29 October 1997

TEXT: SEN. DOMENICI REMARKS ON NATO, EUROPEAN MONETARY UNION

(Budget Committee chairman concerned over burden-sharing) (980)



Washington -- Senator Pete Domenici, the chairman of the Senate Budget
Committee, voiced doubts October 29 about whether the European members
of the North Atlantic Treaty Organization (NATO) will be willing to
pay their share of the costs of adding Poland, Hungary and the Czech
Republic to the Alliance.


"I am very concerned about burden-sharing," Domenici said at the end
of a Budget Committee hearing on NATO enlargement and the implications
for the European Monetary Union.


Similar views were expressed by other members of the committee.



James Baker, secretary of state under President Bush and secretary of
the treasury under President Reagan, also testifying at the hearing,
suggested that while the United States should "press our European
allies on burden-sharing," the Senate should not put so much emphasis
on the issue that an opportunity of truly historic proportions would
be lost.


Following is text of Sen. Domenici's opening statement at the Budget
Committee hearing:


(begin text)



I want to welcome everyone to the third and final hearing looking at
economic and security developments in Europe. The subject of today's
hearing -- NATO enlargement and European Union expansion -- is of
particular interest to this Committee.


First, the Senate early next year will vote on the ratification of
NATO enlargement. The debate is just beginning, and I believe our
Committee hearings are providing a different perspective to the many
questions about the U.S. and Western European roles in Eastern Europe.


Second, I am convinced that monetary union in Europe is a means to
accomplish a larger goal -- European Union expansion. As we begin the
ratification process, we must recognize that NATO enlargement, EU
expansion and monetary union are inextricably linked. The combined
effect of these events on European and U.S. fiscal policy, global
portfolio flows, and national monetary policy has brought us to a
complicated intersection of economics and foreign policy that we are
seeing more often in the post Cold War world.


These hearings have raised several questions that I hope can be
addressed today. As the Cold War becomes a part of history, what is
now the purpose of the NATO alliance? With NATO inviting three new
members -- the Czech Republic, Hungary and Poland -- into the
Alliance, we are witnessing a major event in the histories of these
former Warsaw Pact countries. I was impressed by Hungarian Ambassador
Banlaki's comments about his country's views on NATO. He said, "We
would like to be able to choose our own allies. We would like to enjoy
all those things that history has denied us."


We cannot ignore that it was the presence of a U.S.-led NATO that
provided the security for European Union. But these are new times. We
have Europe uniting beyond its original trade alliance to become a
monetary union. Meanwhile, the EU does not appear to be the political
union that seems necessary for today's challenges such as the conflict
in Bosnia.


We have had CBO (Congressional Budget Office), GAO (Government
Accounting Office), and the Administration come informally to this
Committee's staff and explain their estimates of the costs of NATO
expansion. While they vary some, none seem startling when compared to
the overall levels of defense spending. Which leads to the main reason
for this hearing. Absent from the much quoted cost estimates is an
answer to the important question -- Where do NATO's responsibilities
end? The debate is not purely what are the costs of NATO upgrading the
militaries of the new members, but what are the threats, what
commitment is the United States making to an expanded NATO, and how
will we as the Congress respond?


We have another significant foreign policy debate next year, the June
1998 exit date for U.S. troops in Bosnia. This Congress' reluctance to
keep troops in Bosnia is relevant to the debate on ratifying a treaty
on to greater commitments in Eastern Europe. One argument we hear from
those in favor of NATO expansion is that with no Soviet threat,
eastern and western Europe's stability are increasingly dependent, and
U.S. leadership is necessary to help Europe deal with these types of
"Bosnia" problems in the future.


Could EU expansion be a better instrument for integrating the Eastern
European democracies into the West and provide political stability?
With the economic criteria for EU admittance so strict, is NATO
membership being used as a short-term entry into "Europe?" It is much
easier to enter a military alliance with the West than an economic
union. While the Clinton administration expects new NATO members to
pay about half the cost of the military modernization and buildup
needed, the Czechs, Hungarians and Poles are working hard to get their
economies in shape for EU membership negotiations early next year.


I realize I have not even mentioned Russia and the many possible
implications NATO expansion could have on the U.S.-Russia
relationship. I know our witnesses will address this.


We have two distinguished witnesses to help us address these questions
and open the debate today. Our first witness is not a stranger to this
Committee and this hearing room. Secretary Baker was the 61st
Secretary of State under President Bush and Secretary of the Treasury
under President Ronald Reagan. On March 17, 1997, Secretary Baker was
named Personal Envoy to United Nations Secretary-General Kofi Annan to
help settle the conflict in Western Sahara. We welcome you back to the
Senate, Secretary Baker.


Following Secretary Baker, we will hear from Ms. Susan Eisenhower. Ms.
Eisenhower is president of The Eisenhower Group, an international
consulting firm. In 1991, Ms. Eisenhower founded and chairs the Center
for Political and Strategic Studies, a non-profit institute focused on
increasing understanding of events taking place in the global
environment, especially in the areas of nuclear disarmament and
proliferation, ethnic studies, environmental analysis, and NATO
expansion.


I want to again thank the witnesses for being here today.



(End text)