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A Bigger And Better Nato: Will Clinton's Plan Really Work?


International Outlook

A BIGGER AND BETTER NATO: WILL CLINTON'S PLAN REALLY WORK?

In a landmark speech on Oct. 22 that ended a four-year-long debate among Western allies, President Clinton declared that NATO should admit new members by 1999. So when Western leaders hold a summit next summer, they're expected to invite the Czech Republic, Poland, and possibly Hungary to join the 16-nation NATO--and keep open the door for other countries.

But if the broad outlines of a new European security deal are starting to take shape, the finer lines are still to be drawn. The U.S. and its allies are already working on resolving several thorny issues, from the fate of countries left out to crafting Russia's role in 21st century Europe.

Many experts fear that a mishandled NATO expansion could bolster Russian nationalists, who would feel increasingly isolated. That could make Europe less secure, not more. To assuage Russia, the allies will negotiate a charter giving Moscow the right to consult on a wide range of NATO operations. Secretary of State Warren M. Christopher says the accord should include joint training and a crisis-management mechanism. The pact "must show Russians that we are more important to NATO than some of the small countries that might join," says Andrei Kortunov of Moscow's Russian Research Center.

POWER VACUUM. NATO also may pledge tacitly not to station troops or nuclear weapons closer to Russia's borders in new member states--something NATO might not have done anyway. Says Klaus Naumann, chairman of NATO's military committee in Brussels: "There's no reason [for Russia] to be afraid of NATO."

Down the road, the Clintonites are worried about the power vacuum surrounding countries left out of the club. Latvia, Lithuania, and Estonia are the most vulnerable to pressure from Moscow. But Russia objects to including them. To bridge the gap, some U.S. policymakers suggest that NATO beef up its Partnership for Peace program--a kind of NATO prep school involving two dozen countries in joint exercises. NATO could, for instance, open up more committees to military liaison officers from nonmember countries. "The preoccupation with who is in and who is out would disappear," says Charles A. Kupchan, a senior fellow at the Council on Foreign Relations.

While it's dealing with external questions, the Western bloc also is grappling with internal frictions, such as France's demand that the U.S. cede control of the southern command. Washington is opposed because the command oversees the U.S. Sixth Fleet. But a French Defense Ministry spokesman says if the U.S. doesn't budge, "France will stay where it is" instead of playing, as planned, a military role in NATO.

As the controversial details are resolved, the Clintonites must find a way to sell NATO expansion at home. While the price tag is big--from $60 billion to $125 billion through 2010--the Administration will argue that up to 90% will be borne by European countries. On top of that, an expanded NATO could represent a lucrative new market for U.S. arms makers. A healthy chunk of the $52 billion to be spent by new members could go to military hardware. U.S. defense contractors such as Lockheed Martin Corp. are already showing off their wares in Warsaw and Prague.

But the crucial issues are diplomatic and strategic. And how the nations involved handle the challenges ahead will provide early signs of just how secure Europe's new military map will be.EDITED BY PAULA DWYERReturn to top

EUROPEAN SHARE BUYBACKS

In another bow to Anglo-Saxon business practices in continental Europe, Germany and France are moving to tear down laws that prohibit companies from repurchasing their own shares. Germany's Justice Ministry announced in late October that it would change rules on the legality of share buybacks by 1998. In France, the legislation that would permit share buybacks will be prepared by December.

For some companies, buybacks are an efficient way of retiring expensive equity and boosting share value for existing shareholders. Some 50 European companies, primarily British, have announced share buybacks worth about $50 million in shares in the past six years, estimates J.P. Morgan & Co.EDITED BY PAULA DWYERReturn to top


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