Military Spending

Within a few days after the start of Russia's special operation on the territory of Ukraine, the Swedish government, with the broad support of parliamentary parties, decided to increase defense spending to 2% of GDP. However, no time frame was provided. On April 11, the Swedish Armed Forces handed over to the government a clear timetable, which stipulates that defense spending will gradually increase and reach the level of 2% by 2028. This means that the Swedish defense budget in 2028 will be 127 billion kroons, or 12.7 billion euros, compared to 90.3 billion kroons planned for the same year before the start of the latest events on the territory of Ukraine.

The Armed Forces submitted the budget documentation for 2022 to the government 26 February 2021. It set out how to continue to develop the military capability in the next few years in order to achieve the goals in the defense decision made in December last year. These are major investments in both personnel and equipment. All with the aim of increasing military capability and contributing to stability and security in the immediate area.

In the government bill ‘Totalförsvaret 2021–2025’ (Total Defence 2021–2025), the Government proposed 15 October 2020 a substantial increase of capabilities in both military and civilian defence. The bill includes proposals on a new and expanded war organisation with reinforcements in all branches and functions of defence, as well as the re-establishment of five regiments and one air wing. The bill also includes substantial investment in military equipment, reinforcements of cyber defence, ammunition and foreign intelligence capabilities, and a doubling of basic-training volumes. Within the civilian defence, resilience is strengthened in several important societal functions.

During the period 2021–2025, the level of fundingto the Armed Forces will have increased by SEK 27.5 billion, compared with 2020. In total, SEK 79 billion will be allocated to military defence during the period., The decisions that have been made and proposed by the Government during the period 2014–2020, will mean that the military defence will have increased its funding by 85 per cent in fixed prices between 2014 and 2025.

Sweden's center-left “red-green” government and its sidekicks the Centre and the Liberals have agreed on a SEK 20-billion (over $2 billion) defence hike. Since the budgetary increase immediately raised funding questions, Social Democrat Finance Minister Magdalena Andersson explained that it would be at least partially financed through a “bank tax”. “We have come a long way in working with the Ministry of Finance on what such a bank tax should look like, and the idea is then that it will yield SEK 5 billion ($500 million) by 2022”, Magdalena Andersson said, as quoted by Swedish national broadcaster SVT 31 augusti 2019. The defense will receive SEK 5 billion annually from 2022 until 2025. This corresponds to a budget for the military defense of SEK 84 billion in 2025.

The money will be used to equip the defense, especially when it comes to ground combat forces. The number of defense personnel will increase, from today's 60,000 people to 90,000 including home defense and civilian employees. Defense Minister Peter Hultqvist said at the press conference that the current upgrading of the defense is the "biggest reinforcement in decades". He said "We have a better and stronger defense today than 2014, but much remains to be done."

The main features that form the basis for the settlement include:

• A new war organization from 2021
• Three mechanized brigades
• A reduced motorized brigade
• A mechanized battalion on Gotland
• New special dressings
• Reintroduction of divisional management
• organization will increase from 60,000 to 90,000 people. This includes home defense and civil servants.
• number of conscripts is increased from 4,000 to 8,000 in 2024
• More war aviation bases
• Larger base organization
• Two regiments are being re-established in Arvidsjaur and Gothenburg
• Two new regiments for the training of territorial units
• Artillery training is established in Kristinehamn
• Uppsala Air Combat School is being transformed into an aviation fleet
• More weapons systems and more equipment
• Old Gripen planes of C / D model will be retained after 2030
• All tanks and tanks are upgraded
• 48 artillery pieces of the Archer type are acquired
• New artillery for the three brigades
• A simple caged air defense system is procured
• Older air defense systems are being extracted from the stores
• The navy's vessels are upgraded with robotic air defense
• New naval target robots for the current five corvettes
• Enhanced submarine hunting ability in marine helicopters
• Qualified amphibious associations on the West Coast
• The fighter jet gets robots for long-range ground targets
• New vehicles, grenade boats and armor weapons for the home defense
• Increased transport resources for the defense

MISSION-BASED ORGANISATION 2006-2009

BUDGET ALLOCATION 2007-2012 (SEK bn)

In Sweden, which is currently still non-aligned despite increasing cooperation with NATO, military spending has dwindled from 3.1 percent of GPD in 1981 to a mere 1.1 percent in 2015, when it started to crawl upward, in a bid to match NATO's goal of 2 percent. According to Dagens Nyheter, Sweden's total military expenditure is projected to rise from SEK 37.5 billion ($4.6 billion) in 2015 to SEK 53.4 billion ($6.6 billion) in 2019.

A drastic increase in military spending would give Sweden a military with a sufficient deterrence capacity, a government investigation found in February 2018. A decline in the military's capacity would, by contrast, become "inevitable" after 2020, unless "large material investments" are made. Among others, Stridsfordon 9040 tanks will be over 30 years old after 2020. As a sort of future guide for Swedish politicians, the investigation has assessed and ranked a large number of defense projects considered relevant. Implementing all of them would set the Swedish state coffers back a whopping extra SEK 180 ($22 billion) by 2030, without even counting increased staff expenditures, the Dagens Nyheter daily pointed out. According to government investigator Ingemar Wahlberg, however, this would provide the Swedish defense with higher endurance, flexibility, impact power and better survival opportunities.

The pivotal priority would be to strengthen existing units by replenishing their inventory and using it to the maximum. Additionally, the first step would entail more coastal missiles and an enhanced naval and amphibian capacity. Sweden would retain its five submarines and focus on artillery and air defense. Combined, these measures would cost SEK 56 billion ($7 billion). The second step, costing SEK 65 billion ($8 billion), would put a strong emphasis on fighter aircraft, strengthening sensors, radar equipment and weapons. Additionally, Sweden's air force would be spread across the nation to become less vulnerable to attacks from abroad. Wahlberg described the Swedish Air Force in its current state as "vulnerable." In the third step, costing SEK 47 billion ($6 billion), emphasis will be put on the Navy, procuring more submarines, as well as artillery for the ground forces.

In February 2017 the Supreme Commander of the Swedish Armed Forces, Micael Bydén, said an additional 6.5 billion SEK ($718 mln), or a 15 percent budget boost, was needed to increase the country's military capability in the coming years. This is to be added to the 45 billion SEK ($5 bln) the government already had earmarked for 2017.

"Sweden is poised to have a defense large enough to enable them to stand on their own feet. The rearmament in Sweden and other countries tells us something about the international situation. They are afraid of Russia's growing involvement," Thomas Slensvik from Norway's National Defense College told Norwegian national broadcaster NRK.

Sweden's defense budget had shrunk from 3.1 percent of the country's GDP in 1981 to only 1.1 percent in 2016, but was taking an upwards turn amid Stockholm's efforts to bolster the country's defense capability.

Over the five years 2016-2020, Sweden's defense spending will expand by 11 percent or about 1 billion euros ($1.1 billion), Swedish Defense Minister Peter Hultqvist, who is known for repeatedly re-kindling "the Russian threat," pledged in 2015. Sweden also planned to purchase fighter jets, tanks, infantry fighting vehicles and anti-submarine warfare equipment. According to the Defense Ministry, an additional 100 million euros would be invested in the defense infrastructure of Gotland island.

Sweden's defense outlay has shrunk steadily since the mid-1960s, reaching a record low of 1.2 percent of the country's GDP at the beginning of the 2010s. In 2014, however, Sweden's Ministry of Defense railroaded a significant budget increase on account of Russia's aggression in Ukraine, the takeover of the Crimean peninsula, as well as a series of confirmed violations of Sweden's territorial waters.

The Armed Forces share of total government spending is gradually shrinking. The Armed Forces annual budget is planned at a level of around SEK 39 billion. The allocation for international missions is increasing, from SEK 1.9 billion in 2007 to almost 2.5 billion in 2012. This reflects the increasing importance the Government and Armed Forces place on international missions.

Defense Minister Peter Hultqvist said 12 March 2015 that Sweden would increase defense spending by six billion kronor (US$696 million) between 2016 and 2020. The military had originally asked for 16 billion kronor but was initially offered just two billion, so the current figure was somewhat of a compromise. His negotiations with Finance Minister Magdalena Andersson came before the government submitted the budget for an April vote. The boost in finances will provide for the modernization of two ships in the Swedish navy, the Gavle and Sundsvall, while a small garrison of 150 soldiers will now be permanent residents on Gotland in the Baltic Sea, an island that sits between Sweden and Latvia. The government also wanted to invest in underwater sensors, multi-submarine warfare ships and new helicopters.

On 23 April 2015, the Government proposed a Defence Bill 2016-2020 for the Parliament. The defence bill is based on a broad political agreement between five parties; the Social Democratic Party, Moderate Party, Green Party, Centre Party and Christian Democrats. The Defence Commission reports from 2013 and 2014 served as the political basis and the Armed Forces report has been the guiding document to the Swedish Defence Bill 2016-2020. This defense bill was produced in the context and in light of the developments in Russia and specifically the Russian aggression towards Ukraine.

During the later years of the Cold War, defense appropriations generally accounted for roughly eight to ten percent of the government's operating budget. In the Swedish view, the balance between the two great power blocs would remain, with more than five million men under arms in Central Europe north of the Alps and west of the Urals. Unless Sweden maintained a credible defense, in the event of war, either side might try to prevent the other from gaining access to Swedish territory.

Sweden felt it must be so strong that it deters any possible aggressor from attacking. Since the great powers would already be engaged against each other, the Swedish assumption is that any one of these powers could only detach a small portion of its total military force to deal with Sweden. If Sweden's total force is great enough to deal with a partial force of a superpower, then Sweden would prove too hard a nut to crack. Moreover, advance knowledge of this Swedish capability is counted on to deter any such attack in the first place.

Since the 1970s, the Swedish Armed Forces has undergone a significant reduction in size and scale. In 2006, Sweden's defense spending amounted to 39 billion Swedish kronor (SEK), which translates toroughly $5.6 billion in U.S. dollars (USD). This amount was approximately 1.5% of GDP. Of the total budget, 48% was operational funds for the domestic forces, 39% for material procurement, 4% for international missions, and another 3% for research and development. The remainder of 6% are funds reserved for unexpected costs related to increased materiel costs.

The economic framework set by Parliament in 1995 meant a mode-rate saving of SEK 4 billion (4,000,000,000) kronor in annual defenceexpenditure compared with the 1994/95 financial year. This ten percent saving, which was to be achieved by 2001, was justified by the enormous changes there had been in the security situation since the end of the cold war, and by the not unreasonable demand that defence costs should be subject to the same stringent scrutiny as other social expenditure.

A few years into the 21st century defence expenditure corresponded to less than 2% of GDP (depending on the rate of growth during this period). This may be compared with current expenditure in other countries, for example Norway, 2.1%, Italy, 2.0%, the Netherlands, 1.8%, and Finland, 1.7%. Among NATO countries, Greece spends the largest proportion of national income on its defence - 4.9%, while Germany only spends 1.5%.