As NATO’s anti-submarine warfare (ASW) exercise „Merlin” commenced this week, a powerful new reality for the Baltic Sea was declared: with Sweden’s recent accession, the region has transformed into a strategic „lake full of NATO submarines” under unified command. Top alliance commanders underscored the dramatic shift in regional security dynamics, highlighting Sweden’s pivotal role.
A New Era for the Baltic: A NATO ‘Submarine Lake’
„With Sweden’s addition… that was our first opportunity to add another submarine nation to NATO. And now we have, basically, a Baltic lake full of NATO submarines,” stated U.S. Rear Admiral Bret Grabbe, NATO’s top submarine commander, during a press briefing aboard the Dutch frigate HNLMS Van Amstel in Stockholm. The Merlin exercise itself serves as a critical test of this new reality, gathering submarines from Sweden and Germany, surface ships and helicopters from France, Germany, the Netherlands, and Sweden, alongside a U.S. maritime patrol aircraft. Their mission: to hone all-domain ASW capabilities within the Baltic’s challenging shallow, mine-prone environment.
From Neutrality to Frontline: Sweden’s Pivotal Shift
For Sweden, its entry into NATO in March 2024 marks a profound transformation of its naval doctrine. The nation, formerly non-militarily aligned, has moved beyond merely defending its own shores. The Swedish Navy now assumes responsibility for safeguarding the alliance’s eastern flank, with its „border” effectively extended to the coasts of Finland and the Baltic States. As Rear Admiral Johan Norlén, the Swedish Navy Chief, articulated, „We are also defending our nations on the other sides… The border is on the eastern shore right now.”
The Contested Waters: High Stakes in a Shallow Sea
This strategic reorientation positions Sweden as a frontline state in the Baltic, a cluttered waterway with an average depth of just 200 feet. While ideal for ASW, these shallow waters are also highly vulnerable to a spectrum of Russian hybrid threats, including covert submarine incursions, sabotage by shadow fleets, and attacks on critical infrastructure like undersea cables.
Open-source intelligence suggests Russia typically operates two to three Kilo-class conventional diesel-electric submarines from bases such as Baltiysk in the Kaliningrad exclave. Admiral Grabbe noted the current presence of „a handful of Kilo diesel submarines in the Baltic.” However, NATO’s combined strength offers a significant deterrent. Grabbe emphasized the alliance’s impressive numerical superiority, with a reported three- or four-to-one ratio of NATO ships to adversary vessels in the Area of Responsibility, calling it „quite an impressive deterrent feature that we have when we’re working together.” NATO’s advantage is further amplified by its multi-mission submarines, capable of intelligence, surveillance, reconnaissance (ISR), special forces operations, and future unmanned missions.
Subsurface Might Meets Budgetary Headwinds: The A26 Saga
Sweden’s conventional submarines, particularly the renowned Gotland-class, bring unique value to NATO’s arsenal with their stealth capabilities and advanced air-independent propulsion (AIP) systems. These boats boast a storied history, famously „sinking” the U.S. Navy aircraft carrier USS Ronald Reagan in a simulated attack during a 2005 exercise.
Yet, an aging fleet and new NATO commitments necessitate modernization. Sweden is actively investing in new submarines and surface combatants while upgrading existing assets. However, chronic delays and escalating costs threaten to create capability gaps just as regional tensions surge.
Currently, Sweden operates three upgraded Gotland-class and one Södermanland-class submarines, alongside four Visby-class stealth corvettes—all optimized for Baltic ASW with quiet propulsion and sophisticated sonars. The next-generation A26 Blekinge-class submarines (HMS Blekinge and HMS Skåne) are under construction by Saab Kockums. These Stirling AIP-equipped vessels are designed with multi-mission portals for divers and unmanned underwater vehicles (UUVs), torpedo systems, and seabed warfare tools, making them ideal for the Baltic’s littoral zones and protecting vital underwater infrastructure.
Despite their promising specifications, the A26 submarine program has faced significant setbacks. A firm order placed with Saab in 2015 initially projected deliveries between 2022 and 2024. By 2021, the budget had risen, and deliveries slipped to 2027–2028. More recently, in mid-October 2025, Saab and the Swedish Defence Materiel Administration (FMV) confirmed a new renegotiation, revealing costs soaring to 25 billion kronor ($2.6 billion)—over a 100 percent increase since 2015—with the two new submarines now delayed to 2031 and 2035 respectively.
When pressed by Breaking Defense regarding these increased costs and delays, the Swedish naval chief declined to comment directly, stating, „I can’t really comment on that, because that is actually a question for the Defence Material Administration and the industry.” The Swedish Defence Materiel Administration (FMV), in a written statement upon the announcement of the new timeline and price tag, acknowledged the „very complex project associated with economic and technical risks” involved in building a new submarine class, though it added that manufacturing has progressed to a point where „these risks are at a significantly lower level.”
Beyond Submarines: Sweden’s Ambitious Frigate Program Faces Delays
In a further move to bolster its maritime defenses against evolving regional threats, Sweden is also preparing to introduce larger Luleå-class frigates, significantly surpassing the size of its current Visby-class corvettes. Rear Admiral Norlén revealed that these vessels could measure around 120 meters (nearly 400 feet), signifying a strategic shift towards more robust and versatile naval assets.
The decision is primarily driven by the need to integrate advanced air defense systems. „To harbor these kinds of air defense systems—silos and weapon systems by itself, is quite large. Then you need a bigger ship,” Norlén explained. The expanded size will also accommodate future technologies, including unmanned systems.
However, this new surface combatant program is also experiencing delays. Four new larger frigates are planned to replace older ships and complement the Visby-class vessels, which are undergoing mid-life upgrades into the 2040s, including the addition of air defense systems like Sea Ceptor. Saab and British Babcock are strong contenders for the design phase, with France’s Naval Group and Spain’s Navantia also bidding for the contract. The Swedish public broadcaster noted Navantia as a „dark horse” due to its potential for quicker delivery. The first two new frigates are anticipated by 2030, with all completed by 2035. The total price tag for this program remains undisclosed.
When questioned about the priorities—timeline, capacity, or economy—for the frigate program, Sweden’s naval chief emphasized a balanced approach: „I would say, all three of them, economy as well,” Norlén affirmed. An announcement regarding the contract is expected „in a short time,” though no specific date was provided.
As Sweden fully integrates into NATO’s collective defense, its naval modernization efforts are critical to maintaining stability in the strategically vital Baltic Sea. While the vision of a „NATO lake” is becoming reality, navigating the complex waters of procurement delays and cost escalations will be key to realizing its full potential.
