On 23 August 1939, the Soviet Union (USSR) and Germany signed the Molotov–Ribbentrop Pact, in which the two parties agreed to divide the independent countries of Finland, Estonia, Latvia, Lithuania, Poland, and Romania into spheres of interest, with Finland falling within the Soviet sphere. Shortly after, Germany invaded Poland leading to the United Kingdom (UK) and France declaring war on Germany. The Soviet Union invaded eastern Poland on 17 September. Moscow turned its attention to the Baltic states, demanding that they allow Soviet military bases to be established and troops stationed on their soil. The Baltic governments acquiesced to these demands and signed agreements in September and October.
In October 1939, the Soviet Union attempted to negotiate with Finland to cede Finnish territory on the Karelian Isthmus and the islands of the Gulf of Finland, and to establish a Soviet military base near the Finnish capital of Helsinki. The Finnish government refused, and the Red Army invaded Finland on 30 November 1939. The USSR was expelled from the League of Nations and condemned by the international community for the illegal attack. Foreign support for Finland was promised, but very little actual help materialised, except from Sweden. The Moscow Peace Treaty concluded the 105-day Winter War on 13 March 1940 and started the Interim Peace. By the terms of the treaty, Finland ceded 11 per cent of its national territory and 13 percent of its economic capacity to the Soviet Union. Some 420,000 evacuees were resettled from the ceded territories. Finland avoided total conquest of the country by the Soviet Union and retained its sovereignty.
Finnish flags at half-staff
in Helsinki on 13 March 1940 after the Moscow Peace Treaty became public
Prior to the war, Finnish foreign policy had been based on multilateral guarantees of support from the League of Nations and Nordic countries, but this policy was considered a failure. After the war, Finnish public opinion favored the reconquest of Finnish Karelia. The government declared national defence to be its first priority and military expenditure rose to nearly half of public spending. Finland purchased and received donations of war materiel during and immediately after the Winter War. Likewise, Finnish leadership wanted to preserve the spirit of unanimity that was felt throughout the country during the Winter War. The divisive White Guard tradition of the Finnish Civil War's 16 May victory-day celebration was therefore discontinued.
The Soviet Union had received the Hanko Naval Base, on Finland's southern coast near the capital Helsinki, where it deployed over 30,000 Soviet military personnel. Relations between Finland and the Soviet Union remained strained after the signing of the one-sided peace treaty, and there were disputes regarding the implementation of the treaty. Finland sought security against further territorial depredations by the USSR and proposed mutual defence agreements with Norway and Sweden, but these initiatives were quashed by Moscow.
German and Soviet expansion in Europe
of St. Petersburg pictured in 2017. During the Winter and Continuation Wars, Leningrad, as it was then known, was of strategic importance to both sides.
After the Winter War, Germany was viewed with distrust by the Finnish, as it was considered an ally of the Soviet Union. Nonetheless, the Finnish government sought to restore diplomatic relations with Germany, but also continued its Western-oriented policy and negotiated a war trade agreement with the United Kingdom. The agreement was renounced after the German invasion of Denmark and Norway on 9 April 1940 resulted in the UK cutting all trade and traffic communications with the Nordic countries. With the fall of France, a Western orientation was no longer considered a viable option in Finnish foreign policy. On 15 and 16 June, the Soviet Union occupied the Baltic states without resistance and Soviet puppet regimes were installed. Within two months Estonia, Latvia and Lithuania were incorporated into the USSR as Soviet republics and by mid-1940, the two remaining northern democracies, Finland and Sweden, were encircled by the hostile states of Germany and the Soviet Union.
On 23 June, shortly after the Soviet occupation of the Baltic states began, Soviet Foreign Minister Vyacheslav Molotov contacted the Finnish government demanding that a mining license be issued to the USSR for the nickel mines in the municipality of Petsamo (Russian: Pechengsky raion) or, alternatively, permit the establishment of a joint Soviet-Finnish company to operate there. A license to mine the deposit had already been granted to a British-Canadian company, and the demand was rejected by Finland. The following month, the Soviets demanded that Finland destroy the fortifications on the Åland islands and grant the USSR the right to use Finnish railways to transport Soviet troops to the newly-acquired Soviet base at Hanko. The Finns very reluctantly agreed to these demands. On 24 July, Molotov accused the Finnish government of persecuting the Finland – Soviet Union Peace and Friendship Society, a pro-communist group, and soon afterwards publicly declared support for the group. The society organised demonstrations in Finland, some of which turned into riots.
Russian sources, such as the book Stalin's Missed Chance, maintain that Soviet policies leading up to the Continuation War were best explained as defensive measures by offensive means. The Soviet division of occupied Poland with Germany, the Soviet occupations of Lithuania, Latvia and Estonia, and the Soviet invasion of Finland in the Winter War are described as elements in the Soviet construction of a security zone, or buffer region, against the perceived threat from the capitalist powers of Western Europe. The Russian sources see the post-World War II establishment of Soviet satellite states in the Warsaw Pact countries and the Finno-Soviet Treaty of 1948 as the culmination of the Soviet defence plan. Western historians, such as Norman Davies and John Lukacs, dispute this view and describe pre-war Soviet policy as an attempt to stay out of the war and regain land lost after the fall of the Russian Empire.
Relations between Finland, Germany and the USSR
The geopolitical status in Europe on May 1941:
The United Kingdom and occupied areas
Germany, its allies and occupied areas
The Soviet Union and occupied areas
On 31 July 1940, German Chancellor Adolf Hitler gave the order to start planning an assault on the Soviet Union, meaning Germany had to reassess its position regarding both Finland and Romania. Until then, Germany had rejected Finnish appeals to purchase arms but with the prospect of an invasion of Russia, this policy was reversed and in August the secret sale of weapons to Finland was permitted. Military authorities signed an agreement on 12 September, and an official exchange of diplomatic notes was sent on 22 September. At the same time, German troops were allowed to transit through Sweden and Finland. This change in policy meant Germany had effectively redrawn the border of the German and Soviet spheres of influence, violating the Molotov-Ribbentrop Pact.
In response to this new situation, Molotov visited Berlin on 12–13 November. He requested Germany withdraw its troops from Finland and stop enabling Finnish anti-Soviet sentiments. He also reminded the Germans of the 1939 Soviet–German non-aggression pact. Hitler inquired how the USSR planned to settle the "Finnish question", to which Molotov responded that it would mirror the events in Bessarabia and the Baltic states. Hitler rejected this course of action. In December, the Soviet Union, Germany and the UK all voiced opinions concerning suitable Finnish presidential candidates. Risto Ryti was the sole candidate not objected to by any of the three powers and was elected on 19 December.
German von Ribbentrop
(right) bidding farewell to Soviet Molotov
in Berlin on 14 November 1940 after discussing Finland's coming fate
In January 1941, Moscow demanded Finland relinquish control of the Petsamo mining area to the Soviets, but Finland, emboldened by a rebuilt defence force and German support, rejected the proposition. On 18 December 1940, Hitler officially approved Operation Barbarossa, paving the way for the German invasion of the Soviet Union, in which he expected both Finland and Romania to participate. During this period, Finnish Major General Paavo Talvela met with German Generaloberst Franz Halder and Reichsmarschall Hermann Göring in Berlin. This was the first time the Germans had advised the Finnish government, in carefully couched diplomatic terms, that they were preparing for war with the Soviet Union. Outlines of the actual plan were revealed in January 1941 and regular contact between Finnish and German military leaders began in February.
In the late spring of 1941, the USSR made a number of goodwill gestures to prevent Finland from completely falling under German influence. Ambassador
Ivan Zotov was replaced with the more flexible
Pavel Orlov. Furthermore, the Soviet government announced that it no longer opposed a rapprochement between Finland and Sweden. These conciliatory measures, however, did not have any effect on Finnish policy. Finland wished to re-enter World War II mainly because of the Soviet invasion of Finland during the Winter War, which had taken place after Finnish intentions of relying on the League of Nations and Nordic neutrality to avoid conflicts had failed from lack of outside support. Finland primarily aimed to reverse its territorial losses from the March 1940 Moscow Peace Treaty and, depending on the success of the German invasion of the Soviet Union, to possibly expand its borders, especially into East Karelia. Some right-wing groups, such as the Academic Karelia Society, supported a Greater Finland ideology.
German and Finnish war plans
The matter of when and why Finland prepared for war is still somewhat opaque. Historian William R. Trotter stated that "it has so far proven impossible to pinpoint the exact date on which Finland was taken into confidence about Operation Barbarossa" and that "neither the Finns nor the Germans were entirely candid with one another as to their national aims and methods. In any case, the step from contingency planning to actual operations, when it came, was little more than a formality." 
The inner circle of Finnish leadership, led by Ryti and Mannerheim, actively planned joint operations with Germany under a veil of ambiguous neutrality and without formal agreements, after an alliance with Sweden proved fruitless—according to a meta-analysis by Finnish historian
Olli Vehviläinen. He likewise refuted the so-called "driftwood theory" that Finland was merely a piece of driftwood swept uncontrollably in the rapids of great-power politics. Even then, most historians conclude that Finland did not have any realistic alternatives to cooperating with Germany at the time. On 20 May, the Germans invited a number of Finnish officers to discuss the coordination of Operation Barbarossa. The participants met on 25–28 May in Salzburg and Berlin, and continued their meeting in Helsinki from 3 to 6 June. They agreed upon the arrival of German troops, Finnish mobilization, and a general division of operations. They also agreed that the Finnish Army would start mobilization on 15 June, but the Germans did not reveal the actual date of the assault. The Finnish decisions were made by the inner circle of political and military leaders, without the knowledge of the rest of the government, who were not informed until 9 June that mobilization of reservists, due to tensions between Germany and the Soviet Union, would be required.
Finland never signed the Tripartite Pact, which had been signed by all de jure Axis powers. The Finnish leadership and Mannerheim, in particular, clearly stated they would fight against the Soviets only to the extent necessary to redress the balance of the 1940 treaty. For Hitler, the distinction was irrelevant as he saw Finland as an ally.