While you were asleep: Diving into Finland and Sweden’s potential Nato membership

As the war in Ukraine rages on and Russian President Vladimir Putin remains steadfast in his mission to continue with the onslaught on his country’s closest neighbours, other European nations have started the process of joining the North Atlantic Treaty Organisation (Nato)

Earlier this week, Finland and Sweden formally applied to join the military alliance as the West seeks to bolster its strength against Russian aggression.

Russia, for its part, believes that Nato membership will negatively affect ties with Finland, with whom they share a 1,340 km long border. But the Finns have been quietly insolating themselves against any potential Russian lash back for years, weaning themselves off Russian oil, gas and energy dependency.

Putin himself has said that Sweden and Finland’s Nato membership bid does not pose any “immediate security threats” to Russia and he has no problem with both joining the North Atlantic Alliance.

Still, Russia could retaliate against said nations’ imminent inclusion in Nato and geopolitical experts have been analysing what steps Russia could take in response.

But there is one roadblock to Finland’s and Sweden’s membership bid, and that is Turkey, a member of Nato themselves.

The Turkish government have made it clear they have issues with both joining the alliance and all 30 members of Nato must agree to allow new members to join.

Turkish President Recep Tayyip Erdoğan described Sweden and Finland as a “hatchery” for terrorist groups. Erdoğan’s main concern is a large Kurdish diaspora based in Nordic countries.

The Turkish-Kurdish conflict is a decades-old armed struggle between Turkey and various Kurdish insurgent groups who have demanded separation from Turkey or to secure greater autonomy and greater political and cultural rights for Kurds within Turkey.

Erdoğan has accused Sweden and Finland of “harbouring and financing the Kurdistan Workers party militant group and Syrian Kurdish YPG, who he deems to be “terrorists,” reports The Guardian.

But US President Joe Biden has welcomed Swedish and Finnish leaders to the White House and offered full support for each country’s membership application. Both Finnish president, Sauli Niinistö, and Swedish prime minister, Magdalena Andersson said they are in dialogue with Nato members, including Turkey and hoped to reach an agreement on their inclusion into the alliance.

In the currency markets, the SARB raising the repo rate by 50bps and a softer dollar saw the rand firm by 1.2% to close at R15.85/$ on the day. “The rand touched an intraday best level of R15.77 after the MPC decision before we saw importers take advantage of the stronger Rand. The local currency is currently at R15.82/$ and needs a sustained break of R15.75 to open the way to a move to the R15.50 target,” says TreasuryONE.