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28th May 2022

Nato and EU advised to streamline defence spending

As national budgets face cuts both in Europe and America, Nato and the EU need to get better at streamlining defence budgets and what the money is spent on, a group of experts chaired by former US foreign policy chief Madeleine Albright has recommended in a paper on the future of the military alliance.

"We take note of the fact that taxpayers are the same for most of the countries [in Nato and the EU]. It's important to be efficient and try to figure out ways where the two organisations can co-operate so there is not a duplication," Ms Albright said during a press conference on Monday (17 May) after having presented the report to Nato ambassadors.

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  • Former US foreign policy chief Madeleine Albright submitted a report on where Nato should go from here (Photo: Nato)

The 50-odd-page document entitled "Nato 2020" was drafted as a discussion paper for the upcoming Nato summit in Lisbon in November, where the 28 member states, out of which 21 are also EU countries, will adopt a new "strategic concept" outlining the priorities of the military alliance.

If up until now countries were mostly divided on the issue of Nato enlargement and relations to Russia, the money issue is likely to spark even bigger disagreements in the years to come, Nato diplomats say.

The organisation itself reportedly ran a deficit of "hundreds of millions" last year, as some European countries failed to come up with the necessary contributions for programs helping new members and candidate countries reform their security and defence systems.

Nato's budget of roughly €2 billion is formed of contributions from the national defence and foreign ministries, but the figure is much bigger if direct national expenditures are taken into account, for instance when a country sends troops to Afghanistan.

"Nato needs to spend more smartly," Ms Albright said, stressing that her group specifically asked Nato leaders to back a series of reforms and cut-backs envisaged by the organisation's secretary general, Danish former prime minister Anders Fogh Rasmussen.

European leaders should in fact "make the best out of the economic crisis" and use it as a "leverage for necessary reforms," Mr Rasmussen said during the same press briefing.

The report underlines that the main stumbling bloc in transforming static, expensive military forces in Europe has been "the lack of European defence spending and investment."

Only six of twenty-six European countries spend two percent or more of their gross domestic product on defence, the report notes, and only less than half are earmarking 20 percent of their military spending for investments in new technologies, as opposed to traditional personnel costs.

"The gap is especially large between US capabilities and the rest of Nato, an imbalance that if left unchecked could undermine alliance cohesion," the experts warn.

But with the Lisbon Treaty coming into force and more co-operation and EU competence with regards to research and development, including in the defence sector, Nato is also looking at Brussels for help, supporting for instance the bolstering of the EU's defence agency, which allows countries to aquire together equipment without overlapping.

So far, formal co-operation between the two Brussels-based institutions has been blocked by a dispute between Cyprus, an EU country which does not take part in the military alliance, and Turkey, which is in Nato but not the EU. The issue at stake is the northern part of the island, which Turkey occupied over 30 years ago in order to prevent the country from being annexed by Greece after a coup d'etat.

"Nato and EU leaders should do everything possible to prevent disagreements from interfering with effective cooperation between the two organisations," the Albright report recommends.

Missile defence

The expert group is also strongly in favour of Nato taking over the missile defence programme currently being developed by the US in Europe, a reflection of Washington's own budgetary constraints over the coming years.

"The new US phased, adaptive approach to ballistic missile defence provides an opportunity for the development of an effective Nato-wide strategy that would add to the defence of populations as well as forces," the report says, while stressing that the system is directed against threats from the Middle East, not Russia.

US President Barack Obama has cancelled plans by his predecessor George W. Bush to install missiles and radar in Poland and the Czech Republic, which had prompted fierce opposition from both Moscow and most domestic voters, opting instead for warship-based weaponry in the Mediterranean and a land-based system in Romania at a later stage.

Nato leaders will have to agree by consensus in November if they will fund this system along with the US, with some countries such as France or Luxembourg somewhat reluctant to commit further money, despite the overall non-US expenditure estimated at €150 million.

Russia, friend and threat

The expert group drafting the report had a hard time in trying to reconcile Europe's diverging views on Russia - between those who perceive Moscow as a threat and those who want to re-engage with the eastern neighbour.

"Although Nato members view Russia from diverse perspectives, the alliance is united in its desire to engage with the leaders of that country in order to prevent harmful misunderstandings and to identify and to pursue shared goals. The alliance does not consider any country to be its enemy. However, no one should doubt Nato's resolve if the security of any of its member states were to be threatened," the report says.

Contingency plans for the Baltic states, all Nato and EU members, are being drafted in case there should be a threat to their territory, which in reality could only come from Russia. But at the same time, the experts emphasise the need to co-operate with Russia on counter-terrorism, arms control and non-proliferation.

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