Debt, The New Threat

These days, NATO's future seems to be mired in the foothills of the Hindu Kush. With 70,000 troops on Afghan soil, and with the U.S. pressuring for an even greater commitment, "NATO is about Afghanistan and nothing else," says an official in Brussels.

But the Afghan trap is stretching NATO so thin, it may prove incapable of handling problems in its own backyard. In February, U.S. Director of National Intelligence Dennis Blair said that the deepening financial crisis could provoke civil unrest and even "violent extremism" in Europe's weaker states. Already, mass protests in Greece and crumbling economies in Latvia and Hungary have been cited as worrisome. And just outside NATO's borders, Ukraine is "closer to a failed state than a functioning one," says one NATO official.

But budget cutbacks are handicapping the alliance, affecting its Afghan deployment and making it unlikely that NATO could manage two conflicts at once. Eastern Europe and the Baltics are now fretting that NATO's defense guarantees may prove untenable. To quell their fears, Britain has proposed an "Alliance Solidarity Force" that could be deployed if Russia grows too threatening. But at only 3,000 troops, the force would be mainly a symbolic deterrent, and many Western European members don't want to pay for it. Instead, experts say, a financially crippled NATO may have to focus on settling differences with Russia, not confronting it—and on hoping, like the rest of us, that the economic crisis is quickly solved.