Germany, which is coordinating EU and NATO forces, began the exercises, which will involved 3,600 sailors and troops, 40 ships and 30 aircraft from more than a dozen countries, on Monday.
The manoeuvres, which involve significant cooperation involving EU states, including those which are not members of NATO, are intended to focus on keeping crucial sea routes open in times of conflict.
Captain Sven Beck told reporters aboard the German frigate Hamburg: “The Baltic Sea is our front yard, so we and our neighbors obviously want to be able to move freely on the sea lines of communication.
The move comes after Berlin found itself under increasing pressure from US President Donald Trump to play a bigger military role at a time, while retired US General Ben Hodges, former Commander of US Forces in Europe, has said the US “does not have the capacity to do everything it has to do in Europe and in the Pacific to deal with the Chinese threat”.
Western countries are concerned about rising tensions in the Baltic region, home to Lithuania, Latvia and Estonia, all former members of the USSR.
Russia has deployed missiles to its Kaliningrad enclave, sandwiched in between Lithuania and Poland, which are capable of reaching Berlin.
NATO has thousands of troops in the region and Sweden – which like Finland is not a member of NATO but is an EU member – is remilitarising its Gotland island.
Moscow says it is not threatening anyone and has the sovereign right to deploy weapons on its own territory including in Kaliningrad.
During the exercises, naval vessels practiced clearing mines from harbour entrances, escorted cargo ships through contested waters and simulated using force.
Mr Beck added: “The aim of our exercise is to secure the sea lines of communication, those lines that you can’t see but that guarantee trade and prosperity in the countries along the Baltic coast.”
Germany has been trying to bring the navies of NATO and EU countries on the Baltic closer together since Russia annexed Crimea from Ukraine in 2014, starting with regular meetings of fleet commanders the following year.
It is also constructing a new naval command center in Rostock which is designed to house a permanent staff of international officers.
In times of crisis, this will be able to lead NATO or EU operations in the Baltic from 2023.
Germany has traditionally been reluctant to become involved in military exercises ever since the end of the World War 2.
But speaking last month, Germany’s Defence Minister Ursula von der Leyen said last month as the biggest NATO and EU country on the Baltic, Germany must “take more responsibility for the region”.
Other Western countries have welcomed the German initiative.
Finnish navy chief Admiral Veijo Taipalus said: “We are very happy that Germany has taken the lead in that sense.”
Coordination was necessary, not least because Finland and Sweden are not able to access intelligence restricted to NATO members.
Captain Beck said: “We don’t have a big navy, but in relation to the Baltic countries it is huge.
“So we are happy to take the responsibility.”