The North Atlantic Treaty Organization (NATO) faces many strategic challenges based on the international security environment. As an alliance at war, not only does NATO have to confront an uncertain future in Afghanistan, but also shadowy threats of proliferation of weapons of mass destruction, cyberwar, and terrorism. The 21st century promises to become an even more complex environment over time, while national resources for defense are dwindling. Both sides of the Atlantic face budgetary crisis. Challenges to the euro and potential default of nations threaten Europe’s economic unity. The United States borrows 40 cents on the dollar to finance its entitlements and wars, with no political solution in sight. Confronting challenges to security with sparse resources forms the context of NATO’s strategic situation.

In light of that test, the heads of state and government, the political leaders of NATO, met in Lisbon in November 2010 and agreed on a new strategic concept for the Alliance, entitled Active Engagement, Modern Defence. This concept not only reaffirmed the collective defense of the Alliance, but also established an ambitious level of effort, particularly given the current low level of national investment in NATO via defense budgets, and the significant economic challenges that most member states face. Some details of this strategy are outlined in this article.

This strategic statement offered a new concept for a new century, and was immediately put to the test with the NATO operation in Libya, Active Endeavor. NATO demonstrated a core tenet of the new strategic concept by executing aggressive crisis management. Active Endeavor provided air cover over Libya to protect citizens and enforced an arms embargo on the high seas to prevent resupply of weapons to the regime. Libya established a new realm of the possible with the new strategic concept in place and reaffirmed the Alliance’s stated purpose of reaching beyond its own territory proper to ensure the lasting security of the member states. But the operation simultaneously revealed significant flaws in capability that have forced reconsideration of the way the Alliance will develop resources in the future.

Since Libya, the growing pressure of the Eurozone crisis leads to questions about the viability of the strategic concept itself given the limited focus it gave to resource use. How will the level of ambition in the concept be met by members who are giving less, not more, to the needs of the Alliance? How will the Alliance restore balance among the contributions of its members, when the U.S. share is openly acknowledged to be around three-quarters of the whole? This article argues that the constraints of Alliance resources should force a reconsideration of the strategic concept itself, both to incorporate as a stated purpose the concept of “smart” defense, and to consider a more limited level of ambition, focusing on less security through crisis management.

Extended Reach and Limited Resources

Active Engagement, Modern Defence was released from the NATO Lisbon Summit (November 19–20, 2010). At the time, its concepts reflected an achievement in consensus and forethought, as the heads of state and government reaffirmed their commitment to the bedrock principle of collective defense, while expanding their strategic ambition to include out-of-sector missions, missile defense, cyber defense, access to the global commons, counterproliferation, counterpiracy, countertrafficking, and modernization. Stating that nuclear weapons should ideally be abolished, the Alliance reaffirmed its commitment to nuclear weapons as an instrument. The heads of state agreed to implement ballistic missile defense over the populations of Europe and, in the same vein, wrestled with their ongoing partnership with Russia. All of these missions were affirmed at the same time that operations in Afghanistan demanded great effort. All in all, this was a path-breaking summit with a strategic document to match: Alliance ambition toward the circumstances of a new century.

The affirmation of three “essential” core tasks formed the heart of the strategic concept. The increased level of ambition for the Alliance lies between the lines that announce these tasks.

Collective Defense. This task affirms Article 5 of the Washington Treaty—the charter document of the Alliance—with the addition of a goal to deter and defend against emerging challenges. This goal of combating emerging challenges is what takes the Alliance out of sector and into where they emerge, whether in Libya, the Horn of Africa, or Afghanistan. The task emphasizes expeditionary operations by modernized and deployable conventional forces.

Crisis Management. This task addresses international crises affecting the Alliance before and after they erupt, stops ongoing conflicts before they affect security, and consolidates stability. It commits the Alliance to a wide range of tasks in operational environments that extend beyond territorial boundaries.

Cooperative Security. This task encompasses security cooperation, arms control, nonproliferation and disarmament, and expansion.

At the end of the list of core tasks and principles, there is this statement: “In order to carry out the full range of NATO missions as effectively and efficiently as possible, Allies will engage in a continuous process of reform, modernization and transformation.”¹ This is the only reference to resources in the core principles. This short statement, buried at the end, seemingly implies a limited focus in the strategic concept on the potential means needed to execute such an advanced strategy. From this simple statement, our analysis must determine whether the Alliance is postured for success in the near term against evolving international threats and a threatened international economy.

Closer review of the strategy seems to confirm such lack of fidelity regarding strategic means. The Alliance confirmed its desire to reform, modernize, and transform to meet the operational needs of worldwide commitments. NATO required resources for this new set of missions, and the Allies affirmed their desire to reduce unnecessary duplication, develop and operate jointly, and preserve and strengthen common capabilities. Beyond these broadly stated goals of transformation, not much detail is offered in the strategic concept about what specific means are available to execute the strategy.

This inattention may stem from the economic distractions of the heads of state when the document was written, or it may be intentional. At the time, the European economy was struggling with the effects of the international downturn from 2008, the threatened default of Greece and perhaps more European countries, and the growing need for rescue measures. Declining defense budgets and reduced contributions to Alliance operations and modernization were already a contemporary trend. So the Allies faced a significant challenge—and how to deal with it makes no appearance in the strategic concept. This could mean that the omission of detail regarding Alliance resources was necessarily intentional. Consensus concerning Alliance resources may have been just too difficult. Whatever the cause, the concept was short on details of how to deal with a burgeoning resource crisis, and nothing has rectified the imbalance since. This became clearer as NATO engaged Libya.

NATO and Libya

Within months of the promulgation of the new strategic concept, NATO entered an unexpected phase of execution, Operation Unified Protector. This operation both offered a glimpse of the future potential of the Alliance to react quickly to emerging threats, and a reminder of how the previous lack of resource commitment left the air campaign short of precision munitions; intelligence, surveillance, and reconnaissance (ISR); intelligence fusion; electronic warfare capability; and air component logistic support. Following a successful and fairly rapid conclusion on October 31, 2011, the pundits and academics began to debate the relevance of the Alliance.²

Alliance proponents, such as the NATO Secretary General Anders Fogh Rasmussen, Supreme Allied Commander Europe Admiral James Stavridis, USN, and U.S. Permanent Representative to NATO Ambassador Ivo Daalder trumpeted the success and sought means to address shortcomings in the future. Their reviews echoed the themes that NATO responded quickly and was ultimately successful in reaching the goal of protecting the Libyan people, but the success revealed stress fractures in the Alliance. These shortcomings were those of resources as outlined above, limited member participation (only 14 of 28 members participated), and reliance on the United States for precision munitions and ISR. Unified Protector provided the first evidence of a mixed record with the new strategic concept in practice.³

The Gates Challenge

These various assessments crystallized in a confrontational moment in Brussels at the NATO Defense Ministerial in June 2011. Departing U.S. Secretary of Defense Robert Gates offered his colleagues a candid assessment of the potential future of the Alliance. He echoed the assessment that prospects in Afghanistan were improving and that Libya was a qualified success for NATO, but he also offered a warning. Highlighting the increasing imbalance of member contributions in support to NATO, to the extent that the U.S. accounted for more than 75 percent of NATO defense spending, Secretary Gates warned of a potential retrenchment by the United States. This would come from increased budget pressure to the Congress. He called for three positive things to happen to ensure a solvent future for the Alliance: making a serious effort to protect defense budgets from being further gutted in the next round of national austerity measures, better allocating (and coordinating) the resources the Alliance does have, and following through on commitments to the Alliance and to each other.⁴

Given the NATO standard of consensus, bringing these issues into the open marks Secretary Gates’s departure as a brave episode of truth-telling. The idea that the Alliance really needed a more robust commitment from its European members in order to survive the challenges of the 21^st century struck home, at least in academe and the media. Secretary Gates’s remarks also serve as a call to reexamine the relevance of the strategic concept. He brought into stark contrast the problems of an alliance with grand ambitions yet an anemic resource reality. In his view, the Alliance still suffers from strategic shortcomings in procurement, training, logistics, and sustainment. He openly linked the decreasing level of investment on the part of the European community, the lack of strategic and operational enablers as called for by the strategic concept, and the potential that U.S. leaders in the future would not be willing to continue to invest as strongly in the Alliance when they have domestic budget problems of a crisis nature. Would the Alliance change its ways, and pay for what it wanted to do?

Secretary General Shapes a Response

Fortunately, the Alliance seems to have a leader who addresses problems strategically and openly. Secretary General Rasmussen repeatedly addresses the problem of low investment in the face of expanded strategic ambition, seeing it as a threat to the future viability of the Alliance. He uses a variety of forums, some outlined below. The solution to the problem of limited resources most often repeated by Secretary General Rasmussen is the concept of “Smart Defence.” The concept of Smart Defence was officially promulgated by the heads of state and government at the Chicago Summit in May 2012 in their “Summit Declaration on Defence Capabilities: Toward NATO Forces 2020.” How Secretary General Rasmussen led them toward the concept, and how they thus validated the strategic concept reached in Lisbon, follows.

The Secretary General’s timely article in Foreign Affairs addressed the lessons of Libya and the relative decline in defense spending of Europeans in a widely read forum.⁵ Rasmussen cited statistics of a 20 percent decline in defense expenditure at a time of simultaneous 55 percent growth in gross domestic product (GDP) for European NATO members. Rasmussen emphasized both the potential loss of the chance to be relevant in a changing world, and the potential of turning the United States away from Europe in the same way as outlined by Secretary Gates.

In outlining solutions to this general problem, Rasmussen offered the idea of Smart Defence and began to list its key characteristics, without offering a precise definition. This softness of concept probably allowed Alliance partners to interpret Smart Defence for themselves, within national constraints, as they moved toward consensus acceptance. Smart Defence, according to Rasmussen, “is about building security for less money by working together and being more flexible.” It charges member nations to set spending priorities on the basis of threats, cost-effectiveness, and performance, since they cannot afford everything. Smart Defence includes the key idea of NATO nations working in “small clusters to combine their resources and build capabilities” with the Alliance serving as a matchmaker for the partners. Rasmussen then concluded that he had been trying to engage the transatlantic partners in this strategic dialogue of smarter use of resources ever since the Lisbon Summit, since what NATO requires is an agreement that results in deployable and sustainable capabilities.

Secretary General’s 2011 Annual Report

In his first Secretary General’s annual report, Rasmussen returned to many of the ideas in his Foreign Affairs article. He again cited statistics about the low level of member investment in defense, stating that, for 2011, annual defense expenditures for 18 of the 28 Allies were lower than they had been before the global economic crisis began in 2008. Furthermore, he outlined that only 3 of the 28 member nations were at the required level of defense expenditure required by the Alliance (2 percent of GDP). Levels of investment in modernization were similarly low. The U.S. share of NATO expenditures grew to 75 percent.⁶

By the time of Rasmussen’s annual report, Smart Defence had grown important enough to merit its own section in the document, and a refined explanation of what the concept means. This includes “greater collaboration and coherence of effort . . . prioritizing the capabilities needed the most, specializing in what Allies do best, and seeking multinational solutions.” The Secretary General highlighted an agreement made in Lisbon to invest in 11 critical needs, demonstrating that concern for strategic resources dates at least to the same time as the new strategic concept itself. He also pointed ahead to the Chicago Summit where defense ministers agreed to “deliver a range of substantive multinational projects” to be made available to the Alliance by that time. This effort for resource harmonization extends to NATO staffs working with the European Union (EU) to avoid unnecessary duplication with EU pooling and sharing. The annual report thus outlined some specific areas where the idea of more efficiency is already in progress.

Summit Declaration on Defence Capabilities, May 2012

The Chicago Summit declaration connected the idea of Smart Defence to the concept of NATO Forces 2020: modern, tightly connected forces equipped, trained, exercised, and commanded so that they can operate together and with partners in any environment. It outlined the need to cooperate more closely in acquiring capabilities, prioritize what is needed most, and consult on changes to defense plans. It spoke of the need for a strong defense industry in Europe. The declaration recognized that “as technology grows more expensive, and defence budgets are under pressure, there are key capabilities which many Allies can only obtain if they work together to develop and acquire them.” Allies would take forward specific multinational projects to this end designed to deliver improved operational effectiveness, economies of scale, and closer connections between forces. The words of the declaration carry forward ideas originally offered by the Secretary General. Smart Defence “represents a changed outlook, the opportunity for a renewed culture of cooperation in which multinational collaboration is given new prominence.” In these charter words, the heads of state offered the broad principles under which Smart Defence will be executed.⁷

The Secretary General’s 2012 Annual Report

Secretary General Rasmussen is still emphasizing Smart Defence, and as time passes, his calls for adequate defense resources seem to grow more strident. His second annual report, released January 31, 2013, has a major section calling for securing capabilities for the future. NATO Forces 2020 and Smart Defence are principal to this effort. The principles announced in Chicago remain the same, but the number of Smart Defence projects has now increased to 25. The Secretary General proudly announces that European Allies lead around two-thirds of these projects, with one-third of the 25 projects purely European. Yet the Secretary General warns that continued decreasing levels of defense investment by Alliance partners will lead to potential capability gaps between European Allies, across the Atlantic, and with respect to emerging powers.⁸

Beginning at least with the post-Libya NATO assessments, Secretary General Rasmussen called for better resourcing within the Alliance in order to meet the ambition outlined in the strategic concept. Smart Defence is the key response to the current Alliance resource shortfall, and appears to be an evolving concept. Though vague on specifics in these historical statements, the real work of fleshing out the idea and putting it into practice will be confirmed as the Allies collectively announce and execute collaborative Smart Defence projects. Key to successful implementation will be whether the heads of state and government will be willing to make the bold political decisions that keep the organization funded to its level of ambition in the face of declining resources. They may have to demonstrate this resolve in a deepening economic crisis. Expect Smart Defence to continue to evolve within the constraints of international threat and the relative economic health of its members.

What’s Missing: Coherence and Realism

What do we make of the overall NATO resource problem? A common conclusion for many years is that NATO spends too much money on personnel costs, and not enough on modernization or development. This criticism extends to the type of forces in which European members customarily invest: conventional land forces with limited deployment readiness and not enough strategic lift. These conditions lie behind the conception of the NATO Response Force (NRF) a decade ago. Not much has changed. The NRF, once proved in principle and declared fully operational in 2006, has had limited activity. One wonders if called upon, would it be ready, given the commitment of the Alliance to the International Security Assistance Force in Afghanistan? This may be behind the recent U.S. declaration that, while shifting focus to the Asia-Pacific, it would dedicate an Army brigade to the NRF in order to bring to life a concept that may have gone dormant.

The basic problem for NATO’s strategic execution is one of resources. NATO has high ambition for capable operational forces but struggles to afford them. In reality, the Alliance has a limited expeditionary, conventionally modernized capability. There is certain incoherence to the member nations’ investments. They buy the wrong things, or not enough of the right things. Consider the acknowledged shortage of lift, ISR, precision munitions, cyber capability, and supply. Deployable forces are required, but not yet built. For years in Afghanistan, commanders have struggled with national caveats on operational use of forces. Because of these shortages and caveats, the United States increased its member investment in Alliance capabilities to the point of unsustainability.

Insufficient investment and out-of-balance investment imply lack of realism in what the Alliance can really do. There is a simple mismatch between global ambition in deterrence and defense, crisis management, and security cooperation, and what the Alliance will have over time to accomplish those ambitions. This comes to the question of whether Smart Defence will work to solve the problem. European partners are not going to increase expenditures, and as they decrease them, Smart Defence becomes how to do less with less. Smart Defence requires Alliance members to act with great foresight and trust in a time of economic crisis. It requires member states to forego individual purchase of key operational capabilities in order to enter a collective arrangement that requires other members to deliver those capabilities. The risk of this approach is that in crisis, the partner nation will withhold needed capability. To a degree, Smart Defence requires members to surrender sovereignty over resource decisions to the Alliance. In many ways, the decisions over defense resources for European members parallel the difficulty EU members face with salvage operations of the Eurozone. They require collective action in a time of economic crisis and dwindling resources. It is a steep order.

Much of the potential success of Smart Defence will be signaled in implementing the Chicago Summit Declaration on Defence Capabilities. If the principles outlined by the Secretary General are put into action, if the priority programs are resourced, if there is substance to the ambition for missile defense and ISR in the midterm, then the concept appears to be more viable. The proof will be contained not in strategic tasks, but in member investment in defense and modernization over the next decade.

An Alternative: Update the Strategic Concept

The questions remain, given successful execution of Smart Defence, is the 2010 strategic concept viable? Even smarter spending cannot overcome insufficient spending, and the NATO strategy requires sufficient resources in the areas of collective defense, crisis management, and security cooperation. Collective defense remains the cornerstone of the Alliance, and will likely consume whatever limited resources are available, given real world contingencies requiring multinational defense. How many more prevention situations will NATO enter into? How many more Kosovos, Afghanistans, and Libyas are there?

Given increasingly scarce resources, it is the crisis management pillar that is likely to suffer, particularly the ability to stop conflicts before escalation or to stabilize them long after they have concluded. There is a pending struggle over the ability of the Alliance to stabilize Afghanistan over the long term. NATO is still committed to stability in Kosovo after a dozen years, thus demonstrating the resource drain of commitments to long-term crisis management. Perhaps the pending U.S. step back from long-term stability operations, as announced in the January 2012 defense strategy guidance, will work its way through the national counsels of the Alliance, and curtail appetites for long-term crisis management, counterinsurgency, stabilization, and reconstruction. If European defense budgets continue to dwindle, the appetite for these types of operations may be suppressed. Of course, if members have not yet invested in crisis capability in the first place, then the simple status quo remains.

There is the perception in some circles that the new strategic concept is really U.S. ambitions pitted against European means, that the pressure for continued stability operations stemmed from the U.S. commitments to Iraq and Afghanistan at the time of the Lisbon Summit. If this is true, then the January 2012 U.S. defense strategic guidance may be the first glimmer that the protagonist of such missions is beginning to realize they are beyond capability, and the NATO strategic concept should follow suit.⁹

Conclusion

This article concludes with two small proposals. One is that the Alliance-wide strategic concept could use more tacit recognition of the problem of means and the necessary dedication by members to the ambition of the Alliance through defense spending. If Smart Defence proves successful as an approach, then maybe it deserves inclusion in the published concept. As it is, the document is lean on recognition of the impact that declining expenditures on the wrong things will have on the ability of the Alliance to execute its desired missions. Since the draft of the strategy was produced in the office of the Secretary General before Lisbon, perhaps the Secretary should now include his increasingly better defined Smart Defence concepts in the published NATO strategy. This would give substance to the need to focus on strategic means.

The second proposal is that NATO members may need to amend their level of ambition. Within the next 3 to 5 years, they will be forced to reconsider in realistic terms how much they can do. The strategic concept published at Lisbon was incredibly ambitious, expanding the reach of the Alliance beyond its borders with more missions. It was lean on detail about how to pay for that level of ambition. Economic realities, even with Smart Defence, may soon dictate that the Alliance take a step back from what it tries to do. Collective defense is a cornerstone mission that cannot be reduced. Security cooperation, as it plays out over time and in a variety of small-scale ways, is good value for the investment. Contingency response is the core task most suspicious of successful long-term execution. As governments realize that they cannot afford to pay for reconstruction and stability operations for decades, perhaps this core task in the strategy needs reexamination and further restriction in scope. Contingency response should pay as a reduced strategic goal if NATO cannot come to terms with the reality of its modernization and defense investment challenge.JFQ

 

References

1. Active Engagement, Modern Defence: Strategic Concept for the Defence and Security of the Members of the North Atlantic Treaty Organization (Brussels: NATO, 2010), 9, available at <www.nato.int/nato_static/assets/pdf/pdf_publications/20120214_strategic-concept-2010-eng.pdf>.
2. See facts at NATO Web site, “NATO and Libya,” available at <www.nato.int/cps/en/SID-2CF4288B-6562C4E3/natolive/71679.htm>.
3. For various assessments of Operation Unified Protector, see Ivo Daalder, “Leadership, Lisbon, and Libya,” Remarks to the Aspen Strategy Group, June 10, 2011, available at <http://nato.usmission.gov/>; Ivo Daalder and James G. Stavridris, “NATO’s Triumph in Libya,” Foreign Affairs, March/April 2012; Steven Metz, “Swan Song: Is Libya the end of NATO?” The New Republic, April 15, 2011; Fareed Zakaria, “A New Era in U.S. Foreign Policy,” CNN.com, August 23, 2011; Jamey Keaten and Slobodan Lekic, “NATO Bounces Back in Libya, But Troubles Remain,” Associated Press, August 23, 2011; “Europeans Retreat on Defense Spending,” Wall Street Journal, August 24, 2011; “Libya’s Lessons for NATO—and U.S. Defense Cuts,” Christian Science Monitor, August 24, 2011.
4. Robert M. Gates, “The Security and Defense Agenda (Future of NATO),” Brussels, Belgium, Friday, June 10, 2011, available at <www.defense.gov/Speeches/Speech.aspx?SpeechID=1581>.
5. Anders Fogh Rasmussen, “NATO After Libya,” Foreign Affairs, July/August 2011, 2–6.
6. NATO, “The Secretary General’s Annual Report 2011,” January 26, 2012, available at <www.nato.int/cps/en/SID-95ACA050-DC78A506/natolive/news_83709.htm?selectedLocale=en>.
7. “Summit Declaration on Defence Capabilities: Toward NATO Forces 2020,” May 20, 2012, available at <www.nato.int/cps/en/natolive/official_texts_87594.htm?mode=pressrelease>.
8. NATO, “The Secretary General’s Annual Report 2012,” January 31, 2013, available at <www.nato.int/cps/en/SID-482A978C-0B70AC4D/natolive/opinions_94220.htm>.
9. The author wishes to thank Professors James Cricks and James Varner of the U.S. Army Command and General Staff College for their review of this article. This idea stems from Professor Cricks’s personal experiences while assigned to Supreme Headquarters Allied Powers Europe.