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With Finland and Sweden now set to join NATO in the near future, tensions between the organization’s member states and Russia continue to heat up. That coincides with the initiation of the largest US military buildup in Europe since the Cold War; particularly concentrated in Eastern Europe and the Baltics.

The US is beefing up its military budget for 2023, potentially upping defense spending to nearly $850 billion if a proposal authorized by the Senate’s Armed Services Committee is adopted. That money may be desperately needed to refill America’s stockpile of weaponry and equipment, following huge aid packages to the Ukrainian military that have put a drain on US reserve supplies of rockets and missile systems.

Related ETF & Stocks: SPDR S&P Aerospace & Defense ETF (XAR), Raytheon Technologies Corporation (RTX), Lockheed Martin Corporation (LMT), Northrop Grumman Corporation (NOC)

Yesterday, the North Atlantic Treaty Organization (NATO) officially invited Sweden and Finland to become members of its alliance, formally ending decades of neutrality and putting further pressure on Russia’s northwestern flank. Finland shares a large land border with Russia, approximately 830 miles long, and Sweden is a short naval journey across the Baltic sea from Kaliningrad. Turkey had been the only NATO member state opposing new membership status for the two Scandinavian countries, but softened their stance after a week of negotiations.

According to The Guardian, Russian President Vladimir Putin responded to the news of Sweden and Finland’s new NATO status, stating “We don’t have problems with Sweden and Finland like we do with Ukraine… We don’t have territorial differences… If Finland and Sweden wish to, they can join. That’s up to them. They can join whatever they want.”

However, he warned “if military contingents and military infrastructure were deployed there, we would be obliged to respond symmetrically and raise the same threats for those territories where threats have arisen for us”.

Axios notes the number of U.S. troops deployed in Europe already soared to 100,000 in the wake of Russia’s invasion of Ukraine in February. Now, The US will double down on its growing presence in Europe, initiating the US’s biggest military expansion in Europe since the Cold War, including its first permanent troop presence in Poland. Other addition, highlighted by the Wall Street Journal, include new rotational deployments to Romania and the Baltic region. Probably the biggest and most visible part of the new deployments will be two more Arleigh Burke-class destroyers that will be homeported in Rota, Spain.

Additionally, Breaking Defense reports the House Armed Services Committee has recently authorized an $839 billion defense budget for fiscal 2023, following lawmakers approval of an amendment that added $37 billion for more ships, aircraft and other equipment on top of the White House’s budget proposal. However, the Senate Armed Services Committee would like to boost military spending by an even steeper $45 billion above the White House’s proposal, already authorizing an $847 billion defense budget.

Due to enormous amounts of material assistance to Ukraine, the American military is going to need all the money it can get to begin re-supplying itself.

Washington has sent north of $10 billion worth of arms to Ukraine since Russia invaded. That spend includes…

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