COLOGNE, Germany – NATO was built on the idea of pooling military capabilities. So why not set up your own bank to lubricate the financial wheels? This is a question that emerges from a new report from the Washington-based Center for American Progress to the prospective Biden administration.
The blueprint for such an organization would be similar to that of other multinational credit institutions such as the World Bank, argue analysts Max Bergmann and Siena Cicarelli. Wealthier NATO members would capitalize or help the bank achieve an AAA rating first and gradually set up a self-sustaining financial firm to underwrite new military investments.
The recommendation comes as President-elect Joe Biden assembles his Pentagon team and advisors take up proposals from progressive and democratically-minded think tanks for his national security agenda.
There is no shortage of advice from Washington and Europe on reviving NATO after President Trump resigns. After four years of its multilateral tirades, European members have come to realize that America’s support can be capricious at best.
“In 2021, the future government of Biden must both restore US commitment to NATO and push the alliance to strengthen,” the GAP report said. To do this, it must take new approaches to stimulate investment and strengthen NATO’s capabilities. “
The proposed bank’s low interest rates should primarily help Eastern Europeans remove all remaining Soviet-era equipment from their arsenals, the authors recommend.
A dedicated NATO bank could also help stabilize defense investments in all member states, including dual-use civil transport infrastructure projects, amid the economic downturn from the coronavirus pandemic, the report said.
The authors set up London as the headquarters for their banking idea. “Given the growing tension between the UK and other EU-NATO members over Brexit and concerns that it could affect security relations, the placement of a NATO bank in London could help increase the UK’s commitment to to reaffirm NATO and European security, “they argue.
The leaders of the alliance are expected to meet early this year after Biden’s inauguration on January 20. Secretary General Jens Stoltenberg is expected to propose concrete steps for an ongoing reform agenda, known as NATO 2030.