possibly joined by a fifth (Poland) in 2016. Finland’s defence budget of EUR 2.69 billion stands at 1.3% of a GDP of EUR 207 billion. However, according to our assessment, the figure rises to EUR 3.41 billion and 1.64% of GDP on the basis of NATO definitions. To close the gap, annual expenditure would have to increase by approximately EUR 730 million.
Preserving conscript-based territorial defence while increasing readiness and modernising the force structure (e.g. the upcoming combat aircraft and naval equipment purchases) will require an increase in spending, whether or not Finland joins NATO.
4. Finland and NATO: strategic and political implications of accession
In empirical terms, the membership (or non-membership) of NATO does not appear to have a major bearing on the ability of a small country to exercise diplomatic initiative on the global scene. Good offices, mediation or development policy are not variables which are tied to a country’s status in terms of collective defence. Norway has been no less dynamic and effective than Finland or Sweden in this respect.
The relationship between Finland and Russia is an asymmetric one and, whether as a part of Sweden or as an independent state, has been so for the past 300 years. This asymmetry has historically been managed through different strategies, co-operative relationships or even short-lived alliances with Russia (Sweden in the 1720s and during the final years of the Napoleonic Wars), alliances with other great powers to balance St. Petersburg/Moscow, or by adopting a neutral or non-aligned policy. Finland pursued a policy of neutrality from the 1950s onwards – and Sweden for much longer, since 1814 – and, after the demise of the Soviet Union and joining the EU, military non-alignment. Since 2007, Finland no longer uses the term non-alignment to describe its foreign policy, while Sweden still does. It is simply stated that Finland does not belong to any military alliance.
Unlike Sweden, however, Finland – just like Norway – has a broad bilateral agenda with Russia and a long land/sea border.
Finland’s – and Sweden’s – future relations with NATO, which have developed markedly not least since the end of the Cold War, can for the
