NATO and the Challenges of Austerity

Abstract : In the coming decade, NATO faces growing fiscal austerity and declining defense budgets. The global economic crisis has forced most European governments to trim their defense budgets: Germany will reduce defense spending by a quarter over the next four years, Britain s defense budget will be slashed by more than 8 percent in real terms by 2015, and the defense budgets of some of the smaller European nations have taken even larger cuts. The United States is also planning significant reductions. These cuts have been driven almost entirely by the need to reduce large budget deficits not by a change in the nature of external threats. The cuts have been made, moreover, with little intra-Alliance coordination. If this uncoordinated process of budget cuts and reductions intensifies, NATO will lose critical capabilities. U.S. and European forces might no longer be able to operate together to meet evolving security challenges confronting the Alliance. Meanwhile, the United States is shifting defense priorities. The Obama administration s national security strategy, released in January 2012, gives increased priority to U.S. engagement in Asia and the Pacific. As Washington focuses increasing attention on enhancing stability and security in Asia, pressure is likely to grow on America s European allies to take greater responsibility for providing security in areas such as the Mediterranean littoral, where Europe has strong historical interests. The planned cuts, however, will greatly limit NATO Europe s ability to assume any such responsibility.