Nordic defence firms push for greater regional alignment as conflicts drag

By Marie Mannes

GOTHENBURG, Sweden, Nov 5 (Reuters) - Six of the Nordic region's biggest defence and technology companies proposed on Thursday that military equipment approved in one Nordic country be recognised across the region to speed up arms procurement and strengthen regional security.

Russia's war in Ukraine, attacks on critical infrastructure and growing pressure on Europe to shoulder more responsibility for its own security have fuelled calls for faster procurement and deeper industrial cooperation and development on defence.

The companies, speaking at a conference in Gothenburg organised by new Nordic business alliance Nordic Compass, also called for governments to pay upfront for production capacity.

"There is no time to waste," Jyri Hakamies, Finland's former defence minister and chair of Nordic Compass' defence track, said pointing to lessons from Ukraine, where military innovation is often measured in weeks rather than years.

The recommendations, developed by defence groups Saab, Kongsberg, Patria and Terma together with telecoms equipment makers Ericsson and Nokia, will be presented to government officials at the Gothenburg conference.

All five Nordic countries are NATO allies and collectively account for roughly 10% of NATO's defence expenditure in Europe, making the region the fourth-largest spending bloc in Europe.

However, each Nordic country runs its own certification and procurement, so equipment approved in one country must often be certified again in others. Under the proposal, a product certified in one Nordic country would not need recertification elsewhere.

UPFRONT SPENDING FROM GOVERNMENTS

The group also proposes piloting a framework contract under which governments would buy a set amount of production capacity from manufacturers, allowing companies to expand output before orders arrive.

“The demand signal is nice to have, but it doesn’t pay the bills,” Patria Chief Executive Panu Routila told Reuters.

The six companies announced their participation in Nordic Compass about two months ago, but details of their proposed defence initiatives had not previously been disclosed.

Defence companies typically compete for the same government contracts and rarely come together in this fashion.

"Having six leading Nordic companies sharing a common joint interest in defence is an achievement itself," Hakamies said.

The companies also want to develop shared Nordic capabilities in subsea infrastructure protection, space surveillance and military communications, arguing some projects are too costly for countries to pursue alone.

Routila said government backing would be essential, although some initiatives could move ahead even if only part of the region took part.

The companies said they would act in full compliance with competition rules, with governments and armed forces making the final decision.