NATO’s Secretary General Bangs The Tin Cup

As the Bible teaches us, it is impossible to make bricks without straw. It also is impossible to have a modern, capable military without money. When Pharaoh ordered the Israelites to make bricks without straw, God saved the Chosen People by performing a miracle. Today, there is nothing that will save Western militaries from creeping decline and irrelevance but another miracle: more money.

The problem is particularly severe in NATO. Even during the Cold War, when the Alliance faced the very real threat from the Soviet Union and the Warsaw Pact, it was difficult to get some member countries to meet agreed-to targets for defense spending. With the end of the Cold War virtually all of NATO took the opportunity to extract a “peace dividend” from their military budgets. Five years of recession and economic stagnation has taken defense budgets across Europe to below two percent of GDP. This is an insufficient level of spending to ensure that the Alliance can meet likely military challenges, even with U.S. involvement.

There is an “iron law” in force development which says the more sophisticated the military the higher the costs of people, equipment and training. In part, this reflects the unique demands placed on military goods and services that raise their costs relative to commercial items. Another reason is the set of government imposed regulations and restrictions that distort the market and limit the use of cost-reducing measures common in the commercial marketplace. In the U.S., the regulatory burden has been estimated to increase prices by 20 percent or more. A third reason is that modern militaries are volunteer-based, staffed by professionals who demand serious wages and deserve generous benefits. Finally, even with the best equipment and people, there is a need for continuous, costly training. In fact, in an Alliance of 28 member nations, collaborative training is particularly important. As a consequence of these factors, the cost of maintaining a capable military has increased even as the size of such establishments has fallen.

NATO has tried to find work-arounds for the unwillingness or inability of many of its members to spend even the minimum on their militaries. At the Alliance’s 2012 Chicago Summit, the Secretary General, Anders Fogh Rasmussen announced the Smart Defense Initiative which sought to improve the overall effectiveness of a shrinking force structure and scarce investments through greater collaboration and a pooling of assets. This was complemented by the Connected Forces Initiative which proposed greater integration through enhanced training and exercises across the Alliance. There are agreements to share aerial refueling and transportation assets and NATO collaborative investments in such areas as Airborne Ground Surveillance.

Unhappily, as defense budgets have continued to decline, with the U.S. facing a 1 trillion dollar reduction in projected defense budgets over ten years, these measures are just not enough. The Secretary General has been forced to take out his tin cup, begging his members to spend what is necessary for their own defense and that of the Free World. In a recent speech, Rasmussen warned that its members had to increase defense spending, if the Alliance was to remain relevant.

NATO is rapidly approaching a point of no return beyond which it will lack not just the military capabilities to meet current contingencies but also the industrial base, R&D facilities and training establishments with which to build future forces. This is ironic because since the end of the Cold War, the Alliance has proven itself remarkably flexible and effective in range of operations from Afghanistan to the Horn of Africa and, most recently, Libya. It would be the height of strategic folly for the members of NATO to allow this unique organization to fade away in a misguided effort to save a few dollars, Euros or pounds.