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Historical archive

Transatlantic ties in times of financial austerity

Historical archive

Published under: Stoltenberg's 2nd Government

Publisher Ministry of Defence

- Apart from Norway, Turkey and may be one or two others, all our allies are downscaling their defence budgets significantly, Minister of Defence Espen Barth Eide said at the Leangkollen Security Conference.

The Leangkollen Security Conference 6 February 2012
Minister of Defence Espen Barth Eide

Check against delivery.

Ladies and Gentlemen, dear friends,

It is a great honour for me to address this distinguished audience at this annual conference.

The Norwegian Atlantic Committee is an organization that is very close to my heart. And allow me to say, you are doing a great job. We can see this from recent statistics which tell us that the support for NATO membership in Norway is now at 77 % with 7% against. This is the best result since 1994 and, I believe, also quite unique in an Allied setting. This is of course not solely due to the work of the Norwegian Atlantic Committee, but I definitely think it helps to keep a broad understanding of what the Alliance is, why we have a transatlantic partnership and why this partnership has to adapt and reorient itself in changing times - which is exactly what you do in this organization.

Our evolving transatlantic relations are very much in focus these days. I recently returned from three subsequent international venues where this was at the forefront. I therefore would like to share with you both some fresh inspirations but also some more developed thoughts, drawing heavily on this past week´s events which I believe well illustrate that we are living in a time of great change, a time in which the assumptions we were making only a few years ago are challenged in fundamental ways.

Hence, my opening remarks will be in the future business. And just as a disclaimer, I am not going to speak particularly much about Afghanistan, Syria nor Libya. 

Let me still point out that we are following the developments in Syria with deep concern. We share the need for a collective policy. We deeply regret the Russian and Chinese veto in the Security Council on Saturday. There is an imminent danger here of ending up on the wrong side of history. At the same time, we also recognize that every single other member of the security Council voted actively in favour of the Arab League´s peace plan, including India, Pakistan, South Africa; Morocco and Azerbaijan, neither of whom known to be the traditional harbingers of interventionism. There is, as we see, no coherent BRICS line here. There is an increasing international isolation of Assad´s regime, and the Arab League is now the front line of the international community´s efforts to deal constructively with the fundamental crisis that is unfolding in Syria.

Furthermore we remain deeply committed to Afghanistan. Norway will have troops in Afghanistan as long as ISAF is there. We are there in strength and we will stay there in strength, although the military presence will be reduced in accordance with the transition plan for ISAF. Furthermore, Norway has a long perspective on its civilian engagement in Afghanistan. We will sustain our aid on a high level in the years to come. Since I became Minister of Defence it has been important for me to point out that Afghanistan will continue to face difficult choices long after our military departure. There will be economic, social and political conflicts that are far from solved. But we also believe Afghan authorities and Afghan security forces are much better prepared to meet future challenges. The Afghan people will have to start making their own future including defining a role for this country in the region. 

I am not going to speak particularly about Libya either. We were an active participant in the operations in Libya. Together with some other smaller North Western European countries we made a significant military contribution. The efficiency and speed through which we were able to deploy, the quality of the military skills that were demonstrated, is a tribute to our highly professional men and women in uniform. It is also intrinsically linked to the fundamental military transformation our armed forces have undergone the past ten years.

But as I said, neither of this is what I would like to focus on this morning. 

Military transformation and the need to make difficult choices in dire straits, is a point of departure for the remarks I would like to make. The economic turmoil and recessions have again put transformation at the top of several nations’ domestic agendas. However this time it happens out of necessity. It takes place not from a position of strength, but from a position of economic weakness.

Therefore I would like to pay particular attention to defence policy at a time of widespread economic difficulty. I will talk about the ways in which the economic unrest and security are linked.

My main message today is that we are facing a very different world. Our own continent, Europe, is in real, deep and lasting economic trouble, with potential security implications. This calls upon those of us who care for the transatlantic ties to actively promote transatlanticism. It requires us to argue convincingly for continuing - and strengthening - the transatlantic Alliance. And lastly it requires all Allies to adapt to long term economic constraints. If we can’t do more, we can do better together.

Europe now finds itself at a time when there is less money available for defence. Apart from Norway, Turkey and may be one or two others, all our allies are downscaling their defence budgets significantly.

If we are not careful, this will lead to smaller armed forces and, less collective defence capacity, and in the worst case, reduced security. We must realize that this is a lasting, rather than a transitory situation. Against this backdrop we need to understand the coming of a new world order. And it is against this backdrop we have to consider the transatlantic ties.

A new world order in the making
As mentioned I just came back from several international meetings that were heavily characterized by transatlantic partnership. First, I attended a meeting of NATOs Ministers of Defence in Brussels, a Ministerial that was reasonably substantive on at least some issues and hence actually quite good for. The focus this time was preparations for the Chicago Summit and, of course, how to think about security in a time of austerity. The break-through in agreeing to jointly finance the Allied Ground Surveillance system of drones was a strong tribute to the argument of Smart Defence; i.e. that in austere times, we should do more together and less each on our own.

Then, I travelled on to Munich for the annual Munich Security Conference, or rather, as it once was called, the Wehrkundetagnung (which sounds much punchy, doesn´t it?). Having attended repeatedly in Munich, I can with no hesitation declare that this was the most interesting one I attended so far. But then again, I cannot exactly compare my experience from the Munich forum with the man I happened to sit together with in the audience, a man that spoke at the very first panel of the very first Munich conference exactly 50 years ago and who once again chaired one session this time: Dr. Henry Kissinger.

Thirdly, before leaving Munich, I attended a superbly interesting small roundtable luncheon organized by the Atlantic Council, which of course is the sister organization of the Norwegian Atlantic Committee. I was, by the way, instructed to convey the Atlantic Council´s warmest regards to this audience and to the Norwegian Atlantic Committee. 

The luncheon was dedicated to honor one of the grand old champions of transatlanticism: Three times National Security Advisor in the US, General Brent Scowcroft. One of the men that not only handled the Cold War security challenges but also helped end it and created a better and more unified Europe.

With the participation of a highly select group of people, including the legendary Defence Minister in Germany, Volker Ruhe, current and former SACEURs, and some of the best thinkers and policy-makers in the transatlantic club present, this became a highly inspirational moment. General Scowcrofts brilliant message to us all was that we as political leaders should deal with strategy, not tactics. We employ others to do the tactics. Hence there are issues above and beyond what happens to be NATOs current operational focus at any given moment that are far more important for our collective security. I could not agree more. Now is again time to ask the big questions.

This is exactly what is taking place in Washington these days. Strategy is being reintroduced into the American defence and security thinking. In my meetings with secretary of defence Leon Panetta, I find us to be very much on the same wavelength when it comes to our assessment of several long-term trends. In Norway’s current long-term plan, which we presented to Parliament in 2008, and in the Norwegian Strategic Concept from 2009 (“Capable Force”) we are discussing the long-term trends of a more multipolar order, the rise of Asia, and that we need to prepare for both asymmetrical and symmetrical challenges. A similar evolution out of the 9/11-centric strategic perspective of the US can be found in President Obama’s recently launched Defence Strategic Guidance. Here, the President and the Pentagon clearly puts its sights on the future as potentially different from today and not simply a continuation of the current. This is warmly welcomed from Norway’s side.

Today I find us to be on exactly on the same page when it comes to our strategic outlook.  Such an outlook is of paramount importance in defence planning and defence thinking. If we do not take the burden of thinking ahead, incremental planning will gravitate to mere continuation of what we currently are doing. I can also see how this shift begins to play out also in to our NATO meetings. Until recently one had the impressions that every Ministerial in NATO was almost entirely an Afghanistan-centric  meeting, where too much of the discussion ended up on the operational or even tactical level.  The underlying assumption seems to have been that the next broad engagement we as the alliance would be faced with would be a kind of “Afghanistan II”. That is no longer the case. 

In the new world order we see emerging we must recognize that the position for Europe is significantly altered. We have over the past few years seen, and described, how emerging economic superpowers, such as China, India, Brazil and Indonesia, will alter the global balance of power. We are also seeing a revitalized Russia. We are witnessing a world in which the traditional political and economic dominance of the West is in decline. The United States will continue for many years to be the world’s only true military superpower. But its lead is diminishing. This is something the United States’ political leaders today clearly recognize and has begun to adapt to.

Indeed we have to acknowledge that the centre of global economic power no longer lies in Europe. It is towards Asia in particular, that much of the economic power is shifting. We recall that at the heyday of Western dominance, the collective GDP of the West was way beyond 60 % of the world’s total GDP. Today we have decreased to 40 %. By the middle of this century, it is estimated to be about 30 %.  This, in other words, points towards a world quite different to the one to which we have become accustomed.

We are seeing a world in which China emerges as a new superpower. Accordingly, we are witnessing a markedly new phase in United States policy towards China. The United States’ new defence strategy confirms what we have long been saying, namely that in the new world order, America’s focus will inevitably turn to Asia and the Pacific region.

The United States is facing an emergent China which, to an increasing degree, is engaging in power projection in its areas of interest. They encounter a China that seeks to strengthen its room for manoeuver in the region. Its behaviour is not surprising. China is just doing what great powers have always done throughout history. However, we all need to understand how relations between the United States and China will be of crucial importance to the future international climate. The strategic centre of gravity of the 20th Century was in Europe. In the 21st Century, everything seems to suggest that it is going to be in Asia, and not the least, around the South China Sea.

It is the fundamental structure of the international system itself that is changing. The brief moment of unipolar power is over. History has shown us that military build-up and a demand for greater international influence often follow strong economic growth.

The new Pentagon strategy is in this sense basically adapting to a fundamental new world order. It is actually entirely logical – but the consequences are inevitably that the weight placed by America on Europe will continue to diminish.

Hence, in my view, the reduction of US static, military presence in Europe is quite logical given the prevailing new world order. However, this does not have to entail a weakening of the transatlantic ties. Current plans suggest that previously static presence (permanent bases) is substituted by more dynamic presence, like frequent and large-scale exercises, prepositioning of equipment, for instance in Norway, and increased intelligence sharing and situational awareness.

This actually fits well with the recent re-emergence of a focus on NATOs Article V commitments that we have been arguing for over the last years in NATO, not the least in light of the New Strategic Concept that we successfully adopted in Lisbon in 2010.

However, Article five is not in such good shape as people might think. This is due to the confluence of two different trends: reduced military capability for deterrence, particularly on the conventional side, and the high operational tempo emphasizing non-article V and out of area operations over preparedness at the core. This was starkly illustrated by this fall’s NATO CMX exercise, conducted in Norway. That the institutional memory of Article V response mechanisms isn’t what it once was in NATOs command structure.

The financial unrest and its security implications
Reduced spending of defence is not the only way the current economic situation Europe affects security, however.

I think we have to be honest in saying that Europe is actually in a rather bad shape. Moreover, there is a crisis in the very idea of Europe in Europe itself. We see several countries which have a very significant unemployment, particularly among the youth. Spain has 45 % youth unemployment, sustained over time. There is no reason to believe it is going to improve in several years.

In some countries, elected politicians are substituted by technocratic governments. This may of course be a good tool to make some of the painful decisions that must be made in a very peculiar time. What we are seeing today in Italy for instance is actually quite promising. But the tendency also illustrates another theme; where technocrats are brought in to form a government, this not simply reflects the need for economic expertise. It may also suggest that the trust between the voters and those elected on a political ballot has become very thin. And this is actually somewhat worrying.

The economic crisis has revealed a number of weaknesses in the existing financial system. Not least has it shown how the absence of political control can make otherwise robust democracies quite fragile.

We are witnessing how the political stability in a number of countries is being put to the test. The rule of law is being challenged. In some European countries we can detect a significant growth in xenophobic and nationalistic tendencies. This is not only serious for the countries concerned. It is also a serious concern for a Europe that could become increasingly inward-looking. There are substantiated fears of both economic and political nationalism being on the rise.

This problem I have described is not only an internal concern to Europe. It is also a challenge for the rest of the world. In my previous job, as state secretary in the Ministry of Foreign Affairs, we invested a lot in a strategic dialogue with emerging powers, in particular the many emerging powers being democratic in nature, as India, Brazil and Indonesia.

In this process, I made an interesting observation. When going to places like Brasilia and New Dehli or Jakarta, I was met by officials typically saying that the overall situation in their part of the world was actually quite good, that optimism prevailed, that things were getting better and that regional cooperation was improving. And then they added: “But we are really concerned about Europe”. They are concerned not only because they like us. They are concerned about the spreading effect this might have and how this will affect their own security.

I had exactly the same feeling two weeks ago at the World Economic Forum in Davos. Several non-western countries were expressing deep concern about the economic and political health of the Old World. Felipe Calderon, the president of Mexico and chair of the G-20 expressed it well when he said; “we are all Europeans these days”, and that “indeed, we are all Italians”. His point was that the Euro-crisis has potentially destabilizing effects far beyond the remits of Europe itself, particularly for countries that have been growing precisely because they were exporting to the West.

Furthermore, we must admit that the perception of Europe and NATO among nations in our own vicinity may also change.

One of our collective successes of the 1990s was the peacefully dismantling the Warsaw pact. It was the time when we reached out a hand saying to a lot of countries that had been our adversaries, that you are welcome not only to become our friends, but become part of us. This is the quintessence of the European project as well as the transatlantic security project. We all know that this had a tremendous security effect. It prepared the ground for a sustained peace.

This was, however, based on the power of attraction. It was based on the sense that Europe was seen as a centre of growth, progress and modernity. It was a political unity that a lot of countries, societies and individuals wanted to join because it offered a prosperous future.

That is not there any longer. As a result, the disciplinary effect of the promise of future membership, be it in NATO or in the EU, may actually be much weaker today than it used to be a decade ago. If this is true, is means that one of the strongest instruments of promoting regional stability in the Euroatlantic area is of lesser value than what we thought

Implications for NATO and the transatlantic ties
My third point of this intervention is what this eventually means for NATO and our transatlantic ties. 

First, I guess you expect from me as a born transatlanticist and from a country with strong transatlantic traditions, to say that NATO is more important than ever. This is a policy line at any given moment, but this time, it is even more true than before.

It is our collective interest to make this transatlantic project prosperous again. This is because the alternatives are simply bad. An implosion of Europe would be bad for the US. Obviously a retraction of the US from the world scene would be very bad news for Europe.

Due to the lesser relative position in the world order, we have to stick together in order to promote our values, freedom, and ideas and. These cannot be taken for granted as easily as during the short moment of Western-dominated multipolarity. This has implications also for NATO and the cohesion of the Alliance. Hence, the US needs to see the Alliance as much more than simply a pool of allies they can draw upon for assistance in far-away missions, as seemed to be the dominant thinking during the years of the Bush administration. Likewise, we Europeans need to look beyond our own borders in order to take a co-responsibility for global security in a changing landscape. The rise of Asia isn’t just happening in America’s world. It is our world, too.

The financial unrest is without doubt the greatest challenge currently facing NATO. There are many reasons for this. The economic crisis affects all countries, not least their defence budgets. The defence budget is often seen as an easy target when cuts have to be made. Any negative effects of a reduction in defence spending are widely perceived as something, almost abstract in nature that might be felt only in the longer term. It hurts much more to cut the spending on things that are close to us all, like health, education and infrastructure.

For the European allies, defence budget cuts are, however, more dramatic than for the United States. The cuts are coming just at the time when the need for military transformation is coming to the fore. A number of European countries have chosen to postpone the restructuring of their military organizations. And we see countries where it has not been possible to reach the broad political consensus that we recognize from our own restructuring process.

We understood that it would take many years for the benefits of restructuring to become evident. The process takes time and it is always painful as you start. We were clear that we had to maintain a long term perspective when working out the costs of a new structure and new materiel.

The financial turmoil therefore brings with it a need for restructuring and cuts at a far more existential level. There is no doubt that cuts especially made in the high end will critically affect NATO. They represent a serious challenge in the context of burden sharing and the transatlantic ties.

Today countries are being forced to cut entire elements from their defence structures. If these cuts are not considered in the context of the needs of the Alliance, the process can only lead to substantial gaps in NATO’s collective defence capability. We need, therefore, to see that the cuts are made in a way that takes account of the collective needs of the Alliance. We have to prevent the holes in our common security net from getting larger. As my UK colleague, Defence Minister Phillip Hammond very correctly points out, we must make sure we have assured access to the resources that we pool. 

This brings me back to one of my earlier points, which is the need to re-establish a firm belief in Article five and our collective capabilities. Particularly our collective conventional capabilities, which I believe has been withering away faster than both our ability to deploy to distant theatres and our nuclear capabilities. I believe it is very important that we on our road to the Chicago Summit put this at centre of our discussions. 

Over the course of the last two decades we have witnessed a development where NATO has become associated to an increasing extent with a succession of military out-of-area operations. There are many who seem to believe that this is the main purpose of NATO today. For some, NATO is simply perceived as an organization that takes away their sons and daughters and sends them to remote places to do nation building in the desert.

We have recently been conducting exercises with particular emphasis on the Article five dimension in the Alliance. The lesson is that we are not that good at this any longer, procedural wise. Some of this has withered away because of the intense speed of operations. NATO commands both have to conduct operations and plan for the future simultaneously. Few, if any, of the Allies have succeeded in squaring this circle.  

Of course, times have changed. We must continue recognising the importance of the Alliance’s operational engagements. We should continue to use the Alliance when the UN and the global community request it. But the pendulum has swung too far. We have to find a sustainable balance.

The point I would like to make is that the situation in many European countries in addition to the changes that will take place in the US, may lead to a further weakening of the core capability to defend ourselves both against traditional and asymmetrical threats.

And that is a challenge that we have to take seriously. 

Towards a closer and smarter defence co-operation
Hence, let me finally say a few words on our response to the rather bleak situation we are faced with.

First, we need to know that NATO´s Article 5 rests on solid ground. This has been Norway’s message for many years and it has won broad support, not least in the new Strategic Concept.

The Core Area Initiative, as you know, was launched in 2008. We now wish to take this initiative one step further.

At the Ministerial last week, I offered to make the Norwegian Joint Headquarters as a pilot project in which cooperation with NATO’s Command Structure could be formalized over the course of a trial period. We hope to use this project to give NATO’s command structure a more regional focus. We would also like to show that it is “smart defence” to connect national headquarters with NATO’s command structure and to show that this creates synergy both for the Alliance and for Norway. This would give more defence for our money as well as increased security for NATO and individual members.

Second, NATO has to adapt to long term economic constraints. If we can’t do more, we can do better together. We have to create collaborative solutions that enhance the common capability. This is clearly in the interests of both NATO and the individual countries concerned. In the same way, here at home, we need to find ways of getting better defence value for our money.

For Norway’s part we have made clear the importance we place on the European allies coming together to develop the essential joint support capabilities with NATO as the framework and facilitator. Norway currently participates in all the multinational joint capabilities within NATO’s framework.

We should remember that such joint capabilities are crucial to NATO’s effectiveness and credibility. It is capabilities like the integrated command structure, AWACS and allied ground surveillance (AGS), which we agreed upon last week that gives NATO its operational advantage. Withdrawal from NATO’s joint projects, as we have seen some allies do in recent times, not only serves to chip away NATO’s military capability; it also makes NATO even more dependent on America, an America that is turning its attention increasingly towards the Pacific region.

These are both examples of smart defence. Smart defence is often seen as investing in specific, common platforms. But it should be seen as more than that. It is a long-term vision of how Allies can acquire, maintain and effectively use the capabilities needed for future Alliance operations and missions. It is about doing old things in a new and smarter way. And it is about changing mindsets and preconditions for success. That is what NATO has to do now and it is more important than ever that we do it. 

This is something Norway has been working on for many years. Let me just mention some concrete examples. Together with Belgium, Denmark and the Netherlands, we were founders of the European Participating Air Forces (EPAF) in the late 1970s. Together with the US, we started a unique multi-national development program for the F-16.  

Through this cooperation we have saved a lot of money by doing things together. We have been upgrading, purchasing, thinking, planning and been training together. And of course we all have got better by doing that. Our recent operation in Libya revealed a notable difference between those who had been involved in EPAF and those who did not have the same level of interoperability.

The Nordic countries have also been working together for many years to develop joint solutions. This is nothing new. In the current economic crisis we believe that our existing experiences set a good example. As close neighbors, our geographical location gives us particular advantages. But we also enjoy a high degree of mutual trust. Our thinking is not excessively held back by tradition or by national borders. We have similar views on the need to make our armed forces more effective. And we share the ambition to make the most of our national resources.

These cooperative activities have come a long way. Procurement, logistics, operations and training – these are all areas in which cooperation is up, running and steadily developing. Norway and Sweden have collaborated to produce a new artillery system. Today there are Swedish, Finnish and Norwegian combat aircraft exercising regularly across national borders. Last year saw 62 days of joint training and exercising involving the air stations at Bodø, Rovaniemi and Umeå. Here we meet other “foreign” aircraft. We fly in other countries’ air space. Our training benefits hugely at no extra cost, no-one has to be deployed and all costs are borne from existing training budgets.

Another regional initiative we pay much attention to is what we call the Northern Group. The Northern Group is an important arena which gives us an opportunity to strengthen existing arrangements and establish multinational, as well as bilateral solutions, with countries like the United Kingdom, Germany, Poland and the Netherlands.

Sweden and Finland, as partners to NATO, think along the same lines. I would claim that the Alliance is strengthened by countries with common geostrategic interests coming together. It gives us a new and important building block in the overall defence structure. And it is no coincidence that we, on the morning before the NATO Ministerial, had a Northern Group meeting on ministerial level, led by my Finnish colleague Wallin, and with my Swedish colleague Tolgfors together with our Danish, Icelandic, Baltic, German, Polish, Dutch and British colleagues.

These are only a few examples. I could have chosen others. That is not the point, however. The important thing is to stress that all of this makes us save money. It saves resources to be spent on common security goals in Europe and in NATO. Recognizing that the collective strength of the Alliance is where our security ultimately lies, we do this to the benefit of our own security interests. 

Concluding remarks
Ladies and Gentlemen,

I offered a candid and some may argue a rather grim perspective this morning. But at this stage I do believe some realism is required.

I am saying this not only because of the depth of the financial crisis. I am also saying this based on our own experience from doing military transformation. One lesson we learned, is that transformation is a very good idea, but it hurts before it pays off. While making cuts you still have to keep the wheels turning. And assuming that you want to maintain a certain level throughout, you will most likely have to add a lot of extra costs on top of the running costs. Hence you change in order to see change take place, not this year, but rather in 5, 10 or even 20 years.

The same goes for smart defence. A decision in February to go for smart defence will not deliver economic benefits this year, but maybe in 2017. Given that many of my colleagues in Europe are now told by their Finance Ministers to cut money, not in 2017, but already this year, it is difficult to square the circle. Yes, we can all agree that it is smart, but very difficult. And it will really require some serious effort to get there.

I conclude there with my main message that the world is very different for all of us. Europe is in real trouble, with potential security implications. This is something we all, including the US, needs to take seriously. For the US, I believe it is not a question of either/or. Both Europe and Asia will remain important, but the relative weight will shift. Consequently, Europe again will have to raise the occasion in order to maintain solid transatlantic ties.

While somewhat candid today, I remain a fundamental optimist on behalf of the transatlantic alliance. If we did not have it, we would need to invent it today. It should be the values, principles and ideas that we have shared since the Alliance was born that keeps us together, more than the politico-military situation at any given moment in time.

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