Gov't To Raise Def Spending & Signs Deal w/US In Effort To Boost Support

The Swedish gov't has stated its desire to significantly boost defence spending, and has signed a deal on military cooperation with the United States as it seeks to revive its flagging support levels. Earlier in December, Defence Minister Pål Jonson stated that the gov't intends to increase defence spending by 28% to bring the country up to the military spending target for NATO member states of 2% of GDP.

• The defence bill for 2024 envisages a SEK27bn (USD2.4bn) increase in military spending, and is seen as a key plank in Stockholm's attempts to prove its military credentials as it continues to push for NATO membership.
• The gov't has also signed adefence co-operation agreementwith the United States that will allow US access to military bases across the country. Jonson argued the deal, similar to the one that neighbouring Finland and Denmark have also recently signed with the US, “will create better conditions for Sweden to be able to receive support from the United States in the event of a war or crisis.”
• Efforts to talk tough on security come as the Moderates, and their partners in the minority governing coalition, the Liberals and the Christian Democrats, trail the right-wing nationalist Sweden Democrats in opinion polling.
• Although the Sweden Democrats prop up the minority coalition from outside gov't, the sustained increase in support for the party - driven by concerns about immigration and widespread gang violence - will unnerve the governing parties as SD support could be withdrawn at any time.

Chart 1. General Election Opinion Polling, % and 5-Poll Moving Average

Source: Sentio, Kantar, Novus, Demoskop, Ipsos, Sifo, SCB, Indikator, Verian, MNI