Skip to main content

​
Regional Summary

The Hardware Outran the State The Nordic-Baltic states have been NATO’s most committed rearmers for three years. This week showed that their real gaps lie not in defence budgets but in detection systems, civil-warning networks, and the political resilience that military spending assumes but cannot itself provide. Drones reached or threatened three NATO members in a single week; one government fell over a drone incident; and a survey found 80% of Finns no longer trust Washington to defend European allies — a finding hard to square with a 40-year commitment to the American F-35. The drone incidents cut deepest. Finland’s Interior Ministry issued an emergency warning across the Helsinki region at 3:49am after intelligence suggested Ukrainian drones might stray into Finnish airspace; the airport closed and the defence minister authorised force. The all-clear came by morning, but the civil-protection failure was plain — citizens had no text-message alert, no guidance on whether to send children to school, and officials gave conflicting accounts of whether any drone had crossed the border. Lithuania’s problem runs deeper: it cannot verify a drone’s origin before it lands on its soil. In the same week its government declared an emergency over a sustained Belarusian balloon campaign that shut Vilnius airport twice, a suspected Ukrainian drone crashed on Lithuanian territory — a navigational failure, apparently, but the distinction matters little when the state cannot tell the difference in real time. The region has invested heavily in what it does after detection; it has invested less in detection itself. Latvia is the starkest case. Its government fell in five days, and it started with a single drone incident in Rēzekne — specifically, a one-hour detection delay that cost a defence minister his post. The Progressives left the coalition, and Evika Siliņa, the prime minister, resigned on the morning investigators raided and briefly detained a sitting cabinet minister — the first time in the country’s history. A new prime minister candidate was nominated within 48 hours — the constitutional machinery worked — but the defence ministry has cycled through three leadership arrangements in under two weeks, the government has announced no counter-drone procurement despite a second airspace alert in eastern Latvia on May 15th, and analysts openly doubt the nominee can assemble a viable majority. Latvia simultaneously lost its head of government and the head of its civil service. Into that vacuum, Volodymyr Zelensky named Latvia as a potential Russian target through Belarus — the first time a foreign head of state had done so, whatever its precise intelligence basis. Washington made the picture sharper still. Lithuania’s foreign minister confirmed that the US had lobbied Vilnius to reopen Klaipėda port to Belarusian potash — offering sanctions relief in exchange for goodwill. Gitanas Nausėda, the president, denied formal pressure while acknowledging the diplomatic exchange had taken place, a careful formulation that preserved the relationship without yielding the point. Lithuania has long treated its alliance with Washington as principled; the US is treating it as transactional. Finland’s polling makes the same point differently. Alexander Stubb, the president, called for talks with Russia and urged Europeans to calm down over American troop withdrawals from Germany; his defence minister countered that Russia’s continued full mobilisation is not the behaviour of a country seeking peace. Their disagreement matters less than what drives it: the security guarantee looks less certain, and Finnish public opinion has reached that conclusion faster than Finnish policy has. Estonia shows what the region is building in response. Its expanded Chunmoo rocket order means Russian territory now lies within range of Estonian ground-based rockets for the first time. Norway has formalised a doctrine that its most sensitive defence exports go only to allies, absorbing Malaysian legal pressure to enforce it. Sweden launched its first military surveillance satellite and deepened ties with India as a hedge against American unpredictability. But Estonia’s procurement plan was priced before equipment costs rose more than 50% across the alliance, and the Rail Baltica funding gap — covering the military mobility corridor that this week’s Kevadtorm exercise was designed to test — remains unresolved for the fourth consecutive week. The region is fielding weapons that were unthinkable three years ago. What it has not yet built is the detection systems, the civil-protection networks, and the political resilience to absorb the pressure those weapons are meant to answer. Until it does, the hardware leads and the rest scrambles to catch up.

​
Country Summaries

​
Finland flag Finland

At 3:49 on the morning of May 15, Finland’s Interior Ministry issued an emergency warning across Uusimaa — the greater Helsinki region, home to 1.8 million people — after intelligence suggested Ukrainian drones carrying heavy explosive payloads might stray into Finnish airspace. It was the clearest sign yet that the Ukraine-Russia war reaches into NATO’s northernmost capital. Helsinki-Vantaa airport was closed. Antti Häkkänen, the defence minister, authorised the use of force. Petteri Orpo, the prime minister, was called back from his cottage. By 7:06am the all-clear came, and Timo Herranen, Finland’s air force commander, confirmed at a press conference that no drone had entered Finnish territory. A complicating detail emerged later: the Finnish Defence Forces confirmed the drones had approached from the Russian direction, not from Ukrainian airspace — meaning they had already passed through or over Russian territory before nearing the Finnish border, leaving the full sequence of events unclear. Finland has now twice formally defended its airspace against Ukrainian drone spillover. Alexander Stubb, the president, called Volodymyr Zelensky overnight. Mr Häkkänen said that if Ukrainian drone operations endanger NATO members, “it is condemnable and wrong every time.” Finland is now visibly doing both — deepening its defence partnership with Ukraine and enforcing its sovereignty. The incident also exposed a gap in Finland’s civil protection system. The rescue chief initially told reporters that at least one drone may have entered Finnish territory, then retracted the claim as a miscommunication. Citizens had no SMS emergency alert — Finland’s EU emergency-alert system will not be available until 2027 — and were reportedly uncertain whether to send children to school. Mr Orpo acknowledged the failure: “People need to have clear information about how to act when a warning is given — can you drop the children at daycare, can you go to work in elderly care. We need to take this in hand.” Parliament’s defence committee held a hearing with Mr Häkkänen and Mari Rantanen, the interior minister; Mr Orpo promised to deploy SMS alerts urgently. The drone crisis came in a week when Mr Stubb was already shifting his position on Russia. In interviews with the Italian newspaper Corriere della Sera, Lithuanian media, and Finnish broadcaster MTV, he said “now is the time to start talking with Russia,” tying the argument to Ukraine’s strength on the battlefield, and urged Europe to “calm down” over US troop withdrawals from Germany. Mr Häkkänen countered that Russia’s continued full wartime mobilisation was not the behaviour of a country seeking peace. Mr Orpo mentioned only “weak signals” of Russian interest; Elina Valtonen, the foreign minister, said separately that Vladimir Putin may genuinely want talks. Whether this is coordinated or marks a real split between the president and the defence establishment is the week’s open question. Mr Stubb had a busy week beyond Helsinki. He attended the Bucharest Nine (B9) summit in Romania as an invited Nordic guest — Finland is not a formal member — where he met Mr Zelensky and Mark Rutte, the NATO secretary-general, and pressed for stronger alliance unity. Reports from the summit suggest the Nordic countries may eventually become full B9 members. He also made a state visit to Lithuania, attended the Europe Gulf Forum in Greece, and held talks with Mark Carney, the Canadian prime minister. Meanwhile, all five opposition parties filed an interpellation — the 14th against the Orpo government — forcing a parliamentary debate on economic policy. Mr Orpo acknowledged on the floor that the government’s debt-to-GDP stabilisation target “appears unlikely to be achieved,” blaming external shocks: US tariffs, threats to Greenland, the Iran war’s economic effects. The government survived the subsequent no-confidence vote; coalition discipline held. But the admission marks a break. For three years the government had blamed external factors for poor performance while maintaining its target commitments. The government has now publicly abandoned that defence. The Finance Ministry projects debt reaching 99% of GDP by 2030. Riikka Purra, the finance minister, maintained the consolidation course and attributed rising poverty almost entirely to immigration; Tytti Tuppurainen, who leads the Social Democrats’ parliamentary group, called it “Europe’s worst economic management.” An academic survey published this week sharpened the picture. Some 73% of Finns would still vote for NATO membership and 80% say it has increased their security — but trust in the United States has collapsed. About 80% say they cannot trust Washington to defend European allies, 80% want to reduce dependence on US weapons and technology, and only one-quarter trust the defence pact with Washington. Only one-third now see NATO as a liberal democratic community, down from nearly half a year ago. The researchers described their findings as “tense” with government messaging. With Finland locked into the F-35 for 40 years, the public has recognised a dependency the government cannot soon escape. Karelian Sword 26 — 10,000 troops, with US and UK participation — begins May 18.
​
Ukrainian drone threat to Helsinki region triggers emergency alert, airport closure, and government review of warning systems
May 15–17, 2026
​
Opposition files interpellation over government economic failures; Orpo defends austerity record as pre-election battle heats up
May 11–17, 2026
​
PM Orpo's Eurovision flamethrower videos go viral, drawing praise and criticism at home and abroad
May 15–17, 2026
​
Stubb calls for Europe to open dialogue with Russia while Ukraine holds strong position; Häkkänen more sceptical
May 11–17, 2026
​
President Stubb's busy diplomatic week: B9 summit in Bucharest, Lithuania state visit, Europe Gulf Forum in Greece
May 11–15, 2026
​
Häkkänen attends EU defence ministers meeting, stresses bilateral Ukraine support and Finnish defence-industry opportunity
May 12–13, 2026
​
Finnish public opinion poll: NATO support holds but trust in US has collapsed, majority want less US tech dependence
May 11, 2026
​
SDP MP Joona Räsänen admits April drink-driving offence, steps back from party positions
May 12, 2026
​
Finnish financial regulator fines Oma Säästöpankki €400,000 for insider register violations
May 14, 2026

​
Estonia flag Estonia

Estonia signed a deal this week adding three Chunmoo rocket systems to its existing order — bringing the total to nine — and the munitions package includes CTM-290 tactical ballistic missiles with a 290-kilometre range. For the first time, Russian territory lies within reach of Estonian ground-based strike capability. The expansion, formalised in a government-to-government contract on May 11 between South Korea’s trade agency and Estonia’s Centre for Defence Investments, upgrades the original €290 million six-system purchase from December 2025. Hanno Pevkur, the defence minister, called it a “significant capability development.” Delivery is due by end of 2027. In the same week, Mr Pevkur confirmed at a session of the Riigikogu, Estonia’s parliament, that ARCA, the ammunition producer, has committed in writing to manufacture 155mm long-range shells for the Estonian Defence Forces at Põhja-Kiviõli, with construction starting 12–14 months after the permit is received. Andrus Merilo, the forces’ commander, confirmed they need the longer-range type, not short-range munitions. No purchase contract exists yet — procurement will depend on competitive pricing — but the industrial commitment is now on record. Last week’s concern that the ARCA story rested on a single low-grade source is resolved: Mr Pevkur’s Riigikogu testimony is a parliamentary record. Even as Estonia acquires these capabilities, its forces are practising with what they have. The Defence League (Kaitseliit)‘s South Defence District mobilised over 3,000 reservists and Defence League members on May 16–17 for the decisive battles phase of Kevadtorm, the annual exercise. Allied heavy equipment deployed to southern Estonia for combined combat practice; units incorporated lessons from Ukraine on unmanned systems and tested defence industry equipment. Joint Defence League-police patrols ran through southern towns, testing civil-military co-ordination in hybrid-threat scenarios. The Lennart Meri Conference, held May 15–17 in Tallinn, drew most of the week’s senior visitors. Kristen Michal, the prime minister, opened proceedings alongside Thomas DiNanno, the American arms control under-secretary, and Boris Ruge, NATO’s assistant secretary-general. Alar Karis, the president, delivered a keynote calling for a “militarily capable Europe” requiring hundreds of billions in defence investment. Kaja Kallas, the EU’s foreign policy chief, closed the conference in a fireside chat with the Financial Times. Former Ukrainian commander Valerii Zaluzhnyi and Maia Sandu, Moldova’s president, also attended. The conference confirmed Tallinn’s ability to convene senior Western alliance leadership well above what a country of Estonia’s size would ordinarily draw. At the conference, Mr Pevkur warned of a direct consequence for Estonia’s own plans: European military equipment prices have risen more than 50% in two years, driven by alliance-wide rearmament demand. Estonia’s procurement plan was priced before that inflationary cycle, so the capabilities it expects to buy will cost considerably more than budgeted. Madis Müller, the governor of the Bank of Estonia, confirmed this week that the European Central Bank (ECB) could push its deposit rate to 2.5% or higher — the six-month euro interbank offered rate (Euribor) is already at 2.4–2.5%. The counterpoint came from Coop Pank, which posted April net profit of €2.8m, up 51% year-on-year, and received a Moody’s upgrade from Baa2 to Baa1 with a stable outlook: the domestic banking sector is absorbing the pressure without showing signs of distress. The week’s most novel development came in a separate statement from Mr Pevkur: Estonia is exploring participation in a joint French-British mission at the Strait of Hormuz. Estonia is costing three options — staff officers, a crew of fewer than ten operating underwater robots, or a full ship crew of 40–60 personnel. The mission would begin after hostilities with Iran end. Estonia has built its entire defence around the Baltic-Nordic-eastern European theatre; this would be its first stated operational interest outside that zone. The source is a single low-grade outlet citing Interfax — treat it as a signal worth watching, not a confirmed development. A persistent absence sharpens the contrast between what Estonia is building and what it still lacks. Rail Baltica’s €1.2 billion Phase 1 funding gap remains unresolved for the fourth consecutive week. Kevadtorm — which deployed allied heavy equipment overland to southern Estonia — is testing the very military mobility corridor that Rail Baltica is designed to close on standard gauge. No announcement came from the European Commission or any Baltic capital. The most pointed domestic development was the departure of Varro Vooglaid from the parliamentary faction of the Conservative People’s Party of Estonia (EKRE). Mr Vooglaid, a non-party MP aligned with the faction rather than a formal member, lost the leadership’s confidence after a video emerged in which he called veterans “mercenaries” — a framing irreconcilable with EKRE’s pro-defence positioning ahead of 2027. Martin Helme confirmed Mr Vooglaid was offered conditions he declined. He remains in parliament as an independent, and the Riigikogu now has 18 unaffiliated MPs, more than at any point this century — though analysis by ERR, Estonia’s public broadcaster, finds that only seven are genuinely independent, with the rest affiliated with parties formed through earlier faction splits. The departure matters less for the numbers than as a signal: EKRE is actively managing its credibility on the dominant issue in Estonian politics. The Reform Party opened its 2027 campaign at its May 17 general assembly. Mr Michal named a “conservative octopus” — Isamaa, the Centre Party, and EKRE, plus their aligned institutions and media — as the electoral opponent, and positioned Reform as the defender of individual freedom, an open economy, and security. In a Postimees television interview, the party acknowledged that Reform has polled two to three times below its 2023 result with no sign of recovery. The octopus framing is an electoral narrative, not a policy change; the austerity measures that drove the polling collapse remain in place. Margus Tsahkna, the foreign minister, told Bloomberg this was not the time for diplomacy with Russia. He called on all Ramstein coalition countries to match Estonia’s commitment and allocate 0.25% of GDP annually to Ukraine’s military, and dismissed the former German chancellor Gerhard Schröder as a credible intermediary. The position is unchanged from prior weeks; its significance lies in the platform — a Bloomberg interview also covered by the Guardian and Euronews, giving it broader Western reach than earlier statements on the same theme.
​
Lennart Meri Conference 2026 in Tallinn draws regional leaders and shapes European defense debate
May 14–17, 2026
​
Kevadtorm 2026 — Estonia's largest annual military exercise mobilizes thousands of reservists and allied forces
May 11–17, 2026
​
EKRE parliamentary faction loses non-party MP Vooglaid over foreign and security policy disagreements
May 14–15, 2026
​
Pevkur calls for accountability on EU's €90 billion Ukraine loan amid corruption probe
May 13, 2026
​
Estonia expands South Korean Chunmoo rocket contract — total order rises to nine systems
May 11–14, 2026
​
Tsahkna urges Europe to pressure weakened Russia, not negotiate; calls for 0.25% GDP Ukraine aid
May 11–16, 2026
​
Reform Party general assembly — PM Michal frames 2027 Riigikogu election as contest between freedom and anger
May 12–17, 2026
​
Bank of Estonia to issue commemorative €2 Sipsik coin marking children's character's 65th anniversary
May 13–14, 2026
​
Coop Pank posts 51% profit growth in April; Moody's upgrades deposit rating to Baa1
May 11–13, 2026
​
Pevkur advocates stronger NATO eastern flank; Estonia explores Strait of Hormuz deployment
May 12–14, 2026
​
Other

​
Lithuania flag Lithuania

Lithuania declared a state of emergency this week over a sustained Belarusian balloon campaign that has shut Vilnius airport twice in seven days — and before the week was out, a suspected Ukrainian military drone had crashed on its territory. The balloon campaign is not criminal opportunism. Since 2023, the number of Belarusian balloon shipments carrying contraband over Lithuanian airspace has risen from three to 635 last year; the repeated airport closures confirmed it as a coordinated, state-directed harassment operation. Inga Ruginienė, the prime minister, convened cross-party parliamentary leaders and won unified backing — including from the conservative opposition — to declare a formal emergency, saying Lithuania would not rule out escalating further “if the situation changes.” Laurynas Kasčiūnas, the conservative leader, went further, proposing a contingency plan aimed directly at Alexander Lukashenko should US cooperation fail to resolve the situation. Even as the government prepared its emergency declaration, a threat arrived from a different direction. Gitanas Nausėda, the president, and Alexander Stubb, his Finnish counterpart, had jointly warned “warring parties in Europe” three days earlier not to use Lithuanian airspace, framing any unidentified incoming drone as a target requiring a military response. Three days later, Lithuania’s National Crisis Management Centre confirmed that a suspected Ukrainian military drone had crashed on its territory. The crash appears to be a navigational failure rather than deliberate overflight, but the distinction matters less than what it reveals: Lithuania cannot verify a drone’s origin or intent before it lands on its soil. Mr Nausėda and Mr Stubb called for faster NATO modernisation of detection and interception across the eastern and north-eastern flank, citing Ukraine’s anti-drone warfare experience as the model. The week’s biggest surprise came from Washington. Kęstutis Budrys, the foreign minister, confirmed that the US had lobbied Lithuania to reopen Klaipėda port to Belarus potash exports — trade currently banned under EU sanctions. Mr Nausėda denied experiencing formal “pressure” while acknowledging that diplomatic exchanges had taken place, a careful distinction that preserved the relationship without yielding the point. Lithuania’s public position is resistance; Ingrida Šimonytė, the former prime minister, urged a “cool head.” The episode marks something new: Lithuania has long treated its relationship with Washington as a principled alliance, while Washington treats it as transactional. The US appears willing to exploit Lithuania’s security dependency to extract concessions in unrelated domains — here, to soften sanctions that constrain Belarus. The same week, Lithuania and Ukraine moved in the opposite direction. At a Bucharest summit, Mr Nausėda and Volodymyr Zelensky signed a full Drone Deal covering joint production of long-range strike, naval, interceptor, and bomber drones, technology transfer between companies, and the deployment of Ukrainian defence experts to Lithuanian facilities. Mr Zelensky framed it as explicitly reciprocal: “we support our partners who really and tangibly support our protection.” Separately, Robertas Kaunas, the defence minister, confirmed that the US had paused its troop rotation to Europe, cancelling a planned armoured brigade of more than 4,000 soldiers to Poland. Lithuania and Latvia publicly offered to host additional American forces; Mr Nausėda cautioned against premature conclusions, saying the final disposition of US forces in Europe was likely not yet settled. At home, the government is managing a compound crisis. Investigators from 15min.lt, using hidden cameras over five months, filmed 13 EU-funded farmer training sessions held in empty or near-empty rooms. The sessions were organised by a company owned solely by Vigilijus Jukna, Ms Ruginienė’s public affairs adviser, who simultaneously served as chancellor of the Vytautas Magnus University Agricultural Academy — which received a separate €285,000 from similar EU programmes. Attendance records at one session listed names of people who were not there. Ms Ruginienė dismissed Mr Jukna the same day the story broke, telling media the matter “must be investigated by law enforcement.” The Financial Crimes Investigation Service and the Anti-Corruption Commission opened pre-trial investigations and searched his premises. On the same day investigators searched Mr Jukna’s offices, they also raided the parliamentary cabinet, home, and party headquarters of Remigijus Žemaitaitis, chairman of the junior coalition partner Dawn of Nemunas, over €49,500 in undocumented vehicle lease arrangements drawn from state party funds. Mindaugas Sinkevičius, the Social Democratic Party (LSDP) leader and deputy prime minister, said the raids would not by themselves determine the coalition’s future — “one procedural element of a broader political assessment.” A court ruling on the Electoral Commission’s challenge to the party is expected on June 10, which the LSDP appears to be treating as the moment it decides whether Dawn of Nemunas stays in government. The State Audit Office’s finding that €916.8m in 2025 budget expenditures were undisclosed by purpose — the 14th consecutive year of such misstatements — added a governance-competence charge on top of the personal corruption charges already in play. Ms Ruginienė responded by demanding accountability from the Social Security Ministry, the social insurance fund Sodra, and the Riflemen’s Union. Whether the coalition survives June will depend, above all, on whether any of these investigations reach the prime minister herself.
​
PM adviser fired after investigation exposes EU-funded ghost trainings; FNTT and STT open criminal inquiries
May 11–13, 2026
​
Dawn of Nemunas coalition partner raided by financial crimes investigators; coalition stability questioned
May 10–17, 2026
​
US presses Lithuania to resume Belarus potash transit; Vilnius rejects pressure, demands Belarus concessions first
May 13–15, 2026
​
Vilnius airport repeatedly shut by Belarus smuggler balloons; Lithuania to declare emergency situation
May 12–14, 2026
​
Nausėda and Stubb call for stronger NATO eastern flank air defenses after wave of drone incidents
May 14, 2026
​
Lithuania and Ukraine sign full Drone Deal at Bucharest summit, covering joint production and technology transfer
May 13–14, 2026
​
Ignitis Group posts Q1 revenue growth and releases 2026–2029 strategy focused on green flexibility and grid expansion
May 12–13, 2026
​
Lithuania and Latvia offer to host US troops as Pentagon suspends European rotation; Nausėda urges caution on troop picture
May 11–17, 2026
​
State Auditor finds major 2025 budget reporting errors; Ruginienė demands accountability over misused public funds
May 14, 2026
​
Baltic \$14 billion defense build-up; Lithuania positions itself as regional defense industry hub
May 11–14, 2026
​
Suspected Ukrainian military drone crashes in Lithuania
May 17, 2026

​
Latvia flag Latvia

Latvia’s government fell in five days, and on the morning the prime minister resigned, investigators raided and briefly detained a sitting government minister for the first time in the country’s history. The sequence began when the Progressives pulled out of the coalition on May 13, after Evika Siliņa, the prime minister, had fired her defence minister over the Rēzekne drone incident. Ms Siliņa announced her resignation the next morning, saying: “I am resigning but I am not giving up.” Earlier that morning, the Corruption Prevention Bureau (KNAB) had searched Armands Krauze, the agriculture minister and leader of the Union of Greens and Farmers (ZZS), and separately detained Raivis Kronbergs, the head of the State Chancellery. Mr Krauze was released that afternoon; Mr Kronbergs was not. The criminal case concerns a closed cabinet session in late 2023 in which the government allegedly gave unlawful support to the timber industry through Latvia’s state forestry company. The party’s politicians — including Inara Mieriņa, the Saeima speaker — immediately claimed the raid had been timed to coincide with the resignation. Armīns Meisters, the attorney general, rejected that claim directly at a press conference, saying the searches had been planned two weeks before the drone incident, before any political crisis existed. The State Audit had planned to release findings on state forest oversight on the eve of the searches; a complaint from the party’s ministry blocked that release. Two days later, Edgars Rinkēvičs, the president, completed consultations with all six Saeima factions and nominated Andris Kulbergs, a United List MP described in Latvian media as a “non-partisan problem solver,” to form a new government. Mr Kulbergs said he received “clear presidential support” and sees roles for some existing ministers. The constitutional machinery worked as designed: no emergency government, no dissolution of parliament, a new prime minister candidate nominated within 48 hours of the resignation. But the arithmetic is hard. The most plausible new coalition — New Unity’s 26 seats, the National Alliance’s 13, and United List’s 15 — reaches only 54, and New Unity has already stated its red lines. The Progressives say they are prepared to sit in opposition until the October elections. Analysts quoted in Latvian media openly doubt Mr Kulbergs can assemble a viable majority. A caretaker government running to October remains possible. That uncertainty carries a real cost. With elections five months away, the collapse leaves the Plan B vendor transition for the election IT system in limbo. The defence ministry has cycled through three leadership arrangements in under two weeks, and Mr Rinkēvičs sharpened that uncertainty by saying that the new defence minister “must not be a person with epaulettes” — a direct signal that Colonel Raivis Melnis, whom Ms Siliņa installed after she fired her defence minister, will likely be replaced under any new government. The detention of Mr Kronbergs deepened the damage: Latvia simultaneously lost its head of government and the head of its civil service, with a deputy now running the State Chancellery. The security situation that started the political crisis remains unresolved. A second airspace alert went out for eastern Latvia on May 15, and NATO fighters tracked the drone without intercepting it. Unlike the May 7 incident, no damage was reported, and the alert system appears to have functioned — there was no repeat of the one-hour delay that had cost the previous defence minister his post. But no counter-drone procurement or fixes to detection systems have been announced despite the second incident; the ministerial transition has stalled any institutional response. Volodymyr Zelenskyy added a sharper note, stating Russia is considering a plan to attack a NATO member from Belarus and naming Latvia specifically. The claim rests on a single source and Mr Zelenskyy has clear reasons to keep NATO anxiety elevated; it should not be treated as established intelligence. But it was the first time a foreign head of state had named Latvia in that context, and it arrived alongside the second drone alert rather than in isolation. Through the political crisis, Mr Rinkēvičs kept up diplomatic work. He joined the Bucharest Nine and Nordic countries summit on May 13 — the same day the Progressives pulled out — and the following week hosted Ayman Safadi, Jordan’s deputy prime minister and foreign minister, at Riga Castle. Baiba Braže, the foreign minister, attended separately. Latvia signed its first intergovernmental agreements with Jordan: a memorandum establishing regular political consultations and a visa waiver for diplomatic passport holders. The meeting covered Iran, the Hormuz Strait, and Jordan’s support for Ukraine in multilateral bodies — consistent with Latvia’s work on the UN Security Council. A footnote to the week’s upheaval: a Ukrainian delegation arrived at the State Chancellery the day after its director was detained, on a study visit organised by an EU advisory mission to learn about Latvia’s governance and integration experience. The Bank of Latvia issued Paybis Europe both a Markets in Crypto-Assets (MiCA) crypto-asset service provider licence and a Payment Services Directive 2 (PSD2) payment institution licence — one of the few dual approvals of its kind in the EU. The company serves 7 million users globally. Its chief executive said Latvia’s regulatory framework drove the choice of jurisdiction, a direct return on years of banking sector clean-up. Latvia has now issued 7 fintech licences in the first five months of 2026, against 8 for all of 2025. Latvian startups raised €78m in 2025, with robotics firm Aerones accounting for €54m of that; deeptech now makes up 26% of the ecosystem, backed by three new state-supported venture capital funds.
​
Stray Ukrainian drones collapse Latvia's coalition: Siliņa resigns, Kulbergs nominated to form government
May 10–17, 2026
​
KNAB searches agriculture minister Krauze in forestry sector corruption case on morning of PM's resignation
May 14–17, 2026
​
Bank of Latvia issues Latvia's first dual MiCA and PSD2 licences to crypto exchange Paybis
May 12–13, 2026
​
Other

​
Norway flag Norway

Norway went public this week with a doctrine it has been quietly enforcing for months: its most sensitive defence technology will go only to allies and close partners. The concrete case was the Naval Strike Missile system. Norway’s Foreign Ministry confirmed it had revoked export licences in March for delivery to Malaysia under a 2018 Kongsberg contract worth €124m — pulled, Kuala Lumpur noted, just days before the missiles were due to arrive. Malaysia had by then paid roughly 95% of the contract value. Anwar Ibrahim, the Malaysian prime minister, called the decision “unilateral and unacceptable” in a call with Jonas Gahr Støre, the prime minister, and Malaysia is now pursuing full compensation and considering legal action. Kongsberg confirmed it had complied with all regulations and that the licensing decision rested entirely with Norwegian authorities — a careful separation that leaves the company exposed to a claim it cannot control. Oslo absorbed all of this knowingly. The doctrine has a second face. Even as it closed the door on a non-allied buyer, Norway was preparing for Narendra Modi’s visit — more than 18 business agreements, three government-to-government memoranda covering health, digital infrastructure, and space, and a confirmed Equinor liquefied natural gas supply deal running 15 years. India is seeking to expand the Government Pension Fund Global, Norway’s sovereign wealth fund, beyond its current $28bn in Indian capital markets. Mr Støre called India “a partner, not a development country” and said he had no interest in lecturing New Delhi on its democratic record. The logic is clear: no transfers of sensitive military hardware to non-allied partners; open engagement with everyone else on trade, energy, and investment. At home, Jens Stoltenberg, the finance minister, presented the revised budget on May 12 without triggering a government collapse. He set oil fund spending at 2.7% of the fund’s value — below the 3% ceiling — and senior economists confirmed the budget is neutral and will not affect interest rates. That gives Mr Stoltenberg a partial answer to critics who have spent weeks reminding him that he promised fiscal policy that would bring rates down. He also rejected a tax and fee relief proposal from his own Labour Party (Ap) parliamentary group — a sign that Finance Ministry discipline is outrunning party politics. The parliamentary vote has not yet happened; negotiations with the Socialist Left, the Centre Party, the Greens, and the Red Party (Rødt) were described as “chaotic,” and the budget’s passage is not guaranteed. The dominant political story remains polling rather than parliamentary arithmetic. The Progress Party (FrP) now stands at roughly 31% — its highest in 18 years and nearly double the support of the Conservative Party (Høyre). Sylvi Listhaug, the party’s leader, reached 32.2% as preferred prime minister in a Verian survey for TV2, up from 22.5% in February; Mr Støre sits at 38.8%, down from 50% in September. A racism scandal involving a party adviser — who referred to Pakistanis as “minus variants” — left no measurable mark on the party’s numbers. Ine Eriksen Søreide, the Conservative Party leader, declined to comment on the PM preference gap and refused a TV2 interview, a sign of internal pressure. For now, the government is shielded less by its own strength than by the party’s statement that it will not take power through a Greens-engineered collapse. The real test is the budget vote still ahead. Norway’s annual farm income negotiations had a May 16 deadline, but no outcome was reported. A breakdown would be politically costly for a government already dependent on rural voters; a quiet resolution would remove one more flashpoint.
​
Indian PM Modi visits Norway for first time in 43 years, holds bilateral talks and India-Nordic Summit
May 11–17, 2026
​
Equinor Q1 2026 earnings beat expectations; AGM approves dividend and buyback; European gas supply talks launched
May 11–17, 2026
​
Stoltenberg presents revised national budget; parliament battles, oil fund risk warnings, and Stad tunnel axed again
May 11–17, 2026
​
FrP reaches near-20-year polling highs at 31%; Listhaug emerges as dominant PM candidate despite racism scandal
May 11–15, 2026
​
Norway revokes NSM missile export license to Malaysia, triggering diplomatic row and legal threats
May 14–15, 2026
​
Norges Bank surprises markets with 25bp rate hike to 4.25%; Norwegian krone strengthens

​
Sweden flag Sweden

Ukrainian drone pilots playing the adversary in NATO’s Aurora 26 exercise destroyed Swedish forces on Gotland last week, and one of them was blunt: if this had been real, the Swedes “would have been dead.” The exposure matters because Sweden is otherwise building fast. Its first military surveillance satellite, launched May 3 on a SpaceX rocket, began delivering images of Gotland from 515 kilometres up this week; the Air Force filed for environmental approval to expand F16 Uppsala from roughly 4,300 to nearly 30,000 annual military flight movements; the Coast Guard is arming its Baltic vessels against drone attack; and the Security Service (Säpo) arrested two people suspected of supplying advanced technology to Russia’s war machine. The drone gap sits in a force improving on almost every other front. But drones are now the dominant mode of European land warfare, and Sweden has not kept pace. Pål Jonson, the defence minister, accepted the Aurora outcome as “demanding” and said Sweden must train more with Ukraine. He did not announce a procurement commitment. General Michael Claesson, the Supreme Commander, put something unusual on the record. While telling reporters that American withdrawal announcements should not be read as “the Americans are leaving” — they are not, he insisted — he separately warned that Russia could test NATO “within a short time.” For a serving commander, that pairing of reassurance and urgency was notable. Narendra Modi, the Indian prime minister, flew into Gothenburg on May 17, received the Royal Order of the Polar Star, and signed a Joint Action Plan with Sweden covering defence, artificial intelligence, space, and the green transition through 2030. Ulf Kristersson, the prime minister, highlighted a joint Venus space exploration agreement; the two countries pledged to double bilateral trade from $7.75 billion within five years. Ursula von der Leyen was present to frame the visit within the EU-India trade relationship — Sweden presenting itself as an intermediary. Gripen fighters escorted Mr Modi’s plane into Swedish airspace, a deliberate signal linking defence ties to the diplomatic occasion. India differs from Sweden’s existing partners: not a NATO member, not aligned with de-dollarisation or anti-Western alternatives, but the world’s largest democracy tilting toward Western security interests without formal alliance membership. The Joint Action Plan’s ambition is comparable to the Gripen-Ukraine relationship in formation. Whether it produces that depth, or stays at the level of ceremony — Mr Modi was touring five European nations, and “strategic partnership” upgrades are common on such tours — depends on follow-through over five years. Maria Malmer Stenergard, the foreign minister, was in Brussels the same week pushing for a 21st round of Russia sanctions, including a full ban on services to vessels carrying Russian oil, coal, and gas. She noted an improvement in the EU’s working atmosphere since Hungary’s new government took office: “a lot more smiles in the room.” Swedish policy preferences — stronger sanctions, faster Ukraine support — now face fewer obstacles than a year ago. The domestic economic picture is split. The Riksbank held its rate at 1.75% at its May 6 meeting, with Erik Thedéen, the governor, warning that a hike “draws nearer the longer Middle East supply disruptions persist.” The IMF’s Article IV review, published May 13, endorsed the hold, projected 2.1% GDP growth for 2026, and estimated the Middle East war has cost Sweden 0.3-0.4 percentage points of cumulative output. Against that, April CPI fell unexpectedly by 0.1% month-on-month, making disinflation rather than stagflation the likelier outcome for now. Sweden faces the rare central-bank problem of slower growth and higher inflation at the same time, both driven by a single outside factor. Commercial banks complicated the picture by raising mortgage rates unilaterally despite the Riksbank’s hold, drawing criticism from Mr Thedéen and the finance minister. Jacob Wallenberg, Sweden’s most powerful business figure, made clear how he reads the moment. Joining the board of Nordic Compass — a new alliance of more than 25 corporations including Ericsson, Saab, Nokia, and Nordea — he said: “We are losing companies to the US and other places. We want to keep them here.” The Wallenberg sphere controls roughly 40% of the Stockholm Stock Exchange; the decision to build an organised response to capital flight, rather than wait for US policy to shift, signals that at least this part of Swedish industry has concluded the split is lasting. Separately, Wallenberg-owned Verkan AB confirmed plans for a gunpowder factory in Björneborg creating 450 manufacturing jobs. The governing coalition heads into the September election with a new vulnerability. Aftonbladet reported that Teach for Sweden — whose board includes Marita Bildt, Mr Kristersson’s sister-in-law — received grants that more than doubled since her 2021 board appointment, with a 12 million kronor increase in the spring budget approved in a decision Mr Kristersson took part in on April 9. He told the paper he had not known she sat on the board. The Social Democrats, linking this to the earlier appointment of childhood friend Henrik Landerholm as national security adviser, called it “a culture spreading around the prime minister” and demanded an external review. Neither case is legally definitive, but both arrived in a campaign the coalition was already losing on other grounds. Mr Kristersson pressed on with his tax-contrast strategy — a multi-day bus tour through Skåne, warning that the combined left bloc represents 100 billion kronor in tax rises. The tactic is to bundle the more radical positions of the Left Party and Greens onto the Social Democrats. Internal Moderate commentary in Svenska Dagbladet and Dagens Nyheter has begun asking whether this will be Mr Kristersson’s last election as party leader. The Riksdag handed the government a legislative setback, rejecting its proposal to lower the age of criminal responsibility to 13 — a flagship Tidö Agreement reform Mr Kristersson had announced in September 2025. The coalition’s 176-173 majority leaves no room for defections. Jimmie Åkesson, the leader of the Sweden Democrats (SD), has responded to that fragility by proposing to amend the constitution to make parliamentary mandates effectively the property of parties rather than individual MPs — reversing a principle in Sweden’s Instrument of Government that has protected MP autonomy since 1974. Changing fundamental law requires two Riksdag votes separated by an election. But the proposal shows where SD wants to go if it ever governs.
​
Modi visits Gothenburg, Sweden and India elevate ties to Strategic Partnership
May 11–17, 2026
​
Riksbank holds rate at 1.75%, signals possible hike; IMF and banks weigh in
May 11–17, 2026
​
Malmer Stenergard leads Swedish push at EU FAC for Russia sanctions and Israel settler pressure
May 11, 2026
​
Aurora 26: Ukrainian drone pilots expose major gaps in Swedish NATO-exercise defense
May 11–17, 2026
​
Jonson at EU defence ministers meeting and B9 summit in Bucharest; advocates EU defence clause clarity
May 11–14, 2026
​
Sweden to host NATO foreign ministers meeting in Helsingborg; Rutte bilateral with Kristersson announced
May 12–14, 2026
​
Moderaterna campaign bus tour through Skåne; Kristersson warns of left-wing tax rises ahead of autumn election
May 11–14, 2026
​
Kristersson nepotism controversy: Social Democrats demand external review over Teach for Sweden grants
May 10–15, 2026
​
Swedish Armed Forces military expansion: satellites, F16 growth, coastal guard armament, new company council
May 11–17, 2026
​
SÄPO arrests two suspects for supplying advanced technology to Russia
May 11, 2026
​
Sweden Democrats' parliamentary pairing vote manipulation sparks constitutional debate
May 11–15, 2026
​
Wallenberg family launches Nordic Compass pan-Nordic industrial alliance
May 11–13, 2026
​
Åkesson's foreign policy shift draws criticism from SD's own former leaders
May 11–13, 2026