Photo: Martin Ridne

Four years after Russia’s full-scale invasion of Ukraine, Swedish political, military, and economic leaders gathered at Kulturhuset in Stockholm on February 16, 2026, to discuss what it will take to secure a lasting outcome. The message was clear: Sweden’s support for Ukraine is not only solidarity – it is an investment in Sweden’s own security and in Europe’s stability.

Minister for Defence Pål Jonson described a conflict shaped by rapid technological change. Together with Chief of Operations Vice Admiral Eva Skoog Haslum, he outlined how the war has become a “transparent battlefield,” where drones, satellites, and electronic warfare make it difficult to hide troops or equipment. Innovation cycles that once took years now unfold in months.

Swedish-donated systems such as the CV90 combat vehicle and the Archer artillery system have performed well in Ukraine. According to Jonson, their design – adapted to counter Russian systems in harsh northern conditions – has proven highly relevant on today’s battlefield.

Despite relatively stable front lines, Vice Admiral Skoog Haslum emphasized that the situation is far from static. She described the front as a series of highly dangerous “kill zones,” where constant surveillance and precision strikes make movement risky. She also pointed to Ukraine’s unexpected success in the Black Sea, where it has weakened Russia’s naval presence without relying on traditional large warships.

Economic pressure may decide the outcome

While military developments shape the daily fighting, the long-term outcome may depend on economic endurance. Torbjörn Becker, Director of the Stockholm Institute of Transition Economics at the Stockholm School of Economics, argued that the West holds a decisive structural advantage.

Photo: Martin Ridne

“Russia’s economy is roughly ten times the size of Ukraine’s,” Becker said. “But when you compare Russia to the combined economic power of the EU and the United States, the ratio is closer to 1 to 20. If political support holds, the resources are there to sustain Ukraine over time.”

Becker described Russia’s economy as highly dependent on oil revenues. When global oil prices fall – or when sanctions and price caps limit export income – the Russian state budget quickly comes under strain. At the same time, Russia increasingly relies on China for advanced components used in drones and missiles.

“This dependence makes Russia vulnerable,” Becker noted. “It risks becoming economically subordinate to China in the long run.”

Photo: Martin Ridne

Although Russia’s GDP has not collapsed, Becker highlighted warning signs. The country has drawn down much of its liquid reserves in its national welfare fund, and domestic interest rates have risen to around 20–25 percent. Such high rates put pressure on banks and businesses and increase the risk of financial instability. A banking crisis, Becker suggested, would be one of the fastest ways to weaken Russia’s ability to finance the war.

Planning for Ukraine’s recovery

Ukraine also faces serious economic challenges. The country currently spends more than half of its state budget on defense, and public debt exceeds 100 percent of GDP. Becker argued that a major debt restructuring will likely be necessary to ensure long-term stability.

Photo: Martin Ridne

He also pointed to the roughly USD 300 billion in frozen Russian central bank reserves held abroad. Using these funds to support Ukraine, he argued, would provide a more sustainable financial foundation for reconstruction.

“The main obstacle is not technical or legal,” Becker said. “It is about political coordination and will.”

As the seminar concluded, participants agreed that the war has forced Europe to rethink both military preparedness and economic resilience. The lessons learned – from rapid battlefield innovation to the use of financial tools as strategic pressure – are likely to shape European security policy for years to come.

Contact:
Torbjörn Becker, Director, Stockholm Institute of Transition Economics, Stockholm School of Economics
Email: torbjorn.becker@hhs.se
Phone: +46 8 736 96 76