PARIS — 1986 has dawned on the Continent as a year waiting for the other shoe to drop in U.S.-European relations. Recent crises are over, or at least in abeyance: 1984's deployment of intermediate-range nuclear missiles and 1985's "Star Wars." All's quiet on the Western front until the Gramm-Rudman shoe drops, as it soon will.
Money matters have regularly discomfited the North Atlantic Treaty Organization. Since 1977 the spat has centered on the agreement that each member of NATO should annually increase defense spending by 3% after inflation. Until this year the United States has more than met that target. Yet few European states have done so. Whether as excuse or explanation, they argue that they played their part while the United States was reducing its defense investment during the Vietnam War.
How much the allied states will spend on defense is not just a matter of sharing the burden. There is also widespread recognition that the Warsaw Pact states continue their own military modernization. This is creating a growing disparity in the quantity of arms, though it is partly offset by superior Western quality.
Maintaining this technical edge is requiring the Western alliance to focus on so-called emerging technologies, which have a high price tag but put less burden on West European societies with declining pools of military-age men. At the same time, NATO needs more money for conventional weapons in order to lessen its dependence on the threat to use nuclear weapons. Even though nuclear angst in Western Europe has ebbed in the last year, it rarely lies far beneath the surface of public concerns. Spending more on conventional forces is one means to help forestall its reemergence.
NATO strategy and European confidence also depend on a continuing and robust U.S. commitment to security, expressed in major part by more than 300,000 U.S. soldiers permanently stationed on the Continent. This is so costly that the Pentagon has regularly resisted separating out its NATO expenses, lest it stimulate added opposition on Capitol Hill.
Against this background, Gramm-Rudman looms like a phantom monster. No one in America, much less in Western Europe, knows what it will do. Despite the words on paper, this novel deficit-reduction measure is still unreal, its effect uncertain. Yet one thing was clear even before Gramm-Rudman: U.S. defense spending will not continue growing at the pace of recent years; indeed, it will decline. Pentagon budgeting of a 3% real increase for 1987 is fantasy.
On the Continent, however, all and sundry are blissfully unaware that, at best, the U.S. contribution to NATO conventional defense will stay the same or, at worst, will plummet under Gramm-Rudman. U.S. officials at NATO headquarters have publicly conjectured that the legislation will just not be implemented. No one at NATO has begun to plan for the consequences if, a scant nine months from now, Gramm-Rudman requires major U.S. defense cuts.
Chancellor Helmut Kohl of West Germany has fallen back on the litany that U.S. force cuts are simply unacceptable. The British government looks the other way on the specifics of Gramm-Rudman while applauding America's resolve to reduce its budget deficits. The French evince, or affect, a lack of knowledge and interest.
Yet money is very much on allied minds. While the virtual consensus in Western Europe remains that Star Wars is a strategic nightmare, the allies hope that it will not survive the Reagan presidency. Meanwhile, they are anxious not to be left behind in the race for high technology, and would welcome any SDI research largess flowing from U.S. coffers. This translates as willingness to let business benefit while politics and high cost prevent Star Wars from coming to fruition. And it is no coincidence that Britain is undergoing a political crisis that turns in part on the relative strength of the U.S. and European defense industries. The debate about which side of the Atlantic will control Britain's Westland helicopter company thus symbolizes the wider struggle for survival and advantage in defense economics.
At the moment, the allies are whistling past the graveyard represented by the U.S. deficit debate. But even if Gramm-Rudman ends up in the ash can because both Congress and the President decide that it is the wrong approach in an election year, U.S. defense money for Europe will decrease, likely leading to European cuts as well. The effect on the allies will be more than a bad dream.