The Finnish government received the first tentative peace conditions from the Soviet Union on 31 January 1940. By then, the Soviets made larger claims than they had before the war started. The demands were for Finland to cede the Karelian Isthmus, including the city ofViipuri, and Finland's shore of Lake Ladoga. The Hanko Peninsula was to be leased to the Soviet Union for 30 years. Finland rejected the demands and intensified its pleas to Sweden, France and the United Kingdom for military support by regular troops. The reports from the front still held out hope for Finland, anticipating a League of Nations intervention. Positive signals, however inconstant, from France and Britain and more realistic expectations of troops from Sweden, for which plans and preparations had been made throughout the 1930s, were further reasons for Finland not to rush into peace negotiations. In February 1940, Finland's commander-in-chief, Marshal Carl Gustaf Emil Mannerheim expressed his pessimism about the military situation, which prompted the government to start peace talks on 29 February, the same day the Red Army started an attack on Viipuri.
Terms
On 6 March, a Finnish delegation, led by Finnish Prime Minister Risto Ryti, travelled to Moscow. During the negotiations, the Red Army broke through the Finnish defence lines around Tali and were close to surrounding Viipuri. The treaty was signed on the evening of 12 March, Moscow Time, or 1 hour on 13 March, Finnish time. The protocol appended to the treaty stipulated that the fighting should end at noon, Leningrad time, and the fighting continued until then. Finnish concessions and territorial losses exceeded those demanded by the Soviets before the war. Finland was forced to cede approximately half of Finnish Karelia even though large parts were still held by the Finnish army. Military troops and remaining civilians were hastily evacuated to inside the new border; 422,000 Karelians, 12% of Finland's population, lost their homes. There was also an area that the Russians captured during the war that remained in Finnish hands according to the treaty: Petsamo. The treaty also stipulated that Finland would grant free passage for Soviet civilians through Petsamo to Norway. Finland also had to cede a part of the Salla area, the Finnish part of the Kalastajansaarento Peninsula in the Barents Sea, and in the Gulf of Finland the islands of Suursaari, Tytärsaari, Lavansaari, Peninsaari and Seiskari. Finally, the Hanko Peninsula was leased to the Soviet Union as a naval base for 30 years at an annual rent of 8 million marks. Contrary to a common belief, the Soviet troops' transfer rights by railway to the Hanko base were not granted in the peace treaty, but they were demanded on 9 July, after Sweden had acknowledged the railway transit of Wehrmacht troops to occupied Norway. Additional demands were the handing over any equipment and installations on the territories that were ceded. Thus Finland had to hand over 75 locomotives; 2,000 railroad cars and a number of cars, trucks and ships. The Ensoindustrial area, which was clearly on the Finnish side of the border, as it was drawn in the peace treaty, was also soon added to the Finnish losses of territory and equipment. The new border was not arbitrary from the Soviet viewpoint:
Before the war, Finland had been a leading producer of high quality pulp, which was an important raw material for explosives. By including the Enso factories, the Soviet Union captured 80% of Finland's production capacity.
The location of the new border was consistent with the Soviet defence doctrine, which envisioned taking the fight onto enemy soil by counterattacks and pre-emptive strikes. Under that doctrine, the ideal border should not allow the enemy to have natural defensible barriers and so instead of running through natural border locations, like the Bay of Viipuri or the swamp region in the isthmus between Lake Saimaa and Lake Ladoga, the new border ran on the western side of them. However, those positions were also very easy to encircle for an offensive enemy of the Red Army, as would soon be shown.
The Finns were shocked by the harsh peace terms. It seemed as if more territory was lost in the peace than in the war, in many ways some of the highest-valued areas of Finland. The loss of territory was painful for Finland in several ways:
Large parts of the most populated southern region that remained in Finland had been connected to the world via the Saimaa Canal system, which now was severed at Vyborg, where it connects to the Gulf of Finland.
The southern part of the lost area was Finland's industrial heart.
Karelians and Finns are closely related Finno-Ugric peoples. About half of Finnish Karelia was lost as a result of the treaty, which led to the Karelian question.
Before the war, Soviet atrocities against Ingrian Finns had been a major source of grief for many Finns. Losing part of Finnish Karelia added to this anguish.
Aftermath
Sympathy from world opinion seemed to have been of little worth. A certain bitter disappointment became a common feature of the Finns' view of other nations, especially the Swedes, who had offered plenty of sympathy but did not fulfill their obligations of military support for Finland. The harsh terms imposed on the Finns led them to seek support from Nazi Germany. The Winter War and the subsequent peace treaty were core factors in leading to what would become the Continuation War. In the end, that might have been a necessary condition for Finland's survival during war. Only a year later, in June 1941, hostilities resumed during the Continuation War.
