USNATO SCENESETTER FOR DEPUTY SECRETARY LEW

C O N F I D E N T I A L SECTION 01 OF 02 USNATO 000374

NOFORN
SIPDIS

E.O. 12958: DECL: 09/02/2029
TAGS: EAID PREL AF PK IK EUN
SUBJECT: USNATO SCENESETTER FOR DEPUTY SECRETARY LEW

Classified By: A/Political Advisor Brian Greaney. Reasons: 1.4 (b) AND
(d).


1. (C/NF) You are visiting NATO at a time when the new NATO
Secretary General, Allies, and non NATO partners are refining
mission priorities and reviewing current resource commitments
to align with planned commitments. The new NATO Secretary
General, Anders Fogh Rasmussen, is setting an ambitious
schedule for the Alliance for the next twelve months. His
goal is to steer the Alliance into a more strategic and
decision making body. Rasmussen,s new approach to the
Alliance is very directive and, seemingly, less welcoming to
advice and discussion from the Council. In response, many
Allies have taken a "wait and see" approach with his new
leadership style. The new Secretary General continues to
have broad U.S. government support, both personally and for
institutional reform at NATO. Afghanistan, a new NATO
Strategic Concept, and NATO Headquarters Reform are high on
Rasmussen,s agenda and three areas on which to focus your
discussions at NATO. This visit is an opportunity for you to
engage with senior NATO leadership and share U.S.
perspectives on Alliance civilian and military resources. In
response to your request, a review of USNATO operations and
resources is also included.

Afghanistan
--------------


2. (C/NF) Afghanistan remains NATO,s number one priority.
NATO leads the UN-mandated International Security Assistance
Force (ISAF),which includes 41 Allies and non-NATO partners
contributing almost 37,000 troops. U.S. troops in ISAF and
Operation Enduring Freedom total nearly 62,000. ISAF
partners lead 14 of 26 PRTs, and have pledged over $11.9
billion in development funds since 2001. The new NATO
Training Mission - Afghanistan (NTM-A) will stand-up in
September and facilitate greater Allied contributions to
training Afghan forces. Allies and ISAF partners have
fielded 57 Operational Mentoring and Liaison Teams and
pledged nearly $350 million to NATO,s ANA Trust Fund to
sustain the Afghan Army. ISAF partners have suffered nearly
540 combat deaths; the U.S. has suffered close to 800.


3. (C/NF) The next 12-18 months is a critical time period for
the Alliance to demonstrate visible, measurable progress to
both their domestic publics and their political leadership.
Afghan election results are expected in the next few weeks
along with the results of the ISAF Commander General Stanley
McChrystal,s 60-day assessment of the current Afghanistan
strategy. Both will be reviewed by Allies this month. The
report will prompt the Alliance to review its military,
civilian, and financial commitments in Afghanistan. The
elections will call for a renewed international compact
between the new Afghan government and international partners,
as well as a strategic look forward in Afghanistan. The U.S.
will look to the Alliance to increase its share of the
overall burden at a time when many in the Alliance already
struggle to maintain current commitments.

NATO Strategic Concept
--------------


4. (C/NF) The Strategic Concept, last updated in 1999, is the
authoritative statement of the Alliance,s objectives; once
revised, it will define NATO,s role in meeting the security
challenges of the twenty-first century. On August 3,
Rasmussen announced the composition of a group of experts to
advise him in drafting the Strategic Concept. The Secretary
General asked the USG nominee, former Secretary of State
Madeleine Albright, to chair this twelve-person group. On
September 4, 2009, the Secretary General and the group of
experts will meet with the NAC to discuss the process leading
to NATO,s new Strategic Concept. The group will participate
in four seminars between now and early 2010 aimed at
reviewing NATO,s core tasks, crisis management role,
partnerships, and capabilities. This reflection phase will
be followed by a consultation phase where, in addition to the
Secretary General, the experts group will spend a few months
conducting consultations in Allied capitals before submitting
a report to the Secretary General in April 2010. Rasmussen
will draw on their findings in drafting the new Strategic
Concept for agreement by Heads of State and Government at the
next NATO Summit in late 2010.

NATO Headquarters Reform
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5. (C/NF) In response to an increasingly complex and
changing security environment, NATO has transformed itself by

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taking on new missions and members. Internally, however,
NATO still functions more like a Cold War relic than a nimble
crisis manager, with too many nations defending too many rice
bowls. Rasmussen has indicated a desire to aggressively
reform the way NATO conducts its business. Specifically, our
goal is to empower him with "CEO-like" authorities to move
around budgets and people to meet changing NATO priorities.
Beyond initial considerations of efficiency and
cost-effectiveness, reform must also involve investment in
NATO's future. NATO recently projected a shortfall of 70
million (about $100 million) for NATO,s civil budget - the
smallest of NATO,s three budgets - over the next five years.



6. (C/NF) The U.S. has been open to a real increase in the
Civil budget in an effort to ensure adequate resources, but
key Allies are loathe to provide even a modest real budget
increase (above inflation). NATO,s three budgets (Civil,
Military and Infrastructure) total approximately $3 billion,
with the U.S. contributing approximately 22 percent. The
U.S. support to the Civil budget comes from the Contributions
to International Organizations account; the Department of
Defense funds the Military and Infrastructure budgets. NATO
will need a significant infusion of additional resources,
improved common funding arrangements, and enhanced training
and capabilities to achieve Alliance goals over the next
decade and remain a preeminent security forum. Allies need
to revisit their current Zero Real Growth policies and find
ways to invest in its future.

USNATO Operations and Resources
-------------- --------------


7. (C/NF) USNATO has civilian personnel from the Department
of State, Defense, and Homeland Security (DHS),as well as
military personnel from all services, integrated together
into one single organization responsible only to the
Ambassador. The Mission,s direct management support is led
by the Management Counselor who oversees operational support
responsibilities for approximately 160 mission personnel, 200
Americans on the NATO International Staff, and 7,000 annual
official visitors, all managed by a Deputy and five Team
Chiefs. The Management staff utilizes two administrative
support organizations in Brussels -- the Joint Administrative
Services (JAS) and the U.S. Army Garrison (USAG) Brussels.
JAS is a Department of State administrative services
organization which exists to support the Embassy, USNATO, and
USEU and other non Chief of Mission entities through ICASS.
USAG BENELUX is an Army organization set up to support DOD
personnel assigned to NATO, SHAPE, and other agencies within
the BENELUX area. JAS and USAG provide services to all U.S.
government employees in Brussels and USNATO utilizes their
support for NATO Ministerials.


8. (C/NF) The USNATO Management Staff prepares and executes
the State and Defense operating budgets for the Mission.
The Defense Department has faced funding shortages since FY
05 and the future looks equally bleak. USNATO submits annual
operating budget requests to State and Defense and uses the
funds they allot to USNATO to finance the Mission,s daily
operations.


9. (C/NF) In mid 2010, NATO is scheduled to break ground in
the construction of the new permanent Alliance Headquarters,
which should be completed in mid-2015. The Alliance has been
in temporary and increasingly inadequate space since 1966.
Our Mission will work to ensure that key funding,
construction, and security deadlines are met to facilitate
the timely and safe complete ion of the new building. USNATO
will also work with the Departments of State, Defense, and
Homeland Security to plan and budget for the USNATO Mission
space within the new HQ and divide the cost equitably. The
U.S. contribution to the new NATO HQ is also an area of
concern. The total contribution required to date is $22.9
million Euros. Over the next five years, the following
financial contributions will be required for the building
shell and HQ common space, independent of USNATO internal fit
out costs; 2010 will require 37.7 million Euros, 36.5 million
Euros for 2011, 37.7 million Euros for 2012, 50.6 million
Euros for 2013, and 57.4 million Euros for 2014.


10. (C/NF) The U.S. will have an additional assessment of
approximately $82 million for fit out of USNATO mission space
within the new HQ. Department of State,s Overseas Building
Office is taking the lead in the overall management of the
design and construction of the fit out in the U.S. space in
the new NATO HQ.
DAALDER