An address by Defence Minister Jørgen Kosmo, Oslo Military Society, January 6:

National and International Challenges for Norwegian Defence.

Chief of Defence, Chief of Staff, Ladies and Gentlemen,

Introduction

Allow me to take this opportunity to wish you all a happy new year. I do know that I speak for all of us when, at the entrance of the new year, I sincerely hope that 1997 will be a good year for the Defence Organization; and I first and foremost hope that no injuries or serious damage will be inflicted upon our personnel. The Defence Organization's activities are diverse and demanding. The tasks vary greatly; from international peace-keeping efforts and rigorous education of soldiers, to various types of support to Norwegian civilian life. The personnel of the Armed Forces are very well motivated and qualified. They are, perhaps, among the very best by international standards. Given good leadership, healthy Norwegian sobriety, thoroughness, and respect for the tasks we are expected to accomplish, I do believe that 1997 will be a successful year for the Defence Organization.

However, we are not short of tasks, and the challenges are numerous. We are going to make important decisions regarding the future organization of the Sea- and Air Force. We are going to present a new Long Term Report to the Storting. We plan to go through our budgetary routines, and, at the same time, implement the first steps of our new economic regulations. Our principle security platform, NATO, confronts historic decisions, which will have direct as well as indirect consequences for our own defence. I am a strong advocate of future European security being based on institutional cooperation. This cooperation must be based on the framework of NATO, while allowing for new impulses and members. Being imbedded within the transatlantic relationship, NATO is crucial not only to Norway, but to all of Europe. Institutional and collective defence is necessary since this is the only type of cooperation which ensures commitment, joint efforts, and common responsibility. Europe has painfully experienced that security exclusively based on political agreements without common institutions only provides artificial security and a weak mandate which will burst in a time of serious confrontations.

Institutional cooperation in NATO also calls for an ability to participate in collective defence and a joint effort on the part of the members to claim responsibility for the defence of own territory. This collective military skill, at the end of the day, gives political strength.

NATO must open its doors to new members while ensuring committed cooperation with states which will not become members. In the northern part of Europe we have, of course, placed emphasis on the challenges in our immediate areas; Russia, the Baltics, the Nordic region, and the Visegrad countries. The NATO countries located in the Mediterranean Region certainly seek to focus on their vicinity; North Africa and the Middle East. There are many reasons for this, not the least the danger of proliferation of weapons of mass destruction. A new European security architecture must bear in mind not only East-West considerations, but North-South considerations as well.

New members, enlarged cooperation with partner countries, intensified cooperation with Russia, and new security challenges outside the NATO-area will call for considerable economic and personnel resources. I do not think that the changes in the NATO Command Structure, and the efficiency of NATO's traditional activities give necessary latitude for the Alliance. Against this background, NATO's budgets will most likely have to increase. Most of the European countries have already harvested the profit of a reduced threat in national savings, and the merits of additional savings for the NATO community are minimal.

Our ambition is still to maintain national interests by influencing decisions which have direct impact on our own security. At the same time, we must acknowledge our limitations, and pool our resources in areas that really matter, and not within fields of marginal significance.

The year we just entered will be an extremely important year for NATO and for European security at large. We are facing the most fundamental changes of the Alliance since its conception almost fifty years ago. This is relevant not only to the internal changes, but certainly also to the forthcoming enlargement.

Simultaneously, we must develop our cooperation with Russia, collaboration which will have a stabilizing effect and not isolate Russia in European security. Similarly, the countries that will not be invited to join NATO in the first round and those who do not seek membership, must be linked to NATO's military and political framework. These represent a joint solution which will contribute to increased stability and closer cooperation in all of Europe.

While we enter 1997 with optimism and major ambitions, we must also be prepared that the many processes may run into difficulties before we hopefully arrive at stable solutions.

The restructuring of the Defence Organization at home has not been completed. It has followed along the track spelled out by the Defence Commission of 1990 generally approved by the Government and the Storting. The transfer of resources from operations to investments has been demanding, but has, at the same time enabled us to get started with the long-term modernization of the Defence Organization. If we have learned something from history, it must be that we cannot establish a timely and effective Defence Organization overnight. It is very important not to forget this fundamental fact during pressure from various demands and expectations of the Armed Forces. We must make the necessary choices which will ensure the perseverance of realism in our long-term planning. A credible defence cannot be built up and down based on short term estimates of the current security situation.

New Long Term Report

The Ministry of Defence is now well underway with the preparations of a new Long Term Report for the Defence Organization. The Report, which will cover the period 1999-2002, will be presented to the Storting before Christmas 1997, and be read in the spring of 1998. At the center of this effort stands the comprehensive estimation which constitute the basis for the defence structure we need in order to meet long-term challenges. The military advice of the Chief of Defence, conveyed through his Defence Study, will be an important basis for the Ministry's continued efforts with the Report.

Our credibility and influence in NATO are dependent on the maintenance of a national defence and active Norwegian international involvement. A new operational concept for Norwegian forces, the technological military development, and the changing military capabilities in our neighbouring countries and our allies, are the most important factors we evaluate in determining the future force structure in the Long Term Report.

Key challenges in the Long Term Report will be to estimate:

• the choices we must arrive at in ensuring balance and harmony in the long-term defence structure
• the relationship between traditional defence tasks in Norway and the international involvement of Norwegian armed forces
• the conditions for effective cooperation between Norwegian and allied forces
• the establishing of a flexible force structure which is applicable even if the international situation should change

I am convinced that the changes following the Cold War has just begun. New mechanisms of cooperation and new challenges will emerge. We cannot predict what will happen in the years ahead, and thus we must not lock ourselves up in the current security situation.

When security analysis is to be done, factors which previously did not carry much weight must now be seriously examined. It is important for us to consider and plan for what the Defence Organization can do in a situation in which we are threatened by major environmental destruction. It is especially important that we, jointly with other relevant institutions, estimate the hazards by civilian and military nuclear accidents. International crime threatens our security in its own way. It is not the Defence Organization's responsibility to combat crime, but I mention it as an example on how the internationalizing of our part of the world impacts our society and thereby our security.

NATO's internal restructuring poses particular challenges for a small member. NATO's tasks are becoming diverse and difficult. With more members there is a chance we will have a less effective NATO. All decisions require consensus, and the consultations in NATO are confidential. The development after the Cold War has resulted in a tendency to allow important decisions to be prepared among the great powers without fully including the small states. Thus, it is in our interest that NATO's mechanisms for consultations, which is one of the core functions, are being protected and fully applied.

In the wake of our national referendum over EU membership, our membership in NATO has become an even more important component in our international involvement. Our role in NATO gives us access to confidential consultations with the great powers, and it provides opportunities for active involvement towards Eastern Europe and new security challenges in general. There are, however, reasons to underscore that our influence is predominantly determined by what we actually do through active participation, and no longer by geographic proximity or who we are.

NATO's Command Structure

As you are aware, it is now clear that the command structure of the Alliance again will be changed. There were several conditions suggesting revisions already at this point, among them the need for cut-backs, but also the coming enlargement, Spain and France's integration into the military structure, and the need to visualize the European Security and Defence Identity within the Alliance.

The principals for a new structure are now ready, although the final decisions will be taken at the summit meeting later this year. There is a general consensus in NATO that the command structure will consist of three different levels : strategic, regional, and sub-regional. The current structure consists of four levels. There is, furthermore, consensus that there will be two strategic commands, the Atlantic Command and the European Command, of which both will be headed by an American. Consensus has not yet been reached over the division of the European Command. The alternatives call for either two or three regional commands. We have emphasized that the Allied Headquarters in Stavanger may serve as an example to be copied in the ongoing discussions regarding the arrangements of the sub-regional level. It seems that we will keep this headquarters in the new structure, and we are pleased with this fact.

It has been crucial to Norway to be reassured that the future structure will have the capacity to plan, lead, and carry out operations from joint humanitarian operations to small regional conflicts or crises and major planned attacks on the Alliance. These suggest that the Alliance must be able to deal with all categories of forces. It is also very important that the command structure contribute to upholding the transatlantic relationship, and, at the same time, secure Norway's access to continental Europe. In this regard, a Norwegian headquarters is a crucial element. In addition, the structure must maintain both Article 5 and non-Article 5 operations, and potential WEU-operations in order to avoid all types of costly and unecessary duplications.

The planning has already taken into consideration the full integration of Spain and France, though, as is well known, France has not yet fully decided to be integrated. The role of France in the command structure is thus not yet clear. There is also another unresolved question, and it is a vital one, regarding whether the commander of the Southern Regional Command should be American or European.

A new and important element in NATO's command structure is the Combined Joint Task Forces. Such elements are to be stationed at both the South Command in Naples, and the Central Command in Brunssum. The main task of the CJTF will be to plan and train for peace operations jointly with NATO and partner states. These headquarters will also constitute the command element in potential European operations without American participation. Norway should be fully engaged and find its natural position in the European pillar of future NATO cooperation.

Economy and Resources in the Alliance

While NATO's tasks have become more numerous and diverse, the access of resources to the military component of NATO have become considerably less. Both the military budget, which among other things finance the command structure, and NATO's investment programme, have been substantially reduced. I am worried about this development. Currently, there is little room for cutting the budgets if we are to meet both the new and the traditional tasks of NATO. Norway has thus, despite the fact that we contribute the most to the joint programmes per capita, argued for maintaining a level enabling the Alliance to carry out both new and traditional tasks. Norway has also actively supported the efficiency measures in order to utilize the money. Whether it will be possible to maintain the current level of security cooperation in Europe in the future on a lower financial level than today, will depend on the degree to which we succeed in creating a new security structure in Europe.

External Adaptation

NATO will most likely disclose which countries that will be invited to membership negotiations during the summit that will be held in Madrid in the second week of July. When new members in fact will join the Alliance on the other hand, to a large extent depend upon which countries will be invited to membership negotiations, and how these negotiations develop.

When some partner states are being invited to membership negotiations, others which are not invited may perceive it as if they are being excluded from security cooperation. NATO seeks to prevent this, first and foremost through a deepening of the Partnership for Peace programme. Promises to all other countries, that they over time will become members, must be avoided. At the same time, it should, nevertheless, be underscored that admittance of additional members beyond the «first-round» may happen.

NATO is in the process of defining the extended Partnership for Peace programme. A main goal will be to integrate the partner states in a way which will secure their interests and rights, and give them an opportunity to influence cooperation between NATO and the partner states. Strengthened cooperation with NATO, and secure fortification in the European security structure will have great impact on the continued development of democratic systems in various partner states. This will, in turn, be a precondition for future security and stability.

There is broad consensus within the Alliance that strengthened cooperation must include extended access for the partner states to participate in the planning, shaping, and implementation of activities and operations, especially within crisis-resolution and peacekeeping activities. It will thus be necessary to give this cooperation a more permanent and structured role than today.

In order to get an opportunity to increase participation in the planning and implementation of joint activities, the partner states must be granted associate status to allied civilian and military staffs; primarily the CJTF-Headquarters which plan and prepare international operations. At the same time we must protect planning and operations which include NATO's collective defence, and the maintenance of national defence concepts. In my opinion, it is first an foremost as a credible defence alliance that NATO has its value, hence, its attraction to outsiders.

The relationship to Russia stands as the central dimension in the NATO-enlargement process. NATO has in recent years attempted, and to some extent succeeded, in establishing a special cooperative relationship. To NATO, and not the least to Norway, it is important that this relationship continues and is being deepened, also in the wake of enlargement. Russian authorities, on its part, has firmly maintained its declared resistance to NATO-enlargement, and underscored that enlargement may be counter-productive to the relationship already established. Despite this sharp criticism, its seems that Russian authorities in general have come to terms with the fact that enlargement will take place. In this case we must not yield an inch. In the future we must be prepared that a more democratic Russia will give way to more outspoken criticism of NATO regardless of what happens. I do not view such criticism as a danger in itself. We must accept critical voices condemning the policies being implemented the same way we tolerate great variety of opinions in our domestic debate. There are, as a matter of fact, NATO critics in Norway as well. Russia must first and foremost be judged by its actions, and not merely by internal political rhetoric.

It is, nevertheless, clear that the occasional sharp Russian criticism will not have an impact on the speed or direction of NATO's forthcoming enlargement. The allies have on various occasions signaled toward Russian authorities that enlargement is an open process, which will follow its own pace, and that it must be seen as a link in the efforts towards a pan-European security structure which will include Russia. There is full consensus in NATO that there is neither basis nor need, and therefore no plans, to deploy nuclear weapons on the territory of new member states. At the same time, new member states will be full-fledged members with the same rights and duties as all the other members of NATO, in other words; they will be included under the security umbrella of the Alliance.

A special challenge in the relationship with Russia is found in the further adaptation of the CFE. At the OSCE Summit in Lisbon last December, a mandate for CFE negotiations was adapted. Russia's wish for increased flexibility regarding possession and deployment of conventional forces on its own territory represents a particular challenge for its smaller neighbours. The Norwegian Government's objectives for the coming negotiations is to seek the largest possible degree of predictability with regard to deployments on Russian soil in the north.

Future cooperation with Russia, as well as with other partner states, should be given a more substantial character than today and be based more on permanent structures. For Russia, there will be a need for some additional special arrangements which take the country's political and military significance into consideration. This applies particularly to strategic questions relating to the proliferation of weapons of mass destruction. Such a special relationship has, to a certain degree, already been established, not the least through security consultations in the NATO 16 + 1 configuration. Such consultations have thus far been carried out in an ad-hoc manner, and has not been aimed at formal decisions. Within an enlarged cooperative structure, it will be necessary to allow Russia to influence the decisions related to joint activities, while clear lines should be drawn to the Alliance's core functions. As a link in reinforced cooperation with Russia, NATO has proposed to establish permanent Russian military representation in NATO, and NATO representation in Moscow.

Bilateral and Regional Cooperation

From the Norwegian side, there is a clear desire to develop defence related cooperation with Russia. We hope that the dialogue with Russia will contribute to larger cooperation between Russia and the West in general, and we believe that Norway can play a vital role in this context. During my visit to Russia a little more than a year ago, two bilateral agreements were signed. One deals with contact and exchange of views regarding defence and security policy questions. We have in this context developed annual meetings at senior official level; the first meeting took place in Moscow last fall. The other agreement deals with environmental cooperation through exchange of information concerning environmental measures. During the informal Defence Ministerial Meeting in Bergen last September, a trilateral agreement regarding military related environmental problems was signed betweeen the Defence Ministries in Norway and Russia, and the US Department of Defense. The Agreement is called Arctic Military Environmental Cooperation, AMEC. We consider AMEC important because it will ensure access to US resources and technology and it reflects a genuine US interest in getting involved in these serious problems. It remains to be seen if the rest of Europe will show a similar interest in these problems.

Stability in Northern Europe requires a stable and democratic development in the Baltics as well. Increased contact may contribute to the development of a practical network necessary to integrate the Baltic states into a broader European community. The security needs of the Baltic states, however, can only be maintained through a broader framework.

Norway currently contributes to the efforts of developing democratic structures and competence within the political and military fields in the Baltic states. The establishment of the Baltic peacekeeping battalion, BALTBAT, exemplifies how joint Nordic and broader Western cooperation to the Baltic states can work. There is, however, also a need for improvement within a variety of areas such as: communications, coast guard, and air control. I am in favour of increasing Norway's support towards the Baltic states through broad international cooperation in which the Nordic states will jointly play a main role, and I repeat jointly.

Norway will now take an initiative towards the Nordic and Western states to establish a more adequate structure for coordination of defence related support to the Baltic states. There is clearly a need to improve coordination and mutual exchange of information among the countries supporting the Baltics. On the Norwegian side we plan to invite to an international meeting in Oslo to discuss our initiatives.

International Cooperation outside NATO area

It is not possible to discuss challenges for Norwegian security and defence policy without touching upon our participation in international peace operations. It is important that we consider these activities in a comprehensive national perspective and as an integrated part of our security and defence policy. The basis must always be that tasks abroad are relevant for tasks at home.

Peace operations are defined as a central dimension in the UN and NATO activities, and have become an integral part of the Alliance's defence planning. We must certainly be willing to carry our share of the burden. Our contributions must continously be adapted to changing international requirements, tasks, and conditions. At the same time we must consider our limited resources and our needs in our near abroad. The challenge for our own defence planning is to see tasks in context, in order to see efforts abroad and efforts at home as mutually beneficial, and not contradictory.

The Nordic Dimension

In recent years, Nordic cooperation regarding security and defence policy has both widened and deepened. The best example is the establishment of a Nordic-Polish brigade participating in the NATO led Implementation Force in Bosnia-Hercegovina. This successful cooperation will continue in the new Stabilization Force, SFOR. The main task of this interantional force will be to create a secure and stable scene for the further peace process by preventing a resumption of warfare, and ensure that the parties comply with the military components of the Dayton Accord. The Norwegian contribution is somewhat smaller than our current IFOR force. It makes sense, since the SFOR will be smaller than the IFOR. Throughout 1996 we participated with approximately 1.000 servicemen in the IFOR. A continued Norwegian contribution will amount to a little more than 700 servicemen, and become part of a reduced Nordic-Polish brigade which jointly will consist of 2.500 servicemen. The brigade will continue to operate within the framework of an American division.

NORDCAPS - SHIRBRIG

Last year a new initiative on the Nordic level was taken in order to additionally develop cooperation within the field of international peacekeeping. The project is so far labeled NORDCAPS (Nordic Coordinated Arrangement for Military Peace Support). The idea is to improve the ability of joint Nordic efforts in all the areas of international peace operations. This will apply to planning and implementation of operations, evaluation following operations, and the day to day cooperation. In a long-term prespective the aim is to establish a system in which the Nordic countries can identify different units or modules that can be deployed as a joint Nordic force adapted to pertinent assignments. The force will be based on current and future reaction forces, and will all together amount to 4-5.000 personnel. The efforts with further plans for the extended cooperation will continue towards the next Nordic Defence Ministerial meeting in the spring. So far, it seems as if NORDCAPS will be operational in 2-3 years.

Within NORDCAPS, efforts are also made to develop capacity for rapid deployment (15-30 days) which can be utilized by the Danish SHIRBRIG initiative (Multinational UN Stand-by Forces High Readiness Brigade). This initiative seeks to establish a multinational brigade which can be made available for the UN on short notice. This is a concept still being subject to evaluation in Norway, and we have not finally committed ourselves to it.

The Government has decided that an orientation concerning SHIRBRIG will be given at the Nordic Council's meeting in Bergen this summer. This will be an historic event. Security and defence policy will be debated for the very first time in the Nordic Council, and it gives us reason to believe that closer security cooperation will emerge between the Nordic countries in the future.

Domestic Challenges

In recent years, it has been necessary to carry out comprehensive changes in the Defence Organization's war structure, peace organization, and activities. The main rationale for this has been the changing security and economic climate. A technological development of arms and an economic imbalance between operations and investments have evolved in the Defence Organization.

Our credibility in NATO is dependent on the upholding of a solid national defence and active international participation. It is expected, in the US as well as in Europe, that Norway will contribute significantly to the common defence and to international operations. This is a precondition for the Alliance, and particularly for the US, to prepare forces for the possible defence of our territory.

The restructuring process is, as already mentioned, well underway. Units which were once part of the war organization are being phased out, and new elements are being procured and phased in. The peace-time organization will be adapted to the new force structure. This will happen through closings, reorganizations, and coordination of activities and other adequate efficiency measures. These are, in addition to the introduction of new management systems, important elements in the restructuring process. The education of conscriptive soldiers have also been altered, and new guidelines for personnel have been presented. Measures on the personnel side are being combined with cut-backs in operations and maintenance of the construction services. The restructuring must continue if we are to release means for establishing a timely and effective defence for the future.

A great deal of illegitimate criticism and unfounded suspicion have been aimed at the Intelligence Community. I find it appropriate to underscore that the Community's services are of great importance to the Defence Organization; nationally as well as internationally. I therefore want to emphasize once again that it is crucial that we also in the future seek to maintain our own intelligence services, and that we keep a good relationship to our closest allies. In light of the extremely important role of reliable intelligence for Norwegian crisis management in the future, we must have faith in the Norwegian Intelligence Community and support its efforts.

Personnel Policy and Conscription

We still face great challenges with regard to personnel. The reduction of man-labour years in 1997 will be smaller than anticipated. This is first and foremost because the restructuring process is more demanding than we predicted. This is a fact we have to live with, but our long-term goals with regard to cut-backs in personnel remain unaltered.

The fulfilling of the requirements of personnel cut-backs is one thing, the way we accomplish our reductions is another. We are going to implement a restructuring in the most secure possible way. These are measures which seek to reflect that excess personnel feel that their interests are taken care of, that they meet understanding and help, and that necessary assistance in finding a new job is provided. In this regard, it has been focused on how long excess personnel can stay within the resource-organization. Given its individual and situational status, I do not wish to place a time limit on this matter. Those who choose to be associated with the organization, however, must commit themselves to any offer of employment or additional education.

We have focused a great deal on personnel reductions. Therefore it may seem to be a paradox that we now have to implement measures in order to keep certain categories of personnel. The categories I have in mind are the pilots and the flight technicians. The measures which have been presented and the Government have supported, will hopefully enable us to keep a sufficient number of experienced pilots. We are also critically short of other catgories of personnel who choose attractive civilian jobs over a continued career in the Defence Organization. Although the problem is more substantial than it seems, I do, however, think that the reasons for this trend is predominantly economic. We wish to keep experienced and skilled employees, and I will now appoint a committee which will consider how we are going to successfully meet the challenges of an expansive job-market. We have to look into economic conditions as well as other personnel related measures. We must seek to get away from ad-hoc solutions and rather pursue the problem in a long-term perspective.

Last year the Storting supported both the Reorganization of the Housing Policy and the proposal for an Amendment of the Career Development for Officers. The efforts to implement these measures are well underway in the Headquarters Defence Command after instructions given by the Ministry of Defence. Many have argued that the new Housing Policy will negatively effect the recruitment to Northern Norway and other remote areas. This is not correct. We wish to apply the Housing Policy as an incentive by using means of compensation at the highest possible level. We need, however, first and foremost a new national system of valuation which will avoid tax benefits. This is also spelled out as a precondition by the Storting.

The Amendment of the Career Development for Officers is a lot more than simply new conditions for promotion. It includes a long list of leads which call for a comprehensive follow-up. Negotiation of new personnel regulations and the developing of alternative career paths exemplify this follow-up. The projection plan, which runs until September 1, 1998, when the new Amendment will go into effect, is tight, but I do think that we will succeed, because we all want to.

Against the background of the Government's policy with regard to development of competence and life-long learning, we have recently drafted a strategic plan which will form the basis for the Defence Organization's efforts in this endeavour. The purpose is to elucidate responsibility and roles with regard to the development of competence and make it an integral part of the Organization's planning. Adequate competence is decisive for the Defence Organization in its efforts to carry out tasks effectively and in line with superior political objectives.

I confirm with pleasure that the Defence Organization in a positive manner has paid attention to the effort to increase the number of apprentices. In 1996, we have met the level given by the Storting. The level for 1997 will be even higher, in fact more than doubled. Nevertheless, I do hope and think that the enthusiasm shown among employees in the Organization will continue to develop. To the Government this is an area which is given priority, and we have to follow-up because it is an element of an important educational reform crucial to the future Norwegian work force.

Among other important areas, I will briefly mention that we are in the process of bringing forth a better pay and income policy in the Defence Organization. This does not only call for a a new system, but also for personal evaluation of the employees. The shaping of a local pay and income policy is a responsibility that rests with the employer and the employee, and it requires consensus in order to be implemented. I do believe that the time is ready to take one leap forward in this process.

Conscription is a fundamental element in our defence concept. In my New Year Address last year, I spelled out the challenges we face with regard to conscription and the next Long Term Report. I am not going to repeat it all today and certainly not reveal the findings of the Report. Still, I do see it fit to fill you in on last years development since important progress has already been made.

We have acknowledged that 9 months of service for parts of the Army was not the best way to go. Thus, the normal length of 12 months service for the Army will be maintained, but the servicemen receiving special training with the Home Guard will be allowed to serve for 6 months.

We have realized that it will not work out to establish any type of social service. Thus, there is no realistic alternative for the conscriptive reserve force. This force will now be phased out following the implementation of new and stricter requirements for active service, passed by the Storting. At the same time, we have decided that all personnel who meet the criteria will now be called up for initial service. We are going to implement these changes although it may mean that we will educate more soldiers than we need in order to fill our mobilization force. On the other hand, we must consider the exclusion of the oldest classes from our mobilization force. In this context, nevertheless, the principle of conscription in general, is important.

Materiél Investments

Despite the withdrawal of a temporary surplus of NOK 800 million on this years budget, the planned investments for 1997 can be implemented according to existing plans.

The reason why the means can be temporarily relocated is primarily due to changed routines for materiél procurement from American authorities. The changes consist of reduced requirement on previous payments which has led to a transitory budgetary surplus.

The changes in the payment plans do not, however, indicate any reduction in the total amount which is to be paid, it only defers the payment. The Storting has decided that the funds are being returned upon the implementation of the projects.

Operations vs. Investments

During the efforts with the current Long Term Report it became evident that if the operational costs continued to increase, the capacity to invest in materiél in the next century would be dramatically reduced.

Ambitious but necessary reductions in the Defence Organization's operational costs have thus been sketched out. Primarily, it would be desirable if the reductions are implemented as a result of increased efficiency and adjustments in the security situation. In the budget for 1997, operational costs are increased by 1.8 per cent. This is not in line with the planned reductions. The increase in operational costs for 1997 is due to:

• The reduction of operational costs was larger than anticipated in 1996
• A necessary strengthening of manning, in order to implement the investment programmes
• An increase in training and education

These factors have triggered an increase in the operational costs percentage of the total budget. Continued reductions of operational costs must, however, be given a higher priority in the future in order to facilitate most necessary investments in new materiél.

Conclusion

Allow me to say at the end that I hope 1997 will be characterized by peace and stability. Unfortunately, there is not global peace. The international community must therefore continuously work for peaceful solutions to conflicts and prevent new ones from emerging.

NATO will still be the cornerstone of the European security architecture. There is no alternative. Hence, we will make active efforts to secure the necessary adaptation of NATO's new tasks, while maintaining the core functions of the Alliance. This will, in turn, be the basis for the securement of attention and cooperation with regard to the challenges we confront in our near abroad. At the same time we must not forget that membership in NATO is our most important path to other European institutions in which we are not, or just partly members. Our position in NATO is thus our best tool in maintaining Norwegian security interests and objectives in a broader context.

The adaptation to a new security environment also calls for adjustments in our defence and places new demands upon personnel and materiél. We must succeed in our restructuring process if we are to secure our interests and contribute to international stability and peaceful development.

Thank you.