Created: 8/28/1950

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principal objective of Sweden's foreign policy is to keep the nation out of war. The conduct of Swedish foreign relations is based upon the proposition that if in times of peace thc country avoids alliances with great powers, and makes no political or militaryto them, but maintains its own military defensesood state of efficiency, then in times of war it will be allowed to remainThis policy of non-involvement is described as neutrality; it has been pursued with success for moreentury, and hasherished popular tradition. It is still stoutly defended by the Social Democratic Government, and enjoys the publicly avowed support of all the political parties; obviously, therefore, it stOl appeals powerfully to thepublic. The public clings to neutrality, however, not with full and unreservedbutood deal of uncertainty and doubt. These sentiments are fannedmall but vocal minority, led by some of the Liberal Party press, which preaches thatsecurity would be found In affiliation with the North Atlantic Treaty Organization. With this lastumber of high-rankingmilitary men appear to agree.

The Swedish concept of neutrality is not identical with Isolationism/ Sweden joined the UN without hesitation; itember of the Council of Europe; it participates in the European Recovery Program, andember of OEEC; it has joined inegional economic grouping which combines thecountries with Great Britain. These activities the Swedish Government chooses to consider asnd it has correctlyIts obligations in them all. Yet some Swedes (and many others who are not Swedes) feel that such activities plainly align their

country with the Western nations against the USSR and its Satellites, especiallyember of UN,irm stand against the aggression in Korea. It hasincreasingly clear, even to the Swedes themselves, that the reality of neutrality is difficult to maintain.

On the other hand, despite Sweden'sdemocratic orientation and Its ancient hostility toward Russia, thc Swedishcarefully abstains from certain policies which It feels cannot be construed as neutral. It refused to sign the North Atlantic Treaty, although the membership of Norway andin NATO virtually ensures that anyEuropean war will extend to Scandinavia-It has refused, and will doubtless continue to refuse, to join other Western nations Inup and enforcing any common program of restricting the export of strategic commodities to Eastern Europe. Tlic Soviet orbit indeedatural outlet for the exports ofprosperous and expanding economy. The countries of Eastern Europe aretrading partners, providing alternative sources of some goods formerly obtained from dollar areas. The Swedish Governmentthat as long as lis trade with this region does not exceed "normal" volume it should not be subject to criticism by Western countries, and that any artificial diminution of such trade would certainly be taken by the USSR as on unneutral act.

Close cooperation with Norway andcontinues toignificant factor in Swedish foreign policy, despite the cleavage caused by different decisions as toin NATO. Inweden'sto persuade its neighbors to form adefense alliance based on neutrality

The InteUlgence organizations ol the Departments of State, Army, Navy, and the Air Force have concurred In this report. It contains Information available to CIA as of



failed. Norway and Denmark signed the North Atlantic Treaty, and since that time thc Swedish Government has refused to allow coordination of its strategic planning with that of the other two nations, butonsiderable degree of technical cooperation between military authoritiesorking leveL Thc government apparently feels that Denmark and Norway, which certainly wish Sweden to be strong, can facilitate Swedishto purchase military equipment from the Western Powers. For this reason among many others, the Swedish Government will continue to maintain particularly friendlywith its Scandinavian neighbors.

Current trends of Swedish opinion do not indicate that the nation will In the nearabandon "neutrality" and seekin the NATO. However, Sovietof Finland would almost certainly cause the Swedish Government to reconsider itspolicy, and Uie cumulative impact of other events comparable to the Korean conflict, more remote from Swedish territory if not more dangerous to Swedish security, may alsobringerious re-cxarnination. It Is possible, though doubtful, that Sweden, while abstaining from any concerted plan of restricting strategic exports to the Soviet or-

bit, will soon enforce unilaterally and of Its own volition restrictions over certain types of strategic exports to all countries; by this"neutrality" could be preserved.

Sweden's continued devotion to neutrality adversely affects but does not Jeopardize the security of the US. Swedish participation in the North Atlantic Fact would strengthen Western solidarityaking Sweden's manpower and not inconsiderable defensepart of the Westernroviding bases In close proximity to themproving the morale ofand Norway, which would feel morethrough the adherence of their more powerful neighbor;aking available Sweden's industrial capacity. On the other hand, Sweden's continued pursuit ofdocs not Jeopardize US security because (I) Sweden willelatively highof militaryhe range of bomber aircraft makes Sweden's position strategically lessenmark-and Norway feel assured that in any event Sweden will never fight against them;weden will not cooperate extensively with the USSR economically but will, within the boundaries ofooperate with the Western



Political AipecH of Sweden's Foreign Policy.

The primary objective of Sweden's foreign policy is to keep the nation out of wax; and thc conduct of its foreign relations is based upon the proposition that if in times of peace the country avoids alliances with great powers and mokes no political or militaryto them, then in times of war it will be allowed to remain unmolested. This policy, whether in war or in peace, is described as one of neutrality. Nevertheless, Sweden has Joined the UN and though It has made variousto avoid Involvement in power conflicts within that body, it has increasinglythe position of the US' Thoughto make any military contributions, Itthe UN resolution on Korea, Many Swedes have become fearful thatember of thc UN may conflict with their declared policy of no-alliance and non-involvement, and they therefore seek to keep clearly to thcistinction between the obligations attendant upon their membership in the UNolicy which would involve affiliation with organizations such as NATO.

Although many Swedes suspect that the policy af neutrality actually offers littlefor keeping their country outhird world war. thc majority of the population feels that it offers thc best available means of avoiding Sweden's involvement ln war. There arc. however, indications of uncertainty and dissent, and the attitudes of three important groups deserve particular attention for aappraisal of Sweden's foreign policy and of the nature, extent, and distribution of doubts and convictions concerning its validity These three groups are: the Social Democratic Government, the top-ranking military leaders, and the general public.

a Attitude of the Government.

Tlic failure of Sweden in January 1MB to induce Denmark and Norway to participatecandinavian Defense Alliance based onand thc subsequent adherence of the

latter countries to the North Atlantic Treaty (NAT) materially altered the strategicof Sweden by increasing the possibility that Scandinavia wouldcene of hostilitiesuture war. Thus it reduced the prospects for Sweden's maintaining anneutrality. The Social Democratic Government has not, however, permitted these developments to Influence its own devotion to an independent policy designed to preserve neutrality. Although government spokesmen admit that the NAT has strengthened Western Europe and has thus increased the probability of maintaining peace, they believe thataffiliation would not add appreciable strength to tlic assoclotlon and would only jeopardize any chance of the country'sunscathedew war. Government spokesmen maintain that the Swedish people and their elected representatives (thesupport practically unanimously thepolicy of abstention from the NAT. As proof they point to the position taken byof the four democraticSocial Democrats, the Liberals (People'she Conservatives, and thethe Riksdag foreign affairs debate lnhen all accepted thc government's policy. Social Democratic leaders consequentlyto dismiss any dissident elements asunlnfluentlal, and querulous. .

Although the Social Democratic leadersrefer to the alleged unanimity of pub-tic opinion in favor of neutrality, the leading Social Democratic newspaper Morgontidnin-gen, which is regarded as the semiofficialof the government, feels obliged regularly to refute the arguments employed by certain Liberal newspapers which advocate affiliation with the North Atlantic Treaty Organizationhisertain lack ofby the advocates of neutrality ln the solidity of their own position. For example, the Prime Minister and the Defense Minister both publicly admitted in9 lhat Sweden could not singly defend Itself. Yet,

the Supreme Commander of the Armed Forces, General Helge Jung,imilar remark Inhc pro-neutrality segment of the press became highly alarmed because the pro-NAT newspapers interpreted Jung's remarks as an announcement of his conviction that Sweden should become aOf NATO-

The Swedish Government still desires tomilitary equipment in the US and In the UK and to assure itself that military aid will be forthcornlng in the eventoviet attack on Sweden. Consequently, governmentfrequently point to Sweden's cultural and ideological affinity with the democraticForeign Minister Unden, however, has asserted that Swedenmiddle way" role to play between the competing ideologies of capitalism and Communism, in which political democracy can be combined with economic planning.

b. Attitude of Vie Swedish Military Leaders.

Many top-ranking military men, notably General Helge Jung, the present Supreme Commander, and General Bengt Nordenskjold, Chief of the Air Force, favor membership in the North Atlantic Alliance. As professional soldiers they cannot publiclyourse conflicting with the official foreign policy, but their analyses of Sweden's strategic position permit no other interpretation of their true feelings. General Jung In his Lund speech of9 not only stated that Sweden was incapable of defending Itselfreat power saveelaying action, but also discussed thc problem solely In terms of an attack from the East. The small but vociferous segment of the pressSweden's adherence to NAT used his speech to buttress its arguments. On the other hand, the Social Democratic press feared that his speech might be misinterpreted abroad and therefore hastened to deny that it indicated any modification of Sweden's official policy. Yet the government has not officially made uny effort to muzzlo General Jung or any other military spokesmen, and Indeed long tradition permits military menfreedom of public expression. It ls also possible that the government believescause in Western councils will be pro-

moted by the pro-Western expressions of the military leaders.

c. Attitude of the Public. Although the general public has been and still remains apathetic towards foreign affairs, uncertainty about Sweden's present policy is developing. Even the man In the street has become slightly more interested in Sweden's international position and Is occasionallyby thc apparent lack of unanimity In military and political circles. The Swedes, who in9 rejected the idea ofthe North Atlantic Treaty, still continue to discuss the subject and do not appear to be altogether convinced in their own minds as to the soundness of theirallup poll in the summer9 indicated thatercent of those queried supported the policy of neutrality, whileercent favoredto the North Atlantic Pact;ncludingercent of the so-callederehisurprisingly large percentage of people to be uncertain as to what policy bestmall but vocal minority, led by some ot the Liberal press (chiefly Dagens Syheter, Sweden's largest daily, continually fosters this uncertainly by casting doubt on the wisdom of Sweden'sto remain neutral and by advocating Swedish membership in NATO.

In general, thc discussion has not developed along party lines. Although there iscriticism of the government's views on neutrality, no political leader, whatever his personal convictions, has as yet dared topublicly an outright change inforeign policy. His opponents In the closely balanced political scene would charge him with espousing an adventurous policySweden's security. The Socialtake the role of champions of neutrality, and no leading Conservative or Liberalcares to challenge them openly on

2. Economic Aipects of Sweden's Foreign Policy.

a Cooperation in European Recovery. Although its Initial enthusiasm for thcPlan was dampened by Soviet opposition.


nevertheless ratified thc ECAcarefully expressing its determination to avoid any political implications. With the growing realization that the objectives of the Plan might be achieved without prejudice to Itsweden became an activeIt has received no ECA grants. During the first year ot operations itmall loan; ln the second year It received only conditional aidollars as the counterpart of Swedish grants of kronor to other countries, chiefly Norway).

Indirectly, Sweden has benefited from the general recovery of Westernmall trade deficit9 was more than offset by invisible returns, and even the dollar account was so nearly balanced lhat Sweden's dollar holdings Increased by an amount practically equivalent to its receipts of BCA conditional aid. The Improved dollar position resulted primarilyeduction ln dollar Imports; thereoticeable shift to soft currency areas.

Sweden has been cooperative in OEECIt has carried out DSln the joint effort of the OEEC countries to liberalize trade by progressively removing quota restrictions on imports. With theinto operationuropean Payments Union. Sweden will be willing to extend its free list yet further. On the broader question of European economic integration. Swedenautious stand, prompted to some extentesire not to become entangled with some of thc more unstable economics of the

After it was decided lhat the organizationcandinavian customs union presentedinsurmountable difficulties, Sweden joined the UK. Denmark, and Norway on0egional economic group known as UNISCAN. Although thedid little more than formalize current payments arrangements. Sweden hopes that it will eventually lead to greater economicbetween thc countries. Thcis further evidenceesire towith other countries of similar Nordic

rade with Eastern Europe.

Sweden's postwar trade with Eastern Europe has been significant, not only because ofmade in annual trade agreements and bi credit agreements Immediately after the war. but also because it became necessary to transfer purchases of dollar commodities to that market Moreover, the Easterncountriesatural outlet for the export goods of Sweden's expanding Swedenne billion kronor8 million) flve-year credit to the USSR6 and also extended credits to other Satellite countries. 8he value of exports to Eastern Europe,Finland and Yugoslavia, amountedtondillionof total exports8ercent Thus, while Sweden Is cooperating with thc Western democracies ln economic matters and prefers to trade with the West, balance-of-payments difficulties and anrecovery program calling for Increasedin the engineering industries have led

to substantial trade with Eastern Europe.

Exports to the USSR under theime when capital goods are needed domestically or could bo used to earn foreign exchange, are now generally consideredThe Social Democraticattempts to minimize the ill effects of the agreement, but unlike the Conservative and Liberal opposition It believes that Sweden should not appeal for re-negotiation of the agreement or take unilateral action to reduce the maximum amount of credit which can be extended By the endhe Soviets had placed orders amountingillion kronor, actual deliveries amountedIt Is estimated that by the time the agreement expires1 the USSR will have utilizedillion kronor of the credit

In the export of strategic commodities to lhe Soviet orbit, the government has declared its view that so long as trade does not exceed "normal" volume Sweden should not beto criticism from the West, and moreover that trade with Eastern Europe cannot bebecause this would be construed asby ihe East. Without detriment to


economy, Sweden couldtems from Its trade with Eastern Europe since they are small in proportion to total exports to Eastern Europe. However, the ability tosuch items as machinery, ball bearings, transportation equipment, and certain metals that generally arc onist, plus tron ore and special steel, is an important bargaining factor In obtaining from the USSR and its Satellites such imports as coal, grain, non-ferrous metals, and other commodities ofeconomic value. Despiteby the Western Powers, Sweden has continued to export bearings to Eastern Europe somewhat in excess of prewarThus,7xports to the Soviet orbit,nland,etric tons while the annual average69etric tons. The exporttems89 is estimated notercent of Sweden's total exports to Eastern Europe and to beercent of total exports to all destinations.

In view of Sweden's attitude on neutrality and thc Importance It attaches to its trade with Eastern Europe, there Isemote possibility that Sweden will join with other Western countries In parallel actionthe export of strategic may control exports unilaterally and independently. The government has recentlyecree making lt possible to expand Its list of restricted exports so as toarge numbertems, and the representations of the Western Powers may yet prevail upon the government actually to do so. Swedish neutrality would bo unaffected becausewould apply against thc export of listed items to all countries, not merely to those of the Soviet orbit. It remains to be seen, however, whether thc Swedishwill in fact take steps to Implement its decree.

3. Scandinavian Cooperation.

Despite divergent attitudes toward the North Atlantic Treaty bclween Sweden on the one hand and Denmark and Norway on the other, cooperation with the two neighboring Scandinavian countries continues toig-

nificant factor in Swedish foreign policy. Close tics of language, culture, and socialwith Social Democraticin all three countriesroad basis for this cooperation. In the postwarScandinavian cooperation infields hasigh level,overnmental plane and Informally between large segments of the people. Trade union leaders meet frequently to discussof common interest such as combating Communism within their organizations. The Foreign Ministers, sometimes with the Prime Ministers, also meet to discuss problems of mutual Interest and toommonto be adopted on various Issues before the UN and other international bodies. The Commerce and Social Ministers, as well as specialists such as are on the Jointfor Economic Cooperation, have facilitated practical cooperation In the economic andfields on such subjects as employment service, old age pensions, and tariffIn Uie culturalommission of competent authorities has furtheredbut significant cooperation among schools, scholars, and universities.

Historical traditions and, especially amongatent sensitiveness to Sweden's dominant economic and political position, have acted as deterrents to even closerlengthy attempts toordic Customs Union have produced nothing more tangible than the usual declarations that the Scandinavian governments favor Increased economic cooperation among thc nations of the Northecommendation thatcontinue on such matters as customs nomenclature and thc eflectnion would have on certain Industries in thc three countries. Moreover, with Denmark andin NATO and Sweden'solicy of neutrality, divergentpolicies appear to have adversely affected Scandinavian economic and politicalIn some instances.

The Swedish Government and many of its people were greatly disappointed at the failure of the Nordic Defense Alliance negotiations in9 and of thc Customs Union But the government has since pub-


declared its disapproval of Scandinavian military cooperation on the grounds thatill Inevitably commit Sweden to membership In the NATO. Nevertheless, despite thisthe Swedish Government permits technical cooperation, which now existsmilitary authoritiesorking level, to continue. Moreover, the government, with the support of many of its military leaders,believes that Denmark and Norway can present Sweden's case in Western defense councils and can facilitate Sweden's efforts to purchase arms from the Western Powers. For this among other reasons the Swedishwill continue to maintain close relations with its Scandinavian neighbors except In military affairs

4. Prospectshange in Sweden's Policy.

Sweden will not voluntarily join the "People's Democracies" allied wtth the USSR and the only possible change of anyin its foreign policy would be towards membership In thcrasticdevelopment vitally affectingimmediate security might Induceto seek closer ties with the WesternAn occupation of Finland by the USSR would seriously alarm the Swedes, and thc government has indicated that In this event it would review its position. Not only the usual proponentsestern alliance, but the non-labor press in general, including its Isolationist-pacifist elements, havethatevelopment would push Sweden westward. On thc other hand, the convinced defenders of neutrality might then maintain that Sweden should be all the more circumspect in its behavior.

It is more likely that any changes Inpolicy will be caused by the graduallyeffect of lesser pressures and events (such as thc Korean episode) ina feeling that Isolation Is more dangerous than NAT commitments would be.eeling, fanned by the segment of publicIn favorestern alliance, and coupledealistic appraisal of what Sovietwould mean, may eventuallyeview of the situation. Yet. until someparty undertakes to defy the ingrained


neutrality mindedness of the greater part of the Swedish people, and openly and franklyhange In foreign policy, ltbe said that the feeling has made anyheadway. No party has done so;no significant change in Sweden's foreign policy can be expected in the nearTho Social Democrats, whoso devotion to neutrality Is apparently unshakable, control the Riksdag. Although they may perhaps lose their over-all majority2esult of changes in the Upper Chamber, non-labor gains will not necessarily imply greater strength for the elements in the Riksdag in favorestern alliance. In any event, the Social Democratic Governmenthis matter receive the support of the Communists and the Agrarians. Moreover, while anydisagreement over foreign policy would inevitably divide the ranks of the fourparties (Conservatives, Liberals.and Socialhe dominantdisciplined Social Democrats wouldrelatively intact and would undoubledly secure support of certain elements from the other parties, particularly the Agrarian and Liberal, that would be more than sufficient to offset any possible defections in their own ranks. The prospectignificant change in foreign policy Is thus very slim.

Within the next two years, however, Sweden may have to make the painful decision to abandon either its political neutrality or its cooperation with Western Europe Inmatters. Transformation of the NATO into an association with more pronouncedand economic objectives, andloser relation between NATO and OEEC, would put Swedenilemma. Continued participation in such anwould jeopardize political neutrality.ithdrawal from the Western Europeanorganization would be very distasteful to thc Swedes It would further weaken ties uniting thc Scandinavians and would diminish Sweden's confidence that In thc event of aattack Sweden would receive aid from thc West Nevertheless, Sweden can be expected at first lo cling to Its neutrality and prefer isolation to affiliation with the NAT.the gradual accumulation of pressures.

and the predilection ol the USSR to regard the Baltic Seamareay combine to disillusion the Swedes as to the value of neutralityafeguard and force them,misgivings and apprehensions, definitely to join the Western concert of powere.

Meanwhile. the Swedish Government win continue its efforts to procure militaryfrom the US and the UK on abasis without being required toormal military alliance. With this objective in mind, the government hopes that the US, influenced by Danish and Norwegian desires toilitarily strong Sweden, will bethat over-all Western security interests are promoted by the existenceweden well enough armed loigorous defense of Scandinavia.

The Swedish Government will also continue to cooperate economically with the Western nations but will not follow what it considers an -unneutral" course In trade relations with the countries of Eastern Europe. It is not to be expected, however, that Swedenore definitive Westernthan at present in such delicate matters as East-West trade controls.

5. Eflect on US Security.

Swedish signature of thc North Atlantic Treaty would strengthen Western solidarity and wouldore united front to the Soviet Union:

u. Militarily

Sweden possesses the world's fourthair force, which, allhough weak in modern bomber types, includes an Increasingly greater jet fighter strength. Its navy ranks sixth with an efficient underwater service, consisting of twenty-four submarines and three additional authorized. The merchant marine is the eighth largest In the world. Sweden's army Is second-rate by US standards, but thepopulation of seven million, equal to that of Norway and Denmark combined, provides extensive manpower The army's weakest points are its lack of Urge-unit training, coin-bat-trained leaders, and modem equipment, but it is estimated that it could0 men. all of whom have had at leasttraining Participation In the NATO

-would lead to close military and mutualcooperation between the Scandinavian countries which is now impossible.

In time of war Sweden's geographicalwould provide closer bases for bombing many Soviet industrial and militaryas well as submarine and guided missile establishments along the Baltic. Also,could provide fighter bases and on air raid warning net further east than ls presently possible.

Sweden's membership in thc NATO would give Denmark anduch greater feeling of security and would encourage the Danes ln particular to contribute more enthu-siasUcally to thc Mutual Defense Assistance Program not only because of Scandinavianaction, but also from the feeling that their frontier was extended further eastward. Furthermore, Swedish military forces andwould be available Immediately In the event of East-West conflict, rather than alter the USSR had launched an attack on Swedish territory.

el. Economically.

Sweden has an industrial capacity which could be more fully utilized for the benefit of NAT countries, and there would undoubtedly be fuller cooperation In control of the exporttems

At the present time, Sweden will notsign the NAT, which raises the question of how important lis abstention is to USThe contributions which Sweden could make as an ally cannot be casuallyOn the other hand, the over-allof the US is not Jeopardized by Sweden's neutral and ulliancc-frcc loreign policy

a. Militarily.

Sweden will coniinue to maintain ils armed forces and military installations at about their present level, with relatively large defenseand the purchase of equipment from the UK and the US whenever possible. Sweden wiU fight if attacked by the USSR, which will force the Soviets toer-

tain number ol divisions, planes, and naval units which could otherwise be used in other theaters of operations.

Sweden's location Is ol secondaryln the light of present-day bomberranges.

The Danes and Norwegians Know thatwill never fight against them, and that ii wareutral Sweden would provide

the same kind of covert assistance as wasduring World War II.

d. Economically.

Sweden will continue to participate ln many programs for Western European economicand may even be persuaded tomore fully on matters of East-West trade and restrictions on the export ofmaterials, provided there is nothat Sweden is deviating from Itsof neutrality.


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