Finland

After the collapse of the USSR, Finland restructured its economic policies to build relationships with the former Soviet republics and a stronger orientation toward Europe. In March 1992 Finland formally applied for membership in the European Community (now called the European Union, or EU). In February 1994 Martti Ahtisaari of the SDP was elected president. In May the European Parliament endorsed Finland for EU membership and in November Finnish voters approved their country’s inclusion in the EU. Also in May, Finland joined the Partnership for Peace program as a first step toward full membership in the North Atlantic Treaty Organization (NATO), abandoning a longtime policy of strict neutrality. In January 1995 Finland, along with Austria and Sweden, officially joined the EU.

In elections in March 1995 the SDP emerged as the strongest party in the Eduskunta, winning 63 seats. The SDP then formed a coalition with four other parties, and SDP chairman Paavo Lipponen was named premier. Finland took another step toward integration with Europe in May 1998, when it officially agreed to replace its national currency, the markka, with a new single European currency, the euro. The euro was introduced in 1999 and entirely replaced the Finnish currency in January 2002.

In national elections in March 1999 the ruling coalition headed by Lipponen and the SDP was returned to power, despite a poor showing by the SDP that substantially reduced the coalition’s majority in parliament. In February 2000 Social Democrat Tarja Halonen was elected Finland’s first female president. In a close election that was decided in a runoff, Halonen defeated former prime minister Esko Aho of the Center Party. Halonen replaced Martti Ahtisaari, who did not seek reelection.

In the March 2003 national elections the Center Party emerged as the largest party in the Eduskunta with 55 seats. The following month the Center Party reached an agreement with the SDP, which won 53 seats, and the small Swedish People’s Party, to form a coalition government. Center Party leader Anneli Jäätteenmäki succeeded Lipponen as prime minister and in so doing became Finland’s first female to hold the post. The new coalition government was dubbed the “red-earth” alliance to reflect the SDP’s labor background and the Center Party’s agrarian roots.

In June 2003, within months of coming to power, Jäätteenmäki resigned following allegations that she had used classified documents—purported to reveal her predecessor’s sympathy for the March 2003 U.S.-led invasion of Iraq—during the election campaign. Matti Vanhanen, defense minister and the Center Party’s deputy leader, replaced Jäätteenmäki as prime minister. In early 2006 Halonen narrowly won reelection as president. Parliamentary elections in March 2007 gave the Center Party 51 seats, only 1 more than its rival, the conservative National Coalition Party. The SDP was reduced to 45 seats. Vanhanen faced difficult talks on forming a new coalition government.