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June 20, 2022updated 28 Jun 2022 8:57am

Sweden, Finland and the balancing act of NATO expansion

As the Russian war against Ukraine continues, NATO needs to decide what to do about Finland and Sweden’s applications to join the alliance.

By Andrew Tunnicliffe

“If our Western counterparts continue a clearly aggressive line, we will undertake proportionate military-technical countermeasures and will respond firmly to unfriendly steps,” Russian President Vladimir Putin told a collaborative of his most senior military commanders in front of a national TV audience in December 2021. He added: “I’d like to stress that we are fully entitled to do that.”

At that time the president and his military chiefs were amassing the largest ground force in Europe since the Second World War on Ukraine’s eastern borders.

Despite what Putin would have us believe, the invasion was a long time in the making. It’s perhaps been his goal since he came to power: to conquer Ukraine, claiming back land he believes rightfully belongs to “the Motherland”. The invasion last winter wasn’t the beginning; it was the latest in a string of attempts to destabilise the region, and then turn it upside down.

The annexation of Crimea in 2014 was preceded by wars in Gorgia and Chechnya and attempted assassinations of then presidents of Ukraine. The path to where we are now has long been trodden, not only by Putin but those that have been dragged with him along the way.

When speaking of ‘Western counterparts’ in the days before Christmas, Putin was largely referring to the North Atlantic Treaty Organization (NATO). For almost as long as he has fantasised of his country’s expansion, he has been obsessed with that of NATO. Ironically, until now the organisation had little appetite for it. Of course, it was always looking for ways to shore up its defences, and more locally the defences of member states, but expansion in any meaningful way was not an active consideration.

Strengthening NATO against Russian aggression

Paradoxically, Putin’s military aspirations for Ukraine have resulted in exactly what he didn’t want: potential NATO expansion. After weeks of open discussion, in mid-May, Finland and Sweden submitted letters of application to join NATO.

Words not lightly chosen by NATO Secretary-General Jens Stoltenberg, when announcing the formality, would have been hard to ignore by Putin and his supporters. “All allies agree on the importance of NATO enlargement,” he said. “We all agree that we must stand together, and we all agree that this is an historic moment which we must seize. This is a good day at a critical moment for our security.”

The news wasn’t unexpected and, in fact, had been eagerly awaited by many. Writing in a Royal United Services Institute (RUSI) commentary, retired Colonel Per Erik Solli and Øystein Solvang warned the outbreak of war in Ukraine should be a ‘wakeup call to the Nordic governments’, whom they said should ‘create a more robust and coherent deterrence and defence posture across the region’.

“To ensure security and stability, all the states on Russia’s northwest flank must further advance the regional agenda from intertwined tactical and operational defence cooperation towards more a compelling deterrence strategy,” the two said.

Speaking through RUSI, foreign policy advisor to the National Coalition Party of Finland, Henri Vanhanen, said that whilst for many the decision of his country might have been seen as a ‘sudden change of heart regarding military alignment’, Russia’s decision to invade Ukraine ‘left Finland with no other option’.

Accession to NATO by both countries could arguably be the natural conclusion to what has been a slow creep towards it. The two Nordics have, in recent decades, been working more closely with their regional neighbours and current NATO members – Denmark, Iceland and Norway – on matters of security. In that context, it is easy to see why Putin has become increasingly agitated by NATO activities; even if many would argue, with substance, that his concerns are the result of paranoia rather than anything more tangible.

Expanding NATO’s borders with Russia

So, what do the applications mean for NATO and Russian? For Russia, it’s simple: NATO is increasing its presence on the country’s border. Currently, Russia shares a small part of its European boundary with just two NATO members, Estonia and Latvia.

Relatively and geographically speaking, it really is somewhat insignificant given Russia’s borders stretch for almost 36,000 miles. However, should the applications by Sweden and Finland be successful, their accession will create the largest European border Russia shares with any one NATO member, at 810 miles, thanks to Finland.

Daniel Morris, lead analyst for aerospace, defence and security at GlobalData, says the addition of the two countries, particularly Finland, to the NATO family would strategically add two more nations into the protection of smaller Baltic states such as Estonia, Latvia and Lithuania, limiting any attempt by Russia to use the Baltic Sea to launch an assault.

“For NATO, Finland’s accession would be a strategic advantage due to its geography.”

“It adds another border which Russia now has to consider if it is to try and replicate its actions in Ukraine with other smaller European nations,” he says, reiterating the enduring position NATO has taken; that it is has no ambition to invade Russia: “It never will, unless it’s provoked”.

For NATO, Finland’s accession would be a strategic advantage due to its geography. Together with a large reserve force, this would strategically put Finland in a strong position to join.

“Finland has historically withheld previous Soviet invasions,” Morris says. “Sweden has, for a long time, been neutral, but with a heavy lean to the West. Sweden operates in the Baltic and has a considerable military, so joining NATO will again annoy Russia, which will only see this as a hostile action.”

Morris says both countries have large and advanced militaries for their population size, and Sweden in particular has ‘very advanced kit’.

Will Sweden and Finland’s defence budgets meet NATO spending targets?

One of the requirements of NATO membership, which has garnered huge interest in recent years, is spend. NATO requires member states to invest 2% of GDP in defence, a figure Finland surpasses at 2.2%, spending $6.1bn per year by the end of 2022. However, there is work to do for Sweden, which spends just 1.3% currently.

According to research by GlobalData, Finland’s defence budget will increase by 8.6% over 2021 by the end of the year, and will continue to grow towards 2027, totalling $9.3bn annually, driven by a programme of modernisation and major procurements such as the air force’s adoption of the F-35A fighter aircraft and the construction of a new class of corvettes.

Although Sweden is spending less in terms of GDP, its military budget already overshadows that of its neighbour, amounting to $8.4bn in 2021 (again a rise of 8.6%) and estimated to be $9.3b by 2027.

Whilst the 2% spend of GDP target seems a way off, political figures are increasingly keen to ramp up spending in light of events in Europe, and the country’s Ministry of Defence has outlined plans to restructure its military. Despite this, though, GlobalData analysis suggests that by 2027, spending in relation to GDP will not quite reach the NATO target, sitting at around 1.8%.

Sweden, however, also has another constraint to NATO membership, notes Morris. “One thing to note is that Sweden procures most of its equipment domestically and only imports only when it is necessary,” he explains. The country has a strong domestic defence market, headed by Saab and BAE Systems AB, which supply much of the military’s equipment across air, land, sea and communications.

However, Saab is also a major supplier to other NATO forces. “[Sweden’s reliance on domestic suppliers] has been seen by some analysts as a reason why Sweden has not wanted to join NATO previously,” says Morris. “NATO’s insistence on interoperability is at odds with Swedish equipment procurement. Although, this is somewhat of an outdated view because many NATO nations use Swedish-made kit.”

Could Turkey derail NATO’s expansion?

While the path ahead may look relatively straightforward – NATO will welcome two new members and Russia will be left to contend with an increasingly ‘hostile’ relationship with its neighbours in Europe – it’s not quite as simple.

Turkey, a NATO member since 1952 and located furthest east in the alliance, is less than enthusiastic at the prospect of Finland and Sweden countries joining and has recently threatened to delay the process. “This is a matter of vital national interest, and we are prepared to prevent their membership for as long as a year, if necessary,” said, Akif Çağatay Kılıç, MP for the country’s ruling Justice and Development party and chair of the Foreign Affairs Committee.

Morris says Turkey is concerned about Sweden’s alleged support of Kurdish groups and is placing demands on both countries to stop their perceived support of ethnic Kurdish groups Ankara considers to be terrorists. Turkey also demands the lifting of arms embargoes put in place after Turkish incursions into Syria and the extradition of Turks granted political asylum in Sweden and Finland following a failed coup in 2016.

“In reality, [Turkey is] already at the discussion table and will likely back down if [it] can get access to advanced systems such as the F-35 or the lifting of arms embargoes.”

“Turkey has been very vocal in its animosity towards the two potential members,” says Morris. “It has always felt that it is an outcast of the NATO organisation, believing that NATO doesn’t take its security concerns seriously. Saying that, if its demands are not met then there isn’t a way in which they can allow the two Nordic members.”

The demands are a big ask for both countries. Sweden has a large Kurdish refugee community, totalling as many as 100,000. Finland, has been more receptive to Turkey’s requests in recent years, considering the extradition of seven individuals to Turkey after already agreeing to two since 2019.

Although Turkey is seemingly playing hardball right now, Morris believes this will likely be addressed as negotiations progress. “Turkey’s leader is a ‘populist’ and needs to be seen as winning,” he says. “But in reality, they are already at the discussion table and will likely back down if they can get access to advanced systems such as the F-35 or the lifting of arms embargoes.”

Unknown factors in the path ahead

The coming weeks and months will prove pivotal for the future of NATO and Russia’s relationships with its neighbours and the West. At the time of writing, it’s almost impossible to say what will happen next: how the Ukraine war will develop and what ripples might that cause; what Turkey do as negotiations progress; and, out of left field for this article, what role China might play.

China and Russia have recently announced plans to work more closely on economic issues. The Kremlin says that, during a call between the countries leaders, “it was agreed to expand co-operation in the energy, financial, industrial, transport and other areas, taking into account the situation in the global economy that has become more complicated due to the unlawful sanctions policy of the West”.

Given the many factors, players and power struggles involved, it is difficult to predict how NATO’s expansion plans will pan out. We can speculate and analyse the moves made so far, but the truth is, no one knows – perhaps not even world leaders.

The late Donald Rumsfeld, twice US Defense Secretary, was roundly mocked for one of his more intriguing quotes: “As we know, there are known knowns – there are things we know we know. We also know there are known unknowns – that is to say, we know there are some things we do not know. But there are also unknown unknowns — the ones we don't know we don't know.”

It’s a statement that history has judged him on, but one that could hardly be closer to the truth today.

More information on Finland and Sweden’s defence markets can be found with a subscription to GlobalData. You can request a free demo of our services here.

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