Transatlantic Security Task Force Series
a “deployed NAO” to a “prepared NAO” that retains its long-standing attributes o a high-level o operational competence and responsiveness, but also leverages the operational experience and enhanced interoperability asso-ciated with engagements rom Bosnia to Libya.At the same time, circumstances inﬂuencing the Alliance’s collective capacity to meet the ambition set-out in the Strategic Concept have become less determined and their eﬀects more diﬃcult to calibrate since Lisbon. In partic-ular, the enduring global economic crisis, declining U.S. deense spending, and the uncertain direction o the Arab Spring represent new dimensions in this complex strategic calculus.
Economic Statecraft: The Assumed, but Neglected Partner of Strategy
Te economy-security nexus is, inescapably, a central element o an alliance o democratic nations. Resource concerns have also shaped the NAO agenda persis-tently, rom the days o the 1952 Lisbon ministerial meeting, through the 3 percent deense spending annual growth target o the 1970s, to the more recent guideline o devoting 2 percent o the Gross Domestic Product to deense expenditures.
Te economic and ﬁnancial crisis gripping the world since 2007-2008, however, has altered a undamental assumption underpinning the transatlantic relationship: that while politics and strategy — the “hard power” statecraf — might be, on occasion, sources o intra-Alliance disagreement and even conﬂicting poli-cies, the underlying strength and resilience o the North American and European economies ensured that nothing o consequence would aﬀect adversely that relationship. While politics and strategy might be, at times, a source o riction, economics, characterized by steady growth and low inﬂation since the end o the “Great Inﬂation” era o the 1970s and 1980s, could be counted upon to exercise a virtuous inﬂuence in virtually all circumstances.No two continents depend more on each other economi-cally than Europe and North America. ogether, they account or about hal o the world’s economic output and almost 40 percent o global trade. Every single day, more than €2 billion in goods and services are traded across the Atlantic, with millions o jobs on both sides o the ocean depending on that trade. Te United States and the Euro-
3 The 3 percent guideline was approved by heads of state and government at the NATO Summit meeting in London in May 1977. The 2 percent guideline was approved by Allies in 2006.
pean Union are also each other’s primary source — and destination — or oreign direct investment. For example, in Europe, more than 60 percent o all oreign investment in research and development is by U.S. aﬃliates. And European entities are responsible or some three-quarters o oreign investment in research and development in the United States.Regrettably, there is increasing concern that the evolving circumstances, as much as the original causes, o the current economic crisis have depleted to some extent that essential reservoir o mutual conﬁdence, while adding a urther source o strain to a relationship already laboring under an unresolved military burden-sharing debate. At the same time, a new sense o urgency regarding the resolve and capacity o Allies on both sides o the Atlantic to put their economic house in order, as well as the opportunities that might arise to trigger renewed economic activity, have prompted new eﬀorts. Tese eﬀorts have taken the orm o the ransatlantic rade and Investment Partnership, as well as less visible measures in the regulation o banking practices,
to place the transatlantic economic relation-ship on a new, well-anchored ooting. Whether these steps, while welcome and necessary, will be enough to steady the transatlantic economy remains uncertain.
Allied Defense Cooperation in an Age of Austerity: Retrenchment or Opportunity?
Declining deense spending among many Allies since 2008 and the resultant adverse impact o such a trend on a air sharing o the risks, roles and responsibilities associated with the common deense have been a deepening source o concern or several years. Former Secretary o Deense Robert Gates’ speeches in Washington, D.C. and in Brus-sels, in February 2010 and June 2011, respectively, illus-trated U.S. worries.
NAO Secretary General Anders Fogh Rasmussen has repeatedly warned against any complacency regarding the adverse inﬂuence that insuﬃcient investment in deense, as well as an unbalanced sharing o the burdens and beneﬁts o NAO membership, would have on both the military
4 Kate MacKenzie, “European Bank Deleveraging: Basel III edition,”
, October 24, 2012; Darryl E. Getter,
Implementation of the Basel Capital Regula-tory Framework
, Report R42744 (Washington, D.C.: Congressional Research Service), November 14, 2012.5 Remarks by Secretary of Defense Robert M. Gates as delivered at the National De-fense University on February 23, 2010, and at the Security and Defense Agenda on June 10, 2011, U.S. Department of Defense.