage Finland with the cooperation of the free nations to reduce its reliance on bilateral trade arrangements in favor of unrestricted trade development within the framework of the GATT. In particular, through future tariff negotiations under GATT seek to provide greater export opportunities by offering a significant value of tariff reductions in return for reciprocal concessions by Finland and encourage other Western nations to do likewise. In other administrative actions—including those involved in U.S. procurement programs, aid to other countries, and import restrictions—take into account, as far as feasible or legally permissible, the desirability of facilitating Finnish exports to the West.

10. Stimulate measures to help Finnish exporters to develop U.S. and other Free World markets, including the promotion of Trade Fairs and trade missions to Finland and arrange for Finnish marketing technicians, production experts, and designers to receive appropriate training in the U.S. and in other countries whose experience in the American market will be helpful.

11. While seeking practicable Finnish cooperation on controls over trade with the Communists and attempting through a case-by-case review to minimize any contribution which U.S. exports to Finland might make to the eastward flow of strategic items, continue to export materials necessary to Finland’s economy.

12. Support loans to Finland by international lending agencies for industrial utility and transportation projects consistent with relevant U.S. loan policies. Support loans to Finland by other Free World governments.

13. Encourage private U.S. investment in Finland. Consider utilizing the authority of the Investment Guaranty Program on a case-by-case basis when such a step would contribute to reducing Finnish economic dependence on the USSR.

14. Support sound Finnish proposals to stimulate tourism in Finland and encourage international cultural, educational, and scientific organizations to schedule conferences in Finland as a means of reducing the Finnish sense of isolation.

Confidence in Dealing with the USSR

15. The Finns’ marked sense of isolation and consciousness of the rapid rise of Soviet power have implanted a growing tendency toward accommodation to the USSR. Although found in all parties, this tendency is perhaps most marked among certain Agrarians, including President Kekkonen, who will probably remain in positions of power for some time to come. The Finns must be convinced that they have Western backing sufficient to warrant firmer resistance to the Soviet Union.

Guidance

16. Seek to increase frank exchanges of views with key Finnish personalities, particularly Agrarians, in whom it would be desirable to instill the realization that the West is concerned about Finland’s well-being and that Western unity and strength, rather than concessions to the USSR, help Finland to maintain its independence. Attempt to convince the Finns that acceptance of such concepts as coexistence, a “Baltic sea of peace” (closure of the Baltic to the warships of all except the littoral powers), and an neutral Scandinavian bloc would weaken rather than improve Finland’s position.

17. Focus cultural, information and exchange programs on the development of attitudes favorable toward the West and toward firm resistance to the USSR. Keep these programs under continuing review to assure maximum achievable impact and consider strengthening them if necessary. Consult with other Western countries regarding the possibility of coordinating cultural, information and exchange programs.

18. On a selective basis, invite leading Finns to visit the U.S. Watch for an appropriate time to reconsider a state visit by President Kekkonen to the U.S. in an effort to gain his confidence and to bring him to realize the full measure of the strength Finland derives from Western power and unity. Promote visits to Finland by leading U.S. and other Western personalities and groups in the field of performing arts and sports as tangible evidence of continuing Western interest in Finland.

19. To increase Western concern for the stake in continued Finnish independence and, thus, to improve Finland’s position vis-à-vis the USSR, encourage the closest feasible Finnish participation in Western cooperation efforts—especially among the Scandinavian countries—in the social and cultural as well as economic fields.

20. Be prepared to provide promptly limited economic assistance when such a step would contribute to strengthen Finland’s hand in resisting Soviet economic pressure or, in the event of deterioration of the Finnish economy, where necessary to prevent significantly increased economic dependence on the USSR.

21. By discreet means maintain and continue to develop close relations with the Finnish military establishment in order to sustain their morale and anti-Communist posture, being careful, however, not to provoke Soviet pressure for further Finnish concessions. As appropriate, encourage the continuation and expansion of close relations between the Scandinavian military and their Finnish counterparts.

22. Seek to expand the information program to enable it to place greater emphasis on specific groups and organizations vulnerable to Communist infiltration such as labor, youth, sports, and farm organizations.

Democratic Unity

23. Finland’s effectiveness in attempting to maintain its independence is hampered by dissension among democratic elements—particularly between and within the Social Democratic and Agrarian parties. A firm stance vis-à-vis the USSR is rendered extremely difficult because governments are unstable, splinter parties acquire disproportionate influence, policies are often only temporary compromises, power tends to concentrate in the hands of President Kekkonen, and the Communists have increased their parliamentary representation and threatened to overthrow Social Democratic control of the Finnish Labor Federation.

Guidance

24. While maintaining friendly rapport with all democratic factions, the U.S. should promote political cooperation between the Agrarian and Social Democratic parties, including the re-establishment if possible of a coalition government embracing these parties.

25. Seek the advice and assistance of West European Socialist political and labor organizations—particularly in Scandinavia—as well as officials of the International Confederation of Free Trade Unions (ICFTU) and the U.S. trade union movement in attempting to help the Finnish Social Democrats to reunify their party and prevent Communist control of the labor federation. If necessary, be prepared to support by all feasible means the formation of a non-Communist labor federation. Attempt to secure similar cooperation from Scandinavian Agrarians with respect to the schism in the Finnish Agrarian Party.

U.S. Personnel

26. The nature of the acceptance by the people and government of Finland of the presence on their soil of official U.S. personnel directly affects our capability to achieve our national security objectives. To this end, programs should be developed and improved to encourage and strengthen the natural inclination of the individual American to be a good representative of his country and to promote conduct and attitudes conducive to good will and mutual understanding. In this connection, OCB has developed two comprehensive documents which contain recommendations for action and serve as guidance for senior U.S. representatives overseas:

a. “United States Employees Overseas” (April 1958), and

b. “Report on U.S. Personnel Overseas” (July 1959),¹ including a Statement or National Policy and a Presidential Letter and also a reprint of the Conclusions and Recommendations of the 1958 report.

Guidance

27. Insure that U.S. official personnel and their dependents are aware of the importance to the United States of their role as personal ambassadors.

28. Develop and strengthen activities that promote good personal relations between foreign nationals and U.S. personnel bearing in mind that contacts in the capital city should be continually supplemented by the maintenance of relationships with provincial leaders in towns and villages.

29. Develop and strengthen activities aimed at maintaining knowledge of and respect for local laws and customs and a high standard of personal conduct by U.S. personnel.

30. Hold the number of U.S. official personnel in Finland to a strict minimum consistent with sound implementation of essential programs.

Note: The last Intelligence Estimate on Finland is NIE 28–5–54, dated January 8, 1954.²

Annex C

April 20, 1960.

(An uncoordinated and informal background paper prepared by CIA for use of the Finland OCB Working Group and OCB background.)

INTELLIGENCE PRECIS

Sino-Soviet Bloc Activity in Finland

Political

1. Moscow has been seeking to preserve Finland’s unique dependence on the USSR while preventing Finland from moving toward closer ties with the West. The USSR directly interfered in Finland’s internal affairs when the strong Fagerholm coalition government was toppled in 1958, largely as a consequence of Moscow’s economic sanctions. Although Soviet leaders continue to cite Finland as a prime example of the “peaceful co-existence” between two countries with different social systems, Moscow has warned the Finns against forming another such coalition containing leaders unacceptable to Moscow. The USSR appears to be satisfied for the present with the minority Agrarian party government which is highly sensitive to Soviet pressures.

2. During his October visit to Helsinki, Soviet Deputy Premier Mikoyan virtually precluded any increase in Finnish defense forces, stating that under the 1948 treaty the USSR and its military might guarantee Finland’s security. This was the first time Moscow had publicly espoused a “liberal” interpretation of the treaty and is a further Soviet effort to become the open and avowed protector of Finland. Soviet officials are voicing strong objections to the “anti-Soviet attitude” of the Finnish Defense Force. Following up previous unofficial warnings, Mikoyan both publicly and privately warned against participation in European economic groupings—such as the seven nation European Free Trade Association (Outer Seven)—which he called “remnants of the cold war era” that divide Europe. The Finns are, nevertheless, negotiating with EFTA countries regarding possible Finnish association.

Diplomatic

3. Finland maintains diplomatic relations with the USSR, Communist China, and all of the Eastern European Satellites except East Germany. While Finland has managed to sidestep the problem of German recognition by maintaining only trade missions with East and West Germany, East Germany continues to press for formal recognition. Bloc missions in Helsinki are staffed by over 200 bloc officials, of whom over two thirds are attached to the Soviet Embassy and commercial mission. The appointment in February 1959 of Soviet Deputy Foreign Minister A. V. Zakharov—an economic relations expert long associated with Finnish affairs—as the new ambassador indicates that Moscow intends to keep a close watch over Finnish foreign trade developments during the next few years.

Economic

4. Finland’s 1959 trade with the bloc—as a proportion of total foreign trade—remained at about 1958 levels. In 1959, the bloc share of Finland’s total exports amounted to 23.5 percent and imports of 24.5 percent. Total trade with the bloc was valued at $400 million compared with $380 million in 1958. Trade with the USSR is vital to Finland because it offers an outlet for high price products of the Finnish metal-working and shipbuilding industries which were expanded after the war to meet reparations payments. The Finns also obtain from the USSR the bulk of their requirements for basic raw materials, such as fuels, metals, grains, and fibers, thereby saving hard currency. In December 1959, Finland reluctantly accepted a Soviet commodity credit of $125,000,000 (500,000,000 rubles) first offered in 1958. Implementation of the credit would tend to perpetuate Finland’s economic dependence on the USSR.

Subversive

5. The Communists continue to represent a substantial threat to Finland’s internal security and political stability. Although the Finnish Communist Party (SKP) is small—with an estimated membership of 25–30,000—it controls the Leftist political front, the Finnish People’s Democratic League (SKDL). The SKDL has the largest grouping of parliamentary seats—50 of 200—having increased the number of their deputies from 43 in the 1958 elections. The SKDL continues to demand participation in a governing coalition. The most important target of Communist infiltration is the Confederation of Trade Unions (SAK). The decision of the opposition Social Democrats (Skogists) to end cooperation with the moderate Social Democrats on the SAK executive committee places the balance of power in the hands of the Communist minority and deepens the Social Democratic split. Within the SAK membership of about 240,000, the Skogists and Communists substantially outnumber the moderate Social Democrats. Through their position in the labor movement, the Communists are able to stimulate labor unrest and to inhibit government efforts to achieve economic stability.

Finnish Reaction to Bloc Activity

6. The present Agrarian minority government, and President Kekkonen as well, feel that the wisest course for Finland at the moment is to emphasize accommodation toward Moscow rather than to rally the democratic parties behind a moderate but resolute policy toward the USSR. The population is, however, anti-Communist. Kekkonen himself, despite his willingness to accede to Soviet demands on relatively minor issues, would probably resist any major encroachments on Finnish sovereignty. The Finns are determined to maintain good relations with the USSR while adhering to a policy of strict neutrality. They face, however, a problem in developing ties with the West while not antagonizing the USSR. Finland realizes that it cannot afford to remain aloof from Western European economic integration in which case it would ultimately find itself unable to compete in Western markets. The Finns probably believe they still have room for maneuver vis-à-vis the USSR because of Soviet sensitivity to world public opinion, Moscow’s desire for a showcase demonstration, however forced, of peaceful co-existence, and Soviet awareness of the historic inability to digest the Finns.

The Outlook

7. Moscow’s success in replacing the distrusted Fagerholm coalition constitutes a precedent for future interference in Finland’s affairs should Moscow deem it necessary. The implication that the USSR regards Finland as a protectorate brings the Finns face to face with the reality of the situation and will inevitably depress public morale unless countered by signs of a more independent official attitude. The Agrarian party is trying to entrench itself in power by insisting that it is the only party capable of maintaining correct and “friendly” relations with Moscow and will probably continue this tactic. Return to a strong democratic coalition government, which would inevitably have to include the Social Democrats, at present appears unlikely, particularly since the reelection of the aging party Chairman, Vaino Tanner, on April 17. New elections would not necessarily improve the political atmosphere. On the other hand, a popular front cabinet including the SKDL appears to be excluded by strong opposition from the ranks of the Agrarians. The recent hardening of the split in the Social Democrats in SAK foreshadows the possible loss of control of SAK by the moderate Social Democrats at the 1961 Congress and could lead to a dangerous increase of Communist influence in organized labor.

0. Source: Department of State, OCB Files: Lot 61 D 385, Finland. Secret. Annexes A and B, a Financial Annex, and a Pipeline Analysis are not printed. A copy of this operations plan, which was approved for implementation by the Operations Coordinating Board at its meeting on April 20, was forwarded to Ambassador Sessions under cover of a letter from Deputy Under Secretary of State for Political Affairs Hare, May 2. (Ibid., Helsinki Embassy Files: Lot 65 A 78, 350–U.S. Program for Finland)
1. Neither printed. (Ibid., OCB Files: Lot 62 D 430, Overseas Personnel)
2. Not printed. (Ibid., INR–NIE Files)