Collective Security without an Alliance: Finland’s Defense Relationship with Sweden

Recent concerns over Russian aggression have led countries all around the Baltic Sea to take their security more seriously. Poland certainly has; Sweden has, too. Those concerns have also driven Sweden closer to Finland. A country well-accustomed to the threat from Russia, Finland fought two major wars against the Soviet Union, Russia’s twentieth-century incarnation. Despite pulling off many incredible battlefield successes, Finland lost both the Winter War (1939-1940) and the Continuation War (1941-1944). And after each Finnish defeat, the Soviet Union annexed territory whose terrain could present natural obstacles to a future Russian invasion, leaving Finland in an ever more vulnerable position.

Finland’s Strategic Situation

Finland’s modern-day security challenge is daunting. Its current border with Russia stretches 1,340 km and has few natural defensible barriers. Finland must also worry about its capital of Helsinki, which sits near the Russian frontier, and its strategic Åland Islands in the Baltic Sea, which lie off Finland’s mainland to the southwest. More worrisome still, the Russian military rehearsed seizing those islands in a 2015 military exercise.[1]

Meanwhile, the armed forces that Finland has available to defend its territory are tiny, especially when compared to those of its Russian neighbor. Making Finland’s numerical inferiority even worse today is the changing character of its people. The Finns who fought the Soviet Union knew how to live in and take advantage of Finland’s rugged countryside. But the steady urbanization of Finland’s population has meant that ever fewer modern Finns possess those skills.

What has not changed is Russia’s interest in Finland. Since Russia founded Saint Petersburg in the eighteenth century, Russia has seen Finland’s position as one that could either protect or threaten the security of its grand port city on the Baltic Sea. Ultimately, that was why the Soviet Union invaded Finland at the start of the Winter War. It was also why the Soviet Union demanded from Finland all of its islands in the Gulf of Finland and a 50-year lease to a naval base on its southern coast as part of their peace treaty after World War II. While the Soviet Union eventually relinquished the base, it kept the islands.

Deep Defense

Acutely aware of its long-term vulnerability to Russia, Finland has never really let its guard down. Even after the Cold War, Finland continued to invest steadily in its armed forces. Just recently, it began to upgrade its mechanized units with the procurement of 100 Leopard 2A6 tanks and 48 K9 self-propelled artillery pieces. In the meantime, Russia’s annexation of Crimea reminded Finns of their need for peacetime military conscription. It also prompted the Finnish military to work towards accelerating the mobilization of its reserve forces for wartime duty.[2]

Given its strategic situation, the Finnish military has long prepared for the worst—the possibility that a Russian invasion could overrun it. Typically, a country in Finland’s position might attempt to defend in depth, trading space for time so that it can gradually wear down an adversary’s assault. But in Finland’s case, it does not have much space to trade. Thus, Finnish leaders have sought to create new strategic space.

Back in 2013, Finland and Sweden began discussions on how to strengthen their military cooperation. After Russia’s intervention in Ukraine and provocations in the Baltic region, the two countries proposed a plan to improve communications between their armed forces and share the use of their military bases. In 2017, Finland and Sweden went a step further. They announced a concept called “strategic depth” that would enable Finnish forces to use (and presumably fight from) Swedish military bases should a Russian invasion occur.

Swedish Calculus

What is remarkable about the “strategic depth” concept is not that Finland embraced it, but rather that Sweden agreed to it. Though it does not constitute a security alliance between Finland and Sweden, the concept would have serious repercussions for Sweden should it ever be put into practice. That is because if Russia invaded Finland and Finnish forces were to fall back to military bases in Sweden, it is easy to imagine that Russia would try to destroy those forces. It is equally easy to imagine how Russian attacks on Swedish soil would bring Sweden into the conflict.

Why would Sweden, ostensibly a neutral country, support such a concept? For starters, Swedes have a deep affinity for Finland. As many Swedes recall, Finland was once a part of Sweden, and many Finns can trace their ancestries to Sweden. In fact, during the Winter War, Sweden contributed many of the armaments used by Finnish forces.

But beyond its fondness for Finland, Sweden also has a strategic reason to support the concept. In recent years, Sweden has tried to bolster its security by enmeshing itself in a web of defense relationships. Though none of them rise to the level of mutual security alliances, those relationships could complicate Russian decision-making by raising the escalatory risks associated with future aggression. Already, Sweden has edged closer to NATO and the United States than it ever has before. Its “strategic depth” concept with Finland appears in the same vein.

Finland and Sweden may hope that such a web of defense relationships would be enough to deter Russia from upsetting the Baltic Sea region’s status quo. If successful, both countries could not only enjoy greater security, but also do so without abandoning their long-cherished nonaligned status. But what if the vague prospect of escalation does not deter a reckless Russia? That would leave Sweden with a difficult choice: plunge into a conflict against Russia or renege on Finland. Sweden faced a similar choice during the Winter War. Ultimately, Sweden hesitated, and its assistance fell short of Finnish expectations given Sweden’s pre-war commitments. Perhaps the lesson for Finland is not to rely on hope as a strategy.

[1] Edward Lucas, “Baltic Sea Security: The Coming Storm,” Center for European Policy Analysis Report, June 24, 2015, p. 9.

[2] Bruce Jones, “Finland to speed up mobilisation time,” Jane’s Defence Weekly, Feb. 2, 2016.

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Collective Defense or Unilateral Action: Poland’s Strategic Dilemma in the Baltics

In 1999, Poland joined the NATO Alliance. Ever since, collective defense has been at the heart of Poland’s national security strategy. But recent changes in Europe’s strategic environment may be leading Poland to think twice about whether collective defense alone can guarantee its security. The combination of a more aggressive Russia, a less resolute Western Europe, and a growing divergence between the military capabilities of Poland and those of the rest of NATO have made unilateral Polish action a real possibility.

Strategic Environment

Despite the West’s economic sanctions against it, Russia has continued to throw its weight around on its periphery. After annexing Crimea and fomenting separatists in eastern Ukraine, Russia appeared to have shifted its attention to the countries surrounding the Baltic Sea. Finland, Sweden, and NATO’s Baltic members of Estonia, Latvia, and Lithuania have all experienced repeated Russian incursions into their air and maritime spaces. it would not only create a new threat on Poland’s border, but also damage, perhaps irreparably, NATO’s credibility as a defense alliance.

NATO is important to Polish security. Despite its bigger and better equipped military, Poland cannot deter Russia by itself. Poland needs a strong NATO and one committed to the defense of Eastern Europe. Unfortunately for Poland, most of its NATO allies seem less than fully committed. Twenty-three out of NATO’s 28 members do not meet the Alliance’s minimum defense spending , which obligate each country to spend at least two percent of its GDP on defense and 20 percent of that spending on major new equipment or defense research and development.[1] Nor have Poland’s allies invested in the infrastructure needed to deploy their forces to Eastern Europe, Indeed, many of the elites within some NATO countries, most notably Germany and Italy, want to entirely lift the economic sanctions imposed on Russia.

All of these issues make Poland nervous about the reliability of NATO’s security guarantee. Considering Russia’s threat to the Baltics, Poland has begun to think about what it can do to ensure NATO’s commitment to collective defense should a crisis erupt there. Paradoxically, what it can do—owing to its geographic location and increasingly robust military—may lead Poland to take unilateral action.

Strategic Dilemma

On the one hand, Poland could wait for NATO before taking action against a Russian intervention in the Baltics. But such a wait could last for weeks as each NATO country must debate and approve the use of force, mobilize its troops, and send them to Eastern Europe. While NATO’s rapid response forces could go into combat faster, they could not fight for long without sufficient logistical support. That could result in a long pause in the crisis that would give Russia time to consolidate its territorial gains and conduct an information campaign to discourage already reluctant NATO countries from ever trying to liberate the Baltics. The result could be a negotiated settlement that leaves Russia in control of part or all of the region—which would restore peace in the short run, but mean the end of NATO in the long term.

On the other hand, Poland could act immediately, and unilaterally. The swift entry of a major NATO country would undoubtedly complicate Russian operations. It would also escalate the crisis without a unified NATO decision to do so. While that may sound a little troubling, it may not trouble Poland as much as one might think. After all, Warsaw has long sought to

“internationalize Poland’s security within [NATO] to ensure that an attack on Poland would generate a collective allied response.”[3] Reflecting on Western Europe’s lack of enthusiasm to confront Russian aggression, Poland might think it wise to hold NATO’s feet to the fire.

Unilateral Action and Its Consequences

Since the end of the Cold War, Poland has generally worked in concert with other European countries on security matters. But it has acted alone when it felt its interests were at stake. In 2011, after a rigged election in Belarus, Poland unilaterally slapped sanctions on those Belarusian officials it saw as responsible without waiting for the European Union’s (EU) approval. If relations between the EU and Poland continue to deteriorate because of their conflict over Polish judicial reforms, Poland would have even more reason to act to compel a united NATO response.

However, a unilateral Polish reaction to a Russian intervention in the Baltics could make things far more difficult for NATO. Strategically, it could undercut NATO’s ability to manage the conflict’s escalation, a perilous proposal given Russia’s relatively low threshold for the use of tactical nuclear weapons. At the operational level, it could disrupt plans for a larger and more coordinated NATO counteroffensive, which would arguably stand a better chance of success than the piecemeal introduction of Polish military and NATO rapid reaction forces.

Fate of Collective Defense

The best way to avoid a potentially disruptive, unilateral Polish military action is to ensure that Poland never loses faith in NATO’s credibility. Surely nothing would reassure it like the combination of firm political resolve and strong military forces. Sadly for NATO, that is probably more than it can muster at the moment. NATO needs to do better on both counts. Otherwise, it can expect that some of its members, like Poland, may take unexpected (and possibly unwelcome) actions in a crisis.

[1] In 2018, the five NATO members that do meet the Alliance’s minimum defense spending goals are Estonia, Greece, Poland, the United Kingdom, and the United States. Ironically, six NATO members met the Alliance’s minimum defense spending goals when they were first agreed to in 2006. The number gradually fell to three in 2010 and did not rise until after Russia’s 2014 intervention in Ukraine.

[2] Brooks Tigner, “NATO’s rapid deployment ability faces many obstacles,” Jane’s Defence Weekly, May 25, 2016.

[3] Andrew A. Michta, “Polish Hard Power: Investing in the Military as Europe Cuts Back,” in A Hard Look at Hard Power: Assessing the Defense Capabilities of Key U.S. Allies and Security Partners, Gary J. Schmitt, ed. (Carlisle, PA: U.S. Army War College Press, 2015), p. 164.

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Preparing for the Worst: Poland’s Military Modernization

No one needs to remind Poland of the strategic dangers arising from its geography. Often sandwiched between great European powers, Poland has been invaded, carved up, and occupied for over two centuries. During World War II, its mostly flat and open terrain made it particularly vulnerable to the mechanized armies of Germany and the Soviet Union. Today, Poland’s position is less tenuous, but still fraught. While its western and southern borders are anchored by friendly NATO countries, its eastern border abuts Russia’s military stronghold of Kaliningrad, Belarus (a close Russian ally), and Ukraine (a country riven by Russia).

Russia’s New Military Challenge

Unfortunately for Poland, the last decade has seen the emergence of a militarily stronger and more aggressive Russia, despite Western economic sanctions against it. Much of Russia’s new-found strength can be traced back to its long-running “New Look” military reforms, which assumed a new sense of urgency after its lackluster war against Georgia in 2008. The reforms sought to streamline Russian combat units, outfit them with new military equipment, and most importantly boost their training and readiness.

The reforms turned Russia’s once-lumbering military into a more nimble fighting force, one far better able to fight modern conventional wars as well as leverage “hybrid warfare” techniques.[1] Several of Russia’s airborne and “New Look” brigades can now go into action within 24 hours of an alert.[2] Russia demonstrated that capability in 2014, when it swiftly deployed its special forces, airborne, and naval infantry units to Crimea on short notice. Soon afterwards, it massed another 40,000 to 100,000 troops on its border with Ukraine.

Rising to the Challenge

Russia’s military success in Ukraine convinced an increasingly anxious Poland of the need to be prepared to fight across the entire spectrum of operations. Fortunately for Poland, its briskly growing economy has enabled it to fund those preparations. Over the last three years, its regular armed forces have grown from 100,000 personnel to over 130,000. By 2025, Poland’s Ministry of Defense expects that number to reach 200,000. It also plans to expand the Polish army’s force structure from three divisions to four. In 2017, it even established a new armed service called the Territorial Defense Force (Wojska Obrony Terytorialnej or WOT). Separate from the regular army, the WOT’s wartime role will be to counter Russian airborne and special operation forces behind the frontlines. The WOT will eventually field 17 light infantry brigades, one in each of Poland’s provinces (two in the largest province), with an authorized strength of 53,000.[3]

Poland has also accelerated its military’s modernization. Rather than wait for new-build acquisitions, the Polish military chose to buy off the shelf and update its existing kit. Thus, Poland not only acquired 105 retired Leopard 2A5 tanks from Germany in 2015, but also began to upgrade its 142 Leopard 2A4 tanks with improved armor and combat systems a year later. Likewise, it laid plans to modernize its T-72 and PL-91 tanks and may purchase more second-hand Leopard 2A4s. Poland also expects to procure a full range of short-, medium-, and long-range anti-tank guided missiles for its regular army and the WOT.[4]

In its modernization drive, Poland has not overlooked its combat support arms. In the summer of 2017, it took delivery of the first 14 of 96 Krab 155-mm self-propelled howitzers and the first eight of 64 Rak 120-mm self-propelled mortar systems. And, to enhance the mobility of its mechanized forces, it has begun discussions to acquire new mobile bridging equipment. Finally, to counter Russia’s deployment of 9K720 Iskander ballistic missiles and Su-35 fighters in Kaliningrad, Poland has decided to buy U.S.-made MIM-104 Patriot air defense systems and as many as 48 new multirole combat aircraft.[5]

But perhaps the most telling sign of Poland’s earnestness has been the repositioning of its combat forces. Notably, Poland has shifted its best armored forces eastward. Last year, it transferred the PL-91 tanks of the 1st Armored Brigade on the eastern edge of Warsaw to the 15th Mechanized Brigade in Giżycko, near the Polish border with Kaliningrad and the strategic Suwalki Gap that links Poland to Lithuania. Replacing the PL-91 tanks will be two battalions of Leopard 2A5 tanks, which will be transferred from the 34th Armored Cavalry Brigade on Poland’s border with Germany.[6]

Commitment to Deterrence

In the coming years, Poland’s total defense expenditures will likely exceed two percent of its GDP—well above what most other NATO countries are spending. Even so, Poland’s military modernization still has gaps. A big one lies in its small Soviet-era attack helicopter fleet. Though Poland is upgrading its 23 Mi-24 attack helicopters with new sensors and guided missiles, it needs a next-generation attack helicopter and far more of them.[7] A recent war game demonstrated that even with 120 attack helicopters, Poland would have trouble holding back a determined Russian assault before NATO rapid reaction forces could arrive.[8]

Ultimately, what is most notable about Poland’s military preparations is not how complete they are, but rather the scale and speed with which they are being made—which for a European country are extraordinary. While other NATO countries make excuses for their plodding attempts to enlarge or modernize their armed forces, Poland has done both, at the same time. Surely, Poland hopes for peace. But Poland also seems committed to building a stronger military to help preserve it.

[1] Andrew Monaghan, “The ‘War’ in Russia’s ‘Hybrid Warfare,’” Parameters 45(4), Winter 2015-2016, pp. 65-74.

[2] Gustav Gressel, “Russia’s Quiet Military Revolution and What It Means for Europe,” European Council on Foreign Relations Policy Brief, Oct. 15, 2015, p. 4.

[3] Remigiusz Wilk, “Polish Territorial Defence Force expanded to 53,000 personnel,” Jane’s Defence Weekly, Nov. 17, 2016; The Defence Concept of the Republic of Poland (Warsaw: Poland Ministry of National Defense, May 2017), pp. 46, 53; Remigiusz Wilk, “Poland to stand up Territorial Defence Force,” Jane’s Defence Weekly, Mar. 22, 2016.

[4] Remigiusz Wilk, “Poland seeks short-range ATGM,” Jane’s Defence Weekly, Oct. 9, 2017; Remigiusz Wilk, “Poland reinforces armour,” Jane’s Defence Weekly, Jul. 12, 2017.

[5] Bruce Jones, “Russian Duma confirms Iskander-M Kaliningrad deployment,” Jane’s Defence Weekly, Feb. 8, 2018; Nicholas Fiorenza, “First Polish Army unit receives full complement of Krab SPHs,” Jane’s Defence Weekly, Aug. 4, 2017; Remigiusz Wilk, “Poland receives first Rak 120 mm mortar vehicles,” Jane’s Defence Weekly, Jul. 3, 2017.

[6] Remigiusz Wilk, “Poland relocates Leopard 2A5 tanks to the east,” Jane’s Defence Weekly, Apr. 21, 2017.

[7] Charles Forrester, “Thales, Poland to integrate rocket launchers onto Mi-24s,” Jane’s Defence Weekly, Sep. 6, 2017.

[8] Reuben Johnson, “Baltic conflict simulation concludes Poland is wasting valuable time,” Jane’s Defence Weekly, Sep. 21, 2017.

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What Another Six Years of Putin Spells for Russia’s Economy

This blog draws on a report written by David Szakonyi for FPRI’s Russia Political Economy Project, titled Governing Business: The State and Business in Russia.

Most Russians would be forgiven for skipping this month’s presidential election. With less than two weeks until polls open, we can say with strong confidence that Vladimir Putin will win his fourth term in office. Officials are taking no chances to ensure turnout isn’t embarrassingly low, however, mobilizing students and workers, plastering the regions with pro-Putin materials, and seemingly handpicking the other candidates allowed to run.

There are many consequences to holding stage-managed elections. Clearly they are a violation of basic political rights. But in most developed countries, campaigns also prompt debates over the most pressing policy issues of the time. Candidates must defend reasonably coherent positions on foreign and domestic policy. That way voters have some idea what their next leader will do upon taking office.

In contrast, the Russian presidential campaign offers nearly zero discussions of substantive issues. In his nearly two decades in politics, Putin has never publicly debated his rivals, preferring to spell out his goals in his annual state of the nation speech, this year on March 1. Given only this broad outline of his priorities, what can we expect from another six years of Putin? This analysis looks at the economic front.

Dependence on debt

Just as in 2012, the run-up to this election has seen Putin make a broad swath of promises. Even amidst aggressive saber-rattling, Putin also used his speech last week to announce a “war on poverty.” Spending on health care and infrastructure will be doubled, he promised. Salaries will rise, and these state interventions will halve the effective poverty level. These ambitious goals come in response to criticism about falling living standards in recent years.

However, Putin was vague on details about where the money will come from. On one hand, Russian authorities have made concerted efforts to squeeze taxpayers wherever possible (only, of course, after an election). Proposals have been floated to raise tax rates on individuals and companies, as well as crack down on tax evasion. But these measures will not be enough: The business lobby already began fighting new taxes last fall; taxpayers will not take kindly to seeing more of their incomes go to a government plagued by corruption.

Instead, we should expect the Russian government will look to international credit markets to fuel growth. The opportunities to borrow abroad are many. S&P recently upgraded Russia’s credit rating to investment grade, while the Trump administration has shied away from sanctioning Russian sovereign debt. Finance Minister Anton Siluanov may oppose this new push, but the outcome is inevitable: Russia can’t afford to increase spending without foreign cash.

Domestic borrowing is also the rise, the result of government support for loans. With inflation low, the Central Bank will continue to cut interest rates to pump cheap money into the corporate sector. Putin has also made a point of subsidizing lower mortgage rates, now promising a new low of 7 percent. With salaries low, Russian consumers already are borrowing at record levels to cover basic expenses.

Borrowing creates a short-term stimulus. However, Russia’s financial sector is ripe for abuse and corruption. Regulators’ attempts to purge bad banks have not yet changed a culture that prioritizes connections and kickbacks over due diligence. We could see the emergence of a risky debt bubble that comes back to haunt Russia in the same way the events of 2008 rocked the U.S. economy.

Hungry, hungry state officials

The Russian state now accounts for 70 percent of GDP, and the next six years are expected to see a doubling-down on this strategy of state ownership. Beginning in the early 2000s, the Putin government acquired large stakes in Russia’s corporate giants, positioning state-owned enterprises as the backbone of the economy. At first only “strategic” sectors were targeted, such as those connected to national security and social stability: oil and gas, metals, defense, banking, etc. This wave of state intervention outlasted even the economic headwinds of 2014, with privatization taking a back seat in the government’s crisis response. Putin’s economic approach holds that effective management can be achieved without private ownership.

Over his next term, state officials will target sectors traditionally reserved for private ownership. Authorities have tasted success in developing Russian agricultural firms; since the Soviet Union collapsed, Russia has gone from being a net wheat importer to being the world’s largest exporter. Last month, state-owned bank VTB bought a plurality stake in Magnit, one of the country’s largest retail chains, and was revealed to own part of Russia’s Burger King affiliate. It won’t be long before Russia’s fiercely competitive mobile phone and IT industries find themselves invaded by bureaucrats.        

The main reason we won’t see the state stepping back from the economy is politics. Putin is entering his presumed final term in office and the biggest question on the mind of every powerbroker in Moscow is not who will win this month, but who will succeed him in 2024. Analysts are already seeing the development of influential fiefdoms, jostling for position and accumulating state resources to support their claims to power. Under such political uncertainty, any attempts at liberalization will be paralyzed. No level of debt-fueled spending can overcome the stagnation caused by the state’s continued domination of the economy and refusal to enact real structural reforms.

This article was originally published by Eurasianet on March 7, 2018. Geopoliticus has republished the essay, without further editing, with permission from Eurasianet.

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Bear at the Door: Poland Ponders its Strategic Environment

Russian behavior has long influenced how safe Poles feel. Centuries of fending off or being subjugated by Russia (or, its 20th-century incarnation, the Soviet Union) have left them with an abiding mistrust of their big and often unfriendly eastern neighbor. Needless to say, Russia’s recent aggressiveness in Eastern Europe has put many Poles on edge. Adding to their unease have been worries over the reliability of Poland’s principal security partners: NATO and the United States. At times, both have appeared either slow or unprepared to counter Russia’s actions.

Strategic Differences with Russia

Even without its deep-rooted anxiety over Russia, Poland has good reason to regard its neighbor with suspicion. After all, the two countries have very different aims in Eastern Europe. For generations, Russia has sought to create a sphere of influence over the region and control its ports on the Baltic and Black Seas. To that end, Russia has backed pro-Russian regimes in Belarus and Ukraine, and lately harassed the Baltic countries of Estonia, Latvia, and Lithuania with airspace incursions. In contrast, Poland has viewed westward-looking governments in Eastern Europe as in its national interests. Hence, Poland supported Ukraine after that country’s “Orange Revolution” (which toppled a pro-Russian leader) in 2005 and Belarus’ opposition following a government crackdown on it in 2010.

Unfortunately for Poland, things have not gone its way in the last half decade. Russia successfully annexed Crimea (along with its Black Sea port of Sevastopol), sponsored separatists in eastern Ukraine, and survived Western economic sanctions against it. Russia also bolstered its forces in Kaliningrad, a Russian military stronghold on Poland’s northeast border, with new K-300P Bastion coastal defense missile systems and S-400 air defense systems. Topping it all off, the Russian military conducted large-scale exercises that resembled thinly veiled rehearsals for operations against Poland and the Baltics. The most recent of these exercises took place in September 2017.

Poland’s growing concern over Russia can be seen in the shifting tenor of its official national security strategy papers, particularly after Russia’s military interventions in Georgia and Ukraine. Whereas the papers’ 2003 and 2007 iterations supported the notion that cooperation with Russia was the surest way to ensure Polish security, Poland’s 2014 national security strategy paper declared Russia to be a “challenge” and stressed its need to respect international law and the territorial integrity of its neighbors.[1]

(Un)reliability of NATO and the United States

Meanwhile, Poland has become less confident in NATO and the United States as reliable security partners. A decade ago that was not the case. American commitment to Poland’s security seemed rock solid. As Russia backed away from its conventional and nuclear arms control commitments in Europe during the latter half of President George W. Bush’s administration, the United States suggested stationing interceptor missiles for its Ground-Based Midcourse Defense (GMD) system, an advanced anti-ballistic missile system, on Polish soil. Despite some popular misgivings, Poland’s leaders welcomed the proposal as a tangible sign of American reliability.

But that changed with the election of President Barack Obama. He hoped to “reset” U.S. relations with Russia on friendlier terms. To remove a source of friction, the United States cancelled the deployment of the GMD system. The unilateral American decision left Polish leaders feeling jilted. As a consolation, the United States offered Poland the less-robust Aegis Ballistic Missile Defense system. But soon after the Obama administration backpedaled on that too, scrapping its original plan to outfit the system with the latest SM-3 missiles.[2] Clearly upset, former Polish President Lech Wałęsa grumbled: “It wasn’t that the [missile] shield was that important, but it’s about the way, the way of treating us.”

In the following years, Poland would also find cause to question NATO’s dependability. In contrast to Russia’s swift and decisive intervention in Ukraine, NATO struggled to form an effective response. Even after its member countries agreed on economic sanctions against Russia, many remained hesitant. NATO again appeared flat-footed after Russia intensified its harassment of NATO’s Baltic members in 2015 and again after it deployed nuclear-capable 9K720 Iskander ballistic missiles to Kaliningrad in 2016. It would take NATO over a year to “enhance” its forward presence in the Baltics with a deterrent force of three multinational battlegroups (essentially reinforced battalions). A fourth battlegroup, formed around a U.S. mechanized infantry battalion, deployed to Poland in mid-2017. By comparison, Russia’s nearby Western Military District alone can muster over 22 armored, airborne, and motorized infantry battalions, along with ten battalions of artillery.

But possibly most worrisome to Poland was its recent realization that much of the critical infrastructure that the Alliance needs to deploy and sustain its frontline forces either fails to stretch far enough eastward or is no longer fully functional. And while Poland can take some comfort in the presence of a U.S.-led battlegroup, it does not fully allay Polish concern over the long-term commitment of the United States, given its continued distractions elsewhere in the world and its growing reluctance to act as the “world’s policeman.”

Greater Self-Reliance

How Poland has reacted to the changes in its strategic environment was evident in its 2017 defense concept white paper. The paper’s tone was strikingly different from those that preceded it. It pointed out Poland’s past “wrong conviction that the risk of an armed conflict in [Eastern] Europe was marginal.”[3] Rather than urging cooperation with Russia, it asserted that Russia is “a threat . . . for Poland and other countries in the region.”[4] The paper also intoned in its opening sentence that “The Polish Armed Forces remain the best guarantor of the security of Polish citizens.”[5]

Poland has much to do before its military can adequately deter Russia. While NATO and the United States remain key parts of Poland’s defense plans, Warsaw has come to realize that it must do more itself. As Polish Foreign Minister Witold Waszczykowski summed up: “In recent years, we have found out once again that defense of principles and values is sometimes effective only when supported by force—not only moral force, but also by military force.”[6]

[1] National Security Strategy of the Republic of Poland (Warsaw: Poland National Security Bureau, 2014), p. 22.

[2] Andrew A. Michta, “Polish Hard Power: Investing in the Military as Europe Cuts Back,” in A Hard Look at Hard Power: Assessing the Defense Capabilities of Key U.S. Allies and Security Partners, ed. Gary J. Schmitt (Carlisle, PA: United States Army War College Press, July 2015), p. 150.

[3] The Defence Concept of the Republic of Poland (Warsaw: Poland Ministry of National Defense, May 2017), p. 23.

[4] The Defence Concept of the Republic of Poland, p.6.

[5] Ibid.

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Compete and Cooperate to Make U.S. National Security Strategies Great Again

The views expressed in this article are those of the authors alone and do not necessarily reflect the views of the U.S. government. This article is written in response to History Begins (Again) for the Pentagon by John R. Deni, R. Evan Ellis, Nathan P. Freier, and Sumit Ganguly published on February 22, 2018.

Colleagues at the U.S. Army War College recently published a piece making important arguments that largely echo the competitive approach emphasized in the Trump administration’s new National Defense Strategy (NDS). They correctly argue that U.S. strategy since 9/11 has been obsessively focused on counterterrorism and that U.S. military power has been drained by exhausting and largely unproductive deployments in Iraq and Afghanistan. Their conclusion, however, that this has left the United States at a distinct disadvantage with respect to the revisionist powers of Russia and China, is exaggerated. Moreover, an imbalanced U.S. strategy that is excessively reliant on military force fails to capitalize on America’s significant advantages in the non-military instruments of power. Furthermore, an overemphasis on building ever more offensive military capacity risks provoking even more aggressive counterbalancing by adversaries that will ultimately lead to a self-fulfilling and dangerous security dilemma, in which the international system and the United States will actually be less secure. Finally, a more muscular military strategy will do little to address the central challenges posed by Russia and China as they expressly avoid directly confronting U.S. military strengths and instead seek asymmetric advantages in the “gray zone” below the threshold of open military conflict.

America’s comparative advantage since World War II has been, and continues to be, in the realm of values, enduring beliefs, and the perception that the United States is the key to a more cooperative and peaceful world. In erecting this institutional and intellectual framework, the United States committed itself to underwriting and supporting a rules-based international system and providing the global public goods that were necessary to promote greater prosperity, cooperation, and peace. This edifice was built upon and effectively reinforced and extended U.S. dominance in diplomatic and informational power, economic strength and vitality, and military might. Indeed, the U.S. today retains the most lethal and globally deployable military force on the planet. Even before the Trump administration’s call for a larger defense budget, the U.S. spent more on defense than the next eight countries combined. Economically, the U.S. still accounts for nearly 25% of global economic output with less than 5% of the global population. Moreover, it boasted the fastest recovering economy in the wake of 2008 global financial collapse and maintains significant advantages in technological developments and innovation. Finally, the United States enjoys the advantages of an unparalleled network of political and military alliances and extensive economic partnerships spanning the globe.

How to Address the Challenges Posed by Russia and China

First, U.S. policymakers should be careful not to exaggerate the hard power or global influence of Russia or China. The NDS correctly observes that both countries are revisionist powers intent on undermining U.S. dominance in Europe and the Pacific regions, respectively. Yet, both states confront external and internal challenges that will place practical limits on their ability to exert decisive influence beyond their immediate vicinities. Russia is a much diminished political, economic, and military power when compared to the Soviet Union. President Vladimir Putin resides over a shrinking Russian population and oil-dominated economy that is suffering under low oil prices at a time when the U.S. will surpass both Russia and Saudi Arabia as the world’s number one producer of oil. Meanwhile, even as President Xi Jinping consolidates his power in Beijing, China faces serious environmental degradation, and satiating China’s growing middle class will pose enormous economic and political challenges to his leadership abroad and at home. Moreover, the U.S. already enjoys strong and enduring political, economic, and security alliances with regional powers including Japan, South Korea, and India who will serve as natural checks to Chinese power and influence in the Pacific. This is not to say that Russian or Chinese goals and ambitions do not represent challenges to the U.S., but rather to remind policymakers that Moscow and Beijing—like all actors—will face important constraints and limitations on their ability to extend their influence to far-flung regions of the globe.

Second, U.S. policymakers must be sensitive to the risks of an overly ambitious strategy that is principally dependent on military superiority. There is little doubt in Moscow or Beijing that the U.S. would be the ultimate victor in any military confrontation. This is precisely why they pursue strategic advantages through asymmetric competition with the United States in their respective regions. The risks of U.S. military overreach are particularly acute with Russia. In Syria, the prospect of direct U.S.-Russian military confrontation—something that was avoided during the entirety of the Cold War—is a concrete reality as U.S. military strikes recently killed dozens of Russian military contractors. But recent suggestions to arm Ukraine with more lethal weapons, in a geographical area where Moscow enjoys escalation dominance, only feeds Russia’s paranoia and fears of NATO encroachment, increasing prospects for retaliation that risks direct U.S.-Russian conflict. Similarly, in addition to the perennial risks of conflict with China over American military support to Taiwan, regional analysts have warned of a growing risk of military confrontation in the East China Sea as the U.S. and its allies move to contest Chinese construction of artificial islands intended to solidify Beijing’s expansive territorial claims in these resource-rich waters.

Third, the primary gap in U.S. strategy is not a deficiency in military capability, but rather, it is the need to re-build the diplomatic, economic, and informational tools that have atrophied in the glow of U.S. military primacy. Certainly, there is a role for U.S. military actions designed to contain and restrain Russian and Chinese activities that genuinely endanger vital U.S. national interests. For instance, the United States and NATO have smartly bolstered military deployments and exercises in Europe in order to underscore America’s commitment to the defense of NATO allies. It has similarly increased so-called freedom of navigation operations in the South China Sea to demonstrate America’s willingness to guarantee access to the global commons.

However, the challenge for U.S. policymakers will be to place these military activities within a broader strategy that maximizes the contributions of diplomacy, economics, and informational measures. With Russia, this should include enforcing the punishing set of sanctions that have already been imposed by the U.S. Congress in response to Russia’s occupation of Crimea and its destabilizing activities in Ukraine. Additionally, the United States can simply not tolerate Russian efforts to undermine its democratic process and exacerbate existing societal and political divides in the country. This will certainly require defensive measures to protect electoral systems and minimize the ability of any foreign power to infiltrate and manipulate U.S. social networks and information sharing platforms. Additionally, U.S. policymakers must also consider offensive cyber actions to punish and cripple the foreign officials, institutions, and individuals that participate in these malicious activities.

With respect to China, U.S. policymakers should focus efforts on building diplomatic support for regional institutions that will foster economic and commercial growth consistent within existing international trading norms and rules. For instance, the U.S. should support the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (formed after U.S. withdrawal from the Trans-Pacific Partnership), which builds a multilateral framework supporting and amplifying existing economic and security cooperation efforts in Asia.

Moreover, U.S. policymakers should be confident in the moral case for U.S. global leadership. The U.S. Information Agency once played a vital role in articulating American values, trumpeting the benefits of American political and economic models, and promoting cultural and educational exchanges. Those capabilities need to be restored and programs robustly funded. Francis Fukuyama was certainly overly optimistic when he assessed that America’s victory at the end of the Cold War represented the end of history. But neither Russia nor Moscow has offered a better political, economic, or ideological alternative to the unmatched successes of the American story.

Finally, U.S. policy should not be wholly confrontational. It is also important for U.S. policymakers to recognize that cooperation with both Moscow and China will be essential to achieving American security objectives in battling terrorism; rolling back nuclear and missile programs in North Korea and Iran that threaten regional and global stability; adhering to arms control agreements that reduce the risk of nuclear confrontation; and facilitating a political resolution to the civil wars plaguing the Middle East. Moreover, the United States need not necessarily fear Chinese investment in Africa, Latin America, or the Middle East as these regions are in desperate need of developmental assistance that the United States is both unwilling and unable to provide on its own. Rising to the challenge of better integrating both carrot and stick into a coherent U.S. national security strategy will require a much deeper investment in the non-military instruments of power. Prioritizing the filling of key senior diplomatic posts such as U.S. ambassadors to South Korea and Saudi Arabia is a minimal prerequisite. In a complex and increasingly integrated world, U.S. policymakers should be seeking to bolster investment in American diplomacy and foreign aid programs quite in contrast to the budget reductions proposed by the Trump administration.

While the United States must be cognizant of the competition posed by Russia and China, it should also be careful not to create a self-fulfilling prophecy of conflict with those countries if it wishes to promote international stability and maintain its comparative advantage as the largely benign leader of the liberal international order.

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History Begins (Again) for the Pentagon

The views expressed in this article are the authors’ own and do not necessarily reflect those of the U.S. Government, the U.S. Department of Defense, or the U.S. Army.

Thanks to a near-myopic obsession with eradicating transnational Islamic terrorism, costly invasions and occupations of Afghanistan and Iraq, and a zero-risk approach to homeland security, America’s competitive edge has eroded over the last 16 years relative to China and Russia. That’s the conclusion of the recently released National Defense Strategy (NDS), which recognizes—correctly, in our view—that the United States finds itself behind the curve today when it comes to this inter-state strategic competition and the threats it poses. However, the NDS falls short in identifying how America should best respond to it.

Specifically, the NDS outlines three “lines of effort”—increasing readiness and lethality, strengthening alliances, and modernizing the Department of Defense. Make no mistake, these steps are necessary, but together they are still insufficient to ensure durable advantage in the strategic competition now underway, one that threatens to undermine the U.S.-led international order.

At one time, the international order seemed destined to last well into the 21st century. The period immediately after the collapse of the Soviet Union led historian Francis Fukuyama to declare an “end of history,” in which liberal internationalism, market capitalism, and representative forms of government had become inevitable end states the world over. Simultaneously, existential competition among the great powers had ceased—or so we thought.

When 19 hijackers murdered 2,977 people on September 11, 2001, they hijacked not simply four airliners, but America’s strategic focus as well. Since then, Washington has maintained a relentless drive to eliminate terrorism, first in Afghanistan, but then also in Iraq, the Horn of Africa, the Philippines, the Trans-Sahara region of Africa, and most recently, Syria.

The diversion of U.S. attention has brought about a decline in the United States’ long-term strategic position. Today, Chinese and Russian efforts now threaten to disrupt or dislodge American power and influence from the most consequential geographic theaters and functional domains.

Challenges Posed by China and Russia

The character, quality, and durability of the specific China and Russia challenges differ. China is a rising, focused revisionist power, adept at so-called “gray zone” approaches—designed to avoid triggering a full-scale military conflict. Russia, on the other hand, is arguably a declining power, but also a reckless revisionist state with a greater predisposition for overt risk-taking than China.

The Pentagon’s new strategy rightly argues China and Russia present significantly different qualitative challenges to American interests than do any other consequential threats. Furthermore, we believe the new defense strategy correctly identifies the array of modalities employed by Beijing and Moscow, including hybrid warfare, military technological advancements, corruption, information operations, the erosion and violation of international norms, and predatory economic policies.

China and Russia have employed these methodologies to great success in a variety of geographic and functional contexts over the last decade or more. While the United States focused elsewhere, it also naively pursued cooperation with these zero-sum competitors.

For example, in Europe, the United States held onto the fantasy of a Westernized Russia long after Moscow itself had rejected such a vision. This led to a mistaken notion that security and stability in Europe had become over-determined. As a result, U.S. force structure in Europe was cut dramatically and precipitously since 2001, and the residual American forces stationed there focused almost exclusively on preparing themselves and willing partners for counterterrorism and counterinsurgency in Iraq and Afghanistan. Meanwhile, many other U.S. and allied military capabilities—from large-scale mechanized maneuver warfare through Russian-focused intelligence analysis and equally vital military information support operations—atrophied. As a result, the West is now scrambling to augment force structure in Europe, increase readiness, counter disinformation, and modernize equipment and technology.

In the Indo-Pacific, there have been at least two attempts to rebalance or pivot to that region and reverse these trends over the last 20 years. The Bush administration’s inaugural Quadrennial Defense Review—written prior to 9/11 and published just after—argued that the Indo-Pacific was an area “gradually emerging as a region susceptible to large-scale military competition.” However, policies designed to meet emerging Indo-Pacific competition never received the necessary focus or resourcing they deserved. They were lost in a fevered rush to eliminate Islamic terrorism and its sanctuaries. In 2012, the Obama administration attempted another Indo-Pacific rebalance, including the repositioning of military assets to the U.S. Pacific Command and non-military initiatives like the Trans-Pacific Partnership. However, the Obama rebalance lacked a comprehensive strategic design and sufficient understanding of the gray zone character of China’s challenge.

Meanwhile, the United States has done little to curb the growing influence of both China and Russia across South Asia. It has watched with equanimity as China has acquired a port facility at Gwadar in Pakistan and embarked on the China-Pakistan Economic Corridor (CPEC). Despite designating India as a “major defense partner” in the waning days of the Obama administration, Washington has yet to devise a strategy to wean India off its dependence on Russian military supplies.

In Latin America, where geographic proximity to the United States strongly binds the condition of the region to U.S. security through flows of people, money, and goods, both China and Russia have made important advances at Washington’s expense. Since 2001, China has become the leading trade partner and an important investor in virtually all of the region, particularly from Costa Rica south. While China has been careful to avoid Cold War-style military alliances that could alarm Washington, its loans, investments, and purchases of exports from the region have helped maintain the viability of regimes like Ecuador and Bolivia, which actively work against the United States. At the same time, Russia has shown itself more willing to leverage a coalition of anti-U.S. states, particularly Venezuela, Nicaragua, and Cuba, to act aggressively toward the United States.

Reversing U.S. Disadvantages

So how can the United States achieve durable advantage in this strategic competition? “Winning” in this context won’t look like winning a conventional war—there will be no ticker-tape parades in the end. Instead, the best the United States can probably hope for is more tactical victories than losses in a relentless competition for a preponderance of international influence relative to Moscow and Beijing. Despite widespread disapproval around the globe of the current administration, the United States retains a great deal of worldwide support and admiration. This residual soft power advantage will help the Pentagon vis-à-vis China and Russia. However, staying ahead of these strategic competitors will require unrelenting focus.

In the face of the expanding global challenge from China and Russia, there are a number of steps that the Pentagon can take to most effectively respond to the erosion of America’s strategic position. In Europe, the United States has taken a step in the right direction by finally authorizing the sale of lethal defensive arms to Ukraine. Additional investments are necessary though, including the forward stationing of U.S. forces in Poland, the renewal of occasional large-scale deployment readiness exercises along the lines of the Cold War-era REFORGER series, an increase in intelligence collection and analysis directed at Russia and its affiliates, and augmented military information support and electronic warfare assets and capabilities.

In the Indo-Pacific, the United States requires a comprehensive strategy focused on three key objectives. First, the United States, in coordination with allies, ought to push back harder against spurious Chinese territorial claims or irredentist Chinese activities. Second, an American-led regional coalition should initiate a gray zone campaign of its own to defend assertively the global commons, allied territorial possessions, and clearly enunciated red lines across vulnerable and highly contested functional domains, especially, cyber, space, the electro-magnetic spectrum, and strategic influence. Finally, when appropriate, Washington and its allies should channel Chinese military escalation toward face-saving “off-ramps.”

In South Asia, the United States needs to follow through on the apparent policy shift that the Trump National Security Strategy has spelled out toward Pakistan, which has played both sides of the counter-terrorism fight. Failure to rein in Pakistan will not only prevent the United States from stabilizing Afghanistan, it will also undercut attempts to forge a wider strategic partnership with India. Regarding the latter, the United States should find ways to amplify arms transfers to India and help New Delhi counter China’s expanding reach in South Asia.

In Latin America, the United States should expand military-to-military engagement activities, while working to improve the agility of foreign military sales and foreign military finance programs to strengthen the position of the United States as the partner of choice. It must also ensure that it has contingency plans against Chinese and Russian activities in the hemisphere during times of crisis, anticipating that either or both may seek to use their military relationships and commercial presence to disrupt U.S. deployment and sustainment flows, create crises, or operate against the U.S. homeland from the hemisphere in times of military conflict.

Unfortunately, Russian and Chinese competition aren’t confined to these important regions and contexts. How the United States postures for and undertakes meaningful action in response will in large measure determine its future as the world’s only global power—if flawed, the new defense strategy is at least a step in the right direction.

John R. Deni, R. Evan Ellis, and Nathan Freier are research professors at the U.S. Army War College’s Strategic Studies Institute (SSI), where Sumit Ganguly, a Senior Fellow at FPRI, is a Visiting Professor.

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Sweden’s Foreign Policy: Nonaligned, But Not Entirely Neutral

In late 2014, Swedish authorities spotted what many suspected was a Russian submarine lurking off Stockholm. The incident set off alarm bells among Swedes. It reminded them of a similar incident in 1981, when a nuclear-armed Soviet Whiskey-class submarine ran aground a few kilometers outside Sweden’s main naval base.[1] Following Russia’s invasion of Georgia, annexation of Crimea, and intervention in eastern Ukraine, the recent submarine scare served to underline the threat that a resurgent Russia could pose to Sweden.

No wonder that, despite Sweden’s long tradition of neutrality and an “alliance-free” foreign policy, Swedish leaders of almost all political stripes began to consider closer ties with NATO. That of course irked Russia. Victor Tatarintsev, the Russian ambassador to Sweden, responded with what seemed like a backhanded reassurance that Russia had “no plans to invade Sweden.” In May 2017, Russian President Vladimir Putin put it more bluntly. He warned that if Sweden joined NATO, Russia would take military measures “to eliminate [the new threat].” While Swedish Foreign Minister Margot Wallström clearly stated that her government would not seek NATO membership, Sweden has moved closer to the Alliance. NATO naturally welcomed the shift, given Sweden’s strategic importance to NATO’s defense of its Baltic member countries.

Sweden’s National Interest in the Baltic Sea

Observers have long described Sweden’s security policy as “non-participation in military alliances during peacetime and neutrality during wartime.”[2] But that does not mean that Sweden takes its security environment lightly, especially when it comes to the Baltic Sea. For centuries, its waters have been a thoroughfare for not only trade, but also power projection. Should unfriendly forces control it, they could easily threaten Sweden and even reduce its access to the wider world. Hence, Sweden has had an enduring national interest in the security of the Baltic Sea and the coast beyond.

Armed Neutrality

Throughout the Cold War, the Soviet Union controlled the Baltic coast. Because of that, Sweden kept up its guard. It maintained a sizable standing military and nurtured a world-class defense industry. That attention to military preparedness has had a long history in Sweden where a popular nineteenth-century slogan proclaimed: “one man, one gun, one vote.”

After the Cold War, Sweden cut its defense expenditures. But the advent of an aggressive Russia across the Baltic Sea has led Sweden to rethink its military posture. In September 2017, it raised its defense budget by five percent over its already planned increase. It also recently reinstituted conscription to bring its military back to full strength. Starting in 2018, it will conscript 4,000 18-year-olds. That number will rise to 8,000 per year by 2022. Sweden still has more to do. Apart from the 60 JAS 39E fighters and two A26 diesel-electric attack submarines already on order, Sweden will need more and newer armaments for its soon-to-be larger armed forces.

Even so, Sweden has begun to strengthen its defenses on Gotland, a strategic island in the Baltic Sea. Contrary to reports in 2016 that reestablishing a permanent military presence on Gotland was unexpected, Sweden’s Defence Policy white paper—which all of Sweden’s major political parties agreed to in 2015—outlined Gotland’s rearmament as part of a broader set of security precautions that Sweden would take through 2020.[3]

New Normal for Swedish Neutrality

While it is perfectly understandable why neutral Sweden has felt the need to be better armed, what is unusual is how enthusiastically it has embraced multilateral defense cooperation. Roughly a decade ago, Sweden joined the European Union’s (EU) Common Security and Defence Policy and led the effort to create the EU’s 2,400-man Nordic battlegroup. Soon after, it helped to establish the Nordic Defence Cooperation, which brought together five Nordic countries, including two NATO members.

Recently, Sweden has stepped up its collaboration with NATO. It signed a host-nation agreement that allows NATO forces to train in Sweden and boosted its participation in NATO military exercises, like Baltic Operations (Baltops) and Steadfast Jazz. Sweden has gone so far as to commit a fighter squadron to fight alongside NATO’s rapid-reaction force.

Sweden is also shedding its long-time aversion to a bilateral military relationship with the United States. The number of meetings between Swedish defense ministers and U.S. secretaries of defense has noticeably risen, from an average of once every two years over the last decade to twice a year in 2016 and 2017. During Swedish Defense Minister Peter Hultqvist’s visit to the Pentagon in May 2017, he announced not only Swedish participation in NATO’s Baltops 2017 exercise in June, but also the involvement of about 1,000 U.S. troops in Sweden’s largest military exercise in 23 years. Over 20,000 troops from nine countries (seven of them NATO members) took part in the exercise, called Aurora 2017, which spanned three weeks in September and focused on the defense of Gotland.

Seeking Partnerships, Not Alliances

Swedes—ever conscious of their cherished neutrality—have long opposed their country joining multilateral defense organizations, like NATO. But fewer of them do so than before. A national poll found that a slim plurality of Swedes favored membership in NATO for the first time in 2014.[4] While opinions of the public slipped back the other way two years later, those of Swedish leaders did not. Most now believe that Sweden needs to form stronger partnerships, though not alliances, with NATO and the United States. From their perspective, the real question is how Sweden can translate those partnerships into greater security without formal defense treaties.

Such partnerships bring Sweden close to breaching its traditional neutrality and “alliance-free” foreign policy. Someday, it may be forced to choose one approach over the other. In the meantime, Swedish leaders will continue to wrestle with what it means for Sweden to be a partner, but not an alliance member—to be nonaligned, but not entirely neutral either.

[1] Milton Leitenberg, “The case of the stranded sub,” Bulletin of Atomic Scientists, Mar. 1982, pp. 10-13.

[2] “Sweden: Scene-Setter for Prime Minister Reinfeldt’s May 15 Visit to Washington,” May 4, 2007, WikiLeaks, WikiLeaks cable: 07STOCKHOLM506_a.

[3] Government Offices of Sweden, Sweden’s Defence Policy, 2016-2020, Jun. 1, 2015.

[4] Pütsep Mona and Ryen Linda, Opinioner 2016: Allmänhetens syn på samhällsskydd, beredskap, säkerhetspolitik och försvar (Karlstad, Sweden: Civil Protection and Emergency Agency, Jan. 2017), p. 75.

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Sweden’s Importance to NATO’s Defense of the Baltics

Sweden is not a member of NATO. But Sweden is very important to the defense of NATO’s Baltic member countries of Estonia, Latvia, and Lithuania. That importance mainly stems not from what Sweden could add to NATO’s collective military strength, but from how its strategic position could help NATO overcome the operational challenges it would face if it needed to respond to a Russian invasion of the Baltics.

Strategic Position in the Baltic Sea

Spanning the length of the Scandinavian Peninsula, Sweden’s geography dominates much of the Baltic Sea, a fact that NATO has long appreciated. Early on in the Cold War, NATO recognized that Sweden could serve as a valuable location for early warning facilities to monitor the Soviet Union in peacetime and for combat aircraft to interdict Soviet lines of communications across Germany and Poland in wartime.

Sweden took on a new relevance for NATO after Estonia, Latvia, and Lithuania joined the Alliance in 2004. With tiny military forces of their own and large Russian military forces on their borders, the three Baltic countries are highly vulnerable. Russia could easily sever their air and land connections to the rest of NATO and capture all three countries—a prospect that could jeopardize the very existence of NATO. Thus, NATO holds annual exercises called Baltic Operations (Baltops), in part, to practice reinforcing the Baltics by sea. But, in a conflict, Russian strike aircraft and coastal defense missile batteries based near Kaliningrad could interdict such seaborne reinforcements before they ever reached the Baltics. (See Map.)

Sitting astride of NATO’s most likely reinforcement route, Sweden could mitigate many of Russia’s military advantages. That is what makes Sweden so important to NATO. Were Sweden to allow NATO reinforcements to sail through its territorial waters, NATO could halve the distance over which its reinforcements would be exposed to Russian air and missile attacks between Denmark and Estonia. Theoretically, Stockholm could even allow NATO to safely transport its troops and supplies over land to Sweden’s east-coast ports before they embarked for an amphibious assault across the Baltic Sea.

Got Land?

Sweden also controls Gotland, an island situated in the middle of the Baltic Sea. Gotland is strategic because it is an ideal location from which to defend forces moving through the Baltic Sea or to project power into the Baltics. Though primarily seen today as a holiday destination, it has been prized for its strategic location for centuries. During the Cold War, Sweden stationed a reinforced armored brigade, fast attack craft, and a fighter squadron on Gotland to defend it. While all of those forces have since been deactivated or dispersed, Russia’s recent aggressive behavior prompted Sweden to reestablish a permanent military garrison on Gotland in 2016.

NATO also sees the value of Gotland. At a minimum, the island could complicate Russian anti-ship cruise missile strikes on NATO reinforcements sailing to the Baltics. But if Swedish cooperation with NATO were to increase, NATO air forces could use Gotland’s airfields to fend off Russian air and missile attacks as well as provide air support for NATO military operations in the Baltics. Gotland’s main port of Visby could even serve as a logistical hub for NATO forces fighting in the region.

On the other hand, Sweden could also help NATO by simply defending its territory from Russian incursions during a conflict between NATO and Russia. Doing so would constrain Russian freedom of action in the Baltic Sea. If nothing else, denying Russia use of Gotland would prevent it from not only making any seaborne reinforcement of the Baltics extremely difficult and thus narrowing NATO’s operational options, but also threatening the Baltic coasts of Germany and Poland behind NATO’s frontline.

Sweden in NATO?

Though not a member of NATO, Sweden is important to NATO’s defense of the Baltics.

Swedish cooperation with the Alliance would make protecting the Baltics easier and thereby strengthen NATO’s security guarantee to its member countries. That, in turn, would improve NATO’s ability to deter Russian aggression in the region.

Meanwhile, some have begun to speculate whether Sweden would shed its longtime “alliance-free” foreign policy and join NATO. But Swedish Foreign Minister Margot Wallstroem has dismissed such speculation. She cautioned that NATO membership “would expose Sweden to risks, both political and otherwise” which her government was not willing to bear.[1]

Still, over the last decade, Sweden has taken a more active role in Nordic and European Union defense arrangements, many of whose members are also NATO members. Moreover, Sweden has stepped up its direct military contacts with NATO and the United States. While NATO membership may be off the table for Sweden, it would appear that Sweden has come to believe that NATO’s interest in deterring Russian aggression is very much in its own national interest, too.

[1] Damien Sharkov, “Putin Vows Military Response to ‘Eliminate NATO Threat’ If Sweden Joins U.S.-Led Alliance,” Newsweek, June 2, 2017,

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U.S. LNG In Central and Eastern Europe – Taking Diversification Seriously

Last week President Trump met in Warsaw with Polish officials and Central and Eastern European (CEE) leaders at the Three Seas Initiative Summit. The event brought together countries from the Adriatic, Black and Baltic seas to discuss development of regional infrastructure necessary to reduce their energy dependence on Russia and ensure energy security. This happened shortly after the first cargo of U.S. LNG, carried by the 162,000 cbm-capacity “Clean Ocean, entered the Polish port of Swinoujscie. Both the U.S. and Polish governments lauded the cargo and, following the meeting with Donald Trump in Warsaw, Polish President, Andrzej Duda declared a possibility of signing a long-term agreement (LTA) for the supply of U.S. LNG into Poland.

Much of Duda’s statement is political rhetoric given that LTAs are not signed between governments. Instead these contracts are commercial decisions made by individual companies. But the strong rhetoric coming from both governments in support for U.S. LNG exports to CEE is an indicator that beyond economic aspect, this trade has strong geopolitical dimension.

Given competitiveness of Russian gas and willingness of Gazprom to defend its market, it is highly unlikely that U.S. LNG imports would grant CEE (or Europe as a whole) full and unconditional natural gas independence from Russia. However, standing ability to deliver U.S. (or other non-Russian) gas to Europe provides “credible threat” and changes the bargaining positions of all parties involved. In such scenario Russia stands to lose not as much market share as geopolitical influence that it has derived from CEE’s dependence on its gas. And while LNG exports will not give the U.S. more geopolitical power in Europe per se (given the increasingly competitive global LNG market), Russia’s loss in this regard is a strategic gain for the U.S.

But can the U.S. and CEE governments truly affect the outcome of essentially commercial transactions? Can they effectively facilitate the ‘credible threat’ of U.S. LNG exports? And if so, how?

This ability depends on several factors. These include the usual: pricing and, given competitiveness of Russian gas, the willingness of the CEE governments to support a security premium on natural gas from a non-Russian supplier. Also, policy makers should pay close attention to current policy decisions within the EU that relate to infrastructure and antitrust law, as these decisions may not only impact profitability but also feasibility of LNG imports well into the future.

Forces that Influence Europe’s Natural Gas Market

The European market, while not expected to be as robust as Asia over the coming years, will remain an important source of demand for natural gas suppliers. As reported by Eurogas, going forward Europe will need to import much more natural gas than suggested by demand growth alone (Figure 1). In addition, the region is attractive given dependability of the market and reliability of European governments and customers.

Figure 1. EU Natural Gas Demand through 2030.
Source: Eurogas, “Natural Gas Demand and Supply: Long term Outlook to 2030.”

Much of the future makeup of European natural gas supply might be determined not only by market forces but also by geopolitical considerations and European Union legal and antitrust decisions.

The two main decisions currently on the agenda that will have broad and direct consequences for LNG trade in Europe are: 1) permitting of the Nord Stream 2 pipeline to carry Russian gas under the Baltic Sea directly to Germany, and 2) antitrust decisions by the European Commission related to Gazprom abusing its monopoly position in the CEE.

European Diversification and What It Means to Different Parties

Natural gas market diversification has become a hot topic in Europe following several breaks in Russian gas deliveries between 2005 and 2009. The 2014 crisis in Ukraine and complete shut off of natural gas supply flowing from Russia added urgency to the matter. In principle, all EU members agree that diversification is needed. But there is a visible rift between how diversification efforts are envisaged by the West versus the CEE countries.

Ukraine, Poland, and the Baltics in particular are pushing for diversification away from Russia. Their efforts include a buildup of LNG infrastructure, with the already functioning LNG terminal in Lithuania and the aforementioned LNG terminal in Swinoujscie. Plans are drawn already to expand the existing terminals, and new LNG terminals are planned in Estonia. Small-scale LNG projects are also in the works in the Baltics. In addition, the region is considering facilities for regasification, storage, rebunkering, and reloading, as well as investment in rail transport to support future LNG imports.

It goes without saying that such imports will never be realized unless the price of LNG is competitive. But it is worth noting that although the price of LNG brought to Swinoujscie by U.S.-based Cheniere Energy has not been disclosed, it was lower than Russian and German EEX natural gas prices, according to the Polish trader, PGNIG.

In addition, many CEE countries may be willing to pay a certain security premium for LNG to sustain diversification efforts away from Russian natural gas. Regardless their willingness to pay such a premium rate, these countries also actively seek non-LNG market opportunities to diversify supply, including onshore projects like the Baltic pipe. This means that the ability to pay excessive prices by those countries may be moderated in the future, as the CEE gas market becomes more competitive.

The strong push toward diversification within CEE is related to two main factors. First, dependency rates on Russian natural gas have been historically very high, with some CEE countries previously entirely dependent on Russian imports (Figure 2 below). This led to uncertainty in terms of reliable gas supplies and higher prices. If non-Russian supplies of natural gas are readily available, Gazprom loses ability to charge monopoly prices. Second, there is a strong sentiment that Russia is ready and willing to use energy dependence to achieve political goals regarding its relations with CEE countries. Much of this feeling is informed by the Soviet past, but some of the uneasiness stems from more current events, including Russian invasion of Ukraine in 2014 and annexation of Crimea. Particularly, Poland and the Baltics see LNG imports as a way to dilute the Putin Regime’s economic influence over their countries and to parry Russian attempts at undermining the democratic process and social unity.

Figure 2. Europe’s Dependency on Russian Gas, 2014.
Data Source: Eurogas, Statistical Report 2015.


On the other hand, Western European countries are generally content with diversifying natural gas supply routes away from Ukraine that they see as a high-risk transit territory. They are less interested in diversifying supplies away from Russia and are focused rather on lowering cost than on geopolitical implications of dependence on Russian natural gas. This is related to lower dependency rates in that region (Figure 2) and to long-standing collaboration between Western Europe’s utilities and Gazprom that is seen as reliable partner and supplier. There is much less concern about possible monopolization of the European gas market by Russia and its geopolitical implications.

Nord Stream 2, EU Antitrust Decisions & “Credible Threat” of U.S. LNG Imports

Whether CEE countries will be able to achieve their goal of natural gas market diversification and whether U.S. and other LNG producers will have access to the European market will depend as much on price as on other factors. When it comes to price Russia has significant and undisputed advantage. But EU’s policy framework, infrastructure buildup and willingness of countries to support non-Russian supplies will define boundaries within which market forces operate. As such, these factors will determine whether Russian gas dominance in Europe (particularly in CEE) will be strictly commercial or whether it will continue to yield geopolitical power. Construction of Nord Stream 2 and EU antitrust decisions are currently the two decisions that will have a bearing in this regard and where government’s, and not companies, can influence the outcomes.

Nord Stream 2 (NS2) is planned to cross directly from Russia to Germany. The new pipeline is supposed to accompany the already existing Nord Stream 1, reducing the need for the Ukrainian transit route. The plan is constituent with Western Europe’s efforts to diversify natural gas routes away from the risky transit territory. CEE countries argue against the pipeline, which in their view would damage their efforts geared toward diversity of supply and reducing dependence on Russian gas. If recent research is correct, these fears may be well substantiated. The research shows that NS2 would allow Gazprom to pre-empt diversification measures by using the entire capacity of current pipeline infrastructure. With pipelines committed to Russian gas, Gazprom could deter other potential sources of supply from entering the market and keep prices in CEE countries high.

Gazprom current commitments in the Directorate-General for Competition (DG COMP) antitrust investigation may have similar consequences. Considered soft, regarding the time and scale of alleged anticompetitive practices that affected trade in the CEE, they would possibly result in eliminating competition from other sources of natural gas supply (though, as opposed to NS2 they do not seem to increase prices of natural gas in the CEE or elsewhere in Europe). And while these commitments may be changed in the course of further proceedings, a soft response from the EU indicates general tendency and provides a precedent for future decisions.

EU decisions on NS2 and antitrust will have a profound impact on creating favorable conditions for U.S. LNG in European markets and whether it will be able to provide the ‘credible threat’ to Russian natural gas dominance. Poland and the Baltics are pushing hard against NS2 in an effort to advance their diversification efforts. The U.S. government is also acutely aware of the problem and has engaged in anti-NS2 sanctions and anti-NS2 diplomacy in the region. But there is a noticeable lack of involvement from other CEE countries. Thanks to recent infrastructure and regional cooperation agreements these countries feel more secure when it comes to natural gas deliveries not realizing the potential negative effects NS2 may have, once completed.

This lack of engagement, together with Western Europe’s limited view of diversification may well be responsible for Russia regaining its position as Europe’s dominant natural gas supplier, a position that has been seemingly slipping away from Russia in recent years as LNG technology took off (Figure 3). This is critical especially now as the European Commission (EC) seeks member-state approval to negotiate with Russia on NS2 with an intent to extent at least main provisions of the EU natural gas legal framework (Third Party Access, unbundling) onto NS2.

Figure 3. Origin of Primary Energy Imports to the EU (% Non-EU Imports).
Source: Eurostat


Is There a Hope for U.S. LNG Exports to Europe?

The first U.S. LNG cargo to Poland is a result of a one-off transaction between Chenier and a newly established Polish trading office in London. Although it is probable that future LNG deals will be concluded later this year, the problem of the long-term profitability of U.S. exports of this commodity to the EU is still open. Governments have little say as to what contracts are signed but they have the power to affect market conditions within which companies operate. Currently, NS2 and to a smaller extent, EU antitrust decisions are factors, which governments should consider if they want to affect future access to Europe’s natural gas market.

When it comes to the U.S., its government has been active in supporting European energy diversity in many ways, including active opposition to the NS2 pipeline via unilateral U.S. sanctions against Russia and diplomatic assurances in the Baltics and Poland. But this may not be enough. There also may be a value in the U.S. focusing on issue diplomacy in those European (CEE and non-CEE) countries that are currently quiet or in support of NS2 but would ultimately lose if NS2 comes to be.

That being said any success of CEE and U.S. efforts does not guarantee unobstructed flow of U.S. (or any other) LNG to the European market. However, ability to access that market by any non-Russian supplier will provide an effective check on both, Russia’s pricing policy and the influence that country has historically derived from its monopoly over the CEE market.

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