Sweden maintained its policy of neutrality during World War II. When the war began on 1 September 1939, the fate of Sweden was unclear. But by a combination of its geopolitical location in the Scandinavian Peninsula, realpolitik maneuvering during an unpredictable course of events, and a dedicated military build-up after 1942, Sweden kept its official neutrality status throughout the war. At the outbreak of hostilities, Sweden had held a neutral stance in international relations for more than a century, since the end of the Napoleonic Wars in 1814 and the invasion of Norway.Andrén 1996. P.34.

At the outbreak of the war in September 1939, twenty European nations were neutral. Sweden was one of only nine of these nations to maintain this stance for the remainder of the war, along with Ireland, Portugal,Portugal offered to honor its treaty with Britain but was declined. P. 23. Spain,Some Spanish troops fought in Russia but as the volunteer Blue Division. P. 45. Switzerland, and the microstates of Andorra, Liechtenstein, Vatican City, and San Marino. The Swedish government made a few concessions, and sometimes breached the nation's neutrality in favor of both Germany and, later, the Western Allies.

During the German invasion of the Soviet Union (June–July 1941), Sweden allowed the Wehrmacht to use Swedish railways to transport the German 163rd Infantry Division along with heavy weapons from Norway to Finland. Until 1943, German soldiers traveling on leave between Norway and Germany were allowed passage through Sweden—the so-called permittenttrafik. Iron ore was sold to Germany throughout the war and Germany owned several mines in Sweden that had been bought by German companies before the outbreak of the war. These mines were called Tyskgruvorna ("German mines"). For the Allies, Sweden shared military intelligence and helped to train soldier refugees from Denmark and Norway, to be used in the liberation of their home countries.Linder 2002. P. 38. It also allowed the Allies to use Swedish airbases between 1944 and 1945.

Swedish neutrality remains a subject of debate. Proponents argue that during the war, Sweden softened its policy against accepting refugees, admitting thousands of Jews and political dissenters from Norway and Denmark. Conversely, opponents such as Winston Churchill suggest that Sweden "ignored the greater moral issues of the war and played both sides for profit."

Background Political

Between 1523 and Sweden's final war with the Russian Empire in 1809, a state of war had existed between these two countries for 67 out of those 286 years. Russia was seen as the historical hereditary enemy of Sweden. In the peace that followed the Finnish War in 1809, all of Finland had been ceded to Russia and Sweden was reduced to two thirds of its former size.

As the end of the 19th century approached, and the beginning of the 20th began, Sweden, like many other nations, became beset by strikes and public disorder. Appalling working conditions were no longer tolerated and the working class was rising against the state. In 1908 alone, there were about 300 strikes in Sweden.Adolfsson 2007, p. 249. By 1917, Sweden's need for a new political system was apparent from these riots. Sweden had remained neutral during World War One but with a tendency to side with the Central Powers. Since the 1880s, the socialist movement in Sweden had been divided into two opposing groups: the revolutionary socialists, a communist movement; and the reformists, a social democratic movement – the latter of which being the larger of the two. In 1917, the rules of democracy were changed in Sweden, the electorate's size grew and in 1921, women were also allowed to vote.

But even these reforms were seen as far too radical by some conservatives. Some wanted strong leadership and did not believe in democracy. In the 1920s and 1930s, confrontations between employers and employees in Sweden continued. In 1931, this culminated with the Ådalen shootings, an incident where the military opened fire on a protest march. In the same year, a secret right-wing militia, the Munckska kåren, was exposed. It had recruited about 2000 men and had access to heavy weaponry. It was disbanded the next year.Adolfsson 2007, p. 304.

At the other end of the political spectrum, following the Russian Civil War the Russian Empire had become the Soviet Union and many Swedish communists were cooperating with this new Soviet regime, seeking to realize a world revolution. Compromise and a parliamentary system were thought to stand in the way of a more equal and just society.

A new cabinet led by the social democrats with Per Albin Hansson as Prime Minister took control in 1932. A policy of cooperation and consensus was pursued, which led to a furthering of the divide between the two socialist factions: the communists and the Reformist Left. The distance between these two, at least at the ideological level, became so great that the communists often referred to the social democrats as "the social fascists". Apart from a period termed "the vacation government" (Sw: semesterregeringen) between 19 June and 28 September 1936, Per Albin Hansson was to be the Prime Minister of Sweden until his death in 1946.

Military Sweden had very few tanks in the inter-war era. For a time, the entire armoured corps consisted of ten Stridsvagn mf/21s. This was a design based upon a German First World War tank and had been secretly purchased by Sweden in the form of tractor assembly kits.

In the Defence Act of 1936, it was decided to form two tank battalions. Captain Fale Burman, chief of Army Procurement (Arméns utrustningsdetalj) in 1937, commented:Linder 2006, p. 53.

To make sure training at the battalion level would be possible, machine gun–equipped tanks were purchased as well. By 1939, Sweden had 48 Czechoslovak-built tanks with machine gun armament and about 20 Stridsvagn L-60 tanks armed with a 20 mm main gun.Linder 2006, p. 54.

The Swedish Army had been organized into four divisions since the 1890s, with the regiments of northern Norrland and Gotland standing as separate units. This was outdated, and in 1942, a new military organization was adopted.Linder 2006, p. 52.

Pre-war trade

During World War II, Swedish industry had to supply an increased share of its own domestic goods owing to the British naval blockade of the North Sea, whilst satisfying the vastly increased demand for armaments. Before the war, the annual production of armaments was typically measured in tens of millions of Swedish kronor, but during the war, output exceeded SEK 1 billion (US$240 million).

Military balance Sweden's long-standing policy of neutrality was tested on many occasions during the 1930s. The challenges came from a strongly rejuvenated, nationalistic Germany. From 1919 until 1935, Sweden had been an active supporter of the League of Nations and most of Sweden's political energy in the international arena had been directed towards the League's preservation.

The Swedish non-aligned policy during this period was founded on the assumption that there were two opposing powers in the Baltic Sea region, Germany and the Soviet Union;Wangel 1982, p. 15. because these two powers needed to guard against each other, the hope was that they would only ever be able to deploy minor forces against Sweden or other non-aligned countries. It was this expectation which made the defence of a small country feasible. The Molotov–Ribbentrop Pact, signed at the end of August 1939 between Nazi Germany and the Soviet Union, upset this balance.

Pre-war preparations In 1936, the Swedish government started to heighten its military preparedness as the international situation worsened. Military spending in Sweden went from US$37 million in 1936, to $50 million in 1937, to $58.6 million in 1938, and then increased over fivefold to $322.3 million in 1939. During World War II itself, military spending peaked at $527.6 million in 1942.

Not only was the Swedish government buying material to strengthen its defences, it began drafting conscripts. On 6 May 1938, the government called up all those aged 15 for short periods of training. In addition to this, the Swedish Cabinet ordered that one quarter of those conscripted in 1938 should be retained for further training.

In 1940, the Home Guard was created. Its units were small groups of former soldiers who were equipped with rifles, machine guns, ammunition, medicine and uniforms. They had the option to buy additional materials such as skis, sweaters and marching boots. The Swedish Women's Voluntary Defence Organization had already been in existence since 1924.

While arming itself, Sweden felt that it was necessary to articulate and enforce its policy of neutrality. Per Albin Hansson's statement shortly before World War II began:

Georg Homin, a captain on the General Staff, stated:

War

When, in September 1939, Germany attacked Poland and both France and Britain declared war on Nazi Germany, Sweden declared itself a neutral country in regard to this escalating situation. An example illustrating this situation may be the failed Allied attempt to release Polish submarines (ORP Ryś, ORP Żbik, ORP Sęp) which were interned after they reached Swedish ports (requiring repairs of battle damage, unable to break the German blockade and sail to Britain).

On the outbreak of the Winter War between Finland and the Soviet Union in November 1939, Sweden declared itself to be "non-belligerent" in regard to this particular conflict, actively siding with Finland. This allowed Sweden to aid Finland economically, and with armaments. Sweden and Finland also jointly laid minefields in the Sea of Åland to deter Soviet submarines from entering the Gulf of Bothnia.Wangel 1982, p. 126.Åselius 2005, p. 166.

Foreign trade

Sweden was not directly attacked during World War II. It was, however, subject to British and German naval blockades and accidental bombings from the Soviets on some cities (e.g. Strängnäs), which led to problems with the supply of food and fuels. When Germany invaded Denmark and Norway in April 1940, coupled with a German blockade of the North Sea, every shipment had to be negotiated with both British and German authorities, which drastically reduced the volume of trade. Between 1938 and 1944, the Swedish import of petroleum products and coal decreased by 88% and 53% respectively, which led to severe shortages. Other critical items were natural rubber, alloy metals and food. This situation led to extensive rationing of fuels and food in Sweden and substitutes were developed and produced. Wood gas was used as a fuel for motor vehicles and shale oil as a substitute for bunker oil.Wangel 1982, pp. 444–465.

At the beginning of the war, agreements had been signed between Sweden and the United Kingdom and Nazi Germany in order to sustain vital trade; but in spite of this, and the fact that Sweden had declared itself a neutral country, Swedish shipping came under attack. Sweden's trade with Britain was cut by a total of 70%. Within the North Sea blockade, trade with Germany increased, until 37% of Sweden's exports were shipped to Germany. For very important goods such as ball bearings from SKF for the British aircraft industry, delivery was made by blockade runners, using rebuilt Motor Gun Boats, which could use winter darkness and high speed to penetrate the German blockade of the Skagerrak straits between Norway and the northern tip of Denmark.