The Russian threat rises and rises. The risks and costs from its shadow (and sometimes open) attacks are increasing, and at some point soon there will be a serious crisis, perhaps brought on by the casualties from a successful version of the Kremlin’s bungled strike at Leipzig Airport in August.
Facing this, Europe’s most aware and best-prepared countries are represented by the Baltic states and the Nordic nations of Norway, Denmark, Sweden and Finland. They have been spending and reorganizing at speed since Russia’s all-out invasion of Ukraine, as has Germany.
With France and the UK, the continent’s traditional security heavyweights, hamstrung by enormous debt loads and seemingly unable to make decisive increases in defense spending, and the US now focused elsewhere, the Nordic countries cannot expect others to provide leadership.
They should take the next step toward a unified fighting system. Major work is already underway. Nordic troops are now in Finland, as well as the Baltics, while the Nordic Airpower Concept (NAPC), which offers a unified command over more than 250 modern combat aircraft, started operations early last year.
These are significant steps, but much more can be done and quickly.
It is simply unrealistic to expect the creation of a Europe-wide total defense strategy; that’s the idea of European society mobilizing together to achieve national security goals. The reality is that despite some high-flying concepts and lofty political signaling, it rapidly descends into Westphalian “let us do our own stuff”.
The current approach is that each country treats its economic strength as a purely national vehicle to fund only defense, combined with a path-dependent, pre-NATO approach to seek all capabilities with little or no coordination with others. This is suboptimal. It wastes resources and is therefore self-defeating.
Where can economic torque be used to create the best defense posture for the available money?
The Nordics, more unified by culture and history, and by their common understanding of the threat, provide a good test bed.
How might they further their integration? These are rich societies, but notably Finland lags the rest. The GDP of Sweden, Norway, and Denmark are respectively $730bn, $550bn, and $500bn. Finland’s is about $330bn.
Projected GDP growth for 2026 differs: Finland (1%) is half of Denmark and Sweden (2%) and less than Norway (1.5%). If we instead look at the tangible threat, it is reversed: Finland and Norway are more exposed to geopolitical friction and conflict risk than Denmark and Sweden.
So where does their money best serve regional security?
My proposal is for a Nordic Defense Fund, where Sweden, Denmark, and Norway pay €1bn ($1.1bn) annually for the next 10 years to support the modernization of the Finnish armed forces, enabling Finland to use these funds to buy military hardware, maintenance, R&D, and support from the EU and UK military-industrial complex, with half earmarked for Swedish, Danish, or Norwegian providers.
This could be broken down to €600m from Sweden because of its proximity to the eastern border and the likelihood it will benefit from sales; €300m from Denmark, and €100m from Norway, which has its own direct exposure but will also be a beneficiary of future sales.
Over 10 years, that is €10bn plus some adjustment for inflation, which would go directly to modernizing the Finnish Armed Forces, a significant sum for a country with a defense budget of less than €8bn. The compounded effect creates a long-term impact.
The Nordic Defense Fund would enable Finland to make strategic purchases that will elevate the capabilities of existing units, which will likely be the closest and first to respond to a future conflict in a Northern European theater. Even if Finland can mobilize a large number of units (its wartime army strength is about 185,000, which dwarves its Nordic allies), it still needs modernization; for example, much Finnish artillery is towed and uses equipment in need of replacement. Like many land forces, the Finnish land forces need increased capabilities in short-range air defenses.
The Nordic Defense Fund would support that modernization effort and likely deliver a far higher return on investment in stability and deterrence than traditional spending.
In the 1940s, Germans exploited the static thinking of the Allies by launching Blitzkrieg; Russia today gets its leverage from exploiting the glitches in European coordination, political cohesion, and economic misallocation, an approach which can be termed Glitchkrieg. The Russians have used it in hybrid warfare and will use it in a full-scale conflict, where one part of Europe has the resources but withholds them from those who actually will have the first fight, a glitch in our thinking of a unified European defense.
The Nordic Defense Fund seeks to close that vulnerability and add to the foundation for a European total defense outlook, denying Russian opportunistic geopolitical adventurism glitches to exploit.
Jan Kallberg, Ph.D., LL.M., is a non-resident Senior Fellow with the Transatlantic Defense and Security program at the Center for European Policy Analysis (CEPA) and a George Washington University faculty member. Follow him at cyberdefense.com and @Cyberdefensecom.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
