HELSINKI — Deepening regional tensions caused by Russian military muscle flexing are prompting Finland, Sweden and the Baltic states to boost defense spending despite stalled economies.
Closer defense collaboration between NATO and the non-aligned Finland and Sweden has drawn sharp rebukes from Russia, which is growing increasingly concerned that one or both may join the Western Alliance.
Added tensions over Russia's military intervention in Ukraine are propelling Finland and Sweden to dig ever deeper to find the capital they will need to boost military spending within the framework of tighter national budgets and troublesome public finance deficits.
NATO-aligned Estonia, Latvia and Lithuania also are diverting funding from other departments and public programs to invest more heavily in their militaries.
The proposed deployment by the United States of heavy weapons to the Baltic states in 2016, including tanks, infantry vehicles and artillery, also is expected to heighten tensions while Germany likely will deploy rotating infantry troops for the first time to Estonia in 2016.
Reinforcing military budgets and capabilities, despite the high cost, is the most effective response to potentially scaled-up aggression by Russia in the wider Baltic region, said Juozas Olekas, Lithuania's defense minister.
The Baltic states had sought NATO and US troops and prepositioned equipment since Russia annexed Crimea in March 2014. Lithuania wants NATO to station a permanent battalion-size force and equipment in Lithuania "at the earliest possible time," Olekas said. "This strong and credible allied deterrence, together with militarily purposeful forces and the prepositioning of equipment, is critical to the security of the Baltic region."
Military costs are set to take a larger piece of Lithuania's national budget after the government approved plans to increase spending by 32 percent to $476 million in 2015. This leap in capital expenditure will increase spending as a ratio of gross domestic product to 1.1 percent in 2015 with a projected growth to 1.5 percent in 2016. Lithuania had been spending less than 1 percent of GDP on defense in 2013.
The ambition, said Olekas, is that Lithuania will reach NATO's 2 percent of GDP spending target by 2020.
Estonia's defense budget will exceed US $463 million in 2015, rising above 2.1 percent of its GDP to mainly cover costs associated with providing infrastructure and accommodation for incoming NATO troops and equipment.
Latvia's defense budget will surpass $285 million in 2015, rising by 12 percent compared with 2014, and to a record 1 percent of GDP.
"This is no longer a survival budget, but a development budget. Our task now is to dynamically develop the armed forces to the level necessary for ensuring our country's defense," said Raimonds Vejonis, Latvia's defense minister.
Like Lithuania, Latvia plans to scale up its military spending to meet NATO's 2 percent target by 2020.
Sweden and Finland were planning zero to negative growth in their defense budgets in 2014-2015. This budgetary picture changed in the light of unresolved tensions over Ukraine and elevated activity by Russian air, land and naval forces in the Baltic Sea and High North regions.
Russia's military expansion included the emergence of the newly formed Arctic brigades (3,600 to 7,000 troops) on Kola, with units dispersed to bases near the Finnish and Norwegian borders, including to Alakurtti, some 30 miles from the Finnish border.
The two Arctic brigades comprise motorized infantry and rifle units. Finland shares an 833-mile border with Russia.
Russia advised Finland against changing from non-aligned to NATO member when Finnish President Sauli Niinistö, the commander-in-chief of Finland's armed forces, met Russian counterpart Vladimir Putin for bilateral talks in Moscow June 16.
During the talks, which covered Ukraine and lifting sluggish trade between the two countries, Putin said Finland's neutrality-based national security policy provides the "optimum model for guaranteed and sustainable good relations for non-aligned countries."
Ironically, the decline in Finnish-Russian trade has not only impeded recovery of the Finnish economy, which is facing its fourth year of low to negative growth, but has also weakened its ability to invest more in the military.
Finland is eager to increase trade with Russia despite the recent chill caused by its deepening ties to NATO and Finnish criticism of Russia's annexation of Crimea.
Moscow's distrust over NATO's advance in the High North and Baltic Sea areas again surfaced when Viktor Tatarintsev, Russia's ambassador to Sweden, warned that Moscow's trust-based relationship with Sweden could change overnight if the country joined NATO.
"If it happens there will be counter measures. President Putin pointed out that there will be consequences, that Russia will have to resort to a response of the military kind and re-orientate our troops and missiles. The country that joins NATO needs to be aware of the risks it is exposing itself to," Tatarintsev said in an interview with the Swedish daily Dagens Nyheter June 18.
The "NATO factor" will continue to frustrate normal relations between Finland and Sweden with Russia, said Karl Dorfner, a Bonn-based political analyst.
"Sweden and Finland want improved relations. This is something Moscow wants too, but the annexation of Crimea and events in Ukraine have changed the security landscape in the Nordic and Baltic regions. Russia is seen as less predictable and more inclined to engage in Cold War-era style verbal threats against its near neighbors," Dorfner said.
Although Russia poses no immediate or potential short-term threat to Finland or Sweden, the lack of "predictability" arising out of the Kremlin's large-scale rearmament programs, and its reinforcement of military bases close to national borders, have made Nordic states more cautious, said Dorfner.
"Economically, Finland and Sweden will struggle to find the money they need to meet all the capacity strengthening demands being made by their militaries to deliver modern fighting forces and capable defense organizations. Unlike the Baltic states they cannot depend on NATO. This is why the NATO card, and possible membership of the alliance, will remain in play even if it is not used," Dorfner said.
The new security environment makes it essential that Sweden spends significantly more on its defense despite the added cost burden to central finances, said Allan Widman, chairman of the parliamentary Defense Committee.
The Swedish government reached a cross-party agreement in April to increase defense spending by $1.2 billion between 2016-2020. The budget is set at under $6 billion in 2015.
"A strong defense is not cheap. The agreement will plug some holes in the military's budget, but others will continue to leak. We need to spend a lot more than $1.2 billion to provide our military with the funds they desperately need to give this country a capable and credible defense system," Widman said.