It has been a few weeks since the world watched the proverbial ink of approval dry on Finland’s application to the North Atlantic Treaty Organisation (NATO). Joining as the 31st member (on the 4th of April 2023), Allied nations signed Finland’s Accession Protocol the following day on the 5th of April after a unanimous vote from all 30 member parliaments. NATO was originally founded on 4th April 1949 by a dozen European nations and several Northern American nations with a collective spirit of solidarity and commitment to unified defence. But why has Finland joined now? Why after so long a period of sitting on the fence, has the application form been hurriedly submitted as well as ratified?

“Tomorrow we will welcome Finland as the 31st member of NATO, making Finland safer and our alliance stronger,” NATO Secretary-General Jens Stoltenberg told Brussels based reporters. This bold declaration has had the instant effect of placing NATO right on yet another doorstep of Russia with Finland sharing a 1,300 km (810 mile) border with the red bear. Finland’s declarations of independence in 1917 is not easily forgotten after a century of Russian rule and twice fighting off Soviet forces during World War 2 before ceding approximately 10% of its nation’s geographical territory.

“We will raise the Finnish flag for the first time here at NATO headquarters.” “It will be a good day for Finland’s security, for Nordic security, and for NATO as a whole,” Stoltenberg stated. But this stance flies directly in the face of the Finno-Soviet Treaty of 1948 (ironically signed on the 6th April that year). The eccentric numerologist might think that early April is a time for making and breaking treaties particularly since the original 1948 treaty forbade Western or Allied Powers from attacking the Soviet Union (now Russia) through Finnish territory. Finland’s aim at that time was to increase its political independence from the Soviet Union whilst maintaining a continuity as a liberal democracy that lives in the shadow of Russia.

Strategic and political implications

Finland (much like Sweden) has previously refrained from joining the NATO alliance and has instead pursued strategic policies of nonalignment and neutrality. It has been an effective policy for some time that can be largely boiled down to a “we don’t take sides” stance. But neutrality doesn’t necessarily mean inaction with Finland reintroducing conscription and ramping up defence expenditure ever since Russian annexation of Crimea in February of 2014. It surprises many people outside of Northern Europe to learn that Finland’s defence force ranks 51st in the world (according to the Global Power Index), placing it almost in the top 25% internationally. By comparison, this is small compared to countries like China, Russia or the United States but considering they hold a population of only 5.5 million, this is quite the achievement.

Finland has logistically kept its strategic relations with Allied military powers very distant and NATO in particular. But that was until the Russian-Ukraine conflict erupted. The recent decision by Finland to join NATO has been seen as a major response to Russia’s actions from Putin’s perspective. Despite reactive rhetoric, the West is yet to truly see how President Putin will react to this recent development.

Despite engaging in a proactive and realistic approach to the ever growing NATO reach and expansion, President Putin has not been able to prevent NATO’s growth in the region towards his borders. With continued growth, particularly since the end of the Cold War, NATO has enlarged its membership and strategic-political reach despite extensive Russian protestation. Now with NATO’s border doubling in length next to Russian boundaries, Finland’s move to join the Alliance holds major implications for Russian power and influence.

There is a risk that Putin may respond to Finland’s NATO welcome in a similar manner to the response provided to Ukraine’s attempts to join NATO. The brutal and unprovoked invasion represents a clear and deliberate move to prevent them from joining the alliance. The aim here, on Putin’s part, is to continue a regime of strong-pressure influence in the region. With a possibility that President Putin may use military force to bully and intimidate its neighbouring nation of Finland back into Putin’s line, the world watches with baited breath to see what happens next.

Conversely, there still exists the strong possibility that Russia may take a far more diplomatic response to Finland’s acceptance into NATO given the country’s historical ties and connections with Russia. Finland has specifically emphasised that its decision to apply for NATO membership is not an action specifically made in response to Russia but rather a broader based policy aimed at achieving higher levels of overall security.

Will Sweden also join NATO?

Sweden’s long-standing opposition to joining NATO has been far more ideological in nature when compared to Finland. The country’s foreign power policy following WW2 has been based on constant and consistent open-multilateral dialogue and peaceful nuclear disarmament promotion. The country has positioned itself as “mediator to the conflict” for decades of international politics. The ever-present neutral fence sitter that works to get people to the discussion table, Sweden has traditionally pinned its security on pure and absolute neutrality combined with progressive peace talks.

Notwithstanding this tradition of playing peace-maker, the Swedish Government decided to apply for NATO membership On 16 May 2022. On 5 July 2022, all NATO member countries signed the Accession Protocol for Sweden, but until all NATO countries have ratified Sweden’s application for NATO membership, it remains invitee country in status only. Turkey continues to hold up the application approval process claiming that Stockholm is harbouring members of what Ankara defines as terrorist groups. Sweden has consistently denied this while Turkey continues to demand the legal extradition of said terrorists in order to finalize and ratify Sweden as a member of NATO.

Hungary also represents a roadblock in the ratification process with robustly submitted grievances and criticism of Prime Minister Viktor Orban’s policies. Recent NATO diplomatic events have seen indications that Budapest would be likely to approve Sweden’s bid if Turkey was seen to be doing the same simultaneously.

Economic consequences?

With everyone focusing on the geopolitical implications of this shift in northern European allegiances, the possible economic consequences are worth noting. Economists generally consider that war is bad for an economy and peace treaties are a great stimulant. Long-standing Australian Business Academic and Researcher Dr. Darius Pfitzner commented on interview; “There is a chance here that this membership will improve consumer confidence in Finland and broader Europe widely whilst simultaneously potentially motivating greater defence investment.” Pfitzner’s optimism speaks to the hope that Finland’s acceptance into NATO holds a greater benefit for Europe as a whole than the risks it may present.

“Although this may inflate the spectre of threat from Russia it is also likely to raise the confidences of other non-NATO nations within the EU to consider joining the alliance” Pfitzner further commented. This points to the new deck of cards, both positive and negative, held in Finland’s hand post NATO welcome. With increased hostility from Russia on one hand comes greater friendship and unity on the other hand for the Northern European nation. On the balance of things, the probability of warding off the bear from their doorstep so Finland can enjoy even greater prosperity looks somewhat probable. Peace has nearly always been a positive for economic activity and in this instance there is an incentive for Finland to continue increase defence spending and investment.

Final thoughts

Irrespective of Putin’s rhetoric and response, it is evident that Russia will need to engage in new policies or strategies if it seeks to counteract the effects of Finland’s acceptance into NATO. Increased military spending, a larger deployment of troops and military equipment along border zones and increased strategic alliances with non-NATO nations is likely as Putin feels the tighter squeeze of NATO around him. But the optimistic diplomat also sees a possibility that Russia may choose dialogue over destruction and even some level of collaboration with NATO. The need to restore stability to the region and bring the current Ukraine conflict to an end is self-evident. Restoring positive relations and avoiding a potentially critical escalation must be paramount.

The world has been watching a chess game this last year with pieces moving across the board of world politics and strategy. Every move seems to bring with it a countermove which is in turn reciprocated. It isn’t possible to predict what will happen as a result of each and every move and global war remains a real possibility. Finland has faced a choice of standing alone against a possible future Russian conflict or the option to stand together with NATO allies. Although a difficult choice with no perfect alternatives available, a collective alliance for Finland with NATO seems the best choice politically, strategically, and economically. When one has a bear on one’s doorstep in winter, it is perhaps better to step outside to face it with friends than to confront it alone…

Dan Hadley (MBA, BCOMM, CMC, IML) is a Management Consultant and Economist based in Adelaide, South Australia. His services include strategic advisory services, risk management and consultation in Quality, Safety and Environmental Management systems as well as economic consultation, www.linkedin.com/in/dan-hadley.