NATO's Greatest Test Begins As It Confronts A Changed World
What takes place next could make or break the alliance
Last week, Mark Rutte, the former Dutch prime minister, became the new secretary-general of NATO. Just a short time ago, the crowning of a new NATO chief, leading the world’s most powerful defense alliance, would have garnered global attention. But in the midst of what’s taking place in the Middle East, Rutte’s swearing-in went largely under the radar.
But his appointment should not be overlooked.
Rutte is taking charge of NATO at perhaps the most pivotal moment for the alliance. The group is being pressured to deal with a variety of new challenges, external and internal, that could reshape the alliance. And Rutte himself brings his own outlook, that could influence NATO’s orientation on the world stage.
Rutte is not waiting to take action.
His first trip as NATO chief was to Ukraine, where he doubled down on the alliance’s commitment and full support for Kyiv, especially as Zelensky called for the use of long-range Western weapons against Russia, a move that resulted in the Kremlin changing its doctrine on nuclear weapons.
In many ways, a perfect storm has formed for NATO. And this represents the bloc’s greatest test. The next chapter of NATO could look radically different from the past.
CHINA STRATEGY
During his tenure as the Dutch PM, towards the end of his term, Rutte penned an opinion piece in NRC, a Dutch newspaper. While the focus of the piece was on the Ukraine war, Rutte spent time discussing the US-China rivalry. He boldly wrote that he did not see how China would lead the 21st century. And that instead, this century belonged to the US.
It was a shock move, considering heads of state seldom pick sides so publicly. Yet, here was the head of one of Europe’s most innovative economies, clearly siding with America over China. Added to this, many Dutch companies draw vast revenue from China, including ASML, the chip giant, where China represented almost 50% of its Q2 revenue, even though the company has export controls in place limiting sales to the Chinese market.
Still, Rutte was unphased, making it clear he stood with Washington, not Beijing.
This is “Rutte’s outlook.” He firmly believes that this century should be championed and led by America, and democratic ideas. It is from this place that he is taking up the mantle of NATO leadership.
This could mean that during Rutte’s tenure, he expands the focus of NATO beyond its conventional borders (i.e. Europe) and into new areas like Asia or the Middle East. In fact, when Rutte was the Dutch PM, then-US president Donald Trump proposed “NATO-ME,” expanding the defense alliance to include countries in the Middle East.
Rutte could reorient NATO towards China using two justifications.
First, even if NATO remains a Europe-centric organization positioned against Russia, to adequately tackle the “Russian threat,” NATO must also focus on nations who are aiding Russia’s ideas and causes, in particular China. Second, if NATO is to align with the new geopolitical climate, then the single greatest geopolitical (and geoeconomic) challenge facing the West is China, not Russia.
Except, to take on China globally, NATO cannot expand purely as a defensive bloc. It will have to move in new ways, blurring the lines between defense, economy, and geopolitics.
One of these new ways could be venture capital.
In June, 2022, as NATO moved rapidly to address Russia’s invasion of Ukraine, one of the new projects it unveiled was called the “NATO Innovation Fund” (NIF), referred to as the “world’s first multi-sovereign venture capital fund.” Armed with 1 billion euros, the fund had a 15-year window to help develop startups developing technologies critical to future security and defense.
Out of geopolitics, NATO had suddenly become a VC.
This is a new way for NATO to compete with its adversaries, like China, beyond the defense sphere. Could NATO start to fund startups in different parts of the world as a way to build inroads and develop a new kind of footprint?
Such a move to fund technology-focused startups aligns with broader NATO goals of establishing a powerful presence in areas like AI, quantum computing, blockchain, robotics, and autonomous systems. For NATO, these are technologies that the group must lead in.
Even if NATO relies purely on defense to combat China, when it expands into certain geographies, it is no longer clear-cut what role the alliance will play.
Last year, NATO proposed an office in Japan, in a bid to take on China. However, the idea was struck down, including by France, as some NATO members resisted expansion into Asia.
Except, while yesterday, nations may have waited to join NATO in a bid to bolster their defense, this is not happening anymore. Japan, for example, is already moving full-steam ahead with a historic defense rewrite, including having the world’s third-largest defense budget or even calling for an Asian NATO.
Suddenly, to take on China, NATO has to figure out a new role for countries with massive military projects.
Unlike many nations who have joined NATO, like in Europe, who need the fighting capabilities of the whole bloc to protect themselves, the next NATO contenders are not in the same boat.
Instead of playing a central defense role, might NATO play a more peripheral role, in a bid to respond to the China challenge?
Alongside all this, as NATO moves with a new China strategy, it will cause NATO’s borders to increasingly overlap with the EU.
This has been the case for some time. But so far, there has been alignment, as both NATO and the EU defend against Russia.
But in the case of China, that alignment does not exist. NATO and the EU could be on two separate pages. Just on China, NATO could become frustrated that some members inside NATO are actually “pro China” in the EU.
To properly address the China threat, NATO will have to bring the EU on the same page, and this could begin to informally merge the two blocs, as economic objectives are underpinned by defense priorities and vice-versa.
ARCTIC CHALLENGES
A separate challenge entirely is the Arctic.
As the Arctic melts, many nations are rushing to capitalize on faster and cheaper trade routes. This includes countries that are not even Arctic-bordering nations, like China and India.
For example, one trade route being explored would connect East Asia with Western Europe. Through the Arctic, the trade journey would cover 12,800 kilometers. Compare this to today, where the same trade journey, passing through the Suez Canal, covers 21,000 kilometers. Through the Arctic, transit time would be cut by almost 15 days.
But to secure the “Arctic economy,” defense is walking hand-in-hand with trade as the US, Russia, and others eye a brand new military presence in the polar region. Except the West is behind.
According to some estimates, the US and its allies are at least a decade behind Russia in terms of Arctic military capabilities. Inside the Arctic Circle, Russia’s bases, which include old Soviet bases that have been reopened and modernized, exceed NATO bases by a third.
Except in the Arctic, NATO faces a dual challenge: it has to advance defense goals and also operate in the middle of a growing economic epicenter. This is completely different from mainland Europe, where the EU handles the economic side while NATO handles defense.
This means, in the Arctic, NATO could be forced to mimic what the US and UK are doing in the Red Sea. The core of NATO’s mission in the Arctic could actually be to secure trade routes as Western shipping companies move goods from Asia to the world. And, at what point does NATO begin asking why it is securing trade routes that the whole world is using?
Add to this, NATO has to come up with a plan to combat connectivity derailment in the Arctic.
In 2022, Svalbard, a Norwegian island on the borders of the Arctic Ocean, had one of its two undersea cables cut. At some points, the cables were buried two meters below the sea surface, to protect against fishing vessels in the area. There are conflicting beliefs over whether the Svalbard cable was deliberately cut by a Western adversary or accidentally cut by an “external influence.”
In the Arctic, NATO has to come up with a strategy to not only deter such actions but ensure that Western states do not lose vital communications that take weeks to bring back online. And this becomes increasingly important if NATO is colliding with Russia and China to control the Arctic region.
Could this mean NATO echoes Taiwan and turns to new satellite systems for communications? Of course, this comes with its own hiccups regarding space defense.
UNEXPECTED CHALLENGES
While China and the Arctic require NATO to redesign itself, there are a different set of challenges the bloc faces. And these challenges could paralyze NATO if left unresolved.
To start with, there are big questions about the contributions of member states.
This goes beyond spending commitments (2% of GDP). It is also a question of manpower.
Many NATO countries are facing a demographic crisis. There is a greater and greater number of older people, and a smaller and smaller number of younger people. This has yet to make the public spotlight in terms of defense. But compared to other parts of the world where NATO wants to have a presence from Asia to Africa, where young populations are dominant, NATO is in a different position.
And with the exception of Finland and Sweden, where youth are “activated” to join the military, everywhere else in the bloc, there is growing disinterest in military service. The social outlook is changing.
The next contribution targets for NATO might revolve around manpower and soldiers, not just military spending. And, this could create new internal friction if some member states contribute younger, more able troops than other member states, creating a new generational gap in the bloc.
Another big challenge is the induction of new members.
Already, there is hesitation for Ukraine to join NATO, considering it could cause a direct clash with Russia. But, a European nation joining a Western defense bloc is one thing. However, what if NATO wants to add a non-European country?
For example, from Saudi Arabia to the Philippines to Japan, a host of countries could seek NATO membership. NATO might seek to shield them as they face similar challenges (like China). But how will the rest of NATO feel about coming to the aid of the Philippines in Asia?
Suddenly, questions of identity, culture, and focus come into the equation, in a way they have not in the past.
And this draws in a separate dimension, where already countries like Hungary are redesigning their NATO-membership to limit involvement in projects outside of NATO’s borders like Ukraine.
NATO is undergoing a legal redesign around commitments and involvement.
If this is the feeling towards a war in Europe, imagine the feeling towards NATO being involved in a war in Asia.
Separately, there is a big question mark over Europe’s own defense plans.
From France to Poland, calls are growing for a sovereign European approach to defense, part of what French president Emmanuel Macron called “strategic autonomy.” This would mean Europe could establish its own defense alliance that effectively leaves out the US and Canada.
While such ideas are still in their inception phase, including a 100 billion euro defense fund proposed by the former internal markets commissioner, Thierry Breton, the drums for European sovereignty are likely to beat louder as nationalist parties win elections throughout the continent.
A new era of European nationalism is underway, and this could translate into European capitals moving to form their own military that is not reliant on America. For the first time, NATO might have to coexist with a separate defense bloc, where responsibilities and roles constantly overlap or even collide.
AMERICA’S FUTURE
Strangely, the big elephant in the room when it comes to NATO is not member states paying their fair share or the rise of China that is going unaddressed. It is the US, the largest contributor and the most important member of the alliance.
The US has entered a period of recalibration, where it is rethinking its commitments and positions across the world. This goes beyond Donald Trump. Even under Joe Biden, the US has launched or is discussing new defense blocs, from AUKUS to SQUAD, that signal Washington is not putting all of its “collective defense eggs” in one basket (i.e. NATO).
There are a few paths forward for America that NATO has to prepare for.
The first is the boldest: America leaves NATO.
This is most likely under Trump. It could occur if Trump is unable to get member states to pay more. Or, if outside the bloc, Trump is clashing with a large portion of NATO on separate matters, like trade. Suddenly, Trump could play the “NATO exit” card and throw the entire alliance in disarray.
While an outlandish scenario, it must be discussed and planned for. What happens to NATO if America leaves? What will the remaining “defense bulwarks” like the UK, France, and Poland do? And, how will everybody else, with significantly weaker and smaller militaries, respond to an American exit?
Behind all this, are questions of Russia’s geopolitics without America in NATO.
The second path is that America seeks to redesign NATO. This is most likely. And not just under Trump, but also Kamala Harris and whoever is elected to the Oval Office in 2028.
Because America needs NATO to reflect Western foreign policy, not European foreign policy. And, increasingly, the US focus is going beyond the European theatre, towards the Middle East, Asia, and Africa.
This will force America to redefine what purpose NATO serves and the tasks for member states and figure out how to either bring all states on the same page or even begin the process of pushing out certain members.
The third path is that America sits quietly and lets “someone else” lead NATO.
If the US feels it is in its interest to stay in NATO but give up the reigns, as America turns inward and focuses on more unilateral or smaller settings, then Washington could give Europe the baton. This would also potentially squash European defense ideas (like a European defense bloc), and keep all of the West under a single defense flag.
However, this would also be a transformation in American geostrategy, as Washington willingly gives up control of one of the world’s most powerful organizations and alliances.
ACTIONABLE TAKEAWAYS
A new NATO is forming out of new geopolitics. The NATO that has existed and gained prominence during the Cold War is undergoing a rebirth of sorts. What is forming now is a new defense alliance that is more versatile and more holistic in its outlook. However, growing pains are likely to follow any “expansion” in NATO from its borders to its focus.
China is becoming the new chief rival. With the crowning of Mark Rutte as the NATO chief, who comes with a certain outlook on China, plus the growing friction between the West and China, it is all but guaranteed that the defense bloc will increasingly revolve around Beijing, not Moscow.
NATO could enter the global business landscape. The new footprint of NATO could mean that the defense alliance takes steps in areas that were once well out of its purview, like venture capital or geoeconomics. As NATO moves in such a direction, it will end up entering the business world, meaning some global businesses might have to figure out how to coexist with the world’s largest defense alliance.
Without resolution, NATO faces paralysis. Serious challenges are besieging NATO, from what member states want to do to what NATO leaders expect. The unity that NATO shared is quickly disappearing. Without bringing everybody on the same page, paralysis could spread within NATO, restricting what the group can do today and tomorrow. And in the process, differences within NATO could spill outside of NATO into the trade and economic domains.
Demographics could drive defense and security. When NATO was formed, its members were in a different demographic stage. But decades later, alarm bells are ringing around an older population. Without a steady stream of young people, NATO will struggle to expand its borders indefinitely. This could force NATO to bet bigger on technology as a way to offset demographic strains. In the new chapter of NATO, demographics could play an unprecedented role.
CONCLUSION
Like many countries and blocs around the world, NATO is entering a period of rediscovery. It has to answer the most basic questions, that were clearly answered during the Cold War:
Why does NATO exist?
What is NATO’s mission?
Where are NATO’s interests?
As NATO seeks to answer these and other questions under Rutte’s leadership, the answers it comes to may be unexpected, and shocking. But, they will illuminate the new path forward for the group.
The big question in front of NATO is not what threats it addresses. Those are clear: China, technology, climate change, nuclear proliferation, etc.
The big question is whether NATO chooses to address those threats, and how. This is a different kind of outlook.
Of course, the defense of Europe does not disappear. That remains the base and foundation of NATO. But this means NATO has a “new weight.” It has to maintain its current defense posture in Europe whilst also expanding into new frontiers, almost reinventing itself at times.
For Rutte, his tenure could be one of immense hiccups and disruptions as he steers NATO through new fires (i.e. Israel-Iran) and new requirements (i.e. NATO dealing with China as a collective bloc).
In the end, however, what NATO looks like could be quite different than what it looks like today. With few nations aligned, and chasms growing, including between Europe and America, NATO is being pulled apart internally.
The final effect of all the challenges and issues the defense bloc faces can be summed up in a simple question: can NATO stay united?
That is the most important question to be answered. But one, nobody is asking or addressing.
Perhaps, Rutte will.
-Abishur
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