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 had captured two-thirds of the Karelian Isthmus, 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 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 hostilities the following morning. By the terms of the treaty, Finland ceded 9% of its territory to the Soviet Union, though the Soviets' attempt to conquer Finland had failed. 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 specified in the treaty to the Soviet Union.
