In the generation before the French Revolution the two Scandinavian kingdoms and their appendages—except for Iceland, whose population fell to 40,000 after the great volcanic eruption of 1783—continued to enjoy the relative calm and prosperity which had followed the end of the Great Northern War in 1721. Copenhagen flourished as the political and economic capital of the ‘twin kingdoms’ of Denmark and Norway, with the duchies of Schleswig and Holstein loosely but (after 1773) completely attached to the Danish crown. Stockholm, though overshadowed by St Petersburg, was still the centre of what was probably the foremost second-class power of Europe, one which stretched eastwards across the Grand Duchy of Finland and retained a lodgment on the south shore of the Baltic, Pomerania west of the River Peene, together with the island of Rügen.

Since the death of Charles XII of Sweden neither of the Scandinavian powers had been strong enough to conduct an independent foreign policy of much importance to the rest of Europe, but they were regarded as useful assets in any major combination. Thus Catherine the Great in March 1765 concluded an alliance with Denmark which was not seriously interrupted for more than forty years, one of its original purposes being the maintenance of the free constitution of Sweden, the form of government by the four Estates which gave free play to party politics and foreign subsidies. For ten years (1762–72) Catherine held Sweden too within her ‘northern system’, a position in which the Swedes could continue good relations with Britain but not with France.