You're reading: Finlandization not in the cards for Ukraine

The Revolution of Dignity and the new Ukrainian government’s decision to bind the nation to Europe has created a new geopolitical reality that requires a fundamental restructuring of relations with Russia. One option that some analysts say might satisfy the interests of all parties is for Ukraine to do as Finland did during the Cold War – trade strategic and full economic freedom for national independence and democracy.

Ukraine, like Finland, sits on the geopolitical fault line between member nations of the European Union and NATO, and Russia. This fault line has developed into an unstable frontier after Russian President Vladimir Putin failed to incorporate Ukraine into his Eurasian Customs Union, especially after the fall of Ukrainian President Viktor Yanukovych in February.

Finland endured a similar fate immediately after the Second World War, when as a former ally of Nazi Germany, it had to face the wrath of a victorious Soviet Union. How the post-war Finnish state was able to negotiate this volatile relationship while maintaining its independence through a unique settlement political wags call ‘Finlandization’.

In short, the term refers to the process whereby one powerful country strongly influences the policies of a smaller neighboring country so that it will not challenge the bigger neighbor in foreign affairs, while maintaining national sovereignty. As the Cold War settled in with the formation of respective military alliances, Moscow and Finland in 1948 signed a treaty of friendship, cooperation, and mutual assistance analogous to the Hungarian-Soviet and Romanian-Soviet treaties that demanded Finnish neutrality and certain trade privileges for the Soviet Union. However, unlike the countries of occupied Eastern Europe, no Red Army troops entered Finnish soil and Finland did not join either Moscow-led economic programs or the U.S.-led Marshall Plan.

Arkady Moshes, director of the EU’s Eastern Neighborhood and Russia program at the Finnish Institute of International Affairs, argues that the discussion of Finlandization within the context of Ukraine has been misleading.

“Finland has always had a policy to be close to the West, whereas Ukraine has not,” Moshes told the Kyiv Post. “In addition, the talk has been about Ukraine as a bridge between Europe and Russia, which is something Finlandization was not.”

Also, Europe has put Ukraine in a difficult position by not offering prospects of full integration into the European Union. “They see Ukraine as a sort of no-man’s land,” argues Moshes, “which is unacceptable. As one Polish colleague told me, you cannot live on a bridge.”

Ukraine ratified its Association Agreement with the EU on Sept. 16, although its implementation will be staggered over several years.

Finnish foreign policy acknowledged that the Soviet Union had certain interests in Finland and encouraged close economic ties between the countries. As a result, Finland became by the 1980s the Soviet Union’s second largest trading partner with the West after West Germany, accounting for as much as 25 percent of trade. Until the decline of Soviet economic fortunes in the late 1980s, Finland accounted for four percent of the Soviet Union’s exports and three percent of its imports. Finland provided the Soviet Union with ships, heavy machinery, and consumer goods such as clothing, foodstuffs, and consumer durables, and in exchange Finland received mostly oil.

Former national security advisor to U.S. President Jimmy Carter and ardent anti-communist Zbigniew Brzezinski has explicitly endorsed the Finlandization of Ukraine, saying “Russia needs a ‘Finland option’ for Ukraine,” as a prerequisite for Ukraine making a peaceful transition to the European fold.

He continued: “The U.S. could and should convey clearly to Putin that it is prepared to use its influence to make certain a truly independent and territorially undivided Ukraine will pursue policies towards Russia similar to those so effectively practiced by Finland: mutually respectful neighbors with wide-ranging economic relations with Russia and the EU; no participation in any military alliance.”

However, Finland prospered and solidified its independence during a long period of peace and was able to join the EU only in 1995, after the collapse of the Soviet Union and before Putin ushered in aggressive policies. Ukraine does not have such a luxury of time to recalibrate its geopolitical position and foster internal stability without expecting a severe reaction from Moscow.

After all, while Finland is a small country on the periphery of Europe, Ukraine is a nation of 45-odd million people and was a constituent member of the Soviet Union since 1922.

Rene Nyberg, Finland’s ambassador to Russia in 2000-2004, disagrees with Brzezinski. In a Sept. 2 New York Times opinion piece, he explains that the keys to managing an asymmetric power relationship are to make it clear that come hell or high water the country would defend itself against any invader, as Finland did in 1939, when the weight of the Red Army was thrown against the small nation, and to demonstrate how any attempt to directly interfere in Finland’s free market economy would seriously hurt Russian interests. Finland provided essential goods to the Soviet Union in a type of  closed barter scheme.

So far, Ukraine has proven that it will defend its territory against greater odds, while the West has slapped somewhat damaging sanctions against Putin’s regime, not to mention that Ukraine is a major Russian trading partner that is seriously suffering. Whether Putin will see reason and follow in his predecessor’s wise footsteps – Joseph Stalin – is another matter.

The conservative Brookings Institute falls in line with Brzezinski, as well as another former White House security advisor, Henry Kissinger, arguing that at least in theory Ukraine should go the way of Finland, meaning eschew NATO and join Europe. However, this is impossible in reality, the think tank explains, because of Ukraine’s poverty, instability and corruption compared to even post-war Finland. And even then, Finland had to cede key territory to Moscow.

However, even if Ukraine would become a neutral state and takes Russian economic interests into consideration, Moshes is not sure if Moscow would want to embrace any solution. As Finland steadily integrated with the rest of Europe, the Soviet Union did not respond angrily, but instead took the opportunity of its close relationship with Finland to reach out to other neutral countries, Moshes explained. “Keep in mind that this was a period of détente. Today, there is no such attempt at rapprochement between Moscow and the West.”

Kyiv Post business journalist Evan Ostryzniuk can be reached at [email protected]

Finland at a glance

Total area: 338,000 square kilometers

Population: 5,451,270

Government type: Republic, parliamentary democracy

Head of state: President Sauli Niinistö

GDP (PPP): $208 billion (2013)

GDP (PPP): $38,251 per capita (2013)

Main industries: The country is a world leader in telecommunications equipment. Main exports include telecoms equipment and engineering products, paper, pulp and lumber, glassware, stainless steel and ceramics.

Independence from the Russian Empire: 6 December 1917.

Corruption ranking: 3rd least corrupt nation in the world (2013), 2nd in Europe

World Happiness Report: 7th

Ukrainian-Finnish relations:

Trade: €429 million (2013)

Exports from Finland to Ukraine: paper and cardboard, medicine and plastic

Exports from Ukraine to Finland: iron and steel, textiles, ammonium and oil products

Finnish investment in Ukraine: €100 million (cumulative through September 2014)

Main investors: Konecranes crane manufacturing plants,  Sanitec (Budfarfor) white porcelain factory, Ruukki metal sheet plant, Tikkurila’s Kolorit paint factory and Hartwall family who have invested into wine cultivation in Crimea (Inkerman brand).

Source: Ministry for Foreign Affairs of Finland, europa.eu, World Bank, Embassy of Finland in Ukraine, Transparency International, United Nations