Defense spending: Fighter jet deal set to bring tens of millions in currency losses again

Finland’s F-35 fighter purchase is expected to generate another tens of millions of euros in exchange-rate losses next year, according to a forecast by the Ministry of Finance.

The ministry estimates that currency-related costs will reach €86 million in 2027. The figure remains provisional and may change. Based on the current estimate, exchange-rate losses between 2022 and 2027 will exceed €600 million.

Next year’s losses are expected to be similar to last year’s. The amount would be enough to cover Finland’s annual military crisis-management costs in full. Currency movements have been identified as the most significant known financial risk affecting the total price of the fighter acquisition.

The risk exists because the purchase contracts were signed in U.S. dollars. When payments are made, the difference between the exchange rate set in the contracts and the rate on the payment date produces either a currency gain or a loss. The final cost will become clear only after the last installment is paid in 2030.

The fighter acquisition is expected to cost €1.45 billion next year. In addition to the main order authorization and exchange-rate expenses, the sum includes €167 million in indexation costs. Those costs reflect changes in labor and raw-material prices during the ten-year payment period.