Finnish Democratic Republic

The Finnish Democratic Republic ( or "Suomen kansantasavalta", , Russian: "Финляндская Демократическая Республика"), also known as the Terijoki Government (), was a short-lived puppet state of the Soviet Union in Finland from December 1939 to March 1940.
The Finnish Democratic Republic was established by Joseph Stalin upon outbreak of the Winter War and headed by Otto Wille Kuusinen to govern Finland after Soviet conquest. The Finnish Democratic Republic was only recognised by the Soviet Union and nominally operated in Soviet-occupied areas of Finnish Karelia from the "de facto" capital of Terijoki. The Finnish Democratic Republic was portrayed by the Soviet Union as the official socialist government of Finland capable of restoring peace, but lost favor as the Soviets sought rapprochement with the Government of Finland. The Finnish Democratic Republic was dissolved upon signing of the Moscow Peace Treaty ending the Winter War and merged into the government of the Karelo-Finnish SSR.
Creation.
The Finnish Democratic Republic was established on 1 December 1939 in the Finnish border town of Terijoki (present-day Zelenogorsk, Saint Petersburg, Russia), a day after the beginning of the Winter War. Terijoki was the first town in Finland captured by the Red Army after the Soviet invasion, and the new government was seated there as its "de facto" capital. The Finnish Democratic Republic regime was commonly known by the colloquial name the Terijoki Government (, ), but officially the government was called the Finnish People's Government ( ). In Finnish historiography, the government is also occasionally called the Kuusinen Government ( ). 
Otto Ville Kuusinen was chosen as the prime minister and head of government. Kuusinen's cabinet was made up of Soviet citizens and left-wing Finns who had fled to Soviet Russia after the Finnish Civil War. A declaration delivered via TASS on behalf of the Finnish Democratic Republic stated, "The People's Government in its present composition regards itself as a provisional government. Immediately upon arrival in Helsinki, capital of the country, it will be reorganised and its composition enlarged by the inclusion of representatives of the various parties and groups participating in the people's front of toilers. The final composition of the People's Government, its powers and actions, are to be sanctioned by a Diet elected on the basis of universal equal direct suffrage by secret ballot." Soviet foreign minister Vyacheslav Molotov spoke to the German ambassador to the Soviet Union on 30 November—a day before the proclamation of the Finnish Democratic Republic—saying, "This government will not be Soviet but a democratic republic. Nobody will set up soviets there, but we hope that it will be a government that we can reach agreement with on safeguarding the security of Leningrad."
Finnish People's Army.
The Finnish People's Army was established on 11 November 1939 and nominally under the Finnish Democratic Republic's control, but in practice was fully incorporated into the Leningrad Military District. The People's Army included ethnic Russians, Finns, Karelians and Vepsians, most of whom were Soviet citizens. By November 26, there were 13,405 men in the corps, and by February 1940 there were 25,000 servicemen who wore their national uniform. The People's Army uniform looked like the Finnish uniform of the 1927 model with some of the khaki-colored overcoats captured from the Polish Army. These units where to later form part of the 71st Rifle Division of the Northern Front during the Continuation War. 
Relations with the Soviet Union.
The Soviet government entered into diplomatic relations with the Finnish Democratic Republic's government immediately after its creation. On the first day of its existence, the Kuusinen regime agreed to lease the Hanko Peninsula; to cede a slice of territory on the Karelian Isthmus; and to sell an island in the Gulf of Finland, along with sections of the Kalastajasaarento near the Arctic Ocean to the Soviet Union.
On 2 December 1939, Kuusinen and Molotov signed a mutual assistance agreement and a secret protocol in Moscow. The content of the agreement was very similar to what the Soviet foreign ministry had planned earlier in October 1939, though it never was presented to the Finnish government. According to the new agreement, the Soviet Union would cede a much larger area, Eastern Karelia, except for the Murmansk railroad, in exchange for the same territories that the Soviets had demanded in earlier negotiations from the Republic of Finland.
An earlier draft of the Moscow agreement was signed ten days earlier at Petrozavodsk by Andrei Zhdanov for the USSR and Kuusinen for the Republic. The Molotov–Kuusinen agreement mentioned leasing the Hanko Peninsula, and determining the number of troops to be appointed in a separate agreement. Before the 1990s, historians could only speculate about its existence and content. In 1997, during a joint Finnish-Russian project, Russian professor Oleg Rzesevski discovered the protocol in the Moscow Kremlin. The content is quite similar to protocols the Soviet Union signed with Estonia, Latvia and Lithuania in September–October 1939.
Reaction in Finland and abroad.
The Finnish Democratic Republic failed to gain support among Finnish workers as the Soviet Union had hoped. Instead, in the face of the invasion, Finnish society became strongly united in what is called the "Spirit of the Winter War" . The Democratic Republic also failed to gain any international recognition aside from the Soviet Union itself, although a number of prominent left-wing activists and writers such as Jawaharlal Nehru, George Bernard Shaw, Martin Andersen Nexø and John Steinbeck voiced their support for the government. In Nazi Germany, state newspapers gave their support for the Democratic Republic because of the Molotov–Ribbentrop Pact.
Joseph Stalin was well aware of the domestic political situation in Finland based on Soviet intelligence information, and thus did not anticipate that the establishment of the Democratic Republic would cause any revolutionary action or popular uprisings against the existing Finnish Government.
The Kuusinen Government was officially recognised by the Soviet Union and the Soviet satellite states of the Mongolian People's Republic and the Tuvan People's Republic.
Dissolution.
The Soviets had increasingly began to seek rapprochement with the Finnish government during the course of the Winter War and the Kuusinen regime fell out of favor. Although the Soviets captured two-thirds of the Karelian Isthmus, achieving their stated goal of acquiring land to protect Leningrad, casualties were very high and the upcoming spring thaw threatened their offensive. Both sides were exhausted from the war, but the Soviets held the upper hand and they successfully pressured the Finns into peace on Soviet terms. On 12 March 1940, the Moscow Peace Treaty was signed between Finland and the Soviet Union, ending the Winter War the next morning, and the Finnish Democratic Republic was dissolved. The treaty forced Finland to grant significant territory in Karelia to the Soviet Union, but allowed the country to avoid Soviet conquest and retain its independence. Subsequently, the Finnish Democratic Republic became obsolete and merged with the Karelian ASSR within the RSFSR to form the new Karelo-Finnish SSR, a Soviet republic in its own right, after Finland had ceded the areas to the Soviet Union in the treaty.