Sweden will borrow 300 billion kronor (€27 billion) under a plan agreed by the government and opposition on Thursday, June 19th, securing funding for rearmament and ensuring NATO’s newest member will reach a spending target of 3.5% of GDP on the military by 2032.
The bulk of the money—250 billion kronor—will go to the military with 50 billion to be spent on civil defence and infrastructure.
“We are doing this so our children and our grandchildren don’t need to learn Russian,” Finance Minister Elisabeth Svantesson said.
The Swedish investment will be financed through loans. Sweden will temporarily suspend strict fiscal rules but public finances will need to be in balance again in 2035.
Russia’s invasion of Ukraine has forced Sweden to rethink its security doctrine, joining NATO in 2024. Defence spending has already doubled since 2020 to around 2.4% of GDP, but NATO is likely to set a higher target at its Hague summit this month.
U.S. President Donald Trump has demanded NATO allies commit to spending 5% of GDP on defence, and members will try to reach a deal at a meeting next week.
