Sweden's Shift: From Neutrality to Trust in NATO Dynamics

In light of Russia’s invasion of Ukraine, both Sweden and Finland have transitioned from their historic neutrality to NATO membership, enhancing their defense capabilities and opportunities for economic growth in the military sector. Swedish defense firms, including Saab, report increased collaboration and trust, while recognizing the need for a balanced relationship with the US.

The ongoing geopolitical upheaval catalyzed by Russia's invasion of Ukraine has unexpectedly benefited two of its neighboring countries—Sweden and Finland. In response to the invasion, these Nordic nations applied for NATO membership in May 2022, and by March 2024, both had become full members. This shift has brought about substantial changes in their national security and economic landscapes.

Micael Johansson, CEO of Swedish defense company Saab, expressed a shift in perception, noting, "We're no longer a country that cannot be trusted." This acknowledgment highlights Sweden's evolution from its historically neutral stance. Since joining NATO, Saab has successfully negotiated framework agreements with NATO's Support and Procurement Agency (NSPA), an entity that facilitates defense procurement for allies. Johansson stated, "We couldn't access NSPAs before," reflecting the advantages of being part of a collective defense framework.

Similarly, Jukka Siukosaari, Finland’s Ambassador to the UK, echoed these sentiments, emphasizing equal footing with other NATO allies and the prospect for Finnish defense companies. As NATO members commit to increasing their defense spending, both countries' financial commitments are already substantial—Finland at 2.4% and Sweden at 2.2% of GDP—and expected to increase to between 2.6% and 3% within three years. New NATO initiatives are being implemented, including the establishment of bases and joint defense forces in northern Finland, as well as the formation of The Joint Nordic Air Command.

Moreover, investments in advanced weapons systems and an increasing demand for aerial surveillance programs are indicative of the shifting focus in defense spending. Johansson noted that while US military aid to Ukraine may be paused, European leaders remain committed to long-term arms expenditure due to the persistently escalating tension with Russia.

In this environment, Saab is positioning itself as a key player, promoting innovative solutions like the GlobalEye airborne platform and the Sea Wasp underwater vehicle as European countries seek to bolster their defenses. However, the landscape remains complex, as Europe must balance its growing defense autonomy with the necessity of maintaining strong ties with the US defense industry.

The Nordic countries, particularly, are experiencing a shift as defense spending translates not merely to military capacity but also to economic vitality. Smaller and medium-sized companies are anticipated to contribute significantly to this landscape, signifying a pronounced change in the approach to military readiness and economic sustainability.

Furthermore, the introduction of the “Total Defence” concept, which spans across civilian infrastructure and national security, is emblematic of the evolving mindset in Northern Europe. Siukosaari articulated the need for integrated defense frameworks, as the traditional metrics of defense expenditure may not fully encapsulate the complexity of modern military readiness, wherein civilian systems play a critical role.

Amidst these transitions, both Sweden and Finland stand poised to illustrate valuable lessons to other NATO allies, namely how to redefine measurement and responsibility of defense spending, merging military needs with civilian endurance and capabilities.