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The Paasikivi-Kekkonen line refers to the doctrine President Urho Kekkonen’s (1956-1981) realization and development of his predecessor Paasikivi’s doctrine, aimed at Finland’s survival as an independent sovereign democratic and capitalist country in the immediate proximity of the Soviet Union.
The principal architect of Finland's postwar foreign policy of neutrality was Juho Kusti Paasikivi, who was president from 1946 to 1956. Urho Kekkonen, president from 1956 until 1981, further developed this policy, stressing that Finland should be an active rather than a passive neutral.
- Limiting the size of Finland's defense forces,
- Cession to the Soviet Union of the Petsamo area on the Arctic coast,
- Lease of the Porkkala peninsula off Helsinki to the Soviets for use as a naval base (prematurely terminated in 1956),
- Free transit access to this area across Finnish territory, and
- War reparations to the Soviet Union decided to 300 million gold dollars (amounting to an estimated 570 million U.S. dollars in 1952, the year the payments ended).
In April 1948, Finland signed an Agreement of Friendship, Cooperation, and Mutual Assistance with the Soviet Union. Under this mutual assistance pact, Finland was obligated, with the aid of the Soviet Union, if necessary, to resist armed attacks by "Germany or its allies" (i.e., NATO) against Finland or against the Soviet Union through Finland. At the same time, the agreement recognized Finland's desire to remain outside great-power conflicts. This agreement was renewed for 20 years in 1955, in 1970, and again in 1983.
Contemporary Finns often criticized the Paasikivi-Kekkonen line as tending towards a "liturgy" of good relations. Both countries were militarily prepared. However, international trade was active, in the framework of bilateral trade. Furthermore, the policy was heavily tied to the person of President Kekkonen, who consequently exploited his position as a "guarantor of Soviet relations" against political opponents.
The Finns responded cautiously in 1990–91 to the decline of Soviet power and the USSR's subsequent dissolution. They unilaterally abrogated restrictions imposed by the 1947 and 1948 treaties with the exception of a ban on acquiring nuclear weapons, joined in voicing Nordic concerns over the coup against Soviet leader Mikhail Gorbachev, and gave increasing unofficial encouragement to Baltic independence.
At the same time, by replacing the Soviet-Finnish mutual assistance pact with treaties on general cooperation and trade, Finns put themselves on an equal footing while retaining a friendly bilateral relationship. Finland now is boosting cross-border commercial ties and touting its potential as a commercial gateway to Russia. It has reassured Russia that it will not raise claims about the formerly Finnish territory ceded after the Continuation War (though a small but vocal minority of the people disagrees), and continues to reaffirm the importance of good bilateral relations.