Paying for NATO Expansion

What does NATO enlargement cost, and how will the money be provided? Given the tight schedule NATO has imposed on itself for reaching a consensus on the "whos" of enlargement, it is all the more astounding that the question of financial implications has hardly played a role. Up to now NATO has not presented any cost estimate, nor have there been any statements by the European alliance partners on that topic - at least not publicly.

Meanwhile, however, the first cost analyses have come to the fore. According to a calculation published by the United States Congressional Budget Office, NATO enlargement by the four Visegrad countries - the Czech Republic, Slovakia, Hungary, and Poland - would cost between $60 billion and $124 billion, and NATO's new members would have to contribute between $42 billion and $52 billion. The Rand Corporation came to a different result. According to its calculations, NATO enlargement would carry a price tag of about $42 billion, $8 billion of which should come from the new member states.

In light of these figures, one thing seems clear: There is not the slightest chance for an increase in the defense budgets of any major NATO country. On the contrary, more painful cuts are looming on the horizon. Slicing pieces from NATO's common budgets to finance enlargement wouldn't work either. The alliance's budgets are not very high to begin with, and they are already earmarked for agreed infrastructure work. Nor can those countries that are likely to join NATO be expected to bear the brunt. The annual defense budget of the Czech Republic totals just $1.1 billion. Hungary spends $600 million per year for defense.

Some observers now call for a postponement of NATO enlargement. But this cannot be the answer. The process of enlargement is far too advanced.

It is also worth noting that cost calculations made by the applicant countries show quite different results. A recently published Polish study argues that only those expenditures that are not already allocated for the inevitable modernization of Polish armed forces might be regarded as costs of enlargement. Hence, the real costs are seen as significantly lower. A new study on NATO enlargement released by the State Department argues that adding Eastern European countries to NATO will be much cheaper than expected.

It can be taken for granted that added money from the "old" NATO members will be well below the figures in most of the published cost estimates. They may only marginally extend their present level of contributions. This holds true all the more since, out of consideration for Russia, an expensive deployment of NATO forces on the territory of the new member states is not intended anyway. What might be increased are low-cost measures like the already accomplished transfer of excess defense equipment to Central and Eastern Europe. Consequently, the integration of new members will be a very gradual and protracted process.

In security terms, such an approach seems fully justified - as long as the absence of an immediate threat makes any NATO military action in Central and Eastern Europe highly unlikely. Should there be any change in this unthreatening landscape, financial support for more rapid preparation of new members would certainly require a fresh look.

In a nutshell: Costs of NATO enlargement are first and foremost a political question. Cost estimates are useful as long as they are seen in their political context. But they shouldn't cause a resurrection of the debate over the pros and cons of enlargement itself.

* Karl-Heinz Kamp heads the foreign and security policy section at the Konrad-Adenauer-Stiftung institute in Germany.