Bi-Weekly Geopolitical Report – NATO’s Baltic Vulnerability: Implications for Europe (June 9, 2025)
by Patrick Fearon-Hernandez, CFA | PDF
When Sweden and Finland finally joined the North Atlantic Treaty Organization in 2024, the alliance gained important new territory and military capabilities on its northeastern flank. However, the expansion hasn’t necessarily been enough to fully deter potential Russian aggression against NATO in that theater. Indeed, NATO’s expansion has prompted Russia to increase its military resources there. Northeastern Europe and the Baltic Sea remain an important potential flashpoint for conflict between the West and Russia. In this report, we show how NATO remains vulnerable to Russian threats in the northeast. Against the backdrop of President Trump trying to reduce the United States’ role in European defense, we also examine how the Russian threat is prompting shifts in Europe’s defense and economic policy. We wrap up with a discussion of the resulting investment implications.
Note: The accompanying podcast for this report will be delayed until later this week.