NATO's Defense Capabilities Initiative
CRS Report for Congress
Received through the CRS Web
NATO’s Defense Capabilities Initiative
Specialist in International Relations
Foreign Affairs, Defense, and Trade Division
With the end of the Cold War, the North Atlantic Treaty Organization (NATO)
began to reassess its collective defense strategy and to anticipate possible missions the
alliance might undertake. The conflicts in the Balkans pointed up the need for more
mobile forces, for technological equality between the United States and its allies, and for
interoperability. At the 1999 NATO summit in Washington D.C., the alliance launched
the Defense Capabilities Initiative (DCI), an effort intended to better enable NATO to
deploy troops quickly to crisis regions, to supply and protect those forces, to provide
them with appropriate communications, and to equip them to engage an adversary
effectively–all with greater compatibility. To meet the DCI’s goals, however, most allied
countries will need to increase their individual defense budgets, a step many have been
reluctant to take. In addition, many policymakers are concerned over possible conflicts
between DCI and the European Union plan to field an all-European force.
Since the collapse of communism in the Soviet Union and Eastern Europe, the
European threat environment has changed dramatically. NATO no longer requires a static,
layered defense of ground forces to repel a large-scale Soviet invasion. Instead, the
alliance must address new and different threats for which NATO would have far less
warning time than a conventional assault; these might include terrorism, the use of
weapons of mass destruction, proliferation, and, in some cases, ethnic strife. As the
conflicts from 1992-1999 in the Balkans demonstrated, the alliance must be able to prepare
for security contingencies requiring the rapid deployment of lighter, more mobile forces.1
NATO recognized this need for change already in its 1991 New Strategic Concept.
During NATO’s air war against Yugoslavia in the spring of 1999, U.S. aircraft flew
a disproportionately large share–60%–of the combat sorties. The Kosovo action exposed
1 For background on the debate over NATO’s geographic reach and force structure, see: CRS
Report RS20086, NATO’s Future and the Washington Summit, by Stanley R. Sloan. Updated
March 18, 1999.
Congressional Research Service The Library of Congress
a great disparity in defense capabilities between the United States and its allies. That
disparity, along with the transformation of the overall threat environment, has prompted
the development of two parallel and, it is hoped, complementary transatlantic security
initiatives aimed at, among other things, bridging the technology gap between American
and European forces.
Kosovo motivated European Union (EU) members of NATO to accelerate the
construction of a European pillar within NATO, called the Common European Security
and Defense Policy (ESDP). ESDP is described as an attempt to achieve greater
burdensharing and influence within the alliance. One aspect of ESDP is the EU effort to
create a rapid reaction force, drawn from their own militaries, to undertake “Petersberg2
tasks” in which other countries, including the United States, might choose not to
participate. To achieve this, the EU member states, at their December 1999 Helsinki
summit, set forth “headline goals” of creating, by 2003, a 60,000-strong European crisis
management force that would be deployable within 2 months and sustainable for 1 year.3
The other significant change occurred at the NATO Washington, D.C. summit in
April 1999, when the alliance launched the Defense Capabilities Initiative (DCI). The
Initiative is intended not only to improve NATO’s ability to fulfill NATO’s traditional
Article 5 (collective defense) commitments, but also to prepare the alliance to meet
emerging security challenges that may require a variety of types of missions, both within
and beyond NATO territory. To accomplish these tasks, the alliance must ensure that its
troops have the appropriate equipment, supplies, transport, communications, and training.4
Accordingly, DCI targets improvement of NATO core capabilities in five areas:
1. Mobility and Deployability. The alliance seeks to improve its ability to move
troops and equipment rapidly to trouble spots, including areas outside the immediate
region of the alliance. NATO is currently studying various options for improving
troop and equipment transport, which involve both multinational cooperation as well
as the possible use of commercial means of transportation.5
particularly if to a location distant from alliance territory, they must have sufficient
2 Named after the German city in which they were formulated, these tasks include humanitarian and
rescue missions, peacekeeping, and tasks of combat forces in crisis management, including
3 For additional background, see: CRS Report RL30538, European Security: the Debate In NATO
and the European Union, by Karen E. Donfried and Paul E. Gallis. April 25, 2000.
4 One analyst privately observed that DCI appears to be an attempt to bring NATO’s Force Goals
process, which is classified, into the open in order to make it easier to generate political pressure
for increased defense spending. Another defense expert saw several parallels between DCI and the
U.S.-developed Revolution in Military Affairs. See: DCI: Responding to the U.S.-Led Revolution
in Military Affairs. By Elinor Sloan. NATO Review. Vol. 48, No. 1. Spring-Summer 2000. p.
5 Some analysts believe the problem is more one of force mobility, rather than of munitions, and
trace the genesis of DCI to the NATO-led operation in Bosnia, which required a rapid deployment
of troops to a crisis region. Still other observers point back to the 1991 Gulf War, which revealed
difficulties in interoperability–particularly of communications.
logistical support; during an extended commitment, fresh troops must be rotated into
the area. The alliance has developed a Multinational Joint Logistics Center concept
to enhance logistics interoperability and cooperation.
3. Effective Engagement. NATO must be able to engage successfully an adversary
in a wide range of missions, from high to low intensity operations. One concrete step
envisioned in this area is the procurement of additional precision-guided munitions,
particularly for the suppression of enemy air defenses.
4. Survivability. During out-of-area missions, NATO troops and equipment cannot
make use of existing military infrastructure on NATO territories. The alliance
therefore must be able to provide sufficient force protection through improving air
defense, reconnaissance, and intelligence capabilities; it must also be able to counter
the possible use of weapons of mass destruction.
5. Consultation, Command and Control. Under DCI, the alliance is developing an
enhanced consultation, command, and control (CCC) architecture that will emphasize
international compatibility of communications and information systems. Increased
multinational cooperation means that CCC systems will need to be interoperable at6
lower levels in the chain of command.
To oversee and direct DCI developments, NATO formed a High Level Steering
Group composed of senior officials from member countries and chaired by the alliance’s
Deputy Secretary General. The group meets monthly to review the implementation of the
initiative, and to plan and coordinate DCI-related activities of the NATO defense
As an additional measure to help DCI meet its stated goals, NATO has integrated the
Initiative’s objectives into the alliance’s regular defense planning process, through the
Force Goals that are negotiated with member states every two years.7
DCI has been criticized in some quarters. Some observers have questioned the need
for the Initiative, arguing that NATO already enjoys vastly superior technological prowess,
and that the alliance’s current military capabilities–whatever their shortcomings–are more
than sufficient to meet any threat.8 Others are skeptical of the possible motives behind
DCI; they contend that, given the current security environment, massive defense spending
increases are unnecessary and wasteful, and that DCI merely serves to boost sales for high-
6 For additional discussion, see: NATO’s Defence Capabilities Initiative: Preparing for Future
Challenges. By Frank Boland, Head, Force Planning Section of NATO’s Defence Planning and
Operations Division. NATO Review. Vol. 47, No. 2. Summer 1999. p. 26.
7 U.S. Department of Defense. Report on Allied Contributions to the Common Defense: A Report
To the United States Congress By the Secretary of Defense. March, 2000. p. II-2.
8 A Risk Reduction Strategy for NATO. Julianne Smith and Martin Butcher, eds. British American
Security Information Council. Research Report 99.1. January, 1999.
technology arms and equipment manufacturers. It has also been suggested that the
requirements of DCI effectively raise the bar for those countries that are currently hoping
to join NATO.
Supporters of DCI, meanwhile, have expressed reservations over two major issues.
The first concerns whether member states, particularly the Europeans, will be willing to
commit sufficient funding in their defense budgets to make the changes, some of them
costly, that DCI requires. The second question is whether ESDP will complement or
conflict with the Initiative.
Allies’ Defense Spending. To meet the goals of DCI–and ESDP–the Europeans
intend to restructure and modernize their militaries and address, among other things,
deficiencies in equipment procurement and in their research and development programs.
All these activities, however, imply increased defense spending, which would require a
reversal of the trend of the past decade: between 1992 and 1999, defense expenditures by
European NATO countries fell 22%.9 Although the United States has also cut back on
defense, it still spends a significantly higher share of GDP on defense than the NATO
average. Quoting NATO sources, the London Sunday Telegraph reported in March that
“only the Czech Republic, Hungary, Norway, Poland, Portugal, and Turkey plan to
increase military spending in real terms over the next five years.”10 On the other hand,
Germany, which has the second-largest military in the alliance, has drastically reduced its
Some European member states are eliminating conscription in favor of smaller armies
of volunteer forces, a move that would be costly in the short- to medium-term. In
addition, NATO armed forces also are attempting to cope with unanticipated costs, such
as the air campaign against Yugoslavia and peacekeeping in Kosovo, as well as such
factors as higher oil prices. The Europeans reportedly are seeking additional savings
through rationalizing their defense industries, and improving their procurement practices.
Some Europeans have argued that one of the reasons they have had problems
modernizing their militaries arises from U.S. policies, including restrictions on the transfer
of military technologies, controls on defense-related exports, and a reluctance to co-
produce equipment. At the May 2000 North Atlantic Council meeting, the United States
announced its Defense Trade Security Initiative, intended to address this concern.11
Because each country wishes to protect its sovereignty by maintaining a diversified
defense force, the sum of European military spending will always buy less defense than a
similar amount of spending by the United States. Some have argued that NATO would
best improve its capabilities if groups of countries combined their resources for certain
9 NATO Parliamentary Assembly. Defence Budget Trends Within the Alliance. By Paul
Helminger, Rapporteur. International Secretariat. AT 254 EC (00) 10. September 25, 200.
10 America Duped By Claims Of European Defence Spending. By David Wastell and Julian
Coman. London Sunday Telegraph. March 4, 2001. [FBIS]
11 Defense Trade Security Initiative. Press Statement. U.S. Department of States. Office of the
Spokesman. May 24, 2000. For additional information, see: CRS Report RS20757, Defense
Trade Security Initiative: Background and Status, by Daniel H. Else. February 8, 2001.
projects, or if individual countries specialized their defense capabilities in a complementary
framework. NATO officials point to the alliance’s Airborne Warning and Control System
program as an example of pooled assets. The alliance is also reportedly considering12
tapping the common-funded NATO Security Investment Program.
NATO does not dictate how much member states spend on their militaries, nor does
it criticize countries that spend far below the alliance average. The fact that there was a
consensus on DCI would seem to imply that all recognize the need to boost their defense
budgets; however, some governments reportedly believe that they can satisfy DCI’s goals
simply by restructuring their forces and changing their procurement plans–without
spending more. Most analysts doubt whether any of the goals of DCI can be attained
without a significant increase in defense spending by all member states.
DCI and ESDP. Some policymakers have been questioning whether ESDP is
working in a complementary fashion with DCI. They suggest that ESDP may divert the
attention and energies of EU members from improving their individual military capabilities
while they address their collective EU project; they argue, for example, that the dispute
over the degree of autonomy of ESDP from NATO can jeopardize political goodwill
within the alliance, and degrade its military capability as well. Skeptics also contend that,
unless ESDP focuses sharply on increasing real defense capabilities, as specified in the DCI
targets, it will wind up being just another paper institution–one that will need to call upon
U.S. military assets in the event of a crisis. Finally, analysts note that the ESDP headline
goals are aimed at providing the European force with the ability to conduct peacekeeping
and related missions, while the DCI objectives are intended to address the full spectrum
of potential conflicts; they caution that some European governments may tend to regard
the ESDP headline goals as substitutes for, rather than a subset of, the DCI objectives.
NATO officials and representatives are not unaware of the need to reconcile the goals
of DCI and ESDP. In a June 2000 report, the North Atlantic Council (NAC–the alliance’s
political decision-making body) stated that
Achieving [DCI’s] objectives will ... strengthen European defence capabilities and the
European pillar of NATO, so that European Allies will be able to make a stronger and
more coherent contribution to NATO. It will also improve their capability to undertake
EU-led operations where the Alliance as a whole is not engaged. The EU’s Headline
and Capability Goals and the objectives arising from DCI will be mutually reinforcing.
In addition, the initiative will improve the ability of Allied and Partner forces to operate13
together in NATO-led crisis response operations.
The NAC statement, which referenced a report from the chairman of DCI’s High
Level Steering Group, added that there had been progress in several areas outlined in the
initiative, including “strategic transport, air-to-air refueling, precision guided munitions,
12 Defense Capabilities Initiative Targets the Future. By Linda Kozaryn. Space Daily. September
13 Statement on the Defence Capabilities Initiative issued at the meeting of the North Atlantic
Council in Defence Ministers Session held in Brussels on 8 June 2000. NATO Press Release M-
NAC-D-1(2000)64. June 8, 2000.
air defence, exchanges of information on multinational formations and work towards the
harmonisation of defence planning processes.”
Assessing Progress. The success of meeting the DCI objectives is likely to vary
among member states, depending upon where the different countries place the achievement
of the Initiative’s goals within their national security–and, thus, their national
budgetary–priorities. The Norwegian government, for example, has virtually embedded
DCI into its defense plans. In Poland, there has been some concern over the possible high
costs of DCI, but analysts argue that it is in Poland’s national interest for all NATO
members to develop mobile, interoperable forces, and that, therefore, “within our financial
means, we should aim at making our defense potential compatible with the capabilities of
other allies.”14 The Turks endorse DCI, and hope it will enhance efforts to modernize their
military; President Sezer declared that “Turkey supports NATO’s Defense Capabilities
Initiative and wants this initiative to share technology to a larger extent within NATO.”15
The French Foreign Minister, meanwhile, has argued that DCI and ESDP are consistent
with one another, adding that “we have ensured compatibility between our [EU headline
goal] commitments and those we have made under the DCI.”16
In a January 8, 2001 Washington Post article, former Defense Secretary William
Cohen described progress on improving NATO defense capabilities as “less than brisk”;
he pointed out that, while the United States has significantly increased its military
spending, other NATO member countries have flatlined or decreased their defense
budgets.17 On May 10, at a NATO seminar in Barcelona, outgoing U.S. Ambassador to
NATO Alexander Vershbow concluded that “rhetoric has far outpaced action when it
comes to enhancing capabilities,” and gave the alliance a “failing grade.” He singled out
the European allies in particular, noting that non-U.S. defense spending had increased far
less than would be necessary to accomplish the DCI objectives. He indicated that current
burdensharing arrangements were politically indefensible for the United States, and linked
future U.S. support for ESDP with improvements in European capabilities.18
Congress placed a provision (section 1039) in the FY2000 Defense Authorization Act
(P.L. 106-65) requiring the Secretary of Defense to report annually to Congress on the
implementation of DCI and the progress that the alliance and individual allies are making
toward the attainment of each of the DCI goals. In addition, on November 8, 1999, the
Senate agreed to Senate Resolution 208, a statement of U.S. policy toward NATO; the
resolution cautions that “failure of the European allies ... to achieve the goals [of] the
Defense Capabilities Initiative would weaken support for the Alliance in the United
14 Polish defense Ministry’s expert Views Importance of DCI, Security Interests. By Marcin
Koziel. Warsaw Polska Zbrojna. March 16, 2001. [FBIS]
15 Turkey’s Sezer Discusses Ties with Greece, Role in NATO. Ankara Anatolia. September 15,
16 French Defense Minister’s Speech to Munich Security Conference. February 7, 2000. [FBIS]
17 Preserving History’s Greatest Alliance. By Sec. William S. Cohen. The Washington Post.
January 8, 2001. p. A19.
18 U.S. Department of State. Washington File. Vershbow Remarks on Euro-Atlantic Security and
Defense. May 15, 2001. [http://usinfo.state.gov/admin/006/eur210.htm]