Relearning lessons from the past: NATO and economic deterrence
There’s a growing need for the West to seamlessly integrate military deterrence with economic warfare once more.
NATO is a defensive alliance “committed to safeguarding the freedom and security of all Allies, against all threats, from all directions.” | Tobias Schwarz/Getty Images
OPINION
JULY 3, 2024
BY TOM KEATINGE
Tom Keatinge is the director of the Centre for Finance and Security at RUSI.
POLITICO UK
In her Mansion House speech in April 2022, then U.K. Foreign Secretary Liz Truss proposed “the G7 should act as an economic NATO, collectively defending our prosperity” and prepared to respond in unison, using its economic leverage if a partner faced economic threats from an aggressive regime.
She continued promoting this idea through her stunningly brief period as prime minister and beyond — and was widely derided for it. Isn’t that what the U.N. Security Council does? Since most NATO members are also a part of the EU, doesn’t such an alliance already exist? Isn’t the G7 another mechanism for this kind of coordination? Plus, a perfectly good alliance on sanctions against Russia has been formed without the need for NATO’s intervention anyway.
But all that is far from perfect.
Truth is the U.N. Security Council is broken. And with its permanent members polarized and likely to continue wielding their vetoes on contentious matters, consensus — and thus internationally binding resolutions — are often a distant possibility. Moreover, while it’s true that an alliance against Russia has been formed, it was only formed as tanks rolled across Ukraine’s border — a proper alliance would have been fully prepared and communicating credible deterrence long before then. And yes, most EU members are also in NATO, but even a charitable assessment of the bloc’s performance on Russia sanctions wouldn’t suggest it’s been particularly agile, forceful or prompt.
Crucially, at the heart of all these alternatives lie diplomacy and diplomats — not defense. And at a time of heightened international insecurity and growing global threat of conflict, we should indeed be considering whether keeping the tools of economic deterrence outside the orbit of those we trust to guard our national and collective security is wise — or whether a more clearly integrated economic and military deterrence strategy is much more appropriate for our times.
For one, NATO is a defensive alliance “committed to safeguarding the freedom and security of all Allies, against all threats, from all directions.” Deterrence is a core element of its overall strategy, and it isn’t much of a stretch to envision economics within this purview.
In her Mansion House speech in April 2022, then U.K. Foreign Secretary Liz Truss proposed “the G7 should act as an economic NATO, collectively defending our prosperity” and prepared to respond in unison, using its economic leverage if a partner faced economic threats from an aggressive regime.
She continued promoting this idea through her stunningly brief period as prime minister and beyond — and was widely derided for it. Isn’t that what the U.N. Security Council does? Since most NATO members are also a part of the EU, doesn’t such an alliance already exist? Isn’t the G7 another mechanism for this kind of coordination? Plus, a perfectly good alliance on sanctions against Russia has been formed without the need for NATO’s intervention anyway.
But all that is far from perfect.
Truth is the U.N. Security Council is broken. And with its permanent members polarized and likely to continue wielding their vetoes on contentious matters, consensus — and thus internationally binding resolutions — are often a distant possibility. Moreover, while it’s true that an alliance against Russia has been formed, it was only formed as tanks rolled across Ukraine’s border — a proper alliance would have been fully prepared and communicating credible deterrence long before then. And yes, most EU members are also in NATO, but even a charitable assessment of the bloc’s performance on Russia sanctions wouldn’t suggest it’s been particularly agile, forceful or prompt.
Crucially, at the heart of all these alternatives lie diplomacy and diplomats — not defense. And at a time of heightened international insecurity and growing global threat of conflict, we should indeed be considering whether keeping the tools of economic deterrence outside the orbit of those we trust to guard our national and collective security is wise — or whether a more clearly integrated economic and military deterrence strategy is much more appropriate for our times.
For one, NATO is a defensive alliance “committed to safeguarding the freedom and security of all Allies, against all threats, from all directions.” Deterrence is a core element of its overall strategy, and it isn’t much of a stretch to envision economics within this purview.
For one, NATO is a defensive alliance “committed to safeguarding the freedom and security of all Allies, against all threats, from all directions.” | Sean Gallup/Getty Images
Furthermore, deterrence by denial, “persuading an adversary not to attack by convincing it that an attack will not achieve its intended objectives,” is central to its mission — something political leaders and policymakers singularly failed to achieve with their threat of sanctions against Russia in the months leading up to Russian President Vladimir Putin’s full-scale invasion.
Plus, it isn’t merely in the deterrence phase that an organization like NATO has a role to play. When conflict occurs, targeting an adversary’s economic resources is important. I recall a senior U.S. Treasury official steeped in the experience of combating terrorist financing noting that in the fight against the so-called Islamic State, the best advice he could give his Pentagon counterparts was to drop more bombs on the oil infrastructure that helped sustain their finances.
At this point, it’s also worth recalling some history: The Coordination Committee for Multilateral Export Controls — or CoCom — was set up in 1949 by NATO members as a response to the growing threat from the Soviet Union. And its goal was to control the availability of military-grade technology to Warsaw Pact countries.
Of course, much has changed since the Cold War and the dissolution of CoCom, but with the reemergence of global insecurity, Western allies would do well to revisit that history and assess the extent to which the post-Cold War approach to economic warfare remains fit for today’s geopolitical and international security purposes.
Over the past 20 years, the use of sanctions has — for most Western allies — been a messaging tool used to support foreign policy objectives. Thus, responsibility for their use has resided in ministries of foreign affairs. Only with Russia’s full-scale invasion of Ukraine have allies sought to use sanctions as, first, a tool of deterrence (which failed) and then a countermeasure to influence the course of the war and reduce Russia’s operational capacity to fight. These are two very different objectives, suited to two very different ways of thinking.
Connected to this shift in the desired outcome of sanctions use is the need for a fundamental attitude change in terms of the threat we face. Put simply, the West is at economic war with Russia. This isn’t an attempt to be alarmist — it’s a reality. For Russia, evading sanctions is an existential struggle. The country and its economy are on a war-footing and are responding to sanctions accordingly.
Meanwhile, Ukraine’s allies continue to be tied up with more domestic concerns about the damage that sanctions and other economic measures might cause to their own economies. Their apparent lack of “war footing” when it comes to the application of sanctions has led to sluggish and delayed decision-making, leaving Russia to continue sourcing the critical components it needs for its military production.
As it celebrates three quarters of a century, our need for NATO and its doctrine of deterrence has never been more pressing. Yet, a key pillar of the West’s deterrence strategy remains in the hands of bureaucrats, and faced with the need to press harder on trade and economic restrictions, divisions are emerging across the EU.
It’s time for this to change. It’s time for NATO to relearn some lessons from the past, and to more seamlessly integrate military deterrence with economic warfare.
Furthermore, deterrence by denial, “persuading an adversary not to attack by convincing it that an attack will not achieve its intended objectives,” is central to its mission — something political leaders and policymakers singularly failed to achieve with their threat of sanctions against Russia in the months leading up to Russian President Vladimir Putin’s full-scale invasion.
Plus, it isn’t merely in the deterrence phase that an organization like NATO has a role to play. When conflict occurs, targeting an adversary’s economic resources is important. I recall a senior U.S. Treasury official steeped in the experience of combating terrorist financing noting that in the fight against the so-called Islamic State, the best advice he could give his Pentagon counterparts was to drop more bombs on the oil infrastructure that helped sustain their finances.
At this point, it’s also worth recalling some history: The Coordination Committee for Multilateral Export Controls — or CoCom — was set up in 1949 by NATO members as a response to the growing threat from the Soviet Union. And its goal was to control the availability of military-grade technology to Warsaw Pact countries.
Of course, much has changed since the Cold War and the dissolution of CoCom, but with the reemergence of global insecurity, Western allies would do well to revisit that history and assess the extent to which the post-Cold War approach to economic warfare remains fit for today’s geopolitical and international security purposes.
Over the past 20 years, the use of sanctions has — for most Western allies — been a messaging tool used to support foreign policy objectives. Thus, responsibility for their use has resided in ministries of foreign affairs. Only with Russia’s full-scale invasion of Ukraine have allies sought to use sanctions as, first, a tool of deterrence (which failed) and then a countermeasure to influence the course of the war and reduce Russia’s operational capacity to fight. These are two very different objectives, suited to two very different ways of thinking.
Connected to this shift in the desired outcome of sanctions use is the need for a fundamental attitude change in terms of the threat we face. Put simply, the West is at economic war with Russia. This isn’t an attempt to be alarmist — it’s a reality. For Russia, evading sanctions is an existential struggle. The country and its economy are on a war-footing and are responding to sanctions accordingly.
Meanwhile, Ukraine’s allies continue to be tied up with more domestic concerns about the damage that sanctions and other economic measures might cause to their own economies. Their apparent lack of “war footing” when it comes to the application of sanctions has led to sluggish and delayed decision-making, leaving Russia to continue sourcing the critical components it needs for its military production.
As it celebrates three quarters of a century, our need for NATO and its doctrine of deterrence has never been more pressing. Yet, a key pillar of the West’s deterrence strategy remains in the hands of bureaucrats, and faced with the need to press harder on trade and economic restrictions, divisions are emerging across the EU.
It’s time for this to change. It’s time for NATO to relearn some lessons from the past, and to more seamlessly integrate military deterrence with economic warfare.
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