Finland's Political Thaw. LURE OF THE WEST

THE Baltic Sea is not frozen. Snow barely covers the sidewalks. The sun shines almost every day. Any Finn will tell you this winter has been the warmest in memory - and he's not referring just to the weather. It is also a season of political thaw.

The term ``Finlandization'' has for many lost its negative connotation of supine submission to Soviet domination. In an era of relaxed East-West tensions, this prosperous democracy instead has become a positive model for communist states along the Soviet Union's western border.

Hungarians, Czechoslovaks, and Poles - even Estonians, Latvians, and Lithuanians - talk of ``Finlandizing'' their nations, of obtaining Finland's free-market democracy in return for respecting Soviet security needs.

When Ronald Reagan came to power in 1981, he warned that unless the West was careful, it would end up emasculated and powerless, in short ``Finlandized.''

However, that same American president chose to stop over in Finland for three days last May on his way to the Moscow summit.

The Finns, at least, chose to see great significance in the visit. ``The President could have gone anywhere else, to Geneva or to Ireland,'' says Dieter Vitzhum, deputy director-general of the Finnish Foreign Ministry. ``By coming here, he showed that there is more understanding in the West toward our position.''

For the Finns, the new appreciation of their role has nonetheless translated into no noticeable strengthening of ties with the Soviet Union.

Relations were excellent under Leonid Brezhnev, Mr. Vitzhum says. They remain on a steady course under Soviet leader Mikhail Gorbachev. ``It is in our interest to get along well with whoever rules the Soviet Union,'' he explains.

Unlike with the cases of the unhappy Balts and East Europeans, Mr. Gorbachev doesn't have to worry about an anti-Russian revolt in Finland. In Helsinki's freely elected parliament, all political parties support a ``friendship treaty'' with Moscow which obliges Finland not to allow its territory to be used in an attack against the Soviet Union.

``When a couple of academics in Turku started discussing breaking off the treaty, no one took them seriously,'' recalls Martti Valkonen, an editorial writer at the daily Helsingin Sanomat. ``There's an almost unbelievable consensus about our policy toward the Soviet Union.''

In Eastern Europe, Soviet attempts to fill in historical ``blank spots,'' such as the massacre of Polish soldiers at Katyn, have become major political issues. But in Finland, the release of a new book by Soviet historian Dmitri Volkogonov blaming Stalin for starting the ``Winter War,'' attracted little attention. Previously, the Soviets insisted Finland provoked the invasion.

``We always had a balanced picture of the Winter War, so the Soviet disclosures were no revelation for us,'' explains Jyrki Iivonen of the Finnish Institute of International Affairs. ``In Poland there was a great gap between the official interpretation that the Nazis were guilty of Katyn and the popular interpretation that the Soviets did it.''

Gorbachev's glasnost (openness) has not even revived Marxism's ideological attraction. Finnish communists once won 28 percent of the vote. Today, they have split into three warring factions, which together enjoy no more than 10 percent of the vote.

In the past year, a stock market scandal further embarrassed the main ``Eurocommunist'' faction. The party lost so much money playing the stock market its leaders resigned, and their replacements must sell the party's ``House of Culture'' headquarters in Helsinki, designed by architect Alvar Aalto.

``The mess emphasizes communist incompetence,'' says Mr. Iivonen of the International Affairs Institute. He adds that Gorbachev's perestroika (restructuring) plans also have hurt the communists' image. ``They sharpened our image of the Soviet Union as a giant on clay feet, of a military giant and an economic weakling, at a time when economic power is seen as more important than ever.''

Economic forces are driving the Finns away from the unattractive Soviet market. Finnish trade with its giant neighbor resembles a colonial situation. The Finns import Soviet raw materials, primarily oil, and export finished products, icebreakers, machine goods, and textiles.

When oil prices were high at the beginning of the decade, the Soviet Union accounted for almost 25 percent of total Finnish trade. Since then, oil prices have plummeted, and today's figure is only 13 percent and falling. Trade is done on a barter basis, so the slump in oil prices lowers the amount of Finnish exports the Soviets can afford to buy.

``As long as oil prices stay low, I don't see any prospect for a revival in Soviet trade,'' says Kari Holopainen of the Bank of Finland. ``So far, with or without perestroika, we haven't found anything else to buy from the Soviets.'' Finland's economic fortune lies with the West, where 85 percent of its exports head, and Finnish companies are racing to penetrate Western markets.

``The Eastern trade just doesn't offer any potential,'' says Nokia's vice-president, Matti Saarinen, vice-president of Nokia, a consumer electronics firm doing a booming business with Western Europe. . ``It's the West that counts.''