HELSINKI ― The Swedish government has struck a pivotal cross-party deal that will add $1 billion in new spending to the annual defense budget to be spread over three years, from 2018 to 2020. Sweden’s defense budget will amount to $5.1 billion in 2017.

Significantly, while the budget agreement promises to benefit many of the Swedish Armed Force’s core procurement programs, it will fall short of providing sufficient funding to cover the full range of the SAF’s core air-defense and naval equipment acquisition projects

In effect, the budget increase will result in more than $840 million transferred to the SAF’s central fund to cover combat equipment procurement and important defense capabilities’ programs.

Additionally, more funding will be available for recruitment and specialized training for professional and conscription-based forces.

The agreement, which was reached between the Ministry of Defence and the leaders of Sweden’s largest opposition parties, also includes $160 million in extra spending to bolster the country’s civil defense infrastructure over the years 2018-2020.

The deal, said Defence Minister Peter Hultqvist, has strengthened the consensus between the government and main opposition parties on military spending and the reinforcement of Sweden’s defense capabilities going forward.

“The agreement is positive. It clearly reflects a good sign of political stability and vision. Moreover, it’s good for the Armed Forces and it sends an important signal to the world about Sweden and our commitment to a strong defense,” Hultqvist said.

Apart from air-defense and naval strengthening, the SAF’s capacity-building programs will also target improvements to the Army’s front-line rapid-response combat units and organization. These core modular units will be provided with additional modern fighting vehicles, be equipped with greater firepower and become more mobile across all terrains.

The budget deal was backed by leading opposition parties the Moderates and the Center. The government parties included the ruling Social Democrats and its minority partner the Green Party.

Negotiations between the two sides commenced during the first quarter of 2017, propelled by an increasingly unpredictable Russia as a backdrop.

Sweden sees Russia as a growing security threat in the Nordic-Baltic region. It regards the Kremlin’s military-muscle flexing as a destabilizing factor for all NATO-member and unaligned states in the High North and Baltic Sea areas.

Several parties, including the Moderates, threatened to exit deal negotiations unless the government agreed to a “sizable” increase in spending on a scale that is sufficient to cover major equipment acquisition programs, including aircraft and submarines, in addition to dealing with manpower shortages in the main branches of the military.

“It was important that the main opposition parties remained in the talks. The deal that we have now was secured by hard negotiations. We helped get more money for the Armed Forces. The result would have been less positive if we had left,” said Hans Wallmark, the Moderate Party’s defense spokesman.

The new budget deal hasn’t pleased all opposition leaders. The Liberal Party criticized the deal as being “insufficient” to correct all capability deficiencies within the Armed Forces and national defense as a whole.

“The defense budget decision of 2015 left the Armed Forces underfinanced and with insufficient capabilities. Sweden’s defense capabilities are still insufficient,” said Jan Björklund, the Liberal Party’s leader.

The Christian Democrats left the cross-party budget talks in July after its proposal to increase defense budget spending by $1.3 billion over the years 2018-2020 was rejected by the government parties.

“We feel that the annual defense budget needs to be much higher than it is for the Armed Forces to become operational to an optimum level and achieve all of its capability goals,” said Ebba Busch, the Christian Democrats’ party leader.

Gerard O'Dwyer reports on Scandinavian affairs for Defense News.

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