HELSINKI — Finland's falling spending on defense looks certain to be reversed in the wake of parliamentary elections on April 19 that will result in a more pro-military strengthening government.
Spending on Finnish defense has been in steady decline since 2006, when the military budget represented 1.4 percent of national gross domestic product (GDP). The GDP to defense spending ratio was 1.34 percent in 2014, and has dropped to 1.28 percent in the 2015 budget.
Finland now has the lowest defense budget spend on defense of any Nordic country, with its annual military budget allocation now less than half that spent by either neighboring Norway or and Sweden.
The Center and the Finns are Finland's two leading pro-defense strengthening political parties. Finland's new coalition administration, which is due to take office in May, is also expected to include the Swedish People's Party (representing Finland's minority Swedish speaking population) and either the Social Democrats or the National Coalition.
Robustly opposed to NATO membership — unlike the outgoing pro-alliance National Coalition — the Center and Finns are advocates of the self-reliance Total Defense concept, which supports higher investments in manpower, advanced equipment procurement and expanded multi-branch training and exercises.
Moreover, the Center and Finns are open to enhancing national and regional defense and security through deepening military cooperation with neighboring Nordic and Baltic states, all of whom, with the exclusion of fellow neutral state Sweden, are NATO-members.
The funding depleted state-of-health of Finland's military organization will be form a crucial element in government formation talks under the Center's chairman and Finland's Prime Minister-elect Juha Sipilä.
Although the Center and the Finns disagree on the future size of the spending increase, both parties estimate that the defense budget may need to be raised by between 5 percent to 15 percent from between 2016 to and 2024 in order to cover the cost of future big-ticket procurements.
The For Finland's defense, the foremost big-ticket item is the acquisition of a new fighter type to replace the Finnish Air Force's (FAF) fleet of 62 ageing McDonnell Douglas F/A-18 Hornets that were bought in the 1990s.
The election result will please military chiefs who have warned that the weight of cost-reduction programs, combined with the low level of investment in defense, particularly since 2008, has greatly undermined the military's defense capability and ability to adequately defend all of its land, air and sea territories.
"The need for action in giving the military the resources it needs to fulfill its mission has never been greater in the context of the growing tensions in this region," said Eero Heinäluoma, the speaker of the Parliament. "Finland needs a well-funded, strong and reliable defense structure and capability."
Efforts by government to bolster spending on defense since 2008 were hampered by a faltering economy that was seriously impaired by falling international demand for Finnish export products in the years following the global financial crisis.
The negative impact flowing from rising national debt and weakening central finances are reflected in the military's budget for 2015. This saw sSpending on defense fell fall by around 2 percent to $2.9 billion. The military's budget allocation had previously been cut, in real terms, in both 2013 and 2014.
The US dollars' exchange rate increase against the euro is a cause for further headaches for military chiefs on the procurement side. The euro's weakening against the US dollar since January has significantly reduced purchasing power on non-Euro denominated acquisitions.
The negative affect in the weakening of the Euro's exchange rate against the U.S. dollar can be seen from the 2015 budget allocation itself. When the 2015 defense budget was set in September 2014, the U.S. dollar value amounted to $3.6 billion, much higher than the 2015 budget's present U.S. dollar value equivalent of $2.9 billion.
The military Finnish Defense Force's (FDF) procurement budget will shrink by around 5 percent to $480 million in 2015. The FDF's international operations budget has fallen most, down by almost 36 percent to $41 million on 2014.
"Finland needs to have a strong and capable defense. We also need to develop better relations with Russia, and these two requirements and goals can exist side-by-side as part of our defense cooperation with the European Union, and our foreign and security policies," said Center chairman Juha Sipilä said.
The overall political consensus is that spending on defense must increase if Finland is to maintain a credible military capability, Defense Minister Carl Haglund said.
"If we fail to resource the military in a proper way, our defense capability will decline and we will not be able to acquire the advanced hardware that we need now and will need in the future," said Haglund said.
Additional spending on defense is fundamental if the PDF is to adequately resource training, equipment acquisitions and elevate military preparedness, said defense chief Gen. Jarmo Lindberg said.
The "Kremlin" factor is not the primary force driving the PDF's bolstered readiness operations and activities, said Lindberg, who added that Russia has "done nothing" that could be construed as posing a direct threat to Finland.
"We still need to re-evaluate our defense preparedness due to the increased volume of military activities near our borders," Lindberg said. "The events that have happened in Ukraine and Crimea have changed the operating environment." Lindberg said.
One of these near-border events includes a decision by Russia to re-open the formerly abandoned military base near the town of Alakurtti on the Kola Peninsula. Housing around 5,000 troops, the base is located less than 38 miles from the Finnish border.
The political will to strengthen the PDF's defense budget, both within the framework of the Center's government formation process and the linked Program for Government project, is gaining traction from growing public support for increased spending.
A survey conducted by TNS Gallup in March found that almost 60 percent of Finns favor the reinforcement of the defense budget in 206-2024. The same survey revealed that around one third of Finns would like to see a referendum held on the Finland-NATO membership issue.
Email: godwyer@defensenews.com
