During The Winter War and The Continuation War
When the Winter War broke out, suspicions against Finland's "hazardous foreign politics" remained strong, most importantly among leading Social Democrats in Sweden. As the Winter War ended with the loss of Finnish Karelia, this was generally seen as the failure of the neutralist Scandinavia-orientation. As Soviet disapproval ended the discussions on a Swedish-Finnish defence cooperation in 1940, the Scandinavist line had run into a blind alley — and Fagerholm had no more say in the policy discussions that ultimately led to close dependency of Nazi Germany, German troops on Finnish soil, revanchism, and to co-belligerence in the Continuation War.
During the Continuation War, controversies on 68,000 refugees internment in labor camps in the vicinity of German troops, and particularly concerning a scandalous deportation of eight Jewish refugees to Gestapo on 6 November 1942, prompted Fagerholm to raise the question of his resignation. After the Battle of Stalingrad, when it increasingly became obvious that Nazi Germany was about to be defeated in World War II, the Cabinet of Edwin Linkomies was appointed to seek peace with Britain and the Soviet Union. Fagerholm was not included.
The end of hostilities in September 1944, found Finland in a thoroughly weakened state economically. In addition to its human and physical losses, Finland had to deal with more than 400,000 evacuees from the territories once again lost to the Soviet Union. War reparations were another burden for Finland. The reparations paid 1944–1952 amounted to an annual average of more than 2% of Finland's gross national product. The reparations were delivered according to a strict schedule, with penalties for late shipments. By inciting strikes and other disturbances at moments critical for scheduled delivers, the Soviet Union tried both to strengthen the influence of the domestic Communists, and to exert direct pressure on the government.
Read more about this topic: Karl-August Fagerholm
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