Despite extensive reforms in personnel and logistics, the finances of the Swedish Armed Forces (SAF) remain problematic. At the same time, new threats in the Baltic Sea area demand new defence capabilities and the SAF administration must adapt rapidly, too. Although the defence budget has been increased by 10 billion Swedish Kronor (SEK) for the period 2016-2020, a gap persists between capability needs and financial resources. On the one hand, reforms are necessary, but consume resources, which hinders the reduction of capability gaps. On the other hand, costsavings from international partnerships have reached a dead-end, while partnering remains key in defence policy. Although previous reforms have focused on administrative efficiency, they have led to unwanted effects, such as loss of trust in professionals, increasing costs, and misleading incentives. What kinds of changes would it take to escape from this depressing state of affairs?