The Future of NATO

Ladies and gentleman, it’s really a great pleasure and a great privilege to be here and to address such a distinguished group of leaders of German industry. And I say that because during the 1990s I was the minister for industry and energy in Norway and then I learned by working with you from different German companies, especially in the energy sector, the technology sector but also in other sectors of German industry how much actually I respect what you are doing every day. The quality, the competitiveness, the ingenuity and the ability to innovate is such a trademark of Germany and German industry so I really think it is an honour to be able to address you as a group of German industry leaders.

Second, I would like to start by telling you all the you are important for NATO for our shared security for our collective defence because by your efforts you create the richness, the economic wealth, the prosperity, the economic platform which is so important for the social cohesion of our societies, for the welfare of societies and therefore also for the stability which is extremely important for peace and security.

So even though perhaps you don’t think about that every day what you do is important for our security. Also because you provide the economic foundation and you provide the technology which is so important for us.

We tax you so you can pay for our defence and thank you for all the taxes you are paying. We’re actually looking for some more, no, no that’s not for me to decide but the thing is that we like states to pay more for defence! How they get that money I leave that to the national governments to decide.

But the reality is that the economic growth you create is important for security partly because it creates stability and partly because it creates the economic foundation for funding our armed forces. So therefore I start by thanking you.

But then it also goes the other way around, meaning that what NATO does is important for you because stability, peace, security is a precondition for economic development. Without peace, without security we are not able to have dynamic growing industries.

So this is a kind of relationship where we depend on each other; strong economies is important for peace but also strong defence is important for strong economies.

So just realising that fact is a good start in any relationship between NATO, armed forces and industries as you are representing. And I know that you represent different industries and different companies but you all contribute to the richness and the economic development of Germany and therefore also of Europe.

NATO is the most successful military alliance in history and the reason why NATO is the most successful alliance in history is there are actually two reasons for that: one is our unity; and the other is that we have been able to adapt to change.

For 40 years NATO did in one way only one thing but that was a big and important thing. We delivered credible deterrence in Europe, we deterred the Soviet Union and you as Germans know that better than all us because German was divided and the line between east and west – the Warsaw Pact and NATO - went straight through Germany. That was the case from 1949 to 1989, 40 years, one task, deterrence of Russia ... or the Soviet Union.

Then the Cold War ended, the Berlin Wall came down and the Warsaw Pact was dissolved and people started to ask, and I think that actually was a fair question to ask: do we need NATO anymore because the main purpose of NATO - to deter the Soviet Union - didn’t exist anymore. And then some people formulated the idea that NATO had to choose between either going out-of-area, meaning going out of NATO territory, or going out of business and you know everything about how bad it is to go out of business. So we decided to stay in business but to adapt what we were doing.

So then we went beyond our borders, we helped to end two ethnic wars in the Balkans, Bosnia Herzegovina, Serbia Kosovo. We helped to fight terrorism in Afghanistan, piracy off the Horn of Africa and we did what we call crisis management beyond NATO’s borders outside the NATO territory in Europe and of course we also facilitated the enlargement of NATO but also supported the enlargement of the European Union.

Then for 25 years we didn’t make crisis management beyond our borders, far away. Then 2014, four years ago, we had a new pivotal year in the history of NATO and that was the annexation, the illegal annexation of Crimea, Russia’s destabilisation of Eastern Ukraine, Donbass, and the fact that we saw terrorism violence coming so much closer to our borders with ISIL being able to during a few months control big parts of Syria and Iraq and actually taking over Raqqa, Mosul and threatening Baghdad. They controlled a territory as big as United Kingdom and almost eight million people.

So then NATO had to change again and the thing we have done since I became Secretary General in 2014 has been to implement the biggest adaptation of NATO since the end of the Cold War and we are in the process of implementing that adaptation and when we will look to the future of NATO, it is about making sure that we are adapting, changing.

It is the same as you do when the markets are changing you have to change what you do. Industries which are not adapting they are bankrupt. If NATO doesn’t adapt we will lose relevance, we will not be important anymore.

What we are in the process of doing now is many different things but I will mention some of them. We are strengthening our collective defence in Europe. In one way NATO is coming home but we cannot stop doing crisis management so we have to do both collective defence in Europe at the same time as we do crisis management beyond our borders. But we are coming home and we are strengthening our collective defence in Europe, we are implementing the biggest reinforcement of our collective defence since the end of the Cold War.

With higher readiness armed forces, we have tripled the size of what we call the NATO Response Force. We have established a very High Readiness Joint Task Force, a brigade that can move within a matter of days. Germany will lead that brigade next year and we have deployed for the first time in NATO’s history combat-ready troops in the eastern part of the Alliance, three battle groups ... four battle groups in the eastern part of the Alliance in Poland, Lithuania, Latvia and Estonia and Germany is leading one of the battle groups, the one we have in Lithuania.

We are now looking on how can we make sure that we have sufficient reinforcements as we move towards the next NATO summit in July in Brussels. We will work on reinforcements but also on the importance of being able to move forces across Europe because that is something we have not been very much focused on since the Cold War.

So we need the infrastructure, we need the means of transportation, planes, ships, railroad carts, and all of that we need to move forces and therefore we also need to work with the private sector because very much of those means are privately owned.

We are strengthening our collective defence but at the same time we are striving for a better relationship with Russia because we don’t want the new Cold War, we don’t want a new arms race. We actually want to reduce tensions and therefore what we do is proportionate, defensive and measured and we have what we call in NATO a dual-track approach to Russia, we have to be firm but at the same time we are ready for dialogue to improve the relationship because Russia is our neighbour, Russia is there to stay and we have to try to prevent a new Cold War.

So that’s the first pillar of our adaptation is defence and dialogue as we are implementing now. The other pillar of our adaptation is that we are stepping up our efforts to fight terrorism. Terrorism is a constant threat, it’s there every day in every NATO Allied country. We have to fight terrorism in many different means. It’s about police, civil intelligence, border controls, addressing the neighbourhoods in our own countries where many of these extremists are recruited. That’s about schools, social workers, a lot of different tools, it’s not for NATO to do all that, but we also need military means in the fight against terrorism.

What we are now doing is that we are changing the way NATO is fighting terrorism because instead of sending large number of combat troops into big combat operations we are gradually shifting from combat operations to train, assist and advise, because I think what we have learn from Afghanistan, from Iraq, from Libya, from other places, very different but at least we have some kind of common lesson learned is that in the long run it is much better if we are able to train the local forces to stabilise their own countries. We will always look like foreigners, and we are foreigners, and we can be portrayed as occupants and we have a different colour of our skin and very often a different religion.

So the idea is that we could do less combat more training and therefore in 2015 we ended the combat operation in Afghanistan, now it’s the Afghan National Security Forces who are in the front line.

When we see terrorist attacks in Kabul it’s not German or Norwegian or British soldiers that are going out and repelling that attack, that’s the Afghans themselves trained by us but they do it.

It’s not easy but at least it is better and more sustainable than we fighting the wars in other countries, we help them to stabilise their own countries. That’s what we do in Afghanistan, that’s what we are now more and more focused on in Iraq. NATO has just decided yesterday to start planning our training NATO mission, not combat mission but training mission in Iraq, to make sure that when the combat is over, the fighting is over in Iraq, we must not once again see what we saw after 2011 when the US left Afghanistan and then ISIL came.

To prevent that from happening we have to enable the Iraqis to stabilise their own country so we need to train, build capacity, build defence institutions, help them rebuild local capacity. We work with Jordon, with Tunisia, with other countries.

So that’s the other great adaptation of NATO is that we are stepping up our efforts to fight terrorism but not through combat operations but more by train, assist and advise missions to enable local government, local forces, to stabilise their own country.

These two big adaptations require funding, so therefore the third pillar is that we need to increase investments in defence. And I have been, as you know, a politician for many years and I know that politicians they prefer to spend money on health, education, infrastructure, sometimes also on tax cuts, and I understand that and it was in one way extremely or very natural that when the Cold War ended the Warsaw Pact disappeared, that Germany, Norway, the Netherlands, Belgium, Denmark, all of us wanted to take out a peace dividend. I don’t know the exact numbers for Germany but I know that the normal level of defence spending in Europe was 3 or more than 3% of GDP on defence. Norway spent more than 3% GDP on defence during the Cold War, and of course when the Cold War ended we really appreciated the possibility to take that money and to spend it on something else and if you promise not to tell anyone I was responsible for that myself in Norway, because I was a minister of finance cutting defence spending.

But one thing is to reduce defence spending when tensions are going down, that’s in a way possible to understand. But then you have to be able to increase defence spending when tensions are going up and now tensions are going up and therefore we have to increase again.

So yes it was in one way right to cut in the 90s and actually some years after that but now we have to turn around and start the increase again and that’s exactly what NATO decided back in 2014. We made what we call the Wales Pledge, we decided to stop the cuts, to gradually increase and to move towards spending 2% of GDP on defence and that’s exactly what we are doing.

Across Europe and Canada defence spending has now increased for three consecutive years for the first time in many years, so we went like that and now we go like that.

In 2014, when we made a decision it was three countries that spent 2% of GDP or more on defence, now it’s eight and we expect in 2024 to be 15. So I say that we have made a good start. I’m not saying that we are where we should be, but I am saying that we have started to move in the right direction. And Germany has also started. I welcome that because what Germany does really matters because you are so big. We do this because we have decided to do so, it’s in our security interest to do so, but of course it will also contribute to a fairer burden-sharing in the Alliance.

I think we have to understand that the GDP of the United States is actually as big or actually a bit smaller than the GDP of European NATO Allies. The income they have is approximately as big as ours but they spend more than twice as much on defence and they borrow money to finance US military presence in Europe and I think in the long run it’s hard to explain to US tax payers that they have to finance military presence in Europe because Europeans are not spending. So therefore we need fairer burden-sharing and that’s also why we are focused on this.

Now I see that I promised actually to have some questions, so I think I have to also be very brief meaning that I will just say that we are also doing a lot of other things on cyber, on cooperation with the European Union and in many other areas. The success of NATO, as I said, was partly because we are able to adapt and we are adapting but the success is also because we are able to stand united. NATO is an alliance of 29 democracies with different views, different political leaders with different opinions about many things but the strength of NATO is that regardless of those differences we have always been able to agree around the core task. We stand together, we defend each other, one for one and all for one and as long as we do that we preserve the peace and we are able to make sure that all our citizens, close to one billion citizens, live in security.

That’s what we are doing now and Germany is playing a key role in that adaption of the Alliance.

Thank you so much.

QUESTION: Yeah, you mentioned Germany, in your expectation it will be 1.2% in 2024 what Germany is spending on defence, is Germany fulfilling its responsibilities, you have been very friendly but maybe you can be more precise also on this question?

JENS STOLTENBERG: I am a friendly guy, so that’s a starting point at least. Then I think it is important to remember that there has been almost 25 years of cuts, so I welcome that Germany has stopped the cuts, I welcome that Germany has started to increase, I also welcome the fact that Germany actually has sound economic growth, meaning that for you to increase the percentage of GDP requires that you increase with the GDP growth plus something. But I expect of course Germany to do more. So this is a good start, I thank you for the extra German contribution but we expect more because Germany was part of the decision, both in 2014, but we reiterated that pledge as late as in May last year, so when we sit around the table and agree I expect everyone to deliver, so I expect that Germany should do more. It’s a good start, but we expect even more.

MODERATOR: If you have time for one more question for you please ask your question in English, we have microphones around, is there anybody?

QUESTION: Mr Secretary General just one question, you did not mention EU and its initiatives but I remember the Americans called the Europeans to do more and to invest in efficiency and programmes long before 2014. So what do you think about PESCO, just to mention this famous buzzword?

JENS STOLTENBERG: I think I mentioned it very briefly at the end, but I was running out of time. I welcome stronger EU efforts on defence but it is extremely important that the EU efforts don’t duplicate what NATO does. That what EU does is not an alternative to NATO but actually strengthens the European pillar inside NATO. And the reason why I say that is that we cannot afford to have two command structures. NATO has a strong command structure - we cannot duplicate that command structure, and I also say it because I welcome stronger EU efforts on defence but EU efforts on defence can never replace NATO, especially not so after Brexit because when UK leaves the European Union then their biggest defence budget, United States, will be outside the EU of course, but also the second largest defence budget will be outside the EU, the United Kingdom.

So then when after Brexit 80% of NATO’s defence expenditures will come from non-EU allies, the European Union cannot protect Europe by itself. It has to be a transatlantic effort and also supported by non-EU European allies.

I think that this is also about geography, not only about money, but European security is dependent on, or at least, it’s good to have Norway in the north, Turkey in the south and then in the west you have United States, Canada and United Kingdom.

So yes we welcome stronger European efforts, I think it’s extremely good to address the fragmentation of European defence industry to bring in more capabilities, to increase defence spending but it cannot replace NATO. European security is dependent on transatlantic bond.

Thank you.