Anniversary achievements
Datum: 06.08.2009

Anniversary achievements

«1809 Nation forming»… forming of the Finnish nation
on the basis of the Swedish and Russian traditions
Nation forming is considered to be a continuous process,
which lasts across the generations».

From the site devoted to the anniversary events in Finland

200 years is the age of the Finnish nation; the Grand duchy of Finland forming a part of the Russian Empire has the same age, that is 200 years ago the civilized forming of the Finnish state organization took place and this happened under the patronage of Russia.

In March 1809 in the town Porvoo was convoked the Seym of the representatives of classes from the territory of the former Swedish Finland conquered by the Russian Empire. The meeting had double meaning: the oath of fidelity on the part of the representatives of the conquered territories to the Russian emperor and the recognition by the emperor of the residents of the conquered territories as the citizens, the recognition of their main rights, laws [1] and privileges [2] .

Geographical proximity, common stages of historical destiny, economic contacts, cultural interosculation, human contacts – what has remained from the bygone glory of the mutually beneficial cohabitation and what has changed beyond recognition and is practically impossible to be restored?

From the geographical standpoint nothing could have changed: Finland and Russia are situated on the same Eurasian lithospheric plate, no one moves anywhere. There is of course climate which, as it is known, changes and applies certain restrictions on the conditions of life in the region. There is an ecological state of the Baltic Sea which gives serious concern from the middle of the last century [3]. However there are the higher-order geographical factors determining the new conditions of interactions of two countries. These conditions are set by the parameters of political geography rather than physical.


While in the past the international border extended between Russia and Finland, at present it extends between Russia and Finland-EU. And the question – what is dominant in the Russian-Finnish interactions: the bilateral factor of national interest or the European factor – remains open.

Finland is a member of practically every integration mechanism of the EU: traditional political structures, European monetary union, Shengen agreement. As early as 1986 Finland became a member of the European Free Trade Association (the country became a member candidate of the EFTA as early as 1961). However Finland is considered to be a country non-aligned to the EU, non-aligned in a military sense or in actual interpretation not participating in alliances – Finland hasn’t joined the common defense system of the EU.

The attitude of Finnish population towards the membership in the European Union according to the regularly conducted social researches Eurobarometer is also below the average European rate [4]. If an average statistical European is most worried about the state of economy of his own country, the Finns worry first of all about unemployment and only then about general problems of economy. The third place is occupied not by the anxiety concerning inflation, as for the average statistical Europeans, but by the issues of public health (33% of anxiety of Finns against 12% of average European) [5].

So the extent of the Finnish integration in the European Union is also controversial [6]. It is not a question of the Finnish involvement into institutional processes, but that of the national self-consciousness. Apparently the European common home is not able to accommodate the Finnish sisu [7].

However even the incomplete integration of Finland in the European Union is able to bring big advantages both to Finland and to its interrelations with Russia. While analysing the interaction within the framework of a triangle RF-EU-Finland one can find at least two ways when the trilateral international cooperation can bring the “surplus value”:

  1. Finland as a mediator between Russia and the EU,
  2. the solution of Finnish-Russian problems bringing in the mechanisms of the EU.

Finland is a mediator

Russia has repeatedly turned to Finland with the appeal to introduce the visa-free travel regime for Russian citizens in the EU. However while the heads of the Finnish foreign department show the desire to adopt the visa-free travel regime with Russia [8], the EU still creates obstacles for the opening of its external borders for Russian citizens (though the former head of the European Commission Romano Prodi declared as early as in 2003 that the visa-free travel regime with Russia should be introduced within 5 years, i.e. in 2008).

Another example for the Finnish mediating potential is the process of the Nord Stream project approval by the countries of the EU, across the special economic zone of which the gas pipeline will be laid. President of the Russian Federation Dmitriy Medvedev called upon all the countries of the EU to follow Finland’s example when elaborating their foreign policy position on the issue.

The EU is a sponsor

It is worth searching for examples of the EU potential's use within the rich bilateral cooperation between Finland and Russia first of all in institutional mechanisms of regional, subregional and local transboundary interaction. These are both long-term programmes and short-term projects within the framework of euroregions systems, Interreg, Tacis and Nothern Dimension. While the projects of euroregions, Interreg and Tacis were worked out in the EU «from within», the Northern Dimension programme became a national initiative put forward by Finland in 1997.

Finland-Russia-Northwestern Federal District-Saint-Petersburg

During the whole period of Finland's autonomy from the Swedish kingdom Russia occupied a special place in the Finnish foreign economic activity and the foreign policy [9]:

  1. autonomous status of Finland within the Russian Empire, its independence from Sweden became the main catalyst for the Finnish language development and the Finnish national identity formation;

  2. political proximity with Russia became the prerequisite for industry and infrastructure development in Finland, so at the end of the XIX – at the beginning of the XX centuries the modern railway system was created in Finland (the size of the Finnish track was equal to that of the Russian), after the Second World War Finland provided significant resources for the development of national metallurgy and engineering industry to pay reparations to the USSR in the form of commodity supplies;

  3. by 1915 the Russian direction amounted to about 95% of the overall Finnish exports;

  4. in 70-80-s of the XX century the USSR was the main foreign trade partner of Finland.

A controversial period of the Finnish-Russian relations conversion took place in the 90s after the collapse of the USSR, the economic crisis that broke out in Finland and the deep recession in trade relations.

Now Russia is the main foreign trade partner of Finland again: the Russian direction constitutes 11,6% of exports from Finland and 16,5% of imports (see chart).

Export partner countries Import partner countries

According to the Finnish-Russian Commercial and Industrial Chamber

For Russia in whole its Northern neighbor is not of such great importance as vice versa. Though Finland is one of the 10 leading partner countries of Russia by export, it occupies only the 9-th place according to the results of 2008 (see diagram). By import Finland occupies only the 12-th place and is on the 12-th place by the aggregate commodity circulation with foreign countries. Considering the data produced by "Russian Railways" (more than 26 billion dollars of commodity circulation for a year), Finland outruns Great Britain and takes the 11-th place among all foreign trade partners of Russia.

Export (million dollars) Import (million dollars)

According to the Federal Custom Service

However coming one economic-geographical level in the Russian Federation down one can see that foreign economy indices will slightly approximate to the Finnish ones: Finland is of great importance to the Northwestern region of the RF.

By the volume of exports and imports in the Northwestern region of the RF Finland occupied the 4-th place last year (see diagram).

Export (million dollars) Import (million dollars)

According to the data of the Northwestern Custom-house

In the frontier trade of the Northwestern region the share of Finland is even more significant – 45,8% of the total commodity circulation (see diagram).

According to the data of the Northwestern Custom-house

Coming one more administrative-political level down – to the level of the subject of federation - to the city of Saint-Petersburg - we will see that Russian and Finnish foreign economy indices become even more balanced. At present Finland occupies the 3-rd place in the volume of the imported [10] production in Saint-Petersburg (see diagram).

According to the data of the Northwestern Custom-house

By the volume of foreign investments in the economy of Saint-Petersburg last year Finland also reached the 3-rd place with a share of 8,1% (see diagram).

According to the data of Petrostat

By the volume of foreign direct investments in Saint-Petersburg this year Finland has shot ahead into first place with a share of 20,2% (see diagram).

According to the data of the Committee of economic development, industrial policy and trade

Despite the particularities of the participation of each Russian geographical region indicated above (Russia, Northwestern Federal District and Saint-Petersburg) in the Russian-Finnish economic cooperation one of the determinative vectors of trade cooperation with Finland for all three of them is the energy field.

Russian companies provide for 100% needs of Finland in natural gas, a share of which in the energy of the country amounts to 10,6%. Special closeness of Finnish-Russian gas relations is reflected in the fact that 25% of the shares of Gasum, the natural gas importing company in Finland and the owner of the distributive network, belong to the public corporation Gasprom. The Finnish company Fortum is represented by turn in the power industry of Russia [11] .

There are examples of close cooperation of the RF and Finland in the production and sale of combustive-lubricating materials. Particularly Finnish Neste and Russian Lukoil significantly contribute to the development of fuel markets of the two countries.

For Russia the telecommunication field of Finland is of great importance and it’s not only the favorite mobile phones of Nokia. Finland is one of the key channels for Russian access to the Internet. Finnish-Swedish TeliaSonera is a long-standing participant on the Russian market of mobile communications.

In telecommunications as in the energy branch there is a two-way business-integration: since the 90-s the company Cubio Telecommunications, established by a group of the so called «Petersburg communicators», has been operating in Finland (see the article Finnish-Russian variant of Skype: all is not that bad ).

Petersburg constituent is reflected in the transport sphere as well. First of all this branch fulfils the potential of Saint-Petersburg, Leningrad region and Finland as the transit territories.

In spite of the state policy of the Russian Federation aimed at attraction of export-import traffic into Russian ports, the Baltic countries and primarily Finland keep on playing an important role in the transit of Russian import loads (see the article The increase of modern port terminals of Northern West is a pledge of economic security of Russia). The most important advantage of the Finnish route is the good arranged logistics which has advantages over the domestic ports even with the traffic jams at the border. Economic crisis significantly reduced the volumes of the traffic in 2009 but under favorable legislative conditions in the Russian Federation one can say with certainty that the turnover of the Russian-Finnish goods after the crisis will return to its pre-crisis parameters.

Cooperation between Russian Railways and Finnish railway (VR Group Ltd) is actively developing. The most ambitious transport infrastructure project is the high-speed railway traffic Helsinki-Saint-Petersburg [12] with the cost of more than 2 billion euro. The opening of the high-speed traffic is supposed to take place in 2010 (see the article Will Europe be closer?). There is a big potential of transit by rail freightage between two countries: in spite of the work of a few joint enterprises with both Russian and Finnish railways participating, the volume of turnover of goods by railway significantly yields to motor transport.

The ability of sea communication between Saint-Petersburg and Finland, first of all that of ferry-boat lines hasn’t been realized so far, in spite of the adoption of a range of documents in the RF simplifying visa formalities for the ferry-boat passengers (see the article All flags will come to us).

The role of the field of air traffic of Finland is becoming more important for Russian citizens, first of all for residents of Northwestern Federal District. Airport Vantaa near Helsinki is a favorite place of departure on foreign trips for Russian tourists.

And in the tourist sphere region of Saint-Petersburg significantly stands out of overall Russian statistics. In 2008 the consulate general of Finland in Saint-Petersburg granted more than half a million visas [13] , on the whole in Russia about 700 thousand visas were granted [14], i.e. the share of Saint-Petersburg amounted to 75%. On the part of Finland as a curtsey in return can be considered the fact that the consulate in Saint-Petersburg is the biggest foreign diplomatic representatives of the country.

While the flow of tourists in Finland from other regions of Russia (including the capital region) as a result of crisis events in the economy is reducing the number of Finnish visas granted to the residents of Petersburg is rising [15]. The positive dynamics of increase in Russian-Finnish contacts in the sphere of tourism remains.

Tourists from Russia in Finland differ favorably for Finnish companies (and also for municipal, regional and national budget) from the representatives of other countries as they spend in Finland on average two times more – up to 100 euro per day. One third of foreign tourist infusions in the Finnish economy falls on the Russian direction [16] .

Till recently the bilateral cooperation of Russia and Finland in the field of timber industry has been actively developing. However in the light of new strategy of the Russian Federation regarding its own timber resources and the field of woodwork and owing to the decline in demand on the production because of the economic crisis the expansion of Russian-Finnish interaction in the field of timber industry will be burdened by significant difficulties.

Owing to the crisis condition of the timber industry one of the leading directions of development of the region of the Southeastern Finland can become a sphere of tourist and trade contacts with Russia.

In the building sphere, on the contrary, in the Russian-Finnish relations there is a significant disbalance, and not in favor of Russian companies. Finnish companies have more experience in carrying-out of construction works in Russia as early as from the soviet times. The company YIT participated in the building projects of a few timber industrial complexes, Saimenskiy channel, and reconstruction of a hotel network (about the modern position of the concern YIT in Russia see the article YIT in Russia). After the crisis in the building sphere of Finland at the beginning of the 90-s Finns extend the scales of activity on the Russian territory.

At present in Russia there are all leading players of the building market of Finland: YIT, Lemminkainen, SRV, Quattrogemini. A number of small companies intend to participate in the construction of Olympic units in Sochi [17]. Since 1995 Tikkurila has been developing its own production on the territory of Russia[18]. But Russian companies don’t hasten to enter the building market of Finland. The exception is Petersburg holding Setl Group, which finished the construction of its first cottage settlement in Finland last year.

At the same time the activity of Russian citizens on the market of real estate of Finland is unprecedented: more than a half of bought real estate in the country falls on the representatives of the RF. At that the interest in Finnish real estate is shown not only by the residents of Northwestern federal district. Such scales of activity of Russian citizens on the territory of Finland arouse anxiety of the natives. A project of the company Silta Solutions, belonging to the group of “Petersburg telecommunicators” was opposed by the residents of municipality Saariyarvi who collected the signatures against acquisition by the company with Russian “roots” of 200 hectares of land on the lake board. However the interest of Russian citizens in the real estate in Finland apparently will remain, that is for the entry on this market new, more sophisticated mechanisms will be found.

The sphere of the Finnish dominance is the food one. Since the 90-s chocolate Fazer, candies Panda, coffee Paulig and milk production Valio have shown themselves on the Russian market. Separate companies like for example Fazer [19], are direct investors on the territory of Russia, not restricting themselves to the representatives for coordination of goods sales. The perspective direction of Russian-Finnish cooperation in the food sphere can become the experience of organization of the Finnish milk industry within the framework of Valio on the Russian ground.

Another example of the Finnish activity on the Russian market is publishing sphere. In 2005 Finnish concern Sanoma bought from the Dutch entrepreneurs a publishing house Independent Media [20], which unites more than 50 editions and projects. On the market of Russian mass media another representative of the European North holds strong positions – Swedish investment fund Kinnevik which owns newspaper Metro, TV holding STS Media and reference book “Yellow pages”.

The sphere of practically full integration of Swedish and Finnish participants on the Russian market is the bank sphere (see Unsecured trade or Finnish banks’ operation in Russia). Daughter enterprises of the Swedish bank Nordea on the territory of Russia (International Moscow bank and then Orgrasbank) provide for main needs in financial services of practically all Finnish enterprises. Even diplomatic representatives of Finland are not the exception.

Russian banks made attempts to enter the Finnish market, but they failed. International bank of Saint-Petersburg tried to open its branch in Helsinki at the beginning of the 2000-s, but the counteraction of Finnish regulators made it renounce its plans.

In spite of the difficulties in separate spheres of economic interaction of Russia and Finland cultural and human contacts are rapidly developing. First of all the matter concerns the residents of the Northwestern federal District, but not only the representatives of Finno-Ugric peoples. In language schools of Saint-Petersburg there is a constant increase in persons interested in studying the Finnish language: only for the last two years the number increased two times. On the part of Finnish citizens the interest towards Russians is registered by the number of marriages contracted with Russian citizens. Beyond the sphere of matrimonial relations from the part of Finns there is a splash of interest in the Russian language and culture. Amidst the youth of Russian citizens Finnish musical groups have a lot of fans. Cultural sphere and human factor of Russian-Finnish cooperation are the most perspective directions, they turned out to be subjected to the financial crisis to a very insignificant degree.

[1] Aleksander I accepted all laws which were currently in force on the conquered territories.

[2] The Russian emperor exempted his new nationals from tax duties to the central treasury, having proposed to use the collected means for own needs.

[3] Cooperation in the field of sustainable development and first of all on sewage treatment in the Gulf of Finland, is one of the leading spheres of cooperation between Russia and Finland. The President of Finland Tarja Halonen controls personally a few ecological projects.

[4] The Europeans in 2009// http://ec.europa.eu/public_opinion/archives/ebs/ebs_308_en.pdf

[5] Eurobarometer. The key indicators. Results in Finland// http://ec.europa.eu/public_opinion/archives/eb_special_en.htm

[6] For the first time the idea about contraposition of Finland and Europe was expressed by philosopher Johan Jakob Tengstrem the XIX century.

[7] Separate political groups are however ready to view Finland in the higher-order communities – in the Finnish society there are continuous discussions regarding possible entry of Finland to the NATO.

[8] See the statement of the Foreign Minister of Finland Alexander Stubb in October 2008 on the eve of the ministerial meeting within the framework of the «Northern Dimension»

[9] With the exception of a period 1918-1939 when both economic and political contacts of two countries were reduced to minimum.

[10] By export statistics is a little bit more modest – only the 13-th place

[11] Till 2007 Fortum possessed a share in the public corporation Lenenergo, and then it switched over to generation. At present the company possesses 25,66% TGC-1 and 92,9% TGC-10.

[12] The idea of organization of high-speed railway communication between Helsinki and Saint-Petersburg was proposed already by Anatoliy Sobchak in 1995.

[13] This is a record index among all diplomatic representatives in the city.

[14] According to the data of Finnish statistics in 2008 more than 2 million Russian tourists visited the country.

[15] According to the latest data the increase in granted visas by the consulate general of Saint-Petersburg in 2009 amounted to 3,9%.

[16] According to the data of Tilastokeskus (Bureau of statistics of Finland) of 2.2 billion euros spent by foreign tourists in Finland last year 658 million euros fell on Russian tourists.

[17] Within the framework of the concern SOFI Oy

[18] Supplies of paintwork production from Finland Tikkurila carried out even in the soviet times.

[19] The company Fazer owns a few bread-baking plants (public corporation Bread house, public corporation BKK Neva, public corporation Murinskiy bread-baking plant, public corporation Bead-baking plant of Vasileostrovskiy region, public corporation Zvezdniy) and provides for catering services through Fazer Amica.

[20] After the acquisition by the Finnish concern it was named as Independent Media Sanoma Magazines.
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