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Closing the capabilities gap

James Appathurai examines the nature of the capabilities gap and initiatives to overcome it.

Cold War capabilities: Western European countries
developed heavy-metal armies to counter the threat
from the East
To those who have followed NATO over the long term, the current discussion about the capabilities gap between the United States and its Allies might appear but the latest chapter in a never-ending story. After all, NATO has struggled throughout its history with questions of interoperability and burden-sharing, and yet the Alliance has flourished. Why should the current concern about the capabilities gap be any different?

The answer is simple: because this time it is more serious. During the Cold War, interoperability and burden-sharing problems had limited practical effects, because the transatlantic community had no choice but to share the same strategic goal and methods, in the face of a single and existential threat.

Today, the situation is very different. At the practical level, NATO forces are working together in robust, complex and difficult missions, but the US lead in military technology makes working together difficult for deployed forces. At the political level, the desire among Allies to work together is hamstrung by the growing complexity of doing so. At the strategic level, a growing transatlantic divergence in capabilities can perpetuate both legitimate grievances and unfair stereotypes over burden-sharing and influence.


The capabilities gap has three main foundations: historical, structural and financial. Each, individually, would have proven a daunting challenge to address. Together, they explain why the gap has become so significant.

NATO's success at developing the necessary capabilities requires sufficient resources

While a capabilities gap has existed ever since NATO's creation, the legacy of the Cold War has made it particularly acute today. During four decades of military stand-off, all NATO Allies prepared to meet the major threat to international peace and security: a massive attack from the East through the central plains of Germany. For most Western European countries, this required the development of heavy armies built around armour, artillery and short-range air superiority fighters. Since the battle was to take place at home, there was no need to be able to project forces over great distances, or to sustain them far from home over long periods.

For the United States, by contrast, preparing for a major battle in Europe required precisely the capacities most of its European Allies did not need: mobility, sustainability, the capacity to project and sustain forces over distance and time. In essence, while the United States was busy preparing airlifts and mobile units, most of its European Allies never worried about getting to the battlefield; they quite reasonably planned for the war to come to their doorstep.

The end of the Cold War devalued Europe's capacities, and rewarded those of the United States. Massive, heavy-metal European armies - hard to transport, slow to move - were no longer the key to providing security. Rapid deployment capabilities, to handle unforeseeable contingencies far away from home, were required. For the United States, this meant building on an existing strength. For much of Europe, it meant quickly turning around a defence establishment built up over decades, at significant cost.

This challenge is even more daunting in light of the structure of European defence. Despite decades of European political and economic integration, defence remains very much a national prerogative. In the European Union, there are still 15 countries, each with their own foreign and defence policy orientations. There are 15 armies, 14 air forces and 13 navies, each with their command structures, headquarters, logistics organisations and training infrastructure. There are also multiple national defence industries, supported as often for reasons of national independence and prestige as for reasons of effectiveness. Taken together, the result has unavoidably been duplication of effort and industry, lack of coordination in policies, and higher costs - all of which make it impossible for Europe to match US advances in technology development and defence procurement.

These historical and structural problems are compounded by the financial factor. The raw numbers tell a powerful story. Since the Berlin Wall fell, European countries have cut defence budgets by more than 16 per cent, to an average below 2 per cent of GDP. European major equipment procurement budgets have dropped by 18 per cent since 1996, compared with an 8 per cent decrease in the United States over the same period. The United States spends more than four times the European total on defence research and development. US spending per active duty service member is almost four times that of Europe's. The list goes on and on.

The result of this spending shortfall is clear. Europe, as a whole, is investing significantly less than the United States in the meaningful and substantive defence reform necessary to retool for modern requirements. Where it invests, it gets less return, in terms of capabilities. And European defence industrial development has been hampered by restrictions on industrial cooperation, both within Europe and on a transatlantic level.


As a result of these historical, structural and financial challenges, Europe's defence establishment has entered the 21st century suffering from significant military shortfalls. These include insufficient air and sea transport to deploy European forces with their equipment; inadequate air-to-air refuelling; a lack of precision-strike, all-weather-offensive fighter capability and precision-guided munitions; insufficient reconnaissance and intelligence capabilities at both the strategic and tactical level; inadequate deployable command and control; inadequate capacity to suppress enemy air defence; and shortfalls in secure, interoperable communications.

Over the past decade, the impact of these deficiencies on transatlantic defence cooperation has been growing. In broad terms, the capabilities gap between Europe and North America is making practical cooperation more difficult. It is imposing a division of labour that is politically difficult to manage. And it is reinforcing unhelpful stereotypes, on both sides of the Atlantic.

Problems of interoperability have been an issue for the Alliance since its inception. The difference today is that US advances in communications and data processing, in particular, are moving faster than those of most of its Allies, and in new directions. The essential backbone of a multinational military operation is the capacity to communicate between forces, and to coordinate the actions of those forces quickly and effectively. That cooperation is becoming a challenge.

The United States is increasingly the only Ally, and indeed the only country in the world, with many of the capacities absolutely necessary to operational success. For example, NATO's operation to halt ethnic cleansing in Kosovo in 1999 was critically dependent on the United States for precision strike capability, surveillance assets, refuelling, lift, and high-end command and control systems.

This divergence of capabilities poses the danger of creating a division of labour, whereby the high-tech Allies (principally the United States) provide the logistics, strategic air and sea-lift, intelligence and air-power, and the others, by default, find themselves increasingly responsible for the manpower-intensive tasks such as long-term peacekeeping. Such a division of labour, if it becomes too stark, is politically unsustainable. It would create different perceptions of risk, of cost, and of success, and would thereby put enormous strain on NATO's unity and cohesion.

The capabilities gap is also exacerbating another long-standing irritant in transatlantic relations: burden-sharing. Europe's inability to contribute, in a more equal way, to high-end operations, is encouraging those in the United States who see Europe as unwilling ever to take on its fair share of the burden. For their part, many Europeans feel frustrated at their limited capacity to contribute, and their correspondingly limited political influence.

This worsening debate over burden-sharing is reinforcing inaccurate and divisive stereotypes of Europe and the United States on both sides of the Atlantic. According to analysts such as Robert Kagan of the Carnegie Endowment for International Peace, it also heralds a divergence of strategic culture, whereby Europe and the United States differ on what should be done because they differ on what each can actually do.


Three main efforts are underway to narrow the capabilities gap: in NATO, in the European Union, and in the United States.

NATO's efforts to narrow the capabilities gap, and to promote interoperability, date from the early days of the Alliance. These efforts have met with some success - particularly in light of the political and technical complexity of the task. The proof can be seen in the Balkans peacekeeping operations, where NATO Allies are able to work together seamlessly. It can also be seen in major operations based on NATO forces, including those in the Gulf War and in Afghanistan, where decades of cooperation and standardisation within the Alliance have allowed for good cooperation in coalitions of the willing.

However, much more work remains to be done. That was why, at the 1999 Washington Summit, NATO's heads of state and government approved the Defence Capabilities Initiative (DCI), which identified 58 essential capabilities that the NATO Allies should create or develop, nationally or collectively. The DCI moved the yardsticks forward, but it suffered from ambiguity over targets and individual national contributions.

At the upcoming Prague Summit, NATO will adopt a new capabilities initiative, which will build on the DCI by sharpening its focus, and specifying targets and national contributors. [For more details, see the article by Edgar Buckley in this issue of NATO Review.]

This new initiative will complement, and reinforce, the European Union's efforts to develop, by 2003, its Headline Goal of a deployable corps-sized force. The European Union has already held two Capabilities Commitment Conferences, to assess what capabilities it has, and which it must work to develop. The European Union's Capability Action Plan identified some 25 broad areas for improvement, and panels have been set up to address the shortfalls. Improvements to the forces of EU members of NATO will benefit the Alliance; they will also help to balance transatlantic burdens more fairly, and contribute to a healthier dialogue on burden-sharing.

Another keystone in narrowing the capabilities gap is better defence industrial cooperation. Improved cooperation within Europe will improve economies of scale and remove unnecessary duplication. Improved transatlantic cooperation will enhance economies of scale even further, and ensure that both Europe and North America can take advantage of the latest and best technology.

On this front too, there is encouraging progress. The US Defence Trade and Security Initiative, the new review of the US export control regime, and the UK-US Declaration of Principles will lead to a better environment for mutual defence equipment and industrial cooperation. Washington is also now poised to issue a National Security Presidential Directive mandating a comprehensive, six-month review of US arms export control policies. The Global Project Authorisation process for the Joint Strike Fighter could provide an important model for the future, and the recent US approval of the sale of Predator unmanned aerial vehicles to Italy will help Europe stay in step when it comes to high-end, important capabilities.

All of these measures to bridge the capabilities gap are necessary, both individual and collectively - but they are not sufficient. Success also depends on funding. Several European governments have halted the decade-long downward slide in their defence budgets, and some have even begun to increase them. This is an important development. NATO's success at developing the necessary capabilities, as much as the European Union's success in meeting its Headline Goal, requires sufficient resources. Only if these are spent in the right way will the European Union, NATO and the transatlantic relationship reach their potential to preserve Euro-Atlantic security today and into the future.

James Appathurai is senior planning officer in the policy planning and speechwriting section of NATO's Political Affairs Division.