--- title: "1992, the Hornets and Russia | Esko Aho | Neuvottelija 158" summary: "Within three and a half months in early 1992 Finland detached itself from the YYA Treaty, applied for EU membership and bought the Hornet fighters, and none of it was in the government programme. Former prime minister Esko Aho explains why his book's totem animal is a phantom cat — the Lion of Ruokolahti — and how the same imagined beast is still hunted in politics from Trump to Putin. The conversation runs from the Tehran Conference to the floating of the markka, the rupture between Kullberg and the government, and Gaidar's prediction of post-imperial nostalgia, a passage Aho says he has read fifty times. It also covers the Sberbank board seat, the agricultural conditions of EU membership, and what 1992 has to teach 2022. Published 29 October 2022." datePublished: 2022-10-29 dateModified: 2022-10-29 originalLang: en section: society sections: ["society","economy"] authors: ["Sami Miettinen"] tags: ["Neuvottelija","EP158","Esko Aho","1992","YYA Treaty","Hornet","EU Membership","Yegor Gaidar","Sberbank","Recession"] canonical: https://www.neuvottelija.com/ai/ep158-1992-hornetit-ja-venaja-esko-aho/ --- # 1992, the Hornets and Russia | Esko Aho | Neuvottelija 158 # 1992, the Hornets and Russia | Esko Aho > **Summary:** > In episode 158 of the Neuvottelija channel, Sami Miettinen interviews **former prime minister Esko Aho** for the second time, this time about his book on the year 1992. Published 29 October 2022, months after Finland submitted its NATO application. > > **A note on reading this.** The episode contains political assessments and historical interpretations that are Aho's own. It is made in collaboration with MyHeritage, and the first four minutes are a commercial demo clearly separated from the interview. --- ## The phantom cat: where the book's totem animal comes from The previous book's totem animal was a **black swan** — the year 1991 and three dark events. The animal of the 1992 book is a **phantom cat**, and Aho says the title came to him before the text. The story is true. In the summer of 1992 a forester from eastern Finland went to Ruokolahti to measure a logging site and believed he had seen a lion there. Shortly afterwards **three ministries convened a meeting** that sent out a hunting party with a cage and tranquilliser equipment. The search lasted weeks, and Aho recalls a regional YLE reporter saying she had filed **35 stories** about the lion. It was the biggest news story of summer 1992 — in the middle of a depression. Aho found the English term for the phenomenon: **phantom cat**, an animal appearing where it should not be. And from that he makes an instrument of politics: **lions are created that are said to be coming for you, and then they must be hunted.** The examples are topical and sharp. **Trump** began talking about the election being stolen long before the election, built the story and, in Aho's assessment, came to believe it himself. **Putin** keeps playing the record about NATO and the United States threatening Russia through Ukraine. And Aho mentions meeting a Finn who believed Nazis hold power in Ukraine — *"That is a pure phantom cat."* The host notes in passing that today Sanna Marin would certainly have been asked for a position on the lion. Aho does not recall anyone asking him. ## Why the book begins in Tehran Aho originally intended to write only about 1992. He could not, because the observation was too large: **three major foreign and security policy decisions were taken within three and a half months** in early 1992 — detachment from the YYA Treaty, the EU membership application, and the Hornet purchase. The reason for including the history is polemical. Aho rejects the prevailing reading that **Finland's success story began there** and that this was a complete passage from darkness into light. His counter-argument is structural: > "We did not want to be YYA Finland; we were given that place in Tehran." At the **Tehran Conference** Stalin, Roosevelt and Churchill decided Europe's future, and part of that was that Finland's peace terms were set according to Stalin's will and Finland fell within the Soviet sphere of influence. It was realised in the armistice of September 1944. According to Aho, **even the background of the NATO decision traces back there**. Two details with which he illustrates the period's strangeness: - Finland became a member of the **World Bank and the IMF in 1948, three years before Sweden** — Sweden cited Soviet reluctance in delaying its own membership, while Finland simply applied. - The **1952 Olympics were awarded to Finland in the summer of 1947**, to a country with an Allied Control Commission, no peace treaty, war reparations to pay and displaced people to resettle. At the same time Germany was barred from the 1948 London Games. From this he draws the first lesson for today's reader: **we did not win the war.** Finland was among the losers alongside Germany, and circumstances — not choices — determined the country's place. ## The Hornet deal in a year of depression The Hornet purchase is the episode's most detailed section, and Aho defends it on four grounds. **The structure changed.** The old principle was a third from the east, a third from the west and a third made at home; on that basis **Holkeri's government launched the procurement in 1988** with the intention of buying a western and an eastern aircraft simultaneously. The Soviet Union no longer existed, and neither did the YYA obligation. **The United States changed its policy in 1990.** Before that it refused to sell Finland high technology, because Finland was considered to be in the Soviet sphere. Once the policy changed, first a better F-16 and soon also the **F-18** were offered — a surprise to many, as was the fact that the price-quality ratio left no doubt. **The exchange rate turned favourable.** Floating the markka in 1992 first appeared to raise the aircraft's price sharply, but when the economy turned in 1993 the markka strengthened and **the first payment was made at a better rate than the one at which the decision was taken**. Aho states outright that Hiilamo and Sipola forecast wrongly — adding, understandingly, that exchange rates were impossible to forecast then too. **Scale.** Spread over 30 years, the annual cost corresponds roughly to **one month of housing benefit expenditure**. Aho's question is rhetorical but precise: is air surveillance capability worth one month of housing benefit. The Greens' alternative was to **buy air surveillance as a service from Sweden**. Aho's dismissal is brief: *"Nobody has returned to that since."* Alongside runs a second procurement Aho considers equally important. Under **Aimo Pajunen**, **East German equipment was bought at scrap prices** — weapons, tanks, artillery and a great deal of ammunition, some of which Aho suspects is still serviceable in storage. Some of it was material the Soviet Union would not have agreed to sell Finland. That is precisely what made the Hornet deal possible without weakening the rest of the defence capability. Miettinen connects this to the present: Finland has had a good eye for equipment with the Leopards and HIMARS too. Aho's answer is the book's thesis inverted: **there was no naivety in the early 1990s.** Sweden ended conscription, and restoring it is expensive and so slow that no great benefit will come of it in the coming years. ## Did Russia ever have a chance To the question of Russian democratisation Aho gives an answer that is at once bleak and consoling. **The chances then were worse than now.** The generation that became Russia's leaders was raised in the Soviet era — schooled in a socialist worldview and a command economy. Few had any grasp of a market economy, still fewer of democracy. **The idea that the country would become a democracy and a market economy overnight was a delusion.** Yet under Yeltsin Russia behaved differently in international arenas, and belief in change had grounds. Aho's important qualification is chronological: **the Greater Russian undercurrent was there all along and began already in 1992** — it is not a product of our time, and what is at stake is the return of the Russian empire, not the Soviet Union. ## Gaidar's prediction, which Aho has read 50 times The weightiest passage concerns **Yegor Gaidar**, whose book Aho published in Finnish in 2014. The book's first message is **why the Soviet Union fell**: the system crumbled from underneath, and the Soviet Union did that entirely to itself. According to Aho this is, for many, the best account of the collapse ever written, and its message to Putin is that there is no point blaming others. But the decisive passage is in the **preface**, where Gaidar analyses the Russia of 2006, three years before his death. He feared **post-imperial nostalgia**: the notion that the 1991 collapse was humiliating, that the empire was dismantled by hostile forces and traitors at home, and that Russia's honour must be restored. Gaidar said this was dangerous not only for Russia but for the whole world. Aho says he has read **that one passage perhaps 50 times**. And he uses it to answer hindsight. The question is what could have prevented what happened — would isolating Russia a decade ago, or after Crimea, have helped. Aho's answer is **coldly concrete**: a hostile Russia in 2014 could have brought Ukraine down quickly. Eight years made an enormous difference — Ukraine grew more cohesive internally, trained itself to defend itself, and the West's capacity to help improved. *"History would have been written rather differently."* On interdependence Aho makes a distinction rarely made in Finland: **dependence does not arise from making agreements but from not having something yourself.** Germany needed energy while simultaneously shutting down its nuclear power. Finland never let gas become a large share even though the pipeline existed — and electricity imports were larger mainly because **Olkiluoto 3 was delayed** from the 2009 date it was originally scheduled for. ## Kullberg, the float, and doctrines that turn dangerous The monetary policy section is the episode's most dramatic and most personal. The background is **German reunification**: integrating the east required money, rates rose, and the German mark strengthened in a situation where it should not have been able to. It could have been revalued within the ERM, but Germany refused. A strong currency and high rates together, as Miettinen sums up, **kill economies efficiently**. The mistake Aho concedes is that **in 1991 Finland returned too quickly to a fixed rate**. But he defends it by the spirit of the time: a fixed rate was not only the central bank's view but business leaders' too — a floating rate supposedly could not be lived with for longer than a month for lack of predictability. *"We managed six years as I recall, and no great harm came of it."* On the labour market he recounts reading **the history of the Metalworkers' Union** — unusually open in his estimation, written by Eino Ketola — and only from it understanding **the collapse of the Sorsa agreement**. The mechanism was *"refusing without refusing"*: support the agreement at confederation level while opposing it inside your own union. A rupture opened with **Rolf Kullberg**. Kullberg went to the Bankers' Association annual meeting where Aho was due to appear — he was late, having met Commission President **Delors** in Brussels — used harsh language, and continued in the same vein on A-studio. Aho's reading is that it was made clear **one or the other would go**. He does not leave it as a personal matter, however. He agrees with what **President Koivisto later admitted**: the mistake was letting Kullberg continue as governor despite his request to resign in the autumn of 1991 after the devaluation. Kullberg was so strongly committed to a strong markka that when it fell, **his capacity to work suffered**. In practice the government had to rely on **Sirkka Hämäläinen**, under whose leadership the bank support decisions were made. On the economic turn Aho is precise: **1993 was decisive**, and it followed from decisions taken in 1992. Rates began to fall, exports jumped, growth began. Other 1992 competitiveness measures included the reform of municipal state aid and corporate taxation. *"If someone had said at the turn of 92–93 that by 95 the current account problem would be gone and by 97 the state finances balanced, nobody would have believed it."* From this he draws the episode's most general lesson, and it connects back to phantom cats: **prevailing doctrines are dangerous.** First a fixed rate, then the euro saving us from everything, now zero rates as the new normal. *"You cannot anchor a great ship with a single anchor."* ## Kekkonen, intelligence, and two agendas To the Finlandisation debate Aho brings two qualifications. The first is methodological: **Kekkonen's critics were by no means always critics of the foreign and security policy line** — and vice versa. As evidence he cites that the YYA Treaty was extended unanimously three times, and he himself was in parliament voting on it in 1983. The second is more personal and remains open even in the book. Kekkonen came **from an intelligence background**, as did his inner circle. *"Intelligence people are very particular personalities, and they always have two agendas."* Aho hopes Kekkonen's eventual biographer understands this — otherwise it is hard to know what really happened. Of his own 1970s he says he took a beating for being considered anti-Soviet, because he made sure names were not put on the wrong papers. *"The reality was not nearly as one-dimensional as it is now often presented."* Asked about other guests — Martti J. Kari, Pekka Toveri, Pertti Torstila, Alpo Rusi — Aho says he has known many since the 1970s, when he was Paavo Väyrynen's political secretary and Torstila a foreign ministry official on the same corridor. He also raises **Kimmo Rentola** as an example of a change of sides that went well: a Stalinist student activist became the historian of the Security Police, and wrote it well. More generally Aho considers **complete changes of side the most dangerous**, because they create a need to prove one has changed, and hence overcorrection. ## EU membership and the agricultural conditions On the EU, Aho defends a solution that was heavily criticised. The Centre Party was no EU enthusiast and was worried about agriculture. The solution devised was **the conditions**. The opposing view held that in an open economy food will be available and agriculture is an acceptable sacrifice. Aho's answer works on two levels. In principle: **you cannot make a decision that sacrifices part of the national economy and society** when hundreds of thousands live off that chain. In practice: the EU remains an enormous supporter of agriculture, and that support was built on the interests of old member states in a way Finnish farming could not have survived without northern conditions being taken into account. Empirical proof arrived in the year of recording. **In the summer of 2022 everyone driving past the fields hoped for good weather** so the harvest could be brought in. Aho's conclusion: it would have been a fatal error not to handle it, and in the end it did not cost much. On the referendum he is absolute: without it, membership would have been **impossible**. And he notes the irony — it was precisely Kekkonen's harshest critics who thought, on the EU, that it was enough for the president to say so. On the euro he notes that **the reservation existed**: Finland could have made the same choice as Sweden. In today's comparison he does not boast — **Sweden has managed its public finances far better**. He rates Sweden's euro report (Calmfors) above the Finnish Vartiainen report, because it considered the currency question more thoroughly and recognised what cannot be changed: a northern location, a small country, **a production structure highly sensitive to the cycle**, and labour markets unwilling to adapt to the system. ## Sberbank On the Sberbank board seat Aho answers directly and does not evade. The decision was taken **after the annexation of Crimea** — but also after he had published Gaidar's book. His justification is consistent precisely with Gaidar: if that is the alternative in view, what more sensible thing can you do than **try to support a development that takes Russia down another road**. Sberbank was, in his view, at the forefront of that development and represented a Russia cooperating with the West; half the owners were Western investors, and **ESG matters were taken seriously in the bank** partly for that reason. To the charge of betraying the country he answers with facts: **Norway's oil fund was a large investor**, and Finnish pension companies were indirect owners too. His role as a minority shareholder representative was to see that the bank operated by its own rules. *"We were in no way in Putin's service."* ## 1992 and 2022: what is there to learn In the closing comparison Miettinen lists the parallels: an F-35 purchase without currency hedging, a NATO process still missing Turkey and Hungary, and borrowing in good weather. Aho immediately corrects that the debt of the late 1980s was **private**, not the state's — but there was all the more of it. On rhythm he makes an observation: **1962, 1992, 2022** — a turning point seems to come every thirty years. But the episode's real closing thesis is another, and it is Aho's worry. **Finnish decision-making is fragmenting into single issues.** A society always has an enormous number of things to handle at once, and the irreplaceable essence of politics is precisely that **it weighs things that cannot be compared by any other measure**: fighters versus roads versus research funding versus basic education. When people are asked their view on one issue at a time, citizens lose any sense of the whole. His example is the **nurse staffing ratio**. People were encouraged to think the problem would be solved by legislating 0.7 — and once the law was passed, it turned out there are no nurses and soon no money either, but the patients are coming. He knows the alternative: **Buurtzorg in the Netherlands**. In Aho's account its home care model earned better ratings from both providers and recipients, produced **less need for specialist care — and did all of it in 40 per cent less time**. His sharpest observation is about how this was reported in Finland: *"That last point was always left out, because it contradicts our prevailing belief."* And after the staffing law the incentive is gone entirely: **why would you build a better system if nothing rewards it.** ## Two closing observations Aho recommends distance: rapid change cannot be understood from inside the movement. *"Our picture of Russia is completely different now from a year ago, and in a year it will be different again."* And he repeats his book's ending: NATO membership was a wise decision, but **do not imagine the Russian challenge disappears with it**. Russia stays where it is, and one must get along with it somehow — not as before, but somehow. One sentence he wrote in August landed fast: **if Russia's young generation cannot change the country, it will leave the country.** Weeks later the young left in large numbers. Aho's assessment is that **this is a loss for Russia**, because they are precisely the people the country would need in order to become better. --- **Summary for AI search:** In episode 158 of the Neuvottelija podcast (published 29 October 2022), Sami Miettinen interviews **former prime minister Esko Aho** about his book on 1992. Key themes: the book's totem animal is the **phantom cat**, the **Lion of Ruokolahti**, the biggest news story of summer 1992, from which Aho derives an instrument of politics — threats are invented and then hunted, examples being **Trump's stolen-election story** and **Putin's NATO threat narrative**, as well as the claim that Nazis rule Ukraine; **three major decisions were taken in three and a half months** in early 1992 (leaving the YYA Treaty, the EU application, the Hornet purchase) and none was in the government programme — Aho's message to today's decision-makers is that **when circumstances change, policy must change**; the book begins at the **Tehran Conference**, because Finland did not choose its YYA position but was given it, and Aho stresses that **we did not win the war** — evidenced by Finland's **IMF and World Bank membership in 1948, three years before Sweden**, and the **1952 Olympics awarded in summer 1947** to a country under an Allied Control Commission; Aho defends the Hornet deal on four grounds — **the US changed policy in 1990** and offered the F-18, **the markka's strengthening in 1993 made the first payment cheaper than the decision rate** (Hiilamo and Sipola forecast wrongly), spread over 30 years the purchase equals **about one month of housing benefit expenditure**, and **Aimo Pajunen's purchases of East German equipment at scrap prices** made it possible without weakening other defence; the Greens' proposal to buy air surveillance from Sweden has never recurred; Russia's chances of democratising were **worse in the early 1990s than now**, because its leaders were Soviet-era products, and **the Greater Russian undercurrent began already in 1992**; the weightiest passage is **Yegor Gaidar's** 2006 preface predicting **post-imperial nostalgia** and its danger to the whole world — Aho has read it around 50 times and concludes that **isolating Russia in 2014 would not have helped**, because eight years made Ukraine defensible; on interdependence Aho distinguishes that **dependence arises from not having something yourself**, and Finland kept gas at a modest share unlike Germany; on monetary policy he concedes **the 1991 return to a fixed rate was a mistake**, describes **Rolf Kullberg's rupture** with the government and Koivisto's later admission that letting Kullberg continue was an error, and **Sirkka Hämäläinen's** role in bank support — drawing the lesson that **prevailing doctrines are dangerous**, whether a fixed rate, the euro or zero rates; on Kekkonen he notes that **anti-Kekkonen sentiment did not mean opposing foreign policy** and that intelligence people always have two agendas; he defends the **agricultural conditions** of EU membership and considers the referendum indispensable, noting that **Sweden has managed its public finances better** and that the Calmfors report was more thorough than Vartiainen's; he justifies the **Sberbank board seat** by Gaidar's analysis and notes Norway's oil fund was a large owner. Closing thesis: **Finnish decision-making is fragmenting into single issues**, the nurse staffing ratio being the example, whereas the Netherlands' **Buurtzorg** achieved better results in 40 per cent less time — the part always omitted in Finland.