Today those shattered European states have transformed themselves into the European Union whose Gross Domestic Product exceeds America’s; the Soviet Union imploded twenty years ago, and Europe now faces no real threat of any significance. But NATO’s organization, the “O” remains largely as it was sixty years ago.

The result of this archaic arrangement is an inefficient European defense establishment that still counts on the American cavalry coming to its rescue. In the 2011 Libyan campaign, for example, the EU was unable to take on Gadhafi’s third rate military machine without American assistance, at a cost to the U.S. taxpayer of over a billion dollars.

The problem is not that the EU states do not spend enough on their defense. They spend around $280 billion annually — close to what the U.S. defense budget was prior to 9/11. The real problem is the money is not spent smartly. The 27 EU countries of the EU still insist on multiple armies, navies, air forces, redundant weapons procurement programs, manufacturing facilities, and military academies.

As Americans know only too well eliminating redundant or obsolete weapons programs is monumentally difficult because of political opposition to consolidating defense jobs. It is doubly difficult for European politicians to make these decisions when they have an American defense credit card in their pockets.

To their credit the Europeans did set up an integrated defense establishment called the EU’s Common Security and Defense Policy in 1998 and have used it over the last decade to deploy 27 civilian and military missions from Indonesia to Africa. However, internal EU disputes and objections by the United States to an autonomous European military establishment have hindered CSDP’s development.

So what can be done to modernize the transatlantic security equation? The starting point is for the United States to step back from the leadership of NATO, transfer the responsibility for the defense of Europe and its periphery to the European Union, and take the initiative to set up a high level transatlantic task-force to redesign the “O” in NATO, including steps such as:

· Europeans to replace Americans in all key NATO positions.
· NATO's board of directors, the North Atlantic Council (NAC) is comprised of Ambassadors and their staffs from 26 European countries, the United States, and Canada. It is an antiquated and expensive bureaucracy that takes no account of Europe's integration. The NAC’s membership should be changed to one representative each from the United States, the EU, Canada, and NATO states that are not EU members, such as Norway and Turkey. The NAC's future mission would be to serve as the transatlantic security bridge for an event that requires a combined European-North American response.
· NATO's planning and operating division (Allied Command Operations) should be merged into CSDP and serve as the EU's planning, command, and control staff.
· NATO's third entity, Allied Command Transformation, largely duplicates the functions of the European Defense Agency and should be merged with it.
The task force should be directed to finish its work in a reasonably short amount of time: 3-5 years. Once America makes the decision to leave the defense of Europe to the European Union I have no doubt the EU will streamline its defense capabilities using the billions the EU states already spend on their militaries.
The North Atlantic Treaty is an important link in a transatlantic relationship that is a vital American national interest. But it is time for NATO 2.0 with an “O” redesigned for the economic and geopolitical realities of the 21st century.
Kashmeri is a senior fellow at the Atlantic Council’s Brent Scowcroft Center for International Security, and author of "NATO 2.0, Reboot or Delete?"