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Sweden Still Facing NATO Obstacles by Sven R. Larson

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Sweden Still Facing NATO Obstacles

Sweden and Finland are still far from becoming NATO members. While Finland is held back through no real fault of its own, the Swedish application is still facing a Turkish brick wall. The government in Ankara continues to voice disappointment and frustration over the lack of cooperation from Stockholm over what Turkey claims to be Swedish refusal to accommodate terrorist extradition requests.

On August 3rd, though, there was some good news for the embattled Nordic countries, when the United States Senate approved the NATO membership applications from Sweden and Finland. However, the vote was not buttery smooth: it was preceded by a vote on an amendment by Senator Rand Paul, a Kentucky Republican. 

The purpose of the amendment, according to Senator Paul, was to clarify “that NATO’s collective promise to defend its members from attack” was not going to “supersede Congress’ power to declare war.” In practice, this means that should, e.g., Sweden make a clumsy move in its relations with Russia and thereby provoke a military incident—in other words not a full-scale war—it would be the decision of Congress, not the president, to what extent America would intervene alongside Sweden, or let Stockholm figure it out for themselves. 

Senator Paul’s amendment reflects his long-standing criticism of U.S. military activism around the world, which is made possible in part by Congress having delegated to the president its constitutional power to declare war. The senator explained that the decision whether or not to go to war “is our constitutional responsibility, one that … our constituents expect us to uphold.” 

Furthermore, he explained—albeit in mild terms—that NATO expansion into the Nordic region of Europe could unnecessarily escalate tensions with Russia. In doing so, the expansion could cause a conflict that, in Senator Paul’s terms, the participation in which would not be in the interest of the United States. 

Yet, with Finnish and Swedish NATO memberships, and with the war powers delegated from Congress to the president, a skirmish over territorial waters or the deployment of advanced American weapons systems in the region could draw America into a conflict where none would have happened if the two Nordic countries had remained neutral.

Senator Paul’s concerns were brushed aside by a large majority in the Senate. So was the argument from Senator Hawley that America needs to focus all its military build-up on China. 

If the large Senate majority thought that their vote was just a formality among other formalities to ensure the NATO expansion, they may very well be proven wrong, and soon. This NATO expansion is not at all guaranteed, nor is it going to be cheap for the United States. 

The problem child here is not Finland—they have for the most part handled their NATO adjustment smoothly. No, the problem is Sweden—or, more exactly, two problems with its membership..

The first problem has to do with the Swedish government’s (in)ability to fund its military at a level that is compliant with NATO’s minimum requirements. As a minimum requirement, NATO prescribes that a member state spends 2% of its gross domestic product on its military, and that 20% of this spending goes to military hardware. 

While some sources suggest Finland will at least meet the 2% goal this year, Sweden still has a way to go. According to Eurostat’s database on government spending, in 2020 the Swedish government was only halfway to meeting the 2% NATO threshold. The 49% increase in defense spending that would have been required that year, was equal to half the government’s spending on public safety, or its entire budget for social housing, or about 10% of its health-care budget. 

To pay for this major increase in defense appropriations, the social democrat government has revived an old idea: a new tax designated to fund military spending. Originally proposed in 2019 and then again in March this year, this tax predates the NATO membership application. In the past, it has run into major opposition in the Riksdag, the Swedish parliament; apparently, the social-democrat government appears to have hoped that the NATO membership might sway some of the parliamentary opponents. 

That does not appear to be the case: most of the other parties in the Riksdag think that Swedish taxes are high enough as they are. When the tax was brought up in March, it ran into majority opposition.

To make it more palatable this time, the social democrats have redesigned the tax so that it allegedly only targets “the wealthy.” This has not helped: the defense tax was taken to the woodshed by Dagens Industri, a business daily, whose editorial page explained that the proposed tax

has absolutely nothing to do with Russia’s war [in Ukraine], nor with the need for military expansion. … There are, namely, no earmarked taxes in Sweden, other than in the public debate.  All taxes go into the government’s general fund, and appropriations are decided separately.

The editorial also asks, rhetorically, what tax would be large enough to pay for the significant expansion that is needed for Sweden to comply with NATO standards. 

No numbers are discussed in the editorial, which is a pity. It is critical to have those, in order to understand just how big of a problem the military expansion is to the Riksdag

As it happens, this problem is not made easier by the fact that the numbers vary from source to source regarding the gap between current spending and NATO minimum requirements. While, as mentioned, Eurostat reports Sweden being only halfway there in 2020, the Ekonomistyrningsverket, ESV, the Swedish government agency responsible for fiscal data, reports an even bigger gap. According to them, in 2020 the Riksdag would have had to increase its defense appropriations by 60%. 

The difference of ten percentage points between the two data sources is curious, but it is likely a matter of periodization of data reporting. Eurostat is not entirely clear in its methodological notes, but its data appears to be based on fiscal years, i.e., the year used for government budgeting. By contrast, the Swedish ESV agency reports numbers based on the calendar year. 

The latter is of course preferable, as it harmonizes with other important economic statistics. At the same time, the difference is not just a technicality. Suppose NATO, when assessing Sweden’s readiness for membership, looked at the Eurostat numbers and ignored official Swedish government numbers. If they did, they would see that Sweden “only” needs to double its defense budget (in static terms), a considerably better position than having to expand the same budget by 60%, as per ESV numbers.

A larger fiscal gap not only prolongs the period it will take for Sweden to adequately expand its military budget, but it also aggravates the political battle over budget priorities. In order to become NATO compliant, the Riksdag will have to grow military spending ahead of all other government spending. It is almost a given that this will lead to more political crises and more government instability. The prime minister—whoever he or she is—will have to fight increasingly tough battles against demands from every entitlement program within the massive Swedish welfare state. 

With eight political parties in the Riksdag, it takes a coalition of three, often four, parties to elect and sustain a prime minister. Over the past eight years, the governing center-left coalitions have run into numerous deadlocks over government spending priorities, forcing the prime minister to resign. This instability is bad for the ability of the government to make major new commitments over the long term; it is not beyond the realm of the possible that Sweden proves to be a less-than-reliable NATO member.

The second problem with the Swedish NATO membership has similar, long-term consequences. The Swedish government suffers from a self-inflicted military staffing problem. The large Swedish daily Expressen explains what can only be characterized as an amazing legislative screw-up:

This summer twelve years have passed since the draft was abolished—and this means the first class of employed soldiers and sailors are now aging out of employment. Time is up after twelve consecutive years in the nation’s service. Even if their military units would have wanted to keep them, the law bans the soldiers from renewing their contract. 

The reason why no employee of the armed forces can remain in service longer than 12 years is the idea that high personnel rotation would somehow guarantee that the military did not lose the “popular foundation” guaranteed by a draft. Swedish politicians are afraid of a professional military; for some reason, it is perfectly fine to have a professional police force but not a defense force of similar capabilities. 

In the 1990s, as part of its peace-is-eternal strategy to virtually eliminate the military, the Swedish government reduced the draft to a fraction of what it was during the Cold War. It was formally eliminated in peacetime in 2010. The law with the 12-year cut off was supposed to replace it, but only led to a situation where Sweden had neither a draft army nor a professional military. 

With all that said, the battle over defense appropriations only matters if Sweden actually gets to join NATO. That is by no means a given. The Turkish government has been vocally opposed to Swedish membership since the application was filed. While allowing the Swedish application to be voted on by the NATO members at their recent summit in Madrid, Turkey still has unmet demands on the Swedish government regarding terrorists wanted by Ankara.

Initially, Sweden gave a wobbly response, swinging between rejecting Turkish demands to accommodating them. After the Madrid summit allowed the Swedish NATO application to move forward for member-state approval—as of August 4th 23 out of 30 states have done so—the government in Stockholm seems to have grown more confident in its rejection of Turkey’s demands. 

On July 20th, Middle East Monitor reported (via International Political Economy club) that Sweden will not extradite Yilmaz Aytan, a terrorist accused of being involved in the 2016 attempted coup against the Turkish government. This is just one example of a terrorist wanted by Ankara, but it is no small matter. The Monitor explains (using the Turkish spelling of the country’s name):

The extradition is part of the deal that Sweden signed with Turkiye to stop Ankara from blocking Stockholm’s request to join NATO. Turkiye had said its security concerns must be taken into account prior to Finland and Sweden assenting to the military alliance. 

Aytan has been enjoying protected refugee status in Sweden since 2018. According to Turkish 24TV on July 27th (using Google Translate), and Swedish on July 18th, Aytan was running radical Islamist schools in Afghanistan from where the Swedish government whisked him out, right in front of Turkish authorities. The Samnytt report also claims that Turkey has been trying to get Aytan extradited from Sweden since January of this year—in other words, Ankara’s demands on Sweden are not news to the Swedish government.

On July 29th, Samnytt reports that things are not moving the way the Swedes want them to:

Turkey is now accusing Sweden of not keeping what they promised regarding the extradition of suspected terrorist Kurds, in an agreement between the two countries that would bring Turkey to approve the Swedish NATO application.

The Turkish criticism of Sweden is serious enough that, Samnytt reports, the Swedish ambassador was recently summoned to the Turkish foreign ministry and read the riot act. 

It remains to be seen if the Turkish parliament eventually votes in favor of Sweden (and by extension Finland) joining NATO. Until then, Swedish NATO membership is in limbo. 

Sven R. Larson is a political economist and author. He received a Ph.D. in Economics from Roskilde University, Denmark. Originally from Sweden, he lives in America where for the past 16 years he has worked in politics and public policy. He has written several books, including Democracy or Socialism: The Fateful Question for America in 2024.