Report to Congressional Committees 

United States General Accounting Office 

GAO 

May 2003 NATO 

ENLARGEMENT 

Reports Are 

Responsive to Senate 

Requirements, but 

Analysis of Financial 

Burdens Is Incomplete 

GAO-03-722 
The President’s reports responded to the Senate’s requirements. The 

information provided in the reports was generally accurate and current. 

The methodology for assessing the likely impact of each invited country on 

NATO’s military effectiveness was reasonable. The reports provided a clear 

explanation of the methodology used and provided information on countries’ 

defense reform plans, past and current contributions to U.S. and NATO 

operations, and expectations of countries’ ability to contribute specialized 

military capabilities. The methodology was consistently applied to 

assessments of each of the seven invited countries. 

The methodology used to analyze each invited country’s ability to fulfill the 

full range of financial burdens of NATO membership was not described and 

the information provided was limited. The reports included some cost 

information but did not discuss the costs of maintaining representation at 

NATO’s headquarters or military command posts. Furthermore, the same 

types of information were not consistently provided for each country. 

European NATO Members and Countries Invited to Join the Alliance 

On November 21, 2002, the North 

Atlantic Treaty Organization 

(NATO) invited seven countries to 

join the alliance. To facilitate 

congressional consideration of 

NATO enlargement, the U.S. Senate 

mandated in 1998 that GAO review 

and assess the reports the Senate 

directed the President to provide 

on countries invited to join NATO. 

The President submitted the 

required reports to Congress on 

March 25, 2003. To fulfill its 

mandate, GAO determined if (1) 

the reports met the Senate’s 

requirements and the information 

was accurate and current, (2) the 

methodology for assessing the 

likely impact on NATO’s military 

effectiveness was reasonable, and 

(3) the methodology for analyzing 

the ability of the invited countries 

to fulfill the full range of financial 

burdens of NATO membership was 

reasonable. 

To ensure sound analyses of 

invited countries’ financial 

capabilities in reports required for 

any future NATO enlargement, 

GAO recommends that those 

reports fully explain the 

methodology, ensure the range of 

information is sufficient to support 

the conclusions, and consistently 

apply the methodology. 

We provided a draft of this report 

to the National Security Council. 

The council did not provide 

comments on this report. 

www.gao.gov/cgi-bin/getrpt?GAO-03-722.

To view the full report, including the scope 

and methodology, click on the link above. 

For more information, contact Joseph 

Christoff, 202-512-8979. 

Highlights of GAO-03-722, a report to 

Senate and House Committees on Armed 

Services and Appropriations, the Senate 

Committee on Foreign Relations, and the 

House Committee on International 

Relations 

May 2003

NATO ENLARGEMENT 

Reports Are Responsive to Senate 

Requirements, but Analysis of Financial 

Burdens Is Incomplete 
Page i GAO-03-722 NATO Enlargement 

Letter 1

Results in Brief 2

Background 3

Reports Responded to the Mandate’s Requirements 5

Methodology for Assessing Likely Impact on Military Effectiveness 

Was Reasonable 6

Methodology for Analyzing Ability to Meet Financial Burdens Was 

Limited 7

Conclusion 8

Recommendation for Executive Action 8

Agency Comments and Our Evaluation 8

Scope and Methodology 8

Figure 

Figure 1: Countries Invited to Join NATO and Current European 

NATO Members 5

Contents 

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copyrighted materials separately from GAO’s product. 
Page 1 GAO-03-722 NATO Enlargement 

May 5, 2003 

Congressional Committees: 

In the Senate resolution ratifying enlargement of the North Atlantic Treaty 

Organization (NATO) in 1999,1

 the Senate required the President to submit 

to Congress a classified and an unclassified report that provides updated 

information on the status of political, economic, defense, and related 

issues for countries invited to join NATO. In addition, these reports are to 

provide an assessment of the invited countries’ likely impact on NATO’s 

military effectiveness and an analysis of the ability of each invited country 

to fulfill the full range of financial burdens of NATO membership. The 

President submitted these reports to Congress on March 25, 2003. The 

Senate mandated that GAO review and assess these reports. 

The President had previously submitted a report to Congress that provided 

information on the nine countries that were seeking NATO membership.2

As required by the Senate, this August 2002 report assessed how countries 

would further the principles of the North Atlantic Treaty, contribute to 

North Atlantic security, and affect U.S. national security interests. It also 

evaluated countries’ eligibility for membership and estimated the military 

requirements and costs associated with a country’s membership for both 

NATO and U.S. budgets. In our November 2002 report, we found that the 

President’s report met the Senate’s requirements. However, we provided 

additional information on such eligibility issues as border relations, 

judicial independence, civil rights, human rights, and minority rights 

because the President’s report did not provide a full understanding of the 

 1

Section 3(2)(E)(ii) of the Senate Resolution of Ratification on the Protocols to the North 

Atlantic Treaty of 1949 on the Accession of Poland, Hungary, and the Czech Republic, 144 

Cong. Rec. S4217-20, 1998. 

2

Section 3(2)(E)(i) of the Senate Resolution of Ratification on the Protocols to the North 

Atlantic Treaty of 1949 on the Accession of Poland, Hungary, and the Czech Republic 

required the President to provide such a report before NATO extended any invitations to 

countries seeking membership. 

United States General Accounting Office

Washington, DC 20548 
Page 2 GAO-03-722 NATO Enlargement 

challenges facing these countries and their efforts to address those 

challenges.3

To fulfill our mandate to review the President’s current reports, we 

determined if (1) the reports met the Senate’s requirements and the 

information was accurate and current, (2) the methodology for assessing 

the likely impact on NATO’s military effectiveness was reasonable, and (3) 

the methodology for analyzing the ability of the invited countries to fulfill 

the full range of financial burdens of NATO membership was reasonable. 

To assess the President’s current reports, we developed information from 

a broad array of sources, including U.S., NATO, and foreign government 

reports and analyses of the countries invited to join NATO and discussions 

with U.S. and foreign government officials. We determined if each of the 

Senate’s requirements was addressed and if the information provided was 

accurate and current. To assess the methodologies used for the analyses in 

the reports, we determined if the methodology was clearly and fully 

described, if the range of information provided supported the conclusions, 

and if the methodology was applied consistently to analyses for each 

invited country. 

The President submitted a classified and an unclassified report to 

Congress on the seven countries that NATO invited to join the alliance—

Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia. The 

National Security Council was responsible for developing these reports. 

While we reviewed both reports, no classified information has been 

included in our observations. 

The President’s reports responded to the mandated requirements for each 

of the seven countries invited to join NATO and provided information that 

was generally accurate and current. The information was generally 

consistent with the data we collected independently from a broad array of 

sources, including U.S. government, NATO, and foreign government 

sources. No recent events have occurred to alter the general information 

provided in the reports. 

 3

See U.S. General Accounting Office, NATO Enlargement: Report Is Responsive to Senate 

Requirements, but Additional Information Could Be Useful, GAO-03-255 (Washington, 

D.C.: Nov. 15, 2002). 

Results in Brief 
Page 3 GAO-03-722 NATO Enlargement 

We found that the methodology for assessing the likely impact of each 

invited country on NATO’s military effectiveness was reasonable. The 

reports clearly identified the methodology used and the assessments in the 

reports provided information on the countries’ defense reform plans, past 

and current contributions to U.S. and NATO operations, and expectations 

of countries’ abilities to contribute specialized military capabilities. The 

methodology was consistently applied to assessments of each of the seven 

invited countries. 

We found that the methodology for analyzing invited countries’ ability to 

fulfill the full range of the financial burdens of NATO membership was 

limited. The reports did not identify the methodology used and did not 

provide information on the costs of maintaining representation at NATO’s 

headquarters or military command posts, which representatives of the 

invited countries consider part of the costs of membership. In addition, 

invited countries’ representatives to NATO stated that their commonly 

funded costs and the costs of maintaining representation at NATO ranged 

from about 1 to 4 percent of their defense budgets and that these total 

costs have been included in their budgets. The reports also did not identify 

the costs of NATO membership as a percentage of the countries’ total 

defense budgets. This information would have identified the level of 

demand these costs would place on the country’s total allocation of funds 

for defense. Finally, the reports did not consistently discuss the same 

types of information for each of the seven countries. The discussions of 

these types of information for each country are classified. 

Although the methodology for assessing the likely impact of the invited 

countries on NATO’s military effectiveness was reasonable, the 

methodology for analyzing the ability of countries to fulfill the full range of 

financial burdens of membership was limited. Therefore, to ensure that 

sound analyses of invited countries’ financial capabilities are provided in 

future reports, we are recommending that the National Security Council 

fully explain the methodology, ensure that the range of information is 

sufficient to support conclusions, and consistently apply the methodology. 

The National Security Council provided no comments on this report. 

The North Atlantic Treaty was signed on April 4, 1949, by 12 European and 

North American countries to provide collective defense against the 

emerging threat that the Soviet Union posed to the democracies of 

Western Europe. Since its inception, NATO has enlarged its membership 

four times as changing political and strategic circumstances have 

Background 
Page 4 GAO-03-722 NATO Enlargement 

warranted. Turkey and Greece joined NATO in 1952, West Germany in 

1955, and Spain in 1982. 

In 1994, NATO committed to enlarging its membership to include the 

newly democratic states of the former Communist bloc. In 1999, Poland, 

the Czech Republic, and Hungary became the first of those countries to 

join the alliance. At its summit meeting in November 2002 in Prague, 

NATO invited seven countries to join: Bulgaria, Estonia, Latvia, Lithuania, 

Romania, Slovakia, and Slovenia. Figure 1 shows the invited countries and 

the current members of NATO. 
Page 5 GAO-03-722 NATO Enlargement 

Figure 1: Countries Invited to Join NATO and Current European NATO Members 

The President’s reports responded to the three requirements in the 

Senate’s mandate with regard to each of the seven invited countries. First, 

to provide updated information on the five issues required to be addressed 

in the report submitted to Congress on August 26, 2002, the reports 

included updated information on the political, economic, defense, 

budgetary, information security, and legal conditions and preparations of 

the invited countries. Because NATO’s military requirements did not 

change, the reports included no changes in the methodology for assessing 

the potential costs of enlarging the alliance or in the estimates provided in 

Reports Responded to 

the Mandate’s 

Requirements 
Page 6 GAO-03-722 NATO Enlargement 

the earlier report. Second, the reports provided an assessment of each 

invited country’s likely impact on NATO’s military effectiveness. Third, the 

reports provided a variety of information regarding each country’s ability 

to meet the financial burdens of NATO membership, including such issues 

as current and planned defense spending levels and economic growth 

rates. 

The information provided in the reports was generally accurate and 

current. No major events appear to have been excluded. The information 

provided in the reports was generally consistent with the data we 

collected independently from a broad array of sources, including U.S. 

government, NATO, and foreign government sources. The reports’ cutoff 

date for the timeliness of information was January 31, 2003, and the 

timeframes for events, particularly recent ones, were usually identified. No 

recent events have occurred to alter the general information provided in 

the reports. 

We found that the methodology for assessing the likely impact of each 

invited country on NATO’s military effectiveness was reasonable. The 

reports clearly described the methodology. That methodology called for 

assessing the soundness and feasibility of each country’s defense reform 

plan, each country’s support of U.S. and allied actions through 

contributions to U.S. and NATO military operations, and the ability of each 

country to contribute specialized military capabilities to NATO once it 

becomes a member. The information provided supported the reports’ 

conclusions about the likely impact of these countries on NATO’s military 

effectiveness. The discussion of defense reform plans provided an 

understanding of the status of the countries’ defense modernization efforts 

and their degree of military preparedness. Identifying examples of how 

countries have participated in or contributed to NATO or other 

multilateral defense operations demonstrates how countries can be 

expected to participate in NATO operations as members of the alliance. 

Determining what kinds of specialized military capabilities a country could 

provide to NATO illustrates how the country will enhance NATO’s 

preparations for future missions. Finally, the methodology was 

consistently applied in the assessment of each invited country. 

Methodology for 

Assessing Likely 

Impact on Military 

Effectiveness Was 

Reasonable 
Page 7 GAO-03-722 NATO Enlargement 

We found that the methodology for analyzing the ability of invited 

countries to fulfill the full range of financial burdens of NATO membership 

was limited. The reports did not explain the methodology used and the 

information provided to support the conclusions was limited. 

The reports discussed the ability of countries to meet their share of 

NATO’s commonly funded costs,4

 but did not consider the costs of 

supporting country representation at NATO facilities. Officials of the 

invited countries told us that their share of NATO’s commonly funded 

costs generally ranged from about 1 to 2 percent of their annual defense 

budgets. However, becoming a member also entails the cost of supporting 

country representation at NATO’s facilities such as its civilian and military 

headquarters in Belgium and its command posts in Europe. According to 

officials of each of the seven invited countries, the costs of establishing 

and maintaining country representation at NATO facilities are part of the 

costs of NATO membership. Those country officials anticipated that the 

costs for establishing and maintaining country representation at NATO 

will vary between under 1 percent to, in one case at least, as much as 2 

percent of their annual defense budgets. While the reports do not address 

these costs, officials of the seven invited countries stated that the costs of 

supporting country representation—along with their share of NATO’s 

commonly funded costs—have been accounted for in the defense budgets. 

The reports also did not identify the costs of NATO membership as a 

percentage of countries’ total defense budgets. Although this was not a 

requirement, these data would have provided useful information about the 

level of demand these costs will place on a country’s total allocation of 

funds for defense. 

Finally, the discussions of countries’ abilities to meet the financial burdens 

of NATO membership did not consistently address the same types of 

information for each country. The report provided several types of 

information intended to demonstrate the countries’ ability to meet the 

financial burden of membership. The report provided information on such 

factors as a country’s share of NATO’s commonly funded costs, the 

percentage of Gross Domestic Product committed to defense spending, 

commitment to funding needed defense expenditures, and economic 

 4

Commonly funded costs cover NATO’s day-to-day operating costs, military headquarters, 

and defense infrastructure projects in member countries. Each member of NATO pays a 

certain percentage of these costs. 

Methodology for 

Analyzing Ability to 

Meet Financial 

Burdens Was Limited 
Page 8 GAO-03-722 NATO Enlargement 

growth. The discussions of these types of information for each country are 

classified. 

The President’s reports responded to the Senate’s requirements, providing 

information that was generally accurate and current on each of the seven 

countries invited to join NATO. While the methodology for analyzing the 

likely impact of the invited countries on NATO’s military effectiveness was 

reasonable, the methodology for analyzing countries’ ability to meet the 

full range of the financial burdens of NATO membership was limited. The 

methodology used to analyze invited countries’ financial capabilities was 

not explained. Lack of discussion of the methodology used limits the 

understanding of how the conclusions were derived. Also, because the 

reports did not discuss all of the costs associated with NATO membership, 

the reports did not provide comprehensive support for their conclusions 

on this issue. 

To ensure that sound analyses of invited countries’ financial capabilities 

are provided in future reports required under section 3(2)(E)(ii) of the 

Senate Resolution of Ratification on the Protocols to the North Atlantic 

Treaty of 1949 on the Accession of Poland, Hungary, and the Czech 

Republic, we recommend that the National Security Council fully explain 

the methodology, ensure the range of information is sufficient to support 

conclusions, and consistently apply the methodology. 

We provided a draft of this report to the National Security Council. The 

council provided no comments on this report. 

We assessed the President’s reports by determining the extent to which 

they addressed each of the mandated requirements. We assessed the 

accuracy of the information in the reports by determining if it was 

consistent with the information in the sources we developed. We assessed 

the currency of the information by determining whether any recent events 

identified in our sources raised questions about the accuracy of any of the 

reports’ main findings. We did not independently assess foreign laws or 

regulations. To make this assessment, we developed an extensive array of 

documentary information from a broad spectrum of sources, including 

reports and analyses of the U.S. government, NATO, and governments of 

the seven countries invited to join NATO, including: 

Conclusion 

Recommendation for 

Executive Action 

Agency Comments 

and Our Evaluation 

Scope and 

Methodology 
Page 9 GAO-03-722 NATO Enlargement 

• invited countries’ commitments to NATO upon accession and the 

timetable for meeting those commitments; 

• invited countries’ defense modernization and reconstruction plans and 

their planned defense expenditures; 

• NATO assessments of invited countries’ defense capabilities; 

• invited countries’ documentation updating progress in meeting NATO 

political, economic, budgetary, information security, and legal 

membership goals; 

• the U.S. State Department’s country background reports and its annual 

reports assessing human rights practices and religious freedom; 

• reports of the Congressional Research Service on NATO enlargement; 

• the European Union’s 2002 annual regular progress report on the political 

and economic developments and other preparations of countries seeking 

membership in the European Union; 

• Freedom House 2002 Nations in Transit report’s country ratings of 

democratization, rule of law, and economic liberalization; 

• Freedom House Annual Survey of Press Freedom 2002; 

• Transparency International Corruption Perceptions Index 2002; and 

• related media coverage. 

We met at NATO headquarters in Brussels, Belgium, with representatives 

of Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia, 

and obtained additional testimonial evidence through discussions with 

U.S. agency officials in Washington, D.C. and NATO headquarters, as well 

as with NATO international staff. 

To assess the methodologies used to analyze the likely impact of new 

members on NATO’s military effectiveness and the ability of invited 

countries to fulfill the full range of the financial burdens of membership, 

we determined (1) if the methodology and analytical criteria were clearly 

and fully described; (2) if the methodology provided a range of 

information that supports the conclusions; and (3) if the methodology 

were applied consistently to analyses for each of the seven invited 

countries. 

We conducted this review from December 2002 to April 2003 in 

accordance with generally accepted government auditing standards. 

We are sending copies of this report to other interested congressional 

committees, the Chairman of the National Security Council, the Secretary 

of State, and the Secretary of Defense. We will also make copies available 
Page 10 GAO-03-722 NATO Enlargement 

to others upon request. In addition, this report will be available at no cost 

on the GAO Web site at http://www.gao.gov. 

Please contact me at (202) 512-8979 if you or your staff have any questions 

about this report. Key contributors to this report were F. James Shafer, 

Beverly Ann Bendekgey, Monica Brym, Martin de Alteriis, Ernie Jackson, 

and Lynn Cothern. 

Joseph A. Christoff, Director 

International Affairs and Trade 
Page 11 GAO-03-722 NATO Enlargement 

List of Congressional Committees 

The Honorable Richard Lugar 

Chairman 

The Honorable Joseph R. Biden, Jr. 

Ranking Minority Member 

Committee on Foreign Relations 

United States Senate 

The Honorable John W. Warner 

Chairman 

The Honorable Carl Levin 

Ranking Minority Member 

Committee on Armed Services 

United States Senate 

The Honorable Ted Stevens 

Chairman 

The Honorable Robert C. Byrd 

Ranking Minority Member 

Committee on Appropriations 

United States Senate 

The Honorable Henry J. Hyde 

Chairman 

The Honorable Tom Lantos 

Ranking Minority Member 

Committee on International Relations 

House of Representatives 

The Honorable Duncan Hunter 

Chairman 

The Honorable Ike Skelton 

Ranking Minority Member 

Committee on Armed Services 

House of Representatives 

The Honorable C.W. Bill Young 

Chairman 

The Honorable David R. Obey 

Ranking Minority Member 

Committee on Appropriations 

House of Representatives 

(320175) 
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