Select Committee on Defence Ninth Report

4  NATO capabilities

NATO capabilities and the Bucharest Summit

116. At successive summits since 1999, the Alliance has pledged to improve its military capabilities. Its achievements, however, have been mixed. While important progress has certainly been made—and this progress should not be underestimated—commitments on paper have not always been turned into reality. Enhancing the capabilities of the Alliance is a task that underpins the process of transformation in which NATO is currently engaged. It is perhaps not surprising, therefore, that the MoD has said that achieving improvements in NATO capabilities is a key priority for the UK at the forthcoming Bucharest Summit.[122] Indeed, the Secretary of State told us in evidence that the future of NATO would depend not on developments in Afghanistan but on the ability of the Alliance to transform itself: "it is the transformation of NATO that will determine whether it continues as a successful Alliance…not particularly Afghanistan".[123] Since improvements in capabilities are fundamental to the transformation of NATO, this issue is likely to figure prominently on the Summit agenda; new commitments by the Allies in this area will be a key test of the Summit's success. In the past, NATO members have made pledges to achieving improvements in capabilities which they have struggled to meet. New commitments to achieve real, tangible improvements in Alliance capabilities will be a key test of the success of the Bucharest Summit, but their worth will be measurable only in the light of their delivery over time.

117. Perhaps the greatest commitment the Allies can make at Bucharest will be to increase defence spending. Although the prospects for such an increase are not promising, it will be essential for European nations to spend more on defence if the Alliance is to fulfil its expeditionary role. On this issue, the Bucharest Summit represents a clear opportunity for the Alliance to demonstrate powerfully its commitment to the basic principles of collective defence as well as to success in Afghanistan.

The development of NATO capabilities

118. Over the past decade the Alliance has conducted several initiatives aimed at improving NATO's capabilities. These have focused, primarily, on attempts to improve Alliance expeditionary capabilities, on the enhancement of its capacity to conduct and support multinational joint operations beyond its defined territory, and on the maintenance of such operations for extended periods. Significant progress has been made but there remains a long way to go. Given the huge gap in military capabilities that exists between the United States and Europe, extensive investment in capabilities is still required particularly by the European members of the Alliance.

119. At the Washington Summit in 1999, NATO launched the Defence Capabilities Initiative (DCI). Intended to ensure that the Alliance enhanced its capabilities to meet the threats and security challenges identified in the 1999 Strategic Concept, the DCI sought to deliver improvements in the mobility and deployability of forces, to enhance the sustainability of those forces once deployed, and to consolidate the ability of the Alliance to conduct the full range of military tasks from large-scale high-intensity operations to smaller, low-intensity engagements. It has also sought to develop the protection available to deployed forces, and to facilitate the interoperability of communications, particularly the command and control and information systems. The focus of the DCI was on improving Alliance capabilities in C4ISTAR (command, control, communications and computers, intelligence, surveillance, target acquisition, and reconnaissance), strategic lift, precision guided munitions, the suppression of enemy air defences, and protection against chemical, biological and nuclear weapons.[124] Progress in implementing the DCI, however, was uneven and, in June 2001, NATO's own internal assessment identified "critical and longstanding deficiencies" in many capability areas.[125]

120. The terrorist attacks of 11 September 2001 highlighted the increased urgency of addressing these deficiencies and led to a further review of NATO capabilities. This, in turn, resulted in the Prague Capabilities Commitment (PCC), the successor to the DCI. The PCC was agreed at the Prague Summit in November 2002. Having concluded that the DCI was too broad a programme, NATO agreed that the PCC should have a narrower focus, with clear objectives and backed up by high-level ownership. It was based on national commitments with specific milestones and target dates. The intention was to provide the impetus for members to re-prioritise defence spending, reduce force numbers, upgrade equipment, pool resources, and promote role specialisation. In terms of the areas of concentration, however, the PCC reflected many of the same priorities as the DCI: chemical, biological, radiological and nuclear defence; intelligence, surveillance and target acquisition; air-to-ground surveillance; deployable and secure command, control and communications; combat effectiveness, including precision-guided munitions and suppression of enemy air defences; strategic air- and sealift; air-to-air refuelling; and, deployable combat support and combat service support units.[126]

121. Although the PCC expressed key targets for improving military capabilities by the NATO Allies, the Alliance placed increasing emphasis on deployability and usability of those military capabilities. The experience of Afghanistan was vital to this development. Moreover, in addition to the continuing emphasis on enhancing capabilities in the run-up to the Istanbul Summit in 2004, the Alliance established new goals for force generation, force planning and force readiness, with a target of 40% of forces being capable of deployment at any one time. Following the Summit, NATO Secretary General, Jaap de Hoop Scheffer, stated the rationale for these new targets:

    I am pleased that the Istanbul Summit decided that we should re-examine our approach to force planning and force generation procedures. Because if NATO wants to continue to meet its commitments—in Afghanistan, Iraq or elsewhere—our military means must match our ambitions.[127]

122. In evidence to our inquiry, the MoD stated that prior to the Riga Summit in November 2006, NATO conducted a review of the PCC and concluded that it had been a "valuable initiative" which had "prompted progress in capability development across the Alliance".[128] However, it also found that there remained a number of areas in which "progress has been slow, due in the main to financial or technical difficulties".[129] Although, in its view, 72% of the PCC targets would be met by 2008, the remaining 28% included the most costly undertakings such as strategic lift.[130]

123. At the Riga Summit the PCC was re-focused on the "high priority capability development areas" identified in the Comprehensive Political Guidance.[131] The CPG, which remains the most up-to-date statement on NATO's capability requirements, underscored the importance of the development by Allies, individually and collectively, of the capabilities required to conduct expeditionary operations:

    Given the likely nature of the future security environment and the demands it will impose, the Alliance will require the agility and flexibility to respond to complex and unpredictable challenges, which may emanate far from member states' borders and arise at short notice.

    In order to undertake the full range of missions, the Alliance must have the capacity to launch and sustain concurrent major operations and smaller operations for collective defence and crisis response on and beyond Alliance territory, on its periphery, and at strategic distance; it is likely that NATO will need to carry out a greater number of smaller demanding and different operations, and the Alliance must retain the capability to conduct large-scale high-intensity operations.[132]

The CPG listed a wide range of specific capability requirements that the Allies should seek to acquire or enhance over the coming decade. Among these, the CPG stated that "NATO's top priorities" were:

    joint expeditionary forces and the capability to deploy and sustain them; high readiness forces; the ability to deal with asymmetric threats; information superiority; and the ability to draw together the various instruments of the Alliance.[133]

It placed particular emphasis on the deployability, sustainability and interoperability of Allied forces, on the ability of the Alliance to deliver a rapid military effect, on the ability to protect critical national infrastructure against terrorist attack, and on the ability of the Alliance to coordinate its efforts with other international institutions and organisations.[134]

124. In addition to agreement on the CPG, the Riga Summit witnessed the delivery of specific improvements in capabilities. The NATO Response Force (NRF), which had been launched at the Prague Summit as a key driver in the development of deployable forces and the transformation of Alliance capabilities, was declared fully operational, and NATO increased its strategic lift capability by agreeing to purchase additional C-17 air transport aircraft out of Common Funding. Following the Riga Summit, the Secretary of State for Defence told the House of Commons that "real progress" had been achieved at Riga, where NATO had "agreed new initiatives to increase strategic airlift available to allies, to enhance cooperation between our special forces, to improve alliance logistics support and to streamline the NATO command structure".[135]

NATO's principal capability shortfalls

125. We asked our witnesses what capabilities NATO required to fulfil its expeditionary role, what capability shortfalls currently existed and how those shortfalls could be addressed. General Fry maintained that "NATO's expeditionary capability is no different from anyone else's expeditionary capability…you need forces at the appropriate level of readiness, you need a capacity to project them, you need a capacity to sustain them and command them whilst they are there".[136]

126. In terms of specific capability shortfalls, Dr Bastian Giegrich, of IISS, argued that the requirements of current operations, particularly in Afghanistan, had "revealed several bottlenecks and capability shortfalls".[137] Dr Giegrich identified the following as the most notable shortfalls:

    Strategic and in-theatre lift, sea lift, reconnaissance and surveillance, the integration of close air support, the interoperability of communications systems, information systems…logistics…heavy lift helicopters and maintenance crews…[and] information operatives.[138]

According to Dr Giegrich, not all of these capability shortfalls corresponded with the declared long-term military transformation goals of the Alliance.[139]

127. Despite the additional purchases of C-17 air transport aircraft at the Riga Summit, General Deverell also identified strategic airlift as one of the most significant shortfalls in military capability facing the Alliance.[140] According to General Fry, the reason for this shortfall was straightforward: "these are extremely expensive things to buy and maintain".[141] As we highlighted in our report on Strategic Lift, published in July 2007, strategic airlift is one area of capability the UK is currently committed to expanding through the purchase of additional C-17 aircraft.[142]

128. We asked the Secretary of State for Defence whether he expected any more progress to be made at the Bucharest Summit in improving Alliance capabilities. Mr Browne told us that "we will continue this process and we will continue to reinforce the arguments for why this is in the national interests of individual member but also in the interests of NATO for them to make a contribution to these initiatives".[143]

129. NATO currently faces shortfalls in military capabilities in a range of areas, most significantly in strategic airlift, reconnaissance, surveillance and intelligence assets, and interoperable communications. These capabilities are fundamental to current operations in Afghanistan and are also crucial if the Alliance is to fulfil its ambition of having the capacity to conduct future expeditionary operations.

Political will and Alliance capabilities

130. Witnesses to our inquiry emphasised that whilst specific military capabilities—such as strategic lift, Network Enabled Capability, and intelligence assets—were essential in underpinning the Alliance's expeditionary operations, the biggest single shortfall in Alliance capabilities was, in fact, one of "political preparedness" or "political will".[144]

131. One key difference between a national expeditionary capability and an Alliance expeditionary capability was the need for the latter to be based on "unity of concept, of training and of doctrine".[145] According to General Fry, the more significant difference, however, was the need to sustain collective political will. Modern expeditionary operations, General Fry maintained, "by and large, are synonymous with discretionary operations". For the most part, they are not wars of national survival. There is always a choice involved in determining the extent of a given nation's participation in a military operation. As a result, Alliance expeditionary operations "must be written, and underpinned, sustained essentially, by a political will". This was no easy task: "everybody who is a force contributor gets a vote in that equation, and keeping that political will solid and not allowing those who wobble to undermine the whole is actually quite a difficult thing".[146] Similarly, Colonel Christopher Langton, of IISS, argued that NATO was not principally a military alliance; "it is a political alliance trying to deliver a military capacity". This created real complexities in that there were "26 countries, with 26 defence budgets, [and] 26 constitutions, which limit the preparedness to take part in expeditionary [activity]".[147] According to Colonel Langton, recent deployments of European armed forces revealed key differences by European nations in political will to commit to expeditionary operations:

    If you look at Europe as a whole, including European NATO member states, there are 39 countries with troops deployed in the world and 19 of those have deployed less than 3% [of their armed forces]. If you compare that with the United Kingdom, it is a fairly stark comparison and it is an indication of preparedness which limits the ability to engage in expeditionary warfare.[148]

132. According to our witnesses, part of the explanation for the apparent lack of political will within the Alliance to mount and sustain expeditionary operations was a divergence in perception about the proper role of armed forces. For example, those countries that still rely on conscription can find it difficult to send to a dangerous overseas deployment conscript troops with little training. According to General Deverell, there existed " a great absence of a unifying purpose at the military level". He argued that it would be "very difficult, very demanding to get political coherence underpinned by military coherence if there is not a similarity of view of what your armed forces are for".[149]

133. We asked our witnesses how it would be possible to generate and sustain the required political will to fulfil the expeditionary role of the Alliance. General Fry told us that "the greatest method of getting greater cohesion of thought across NATO members is to convince them of a shared danger and a shared requirement to respond".[150] Given the dangers posed by the "malevolent combination" of international terrorism and weapons of mass destruction, "the only response is to be direct, effective and unified".[151] General Fry told us:

    There is a task here of political advocacy drawing on the military situation…to persuade people that they share a common threat, to which a common response is the only thing to do.[152]

134. Overall, our witnesses maintained that political will currently represented a greater challenge to NATO than shortfalls in specific military capabilities. Dr Giegrich argued that NATO was becoming "more creative" in meeting its equipment needs and in dealing with operational requirements than it was in "maintaining unity of purpose and providing the political will to maintain the level of ambition necessary to achieve its objectives".[153] A similar point is made by Dr Williams, who argued that, in the end, "capability really boils down to political will". [154]

135. In terms of fulfilling its expeditionary role, one of the key capability shortfalls confronting the Alliance is that of political will. This, in turn, depends on a perception of a shared danger and a shared requirement to respond. Expeditionary operations are predominantly discretionary by nature; there is a choice to be made about participation in any given mission. Alliance expeditionary operations, such as the current Afghanistan deployment, must be underwritten and sustained by the political will of the countries involved, both individually and collectively. Its absence undermines the capability of the Alliance. As important as it is to deliver tangible military capabilities, such as strategic airlift, the generation of the political will necessary to fulfil its expeditionary role is the greatest challenge currently facing NATO.

The NATO Response Force

136. The Alliance committed itself to creating a NATO Response Force (NRF) at its 2002 Prague Summit. NATO hoped that the NRF would act as an engine for Alliance transformation and as a catalyst for improving NATO's expeditionary capabilities, particularly force generation, by pushing European nations to reform their militaries and make them more deployable, interoperable and capable. The NRF was seen as important in making the Alliance more agile and flexible and capable of responding to crises at short notice. It was also important in helping NATO to achieve and implement its PCC commitments. Composed of a force of some 25,000 troops, the NRF was designed to be deployable within five days and sustainable for up to 30 days (or more if re-supplied). It consists of land, air, and sea components from NATO member states, with the option of adding support from NATO partner countries on an ad hoc basis. National force commitments to, and leadership of, the NRF rotate every six months.[155] While strategic command of the NRF is provided by the Supreme Headquarters Allied Powers Europe (SHAPE), operational command rotates every 12 months between NATO's Joint Forces Command (JFC) Brunssum, JFC Naples, and the Joint Headquarters in Lisbon.[156]

137. The development of the NRF has been rapid. From its conceptual origins in 2002, it achieved initial operational capability of 17,000 troops in October 2004 and full operational capability in November 2006.[157] To date, the NRF has been deployed twice. Its first official mission was in the aftermath of Hurricane Katrina in September 2005, when it mounted a small-scale operation to deliver assistance to victims on the US Gulf Coast. Its second, more sizable and significant, deployment was its operation in Pakistan following the devastating earthquake of October 2005. There, the NRF used tactical airlift, command and control and some ground elements to deliver vital assistance to the survivors and provide a basis for long-term support and reconstruction by other organisations.[158]

138. In evidence to us the MoD says that the NRF has been "at the vanguard of the process of the Alliance developing flexible, rapidly deployable and sustainable forces called for in the CPG".[159] The Secretary of State explained that the NRF was "intended to be NATO's first tool of response" and "an important catalyst for transformation". Mr Hugh Powell, Head of Security Policy at the Foreign and Commonwealth Office (FCO), argued that the NRF had led to significant improvements in NATO's capabilities; "readiness and getting other countries to actually put troops on stand-by is a major capability gain".[160] He also maintained that the NRF arrangements had a practical "burden-sharing effect". According to Mr Powell, in the case of the Pakistan earthquake, rather than having to turn to the UK as the only European country able to react, the NRF arrangements ensured that Spain was able to send engineers out to Pakistan to help in the relief mission; without the NRF "we would never have been in a position to have done that".[161]

139. Andrew Mathewson, Director of Policy for International Organisations at the MoD, acknowledged that whilst the NRF "was set up as an engine for transformation" it had "not been possible to commit the forces to the NRF that were originally intended".[162] However, Mr Mathewson insisted that this did not imply that the transformation agenda had been dropped. On the contrary, he argued that the reason it had not proved possible to commit forces to the NRF was because "NATO is actually doing real work and forces are heavily committed in Afghanistan".[163] He maintained that:

    It is now Afghanistan that is driving transformation, driving the change in the capabilities that nations need to develop, becoming the test-bed for the relevance of the command structure, so the transformation agenda is comprehensive; it covers structures and capabilities and ways of working.[164]

140. General Deverell, whose headquarters at Allied Forces North (AFNORTH) had set up the first NRF, told us that the Force was "an aid to transformation because it does actually drive nations to ensure their force structure is at levels of real readiness which can be measured rather than stated readiness". According to General Deverell, the value of having the NRF was that it exposed problems of compatibility and interoperability—both conceptual and physical—and, at the same time, provided a mechanism for dealing with, and resolving, those problems.[165] Although General Deverell accepted that there were difficulties with the NRF, particularly in terms of generating the political will necessary to meet the stated force requirements, he maintained that he had "no doubt" that it had " a real capability".[166] Much would depend on how the NRF evolved in the coming years:

    Whether [the NRF has] quite the capability that we first thought, whether it is as flexible as we first thought and whether it is as politically robust in that it cannot be unhinged dramatically by a nation at the last minute saying, 'You cannot have that capability', remains to be seen. That is where I have my doubts. We are back…to this main theme…political will.[167]

141. Despite his overall support for the concept, General Deverell highlighted one further problem with the NRF; that the burden for filling the force requirements falls mainly on the non-Afghanistan and non-Iraq players. In itself, greater burden-sharing is to be welcomed but General Deverell noted that one of the original intentions behind the establishment of the NRF was to create a capability for intervention in order to reinforce current operations, the idea being that "if you wished to conduct a surge operation, you could use the existing, trained, coherent NATO Response Force for a limited period of time, put it into theatre and bring it out again".[168] General Deverell argued that this was a "perfectly reasonable thing to do" but noted that "some nations have found that, for all sorts of reasons, [this approach is] very difficult and there has been enormous reluctance".[169]

142. Other witnesses highlighted additional difficulties with the NRF. Dr Bastian Giegrich told us in evidence that operations at the upper end of the operational spectrum are "judged to be problematic because certain capability shortfalls remain unresolved".[170] There was also disagreement within NATO about what the NRF was for. Some allies are concerned that the NRF, which was designed for high-intensity combat, risks becoming no more than an instrument for humanitarian assistance, with some Allies arguing that this is not a role NATO should seek to fulfil. However, there is a danger that if the NRF is ring-fenced for high-intensity operations, some NATO members might assume the chances of it being used are sufficiently low and, as a result, will not contribute the necessary forces to fill future rotations. There is also the risk that in those countries where deployment of troops is subject to constitutional requirements of democratic permission, the processes involved would take too long to allow for the rapidity of deployment that is the purpose of the NRF.

143. Another weaknesses of the NRF is its funding mechanism which is said to act as an "obstacle to the actual use of the NRF".[171] The so-called "costs-lie-where-they-fall" principle means that the costs of deploying and sustaining NRF operations are borne almost exclusively by the nations that provide the components of the force at the time of its deployment. Any rapid deployment of the NRF, therefore, imposes significant costs on the nations involved. Some nations have indicated that the unpredictable financial consequence of short-notice deployments acts as a disincentive to making force contributions to the NRF.

144. The creation of the NATO Response Force is a significant achievement by the Alliance and promises, in theory, to help improve Alliance capabilities in the long term. However, if the NRF is to be effective it will be important for the Allies to achieve consensus on when, where, and why to use it. It is also essential that the force requirements of the NRF are met in full.

145. We believe NATO should abandon the present "costs lie where they fall" arrangement for funding the NRF. We believe an appropriate alternative would be to finance the NRF through NATO Common Funding. Putting the NRF on a more stable financial footing is essential if it is to be an effective force. The current arrangements impose unpredictable financial burdens on troop contributing nations and act as a significant political disincentive for deploying the NRF.

The role of Allied Command Transformation

146. During the course of our inquiry witnesses raised concerns about the effectiveness of Allied Command Transformation (ACT) in developing and implementing NATO's transformation agenda. ACT, which is based in Norfolk, Virginia, USA, is the organisation charged with transforming the military capabilities of the Alliance. According to its "vision statement," ACT is "NATO's forcing agent for change" in "uphold[ing] NATO's global security interests". Its "standing priorities" are to: transform NATO's military capabilities; prepare, support and sustain Alliance operations; implement NATO Response Force and other deployable capabilities; achieve ACT full operational capability; and, assist transformation of partner capabilities.[172] During our visits to European NATO capitals, we heard that ACT was not performing effectively and that its location on the East coast of the United States, in effect, isolated it from the European nations where the real need for transformation existed.

147. Colonel Christopher Langton told us in evidence it was true that ACT had encountered problems since its inception. This was particularly the case in terms of its relationship with Europe and particularly with the European Defence Agency (EDA) where there was a lack of adequate communication between ACT and the EDA. However, according to Colonel Langton, the initial problems with ACT had been overcome and the organisation was "now beginning to have an effect" and was "transforming or increasing interoperability in many areas".[173]

148. We asked the Secretary of State for his impressions about the effectiveness of ACT and its impact in facilitating the transformation of Alliance capabilities. Mr Browne told us that, despite the fact that ACT had not "figured in any discussions that I have been present at", the organisation had nevertheless played an important role in training the NATO Allied Rapid Reaction Corps (ARRC) prior to its deployment to Afghanistan in 2006 where it took command of the ISAF mission. According to the Secretary of State, ACT had made "a very positive contribution" to the training of the ARRC.[174] While he recognised that there were criticisms about its location he maintained that by virtue of the fact that it was located next to the US Joint Forces Command, NATO stood to gain from American experiences. The United States was at "the forefront of transformation". Basing ACT in Virginia meant that NATO could "effectively hinge" its own transformation on that of the United States.[175]

149. In evidence to us, Mr Mathewson, Director of Policy for International Organisations at the MoD, argued that "Allied Command Transformation is an important part of the Alliance".[176] He told us that:

    It is important because as well as having Allied Command Operations fighting the current battle and handling the issues of the day, it is important that there is another part of the Alliance which is thinking further ahead, and that is what the role of ACT is; it is to think about how the Alliance develops its concepts and its doctrines over the future, for example, to develop thinking on the comprehensive approach.[177]

150. Mr Mathewson, however, acknowledged that ACT had encountered some difficulties. To some extent, this was a reflection of the fact that ACT was "still bedding in". The MoD still wanted to see "some further improvement in the operation of the ACT, particularly at its headquarters level".[178] According to Mr Mathewson, its location in America was a "strength" in that it was "a visible expression of NATO in the United States" and, therefore, of the transatlantic partnership.[179]

151. The contribution made to date by Allied Command Transformation to the improvement of the Alliance's expeditionary capabilities is difficult to measure. We are also concerned by reports that its focus on long-term capability development has been overshadowed by the operational demands of Afghanistan. ACT potentially has an important role to play in improving NATO capabilities in the long-term and in developing the Alliance's concepts and doctrines for the future. As important as current operations in Afghanistan unquestionably are, ACT must not be diverted from this central purpose. ACT must also improve its relationship with Allied Command Operations and with the European Defence Agency.

Defence spending and the future of NATO

152. The effort to improve NATO's capabilities—whether through the ACT, the NRF, the PCC or through any of the Alliance's various capability initiatives of the past decade—must be underpinned by adequate defence expenditure. NATO itself has no capacity for financing major procurement projects and its ability to generate improvements in capabilities rests on the preparedness of each member state to commit sufficient resources to defence. One of the most longstanding complaints of the United States has been the failure of European members of the Alliance to commit those resources.

153. Recent defence expenditure statistics reveal the extent to which European nations lag behind the United States. As tables 2 and 3 show, in 2006, whereas the United States spent some 3.8% of its GDP on defence, European nations spent an average of just 1.74%.[180] Moreover, there had been a steady decline in European defence spending as a percentage of GDP over the past decade.

Table 2: Defence Spending in NATO, by country, in 2006 as a percentage of GDP

Source: House of Commons Library

Table 3: Average European NATO defence expenditures (excluding US) as percentage of GDP, 1997-2006

Source: IISS Military Balance 2008

154. Similarly, the total US defence budget dwarfs those of the European members of NATO. In 2006, the US defence budget totalled $617 billion. The next highest NATO spenders were the UK on $53.1 billion and France on $44.25 billion.[181] Indeed, in 2006, the US defence budget represented 75% of the combined defence budgets of all NATO member states. Table 2 reveals the gap in defence spending between the US and Europe.

155. In a speech on NATO and the European Security and Defence Policy (ESDP), the Secretary of State for Defence stated that "the real problem that European defence faces is insufficient and inadequate military capability".[182] He agreed with comments by President Sarkozy that "European security cannot rest on the shoulders of 3-4 countries". The only solution was to spend more, but at present "most European nations spend too little on defence". A further problem was that those countries "spend too little of those inadequate budgets on acquiring the modern capability that NATO and the EU need". Efforts to improve capabilities were "futile if nations do not step up to the plate and commit the necessary resources".[183] Mr Browne declared that, in the final analysis:

    unless Europeans spend more on defence, and more of their defence budgets on capability, both NATO and the EU will be hamstrung. For Europe to have more capability its members must spend more—quite a lot more.[184]

156. At the Riga Summit, in November 2006, the NATO Allies reaffirmed their commitment to investment in improving capabilities. The CPG issued at Riga declared that:

    The development of capabilities will not be possible without the commitment of sufficient resources…Increased investment in key capabilities will require nations to consider re-prioritisation, and the more effective use of resources, including through pooling and other forms of bilateral and multilateral cooperation.[185]

157. The prospects for an increase in European defence spending, however, are not encouraging, particularly in the short-term. During our visits to European NATO capitals we heard repeatedly that the chances of increases in national defence budgets were extremely unlikely. Likewise, in evidence to us Charles Grant stated that "it is almost inconceivable that defence budgets will go up".[186] He recommended that the NATO Allies consider new mechanisms for pooling defence assets, since "pooling saves money". Indeed, Mr Grant argued that "we could save a lot of money if we collaborated and built common organisations".[187] If European NATO nations do not increase their defence expenditure the ability of NATO to meet its declared capability ambitions will be in jeopardy.

158. The implications of the gap in defence spending between the United States and Europe are significant. In evidence to us, Dr Robin Niblett noted that for over a decade the United States had been spending "high amounts of money on very sophisticated technologies and the ability to fight in ways that are fundamentally different to the way the EU nations can fight".[188] Dr Niblet argued that, over time, this would have a direct impact on the interoperability of US and European forces and their ability to act alongside each other. He warned that the gap would ensure that the difficulties of interoperability, revealed during the 1991 Gulf War, would be "widened and exacerbated even further into the future".[189] The danger that disparities in defence expenditure might lead to US and European forces becoming unable to operate together was also highlighted by Dr Johnathan Eyal:

    If you look at European defence research expenditure, which of course is dwarfed by the Americans, within that research budget about 80 per cent is dominated by spending by Britain and France. The rest is almost no activity at all. The result of it is not simply that we have less equipment but very often that our equipment becomes incompatible with that of the Americans….they simply are incapable of digesting or deploying the kind of technology which the Americans have. It is not merely volume; it is also how it is spent".[190]

159. Although the debate about spending focuses predominantly on the chasm that exists between US and European defence expenditure, there is also a less heralded but equally significant spending gap between the European nations themselves. As Dr Niblett told us, "the disparity within the EU on defence spending is as dramatic as the disparity between some of the top spenders within the EU and the United States".[191]

160. However, it is not only a question of how much money is spent by nations on defence; it is also a question of how those nations choose to spend their money and in what they choose to invest. The MoD told us that "institutional investment must be reprioritised in line with current and emerging requirements rather than continuing to spend money maintaining out-of-date and less relevant capabilities".[192]

161. We asked the witnesses to our inquiry whether NATO's informal defence expenditure target of 2% GDP for each member of the Alliance should be binding. Overwhelmingly, our witnesses argued that, desirable or not, binding targets would simply not prove feasible. Professor Cox stated, "I do not think there is any chance at all" of implementing binding targets on defence. There had been huge debates in the 1970s about Alliance burden-sharing, but "they did not go anywhere".[193] General Deverell asked since "NATO [is] the sum of national wills…who is going to make it binding? It is rather like turkeys voting for Christmas".[194] In reality:

    Those who want the flexibility not to spend 2%...are going to find it very difficult to get themselves to vote for something they do not want to do, so I do not understand how it can be made binding unless you have some form of majority voting which, of course, under consensus one does not.[195]

162. Noting that NATO's target for each nation of spending 2% of GDP on defence was an informal one, Dr Webber argued that "there is no binding limit and attempts to use guidelines within NATO have generally failed…they only generate resentment".[196] He maintained that:

    With an alliance of 26 Member States with hugely divergent economies, histories and military capabilities, you cannot impose matters of that sort and you must allow allies within NATO, if they share membership with the EU, to contribute to defence and security in more creative ways than assuming that what matters is [the] headline spend in [the] defence budget.[197]

163. Dr Mark Webber also argued that the gap in defence spending between the United States and Europe was not all that it appeared. He maintained that the disparity had been "exaggerated by the way the figures are calculated".[198] In terms of defence budgets, he acknowledged that the differences in spending appeared vast. However, Dr Webber maintained that "if you look at the overall spend on security issues", whilst the US was still "way out in front", the EU member states spent money on things like humanitarian aid and assistance which, though "technically not defence expenditure", nevertheless "clearly feeds into the issue of security". In that case, the disparity became "less clear".[199]

164. Professor Cox argued that, ultimately, the debate over burden-sharing and defence expenditure was not a new discussion. It had been going on for decades within NATO and was likely to do so for the foreseeable future. According to Professor Cox, the future of NATO was not at stake due to the disparities in defence expenditure between American and Europe, however it was measured. The Alliance would endure despite those disparities. However, he suggested that the gap in spending was linked to the issue of the leadership of NATO and the influence of member states upon the direction of Alliance policy. He posed the question, "if the United States is the one putting most money into this Alliance and most lives on the line…does that not also give it legitimate leadership of this Alliance?"[200]

165. The ability of the NATO Alliance to deliver real and lasting improvements in military capabilities depends on the willingness of Allies to commit sufficient resources. There can be no greater demonstration of political will in NATO, or the lack of it, than the amount of money each member of the Alliance is willing to spend on defence. There exists a clear, persistent and growing gap in defence expenditure between the European members of NATO and the United States and there seems little prospect of this being reversed.

166. Despite a longstanding commitment by all members of the NATO Alliance to spend a minimum of 2% of their GDP on defence, only six out of the 24 European members of NATO actually achieve that target. But defence spending is not simply about quantity; it is about what the money is spent on. We believe that in addition to the 2% target the Alliance should establish detailed capability targets, and timeframes, against which the performance of Allies could be measured.

167. If the European members of the Alliance want to be taken seriously, if they want the United States to remain engaged in, and committed to, NATO, and if they want greater influence in the overall direction of Alliance policy, they must commit the necessary resources and improve their capabilities. We are concerned that an Alliance with such large, and growing, discrepancies in defence expenditure will not be sustainable in the long term.

122   Ev 161  Back

123   Q 237 Back

124   NATO: The Istanbul Summit, Research Paper 04/60, House of Commons Library 26 July 2004, pp 26-28 Back

125   NATO press release M-NAC-D-1 (2001) 89, 7 June 2001 Back

126   NATO: The Istanbul Summit, Research Paper 04/60, House of Commons Library 26 July 2004, pp 26-28 Back

127   Speech by NATO Secretary General, NATO website ( Back

128   Ev 108 Back

129   Ibid Back

130   Ibid Back

131   Comprehensive Political Guidance, 2006, NATO website ( Back

132   Ibid  Back

133   Ibid  Back

134   Ibid Back

135   HC Deb, 30 November 2006, col 1240 Back

136   Q 123 Back

137   Ev 90 Back

138   Ibid Back

139   Ibid Back

140   Q 132 Back

141   Q 142 Back

142   Defence Committee, Eleventh Report of Session 2006-07, Strategic Lift, HC 462 Back

143   Q 305 Back

144   Q 127 Back

145   Q 125 Back

146   Ibid Back

147   Q 126 Back

148   Q 126 Back

149   Q 133 Back

150   Q 131 Back

151   Ibid Back

152   Ibid Back

153   Ev 91 Back

154   Ev 104 Back

155   NATO: The Istanbul Summit, Research Paper 04/60, House of Commons Library, 26 July 2004, p 29 Back

156   Ev 90 Back

157   NATO: The Istanbul Summit, Research Paper 04/60, House of Commons Library, 26 July 2004, p 29 Back

158   NATO website ( Back

159   Ev 112 Back

160   Q 317 Back

161   Q 317 Back

162   Q 307 Back

163   Ibid Back

164   Ibid Back

165   Q 149 Back

166   Q 151 Back

167   Ibid Back

168   Q 149 Back

169   Ibid Back

170   Ev 90 Back

171   Ibid Back

172   Allied Command Transformation website ( Back

173   Q 135 Back

174   Q 313 Back

175   Ibid Back

176   Q 308 Back

177   Q 309 Back

178   Q 311 Back

179   Q 310 Back

180   IISS, Military Balance 2008, p 107 Back

181   IISS, Military Balance 2008 Back

182   Speech by Rt Hon Des Browne, Secretary of State for Defence, "NATO and ESDP: forging new links", 8 June 2007, MoD website ( Back

183   Ibid Back

184   Ibid Back

185   Comprehensive Political Guidance, NATO website (  Back

186   Q 73 Back

187   Ibid Back

188   Q 119 Back

189   Ibid Back

190   Q 120 Back

191   Q 119 Back

192   Ev 111 Back

193   Q 121 Back

194   Q 209 Back

195   Q 209 Back

196   Q 120 Back

197   Ibid Back

198   Q 119 Back

199   Q Ibid Back

200   Q 121 Back

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