By Dr Dan Steinbock

Since June 2023, Finland has been led by the most far-right government of its postwar history. The past economic success is past. The NATO membership is increasing security costs and risks. Risks hover over and above the “last welfare state standing”.

Recently, the Finns voted to elect their president for a six-year term. The presidential race followed Finland’s volatile NATO accession, which was to make the country more secure and more prosperous. It didn’t. And the new conservative president, despite eloquent rhetoric, has long supported more conservative economic policies and intimate NATO ties.

Although S&P Global Ratings has applauded Finland’s “energy diversification away from Russia”, it expects economic activity in Finland to be “broadly flat” and not pick up until 2026. Worse, when Economist asked which economy did the best in 2023, Finland ranked at the very end of the 35-country comparison – a new, embarrassing low for the ex-top performer.^[i]

In the past, the tiny Nordic country of 5.5 million people was seen as a bastion of stability, unity, and neutrality; a sort of frosty Santa Claus-land. Today, the tensions in Finland and its borders are rising. In part, this is an outcome of long-standing structural challenges in the Finnish economy. In part, it is a spillover of the proxy war in Ukraine. In part, it is also a result of purposeful political maneuvrings; that is, maneuvred “strategic tension”. In such cases in other countries, the objective has been to use a general sense of insecurity against targeted groups to buttress repressive government. As geopolitics replaces development, welfare suffers, but the perceived common enemy is expected to “unite the nation”.^[2]

Most far-right government since 1945

Led by Prime Minister Petteri Orpo, the cabinet is dominated by conservatives and far-right Finns, coupled by the small Swedish and Christian Democrat parties. As soon as it started its work, political turmoil ensued (Figure 1).

Figure 1: Finland’s most far-right cabinet since 1945 

• The official picture

• The unofficial picture

At first, the far-right Minister of Economic Affairs Vilhelm Junnila got caught for statements proposing “climate abortions” in “underdeveloped Africa”. He was replaced by the far-right Wille Rydman, who was amid a sexual harassment scandal and had texted racist messages about Arabs as “desert monkeys”, and Jewish names as “kike things” that “we Nazis don’t really like”.^[3]

Things got worse last summer when the media discovered that the far-right ministers Mari Rantanen (Interior), Leena Meri (Justice), Ville Tavio (Foreign Trade) and Riikka Purra (Finance and PM deputy) had suggested in the Parliament and social media for years that ethnic Finns are being demographically replaced through large-scale immigration. Presumably, they took seriously the racial “great replacement” theory, in which “dark Muslims” substitute for white Europeans. Also, an old blog by PM Deputy Purra was found. It was about a confrontation with young immigrants: “If they gave me a gun,” she wrote, “there’d be bodies on a commuter train.”^[4]

The racist debacle was deeply embarrassing to most Finnish, including many conservatives. But the latter need the far right to govern. By fall 2023, Foreign Minister Elina Valtonen, a conservative whose campaign finance features the big donors who also fund Stubb, acknowledged that the Nordic country’s “EU partners have been equally concerned for Finland’s economic growth as they have been of its racism debacles”.^[5]

But there was still worse ahead.

Toward labour turmoil

As the cabinet was struggling for credibility and struggling to contain realities, its supporters shrank to barely 24 per cent of Finns and mass strikes ensued. Workers protested against government plans to reject centralised work accords, limit the right to strike, and cut unemployment benefits. After a Christmas truce, some 290,000 Finnish workers – every eighth adult employee – began two days of strike action against the cabinet’s proposed labour reforms and planned cuts to social welfare. In the past, tough talk might have been followed by pragmatic reconciliation. Now government ministers called the unions “mafia”^[6], as in Finland’s dark 1930s.

Meanwhile, the conservative presidential campaign sold Alexander Stubb as the “uniting factor”, despite his close ties with the Orpo cabinet and its policies. And right after the first round of the presidential race, Stubb was courting the far right he needed to win. The costly campaign has shrewdly distanced Stubb from the policies of Orpo’s cabinet, which was only implementing what he himself demanded already in 2015: “Structural reforms, structural reforms and more structural reforms.”^[7]

In the end, the NATO process was speeded up by Finland’s president, Sauli Niinistö, a veteran conservative, and the young prime minister, Sanna Marin, a social democrat. But as the risks and costs of the Finnish NATO membership are likely to increase, Niinistö is leaving the presidency. In turn, Marin retired abruptly from Finnish politics in the middle of her term last September. She cashed out and joined the controversial but money-rich Tony Blair Institute, although some of its financiers are the same Russian oligarchs she, as Finnish premier, pledged to fight, and lobbies for the kind of states that she has charged for human rights violations. In the process, her Social Democratic Party lost its status as the largest party, which paved the way for the far-right government.

Meanwhile, as challenges have increased on Finland’s 1,340 km border with Russia and the US-led NATO, both economic and geopolitical risks are on the rise. The new president can make or break Finland’s future.

Election 2024

In January, nine candidates ran for the Finnish presidency. The conservative former prime minister Alexander Stubb (55) led the first round with 27 per cent of the votes, while Pekka Haavisto (65), Finland’s top diplomat in 2019-23, took second place with 26 per cent. The final race was between the two (figure 2). And on February 11, Stubb won against Haavisto, though barely (51.6% – 48.4%).

Figure 2: Presidential rivals

Haavisto was gaining fast until the 2nd round, when homosexuality was turned into a voting issue in a TV debate by the Finnish Broadcasting Corporation, a key member of the Finnish mass media. While Stubb conducted himself gentlemanly during the race, some of his background forces, supporters and political journalists chose a more aggressive stance. The last-minute  “good cop, bad cop” campaign paid off. It was a lesson from U.S. Republicans that many Finnish conservatives admire.

Most conservatives and the far-right were expected to vote for Stubb, but not all. A Green League politician, Haavisto battled twice for the presidency against conservative Sauli Niinistö. Despite past failures, his broad support steadily increased in the current race, particularly among Finnish youth and women. Openly gay, the Finnish top diplomat has represented the UN in multiple tasks since 1999 and many hot spots. Seen as consensus-seeking and very knowledgeable, he enjoyed great regard across the Finns. But as the country has shifted toward the far right, his constituencies weren’t as powerful as those behind Stubb.

Nonetheless, Haavisto garnered influential supporters, such as Erkki Liikanen, a veteran Social Democrat and former EU commissioner and central banker, and Sixten Korkman, one of the country’s leading economists, EU expert and a long-time influencer in the private sector.

Haavisto likely garnered significant support from the Social Democrats and the Left Alliance, and from the Centre Party, as evidenced by the last-mile joint photo-ops with the former PMs Matti Vanhanen (Center) and the Sanna Marin (Social Democrats). But to win, he would have needed just a little more.

By contrast, Stubb has a seemingly strong track record, but it has its cracks, repeated allegations of favouritism, disconcerting gaffes, and personal promotion. Critics claim that experienced officials downplay Stubb’s credentials and find it embarrassing.^[8] In the mid-2010s, when he joined the European Investment Bank (EIB), his conservative precursor Jan Vapaavuori, the ex-mayor of Helsinki, said in a comment reportedly referring to Stubb that “even leading job posts are sometimes open also to pathological narcissists who view the substance of politics as only instrumental to their public image”.^[9]

The criticism hasn’t gone away. In 2019, another fellow conservative Pertti Rosila, ex-head of the Parliament’s accounting office, described Stubb as the greatest flop of the political decade, with “fully unrealistic views of himself.” As he became the PM, Stubb knew little about Finnish domestic politics and appointed ministers on the basis of loyalty, such as current PM Orpo. Hence, the concern over Stubb’s “mix of incompetence and narcissism.”^[10]

Credibility gaps, CIA stories

After holding several offices as a minister, Stubb served briefly as the prime minister in the mid-2010s. In summer 2017, he became one of the vice presidents of the EIB. Until the 2024 election race, he served as a professor and unit director at the European University Institute (EUI).

But the official story has holes. While acknowledging that he “probably has no refereed scientific articles”, Stubb has claimed to have published some 30 academic articles and nearly 20 books.^[11] Yet his own EUI home page features mainly his “big name” video talks and podcasts, a few journalistic columns, and several blogs. He did co-author one chapter article, but it’s from 2003. There are no “research outputs” in 2004-19. Some articles are written in Italian, which he does not speak. The irony is that, in the Finnish government, he defended heavy cuts in the national innovation system and criticised loudly academic tenures without actual output.^[12]

Then there is the odd “CIA debacle”. Stubb graduated from high school in Florida and studied in the private liberal arts Furman University in South Carolina in 1989-93. His brother had been an exchange student in the family of the Furman professor William J. Lavery, specialising in Russian studies and reportedly linked with the CIA. In the dormitory, his roommate was Lavery’s son. “In honour of the CIA,” he writes ambiguously in his memoirs, “it can be said that it has good agents that know to put their claws into a guy who would later become Finland’s prime minister.”^[13] Yet Laverne was hardly unknown at the CIA. In 1988, Robert Gates, then deputy director of the CIA, wrote to him a warm personal letter – declassified only partially two decades later – “to catch up on the last 20 years”.^[14]

Stubb then studied at the College of Europe in Brugge, where he became friendly with “an interesting American woman called Valerie Plame”. By his admission, the two kept in touch for years.^[15] From 1999 to 2001, Stubb served among Finns in the European Union in Brussels. Afterwards, he became an adviser to Romano Prodi, President of the European Commission. According to Plame, after the Persian Gulf War in 1991, the CIA sent her first to the London School of Economics and then the College of Europe in Brugge, Stubb’s parallel locales. Working undercover in Brussels, her task was to recruit informers and gather intelligence in various covert positions (Figure 3).

Figure 3: The CIA femme fatale

In Stubb’s story, the contact ended when “some Republican” decided to disclose Plame’s real identity. Actually, Plame was exposed in 2003 when her identity as a CIA officer was leaked to The Washington Post. The leak originated from the US Department of State, while Dick Cheney’s right-hand Scooter Libby was convicted of lying to investigators. In the Fair Game (2010), based on Plame’s book, Naomi Watts starred as Plame and Sean Penn as her husband, Joe Wilson, who in real life played a role in famously discrediting the idea that Saddam Hussein had weapons of mass destruction.^[16]

The winding path to the presidential race

Last year, Prime Minister Orpo and Stubb, the two conservatives, manoeuvred Stubb’s return to the national limelight. It looked democratic, but it didn’t happen democratically. Reportedly, the two wanted to avoid an internal party vote. Orpo “invited” Stubb to be the conservative candidate. The problem was that many in the party, especially the youth, supported Antti Häkkänen, Finnish defence minister. So, he was played out in the name of “party unity”.^[17]

Neither all of the young nor the old liked the show. Raimo Ilaskivi, the conservatives’ 95-year-old veteran Mahathir, thundered: “Instead of a seemingly dictatorial decision, I had expected that the party would have relied on a vote by the party’s members.”^[18] Ilaskivi blamed Orpo and Stubb for suppressing party democracy and the youth vote. Stubb agreed on the candidacy on the condition that there would be no membership vote, and that in the case of failure he would be given the post of an EU commissioner.^[19]

It was shrewd, unethical, but effective.

Overshadowed by the NATO process, recent Finnish electoral campaigns have been dominated by geopolitics.^[20] With elevated strategic tension, most candidates compete on hawkish stances. But, unlike Haavisto, Stubb supported the deployment of nuclear weapons in Finland.^[21]

But why and how did geopolitics “hijack” the 2024 election?

From NATO pledges to soft “coup”

Through the Cold War, Finland maintained a stance of neutrality and military non-alignment. The idea of NATO membership became a topic of debate only after the end of the Cold War, following the country’s accession to NATO’s Partnership for Peace (PfP) programme and the European Union (EU) in the mid-1990s, participating in nearly all PfP sub-areas. Finland maintained close relations with NATO and, by 2014, defence minister Carl Haglund was in talks of a memorandum of understanding with NATO, which led to joint exercises. While the government said it was not a step toward membership, it was. NATO proponents were pushing Finland into NATO step by step. Then, each step was used to legitimize the next one as “necessary”

Yet, public support for NATO accession remained low.^[22] Even the 2014 Ukraine war did not change the Finns’ opposition against NATO.

So, what did? The standard story is that the 2022 Russian invasion of Ukraine marked a turning point in the debate, swinging public opinion in favour of NATO membership. But there is a bit more to the story.

The conservative push for the membership intensified after the mid-2000s, as exemplified by the Selin debacle. After the Iraq war, the US State Department issued terror warnings also in the Baltic and Nordic areas. As Jyrki Katainen became the chairman of the conservatives, the then-opposition leader stated that rising terrorism makes NATO increasingly important to Finland.

When Paavo Selin, then-head of Finland’s counter-terrorism unit, was asked about the matter, he said that “the NATO focuses on the military dimension associated with terrorism. From the perspective of anti-terrorism in Europe, it isn’t meaningful.” The statement was in line with the stated position of the government, and the heads of the Finnish Security and Intelligence Service (SUPO). Yet, Katainen saw it as a ploy against himself as the conservatives’ chair. What ensued was half a decade of bullying against and marginalisation of Selin at SUPO. The rising star of Finnish anti-terrorism was scapegoated, for all the wrong reasons. As critics charged, it was pitiful politics at the expense of national security.^[23]

But the political games had only just begun. In February 2011, the leading Finnish daily reported that, according to Wikileaks, the Finnish conservative party had promised the US Embassy, which had been “urging” Helsinki to become a NATO member, that Finland would join NATO soon. As Stubb’s special assistant Jori Arvonen told the US Embassy, “[the conservatives’] leadership sees the party leading the next government and taking Finland into NATO.”^[24]

Only a month later, another revelation indicated that these efforts had entered a new level, when state councillor Risto Volanen warned about a “coup” in Finland. As he saw it, “the army and police have strayed from government’s oversight.” It was a stunning wakeup call from a moderate Centre Party veteran. Having served for seven years as the right hand of Prime Minister Vanhanen, Volanen charged Finnish military and police leaders for disloyalty. Grabbing power from democratically elected politicians, they were leading themselves without overview. “This can give rise to a sort of Finnish version of the military-industrial complex that President Eisenhower once warned about in the United States.”^[25]

Volanen foresaw the NATO membership and the process leading to it a decade in advance.^[26] Yet, the accession process intensified fast.

Along with neighbouring Sweden, Finland applied to join NATO in May 2022. During the year-long accession process, the debate of the Finnish foreign policy and security elite was framed so that the focus was on the opportunities of the NATO membership, but not on its potential risks.

When Finland joined the European Union in the mid-1990s, it gave away much of its fiscal and monetary sovereignty. As a result, an advisory referendum had been held on the membership. When Finland joined NATO, it gave away much of its military and security sovereignty. Yet, no referendum was held. Democratic institutions were available, but they were bypassed.

As Finland became a member of NATO in April 2023, it basically “doubled the military alliance’s border with Russia”.^[27]

Media as prime influencer

In summer 2022, the veteran Social Democrat Erkki Tuomioja, former minister of foreign affairs, argued that although “Finland should have an opportunity to apply for NATO membership, this opportunity should not be used now.” As in many other countries, he also lamented that Finnish tabloids were “analysing Russia in a deliberately conflict-driven Manichean way of good and evil, Russia representing the evil.” In the process, NATO supporters were “aided by many actors in media and some officials of foreign ministry and defence forces.” There should be a referendum on any accession proposal, he stressed. Certainly, NATO would not make Finland more secure. It would escalate hybrid threats.^[28]

Indeed, critics argue that dissenting views about the NATO membership were marginalised in Finnish media. The sidelining prevails. In early January 2024, when professor of world politics Heikki Patomäki was interviewed by a major tabloid, he argued that “Ukraine should stay outside NATO; and Finland should have done the same.” That prompted some 1,500 comments, coupled with personal emails, including hate speech and threats.^[29]

As NATO opposition was subdued, dissent came to be penalised. In 2008, some 60 per cent of the Finns had still opposed NATO membership, with just 28 per cent for it. Even after Russia’s annexation of Crimea in 2014, that figure prevailed, climbing to 64 per cent. It was only in 2020-1 that things began to change. Before Russia’s “special military operation” in Ukraine in February 2022, NATO opposition remained dominant against the supporters (43 per cent-30 per cent). But by late 2022, there were over 80 per cent NATO supporters.^[30]

In the process, the media has had a central role. According to the World Press Freedom Index (WPFI), Finland ranks at the top with other Nordic countries.^[31] But the index may not be quite as transparent as it claims to be. In addition to high media concentration, Finland’s ranking excludes the role of the Finnish “Mediapool” (Mediapooli), whose members include all dominant media. It is funded by the state through the National Emergency Supply Fund to “safeguard the operating conditions and free and diverse media”.

As Finnish critics stress, the creation of Mediapool coincided with the Helsinki launch of the European Centre of Excellence for Countering Hybrid Threats, which Mauno Saari calls a “spy centre”. The veteran Finnish editor has served in Finland’s leading media companies. “An unsaid censorship prevails here,” he laments, “even as Finland heavily criticises countries where media is state-owned.”^[32]

As the activities of the Mediapool have broadened, the numbers of the NATO opposition have steadily declined. In parallel, a wave of new history books has swept across Finland. In many cases, Finland and many of its leaders are portrayed as having been “compromised” toward Moscow. The publishers include the dominant media and publishers of the Mediapool. Proponents claim the wave is testimony of new openness. Critics argue it is more reminiscent of old Finlandisation, with new sugardaddies. Orwellian terms have proliferated. In the West, NATO is described as a “peacetime military alliance” or a “security alliance”. In Finnish media, the term “defence alliance” reigns. Meanwhile, Russia is seen as synonymous with “risks,” “threats,” and “evil.” So, when the Finnish parliament members were asked in 2022 whether “Putin’s Russia is a military threat to Finland”, nine out of ten responded positively (Figure 4).

Figure 4: “Putin’s Russia is a military threat to Finland”

In Finland, NATO proponents deem the military alliance an “existential necessity”. They have triumphed. In late 2023, polls suggested more than half of the Finnish population were convinced the country has to prepare for war in the next few years.^[33] And even at the eve of Christmas, foreign minister Elina Valtonen warned that “Russian attack is possible”.^[34]

Economic erosion

In Finland, the expected strong post-COVID recovery has faltered, due to long-standing structural challenges, compounded by the spillovers from Russia’s invasion of Ukraine. Higher energy prices passed through to core prices, sustaining inflation. While wage growth remained moderate, public-sector pressures resulted in waves of strikes. After stalling in 2023, economic activity is expected to further erode. Instead of a recovery, the economic landscape is dire, reflecting an ageing population and low productivity growth. Moreover, the steadily widening fiscal deficit is likely to put public debt on a riskier path.^[35]

These adverse trends are aggravated by higher “security-related” spending (read: increasing military expenditures), due to the NATO membership, that are likely to persist in the medium term.

Prior to the 2008 financial crisis and the subsequent debt crises, Finland’s competitiveness and innovation was still world-class. As the headquarters of Nokia, the leading global mobile manufacturer, the country benefited from an entire ecosystem of suppliers, operators, and service providers. In turn, Nokia benefited hugely from Finland’s political neutrality and strong position in the fastest-growing emerging economies. Unlike all its rivals, it made over 99 per cent of its revenues outside the home base.^[36]

Today, Finland is no longer among the top-10 most competitive economies. Innovation expenditures have been penalised. Nokia was undermined by an ex-Microsoft executive and restructuring that effectively dismantled the company, with Microsoft eventually buying the leftovers.^[37] At the same time, Finland’s trade surpluses morphed to deficits. A decade ago, the country was dependent on Russia, which accounted for 18 per cent of imports and 10 per cent of exports. Today, one dependency has been replaced with another (Figure 5). As Russian imports have plunged and exports to Russia have been decimated, imports from the US have increased by some 50 per cent and exports to the US by 30 per cent in relative terms. Meanwhile, Finland’s trade with emerging economies has stagnated, except for China (although NATO loyalists have targeted this tie as well) As the West has replaced Russia, its structural challenges, particularly runaway inflation, haunt the more vulnerable Finns, whose numbers are on the rise.

Figure 5: Finland’s main trading partners

Soaring military expenditure 

In the coming years, the military dependency on the US is likely to rise. Finland’s 2024 budget puts defence spending at about €6.2 billion (US$6.6 billion), a nearly 5 per cent rise from 2023. In the past, the country restocked ICT exports; now it’s focusing on arms restocking and security on the Russian border, which used to be relatively quiet before the NATO membership.^[38]

The dependency on the US is rapidly growing through progressive militarisation. During the Cold War, Finland tried to balance its aircraft purchases between East, West, and domestic producers. The US ties originate from the 1990s with costly purchases of US F/A-18C/D Hornets by McDonnell Douglas. Finland’s F-35 programme began in 2021 when it ordered 64 F-35A fighter jets from Lockheed Martin. The deal is Finland’s biggest ever. It was deemed “necessary”, despite mounting US and international criticism for the unprecedented size, complexity, ballooning costs, and delayed deliveries of the F-35 programme.^[39]

Finland spent about $3.9 billion on defence in 2020. In just three years, the figure has climbed by nearly 70 per cent. The problem is that, while the expenditures soar, revenues linger. Finnish GDP grew by 0.1 per cent in 2023 and is expected to increase by 0.8 per cent in 2024.

Rising inequality

Despite egalitarian ideals and relatively low polarisation in the past, Finland has long been divided. At the end of the Cold War, the rich (top 10 per cent of the population) dominated almost half of national income. The share is about the same as that of the entire labour (bottom 50 per cent). The middle classes (middle 40 per cent) still controlled the highest share, about 40 per cent of national income.

With the turn to the West in the first post-Cold War decade, the rich enjoyed a boom, whereas the share of the labour shrank. However, that of the middle class actually increased.

Today, the rich retain 32 per cent of national income, a share they had already in 1996, whereas labour’s share remains only 23 per cent, or what it was already in 1980, that is, four decades ago. By contrast, the middle has kept its 45 per cent, or what it had two decades ago. Meanwhile, the share of the ultra-rich has stayed around 10 per cent of the total (Figure 6).

Though more stable and less volatile, wealth inequality mimics the trends of income inequality. In this view, there has been barely any change in the past four decades. The rich control over 56 per cent, the middle some 42 per cent, and the labour barely 2 per cent of national wealth. By 2000, the ultra-rich had 18 per cent of national wealth and its grip has prevailed. In relative terms, they own almost 10 times more than they earn.

Figure 6: Rising income inequality, 1980-2020

In Finland, political power belonged to the centre-left (conservatives, Social Democrats and Centre Party) through the Cold War. Conservatives got into the government only thereafter. Until the 2008 crisis, the Big Four dominated. Thereafter, the far right has broken into and consolidated its position at the top, largely at expense of the centre and the left.

As the struggle is intensifying for the very future of the Finnish society, most of the rich and ultra-rich, and significant chunks of the middle classes likely united behind Stubb.

The labour, or the bottom 50 per cent of the Finns, are struggling to avoid outright poverty and to revive the country’s long-standing democratic traditions. Many of these voters likely voted for Haavisto, but those whose vote is determined by geopolitics won’t.

The critical role belongs to the middle 40 per cent. The part of the middle class idolising the upper classes likely voted for Stubb. As did those driven by geopolitics and traditionalist, anti-LGBT values. By contrast, those who see themselves squeezed between the middle classes and the working poor and who prioritise economic and ecological considerations likely went for Haavisto.

In the 2024 election, Haavisto built on democracy, green values, and ordinary people; Stubb relied on elite ties, the far-right tide and big money. Haavisto represents an inclusive future, Stubb the exclusive past. However, the latter’s campaign purse  is estimated at €3 million (U.S. $3.2 million), a historical record in the tiny Nordic country, thanks to Finland’s wealthiest donors, companies and enterprises and the conservative party. Despite some very loyal and generous donors, the funds of Haavisto’s campaign pale in comparison.^[40]

Days before the vote, Stubb’s lead over Haavisto now stood at 53%-47%.

Postscript 

Through half a century of the Cold War – after a fatal period of far-right extremism contributing to wars against Soviet Union and ties with Nazi Germany – Finland was led by relatively tough presidents; experienced politicians who stressed national interest rather than sectarian or personal goals: the conservative banker Juho K. Paasikivi, the strong man Urho Kekkonen of the Centre Party and the cautious social-democrat Mauno Koivisto. Theirs was an era of stability: economic growth and welfare state, international neutrality and good relations with Moscow. They were succeeded by Martti Ahtisaari who pushed for NATO membership and Tarja Halonen who was more critical toward the military alliance; and the current Niinistö, the conservative transitional figure.

Those times are now gone. Stubb has proactively pushed for the new and assertive conservative trajectory, including the conservative collaboration with the far-right and himself as the “NATO president.” By contrast, Haavisto stresses caution and moderation seeking to preserve what was good in the old while embracing a more inclusive and sustainable future.

Today, Finland is a NATO member. The membership was said to bring about security and prosperity into the tiny Nordic country. Nonetheless, as border friction, hybrid threats, even nuclear risks are climbing, Finland’s economic erosion is the new reality. At the same time, the welfare state is under fire by the far-right government. Income and wealth polarisation is broadening.

With its ageing population and slowing growth, Finland should invest increasingly in social security, welfare services, economic growth and innovation, and sustainability. Internationally, the country should focus on broad-based cooperation, particularly with the Global South to benefit from its secular economic potential. Yet, the NATO membership will require further militarisation for years to come. And internationally, that compels the country to remain more euro-centric and perhaps even distanced from some large emerging economies, due to geopolitics.

The current status quo is untenable. Something has got to go.

About the Author

Dr Dan Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Centre (Singapore). For more, see https://www.differencegroup.net/ 

Full disclosure: In the past, Dr Steinbock has addressed, advised and consulted Finland’s leading multinationals, government agencies, parliamentary committees, financial institutions, and competitiveness and innovation organisations.

References

• [1] “Finland ‘AA+/A-1+’ Ratings Affirmed., S&P Global Ratings, O0 Oct 2023; “Which economy did best in 2023?” The Economist, December 2023.
• [2] See Ferraresi, Franco. 1997. Threats to Democracy: The Radical Right in Italy after the War. Princeton, N. J: Princeton University Press,
• [3] Teittinen, Paavo. 2023. “‘Spreads and proliferates like a Somali’ – ‘desert monkeys make me puke’ – Minister Wille Rydman’s old text messages reveal repeated racist use of language.” Helsingin Sanomat, 27 July. [in Finnish]
• [4] On the voluminous media stories, see e.g., “Interior Minister Mari Rantanen comments on her writing that has been associated with racial doctrines: ‘I believe in statistic.’” Iltalehti, 22 June; “Minister Tavio has talked about demographic replacement several times in the parliament.” Helsingin Sanomat, 3 July. [in Finnish]; “Online threats against Finnish journalist Ida Erämaa should be investigated and condemned” Council of Europe, J July 2023; “Far-right Finnish leader Riikka Purra sorry in racist posts uproar” BBC News, 1 July 2023.
• [5] “Foreign minister to MTV.” MTV News, 6 September 2023.
• [6] “Finnish workers on strike to protest labour reforms, welfare cuts.” F February 2024; “’Mafia’ strikes bring Finland to a standstill as unions face down government.” EuroNews, February 2024.
• [7] Quoted in the interview for the commercial “Seven O’Clock News, MTV 3, F February 2016. [in Finnish]
• [8] Suomi, Juhani. 2011. On this side of stars. Siltala [in Finnish]
• [9] Vapaavuori, January 2016. Half-Reckless Finland. Otava [in Finnish]
• [10]  Rosila dedicated to Stubb tens of pages in his memoir. See Rosila, Pertti J. 2019. Herrahissin vauhdissa. Tammi [in Finnish]
• [11] Finnish Broadcasting Corporation (YLE): With Alexander Stubb, 17 January.2024, 9 PM.
• [12] See https://www.eui.eu/people?id=alexander-stubb
• [13] Stubb, Alexander. 2017. Alex, Otava, pp. 52-3 [ebook]
• [14] Gates, Robert. 1988. A letter to Prof. Lavery. 30 August. Declassified in part; sanitised copy approved for release on J1 July 2012. CIA-RDP89g00720r000300100001-6
• [15] Stubb 2017, op.cit.
• [16] Bumiller, Elisabeth (O October 2003). “Debating a Leak: The Director: C.I.A. Chief Is Caught in Middle by Leak Inquiry” See also Wilson, Joseph. 2003. “What I Didn’t Find In Africa”. New York Times, 6 July.
• [17] In 2012, Häkkänen had declared that the conservative “youth share the financial views of Republican Party in the United States”.  See “Antti Häkkänen on conservatives’ presidential nomination: ‘Stop talks and together forward.’” Finnish Broadcasting Corporation, 13 August 2023. [in Finnish]
• [18] “Raimo Ilaskivi scolds Orpo and the way to select Stubb as the party’s presidential candidate.” Helsingin Sanomat, 4 August 2023 [in Finnish]
• [19] Ilaskivi, Raimo. 2023. “What happened to party’s presidential place?” Uusi Suomi, 8 August. [in Finnish]
• [20] See e.g., “Finnish presidential election: Faced with Russia, security takes centre stage”. Le Monde. 8 January 2024.
• [21] “Haavisto: Opportunity to transfer nuclear weapons through Finland would increase insecurity” – Stubb disagrees.” February 2024. [in Finnish]
• [22] Steinbock, Dan. 2008. NATO and Northern Europe: From Nordic Balance to Northern Balance. American Foreign Policy Interests. The Journal of the National Committee on American Foreign Policy, V0 Volume 2008 – Issue 4, pp. 196-210.
• [23] Anttila, Pekka. 2010. “Marginalised and into a sick leave.” Suomen Kuvalehti, 47. [in Finnish]
• [24] “Wikileaks: The [conservative party] promised Finland into NATO.” Helsingin Sanomat F2 February 2011 [in Finnish]; Wikileaks: US Embassy Urged Finland to Join NATO”. YLE News. 11 February 2011. On the Wikileaks cable 08HELSINKI427_a, see https://wikileaks.org/plusd/cables/08HELSINKI427_a.html
• [25] Lappalainen, Tuomo. 201. “Warning about a power coup: ‘Military and police have run away from government overview in Finland.” Suomen Kuvalehti 18 March. [in Finnish]
• [26] “Our wisdom has always been that we will not invite to our area the kind of forces, which in crisis situation would be enemies of Russia.” See Nurmi, Eero. 2013. “Finland is being taken gradually toward NATO.” 17 June. [in Finnish]. Volanen scrutinised these challenges of high-level Finnish decisionmaking in Volanen, Risto. 2016. Prime Minister as a foreign- and security policy decision-maker.” In Kimmo Pulkkinen et al. (eds), The augurs of fatherland. Edita, pp 463-86 [in Finnish].
• [27] John, Tara (4 April 2023). “Finland joins NATO, doubling military alliance’s border with Russia in a blow for Putin”. CNN.
• [28] Tuomioja, Erkki. 2022. Finland and NATO. TSL [in Finnish]
• [29] “Finnish expert: Ukraine should stay outside NATO; and so should have Finland.” Iltalehti, J January 2024; “A storm after the Russia comments by the Finnish professor.” Iltalehti January 2024.
• [30] 17 Oct – 4 Nov 2008; 26 Sep – 12 Oct 2014; 14 Nov – 3 Dec 2019; 23–25 Feb 2022; Taloustutkimus, Advisory Board for Defence Information (Ministry of Defence)
• [31] On the odd history and flawed methodology of the Index, see Steinbock, Dan. 2021. “How the World Press Freedom Index Was Politicised – Long Before the New Cold Wars.” The Street, 25 May. On the Index, see https://rsf.org/en/index
• [32] Saari, Mauno. 2019. “Questions to Finland’s free media.” Personal blog, 7 March. See https://www.maunosaari.fi/blogi/?k=vastuullinen+journalismi&p=1
• [33] Paananen, Veera. 2023. “Half of the people say that Finland must prepare for war in the coming years.” Helsingin Sanomat, 22 December. [in Finnish]
• [34] Quoted by Nurmi, Lauri. 2023. “: “Elina Valtonen warns Finland of drifting in NATO – Russian attack is possible.” Iltalehti, 23 December. [in Finnish]
• [35] Finland, Article IV/Country Report, IMF 3 January 2023
• [36] On competitiveness and innovation, see the Global Competitiveness Report by the World Economic Forum (annual). On Nokia, see Steinbock, Dan. 2001. The Nokia Revolution. Amacom; and by the same author. 2010. Winning Across Global Markets. Jossey Bass.
• [37] Steinbock, Dan. 2013. “Nokia’s failure.” CNBC guest blog, 17 September. See https://www.cnbc.com/2013/09/17/nokias-failure-no-flexibility-in-us-emerging-markets.html
• [38] O’Dwyer, Gerard. 2023. “Finland’s 2024 defence budget targets arms restocking, border security.” Defense News, 14 October.
• [39] Miller, Kathleen; Capaccio, Tony & Ivory, Danielle (22 February 2013). “Flawed F-35 Too Big to Kill as Lockheed Hooks 45 States”. Bloomberg L.P.
• [40] Laisi, Erno. 2024. “Here are the background players and financiers of Haavisto and Stubb.” Ilta-Sanomat, Feb 2. [in Finnish]