Luísa Maitto
Financial Markets
Pedro Santos
Financial Markets
Luísa Maitto
Financial Markets
Pedro Santos
Financial Markets
The North Atlantic Treaty Organization (NATO) is the biggest military alliance in the world, gathering a total of 30 countries. It was founded in 1949, but it still remains as relevant today as it was in the wake of World War II. With the war between Russia and Ukraine with no near end in sight and the threat of nuclear war rising every day, it is important to understand the context in which NATO was founded and why it is still fundamental in today’s world.
At the end of the World War II, Europe was reduced to ruins. With millions of casualties, entire countries ravaged by missiles and the economy reduced to shambles, the West was weak and vulnerable. On contrast, the Soviet Union remained vigorous and capable, with control of all countries in Central and Eastern Europe, repressing any anti-communist activity. In this divided context, the Iron Curtain came to separate the capitalist West from the communist East, as an ideological, political and military barrier. This boundary, put up by the Soviet Union across Europe, ended up dividing Germany into two. The Cold War was beginning to emerge.
In 1948, with a civil war in Greece, tensions in Turkey and the growing power of the communist party in Italy, Western Europe was slowly growing more wary of the Eastern block’s rising and of the West’s ability to proctect itself from this threat. In the United States, president Harry Truman was afraid European countries would negotiate with the Soviets. A Soviet-sponsored coup in Czechoslovakia was the defining event that led the United States, Canada and Britain to begin discussions on how to protect and promote the democratic values of the West. To these discussions later joined France, Benelux – Belgium, The Netherlands and Luxembourg – and Norway.
There were several months of negotiations, where Europe asked the US for unconditional aid in case of a Soviet assault on their territory, while the US tried to make aid conditional, since it was written in their constitution that declaring war was the congress’ decision. The US also suggested that the treaty extended to more countries of the North Atlantic, including Portugal. Eventually, in 1949, the North Atlantic Treaty was signed by eleven countries, connected by a “common civilizational heritage”: The United States, Canada, Britain, Belgium, The Netherlands, Luxembourg, Norway, Denmark, Portugal, Iceland and Italy. NATO became a symbol of the Western block, created to resist the Soviet Union and the values it represented.
Throughout the remainder of the Cold War, NATO played a more passive role, although it still made a stance to counter the Warsaw’s pact – the defense treaty established between the Soviet Union and other Eastern communist states. The organization was ready for a potential nuclear war scenario, with a strategic placement of nuclear warheads, which some say escalated the Cold War to a point of near human extinction.
Happily, the Cold War was surpassed and the policies introduced by Mikhail Gorbachev, the leader of the Soviet Union from 1985 to 1991, led to the dissipation of the Soviet Union and its threat on Western ideals. With the war finished, NATO’s objectives changed and its goal became incentivizing dialogue and cooperation and managing conflicts in the European sphere. The organization played a big part in Europe’s geopolitics throughout the second half of the 20th century and now its is mentioned more than it has ever been in the last few decades, due to Russia’s invasion of Ukraine – the biggest military mobilization in Europe since World War II.
Russia presented NATO and the United States in December with a set of written demands which they claimed necessary to ensure peace between these powers. Chief among them is the guarantee that Ukraine would never join NATO. This aggressive stance by Russia inflamed Ukrainian nationalism. Nevertheless, the West rejected these demands as they were considered put of hand.
President Biden made it clear that his administration was not considering sending troops to fight for Ukraine, as Article no.5 of the NATO Charter obliges countries to defend a NATO member if attacked. But since Ukraine is not a member of NATO, this obligation did not hold its grounds. Instead, the US sent anti-tank and anti-aircraft weapons to Ukraine, increased its military presence in NATO countries bordering Russia and ordered an additional 7.000 troops to Europe.
The US president also banned energy imports from Russia to the United States and issued sanctions against the company behind an oil pipeline linking Russia with Germany. Financial restrictions in the US and Europe are stifling banks and other businesses in Russia, limiting the Russian government’s ability to use its huge foreign currency reserves and preventing millions of Russians from using their credit cards, accessing their bank deposits or traveling out.
But Europe has important trade ties with Russia and stands to lose far more than the United States if it applies sanctions. Even with this awareness, the United Kingdom, Canada, France and the Netherlands are also sending air defense systems. NATO and the European Union responded with great effectiveness in the first months of the war. US leadership once again proved essential to successfully mobilize international efforts, especially in coordinating military support for Ukraine.
In conclusion, NATO has had a very important role in the world’s geopolitics since its foundation in 1949. Today, it remains very relevant, having the main focus of promoting cooperation and managing conflicts in Europe. The main conflict in Europe right now, Russia’s war on Ukraine, is threatening world peace and nuclear war, thus NATO will be one of the most important agents to look out for in the future.
Congratulations!
Very well written text!