NATO Summit Must Make Further Progress on Smart Defense

NATO exercise in Slovakia, June 17, 2013Next month’s NATO summit needs to make greater progress on so-called Smart Defense, the alliance-wide effort to get more collective benefits out of individual members’ defense budgets. The initiative aims to induce NATO governments to acquire military capabilities collectively that they cannot afford individually, so that even members with limited resources can contribute to expensive joint projects. . . .

Though an international alliance, NATO is funded by national governments on which domestic political considerations typically exert much more influence on spending than multinational considerations. National governments have powerful incentives to favor their own companies and workers for any major military procurement, for instance. And although they cooperate on security, NATO countries often compete over arms contracts.

In addition, national governments are naturally reluctant to depend on other countries for important military capabilities that they might need in an emergency, since even allies regularly disagree on how to respond to security threats. Although NATO pledges “guaranteed availability” and “assured access” to countries that agree to relinquish their capabilities through specialization, Germany’s decision to remove its soldiers from the AWACS assigned to the Libyan War, despite the Bundeswehr’s being in charge of that multinational project, reminded many NATO members that foreign military assets might not be available in controversial conflicts. Extreme niche specialization, in which only one country can provide a capability, risks granting that state effective veto power over collective NATO operations that require that asset. NATO lacks the power to force a member to join an operation simply because it specializes in relevant capabilities. . . .

Since NATO leaders lack the means to compel countries to join or remain in these projects, the alliance needs to establish structured incentives to encourage participation, such as ensuring that those that have contributed funding to a project will receive some of the resulting contracts. Such packages are admittedly difficult to arrange due to their complexity as well as competing national and business interests.

At a May 2 speech at the Wilson Center, U.S. Defense Secretary Chuck Hagel thoughtfully advocated convening regular meetings of NATO’s senior budget and finance officials to complement the sessions of the alliance’s foreign and defense ministers. The goal would be to ensure that member states consider strategic issues beyond money when making budgetary decisions.

Furthermore, NATO leaders and analysts have also been assessing a “framework nations” concept in which one or two of the most powerful alliance members would lead a group of allies to build integrated capabilities. Although the initiative could encourage greater specialization, there is some risk of deepening fragmentation within the alliance by reinforcing members’ diverging capabilities and threat perceptions.

In the end, there is no escaping the imperative of raising alliance defense spending, especially in Europe, to meet critical requirements. Smart Defense is in principle a sound approach to squeezing more capabilities out of limited resources. But in practice, it requires a minimum level of financial support from individual member states to effectively meet the alliance’s collective needs.

Richard Weitz is a senior fellow at the Hudson Institute and a World Politics Review senior editor.

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Image: NATO exercise in Slovakia, June 17, 2013 (photo: NATO)