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Thank you. I am honored to be invited to appear before this Committee to address the security and military aspects of NATO enlargement. I would like to address first the rationale for NATO enlargement in the context of the European security framework and then talk about the military implications of enlargement, including the aspect of costs, which I know has been of interest to this committee, the Senate, and the public at large.

As Secretary Albright made clear in her appearance before this Committee, nowhere are American concerns more vital, and our efforts more concentrated, than in Europe. We will maintain our commitment to Europe in troops on the ground, in capability to reinforce as needed, and in political engagement in seeking to resolve problems. America makes this commitment not as an act of altruism, but because the security of Europe is vital to our own, as events in this century have repeatedly shown.

And we have an historic opportunity before us. President Clinton said recently, "Taking wise steps now to strengthen our common security when we have the opportunity to do so will help build a future without the mistakes and the divisions of the past, and will enable us to organize ourselves to meet the new security challenges of the new century."

Twice before in this century, America had the opportunity to help build a system of European security. The first time, after WWI, we foolishly held back from the responsibilities our interests required we assume. The second time, after WWII, 50 years ago, Western Europe and the United States together chose a path of reconciliation and reconstruction through the Marshall Plan, and together moved from terrible destruction to unprecedented prosperity and security. However, Eastern Europe and Russia did not participate because of Stalin’s paranoia and relentless expansionism.

We now have a third chance . . . this time to build a security system for all Europe that will:

Solidify the place of the newly free nations in a secure Europe linked to the U.S.;

Maintain U.S. leadership and engagement;

Foster growing European integration;

Ensure that Russia will play a constructive role, commensurate with its importance and weight in European affairs; and

Preserve and strengthen NATO as the core instrument of military security in Europe.

And, unfortunately, we face problems as well as good opportunities. The end of the Soviet threat, while very welcome, has not meant the end of threats. Threats to stability and security can still arise from old national and ethnic hatreds, home-grown and state-sponsored terrorism, threats from unstable regions outside Europe, and the prospect of the spread of weapons of mass destruction.

In the new European security system we seek to build, the key instrument is NATO. NATO is the only effective, continuing multilateral military alliance in the world. It has risen to the challenge of providing a critical instrument to promote peace in Bosnia. The best evidence of NATO's continuing relevance is the eagerness of many countries to join it -- and the determination of its current members to keep it strong and to shape it to respond to the new challenges and opportunities we face. Countries want to join NATO because of what it is -- a strong military alliance, with strong U.S. leadership. It will remain so.

To that end, we have embarked on an historic program to build a new NATO. NATO enlargement is the most publicized, but not the only, part of a much broader strategy to help create a peaceful, undivided and democratic Europe. That strategy has included many other elements: support for German unification; fostering reforms in Russia, Ukraine and other new independent states; assistance to the withdrawal of Russian forces and nuclear weapons from newly independent states; negotiation and adaptation of the Conventional Forces in Europe Treaty; and the evolution and strengthening of European security and economic institutions, including the European Union, the Organization for Security and Cooperation in Europe, the Council of Europe and the Western European Union, and working toward the creation of a European security and defense identity within NATO.

With regard to NATO itself, NATO enlargement is also part of a much broader series of steps to adapt the Alliance to the post-Cold War security environment, including adaptation of NATO’s strategy, strategic concept, command arrangements and force posture; strengthening its ability to carry out new missions beyond NATO’s territory, as it has in Bosnia, while maintaining its core function of collective defense; and the creation and enhancement of the Partnership for Peace (PFP). As part of this broad series of steps, NATO enlargement aims to help the United States and Europe erase outdated Cold War lines and strengthen shared security into the next century.

The impulse for so many of the nations of Central and Eastern Europe to wish to join NATO stems from their desire for thorough, permanent inclusion in the broad Atlantic community and for the sense of living in the secure neighborhood that NATO has brought to its current members. They want to be irreversibly part of the West, and we want to help them in this endeavor.

Enlargement will serve the common security interests of all current NATO members. Adding nations to the Alliance in a gradual and careful way as they meet the standards for membership will:

foster stability throughout Europe by providing an institutional stability for Central Europe, which has historically been a principal source of conflict in Europe;

make NATO stronger by creating a larger circle of like-minded nations devoted to collective defense, both for protection of their own territory and for mutual action when their security is threatened by events outside their territory;

improve relations among the region's states -- both members and non-members -- as in the historic reconciliation of Germany and the Czech Republic, and of Hungary and Romania;

broaden burden-sharing within NATO;

create a better environment for trade, investment and economic growth in Central and Eastern Europe;

help secure the historic gains of democracy in Central and Eastern Europe by providing the security in which their free societies can flourish and the hatred of the past be permanently buried, just as it did for Western European nations such as Germany, Italy, and Spain; and

help all of Europe become a stronger partner for the United States in political, economic and security affairs. This will serve American interest and American principles, just as it will serve those of all of Europe, both old and new members and states inside and outside the Alliance.

Of course, the process of enlargement must be carefully prepared. Formal membership in NATO carries with it both political and military obligations of a special character -- what President Clinton has called "the most solemn security guarantees." Enlargement must not, and will not, dilute the Alliance’s military effectiveness, nor its political cohesion. The broader context of European security, including impact on Russia, on Ukraine, and on nations that remain outside NATO, must be taken into account.

Sincere aspiration to join cannot alone be enough for membership. New members must be ready to accept the obligations of membership. They must demonstrate a commitment to democracy and the rule of law, to an open market economic system, to civilian constitutional control of their militaries, to peaceful resolution of disputes with neighbors, to respect for human rights and the rule of law, and to a gradual development of military capabilities that are congruent and interoperable with NATO systems.

After extensive discussion with allies, with candidate countries, with members of Congress, and within the Administration, the President decided this year that the US would support Poland, Hungary, and the Czech Republic for first round invitations. In Madrid, NATO invited these three new democracies to begin accession talks to join the Alliance. This decision was based on our conclusion, shared by the military and our allies, that the three invitees -- Poland, Hungary and the Czech Republic -- have made sufficient progress on military, political, economic, and social reforms. They are clearly ready to take the next steps to becoming full members, accepting all the rights and responsibilities of membership.

Nine other European states had also declared their desire to join NATO, and many of them are making excellent progress in preparing themselves for membership. The United States and the Alliance recognized the arguments in favor of several other candidate countries, including Slovenia and Romania. We concluded, however, that the alliance should extend an invitation now only in the clearest cases, where there is a broad consensus that the candidate countries have already demonstrated readiness for membership on all relevant standards. Inviting accession is a profoundly significant action, which carries heavy obligations both for new and old members. Where there is reasonable doubt about whether a nation has yet made sufficient progress, the prudent course is to defer invitations. This approach is all the more appropriate, given that the door to membership will remain open, so that there will be ample opportunities to invite additional members.

The key non-selects -- Slovenia, Romania, Bulgaria, and the Baltic states -- have naturally all expressed disappointment at their non-selection. But all have also indicated that, far from abandoning the course of integration, NATO membership will remain a top foreign policy goal for them. They are committed to continuing and accelerating reforms. They are prepared to make the necessary sacrifices. In addition, all aspirants have expressed their intentions to participate in enhanced PFP and the EAPC.

NATO’s first task is "Article V" defense of the territory of its members. NATO's adoption of a new Strategic Concept in 1991 shifted from the Cold War program of positioned forward defense to place a new emphasis on enhanced flexibility and mobility and an assured capability for augmentation when necessary. Consistent with this concept, NATO does not see a need in the existing strategic environment to permanently station substantial combat forces on new members' territory. Instead, it envisions an effort to make the military forces of new members capable of operating with NATO forces, supplemented by the capability of current members to provide appropriate NATO reinforcements in a crisis.

Thus, the defense posture associated with enlargement will apply to new members the same concept of regional reinforcement that it applies to current members, relying on the capability of new members' forces to operate with and be reinforced by NATO units. The same forces and capabilities needed to meet today’s needs will apply to meeting those associated with the new members.

Similarly, NATO has agreed that while new members will be expected to support the concept of deterrence and the essential role nuclear weapons play in Alliance strategy, enlargement will not require a change in NATO's current nuclear posture. For this reason, the Alliance has stated that it has no intention, no plan, and no reason to deploy nuclear weapons on the territory of new members; nor does it foresee any future need to do so.

NATO will also expect new members to be able to contribute to NATO’s non-Article V missions, including being able to contribute to out-of-area deployments.

Of course, NATO enlargement carries costs. Security is not free.

There are new financial costs to enlarging, but these costs are affordable. They are modest compared both to our total defense spending and to the costs and risks of not enlarging.

The most important costs -- like the most important benefits -- are non-financial. The United States and its allies will, by enlargement, extend solemn security guarantees to additional nations. NATO members must provide the capability, with that of the new members, to back those guarantees. The Madrid Statement acknowledges that the Alliance will need to find the needed resources.

Analysis of the financial costs of enlargement can be broken into three components:

First, there are the costs to new members to develop military forces to contribute to their own defense, to the defense of other NATO members, and to other NATO operations. While they currently make some contribution, in order to be greater producers of security, the new members must over time re-build, re-equip, and re-train their forces. They must have smaller, better equipped, better supported, and better led forces, and those forces must be better able to operate with other NATO forces.

Second, there are the costs to current members to improve their forces’ mobility, deployability, interoperability, and flexibility-- in short, to proceed with the efforts already committed to and needed for NATO’s current membership.

These two categories of costs are all for actions that the countries concerned would need to take to provide for their own defense, with or without NATO enlargement. Indeed, to get comparable levels of security without NATO enlargement the new members would have to spend more. Similarly, existing members would need to meet their commitments to improve their forces’ flexibility and deployability whether or not NATO added members. But with enlargement, the capabilities that these other costs will fund will be needed all the more. So it is important that the commitments actually be met, and we have thought it right to identify the first two categories of costs that will need to be paid to ensure that an enlarged NATO is able to meet its obligations.

Finally, there are the costs to both new and old members of integrating new members into NATO. These direct costs to enlarging could be considered the only true costs of NATO enlargement, since they are the costs that would not be incurred if NATO did not add new members.

These costs are associated with enhancing interoperability in communications, reinforcement, exercises and air operations. They include:

Communications:

Refurbishment/renovation of new members' existing headquarters facilities to accommodate a NATO C2 element (including necessary intel & comms equipment).

Extension of communications interfaces to all new member forces.

Education in NATO languages & procedures for new members' officers.

Air Command and Control:

Acquisition of interoperable air traffic control capabilities and weapons engagement capability.

Interoperable aircraft avionics (IFF).

Logistics:

Acquisition of interoperable fuel facilities and other support equipment at reception sites.

Host-nation support planning and procedures for arranging routine logistics support.

Infrastructure:

Improvements to new members' airfields, road and rail links, ports, and staging areas to accommodate NATO reinforcements.

Enhanced fuel storage and distribution capabilities.

Exercises:

Upgrades to existing exercise facilities to ensure compatibility with NATO safety standards.

Transportation and operating costs for incremental combined exercises tied specifically to enlargement.

B. Initial U.S. cost estimate

As you know, the Department of Defense has prepared a notional estimate of the costs of enlarging. This estimate was part of the report, requested by the Congress, that the President submitted to you in late February of this year.

Our initial estimate assumed that, while there would be a need for serious defense capabilities for an enlarged NATO, there is currently no threat of large-scale conventional aggression in Europe, and that any such threat would take years to develop. This is, of course, the same assumption that we make for our own national planning, and that NATO makes in planning for defense of its current members.

Total costs for achieving all three categories were estimated as $27-35 billion. These costs would be spread over the 13-year time frame of 1997 through 2009 ten years after the planned accession of new members.

Now, using the breakdown for these costs which I just outlined for you, let me give you what we estimated each group would have to bear for each of the three categories of costs:

1. New Members’ costs for restructuring their national forces.

Prospective new member costs for restructuring their militaries were estimated at about $10-13 billion over that time frame or about $800 million to $1 billion per year. These costs amount to some 10-30% of the total current defense budgets of the prospective new members.

New members will be expected to increase their defense budgets to some degree, and they have outlined plans to do so. But we expect a substantial part of these costs will be met by savings from reducing the size of the three nations’ current forces. These costs would all be borne by the new members, except to the limited extent Congress decides to continue limited support to Central European militaries. (As you know, the U.S. now provides about $100 million in Warsaw Initiative funding to all PfP countries combined to support their participation in PfP.)

These will be costs of moving from their old Soviet-style forces, which were little more than auxiliaries of the Red Army, to militaries appropriate for independent democracies. These countries do not start from zero. Indeed, they have, per capita, rather larger militaries than most NATO allies. They each are contributing to NATO’s force in Bosnia. They have begun restructuring their forces, which are poorly equipped, trained, and manned.

We have, since our first analysis, discovered some unanticipated capabilities in the three invitees; however, as our study continues, we will, of course, likely also find some deficiencies - especially regarding personnel, specialized training, communications, and force modernization. While the three cannot be expected to "fix" everything by 1999, each must have a serious program that lays out a defined path toward the enhancement of their defense capabilities.

We have told each invitee that its highest priority should be investing in quality personnel. They must develop effective systems for recruiting and retaining good troops. Key to this is the development of an effective NCO corps. The next priority is training including English language training for personnel and equipment are meaningless without adequate training. The next priority is achievement of a real degree of interoperability with NATO, including communications, logistics, infrastructure for reinforcement, and air defense. In all 3 cases, the outcome will be smaller, but more capable forces.

While it is clear that each of the invited nations must undergo modernization of major weapons systems in the years ahead if it is to remain a contributor to overall alliance security, acquiring high tech weapons systems should not be the highest priority.

These three countries are working hard to demonstrate that they are ready for membership in NATO. Right after the Madrid Summit, Secretary of Defense Cohen met with the three Ministers of Defense to explain what they would need to do and to hear their plans. After the Madrid Summit, Secretary Cohen traveled to Budapest while the President and Secretary Albright traveled to Warsaw and Prague. We made these trips not only to congratulate them but to remind them that the journey to Alliance membership had just begun, not ended.

Each country has some work to do. The Czechs, for example, in their original DPQ responses to NATO, did not commit enough of their forces to NATO missions, but their most recent response commits virtually all of their forces to NATO. Their future budgets need to allocate greater resources for defense; they have promised to increase their defense budget, currently 1.7% of GDP, to 2% by the year 2000. While both Poland and Hungary have had similar deficiencies they are overcoming them. Hungary has increased its budget and Poland has an extensive fifteen year plan. I am encouraged by the rapid Czech response to our and NATO’s constructive criticism during the past few weeks.

2. Current Allies’ Costs to Improve Deployability.

Current allies’ costs for NATO regional reinforcement upgrades were estimated at about $8-10 billion, or about $600-800 million per year. These are a modest share of their total defense budget -- less than 1% -- and for the most part, represent efforts already underway to adapt their forces to new post-Cold War needs and missions.

These costs would all be borne by the current allies. For decades now, the U.S. has made no financial contribution to Allies’ defense budgets (except for some loans to Greece & Turkey).

It is important to note that our cost estimates to date do not anticipate any added costs to the U.S. in this category because U.S. forces are already readily deployable and sustainable. The requirement to deploy to meet a contingency in places like Korea or Southwest Asia is more demanding than a hypothetical crisis in Central Europe. US costs of enlargement are relatively low because we have already provided for the forces’ projection missions that the new NATO requires.

Both the U.S. and our NATO allies have made big cuts in our defense budgets since the end of the Cold War. But, using the key indicators of burdensharing, as set by Congress, most of our NATO allies still make very substantial contributions to the common defense. For example, more than two-thirds of the troops participating in SFOR are non-U.S. forces.

We believe the allies can and should do more to improve their capability for the sort of mobile, flexible operation NATO will need to be ready for in the future. But is it important to recognize that most have already made improvements, and are committed to more. For example, Britain provides NATO’s only rapidly-deployable corps headquarters committed to NATO and British forces are the backbone of the Allied Command Europe (ACE) Rapid Reaction Corps (ARRC). The U.K. also has the capability to deploy and sustain a division-sized force of 20-25,000 personnel in a Gulf War-style scenario.

France, in general, is restructuring its armed forces to be more mobile and easily deployable. The French are establishing a Rapid Action Force (FAR) designed for rapid response in both European and overseas contingencies. France also participated heavily in IFOR efforts to implement the Dayton peace accords in Bosnia and Herzegovina. With nearly 10,000 troops, France was the third largest troop contributor, after the U.S. and Britain, and was responsible for one of the three geographic sectors and continues to be in SFOR.

Likewise, Germany is standing up a Rapid Reaction Force of some 53,000 fully-equipped troops from the Army, Navy and Air Force. The first units stood up in 1996 and the force will be fully capable in 1998. In general, German armed forces are in the process of re-creating themselves into a mobile, deployable - rather than static home defense - force.

The smaller European nations are also improving their forces. For example, the Royal Netherlands Navy and Air Force have improved both their transport and air defense capabilities with new procurements such as: two KDC-10 transport/tankers (the Dutch can now deploy their own F-16s without reliance on the U.S.); an amphibious-lift ship to make the marine brigade self-deployable; and upgrades to their F-16 fleet and their Patriot

3. Costs to Link NATO and New Members.

Turning to the third category of direct enlargement costs for linking new and old allies, those were estimated at about $9-12 billion, or about $700-900 million per year. This again, is the cost of items such as communications, reinforcement reception infrastructure, and other interoperability measures. We estimated that about 60% of these costs, or about $5.5 - 7 billion, would be paid for out of NATO common budgets over the ten years following accession, with the remainder paid by new members. We further assumed that the U.S. would pay its current approximately 25% share of the NATO common budget.

In 1997, total NATO common budget spending totaled about $1.8 billion. The total U.S. contribution to the three budgets was about $485 million, while the allies contributed the other $1.3 billion. We expect these relative percentage cost shares will stay the same three European to one U.S. in the period when NATO is meeting the requirements of enlargement.

With these assumptions, the U.S. share of the direct costs of enlargement would be about $150-200 million per year, representing our share of the NATO common budget that would be applied to the linking of new and old members.

These costs are manageable. Projected U.S. requirements to meet direct enlargement common budget costs amount to only a fraction of a percentage point when compared with total U.S. defense spending ($266 billion in 1997).

Still under discussion is whether that portion of the direct costs of enlargement which are a shared responsibility and funded from the common budget will result in an overall increase in the NATO common budget or whether some can be offset by reductions in lower priority programs currently in the common budget. While there will certainly be some reprioritizing of projects, and therefore a less than dollar-for-dollar increase, we continue to believe that additional resources will be required.

As noted, our February estimates were necessarily preliminary, if only because we did not know what nations would be invited to join, nor the detail of steps needed to link them to the Alliance. Immediately after the Madrid decisions, NATO started a detailed review of the military implications and costs of enlargement, what new members will bring to the Alliance, and any additional requirements for current allies. The U.S. has long argued that any NATO cost estimate must be driven by the military requirements of enlargement. We were successful in pressing that argument in the Alliance, and a review of the military requirements is currently underway by the NATO staff.

These reviews are ongoing at NATO this fall, with recommendations to be completed in November for consideration by ministers in December. The invitees worked with the NATO international staff to fill out a special Defense Planning Questionnaire (DPQ) response as their initial step into the NATO Defense Planning Process. All NATO allies respond to the DPQ annually.

The present NATO costing effort is highly specific and focused. In an effort to better understand requirements as well as the current capabilities of the invited nations, members of NATO’s international military staff have been conducting site visits at various military facilities in the invited countries this summer. They visited airfields and railheads in each country. They checked out communications facilities and visited air defense radar stations. This month they are visiting other facilities in each country to try to ensure that the first facilities they inspected are representative of the condition of the majority of facilities in that country.

The international staff of NATO will then cost those new requirements. They will also help determine a schedule by which to meet requirements. That is part of the work that is to be completed in time for the December ministerials. This level of detailed information was obviously not available to us when we did our first cost study, and it is still being formulated. But cost estimates based on these detailed analyses will be available to Congress well before any vote on enlargement.

Based on what we know now, we expect that the NATO cost estimates will be lower than those that you received from us in February. First, the initial U.S. cost estimate assessed four, not three, new members. Further, the NATO estimate will address only the direct, common-funded costs, which, as explained above, OSD estimated at $5.5-7 billion over 10 years. National costs borne by each ally or prospective ally are separate from, and will not be estimated by, the NATO work.

But we also expect the NATO cost estimates will be lower because some things are better in the invited nations than people thought. As a result of assessments NATO planners and logisticians have been conducting, we believe the additional investment required to prepare each of these nations, their military forces, and their infrastructures for full NATO membership will be less than initially anticipated.

Let me share some examples of our experiences during these assessments to show why this is the case.

When the American General heading a small NATO team visiting Kecskemet Air Base asked his Hungarian host how he might accommodate a squadron of NATO F-16s, he was surprised by the precision and detail of the Hungarian response and the level of installation readiness already achieved. He commented that the Hungarians had done some excellent research. He was told it wasn’t just research. Hungary had hosted a squadron of Dutch F-16s for several weeks in 1996, and a United States Air National Guard squadron was scheduled to arrive the week after the general’s visit. The Dutch and American planes were in Hungary as part of a series of PfP exercises designed to improve interoperability. Thus Hungarians are already capable of handling NATO aircraft at some of their airfields. There is less work that needs to be done and in turn less money to be spent to improve these airfields than we had estimated earlier this year. This example also shows how PfP has contributed in direct and practical ways to preparing for NATO membership.

In another example, an analyst monitoring the NATO Common Fund Cost Study’s progress noted that even though communications and information systems requirements were increasing, the prospective costs to the Czech Republic kept dropping. Upon closer inspection, it turned out the Czechs had already anticipated requirements for secure and non-secure digital communications programs and had applied NATO standards to the national programs they are pursuing on their own. In short, the Czechs had already spent their own money to fund some projects that we had assumed would be paid for by NATO as a whole through the common budgets.

Finally, an American general asked a Polish major familiar with the details of a particular rail complex whether we could reasonably expect to transport a NATO armored division through it in one week’s time. The amused major replied by asking the general how many Soviet heavy divisions he thought they planned on moving through the same location when trains were going the other way?

These examples demonstrate an important point. When we conducted our initial cost study, we assumed a very substantial need for improving military bases and equipment to support interoperability and reinforcement. As we spend more time on the ground in the countries of each of the invitees, learning the details of their military forces and infrastructure, we are gaining a better appreciation for just how well prepared they were to fight against NATO, and for how much effort they have subsequently dedicated to preparing to integrate into NATO. Of course, we will also find deficiencies, but the new members will be modernizing from a relatively robust foundation. We will not be building airfields from scratch. In fact, NATO will be inheriting a great deal of usable infrastructure. Accordingly, the direct costs of enlargement will likely be less than we originally estimated.

During the Cold War these levels of capabilities would have been bad news stories, but today they are all good news stories. What I am attempting to demonstrate is that we are increasingly impressed by the levels of readiness, understanding, and initial success of the invitees in working toward NATO interoperability. These capabilities will contribute to driving down the need for NATO common-funded improvements once they become members of NATO. These capabilities are generally higher than we assumed in our February study on the requirements and costs of enlargement. I’m convinced, as we delve deeper into the circumstances in these countries, we will discover more examples of infrastructure capabilities either inherited from the Cold War or built up over the past three years through the Partnership for Peace.

The NATO staff work I have been outlining for you, when forwarded to Ministers in December, will provide the basis for a more refined assessment of the costs associated with NATO enlargement. In order to support the Congress’ review of issues associated with enlargement, we will, as Secretary Cohen stated in his 16 October letter to Senator Stevens, provide you with an update based on these NATO efforts in early 1998.

Once the military requirements and cost estimates are agreed to in December, we will move forward to make good on the commitment undertaken by national leaders at Madrid that, "the resources necessary to meet [the costs of enlargement] will be provided."

In Maastricht, at the informal NATO defense ministerial, Secretary Cohen led the discussions on this issue. Secretary Cohen reminded his colleagues that at our defense ministerial in June, we all pledged to play our full part: (1) in preparing the nations invited to join NATO for their future roles and obligations as Alliance members; (2) in providing sufficient resources to maintain the Alliance’s ability to perform its full range of missions; (3) in implementing the Alliance’s decisions to further enhance its relations with partners; and (4) in acknowledging that, "the admission of new members will involve the Alliance providing the resources which enlargement will necessarily require." These commitments were reaffirmed at the Summit in Madrid, where our Heads of State agreed: (1) that there will be costs associated with the integration of new members; (2) that these costs will be manageable; and (3) that the resources necessary to meet these costs will be provided.

There was no disagreement on this point in Maastricht. Of course, until we know the detailed cost and proposed schedule of action, we will not be able to determine how much net increase in the NATO common budgets will be needed. And, as British Defense Minister George Robertson stated last week, "[b]ecause enlargement is a high priority for NATO, we may have to delay some lower priority projects." But, Minister Robertson added, "if additional spending is required, Britain will pay its share." We are confident that will, in the end, be the position of all the allies.

We will keep you informed over the coming months as this discussion continues.

Finally, it is important to understand that these estimates of the cost of enlargement -- and of keeping NATO capable in new conditions -- relate to the capabilities required in the European security environment that we in fact foresee -- one in which nations need serious defense capabilities, but in which there is no threat of large scale military conventional aggression and where any such threat would take years to develop. Of course, a fundamentally different -- and far more demanding -- set of defense requirements would arise if trends in Russia or elsewhere developed in such a way as to renew a direct territorial threat to NATO members. Such a threat does not exist, nor is there an expectation that it will reemerge. Moreover, the United States and its allies would have years of warning and preparation time in the very unlikely event such a dramatic change in the European security environment were to occur.

Because such a threat is hypothetical, it is not possible to estimate with any precision the costs of meeting it. But there can be no question that the cost of responding to such a threat would be substantial. Just ten years ago, for example, the United States and most of its Allies were spending nearly twice as much of GDP on defense as today.

There can, however, be no question that, if we had to meet such a threat, we could do so more effectively and less expensively in an expanded alliance than in a Europe still divided along Cold War lines. In such circumstance, the added manpower, military capability, political support and strategic depth afforded by NATO enlargement would amply justify whatever additional cost there were in having additional members in the Alliance.

Perhaps the most important point to be made about the costs of enlargement is that there would be greater costs and risks to not enlarging. If we fail to seize this historic opportunity to help integrate, consolidate and stabilize Central and Eastern Europe, we would risk a much higher price later. The most efficient and cost-effective way to guarantee stability in Europe is to do so collectively through NATO. The costs of doing so are manageable for all concerned. Alliances save money. Collective defense is both cheaper and stronger than national defense. A decision to defer enlargement, much less to withhold it altogether, would send the message to Central and Eastern Europe that their future does not lie with NATO and the West. It would falsely validate the old divisions of the Cold War. The resulting sense of isolation and vulnerability would be destabilizing in the region and would encourage nationalist and disruptive forces throughout Europe. NATO would remain stuck in the past, in danger of irrelevance, while the U.S. would be seen as inconstant and unreliable in its leadership and withdrawing from its responsibilities in Europe and the world.

V. Conclusion

The years ahead will be challenging ones in European and Transatlantic security. NATO enlargement is an essential feature of adapting the Western military and security organization to efficiently and effectively meet the challenges ahead. While there will be costs, they are manageable. More important, for the United States and its allies and partners, the costs -- and not just financial costs -- of a strong, effective and engaged North Atlantic Alliance pale in comparison to the costs that would be implicated by stagnation, instability and failure of leadership in Europe.