COLOGNE, Germany – NATO was built on the idea of pooling military capabilities, so why not create its own bank to grease the financial wheels? That’s a question posed by a new report from the Washington-based Center for American Progress to the incoming Biden administration.
The blueprint for such an organization would be similar to those of other multinational lending institutions, like the World Bank, analysts Max Bergmann and Siena Cicarelli argue. Wealthier NATO members would initially capitalize the bank, or help it achieve a AAA credit rating, gradually setting in motion a self-sustaining financial enterprise for underwriting new military investments, the idea goes.
The recommendation comes as President-elect Joe Biden is putting together his Pentagon team, with advisers soaking up proposals from progressive and Democratic-leaning think tanks for his national security agenda.
There is no shortage of advice from Washington and Europe for revitalizing NATO after President Trump leaves office. After four years of his anti-multilateral tirades, European members have been left to stew in the realization that America’s backing can, at best, be capricious.
“In 2021, the incoming Biden administration will need to both restore America’s commitment to NATO and push the alliance to strengthen itself,” the CAP report states.” In order to do so, it must take up new approaches to spur investment to bolster NATO’s capabilities.”
Low interest rates of the envisioned bank should first and foremost help Eastern Europeans flush all remaining Soviet-era equipment out of their arsenals arsenals, the authors recommend.
A dedicated NATO bank could help stabilize defense investments throughout all member states, including dual-use, civilian transportation infrastructure projects, amid the economic downturn of the coronavirus pandemic, the report states.
The authors pitch London as the headquarters for their bank idea. “With tensions between the United Kingdom and other EU NATO members growing from Brexit, and concerns that this could impact the security relationship, placing a NATO bank in London could help reaffirm the United Kingdom’s commitment to NATO and European security,” they argue.
Alliance leaders are expected to meet early this year following Biden’s inauguration on Jan. 20. Secretary-General Jens Stoltenberg is expected to propose concrete steps for a reform agenda already underway, dubbed NATO 2030.