NATOs Identity Crisis
Pfäffikon SZ, Switzerland – The founding of the North-Atlantic Treaty Organisation (NATO) in the spring of 1949 is reasonably easy to explain considering the era in which it took place. The West was licking its wounds after the Second World War and was in need of some rest and defensive security. NATO is a military treaty which enables the cooperation of the Western armies with the initial chief aim of putting a stop to the spread of communism. I can recall very clearly that when the former secretary-general of the NATO – Joseph Luns – had something to say, all would listen. As counterpart to the NATO, the communists founded the Warsaw pact, which seized to exist in 1991. Today Moskou has let us know it will let the market decide the price of the ruble. Those are not the statements of a sworn communist, which suggests that the Russians are a lot further in their western development than most think.
End of the Cold War
It goes without saying that a lot has changed in Europe since 1949. It has been quite some time now since we have left the Cold War and the Iron Curtain behind us, thanks to Ronald Reagan, Michail Gorbatsjov and Helmut Kohl. Since the fall of the Berlin Wall the Europe of today began taking shape and NATO quietly advanced further East. This all took place in violation of prior agreements. That’s why it is no surprise that Russia is now saying enough is enough. After decades of operating in the background, NATO is seizing the opportunity to reassume its glamorous role. In reality NATO has long been undergoing an identity crisis. The tug-a-war surrounding Crimea comes as a godsend to NATO.
Kosovo
Perhaps worth mentioning is that Russian president Vladimir Putin compared the situation on Crimea to previous events in Kosovo. According to Serbia, Kosovo is part of Serbia. However Kosovo has been independent since 1999 and in practice Serbia has no jurisdiction over Kosovo. On July 22, 2010 the International Court of Justice determined that Kosovo’s unilateral declaration of independence was not in violation of international law. “Kosovo, which you mentioned, declared its independence by parliamentary decision alone. In Crimea, people did not just make a parliamentary decision, they held a referendum, and its results were simply stunning,” said Vladimir Putin.
More money
In any case NATO smells its opportunity to once again play a meaningful role on the world stage, with all the accompanying risks. The first thing NATO wants is more money. I have mentioned before that the current defense expenditure of for instance The Netherlands, is a joke. The Dutch army will receive 100 million euros more than last year, which is a mere drop in the ocean. In European context it makes sense to me for defense expenditure to be brought to a responsible level. This has nothing to do with a possible Russian threat, but with keeping the armed forces reasonably up to date, since there is a lot going on at the peripheries of the EU.
Putting its own house in order
NATO isn’t quite on the same page. For years these gentlemen have not been able to supply a decent explanation of their expenses. A feat which has no place in the modern world for a publicly funded organisation. In 2013 NATO spent more than 12 billion euros, half of which could not be accounted for even by her own controlling body IBAN. According to Saski Stuiveling, president of the Dutch National Audit Office, there are 378 NATO projects that have never been completed. “Those are skeletons in the closet” says Stuiveling. It seems sensible to me for NATO to first put its own house in order.
It remains for me to wish you a good weekend.
Jan Dwarshuis is a senior asset manager at Thirteen Asset Management AG, where he is responsible for the Thirteen Diversified Fund. Dwarshuis writes his columns in a personal capacity and is not paid for them. Nor is he paying for his columns to be placed. Professionally, he holds positions in major European, American and Russian stock funds. The information in his columns is not intended as professional investment advice or a recommendation to make certain investments. At the time of writing, he has no position in the above shares and has no intention of doing so in the next 72 hours.
