Order Code RS21659
Updated January 24, 2007
NATO’s Prague Capabilities Commitment
Carl Ek
Specialist in International Relations
Foreign Affairs, Defense, and Trade Division
Summary
With the end of the Cold War, NATO began to reassess its collective defense
strategy and to anticipate possible new missions. The conflicts in the Balkans
highlighted the need for more mobile forces, for technological equality between the
United States and its allies, and for interoperability. In 1999, NATO launched the
Defense Capabilities Initiative (DCI), an effort to enable the alliance to deploy troops
quickly to crisis regions, to supply and protect those forces, and to equip them to engage
an adversary effectively. The conflict in Afghanistan marked a new development in
modern warfare through the extensive use of precision-guided munitions, directed by
ground-based special forces; many believe that this step widened the capabilities breach
between the United States and its European allies. At its 2002 summit in Prague, NATO
approved a new initiative, the Prague Capabilities Commitment (PCC), touted as a
slimmed-down, more focused DCI, with quantifiable goals. Analysts have cautioned
that the success of PCC will hinge upon increased spending and changed procurement
priorities — particularly by the European allies. At NATO’s 2004 Istanbul summit and
its 2006 Riga summit, the alliance reaffirmed the goals of PCC and, in light of NATO
missions, particularly in Afghanistan, stressed the urgency of acquiring specific
capabilities such as airlift. During the 110th Congress, lawmakers are likely to review
the alliance’s progress in boosting NATO capabilities, especially in the context of the
appropriations process. This report will be updated as events warrant. See also CRS
Report RS22529, The NATO Summit at Riga, 2006, by Paul Gallis.
Background
Since the collapse of the Berlin Wall, the European threat environment has changed
dramatically. NATO no longer needs a static, layered defense of ground forces to repel
a large-scale Soviet invasion. Instead, the alliance must address new and different threats
for which NATO would face far less warning time, yet more complex circumstances, than
a conventional assault; these might include terrorism, weapons of mass destruction,
proliferation, and ethnic strife. As conflicts from the Balkans to Afghanistan have
demonstrated, the alliance must be able to prepare for security contingencies requiring the
rapid deployment of more agile forces distant from the treaty area.

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During NATO’s air war against Yugoslavia in the spring of 1999, U.S. aircraft flew
a disproportionately large share of the combat sorties. The Kosovo action exposed a great
disparity in defense capabilities between the United States and its allies. That gap, along
with the transformation of the overall threat environment, prompted the development of
two parallel and, it was hoped, complementary transatlantic security initiatives aimed at,
among other things, bridging the technology gap between U.S. and European forces.
The Balkans conflicts of the 1990s motivated the European Union (EU) to speed the
construction of a European defense arm, called the European Security and Defense Policy
(ESDP), which might be tied to NATO, depending on the circumstances. One aspect of
ESDP is the EU effort to create a rapid reaction force to undertake several military tasks
— including humanitarian and rescue missions, peacekeeping, and crisis management —
in which other countries, including the United States, might choose not to participate. To
achieve this, the EU states set forth “headline goals” for creating a 60,000-strong crisis
management force that would be deployable within two months and sustainable for one
year. The force does not yet exist. In December 2005, Javier Solana, the EU High
Representative for foreign policy, urged member states to improve their military
capabilities in order to be able to undertake crisis management and other tasks; Solana’s
wish list included several areas that would benefit NATO.1
The other significant change occurred at NATO’s Washington, D.C. summit in April
1999, when the alliance launched the Defense Capabilities Initiative (DCI). The Initiative
was intended not only to improve NATO’s ability to fulfill NATO’s traditional Article
5 (collective defense) commitments, but also to prepare the alliance to meet emerging
security challenges that may require a variety of types of missions, both within and
beyond NATO territory. To accomplish these tasks, the alliance must ensure that its
troops have the appropriate equipment, supplies, transport, communications, and training.
Accordingly, DCI aimed to improve NATO core capabilities by listing 59 “action items”
in five categories: mobility and deployability; sustainability and logistics; effective
engagement; survivability; and consultation, command and control.2 Before long,
however, analysts realized that DCI was not meeting its goals because the changes that
had been agreed to required most countries to increase their defense spending. Most,
however, did not.
The aftermath of September 11 further highlighted allied military limitations vis-a-
vis the United States. NATO invoked Article 5 for the first time, but during the
subsequent war in Afghanistan, the United States initially relied mainly on its own
military, accepting only small contingents of special forces from a handful of other
countries; allied combat and peacekeeping forces entered the fray in larger numbers only
after the Taliban had been defeated. Analysts believe that the allies were not invited to
contribute because they lacked many of the military capabilities — airborne refueling, air
transport, precision-guided munitions (PGMs), and night vision equipment — necessary
to conduct a high-tech campaign designed to achieve a swift victory with minimum
civilian and U.S. casualties. Lack of interoperability was also an issue.
1 Atlantic News. No. 3737. January 5, 2006. p. 2. For additional information, see CRS Report
RL32342, NATO and the European Union, by Kristin Archick and Paul Gallis.
2 NATO’s Defence Capabilities Initiative: Preparing for Future Challenges. By Frank Boland.
NATO Review. Summer 1999.

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The 2002 Prague Summit: Enter PCC
NATO sought to address the perceived problems of DCI at its November 2002
meeting in Prague by approving the Prague Capabilities Commitment (PCC). Like DCI,
PCC seeks to improve members’ operational capabilities to address evolving defense
needs. Analysts describe PCC as an attempt to resuscitate DCI, which foundered because
it was too broad and diffuse. PCC is also intended to improve upon DCI in light of the
security threat that emerged on September 11. In an effort to combat terrorism, it
emphasizes air lift, secure communications, PGMs, and protection against weapons of
mass destruction. As was the case with DCI, progress on PCC is monitored on a regular
basis. For the periodic evaluations, NATO’s international staff ask each country to
provide information on how its commitments are being implemented, along with
explanations of any divergence from the items it has pledged to fulfill.
NATO officials point out, however, that PCC differs from DCI in several important
ways: PCC is focused on a smaller number of goals, emphasizes multinational
cooperation and specialization, requires specific commitments from member states, and
was designed with a particular force in mind: the NATO Response Force (NRF.)3 PCC
calls for alliance members to make commitments to bolster their capabilities in eight
specific areas: (1) chemical, biological, radiological, and nuclear defense; (2) intelligence,
surveillance, and target acquisition; (3) air-to-ground surveillance (AGS); (4) command,
control, and communications; (5) combat effectiveness; (6) strategic air and sea lift; (7)
air-to-air refueling; and (8) deployable combat support and combat service support units.
PCC also places greater emphasis on multinational commitments and pooling of
funds than did DCI; this enables smaller countries to combine resources to purchase
hardware that would be unaffordable for each alone. The Netherlands, for example,
volunteered to lead a group of countries buying conversion kits to transform conventional
bombs into PGMs. Germany managed a consortium that will acquire strategic air
transport capabilities, while Spain headed another group that would lease tanker aircraft.
Norway and Denmark coordinated procurement of sealift assets. The Czech Republic has
concentrated on countering the effects of chemical, biological, radiological and nuclear
(CBRN) weapons.4 In addition, PCC recognizes the value of role specialization, or niche
capabilities. This concept is especially important to the new member states. Romania,
for example, can offer alpine troops, Hungary has a skilled engineering corps on call, and
the Czech and Slovak Republics have units trained in countering the effects of chemical
and biological weapons.
PCC is also much more specific in its requirements of commitments than was DCI.
Defense officials argue that DCI was loaded down with too many vague requirements and
that many countries contented themselves by picking the low-hanging fruit, acquiring the
less costly materiel. PCC is drafted to extract specific, quantifiable commitments from
3 Prague Capabilities Commitment Explained. Interview with Dr. Edgar Buckley, NATO
Assistant Secretary General for Defence and Planning Operations. December 6, 2002. NATO
website: [http://www.nato.int/docu/speech/2002/s021206a.htm].
4 NATO: Building New Capabilities For New Challenges. Fact Sheet. White House Office of
the Press Secretary. November 21, 2002. “NATO To Adopt Capabilities Plan.” By Nicholas
Firoenza. Defense News. November 18, 2002.

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member states; at Prague, the alliance approved a package of proposals from individual
countries obliging them to acquire specific equipment.
Istanbul and Riga: PCC Fine-Tuned and Expanded
Unlike Washington and Prague, neither the 2004 summit in Istanbul nor the 2006
meeting in Riga announced new initiatives setting out extensive programmatic objectives
for enhancing the alliance’s capabilities. At the conclusion of the Istanbul summit, the
member heads of state and government in their Final Communiqué reaffirmed their
commitment to improving NATO capabilities through PCC, a task they referred to as “a
long-term endeavor.” The summit declaration stated that PCC implementation was
progressing and singled out for praise the multinational cooperative efforts to acquire lift,
refuellers, and AGS. The leaders agreed to “further the transformation of our military
capabilities to make them more modern, more usable and more deployable to carry out
the full range of Alliance missions.” They also urged some nations to reorient their
national resources toward investments in deployable capabilities. Finally, the leaders
approved the creation of a NATO Active Layered Theater Ballistic Missile Defense
program as an important element of force protection.5
In the final communiqué of their November 2006 Riga summit, NATO leaders stated
their intention to continue building on their work on capabilities at Prague and Istanbul.
After describing the status of several alliance missions, they declared that force adaptation
and support for expeditionary operations should proceed and laid out a pared-down list
of key activities. They noted that progress toward one major goal — beefed up airlift
capacity — had been achieved through two cooperative initiatives: 1) the Strategic Airlift
Interim Solution, under which several countries committed to buying Airbus A400M
cargo planes by 2010 have, in the interim, chartered Antonov transporters from Ukraine;
and 2) the creation of a NATO Strategic Airlift Capability, under which 15 member states
and one partner (Sweden) agreed to pool funds to purchase three or four C-17 aircraft; the
planes will be staffed by international crews and will be available for NATO, EU, UN,
or other international operations, military or humanitarian. The communiqué also
reported progress on key capabilities in other areas, including special operations,
networking, intelligence sharing, AGS, missile defense, and anti-CBRN capabilities.6
Defense Spending and Progress Reports
To meet the goals of PCC, the European allies need to restructure and modernize
their militaries and address deficiencies in equipment procurement and in R&D programs.
However, this implies increased defense spending, requiring a reversal of the trend of the
past decade: between 1992 and 1999, defense expenditures by European NATO countries
fell 22%. Although the United States also cut back on defense during that period, it still
spends a much higher share of GDP on defense than most other NATO countries, and has
increased its defense spending significantly in recent years. On the other hand, Germany,
with the second-largest military in the alliance, has drastically reduced its military budget.
Defense News notes that “[d]espite a decade of haranguing by NATO headquarters, the
5 Istanbul Summit Communiqué. NATO Press Release (2004)096. June 28, 2004.
6 NATO Riga Summit Declaration. PR/CP (2006)150. Riga, Latvia. November 29, 2006.

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defense spending of most allied governments is still well below NATO’s recommended
guideline of 2% of GDP. Only seven allies — Bulgaria, France, Greece, Romania,
Turkey, the United Kingdom, and the United States — spend this amount or more on
defense.”7
In November 2006, National Security Advisor Stephen Hadley stated that, in a
meeting with the NATO Secretary-General, President Bush had privately brought up the
need for “additional defense capabilities and additional defense spending.” Subsequently,
the Riga Summit declaration explicitly addressed the budget issue: “We encourage
nations whose defense spending is declining to halt that decline and to aim to increase
defense spending in real terms.... [T]he development of capabilities will not be possible
without the commitment of sufficient resources.”8
Most reports on the progress of PCC are classified. A late-2005 NATO
Parliamentary Assembly report noted that it is difficult to assess the progress of PCC
because of incomplete information, mainly stemming from a lack of transparency on force
goals of member states. Nevertheless, the report made tentative judgements in several
areas. It stated that the outlook was good for sealift and CBRN and in equipping aircraft
with precision-guided munitions (PGMs.) It noted that development of European PGM
capabilities had been complicated by U.S. reluctance to share sensitive technology and
encryption codes. Air-to-air refueling was described as a “serious lack” among European
capabilities, although Germany and Canada had already begun procuring multi-task planes
able to refuel. In 2005, a transatlantic consortium was tapped to provide an AGS
surveillance system to be NATO-funded and -operated, much as the AWACS program
has been. The system is expected to be fully operational by 2012.9
Reading between the lines of NATO publications and statements, some analysts
sense that there have been real improvements in boosting capabilities. For example, at
their June 2005 meeting, NATO defense ministers issued a communiqué stating that PCC
had “brought some improvements in capabilities, but critical deficiencies persist,
particularly in support for our deployed forces.” One year later, however, the ministers’
statement was more sanguine, noting progress in a number of areas and indicating that
they had “provided further guidance on the way ahead.” Finally, shortly before the Riga
summit, the alliance issued a media summit guide stating that “[b]y the end of 2008, over
70 per cent of the 460 or so [PCC] commitments made by Allies will have been fulfilled.
Most of the remainder will be completed by 2009 and beyond.”10
7 Tighter Budgets Pose Planning Challenge For EU, NATO. Defense News. September 11, 2006.
8 Bush Offers Clues To His Approach At US-Iraq Summit. AP. November 28, 2006. Riga
Communiqué.
9 NATO Parliamentary Assembly. Progress on the Prague Capabilities Commitments. John
Shimkus, Rapporteur. 170 DSCTC 05E. November, 2005. NATO Handbook 2006. p. 179.
Info Sharing Could Close U.S.-Euro Tech Gap: Report. Defense News. November 14, 2005.
10 Final Communique. Meeting of the North Atlantic Council in Defense Ministers Session. June
9, 2005. NATO website: [http://www.nato.int/docu/pr/2005/p05-076e.htm] Riga Summit Guide.
Chapter 10, p. 5. See [http://www.nato.int/docu/comm/2006/0611-riga/media-guide.htm].

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A Range of Views
The Riga final communiqué noted that NATO is involved in six missions and
operations on three continents. Some analysts conclude that the capabilities debate has
increasingly been driven by the experience of NATO forces in these missions as military
leaders assess their earlier goals in light of actual operations, especially in Afghanistan.
This is particularly the case with special forces and with strategic lift, which one observer
has termed “potentially the alliance’s Achilles heel of capabilities.” In addition, U.S.
NATO Ambassador Victoria Nuland has noted that increased operational tempo
demonstrates the need for greater spending on new military assets.11
Because NATO operates under a consensus rule, the fact that the alliance adopted
both DCI and PCC implies that all member states agreed to the need to strengthen
capabilities of an expeditionary nature. Some critics, however, have questioned the two
initiatives, arguing that NATO already enjoyed vastly superior technological prowess vis-
à-vis countries other than the United States, and that the alliance’s military capabilities
— whatever their shortcomings — are more than sufficient to address any threat. Others
are skeptical of the possible motives behind the push for more advanced capabilities; they
contend that massive defense spending increases are unnecessary and wasteful, and that
PCC merely serves to boost sales for high-technology arms and equipment manufacturers.
Finally, some analysts have challenged the significance of the capabilities gap between
the United States and its NATO allies.12
Supporters, meanwhile, also have expressed reservations. Some question whether
member states, particularly the Europeans, will approve sufficient funding in their defense
budgets to make the required changes. This has increasingly been the case for countries
that have made significant contributions to overseas NATO missions, particularly in
Afghanistan. Unless military budgets are increased substantially, the costs of deployment,
maintenance, and equipment replacement will likely displace expenditures for
modernization. It has also been suggested that the capabilities requirements effectively
raise the bar for new members of the alliance.
Finally, some analysts insist that DCI and PCC need to be viewed in the context of
the traditional debate over NATO burdensharing. Shortly after the Prague summit, Jiri
Sedivy, director of Prague’s Institute of International Relations noted that “[p]eople talk
about new members like the Czech Republic not contributing enough to NATO, but what
they don’t realize is that the Western Europeans have failed to keep their promises since
the 1950s.”13 By focusing on specific, agreed-upon military capability requirements, the
alliance hopes to end-run this decades-old problem.
11 Assessing NATO Transformation. By Mario Bartoli. NATO Review. Autumn 2006. NATO:
A 21st Century Alliance That Is Delivering. Address by U.S. NATO Ambassador Victoria
Nuland. Brussels, Belgium. November 5, 2006.
12 “Only Paranoia Can Justify The World’s Second Biggest Military Budget.” By George
Monbiot. The Guardian. November 28, 2006. “It Ain’t Broke After All.” Los Angeles Times.
By William Arkin. April 27, 2003. “The Widening Military Capabilities Gap Between the
United States and Europe: Does It Matter?” By Stephen J. Coonen. Parameters. Autumn. 2006.
13 “Ready to Pay.” By Dinah Spritzer. Prague Post. November 27, 2002.

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