The Finnish vessel Hamina leaves the Frederikshavn Harbour to take part in a German-led naval exercise. Finn leaders are reaching consensus about increasing the military budget. (Henning Bagger / AFP)
HELSINKI — The crisis in the Ukraine has united cross-party political consensus to strengthen defense spending in Finland, after six years of near static growth in the military budget.
Finnish government and opposition parties are expected to discuss increasing defense spending when party leaders meet for 2015 budget talks in September.
These talks also will redefine spending targets and review Finland’s overall capability as part of the armed force’s ongoing reorganization.
The discussions will establish the basis for long-term defense funding goals that can accommodate future big ticket acquisitions, such as the replacement of the Air Force’s fleet of F-18 Hornets after 2020.
“There is now a common political acceptance across all major parties that more needs to be spent on Finland’s defense. We need to bolster the military’s readiness and capability, and raise the budget to a level that ensures our military has the funds it needs. This is a fundamental objective,” said Jussi Niinistö, chairman of the Finnish Parliament’s Committee on Defense.
The government’s growing support for a higher level of defense spending is happening against a backdrop where the military continues to implement cost savings measures.
The budget allocated to the military in 2014 amounts to US $3.67 billion, including supplementary spending of $451 million. This compares with the 2013 budget of $3.84 billion, including supplementary spending provisions.
As a proportion of its gross domestic product, Finnish spending on defense is expected to decline to 1.36 percent in 2014, down from 1.51 per cent in 2010.
Significantly, the Office of the Finnish President is supporting higher defense spending. President Sauli Niinistö, the commander in chief, told a defense and security conference held near the south coast town of Naantali in June that there is now “cross-party unanimity” on the issue of higher spending.
“We have a reasonable level of operational spending, but when it comes to materiel procurement we need more on the expenditure side,” Niinistö said.
Finland not only needs to bolster future defense budgets but to allocate a greater share of its GDP to military expenditure, said Juha Sipilä, chairman of the Centre Party, Finland’s biggest opposition group. Based on latest polls, the Centre is on course to lead the country’s next government after parliamentary elections in 2015.
Opposed to Finland joining NATO, the Centre wants the GDP-to-spending ratio on defense to move closer to 1.7 percent.
“If we were to lift the GDP spending ratio closer to the 2 percent recommended by NATO for its member states, then Finland would need to spend an additional $2 billion on its defense annually,” said Sipilä.
Within the framework of its reorganization and allied cost savings program, the armed forces will eliminate 2,100 positions, almost 20 percent of its pre-reform force, by 2015. Of this number, 670 of the layoffs will impact military and 1,430 civilian personnel. ■