Figure 1.--Here we see a displaced Karelian family after the War in 1947. Finland had a huge problem after the War. It was not a rich country before the War, and massive damage was done to the country's infrastructure. And now the country had 0.4 million displaced people to reuintergratte into Finnish society. ASnd they had to do it without access to the Marshall Plan which Stalin prohibited as well as to pay massive reparations to the Soviet Union.

Finland was not a rich country before the War. As part of the Paris Peace Treaty, Finland was classified as an ally of NAZI Germany, bearing responsibility for the War. The 1939 Soviet invasion of Finland was not considered. The Treaty imposed substantial war reparations on Finland and they were to be in goods so the Finns could not engage in financial manipulations. The Soviets also demanded a lease for the Porkkala area near Helsinki as a military base for 50 years. The reparations were widely seen as crippling the economy, especially as the Soviets did not allow the Finns to participate in the American Marshall Plan. The process was called Finlandization. The Soviets assumed that the joys of socialism would make the Finns as well as occupied Eastern Europeans enthusiastic allies and Communist Parties would win free elections. Only socialism failed , as it always does, and the occupied satellite countries lagged behind the Western European with free market economies. A communist coup failed (1948). The same occurred in Finland. The Soviets reduced their reparations were reduced by 25 percent (1948). They were finally paid off completely (1952) and Finn's developed a dynamic economy which reached Western European standards. But all of this meant that in the immediate post-War era, resources to deal with the displaced Finns were very limited. The War has severely weakened the Finnish economy as did the forced reparations. And the needs were enormous. More than 0.4 million fled the Soviet occupied areas. These were not forced movements. It was entirely voluntary, but virtually the entire population decided on fleeing Soviet occupation. A major step was Land Act of 1945. The Finnish Government purchased farmland, often compulsory purchases, and redistributed the land to veterans, creating 142,000 new holdings. Many of the veterans were from Karelia and other areas seized by the Soviets. This significantly expanded the substantial numbers of independent farmers. Some of the holdings were too small to be profitable, they helped the integration of the displaced Finns into the social and economic fabric of the country. The vibrant growth of the Finnish economy was probably even more important. While Finland was not allowed by the Soviets to participate in the Marshall Plan, the United States Export-Import Bank extended more than $100 million in financial credits. In addition, war0-time factories and companies created to meet the Soviet reparations were also able to earn need foreign exchange by exporting to the West.

Created: 10:26 PM 12/8/2022
Last updated: 10:26 PM 12/8/2022