In Chapter 8 of John Knowles A Separate Peace, Gene narrates,
Until now, in spite of everything, I had welcomed each new day as though it were a new life, where all past failures and problems were erased, and all future possibilities and joys open and available, to be achieed probably before night fell again. Now, in this winter of snow and crutches with Phineas, I began to know that each morning reasserted the problems of the night before.
But, on the battleship grey day Finny becomes functional for "the first time...since he came back" from his accident. So while Gene has reflected that Winter's occupation seems to have conquered, overrun and destroyed everything," Finny's attitude that "winter loves me" and his creation of the Winter Carnival conquers winter instead. Later, Gene expresses his feelings as Finny places on his head a laurel wreath made from the evergreen trees:
Phineas recaptured that magic gift for existing primarily in space, one foot conceding briefly to gravity its rights before spinning him off again into the air. It was his wildest demonstration of himself, of himself in the kind of world he loved: it was his choreogaphy of peace....It wasn't the cider which made me surpass myself; it was this liberation we had torn from the gray encroachments of 1943, the escape we had concocted, this afternoon of momentary, illusionary, special and separate peace.
For Gene, the restoration of Phineas to his old self, and the escape from thoughts of the war are what make the Winter Carnival so significant to him.