STOCKHOLM – Sweden’s investment in new Gripen fighters and diesel-electric submarines is being driven forward by increased Russian aggression in the Baltics, the country’s defense minister says.

Speaking here May 17 on the eve of the rollout of the prototype Gripen E fighter jet, Defense Minister Peter Hultqvist said Sweden was enhancing its capabilities and deepening partnerships with its neighbors in reaction to Russia’s aggression and moves into Eastern Ukraine and the Crimea.

“We have seen a lot of investments in their [Russian] armed forces, and we have also seen that they are ready to use these capabilities to fulfill their political goals,” Hultqvist told reporters May 17.

“There are more in exercises and intelligence activities on our neighbors. We and the Baltic States feel a level of tension toward Russia.”

The Swedish Parliament has already approved a 10.2 billion Swedish krona ($1.26 billion) hike in defense spending until 2020. As well as increasing budgets for investments in equipment, this has also allowed regular exercises with other Scandinavian armed forces. In addition, it will clear the way for the creation of a battle group on the Baltic island of Gotland, with mechanized and armored units. It will be formed in 2018.

“We think it is necessary to have this level of capability for the situation we now have,” Hultqvist says

However, the current Swedish government has ruled out NATO membership. Instead, relationships are deepening with Finland, with plans to use each other’s airfields and harbors, as well as conducting additional exercises. The defense ministries in Helsinki and Stockholm are now securely linked, Hultqvist said.

“What we are doing with Finland is something we have never done before. We are stepping forward, trying to handle a new situation,” he said.

The situation has prompted Sweden to focus more on national defense rather than supporting international operations, as when Swedish Gripens flew reconnaissance missions over Libya in 2011. Even so, Sweden still maintains troops in Mali and Iraq, where they train local Peshmerga fighters.

Hultqvist also said Europe would see the start of “negative processes” if the U.K. decides to leave the European Union. A voter referendum on EU membership is set for June 23.

“We need Britain in the European Union … as a partner in the EU,” Hultqvist said. “What we definitely need now is unity, and it is acting together that makes the situation stabilized.”