birthday and have a check and rewrite the strategic concept. one could argue that maybe it doesn't provide enough detail, but i think it was a very helpful exercise for the alliance to go through. frankly, having worked on it behind the scenes, it was painful and difficult. simply because, as i just said, you do have some competing visions. and that balance between, you know, finding the sweet spot between article 5 and regional/global security provider is challenging. but i do think that the strategic concept does provide a basic level of guidance in it that regard. and, again, there will be differences. but i think with that guidance, you can determine that there's certain level of capabilities that are required. and frankly, the gap between article 5 and more broader global regional security

providers outside the euro atlantic area isn't as wide as i think some would believe. i mean, the truth is, you're going to need a basic level of expeditionary capabilities to respond to an article 5 scenario, whether it's something inside the euro atlantic area or a threat that's challenging the alliance or the euro atlantic community from beyond that region. if portugal is thinking of responding to some sort of scenario in the baltics, it needs to be expeditionary. this is not a scenario anymore where we expect the threat and the challenge to come to nato. you know, the vision of tanks rolling over the border and coming to you is fading away. and so i think while, again, different countries can choose to play to their strengths and their regional expertise, i think you can -- it's not that challenging to begin a conversation about the level of

capabilities or the types of capabilitieses this is going to need. and i think taking that conversation coming back to the first question, the alliance has decided collectively at its last summit that it wanted to pursue a missile defense system. it decided that it wanted it to be nato providing that system, not simply the united states moving ahead with the epaa. the nato system is anticipated to bring more to the table than the epaa. the epaa is, no question, the core of nato missile defense. but i think the vision is that over time, countries will be able to add on capabilities to it. we now have a situation where we have countries coming forward with contributions, the netherlands has indicated that it will be upgrading some of its frig it's to add missile defense radar. germany is contributing patriots. different countries are trying

to figure out -- france is working on early warning, ways in which they can contribute to the system. but it was in lisbon we have reached phase one, and we will declare this capability interim-capable at the summit in chicago. >> i would like to warn those who use this obesity analogy, that that's a very, very dangerous path to go down. if we look back the past 20 years, my big concern is that actually, we have started spending the peace dividend too fast and too early, too happily. and so i think we just have to get back to the understanding that this really -- we have to

figure out how to be rational about our spending. and i wouldn't encourage the united states to spend less. and i would just say that i guess we europeans, we are very pleased with the u.s. spending so much, because honestly, we kind of knew -- we don't say it, but we kind of need you to be there for us when we need you. and that really has kind of put us in a mind-set, where honestly, i think most europeans think we can get away with this. this is not that important, because in the end, the u.s. will be there for us. and the real worrying messages in the last couple of years is that, you know, the u.s. might not be there for us. and so i think it is important. it is up to us europeans also to make sure that the u.s.

understands that we don't want you to go away. and that we will be rethinking our own spending in order to make sure you understand that we're in it together. just want to say a few words about the defense industry. i think it is important that the u.s. understands that there is this concern in europe that basically smart defense will mean more american equipment in europe. and i think it is in your interest -- it is in the american interest, and it's in our interest that we have -- we find a good balance between good competition, between competition that enhances technology, making sure that there is no protectionism in the arms market, but at the same time, that europe itself also keeps up with the technological developments, and will be able

to provide proper equipment, proper european equipment. that, by the way, might be used in the u.s., as well. so i'm not advocating european arms for europe. what i'm advocating is that it is important that the european armaments industry stays part of the alliness armament industry. >> just before i post it on to the remaining members of the panel, may be useful that some of the numbers bandied about, about reductions and the kind of withdrawal -- i know the u.s. military doesn't like to talk about in terms of withdrawal from europe. they talk about in terms of rebalancing of its commitment to europe, and they're looking to make a reduction of i think around 15% in the current troop numbers in europe, and there are currently 80,000 u.s. troops based in europe.

and there were something like 400,000 during the height of the cold war. so i think that's an indication. part of the rebalancing is additional commitments they're putting into europe, and that includes missile defense, includes new commitments for maritime forces and also includes special forces, as well, which are being deployed into europe. i think on the -- just another set of figures. i think there is a case to be made about the -- at looking at the level of u.s. defense. i looked at the nato produces an annual set of defense expenditure throughout the alliance. and if you take the peak year of defense spending in 1995 and follow it through in constant prices, collectively, european nato is spending about the same as it did in 1995 at the peak of the cold war. now, obviously, 1995, there are only 14 european members of

nato, and now there are 26. so in terms of individual members, states spending it has gone down, and it's gone down significantly. but overall, collectively, european nato is still spending the same. given we moved from the peak of the cold war into an -- into a security environment which is not necessarily involving extensional threats to me that seems quite reasonable. and if you look at the u.s. defense spending from the peak of the cold war to where it is today it's gone up something like 75% and that kind of confirms what john was saying earlier. so, again, there is a context for saying the capabilities gap is in part a kind of supply push on the part of the u.s. now, whether, you know -- i guess i'll thread it back to the panel. one of the questions was about how much is enough. and so i will throw out -- i just wanted to kind of set that and give you a little bit of a context. >> may i just say something that

is really important. the withdrawal of the troops from the u.s. troops from europe will have important not only military, but sociological impacts. and i think that is something that should not be underestimated. so i think both sides have to work on how do we replace that, because don't forget, the presence of u.s. troops, their participation in local societies, the message they convey, their closeness. and you could go on and on, have been a very important part of how this relationship is proceeding. >> sorry, but i would add that two of the four brigades that are stationed in europe have not been on european soil more or less for the last decade. so returning those two bring guards to the united states

means they will not return to europe from afghanistan. i fully appreciate what you're trying to say and trust me, as someone who was actually arguing to keep that third brigade in europe, and succeeded for at least a year, i take your point. but it also needs to be known that two of the four have not been present, and those interactions have not been occurring. and so one could say, with the new brigade assigned to the united states, with battalions rotating to europe, some of that connective tissue will occur once again that's been lacking since we went into afghanistan. >> john. >> yes. i think that you've very adequately and pneumonia m mercally expressed the problem. the peace dividend disappeared in the 1990s. we're familiar with what happened. we were able to balance our budget. we were able to do a little bit

with some of the money we saved. but that disappeared quite rapidly. with the doubling of the u.s. military budget after 2000, 2001. we did not prepare for transformation of our manufacturing base, and we saw the erosion of our manufacturing base as a result of that. it's not the complete causal relationship there. it's only one of the contributing factors. but we did not prepare for -- with -- when we had a peace dividend, for a transformation of our manufacturing base. in terms of the obesity analogy, well, obviously, we are the biggest elephant in the room. we're responsible for 43% of all military spending in the world, according to figures released about a month ago. but we're not the only fat cat. there are some pretty pudgy people out there. and some europeans are kind of pudgy too. i mean, up there in the top five, u.k., france, germany,

pretty big spenders. they could use with a little slimming, in my humble opinion. now, how much slimming? do we do? i'm not a dietician. i don't know exactly. but i do think that as they say with diets, not just cutting the amount of food that you eat. it's lifestyle. it's changing your whole approach. if we're going to be cutting in europe, we have to change the lifestyle. the approach to security issues. we talked about human security as kind of a nebulous topic, granted. but, yes, looking at a variety of different approaches to threat that are nonmilitary based. when we outline the various threats that face nato, we have this kind of hodgepodge of threats. cyber terrorism, you know, piracy, that add up to not a whole heck of a lot in terms of the needed capabilities to address them. roke states seem to be a return of the 1990s in terms of nato's

search for a rationale. syria, iran, countries that pose a threat. not only to their region, but at the global order, and therefore nato has to kind of bulk up for that. but i find that a very problematic concept, as it was problematic in the 1990s. a resurge of russia. that's always kind of in the background of people talking about what nato might be useful for. but ultimately, you know, i think that looking at different capabilities in europe that can replace the military capabilities that are either being removed by the united states or being reduced by european countries is a necessary conversation to have. and i look forward to having that conversation. it's not going to take place in chicago. unfortunately. but maybe later. and at a subsequent nato summit.

>> until now, speaking of germany and the u.s. and france, all these big countries in the u.k., they haven't -- you haven't spoken about a small country spending more money than we actually should. and not only that, but buying weapons that we're not deploying. we're just keeping. now, this is my argument to support your bit. what is my counter argument? yes, well, we don't have any money. you probably realize by now. we don't have any money. so the options are very specific. what do you do then? do you sort of like close that country and goodbye? or you reinstate your status all over? the idea is basically a button called reset like a computer sort of reset. where you know what were the mistakes and you learn from the mistakes of other countries,

namely those that have been leading. now the correlation between the leading countries that we have common history on this one. and those kind of places, those areas, history plays a very, very important role. so don't wonder why we do not allow so easily neighboring countries to join nato so suddenly. the i object issue is that we cannot as a country, we cannot play the role of burden-sharing as other countries do. so instead of basically -- this is my point of view. but, you know, we don't have a government anymore. so -- instead of fooling -- making a fool out of ourselves globally, and we've been doing that quite a while, for the last year, we decided that we need to specialize in something. and that is before smart defense came about. i remember when i was at the ctr, even talking about specialization.

so what is the key point for countries that have water all around it? have a lot of natural resources and have a lot of issues when it comes down to security, you know, regional security stability? you -- you specialize on an issue that basically concerns the world. and that is transport of goods knew the waters. that is called piracy. counter piracy issues. maritime issues. and in this case, unlike the whole government economics and all this stuff, we seem to have a lot of money. and we're talking about billions or trillions. the problem is that not everybody has a flag with a country on the back taxation. so why don't we specialize on this. maybe, just maybe, other allied member countries can actually specialize on the things they're interested in, find a common ground where they can actually decide, because the way that i

interpret things, and the way that i have been receiving things when it comes down to nato is there is a bit of egoism, as well. who is the best. who is the worst, who is the best. who leads, who doesn't lead and all this stuff. and so instead of just making too much conversation, decide each country needs to specialize in one thing and then create the services. the service on the back, the industry on the back, the r & d, you do the human capital training, do you -- you know, from universities to institutes and so on and so forth. that is a very simple, because basically, you cut back on everything, and you leave only one sector. which basically makes you a very important player in the world arena. and unlike my colleague here whom he said they need to cut spending, the united states made a very good job into understanding what are the global threats at an early time. whereas we europeans, we do not. we're still thinking about

integrating ourselves again and again and again and again. and more and more. from the coal and steel to the european union, now we have the currency. probably the currency is falling apart. and it's not only greece. it's italy, it's spain, it's portugal. other countries, ireland, hungary had problems, poland has problems, so on and so forth. and, yes, big countries like germany need to -- and they do that. they take all the burden sharing like france does. but instead of arguing and fighting who is the best and who is the worst, when you specialize, you cut back on everything. and this is the most viable solution, because you also need to take care of the political situation that is rising right now in europe. and it's not a good one. it's not a good one. and it's not a viable one. it's not a credit be one. it's not a trustworthy one. and trust me, i had special experience with these guys trying to get inside government. so i would say let's be more honest. let's say yes, there are things

that we're missing. yes, there are things that we need to negotiate. yes, we need to find a solution, like they do in the vatican where they close themselves until they find a new pope. and at the same time, let's be honest. and let's sacrifice some issues in order to resolve some others. because the world is not safe. its it's not safe. we're nearby syria and i know how unsafe things are. if we go down the eurozone, there is going to be a domino effect. and if -- if any country falls, there is going to be a domino effect. not only greece. but let's be sort of friends, let's be honest, and let's give nato a chance. let's give solidarity a chance in this case. >> i would like to take another batch of questions. again, we're running out of time, so try and be brief. paul. >> i would like to address that last point. one of the preproblems -- excuse

me, hall gardner, americans of european paris. i would like to address the last point, one of the problems in that specific region in the world is the lack of solidarity between solidarity between two nato members, and i mentioned you have gone around the word turkey. and that's your regional base. your expenses are not cold war, they're vis-a-vis turkey, who has historical debate as you said. and what can be done in nato to begin to reduce the tensions between the two. if you emphasize sea power, as you did, sea power is to guarantee the resources. you know there is a burgeoning conflict between turkey and greece over the eastern mediterranean. over cypress, and that's linked to israel, and it's linked to lebanon, and even the palestinian question. and that growing tension i think is really crucial. and it's an achilles heel to nato. and i really think it needs to

be addressed. thank you. >> sorry, just behind. >> thank you very much for your remarks. i was just wondering when you were at sais. you talked a lot about pooling resources and niche capabilities and european defense agency, so i wonder now that you're in government, if you see burgeoning trends in that regard since then. >> thank you. a very quick question. ambassador simonyi, thank you for mentioning partnership in the presentation. in particular as it relates to smart defense. and i was wondering whether you had any sense of the expectations prior to chicago in terms of associating partners to our discussions at 28. on smart defense.

>> i wonder if anyone on the panel might want to comment on the link between smart defense and the nuclear issue in particular. i think it's already been mentioned. the uk decisions up to now to reduce investments in conventional forces in favor of maintaining the trident in terms of smart defense, what the panel think might be better to go the other way. >> okay. we have four questions. one on the intranato tensions. and given the smart defense is all about trust, trusting neighbors and working with neighbors, how does that kind of pan out. another question on the kind of pooling of resources based on the earlier studies.

another question on partnerships, and also linkages between smart defense and nuclear issues. i know that will be one of the key topics for two of the sessions we have tomorrow. but if i could ask the panelists to be relatively brief. again, pick and choose which parts of the questions you want to answer. so maybe i'll start the other end this time. marios? >> okay. >> maybe mayor owes, you could focus on -- >> turkey? >> yeah. >> you know, that's a million -- i've heard this question so many times. okay. i'm very difficult. i'm not going to go oh, the turks are going to attack. no way. i'll replay in a very different way. israel suddenly declared they have an -- with greece, solution solved. we have our own sovereign borders, and we respect specific things. if our counterparts would like to negotiate, it's not

negotiable. i'll put a point on this one. however, i can guarantee you you do not choose your neighbors. you live with your neighbors, especially when it comes to geographical issues. i believe we made a very good start with relations. turkey is very keen on ballistic missile defense. and at the same time, turkey is suddenly becoming a peripheral power. now we have to disengage those two countries between them. turkey's 80 million market economy, developing economy. and greece is an 11 million market economy. not -- i wouldn't say falling apart, but it's restructuring itself. the only thing that binds us together is that if we fail, they will fail. other than this, if you want me to criticize a bit turkey, there is some games that for me is a total failure. i don't see any reaction. didn't solve an issue.

but nonetheless, we're the best ally. we're their best ally. they are our best ally. and we have shown that. we have the nato maritime interdiction training operation center. the director is basically a naval officer greek, and number two is a turkish. if only we could see that in h in brussels. i would love to see that at some point. so this is my answer. >> thank you. >> just briefly on that issue, alliances sometimes have perverse effects. i mean there was an attempt a couple of years ago at least where turkey and greece a sat -- the leaders sat down to talk about reductions in military spending and confidence building, et cetera. and yet within the context of nato as a whole, of course the push is to increase military spending. without too much thought about how that might impact the relationship between greece and turkey.

it's not, you know, a peculiarity of the nato alliance. we have the same thing with south korea and japan. we push south korea to spend more and more money without thinking necessarily but wait a second, south korea and japan, our other ally, have a serious territorial conflict. and the fact that south korea calls one of its destroyers the island of dispute between south korea and japan doesn't send warning signals to the united states that maybe it's not such a good idea to encourage our allies to spend more money without thinking or preparing for some kind of confidence building alternative, some kind of military tension reducing formula between our allies? so that's the kind of discussion i would like to see not only within nato, but that the united states fosters among its allies in general. >> julie, would you go first? >> sure. really quickly on the european defense integration report that

we put out at csis, i think it was before its time. it was 2003, and we've seen a little bit of traction on some of the concepts presented in that report, the pooling and sharing, niche capabilities. but it's really taking root now, primarily because of the financial crisis. and it's obviously front and center on everyone's minds. but we have not come to a point where this is the be all, end all answer to all our problems. there are a lot of questions on the table similar to the questions that we heard when we report the report about sovereignty, about handing over responsibility for your security to a neighbor or a collection of neighbors. and there is still questions about where to invest and who is coordinating it, as i pointed out. so i think it could take root, and i think smart defense's big opening act is going to occur this weekend. but the real proof will be in whether or not this is a concept that is sustainable and pursued long-term.

it cannot be a one-off. we do not want to have this summit open with smart defense and close with smart defense, because 20 multilateral initiatives is by no means enough. so i think we're putting the keys in the engine, and we're going to see how things work out. but really, the success of this will rest on future commitments to it. >> i really like that, julie. i think you're certainly right. just two comments. one is i don't think we should conclude on a pessimistic note on what happens to the eurozone. my personal belief is that it's tough. i don't see it falling apart, and there is clearly an option that we will figure out how to -- how to get beyond the situation that we have now. so i have to say that i disagree

with your pessimism. but on the partnership note, i want to be very clear. i don't know what will happen. i have my very strong views on this. i do feel that finland and sweden have come very, very close to -- the difference between finland's ability to participate and the ability of a full member state is hair-thin. and i think that has to be appreciated. i do believe that in one way or another, nato should appreciate this fact. i think there should be a differentiation among members. and i don't think nato should push either sweden or finland towards making their closer cooperation a condition to their membership, because their internal factors are historic factors,