Last updated in March 2008
Political relations
Historical, cultural and economic ties have existed between Germany and Finland since the time of the Hanseatic League and the Reformation. In 1917, the German Empire played a leading role in Finland's break with Russia and its subsequent achievement of independence.
After the Second World War, the traditionally good economic and cultural relations between Finland and Germany were restored. Diplomatic relations were not resumed between Finland and the two German states until 7 January 1973, however.
Finland attaches great importance to its policy towards Germany, as also reflected by the numerous consultations on the political, economic and cultural fronts. The Finnish and German EU presidencies immediately succeeded each other for the second time in the second half of 2006 and the first half of 2007, which led the two governments to engage in very close dialogue.
Personal contacts are good at all political levels; high points of diplomatic exchange were the state visit to Finland by President Rau from 10 to 12 September 2001 and the state visit to Germany by President Halonen vom 2 to 5 May 2007.
There are good contacts between the parliaments of the two countries at both central and federal state level. The German-Nordic Parliamentary Friendship Group in the German parliament has maintained ties over many years with the Finnish-German Group of Parliamentarians in the Finnish assembly.
Economic relations
On both the import and export side, Germany has been Finland's most important trading partner since 1991. Finnish statistics for 2007 recorded imports from Germany of EUR 8.4 billion and exports to Germany of EUR 7.1 billion, resulting in a German surplus of EUR 1.3 billion. Taking imports and exports together, in 2007 total trade with Germany was worth EUR 15.5 billion, putting Germany just ahead of Russia (EUR 15.1 billion). In 2008, Germany is likely to remain Finland’s largest trading partner.
Eighty-five per cent of imports reach Finland by sea, the German seaports of Hamburg and Lübeck playing a key role.
Germany is a major destination for Finnish investments. Since 1985, Finnish companies have invested a total of EUR 10 billion in Germany. Up to the end of 2007, direct investments by German companies in Finland amounted to EUR 2.4 billion. Some 450 Finnish firms have made investments in Germany, mainly already well-established companies in the paper industry (including Stora Enso with Sachsenpapier in Eilenburg and UPM-Kymmene Oyj's acquisition of Haindl-Papier in Augsburg). The activities of German companies in Finland have increased during the past years: Valmet Automotive builds a large part of the Boxster and Cayman models for Porsche in Uusikaupunki on Finland’s west coast. In recent years, an increasing number of German banks (Deutsche Bank, NordLB, HSH Nordbank) and retail chains (Lidl, Bauhaus) have been operating successfully in Finland. The discount chain Lidl, which now has over 100 stores in Finland, has by offering an inexpensive range of goods helped to generally cut food prices in Finland. The DIY chain Bauhaus opened its fourth outlet in Finland in October 2007.
To complement the two existing nuclear power stations in Olkiluoto and Loviisa (each with two blocks), the Franco-German joint venture AREVA NP (34% Siemens) is currently constructing Finland’s fifth nuclear power plant in Olkiluoto, which will have a capacity of 1600 MW. The plant’s foundation-stone was laid in September 2005. The French partner is providing the nuclear technology, while Siemens is responsible for the turbine technology. It is a third-generation nuclear reactor, a so-called European Pressurized Water Reactor (EPR). The construction costs amount to approx. EUR 3 billion, 75% of which were financed via loans. The project is the largest single investment ever made in Finland.
A German-Finnish Chamber of Commerce has existed since 1978. German-Finnish EU and business consultations have been held annually since 1960.
Cultural relations
Although German ceded its status as leading foreign language to English around 1960, the influence of the centuries-old traditions of Finnish-German relations still makes itself felt in academic life, culture and jurisprudence.
The promotion of German teaching at Finnish schools is actively supported by the central Finnish school authorities. Another priority concern of German cultural policy in Finland is promoting Germany as a place to study in close cooperation with German universities. With tight budgets at schools, universities, museums and cultural centres, Finland is grateful for the assistance provided by the German Academic Exchange Service (DAAD), the Educational Exchange Service (PAD), the Alexander von Humboldt Foundation and other cultural organizations.
In spite of considerable budget cutbacks, the Goethe Institute in Helsinki makes a significant contribution to lively cultural exchange. Other major pillars of cultural relations are the German School and the German Library in Helsinki, both of which celebrated their 125th anniversary in 2006, the German Lutheran community in Finland (which is celebrating its 150th anniversary in 2008), the four DAAD academic teachers and the German departments at Finnish universities.
There is a tightly-knit network of cultural exchange in the private sector as well. In addition to numerous visits and personal contacts between artists, scientists and scholars from the two countries, a wide range of cultural activities are organized by the more than 30 Finnish-German cultural associations in Finland, as well as some 80 local chapters of the German-Finnish Society, the third-largest bilateral society of its kind in Germany. Activities are also carried out under some 80 town and municipality twinning arrangements, including exchanges for secondary school students and young people. Germany remains a popular place to study for Finnish students.
