The Swedish government announced today (March 26, 2025) that it will increase defense spending by 300 billion Swedish kronor (approximately €28 billion) over the next ten years. The funds for these additional defense expenses will be sourced from loans, marking “the largest rearmament since the Cold War,” stated Swedish Prime Minister Ulf Kristersson. “The security situation is entirely new, and uncertainties will remain significant for a long time,” he emphasized during a press conference. The goal is to have defense spending reach 3.5% of Sweden’s GDP by 2030, up from the current 2.4%. Although Sweden has already allocated extra resources for defense, aiming for 2.6% of GDP by 2026—well above NATO’s 2% target—Kristersson highlighted that this is insufficient. He stressed that NATO, particularly European member states, must take substantial steps in the coming years, especially as Washington’s support for its European allies becomes increasingly uncertain under Donald Trump’s second term in the White House. Following its accession to NATO in March 2024 after Russia’s invasion of Ukraine, Sweden ended over 200 years of military neutrality. In January, Kristersson noted that Sweden is “not at war, but not exactly at peace either,” underscoring the importance of strengthening national defense. Addressing hybrid threats in the region, he added at an annual defense forum: “The Russian threat may persist for a long period, so our defense must match that duration.” While previous increases in defense budgets were funded through regular national budgets, Prime Minister Kristersson pointed out that to successfully rearm the country within such a short timeframe, it is essential to borrow capital during a ‘transitional period.’ Source: APE-MPE.