Podium: The future of the Atlantic alliance

From a speech by the US Ambassador to France at a defence industry conference in Paris
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TODAY, THE launch of the euro, the war in Kosovo, and the Asian financial crisis all have shown how critical it is for the transatlantic partnership of Europe and the United States to provide a stable platform for security in the world.

The cooperation among Nato allies in the operations in Kosovo, following our joint actions in Bosnia, bodes well for the capacity of the Alliance to do what is necessary to maintain peace on the continent and to defend our fundamental values of freedom and human rights, without which democracies cannot survive.

Ten years ago, when the Berlin Wall fell, my country made a strategic decision to remain engaged in the world economically, politically, and militarily, and not to retreat again into a new form of isolationism. We took that decision because we were convinced that an open US economy in an open world economy would generate greater prosperity for Americans and our trading partners. At the same time, we adjusted our security posture.

We reduced the overall size of our forces, but retained a substantial forward presence, and the capability to rapidly deploy new forces if necessary. Similarly, we have reassessed and adjusted our export control and industrial security policies to focus on keeping essential military technologies from a core group of states which do not share our democratic values and principles.

The new post-Cold War environment is not without risks, but the remarkable economic growth we have experienced has demonstrated the soundness of the fundamental strategic choices we made. We wish the euro to succeed because what is good for Europe is good for the US, and vice-versa. Overall, despite sharp disputes over specific commercial issues, there is little disagreement either in my country or in Europe that the world's prosperity depends on Europe and the US.

I have heard a great deal of concern about American hegemony and unilateralism, as well as about American tendencies toward isolationism and protectionism. These are understandable, but exaggerated, concerns. A strong sentiment exists in America for the idea that "shared leadership" with a strong, stable and democratic Europe, is in the greater interest of the US. While there are certainly voices in the US somewhat nervous about a future European security and defence identity, most of our leaders and opinion-makers support the idea, provided it strengthens, rather than weakens, Nato.

Like the euro, your success will be in our interest. To many in Europe, the consolidation and restructuring of European defence industries is the next big step in building a unified Europe, with the tools needed for a Common Foreign and Security Policy.

Today Europe has over 750 defence companies, compared to about 250 in the US, and with defence expenditures only one-half as large. For defence companies on both sides of the Atlantic, the end of the Cold War, and greater openness to transnational defence trade and investment are bringing new opportunities and risks.

In the United States, our Pentagon has worked hard to break out of the old Cold War model wherein defence companies were tied to the government, inefficiencies were legendary, and innovation was slowed. As you know, approximately 40 companies were merged into Lockheed Martin, Boeing, Raytheon and Northrop Grumman. In this decade alone, the restructuring of the American defence industry has reduced employment by nearly 2 million jobs.

Even though the cooperation among Nato members in the Kosovo crisis is outstanding, some military specialists warn that these signs may be misleading. German General Klaus Neumann, who heads Nato's Military Committee, warned in a recent interview that "the day may soon be coming" when Europeans and Americans may no longer be able to fight alongside each other on the same battlefield because of the rapidly expanding gap in the their combat capabilities.

Europe's defence budgets have gradually shrunk to what some defence experts believe to be dangerously low levels. There is very little popular inducement for political leaders to raise defence-spending. However, the political will for a European defence identity will likely require greater investments in defence.

We encourage Alliance member efforts to strengthen national defence structures by increasing defence spending. Reconciling budget constraints and military ambition will require a combination of European defence Industry restructuring and transatlantic cooperation.