DEFENCE PROCUREMENT AND SECURITY OF SUPPLY. With the important exception of ACCS (see above), NATO is no longer involved in the procurement of major equipment programmes. Conversely, it plays an essential role in setting norms and standards for defence systems. Being fully part of that process would be an improvement on the current situation. Today, Finland has little choice other than to acquire systems incorporating specifications which it has played no part in defining: this applies in practice not only to systems purchased abroad but also to those produced by Finnish contractors. Given the quality but also the diversity of Finland’s defence industrial base, there should be little difficulty in exercising due influence. Finland’s policy of emphasising national control of acquisition choices may be somewhat easier to sustain in the multilateral NATO framework than in pursuing purely bilateral relations with the most powerful foreign suppliers, notably the US, as Sweden has done.
NATO also plays a significant role in terms of providing logistical support, through the NSPA (NATO Supply and Procurement Agency) in Luxembourg and other agencies involved in the security of supply, including NATO’s pipeline system. The recent Host Nation Support Memorandum of Understanding concluded by Finland should facilitate peacetime cooperation in this area, ahead of possible membership of the Organisation.
Finland places greater emphasis than most of NATO’s members on security of supply broadly conceived, notably in terms of sustaining economic activity in a crisis. There would be no reason for NATO membership to change that national policy, which has no downside for the Alliance.
BUDGET IMPLICATIONS. NATO as such is a relatively low-cost organisation. Its annual infrastructure expenditure amounts to some EUR 5.2 bn. In view of Finland’s GDP as a proportion of NATO’s total, its share should be slightly in excess of 1%, meaning in practice less than EUR 55 million. These costs should rise in the near future given the currently unsatisfactory state of defence preparations in and towards the Baltic States. To this must be added the human resources cost of Finnish personnel working within the NATO framework in case of membership. NATO currently has an international staff of 1100, and 6700 military and civil servants in the command structure. Using the same ratio, this would represent about 80 people from Finland.
NATO’s benchmark for defence expenditure is set at 2% of GDP: out of 28 members, only four countries (including neighbouring Estonia) meet it,
