Administration Releases NATO Expansion Cost Report

On February 24, the Clinton administration released its "Report to the Congress on the Enlargement of NATO: Rationale, Benefits, Costs, and Implications." The study, conducted by the Department of Defense (DOD), estimated the cost of NATO enlargement will total $27 billion to $35 billion over a 13 year period, beginning in July 1997, when the alliance is expected to extend invitations to new members at a NATO summit in Madrid.

DOD assumed the initial expansion would include a "small group of nonspecified Central European countries" integrated at a modest pace, reflecting the lack of any overt threat to the security environment. The estimate assumed no substantial NATO forces or nuclear weapons would be permanently stationed on the new territories. Instead, the report foresees a rear guard strategy emphasizing rapid reinforcement capabilities. Earlier studies by RAND ($42 billion) and the Congressional Budget Office ($61 billion to $125 billion) based their estimates on a more extensive reconfiguration of NATO forces and alternative threat scenarios.

The DOD report estimated U.S. costs at $1.5 billion to $2 billion over 10 years. DOD assumed the United States would incur minimal costs for the restructuring of new members' militaries and for upgrading the regional reinforcement capabilities. The United States would be responsible for 15 percent of the direct costs of NATO enlargement, such as ensuring interoperability of forces and integrating command and control systems, while new and current members would account for the other 85 percent. Overall, the U.S. portion of total NATO expansion costs would be approximately 5 to 8 percent using the DOD estimates. The administration cautioned that this was not an official NATO position and that costs were subject to change if underlying assumptions proved incorrect.