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Officially claiming to be neutral, Finland lay in the grey zone between the Western countries and the Soviet bloc during the Cold War. The military YYA Treaty (Finno-Soviet Pact of Friendship, Cooperation and Mutual Assistance) gave the Soviet Union some leverage in Finnish domestic politics. This was extensively exploited by president Urho Kekkonen against his opponents. He maintained an effective monopoly on Soviet relations from 1956 on, which was crucial for his continued popularity. In politics, there was a tendency to avoid any policies and statements that could be interpreted as anti-Soviet. This phenomenon was given the name "Finlandization" by the West German press.[83]
Finland maintained a market economy. Various industries benefited from trade privileges with the Soviets. Economic growth was rapid in the postwar era, and by 1975 Finland's GDP per capita was the 15th-highest in the world. In the 1970s and 1980s, Finland built one of the most extensive welfare states in the world. Finland negotiated with the European Economic Community (EEC, a predecessor of the European Union) a treaty that mostly abolished customs duties towards the EEC starting from 1977. In 1981, President Urho Kekkonen's failing health forced him to retire after holding office for 25 years.
Miscalculated macroeconomic decisions, a banking crisis, the collapse of its largest trading partner (the Soviet Union), and a global economic downturn caused a deep early 1990s recession in Finland. The depression bottomed out in 1993, and Finland saw steady economic growth for more than ten years.[84] After the collapse of the Soviet Union, Finland began increasing integration with the West.[85] Finland joined the European Union in 1995, and the Eurozone in 1999. Much of the late 1990s economic growth was fueled by the success of the mobile phone manufacturer Nokia.[42]
The Finnish population elected Tarja Halonen in the 2000 Presidential election, making her the first female President of Finland.[86] Financial crises paralyzed Finland's exports in 2008, resulting in weaker economic growth throughout the decade.[87][88] Sauli Niinistö has subsequently been elected the President of Finland since 2012.[89]
Finland's support for NATO rose enormously after the 2022 Russian invasion of Ukraine. Prior to February 2022, polling showed a narrow but definitive majority in opposition to NATO membership;[90] by April, a supermajority were in favor of membership.[91][92][93][94] On 11 May 2022, Finland entered into a mutual security pact with the United Kingdom.[95] On 12 May, Finland's president and prime minister called for NATO membership "without delay".[96] Subsequently, on 17 May, the Parliament of Finland decided by a vote of 188–8 that it supported Finland's accession to NATO.[97] Finland became a member of NATO on 4 April 2023.[98]
Lying approximately between latitudes 60° and 70° N, and longitudes 20° and 32° E, Finland is one of the world's northernmost countries. Of world capitals, only Reykjavík lies more to the north than Helsinki. The distance from the southernmost point – Hanko in Uusimaa – to the northernmost – Nuorgam in Lapland – is 1,160 kilometres (720 mi).