Costs of NATO Enlargement: Moderate and Affordable

Abstract

Conclusions * NATO must pursue a sound defense program as it enlarges-not to prepare for a threat, but to meet its preparedness standard. * DOD's cost estimate of $27-35 billion for all NATO enlargement measures through 2009 causes sticker shock to some, but it is moderate: only about 1% of NATO's total defense spending. * This estimate is not low-sided or prone to major inflation. It is similar to the RAND estimate, and lower than the CBO estimate because CBO embraced a higher threat and theory of requirements. * The United States will not be carrying unfair burdens. Its expense may be no more than $2 billion through 2009. The cost of stationing U.S. forces in Europe will not rise appreciably. The Cost Issue in the Enlargement Debate Cost has become an important factor in the NATO enlargement debate. It will influence the Senate's vote on ratifying the admission of three new members in 1999-Poland, the Czech Republic, and Hungary. NATO's willingness to fund key defense measures will influence whether enlargement unfolds safely and effectively. This Strategic Forum explains the costs of NATO enlargement in clear terms. Strategic Forum #129 by David C. Gompert addresses the benefits of a sound defense program. This paper focuses on seven key issues: 1. Why pay costs if no threat exists? 2. What is DOD's cost estimate and its rationale? 3. Is the cost affordable or excessive? 4. Is DOD's estimate accurate or vulnerable to inflation? 5. Is DOD's estimate lower than other estimates, and if so, why? 6. Will enlargement require bigger defense budgets? 7. Will the United States have to carry an unfair share of the burden? Why Pay Costs If No Threat Exists? The answer is that NATO needs strong defenses even though its new borders today face no major threat. NATO's peacetime preparedness standard needs smaller forces and budgets than during the Cold War, but it is still demanding. As NATO enlarges, it must avoid a two-tier alliance in which new members receive less security than old members. Strong forces are required for peace support missions, minor crises, as well as other interventions. These forces will help build partnership relations with non-NATO powers, deter threats from emerging, and prevent destabilizing trends. Members must be assured of their security in the event relations with outside powers sour. NATO also needs to promote sound planning and integration. Members can decide upon defense efforts and multinational involvements only if they are given a clear definition of NATO's commitments to their security. NATO must ensure that the forces of new and old members are sufficient both now and for the future. What is DOD's Cost Estimate and Its Rationale? In February 1997, the Clinton Administration issued a study judging that the costs of NATO enlargement will be $27-35 billion for the years 1997-2009. This is the cost facing the entire alliance. The United States will pay only a small portion of it-perhaps no more than $1.5-2.0 billion. The average annual cost will be $2.1-2.7 billion for NATO as a whole, and $150-200 million for the United States over the decade following accession. The primary reason for the low U.S. expense is that the United States already has paid the cost of developing forces for projection missions. This DOD estimate is notional, but it was a product of a serious review that employed sound methods. It was prepared before NATO began assessing defense requirements for enlargement. It also was prepared in advance of validated cost data for some specifics. Its purpose is not to be definitive, but instead to gauge costs in approximate terms. It is a starting point for designing NATO's defense relationships with new members. Doubtless it will be refined as NATO develops better information. It should be viewed as a basis for judging broad policy and strategy, not as precise tool for programming and budgeting. …