Economic conclusions not yet clear

"We must be careful in drawing any conclusions until we receive the government planning directions", says Rear Admiral Jörgen Ericsson, Head of the Command Office Strategy Department.

The government has resolved that the Swedish Armed Forces can transfer SEK 170.5 million from its materials budget to unit operations. The Swedish Armed Forces had requested permission to transfer SEK 850 million. Minister for Defence Sten Tolgfors is also open to the Swedish Armed Forces being allowed to finance unit tasks against next year's budget.

"The government is aware that Swedish Armed Forces operations are already running at a low level and the 850 million kronor are important for us to be able to operate reasonably. This does not mean the government has rejected the Swedish Armed Forces' request and the potential consequences of such that we had already presented. However the government does not envisage scope to effect a transfer of the magnitude proposed by the Swedish Armed Forces."

This credit against next year's budget is effectively a loan from the treasury that must be repaid in 2009. The credit limit is three percent of the budget, but according to Jörgen Ericsson it is highly probable that this percentage will be increased. It is still not clear how much of this credit will be used by the Swedish Armed Forces as this can only be determined once we have analysed the government’s planning directions.

The government will notify the Swedish Armed Forces of the planning directions on 10 April. The planning directions are a series of guidelines related to what operations the Swedish Armed Forces should perform during the year, such as which exercises should be undertaken. 

"When we receive the directions we will know which operations we are to undertake and can analyse the need to utilise the credit. Supplementary budget two that will be announced in September will enable us to make additional transfers to the operations budget that can mean we will not need to use as much of this credit." 

As this money is borrowed and has to be paid back to the treasury next year the Swedish Armed Forces will need to analyse the consequences such credit can have for the 2009 budget. This autumn, an orientation proposition for 2010 will be announced which is designed to create a balance between tasks and resources. This should also provide guidance on how the residual structural imbalance in the Swedish Armed Forces dating from the former invasion defence force structure is to be corrected.

There are several reasons for the imbalance in the Armed Forces economy. The main reason is increased costs as, in contrast to the invasion defence force structure, we now use our mission based units internationally on a totally different scale. 
 
"As we have limited experience of the costs for mission based defence and deploying units in the way we do today, it is difficult for us to calculate our costs and we have underestimated such costs. Deploying units on international mission operations is more costly than having a supply based invasion defence force. The government has also given us additional duties and reallocated funds to other authorities within the defence area. Salary and pension costs have also risen more than we had been able to anticipate when making our calculations in March 2007. "