Sweden’s recent defence budget for the years 2021-2025 that featured a 40-percent increase, and presented as the largest since the Cold War-era, has run into problems amid ballooning costs and compensatory mechanisms leading to losses in purchasing power.
The soaring costs for new Gripen jets and submarines has made the Swedish Armed Forces reconsider its 12-year investment plan adopted last year, the newspaper Dagens Nyheter has reported.
Earlier this year, Supreme Commander Micael Bydén warned that large materiel projects involve risks and that the investment plan may need to be reviewed – which is exactly what happened.
Expenditures are being reconsidered to avoid disruptions in other costly investments, such as ships for the navy.
Sweden has ordered 60 new Jas 39 E-class planes, which are proving more expensive than initially planned. Therefore, previous risk allocations will be used, the Armed Forces said. In 2022, SEK 6.3 billion ($750 million) will be invested in the Swedish Air Force, the majority of which will be spent on combat aircraft. Yet, despite the price hike, it has been promised that the aircraft will be delivered as planned.
By contrast, two new Blekinge class submarines, also built by Saab, will be delayed for several years. In 2022, SEK 2.7 billion ($320 million) will be invested in submarine systems, which is 71 percent of the navy’s investment volume. The price increase implies that “compensatory measures”, such as the renovation of existing…