https://crsreports.congress.gov
Updated October 25, 2023
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 1. The Nordic Countries: Key Facts
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
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 Security, 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
