September 10, 2011: Finland is cutting its defense budget 5-10 percent a year over the next four years. This is in reaction to an economic slump that has done more damage than expected, and a new government that is willing to make the cuts. This is a sharp change from two years ago, when the government voted to increase defense spending over 2 percent in order to keep up with inflation. Back then, Finnish lawmakers believed that the rising cost of war material and military equipment justified the additional money. Defense spending is currently about $4.2 billion a year, about two percent of the GDP. 

Finland currently has no major military threats, but they do remember that this can change quickly. Finland is a small country with a small military (34,000 troops on active duty, and 230,000 when reserves are mobilized). To make up for their lack of manpower, buying high-tech weapons and equipment has been a top priority.

Thus the cuts will not halt the purchase of new gear. About a third of the civilian employees will be dismissed. There will also be cuts in training budgets, which military leaders oppose.

The active military mainly serves to train conscripts to fill the reserve units. The large “reserve army” has, in the past, proved capable to dealing with major military operations.