PRESS RELEASE

11 March 1997

Britain to Pay £200 Million a Year for NATO Expansion

Britain will pay £200 million per year, twice the American share, according to analysis conducted by BASIC of the Clinton Administration's budget for US and non-US shares of the cost of expanding NATO. Britain will pay $3.24 - $4.02 billion over the next thirteen years towards the expansion of NATO. The US will pay $1.5 - $2.0 billion. BASIC's analysis was based on the percentage formula used by NATO to apportion costs amongst the allies.

The estimates are included in a report released on 24 February by the US administration on the costs of NATO expansion. The report to Congress titled "Enlargement of the North Atlantic Treaty Organisation : Rationale, Benefits, Costs and Implications", estimates that the financial cost of expansion will range between $27 and $35 billion over a thirteen year period (1997-2009).

Europe and Canada will pay a total of $12.5-15.5 billion ($8-10 billion towards improving NATO's reinforcement capabilities and $4.5-5.5 billion towards direct enlargement costs). The US will pay $1.5-2.0 billion and the rest --$13-18 billion -- will be met by Poland, the Czech Republic and Hungary, expected to be the first to join NATO.

According to official NATO data from 1994 the UK pays 25.93% of the total NATO budget excluding the US contribution. Therefore, the UK will be asked to pay between: $3.24- $4.02 billion over the next thirteen years ($250 and $300 million per year) which is double the US contribution.

At an exchange rate of $1.5:£1, $4 billion equals £2.666 billion or £200 million per year over 13 years.

"The question for Ken Clarke and Gordon Brown is: Will the £200 million a year for NATO expansion be paid for by cutting other Defence items, from cutting domestic spending or by increasing public spending?", said Daniel Plesch, Director of the British American Security Information Council. "The government has refused to carry out its own study saying it was waiting for NATO's cost study, now it has been preempted by Washington", he added.

These figures are conservative and far lower than previous estimates by the RAND Corporation and the Congressional Budgetary Office.

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