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Defining Trends

NATO Is Adjusting Better than Expected
Defense Budgets Are Declining in Most NATO Countries
Western Europe Is Deepening and Broadening Its Integration
Central and East Europeans Are Struggling for Internal Reform While Seeking Integration With the West
Ethnic Tensions Are Widespread But Largely Under Control Except in the Former Yugoslavia
Europe's Southern Region Faces Increasing Instability

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NATO Is Adjusting Better
than Expected

Some observers maintain that NATO is eroding or that it is an anachronism that should go the way of the Warsaw Pact. Most observers, however, believe that the Alliance has been adapting itself--some would say admirably--for a new era, steadily transforming its political focus, security agenda, and military structures. In NATO's forty-five year history, there have been a dozen summits involving heads of state and government; half of these have occurred in the last seven years, launching major initiatives that demonstrate NATO's desire to stay relevant in a rapidly evolving security environment.

NATO has developed a substantial outreach program through the North Atlantic Cooperation Council (NACC) and the Partnership for Peace (PFP) program, in which NATO's 16 members have engaged in cooperation with more than 20 states in Central and Eastern Europe, Western Europe, and the Commonwealth of Independent States. While some people have advocated immediate NATO membership for the Czech Republic, Hungary, Poland, and Slovakia, it became apparent at the NATO summit in January 1994 that the NATO allies were not ready immediately to accept new members into NATO, that further work was needed to develop the NATO relationship with Russia, and that the ground had not been laid for NATO expansion with the U.S. Senate and European parliaments. An evolutionary, step-by-step process leading to the point where NATO expansion seems only natural may stand the best chance of success.

The expectations raised in 1991 by the rhetoric of the Rome NATO summit declaration and the new Alliance Strategic Concept, calling for NATO to promote stability throughout the trans-Atlantic region, have yet to be fulfilled. NATO, however, now supports the initiative to establish a European Security and Defense Identity (ESDI), which is to strengthen the Alliance's European pillar while reinforcing the trans-Atlantic link and enable European allies to take greater responsibility for their common security and defense. NATO has also launched an initiative to develop a concept for Combined Joint Task Forces (CJTF). More will be said later about each of these. The Alliance has also moved from a near-dogmatic belief that it must never tread outside of NATO territory, to the conviction that to remain relevant it must be prepared to operate out-of-area. The experience in the former Yugoslavia, however, may dampen allies' enthusiasm for out-of-area operations.

Evolution of Cold War Security Institutions

The Alliance's 1991 new Strategic Concept and related declarations lay down a whole new set of missions. NATO's military was told to expand its horizons to include roles in peacetime and in crisis management, as well as to retain the ability to go to war. In 1992, NATO declared itself prepared to support peacekeeping under the auspices of the CSCE and the United Nations. By 1994, NATO was heavily involved in peace operations in the former Yugoslavia and had drafted a new doctrine for peace operations that is to provide the foundation for future training, exercises, and planning.

NATO's intervention in the former Yugoslavia has been criticized by some as too little and too late, and serious policy differences have emerged among allies. None-theless, NATO has had limited success and, more importantly, has gained valuable operational experience in crisis response. NATO has been on extended duty in the Adriatic blockade Operation SHARP GUARD and in Operation DENY FLIGHT over Bosnia. The Alliance's military operations in the former Yugoslavia mark the first time NATO has engaged in combat operations since its founding in 1949. NATO forces were largely responsible for the lifting of the siege of Sarajevo in February 1994. While developments in late fall 1994 make it more problematic, were a peace agreement to be reached, NATO's military leaders have developed contingency plans for Operation DISCIPLINE GUARD which would deploy a peacekeeping force to Bosnia.

As NATO's military missions have changed, forces and command structure have been reduced, reflecting the decreased threat of general war. NATO itself has few assigned forces, and the militaries of nearly all its member states are shrinking. This indicates a strategy of anticipating and managing crises and a growing reliance on reserve forces. NATO's integrated military structure has reduced both the number and size of its commands, consolidating areas of responsibility and streamlining command links.

The focus on political tasks and, for the military, the shift to peace operations and crisis intervention and smaller, more flexible forces are intended to improve NATO's capability for effective crisis management and prevention of war. There is, nevertheless, growing concern that the continued reductions in defense budgets of the allies may forestall the technological modernization necessary to give these smaller forces the needed flexibility and mobility. Such a development would have serious repercussions for the path NATO has committed to follow.

Finally, NATO is making a concerted drive to address emerging tensions and crises before they erupt into military conflict. Evidence of this broader political and economic focus can be found in the NACC workplans. The NACC has set out an ambitious agenda for activities related to defense conversion, privatization, environmental reclamation, economics, and other issues. NACC meetings have issued position statements on conflicts and situations far removed from NATO itself, such as the armed confrontation along the Tajik-Afghan border and the nuclear crisis in North Korea. The respective roles of NACC and PFP are still evolving.

Key Post Cold War NATO Decisions

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Defense Budgets
Are Declining in Most
NATO Countries

In real terms, defense budgets in the U.S. and most other NATO member states peaked in the latter half of the 1980's and have been in steady decline since. The U.S. defense budget began its decline early (in 1986) and since 1990 has fallen faster (13 percent versus 10 percent) than the aggregate budgets of other NATO countries. Defense budgets of NATO member states have followed measured, deliberate reductions, and many expect reductions to continue for several more years, with some exceptions. While the aggregate of the allies' real spending on defense is in decline, some countries--Turkey, Norway and Luxembourg--for differing reasons have actually increased their defense budgets in recent years, and some states may strive to maintain current real levels of defense spending.

The reasons for declining budgets are not surprising: the lack of a threat of attack by hostile forces; competing domestic demands long subordinated to Cold War defense priorities; the economic recession; and a perceived urgency to invest in restructuring and "re-invention" of governments and industries in preparation for greater economic competition in the future. Of these reasons, the first--the absence of a visible threat--is the basic rationale that allows consideration of all the rest.

At the same time, reductions are unlikely to gain greater momentum due to concerns over defense industry job losses, the time necessary to effect defense conversion to commercial enterprise, the recent ebbing of recessions (especially in the U.S.), and the growing realization that there are greater and more costly demands for military power in the post-Cold War era than initially perceived. For the U.S., the many post-Cold War contingencies, both outside and inside the NATO region, and the costs of all-volunteer forces have imposed great strains on U.S. military manpower and equipment.

The trend in declining budgets in NATO is most evident in the area of active force reductions. Generally, the forces of NATO nations have declined by 15 percent since 1990, although in some force indicators (e.g., maneuver brigades, fighter aircraft, and combatant ships) those states with the most modern forces have taken reductions of up to 30 percent (Germany) and 40 percent (U.K. and U.S.). Percentage reductions in major force indicators of NATO forces are projected through 1998 on the accompanying chart.

A less visible yet telling effect of reduced budgets and smaller forces is the reduction in opportunities for NATO forces to train together. Exercises now are fewer and smaller and often rely on simulation technology.

The arsenal of NATO integrated forces and infrastructure, which has been ready for Europe's defense and often tapped for contingencies from the Middle East to Africa to the Falkland Islands, is dwindling significantly, and NATO's superior multinational experience from decades of collective training is waning even more quickly.

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Western Europe Is Deepening
and Broadening Its Integration

The transformation of the European Community into the EU is the most recent achievement of a long, often tedious, and yet persistent integrative process that has been underway since shortly after World War II. Before 1991, integration in Europe was confined to trade and related economic policies. With the creation of a single market--which was officially inaugurated on January 1, 1993, although not all aspects have yet been fully implemented--economic integration reached a new plateau and now appears to be all but irreversible, though the tendency to suffer occasional setbacks can be expected to continue.

In the early 1990s, the integrative process spread to the social, political, security, and defense arenas. With the signing of the Treaty on European Union--the Maastricht Treaty--in December 1991, integration was broadened to include both Cooperation on Justice and Home Affairs and development of a Common Foreign and Security Policy, with provision for an eventual defense component. A Common Defense Policy is now envisaged. How deep such integration will go and how quickly it will progress are matters for speculation. While few expect Europe to stop at the single market stage, progress is likely to be cautious and evolutionary, with periods of apparent backsliding, as EU members struggle to compromise on the way forward. The unexpected delays in ratifying the Maastricht Treaty in 1992-1993 and the weeks of public debate over a new successor EU Commission President in spring 1994 are examples of the difficulties faced in integration. The most important challenges for the EU in the next several years will be addressed at the Intergovernmental Conference set for 1996.

As the EU pursues deeper internal integration, it is also broadening its geographic reach. The 12 members in 1994 will become 15 in 1995, with the addition of Austria, Finland, and Sweden. Six countries from Central and Eastern Europe have signed association agreements and could start entering the Union by the beginning of the next century. How effectively the EU could coordinate its activities with in excess of twenty members is a major question, but the Union does seem committed to further expansion.

The accession to the EU of Austria, Finland, and Sweden will increase the economic power of the EU. On the other hand, it will also take some adjusting to accommodate the three new "neutral" states; with current member Ireland, more than a quarter of EU membership will comprise states formerly described as "neutral." The EU will also share a new long border with Russia in Scandinavia. If East European states are eventually admitted, this will have even greater implications in the context of addressing issues beyond those traditionally discussed by NATO allies.

Parallel to integration in the EU, the WEU, since 1987, has gradually expanded its activities, both operationally (participating in the Persian Gulf War and operations in the former Yugoslavia) and politically (moving its headquarters to Brussels and absorbing the functions of the defense-oriented Eurogroup and the armaments cooperation-oriented Independent European Program Group). The WEU has also expanded its membership from the seven states that founded it in 1954 to nine members (with a tenth--Greece--awaiting membership ratification), two observers, three associate members, and nine associate partners. At half the WEU's meetings, when all are invited to attend, there are 24 states represented.

The WEU is now the most visible embodiment of the ESDI and the strengthening of the European pillar within the Alliance. Most observers expect ever-closer WEU ties with both the EU and NATO.

The trend in U.S.-EU relations is toward increased ties and greater collaboration on global issues. Potentially, the EU has the collective strength to be Washington's most significant partner, and the U.S. and EU already work together on many security issues. In 1990, the U.S. and the EU agreed to establish high level bilateral contacts, and there are indications that both sides would like to see cooperation grow after the 1996 EU Intergovernmental Conference.

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Central and East Europeans
Are Struggling for Internal
Reform While Seeking
Integration With the West

Events in Central and Eastern Europe have been in fast-forward over the past five years. Having experienced three distinct periods since the revolutions of 1989-90, the region is now poised for another shift.

Initial Euphoria: In 1989-90, Central and Eastern Europeans experienced euphoria, stemming from their successful revolutions and optimism about establishing democracies and market economies and joining NATO and the EC. This period saw German unification and NATO's extension of a "hand of friendship" to the East.

Return to More Cautious Optimism: In 1991 came the disintegration of the Warsaw Pact, withdrawal of Soviet forces from Hungary and Czechoslovakia, the failed coup in the Soviet Union, and a NATO Summit which resulted in the new NATO Strategic Concept, the creation of the NACC to engage the East, and the initiation of military ties with the East. Central and Eastern Europe's initial euphoria turned to more cautious optimism.

Increasing Skepticism: By 1992 and 1993, the Soviet Union had disintegrated, and Boris Yeltsin initially acquiesced in but subsequently opposed the bids of several nations in Central and Eastern Europe to join NATO. NATO and EU hesitancy to embrace Central and Eastern Europe contributed to pessimism about the prospects for the extension of Western security institutions and economic support to the East, while Russia's domestic turmoil and entanglements in the "near abroad" led to increased skepticism about Russia's democratic development. Greater realism about the time frame for a successful economic transformation began to set in. Voters in Lithuania and Poland in 1993--and in Hungary, Slovakia, and Bulgaria in 1994--expressed their frustration at the ballot box, returning ex-communists to power.

Testing NATO: The fourth period, beginning in 1994, has seen Central and East Europeans reluctantly resigned to a slower process of integration than they wish but willing to participate in cooperative arrangements, testing Western intentions. NATO's Summit in Brussels in January adopted the PFP program, suggesting possible eventual membership in NATO through PFP participation and the possible inclusion of forces of PFP partners in the newly conceived Combined Joint Task Forces (CJTFs) presumably for out of area contingencies. Central and East Europeans, increasingly skeptical about Western intentions, are pressing NATO to clarify whether participation in the alliance's new PFP program is truly considered a step toward NATO membership.

If NATO (and the EU) appear to defer indefinitely membership for new entrants from the East, Central and East Europeans could become disillusioned and seek some alternative security arrangements, although working out such arrangements would not be easy. Poland, for example, has been establishing ties with Germany and France, which could provide the basis for a trilateral security group. Poland has also been developing ties with Ukraine; if Ukraine remains independent, a Polish-Ukrainian relationship could provide security assurances in the future vis-a-vis larger neighbors. Finally, a strong pan-Slavic pull within the Polish military could provide the basis for some accommodation with Russia, depending on what happens there.

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Ethnic Tensions Are
Widespread But Largely
Under Control Except in the
Former Yugoslavia

Europe has a mixture of ethnic situations, including states that are nearly ethnically homogenous and states with a high degree of ethnic heterogeneity. Many European states also have increasing numbers of immigrants, some coming from former colonies but many increasingly coming from Southern and Eastern Europe seeking jobs and relief from ethnically-based conflict.

Ethnic tensions are, in general, being managed peacefully in Western Europe. The German government has been able to reduce domestic violence against immigrants and foreigners. In Northern Ireland, the ceasefires announced in late August by the Irish Republican Army and in October by armed Protestant militants are promising, although it remains to be seen whether this signals the beginning of the end of 25 years of sectarian violence there.

CSCE has been helpful in developing conflict-prevention mechanisms focused on diplomatic measures to keep potential conflicts from erupting into violence. The fruits of these efforts can be seen in the Baltics, in the mitigation of problems between Slovakia and Hungary, and in Macedonia. The French initiative on stability talks also seeks to use diplomacy to prevent conflicts between states.

In Central and Eastern Europe, three types of ethnic minorities can be distinguished:

These three types of situations give rise to different problems and conflict resolution approaches. The problem of frontier minorities can be addressed by special agreements between neighboring states or negotiated revisions to existing frontiers, although the latter are politically difficult. Tensions arising from the presence of isolated minorities can be reduced by providing adequate legal protection for minority rights. In mixed regions, guarantees of minority rights from the government in control of the region are also crucial, as is promoting peaceful coexistence among the groups that consider the region their home.

Although several areas of ethnic tension remain in Central and Eastern Europe, violence has generally been avoided, with the glaring exception of the former Yugoslavia. In most areas, the interests of ethnic minorities have been accommodated by peaceful means.

Poland exemplifies a twentieth-century Central European trend toward ethnic homogenization within national borders. When Poland achieved independence in 1918, Poles comprised only 60 percent of the population. By 1990, as a result of border adjustments and mass migrations, they comprised nearly 98 percent. A good-neighbor treaty with Germany has addressed the concerns of the 1.3 percent German minority.

The January 1993 division of Czechoslovakia into a generally ethnically homogenous Czech Republic and a somewhat less homogenous Slovakia took place on peaceful, if perhaps not entirely amicable, terms. However, ethnic tensions could evolve concerning the Hungarian and Czech minorities in Slovakia.

Hungary is also nearly ethnically homogenous. Tensions arise, however, over the status of Hungarian minorities in neighboring states--notably in Romania (2.3 million Hungarians), Slovakia (600,000 ethnic Hungarians), and the former Yugoslavia (400,000 ethnic Hungarians primarily in the Vojvodina autonomous republic of Serbia). Hungary and Romania have not yet signed a good neighbor treaty, and Hungarian relations with Slovakia and Serbia have not always been cordial.

Romania is nearly 90 percent ethnic Romanian but also has a relatively large ethnic Hungarian population (8.9 percent). Issues involving Hungarians in the Transylvania area have been the most contentious.

Bulgaria has potential ethnic problems with the 8.5 percent of its population who are ethnic Turks, as well as with several smaller minorities. Official discrimination against Turks was terminated under a new Bulgarian government, and this has contributed to warming of Turkish-Bulgarian relations. However, Bulgaria risks being drawn into conflict in the ex-Yugoslavia over ethnic issues, particularly if hostilities extend to Macedonia.

Sizable ethnic Albanian populations exist in states neighboring Albania, including Serbia and Montenegro (where 14 percent of the population is ethnic Albanian, concentrated in the Kosovo region), and Macedonia (which is 21 percent ethnic Albanian).

Finally, the treatment of large ethnic Russian minorities in the three Baltic states was a major issue in negotiations on Russian troop withdrawals from that region, especially in Latvia and Estonia.

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Europe's Southern Region
Faces Increasing Instability

Instability in and near Europe's southern region is an increasing security concern. Of immediate and primary concern is the conflict in Bosnia and the danger that it will expand. Beyond this, instability in North Africa and terrorism from the Middle East pose a number of risks to Europe. Tensions between Greece and Turkey have also increased significantly.

Former Yugoslavia. The bloody three-year conflict and ethnic hatred among and within the successor states to Tito's Yugoslavia present a major challenge to post-Cold War Europe. Not since World War II has Europe experienced the types of horrors seen in the former Yugoslavia--ethnic cleansing, indiscriminate shelling of civilian centers, concentration camps, organized rape as an instrument of intimidation, and mass movements of refugees. Beyond what has already been experienced, there is the potential that the conflict could expand across borders.

The institutions created by the international community during the Cold War to manage crises have failed to end the violence in the former Yugoslavia, although they have helped to moderate it. The inability of the EU and its Atlantic and Eurasian partners to stop the violence casts a shadow over the concept of a new European security order.

North Africa and the Near East. The risk of civil war in Algeria, instability elsewhere in North Africa, and the security risks posed by the irresponsible Libyan regime have serious implications for security in Southern Europe. To the east, the Middle East peace process has lessened the threat of full-scale war in the Levant but has increased the threat of terrorist reactions by opponents of the peace process. The situation in Iraq remains a major concern to neighboring Turkey and others.

This instability poses risks in the Mediterranean basin and to Southern Europe itself. The safety of Americans, Europeans, and others in the North African states is an increasing concern, as is the waxing potential for terrorism emanating from this part of the world. Many countries in Southern Europe rely on natural gas and oil from North Africa and would be seriously affected by any disruption. Major conflict or civil war in North Africa could also result in a massive flow of refugees to Southern Europe; there are already hundreds of thousands of North African immigrants in Southern Europe, and some estimate that a major conflict in North Africa could lead to 500,000 to 1,000,000 refugees.

Greece and Turkey. Tensions between Greece and Turkey have increased lately; if not moderated, these could pose significant problems for cooperation in NATO. Activity by each nation's air and naval elements in the Aegean are cause for concern, and the situation in Cyprus continues to be a source of tension. The conflict in the former Yugoslavia, with the potential for Turkish support for Muslim elements in Bosnia (in tension with Greek ties to Serbia), has made it increasingly difficult to moderate the tensions between Greece and Turkey. Efforts by NATO allies and others to persuade Greece to drop its blockade of the former Yugoslav Republic of Macedonia have been unsuccessful to date.

Turkey also faces instability in neighboring Iraq under Saddam Hussein, as well as from terrorists among its own sizeable Kurdish minority.

A Growing Network of Institutions

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