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1 1 (October 25, 2023)

handle is hein.crs/govenhc0001 and id is 1 raw text is: Congressional Research Service Informing Ih legisative debabe sin'e 1914 The Nordic Countries and U.S. Relations Political and Economic Overview The five Nordic countries-Denmark, Finland, Iceland, Norway, and Sweden-share deep historical, linguistic, and cultural ties and many political and economic similarities. They are all stable democracies with parliamentary systems of government and prosperous market economies with relatively high standards of living. With a collective population of over 27 million people, the Nordic countries have a combined gross domestic product (GDP) of over $1.9 trillion (see Figure 1). They have extensive social welfare systems and relatively high tax rates but are considered to be innovative, business-friendly countries. The Nordics generally rank high on global competitiveness and innovation indexes. Foreign trade plays a key role in their economies. They also enjoy substantial natural resources. Norway in particular benefits from vast North Sea oil and natural gas deposits. Figure I. The Nordic Countries: Key Facts Membership(s)* NATO European Union (EU) Both *Sweden applied to in'N,'A O n May 2022; its accession remains pendng. A Population $ GDP (nominal, 2022) Iceland4 A 376,0Q Norway Finland $28 billon 15.4 min < 5 millio Source: Graphic by CRS, based on Economist Intelligence Unit data. The Nordic countries have been affected economically by the Coronavirus Disease 2019 (COVID-19) pandemic and Russia's war against Ukraine. GDP contracted in all five Nordic countries in 2020 due to the pandemic, rebounded in 2021, but slowed in 2022 and 2023 amid the conflict in Ukraine, elevated energy prices, high inflation, and rising interest rates. Aging populations and other demographic and societal changes raise questions about the long-term sustainability of the Nordics' social welfare systems. Migration policy is a key political issue in the Nordics. The 2015-2016 spike in refugees and migrants in Denmark, Finland, Norway, and Sweden-mostly from the Middle East, Afghanistan, and Africa-strained education, housing, and welfare systems. Most Nordic governments introduced tougher asylum policies and curtailed some welfare benefits. The refugee and migrant waves also stirred debates about identity, integration, and security (in relation Updated October 25, 2023 to both terrorism and crime). Refugees from Ukraine, however, generally have been welcomed by Nordic governments and societies. Over the past decade, concerns related to migration, globalization, and other political and economic challenges have generated voter distrust of established center-right and center-left political parties throughout the Nordics and fueled the rise of populist parties. Most anti-establishment, populist parties in the Nordics are on the right or far right and hold nationalist and anti-immigrant views. In Sweden, a far-right party has provided parliamentary support for a center-right government since October 2022 (in exchange for tightening immigration, asylum, and criminal justice policies). Following Finland's April 2023 election, a far- right party with nationalist, anti-immigrant views joined a coalition government led by a center-right party. Foreign and Security Policies The Nordic countries generally share an international outlook that prioritizes cooperation, both among themselves and with the international community. The Nordics work together on regional issues in the interparliamentary Nordic Council and the intergovernmental Nordic Council of Ministers. They promote Nordic defense cooperation through NORDEFCO, a forum that brings Nordic military officials together. Since the 1950s, the Nordic Passport Control Agreement has allowed Nordic citizens to travel freely and reside in any Nordic country. The Nordics also are strong proponents of the United Nations and multilateral solutions to global challenges. They are frequent contributors to international peacekeeping missions, major providers of development and humanitarian assistance, and supporters of U.N. efforts to address climate change. As shown in Figure 1, the five Nordic countries are either NATO members or aspire to join NATO. Although traditionally militarily nonaligned, Finland and Sweden applied for NATO membership in May 2022 given growing security concerns about Russia. Finland joined NATO in April 2023, but Sweden's accession has faced delays (see below). Nordic membership in the European Union (EU) varies. Finland is the only Nordic country that uses the euro, the EU's common currency. Although not in the EU, Iceland and Norway participate in the EU's single market and Schengen area of free movement. Nordic Securty, Russia, and NATO Since 2014, Russia's aggression in Ukraine and increased military activity near Nordic borders have alarmed Nordic officials. Nordic countries responded by enhancing defense cooperation and working with NATO to strengthen deterrence. Since Russia's renewed invasion of Ukraine in February 2022, all Nordic governments have provided military, financial, and/or humanitarian assistance to Ukraine and have backed increasingly punitive sanctions

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