According to Nato's own projections, Finland is among the alliance's top performers in terms of targets for national defence spending.
Finland, like many other Nato countries, has increased defence spending in recent years.
Nato set a target in 2014 for each member state to allocate two percent of its gross domestic product (GDP) to defence spending. Prior to Russia's invasion of Ukraine, only a handful of Nato member states were meeting this target.
However, a Nato defence spending projection produced in March found that 23 of Nato's then-31 member countries will reach the two percent defence spending target. Back in February, Nato Secretary General Jens Stoltenberg said that 18 countries would exceed the 2 percent defence spending threshold this year.
Sweden joined the alliance on 7 March, after the projection was compiled.
Finland at the top
Finland will clearly exceed this two percent target, and in 2024 Finland will rank seventh among all Nato countries in defence spending with 2.41 percent of the country's GDP, overtaking countries like Denmark and the UK.
Finland's defence budget for 2024 is around six billion euros, almost doubling since 2020.
The recent increase in defence spending is linked to large equipment purchases, such as F-35 fighters and naval vessels, budget decisions which were made prior to Finland joining Nato.
The Ministry of Defence calculated that the current decisions would take Finland up to two percent until 2027. The new purchases also put Finland at the top of Nato's second target, where 20 percent of the defence budget should be allocated to purchasing new equipment.
Finland's share of equipment purchases in its defence budget this year is 45.8 percent, putting it in fourth place after Poland, Hungary and Albania.
Russia's invasion of Ukraine altered Nato's strategy
Iro Särkkä, a Research Fellow at the Finnish Institute of International Affairs (FIIA), views the change in Europe over the past year as a significant movement towards bolstering up defence.
"This is a really important signal that European states are finally taking on the responsibility they should have assumed a long time ago," Särkkä told Yle.
The turning point for Nato came at the Madrid Summit in 2022, when the new strategy adopted there identified Russia as the most significant threat.
In the previous strategy from 2010, Russia was still seen as a cooperator with Nato. At the Vilnius Summit in 2023, all Nato countries pledged to increase their defence budgets to at least two percent, and since then several have done so.
Some countries were already seeking to increase this figure from two percent before Vilnius. Poland and the Baltic States, for example, already spend between three and four percent of their GDP on defence. Latvia and Lithuania have more than tripled their defence budget to GDP ratio over the past decade.
According to Särkkä, the explanation lies entirely in Russia's behaviour, its invasion of Ukraine and the fact that Russia is an existential threat to these countries.
At the same time, there are countries at the bottom of the list that have not made any active changes. The countries below two percent are Croatia, Portugal, Italy, Canada, Belgium, Luxembourg, Slovenia and Spain.
Särkkä said this is apparently due to the fact that Russia's war does not represent the same level of threat for these countries, and they feel distant and safe.
She cited the example of Canada, which is similar to Finland in terms of GDP per capita, as a point of comparison for defence spending. Canada's defence spending is estimated to be around 1.37 percent of GDP this year and it has a long way to go to reach the two percent target.
"You would think they would be better prepared in the current world political situation, because they also have an Arctic region that could be explosive in the future," Särkkä said.
Model student Finland could face challenges in future
Finland has been one of the few countries conscientiously developing and maintaining their own national defence, Särkkä further noted. Nato members have lauded Finland's defence model and the term 'model student' — previously used to describe Finland's participation in the EU — has been used to describe Finland as a Nato ally.
However, Särkkä said that there are big challenges ahead for Finland in the future. Now and in the next few years, Finland's fighter aircraft and naval vessel procurement will raise Finnish defence spending above the two percent mark and its equipment procurement spending well above the targeted 20 percent.
"Equipment procurement will improve the statistics until 2027, but after that the level will collapse if no measures are taken," said Särkkä.
Measures could mean, for example, purchasing new military equipment procurements.
With 45.8 percent of Finland's 2024 defence budget spent on equipment purchases, the share of its defence budget to GDP will reduce significantly when these expenditures are eliminated.
According to Särkkä, it will only become clear in 2027 if Finland will be able to maintain this two percent target. Even if Finland has the will to spend on defence, the other side of the equation depends on the performance of the Finnish economy.
"These could be difficult questions for Finland's national economy, because we are not growing in the same way as the other Nordic countries," Särkkä said, adding that Finland's peer countries are no longer Sweden, Norway and Denmark, which are much more prosperous in terms of GDP per capita.
"Then we must either get our national economy growing and humming along, or we will have to make some painful choices," she said.
Message from Europe to Washington
Särkkä also told Yle that European countries bolstering their defence spending are sending a message to the forthcoming Nato summit in Washington that European defence spending is now on an upward curve.
Nato's European allies want to take greater responsibility for the defence of Europe, she said. The large defence budget of the US — typically over 3 percent of the country's GDP — has led to claims that European countries have tried to coast on defence spending since the end of the Cold War.
However, Russia's invasion of Ukraine has marked a turn around as more Nato member states than ever are prepared to meet the two percent mark.
"European states should take greater responsibility for the common defence of Nato, and that the US cannot always come to the rescue to fund defence," Särkkä said.
Finnish President Alexander Stubb, along with a delegation that includes Foreign Minister Elina Valtonen (NCP) and Defence Minister Antti Häkkänen, will attend a Nato summit in Washington DC this week.
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