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Regional Summary

Armed and Unstable The week’s most clarifying moment came not in a parliament or a defence ministry but in the sky over eastern Latvia. On May 7, two Ukrainian drones — diverted by what Ukraine’s foreign minister attributed to Russian electronic warfare, though this has not been confirmed — crossed into Latvian airspace; one struck oil storage tanks near Rēzekne, 40 kilometres from the Russian border, the first weapons damage on Latvian soil since the war began. Three days later, the prime minister fired the defence minister by social media post and the governing coalition was close to collapse. The two events together expose the region’s central problem: the Nordic-Baltic states are arming faster than their political structures can manage, and the friction is now in the open. Latvia’s case is the sharpest. Evika Siliņa, the prime minister, dismissed Andris Sprūds, the defence minister, without consulting his party, the Progressives, whose ten seats she needs for a majority. Mr Sprūds went to a press conference and accused New Unity of running a systematic campaign against his party and wilting under electoral pressure — five months before the October 3 vote. The army’s radar had failed to detect the first drone. The political response produced open coalition warfare that a country with a disputed defence ministry five months from an election can least afford. Mr Sprūds’s replacement is a colonel who had served as the Defence Ministry’s representative in Ukraine and brings real experience. His appointment by social media announcement, bypassing normal process, handed Ms Siliņa’s critics their argument: that she used Rēzekne to tighten her party’s grip on defence at the moment it needed steadiness most. The same tension plays out differently in Estonia and Lithuania. Estonia has spent three weeks legislating a civil-defence framework — mandatory shelters, extended obligations across civilian society — while running its largest spring exercise and signing a deal to build an artillery-shell factory on Estonian soil with a Turkish manufacturer. Its army commander warned this week that Russia may recover its combat capacity by 2027. The governor of the Bank of Estonia told parliament that state finances are critical, that public debt will double to €21 billion by 2030, and that interest costs will rise from €28 million in 2022 to roughly €650 million a year — enough to run the entire domestic security sector. He called for a cross-party deal on public finances before the 2027 election — a demand the central bank has never made before. Lithuania faces less acute fiscal pressure; it has just signed a €6.375 billion EU loan at favourable terms with principal deferred for a decade, and received its first High Mobility Artillery Rocket System launchers. More striking is what Vilnius is now prepared to do without Washington’s blessing. Its president and prime minister both endorsed joining a coalition to reopen the Strait of Hormuz, and when the American president paused the US operation there, neither Lithuanian leader wavered. They are acting on their own judgment. Finland’s governing coalition spent the week launching rival election campaigns — competing slogans, competing promises, competing logos — while the prime minister was caught misrepresenting employment figures in parliament for the third time this year. Behind the campaigning, the security establishment was doing something different: joint drone production with Ukraine is accelerating, three simultaneous exercises ran — one involving roughly 100 government bodies simulating a live attack — and when Frank-Walter Steinmeier, Germany’s federal president, arrived in Helsinki, his delegation unusually included Bundeswehr command. Alexander Stubb, Finland’s president, said Europeans should assess whether American Russia policy serves European interests; the prime minister told an audience that values without power cannot be defended. The coalition is fighting the 2027 election. The defence structures are preparing for something closer. Norway’s version of the same gap is economic rather than political. On May 7, Norges Bank raised rates for the first time since 2023, directly contradicting the promise that had brought Jens Stoltenberg, the finance minister, into government; the same day, a battery manufacturer backed by NOK 1.5 billion in state guarantees declared bankruptcy. Both economic promises — lower rates and green industrial success — collapsed in a single day, five days before the government must present its revised budget. Equinor, indifferent to the politics, posted record production, and the government opened 70 new offshore drilling permits to supply European energy. Sweden, alone among its neighbours, used the week to close a structural gap rather than widen one: it will create its first dedicated civilian foreign intelligence service by January 2027, aligning its apparatus with NATO’s after years in which functions were divided across military and signals agencies — a reform prompted partly by intelligence failures before Russia’s 2022 invasion. The Rēzekne drone was, on one account, a navigation accident — Russian electronic warfare turning Ukrainian munitions off course rather than a deliberate strike. The political crisis it triggered was not accidental. Across the region, the gap between the security bets being placed and the political capacity to sustain them is growing. Latvia is heading into an election with an openly hostile coalition and a disputed defence ministry. Estonia is borrowing its way to rearmament while its central bank issues warnings it has never issued before. Finland’s prime minister is misrepresenting his own government’s record while the defence establishment runs live-attack simulations. Norway enters budget negotiations with its economic credibility shredded. These are not distractions from the security project — they are what will make it hold or fail. The question is not whether the region is serious about defence. It plainly is. The question is whether the politics can keep pace long enough to pay for it.

Country Summaries


Finland flag Finland

Finland’s two governing coalition parties launched their 2027 election campaigns this week — simultaneously, with rival branding and competing promises — while the prime minister was caught misrepresenting employment figures in parliament for the third time this year. The National Coalition Party (Kokoomus) released a 92-page draft programme called “Vapaus onnistua” (“Freedom to Succeed”). Among proposals for university fees, dissolving the Alko alcohol monopoly and a debt brake, the document included something that has never appeared in a Finnish governing party’s programme: a stated readiness to “assess without preconceptions” the future of Åland’s demilitarisation. The islands have been demilitarised under international treaty since 1856, a status reaffirmed in 1921 and 1947. Since joining Nato, the question of whether that status still serves Finnish security has circulated among analysts; it has now entered electoral politics. Petteri Orpo, the prime minister, also promised to reveal Kokoomus’s deficit-reduction plan — €8-11 billion over the next term — by autumn 2026. Riikka Purra, the finance minister and Finns Party leader, ran her own event the same week. Billing it “Kiihdytysajot” (“Acceleration Races”), she unveiled a new dandelion party logo — described as “brave and determined, yet humble” — and a new slogan, “Kotimaa kutsuu” (“Motherland Calls”). She pledged no further welfare cuts this term, called for constitutional amendments to restrict immigration and demanded strict immigration conditions from any future coalition partner. She attacked Antti Lindtman, leader of the Social Democratic Party (SDP), accusing him of “prime minister disease.” The SDP hit back, its deputy chair listing cuts to workers under the government’s labour reforms and accusing Ms Purra of amnesia about her own government’s record. The Finns Party has fallen from roughly 20% support in 2023 to around 14% in polls; the new branding and hardened immigration line are an attempt to recover ground by distancing the party from Kokoomus on economic policy. The dual launch confirms what has been building for weeks: both coalition partners are now campaigning as much as governing, competing for their own 2027 vote shares while keeping the parliamentary majority intact to complete the term. A dispute in parliament over employment data did Mr Orpo no favours. He claimed during the public finance framework debate that employment was “almost the same” as when his government took office. Statistics Finland data show it was 64,000 lower in March 2026 than in June 2023, seasonally adjusted. When pressed, Mr Orpo acknowledged the claim was “open to interpretation” and cited a distinction between the employment rate and the employment count. Yle, Helsingin Sanomat and Ilta-Sanomat all independently confirmed the error. It was the third such documented misrepresentation of employment data in parliament this year. On security, the week confirmed Finland’s dual-track approach to Ukraine. Antti Häkkänen, the defence minister, met his Ukrainian counterpart, Mykhailo Fedorov, and confirmed that joint drone production is accelerating — covering development, components, counter-drone systems, command structures and drone AI. In the same meeting, Mr Häkkänen told Mr Fedorov that Ukrainian drones transiting Finnish airspace “must not happen” and received an apology. The Finnish Army also unveiled the M26, a drone built on lessons from Ukraine’s battlefield — independent of global navigation satellite systems, jamming-resistant, with a range of over 20km — worth roughly €15 million. The Defence Forces Logistics Command joined CORPUS, a defence procurement coalition founded in Ukraine whose members include Norway, Sweden, Italy and the UK. Finland is deepening the production partnership and embedding it in multilateral structures; it is also drawing a firm line on its sovereignty. Three exercises — SILTA26, KETJU26 and Mighty Arrow 26 — ran simultaneously. The KETJU26 logistics exercise involved roughly 100 government bodies and private firms working through a scenario in which Finland was under attack. The visit of Germany’s federal president ran differently. When Frank-Walter Steinmeier visited Helsinki on 7 May, his delegation unusually included Bundeswehr command and defence ministry leadership. Alexander Stubb, the president, named Finnish firms — Patria, Nokia, ICEYE — as contributors to German and European rearmament, and the pair toured a civilian bomb shelter, framing Finland’s civil defence model as something Germany might adapt. Mr Stubb said he had “no doubt the US would come to our aid” but added separately that Europeans should assess whether American Russia policy serves European interests — a position he has maintained across several appearances this week. Mr Orpo told an Aalto University audience that “values without power cannot be defended” and announced Finland will host a European Arctic Summit in autumn 2026.
Finns Party 'Kiihdytysajot' event: Purra attacks SDP, unveils dandelion logo, hardens immigration line
May 5–10, 2026
Kokoomus publishes new party programme; Orpo presents at party council
May 9–10, 2026
Stubb calls for immediate opening of Strait of Hormuz after call with UAE president
May 6–9, 2026
Stubb suggests Canada could seek EU membership; speaks at Nordea seminar on EU expansion
May 08, 2026
Orpo at EPC summit in Yerevan: Finland assesses Ukraine drone cooperation and Ukraine EU membership
May 04, 2026
SUPO chief calls for public debate on Finnish intelligence culture and capabilities
May 06, 2026

Estonia flag Estonia

The commander of Estonia’s armed forces warned this week that Russia may restore its fighting capacity as early as 2027. Estonia’s answer was its busiest security week yet. The government adopted the Security Policy Foundations 2026, capping three weeks of legislation that extends defence obligations across civilian society. A separate regulation now makes civil-defence shelters mandatory for specified building categories — binding law, not policy. Kevadtorm 2026, Estonia’s annual spring exercise, opened on May 4 with more than 12,000 troops: the Estonian Division’s 2nd Infantry Brigade, the Kaitseliit (Defence League), and Britain’s 4th Brigade — the unit pledged to reinforce Estonia within 48 hours under a 2024 defence agreement — alongside French and Latvian forces. For the first time, the exercise tested new defence-industry systems in live conditions, and troops crossed into northeastern Latvia to rehearse cross-border operations. In Istanbul, Hanno Pevkur, the defence minister, signed an agreement with Turkish manufacturer ARCA Defense to build a long-range artillery-shell factory on Estonian soil, creating roughly 1,000 jobs and extending Estonia’s defence industry into one of NATO’s most acute supply gaps. The army’s annual yearbook carried Estonia’s clearest public threat assessment yet: Lieutenant-General Andrus Merilo, the defence forces commander, warned that Russia may rebuild its combat readiness by 2027 despite its losses in Ukraine. General Merilo also said delays in High Mobility Artillery Rocket System (HIMARS) supplies are a “temporary setback” while Estonia looks for compatible ammunition from other suppliers. Estonia is building all of this while its public finances are unravelling. Madis Müller, the governor of the Bank of Estonia, told parliament this week that state finances are “critical.” Public debt will double from €10 billion to €21 billion by 2030, reaching 39% of GDP. Interest costs — just €28 million in 2022 — will hit roughly €650 million a year by 2030, equivalent, Mr Müller noted, to running three major universities or the entire domestic security sector. He called on all parties to agree a fiscal compact before the March 2027 parliamentary election — something the central bank has never publicly demanded before. The interest-rate outlook is also turning against Tallinn. Estonian banks now expect the European Central Bank to raise rates this year, not cut them — energy prices pushed up by the Iranian conflict drove April inflation to 3.4%. The 2026 growth forecast of 2.5% depends on the Hormuz Strait reopening within months, which has not happened. The political machinery meant to manage all this is in poor shape. The governing coalition of Reform and Estonia 200 holds 13.8% combined support. Rather than fight for the coalition’s survival, Kristen Michal, the prime minister, has turned to the autumn presidential race. This week he used a Facebook post nominally about the Estonian Olympic Committee to float Kersti Kaljulaid, the former president, as his candidate, writing that she “stood for the right cause.” Sources in parliament told Delfi that support for Alar Karis’s re-election has “collapsed.” Mr Karis told an interviewer he will give a clear answer by midsummer. The Conservative People’s Party of Estonia (EKRE) rose 2.4 percentage points to 14.1% — level with the Social Democrats — after a Tallinn court acquitted a former aide to Martin Helme in the Porto Franco corruption case, ruling that prosecutors had “often interpreted evidence arbitrarily.” Mr Helme called it a “witch hunt.”
Estonia presses Ukraine to better control drones after repeated Baltic airspace incursions
May 10, 2026
Other

Lithuania flag Lithuania

Lithuania signed a €6.375 billion Security Action for Europe (SAFE) loan — the largest military financing deal in its history — days after drones from Russian airspace exploded over neighbouring Latvia and Lithuanian jets scrambled to fill the gap. The loan, signed on May 9 by Kristupas Vaitiekūnas, the finance minister, and Robertas Kaunas, the defence minister, alongside two EU commissioners, locks in 45-year funding at EU borrowing rates with principal deferred for the first decade. A first advance of €956 million arrives within three months. The money is earmarked for a new land forces division, heavy armoured vehicles, Baltic Defence Line fortifications, and — the largest single share, Inga Ruginienė, the prime minister, said — air defence. The same week, Lithuania received its first M142 High Mobility Artillery Rocket System (HIMARS) launchers at a ceremony in Camden, Arkansas, becoming the 14th NATO country to field the system. Lockheed Martin simultaneously registered in Lithuania to pursue joint manufacturing. On May 7, multiple drones crossed from Russian airspace into Latvia; one crashed into an oil storage facility near Rēzekne, 40 kilometres from the border. Latvia’s army commander admitted the country’s radar had not registered the first drone at all. Lithuanian jets — French-piloted, flying NATO Baltic Air Policing from Šiauliai — scrambled to patrol Latvian airspace. Mr Kaunas pressed the point: “Strengthening anti-drone defence in our region should be a particular emphasis [for NATO] … this is where we have threats today, and they are not theoretical but real.” Latvia’s defence minister assessed the drones were probably Ukrainian munitions that had gone off course. That framing matters: the incident was a navigation failure, not a deliberate Russian strike — but the air defence gap it exposed is real regardless of cause. Even as it prepared to build up at home, Vilnius committed to operating further afield. Gitanas Nausėda, the president, and Ms Ruginienė both endorsed joining a coalition to reopen the Strait of Hormuz — the first time the two have agreed publicly on an out-of-area deployment. The day after their statements, the American president paused the US operation in the strait. Neither Lithuanian leader wavered. Mr Nausėda framed Lithuania’s contribution as a demining and freedom-of-navigation mission and confirmed the State Defence Council will meet shortly; the Seimas must still grant a deployment mandate. Ms Ruginienė called reopening the strait “a major European interest.” Their willingness to hold the commitment regardless of what Washington does signals that Lithuania is acting on its own judgment, not following the American lead. At joint exercises in Kalvarija — Lithuania, Poland, and Portugal simulating the defence of the Suwałki Corridor — Mr Nausėda stood alongside Karol Nawrocki, the Polish president, on the 235th anniversary of the Polish-Lithuanian Commonwealth Constitution and went further still, saying Lithuania is “prepared to receive as many allies as we can accommodate.”
Coalition instability deepens as Nausėda and LSDP clash over Dawn of Nemunas deadline
May 1–8, 2026
Latvia drone incursion from Russia triggers Baltic NATO air-defense alarm, Lithuania scrambles jets
May 7–10, 2026
Bank of Lithuania proposes anti-fraud package requiring banks to compensate scam victims
May 6–7, 2026
Lloyds Banking Group acquires Lithuanian fintech Curve Europe with Bank of Lithuania approval
May 5–6, 2026
Ruginienė communication team controversy as new adviser hired and interview format debated

Latvia flag Latvia

Russian electronic warfare redirected two Ukrainian drones into Latvian airspace on May 7, and one struck oil storage tanks near Rēzekne — the first time weapons have caused physical damage on Latvian soil since the war began. Three days later, the incident had cost the defence minister his job and left the governing coalition close to collapse. The drones entered from Russian territory. General Kaspars Pudāns, the National Armed Forces commander, confirmed that detection technology had failed. A second air-threat warning went out the following night across eastern municipalities, with NATO fighters scrambled. Andrii Sybiha, Ukraine’s foreign minister, confirmed that Russian electronic warfare had deliberately diverted the drones from their targets inside Russia into Latvian airspace — turning what might have been treated as a navigation accident into documented Russian aggression against NATO territory. Mr Sybiha told Baiba Braže, Latvia’s foreign minister, that Ukraine was ready to work with the Baltic states and Finland to prevent further incidents, including by deploying Ukrainian specialists. Evika Siliņa, the prime minister, did not wait. On May 10, she demanded the resignation of Andris Sprūds, the defence minister, via social media, citing slow counter-drone deployment and late civilian alerts. Mr Sprūds resigned — but not quietly. At a press conference he said he was acting “to protect Latvia’s army from divisive political campaigning,” accused New Unity of running a “systematic campaign” against the Progressives because the smaller party refused to “toe the line,” and said the governing party had “wilted under pressure from various other parties” ahead of elections. He said he would remain in the Saeima, Latvia’s parliament. The Progressives hold 10 seats in the 53-seat coalition. Their departure would drop the government to 43 seats, below the 51 needed for a majority, with no viable replacement partner in reach. The Green-Farmers Union said it would stay; the National Alliance had already prepared its own resignation demand for Mr Sprūds before Ms Siliņa moved first. The Progressives announced they would decide the following week whether to remain. Because no viable alternative majority exists, the likeliest outcome is that they extract concessions and stay — but the relationship between the two leading coalition partners is now openly hostile, and Mr Sprūds’s accusations will not be easy to unsay. Ms Siliņa filled the vacancy immediately, naming Colonel Raivis Melnis — previously the Defence Ministry’s representative in Ukraine — as the new minister. She made the appointment without consulting the Progressives. Colonel Melnis brings direct operational experience from Ukraine, but his appointment by social media announcement, bypassing normal process, gave Ms Siliņa’s critics a ready argument: that she used the Rēzekne incident to tighten New Unity’s hold on the Defence Ministry five months before the October 3 election. The governing coalition’s main rival also came under pressure. The Corruption Prevention Bureau (KNAB) opened a review into a campaign operation run by Ainārs Šlesers, founder of Latvia First, that has spent roughly €275,000 promoting him as “Premier Šlesers” through Riga billboards, bus stop posters, digital screens, and radio jingles. KNAB is investigating whether the spending, channelled through an association called Latvija pirmā (“Latvia First”), constitutes an illegal donation to Latvia First, which as a party cannot legally receive money from a legal entity. The bureau’s division chief expressed “surprise” at Mr Šlesers’s claim that he had cleared his approach with it in advance. If a violation is found, Latvia First faces penalties, repayment of the illegal funds, and potential loss of all state financing — a severe blow before October. Meanwhile, Latvia First’s pension referendum is collecting signatures: the Central Election Commission registered the initiative, which seeks roughly 150,000 names to force parliamentary consideration of a law letting pension second-pillar participants withdraw accumulated savings before retirement age. The Finance Ministry, the Bank of Latvia, and financial sector bodies have all opposed it. The referendum is the electoral instrument; KNAB is the obstacle. Against the domestic turbulence, Edgars Rinkēvičs, the president, travelled to Yerevan on May 7, meeting Vahagn Khachaturyan, his Armenian counterpart, and Nikol Pashinyan, the prime minister. A joint statement called for cooperation to disrupt EU sanctions circumvention — relevant because Latvia helps enforce EU sanctions. Mr Rinkēvičs’s presence carried additional weight: the same day, Vladimir Putin warned Armenia that EU integration could produce consequences “like Ukraine.” The same week, Valdis Dombrovskis, the European Commissioner, presented Ms Siliņa with confirmation of Latvia’s fourth EU Recovery Fund tranche — €371.2 million, bringing total receipts to roughly €1.5 billion, or 75% of the full €1.97 billion allocation. Forty-one plan milestones fulfilled and verified. The institutions delivered while the politicians fought. Separately, the economic picture darkened. Līva Zorgenfreija, Swedbank’s chief economist for Latvia, cut the bank’s 2026 GDP growth forecast from 2.3% to 1.9% and raised its average annual inflation forecast from 2.8% to 4.2%, citing the Strait of Hormuz closure as the primary driver. Energy prices, particularly diesel and aviation fuel, have risen sharply. In a worst case — prolonged closure — inflation could reach 8% and growth could slow to 1%. The European Central Bank is expected to raise rates from 2% to 2.5% in response to eurozone-wide pressure. Latvia’s defence spending is locked at nearly 5% of GDP. If growth slips, the fiscal choices narrow further. Latvia’s election technology vendor transition — required after EU investigators found national security risks in the original procurement — must succeed within roughly five months for credible October 3 elections. The ministry overseeing it is a coalition portfolio. If the Progressives exit, ministerial assignments shift, disrupting the transition at the moment it needs stability most. No reporting on progress appeared this week. The silence is not reassuring.
Ukrainian drones hit Rēzekne oil depot, triggering Defence Minister's resignation and coalition crisis
May 7–10, 2026
Other

Norway flag Norway

Two events landed on May 7 that, together, broke the government’s core economic argument days before the revised national budget. Norges Bank raised its policy rate by a quarter of a percentage point to 4.25% — the first increase since 2023. Ida Wolden Bache, the governor, gave two reasons: Middle East war-driven energy and commodity prices, and strong domestic wage growth in recent years. Only 45% of the market had priced in a hike. Ms Bache warned that failing to act risked losing trust in the inflation target, potentially forcing even larger increases later. The krone strengthened against the euro and the dollar; DNB Carnegie immediately forecast another rise in June. The political damage was swift. Aftenposten found a voter who had been personally promised rate cuts at a “pizza dinner with Støre and Stoltenberg” during the election campaign. “I knew they couldn’t stand by it,” the voter said. The Conservative Party (Høyre) called it “Jonas Gahr Støre’s interest rate bluff.” Sylvi Listhaug, the Progress Party (FrP) leader, told the prime minister to “look to Sweden” for economic leadership. Jens Stoltenberg, the finance minister, joined the government in February to restore Labour’s economic credibility. He has now presided over a rate hike that contradicts the promise that justified his appointment. That same day, Morrow Batteries AS declared bankruptcy along with its two sister companies, putting 206 people out of work in Arendal. The company cited global battery market oversupply, higher capital costs, and delays in industrialisation. It was 21 months since Jonas Gahr Støre had ceremonially opened the factory and 17 months since the government had extended the company NOK 1.5 billion in state loan guarantees. Cecilie Myrseth, the industry minister, called it a “heavy” day for employees and defended the principle of industrial risk-taking: “Sometimes you don’t succeed.” She declined to say how much the state stood to lose until the bankruptcy estate concludes. Ms Listhaug was less restrained. “The core of Labour’s climate policy has imploded,” she said, calling Morrow “another castle in the air” — a prediction she claimed to have made when the state loan was issued. Both attacks — on rates and on green industrial policy — arrive five days before May 12, when the government must present its revised national budget and persuade four support parties with conflicting demands to back it. The Centre Party (Senterpartiet) has not guaranteed its support. The government now enters those negotiations with its two flagship economic promises publicly shredded in a single day. Norway’s energy position looks different. Equinor posted first-quarter adjusted operating income of $9.77 billion at record production of 2.313 million barrels of oil equivalent per day, up 9% on the year, boosted by Iran war-driven price surges. The Eirin gas field — a 1978 discovery fast-tracked from investment decision to first gas in three years — came online on May 5 and is now sending supply through the Gina Krog and Sleipner platforms to Europe. The government also opened 70 new offshore drilling permits and announced it would reopen three fields closed since 1998: Albuskjell, Vest Ekofisk, and Tommeliten Gamma, targeting production by end-2028. Terje Aasland, the energy minister, was explicit about the logic. “They ask me every day — can you deliver more oil and gas? We are talking about energy security for Europe.” The Socialist Left Party (SV) called it greenwashing; the government’s own environment agency had advised against the move. Tore Sandvik, the defence minister, hosted Nordic Defence Cooperation (Nordefco) partners in Trondheim and at Ørland air base on May 5 and 6, under Norway’s Nordefco chairmanship. The talks produced no capability announcements. That the meetings were held at Ørland — Norway’s primary F-35 base — rather than a conference room is a mild signal that Nordic defence talks are shifting toward real operational sites. Away from the budget politics, the week brought a separate concern. Gaute Skjervø, the leader of the Workers’ Youth League (AUF), the Labour Party’s youth wing, confirmed he is carrying a violence alarm after a wave of threatening social media messages following a television appearance. AUF filed 10 police complaints for hate speech. Mr Støre said the threats “outrage me deeply.” Ms Listhaug condemned them too, noting that FrP’s own Simen Velle had received similar treatment.
Norges Bank raises key rate to 4.25%, first hike since 2023, triggering political backlash
May 5–10, 2026
Equinor posts record Q1 2026 earnings as Iran war drives production and price gains
May 6–9, 2026
AUF leader receives death threats, carries violence alarm as political harassment intensifies
May 08, 2026

Sweden flag Sweden

Sweden announced this week that it will create its first dedicated civilian foreign intelligence service — closing the last major gap between its intelligence structure and those of its NATO partners. The foreign minister called it “Sweden’s largest intelligence reform in decades.” The new agency, the Foreign Intelligence Service (Sveriges utrikes underrättelsetjänst), will receive 2.8 billion kronor and open on January 1, 2027. It will absorb functions from the Military Intelligence and Security Service (MUST) and work alongside the Security Service (Säpo) and the National Defence Radio Establishment (FRA), the signals intelligence agency. Maria Malmer Stenergard, the foreign minister, was clear about the NATO rationale: “As we now develop our intelligence structure, we will also be better aligned with the structures that exist within NATO and among our allies.” The bill now goes to the Council on Legislation; the government plans to submit it to the Riksdag in June. The reform acts on a recommendation from a review led by Carl Bildt, the former foreign minister, prompted in part by intelligence failures before Russia’s 2022 invasion of Ukraine. The announcement came as Sweden’s most important arms negotiation advanced. Mykhailo Fedorov, Ukraine’s defence minister, visited Stockholm on May 7-8, meeting Ulf Kristersson, the prime minister, and Pål Jonson, the defence minister, and visiting Saab’s Gripen plant in Linköping. Mr Fedorov said Ukraine has a financing plan and predicted “good news” on a Gripen E purchase “within months.”
Riksbank holds rate at 1.75% for fifth consecutive meeting amid Middle East uncertainty
May 4–10, 2026
Moderate Party holds election convention with German Chancellor Merz as guest; launches 'Fairer Sweden' campaign
May 5–10, 2026
SD breaks parliamentary pairing agreement, triggering riksdag voting crisis and ongoing political fallout
May 4–10, 2026