MADELEINE ALBRIGHT, Secretary of State: "Let me begin by explaining the fundamental goal of ourpolicy. It is to build for the first time a peaceful, free and undivided transatlantic community. It is to extend eastward to Central Europe and the former Soviet Union the peace and prosperity that Western Europe has enjoyed for the last 50 years."

Admiral, Sir JAMES EBERLE: "The intention of the expansion of NATO membership was to provide increased stability and security in Europe. There was in many people's view, and in my personal view, just as big a chance that it would do exactly the reverse."

ADM JOHN SHANAHAN: I'm Vice Admiral Jack Shanahan, director of the Center for Defense Information.

The North Atlantic Treaty Organization, better known as NATO, is planning to admit a small group of new members at its July summit in Madrid. This military alliance has served its purpose. Now the political situation in Europe has changed completely since the fall of the Berlin Wall. NATO's response is to expand to include former Warsaw Pact countries, but to leave Russia on the outside.

Is a collective security arrangement the answer to the problems of Central and Eastern Europe today?

CAROLE SIMPSON, ABC News (ABC footage): "April 4th, 1949 the United States, Canada, and ten European nations met in Washington to form the North Atlantic Treaty Organization..."

NARRATOR: The purpose of NATO was to counter the military power of the Soviet Union. The now 16-member alliance, in search of a role in a post-Cold War era, is expanding into Central and Eastern Europe. Twelve countries from the former Soviet bloc have applied for membership in NATO. Of these, a small group is likely to be selected in July 1997 for future admission. The top candidates are the Czech Republic, Hungary, and Poland.

Secretary of State Madeleine Albright lists internal instability and ethnic conflicts as reasons for NATO expansion.

Secretary ALBRIGHT: "What we are talking about now are primarily these internal threats that are due to instability and problems created by ethnic tensions within those areas."

NARRATOR: Madeleine Albright's words underline the uncertainties about NATO's new mission. Membership in the alliance is expected to protect the new members from three kinds of threats:

...Instabilities within the countries themselves

...Conflicts with other countries in the region

...and thirdly, threat of an outside invasion.

Dr. Ira Straus, US coordinator of the Committee for Eastern Europe and Russia in NATO, a non-governmental organization, explains:

Dr. IRA STRAUS: Central Europe, the main threats are internal, even if we count Poland in Central Europe. Mutual relations, internal ethnic problems, especially in Slovakia. Somewhat in Hungary. The problem in Hungary not being its minorities as the attitude of some parties toward minorities. Romania, certainly internal problems. The former Yugoslavia, we have seen what has happened. And parts of the former Yugoslavia, such as Slovenia, we count nowadays as Central Europe.

NARRATOR: But is NATO suited to handle these non-traditional missions? Secretary of Defense William Cohen, speaking at a Senate hearing, ruled out NATO's intervention in internal conflicts.

WILLIAM COHEN, Secretary of Defense: "A domestic problem of instability is not NATO's interest, as such. It's a collective defensive mechanism, where any one of the countries who are part of NATO are attacked from another country. But an internal dispute is not something that NATO would be engaged in."

NARRATOR: There are serious differences between NATO's current mission and the security needs of Central and Eastern Europe which put in doubt NATO's future role in this region. Some observers argue that expansion of the NATO military alliance may actually increase instability in Europe.

Current expansion plans call for a small number, probably only three countries, to be admitted in the first round of expansion. The majority of the applicants have been ruled out for a variety of reasons, such as problems with upgrading their obsolete militaries and because of questions surrounding NATO's ability to work efficiently with too many members. Another strong factor is Russia's opposition to the inclusion of some countries, most notably, the Baltic countries -- Estonia, Latvia and Lithuania.

Lawrence Eagleburger, former secretary of state, explains:

Secretary LAWRENCE EAGLEBURGER: If we ever think of bringing the Baltic countries into NATO, we ought to have our heads examined. In the first place, it would be a real threat -- a real threat, maybe not -- but a real challenge to the Russians. Think about the commitment to defend them. We couldn't do it if we were the only superpower in the world, which we seem to be. If they get in trouble with the Russians, there's nothing we can do really to defend the Baltic states.

NARRATOR: Another group of Central and Eastern European countries, such as Slovakia and Bulgaria, did not meet the requirement that future NATO members have a stable democratic political system.

Secretary EAGLEBURGER: They are clearly not democratic and NATO is by and large an alliance of democratic states. If the Romanians, and the Bulgarians, and the Slovaks can get their internal act together and really develop into relatively stable democracies, I think we ought to look at the question of bringing them into NATO.

NARRATOR: Central and Eastern European leaders are worried about the public support for democratic reforms if NATO expands and leaves their countries out. Their concern is that NATO rejection, perceived as a snub at efforts toward democratization, can potentially destabilize their governments.

Roman Severin is the deputy prime minister and the minister of foreign affairs of Romania.

Minister ROMAN SEVERIN: We are expecting a great deal of frustration and disillusion at the level of population.

NARRATOR: In addition to the internal political situation of the countries left out, another source of concern are the relations among the countries in the region. Experts warn of a new cool-down in regional relations if NATO expands to only a few Central European countries. In the past, the relations have been anything but rosy. Two world wars in this century started in Central and Eastern Europe.

During the communist era, ethnic or border disputes were kept in check by the police states created by communist governments. After the fall of the Berlin Wall, these nationalist and ethnic sentiments came to the surface, and in some places, like Yugoslavia, exploded into open warfare.

But events have taken a turn for the better in the past few years. The war in Yugoslavia stopped, at least temporarily, and many Central and Eastern European countries signed treaties of mutual partnership and cooperation. The US administration credits plans for NATO expansion with this progress.

STROBE TALBOTT, Deputy Secretary of State: "In pursuit of their goal to join NATO, a number of Central European states have accelerated their internal reforms and improved relations with each other."

NARRATOR: NATO expansion, however, can potentially erase these recent gains in regional relations.

DR. STRAUS: There is a danger that if there is only a first round of expansion and then a long delay between that and a second round, the new member countries could try to use their superior status over their eastern neighbors in order to settle ethnic issues, or border issues, or trade issues more discriminately in their own favor.

NARRATOR: Central European leaders worry that NATO expansion may jeopardize their recently formed partnership and security arrangements.

Minister SEVERIN: We are afraid that some very important processes which are linked to the building of security structures in our area would be diluted. I'm thinking to all this kind of partnerships we are creating with Hungary, with Poland, with some other countries.

NARRATOR: What concerns some US foreign policy experts is that rejected countries may form a counter-alliance with Russia. Lawrence Eagleburger, however, says it is unlikely.

Secretary EAGLEBURGER: Where do the Romanians, and the Bulgarians, and the Slovaks have to go? They want to ally with Russia at this stage? I'm not sure that makes much sense.

NARRATOR: But there are early indications of a trend toward new divisions in Europe. Belarus and Russia signed a union treaty and Russian President Yeltsin has already called for a merger between the two countries. Belarus' relations with NATO-bound members are deteriorating. Signs of a rift appeared between the Czech Republic, a frontrunner for NATO membership, and Slovakia, which has been excluded from the first round.

Tensions between NATO and non-NATO countries could well develop into the first conflict that the alliance may be called to deal with in the region. The US is countering these potential dangers by emphasizing that there will be other rounds of NATO expansion and hoping the rejected countries will stay on track toward democracy.

Secretary TALBOTT: "For those who have now or may develop in the future a desire to join the alliance, we've made clear that enlargement is not a one-time event. Madrid is the beginning of the process, not the end. The first will not be the last."

NARRATOR: Others view this promise with much more skepticism. Diplomats from Central and Eastern Europe have embarked on a frantic, last-minute campaign for their countries' admission to NATO. They won't settle on anything less than a place in the first round of NATO expansion for a number of reasons.

Russia stated its opposition to NATO expansion very clearly. Despite the Founding Act recently signed between Russia and NATO, disagreements between NATO and Russia on the expansion remain.

DR. STRAUS: Russia's going to try to play as big a role as it can and NATO is going to resist Russia's playing any role in the selection of new members.

NARRATOR: The perception in Central Europe is that Yeltsin may yet attempt to block certain countries' admission. Applicants to NATO are also concerned that if the first round of expansion causes controversy, there may not be support in current NATO countries to expand the alliance further.

Ambassador Petric represents Slovenia in the United States.

Ambassador ERNEST PETRIC: We are told again and again by our American counterparts that NATO enlargement will remain a process and NATO will remain open. But, you know, one doesn't really know what will be the future developments.

NARRATOR: Even if there are other rounds of NATO expansion, they will likely be several years away. This gap will represent a period of uncertainty and instability for Central and Eastern European countries outside NATO.

Secretary EAGLEBURGER: The facts of life are that we're going to take these countries into NATO, assuming the Senate approves, and there isn't an awful lot we can do to make those who are kept out feel better.

NARRATOR: What makes some Central and Eastern European countries nervous is the possibility that they will be caught between an expanded NATO and an increasingly paranoid Russia. They remember the not-so-distant history and feel they have a reason to fear Russian influence or even expansion.

Many nations seek NATO membership for its security guarantees. Under Article V of the Washington Treaty, which created NATO, all members of the alliance have agreed to come to each other's defense if attacked. These security guarantees would now be extended to the new members of NATO. Current NATO members, including the US, could be called upon to defend new members against Russia.

The fear of Russia indeed looms large over NATO expansion plans.

DR. STRAUS: In the near term, Russia is not a threat. In the long term, if Russia is kept on the outside and if the partnership with NATO does not develop, well, then Russia will once again become a threat to some of these countries.

NARRATOR: Central and Eastern European leaders take the possibility of an outside threat very seriously. They see NATO as a way of guaranteeing that they will not fall prey to Russia's future dominance, should it occur in the future.

Ambassador PETRIC: You know, the life -- international life is very full of challenges, which occur suddenly. And for a small nation, like Slovenia, like Czechs, like Slovaks, like Hungarians, it's very good that when the winds come, when the storm is coming that you are safely anchored in a safe shelter.

NARRATOR: However, Ambassador Petric acknowledges that there is no clear and present danger to Central and Eastern Europe.

Ambassador PETRIC: We are not facing an imminent danger from nowhere.

NARRATOR: Russia's military is in turmoil and most Russians are more concerned with domestic problems than NATO expansion. The alliance has also signed a partnership agreement with Russia, the so-called Founding Act, in order to assuage its fears. Nevertheless, the uncertainty about what Russia looks like in five or ten years is on the minds of the proponents of NATO expansion.

Secretary ALBRIGHT: "On the off-chance that, in fact, Russia does not turn out to be the way that we are hoping it will and its current leadership wants, NATO is there."

NARRATOR: NATO's plans for expansion have already caused a deterioration in US-Russian relations. Even as NATO tries to improve the situation, a resurgent and expansionist Russia in the future remains a possibility. But if the need arises, would the United States and other NATO countries really come to the defense of Central and Eastern Europe?

Secretary ALBRIGHT: " If there were a major threat to peace and security of this region, it is already likely that we would choose to act. The point of enlargement is to deter such a threat from ever arising."

NARRATOR: Despite Secretary Albright's strong words, it is not clear that the public in the United States and other NATO countries wants to bear such commitment. Lawrence Eagleburger is in favor of committing to the defense of Central Europe, but warns of the responsibility it entails.

Secretary EAGLEBURGER: There ought to be some concern about extending the US guarantee to three more NATO members, in terms of the commitment that makes for the US in the future. Now again, I'm prepared to pay those prices because I think it's important that we proceed, but I don't think we ought to kid ourselves that this is an easy thing to do, or that it won't cost us money, or that it won't in some way or another complicate NATO's relations with the East.

NARRATOR: Bosnia is an example of the consequences of making security promises which you are unable and unwilling to fulfill. In Bosnia, the so-called safe havens that the United Nations declared under its protection were overrun by the Serbs. Thousands of people died and the credibility of the United Nations was seriously hurt.

Admiral, Sir James Eberle is a former top NATO military commander.

ADM JAMES EBERLE: One of the clear lessons that we should learn from the Bosnian experience is that we should not give security guarantees that either we don't have the military means to implement or do not have the public support, the political will, if you like it, to carry out.

And yet essentially, by looking to expansion eastward of the NATO treaty, with its Article V, which says an attack on one will be an attack on all, then we are essentially giving security guarantees that I find it difficult to believe that we would necessarily have -- if there was a threat, and I don't see one -- if there was a threat the military means to counter effectively. And I find it difficult to believe that there would be the political will to support the governments in that.

NARRATOR: Aside from NATO's loss of credibility, the question of observing security guarantees is of vital importance to the potential new members. The recent increase in tensions between NATO and Russia resulted from the plans to enlarge the alliance. The same can be said of some tension among Central European countries themselves. It would be a cruel irony if NATO created a problem for these countries and did nothing to rectify it.

Central and Eastern European countries seem to expect other benefits from NATO membership, as well. Since the fall of the Berlin Wall, many former communist countries have worked hard to reform their economic and political systems. Most nations privatized state properties and opened their economies to foreign investment. To them, NATO is also a stamp of approval of their progress and a platform for deeper cooperation.

Ambassador PETRIC: We feel that membership of NATO is bringing Slovenia into the club of Western democracies and is also establishing a security for Slovenia for all possible challenges in the future.

NARRATOR: NATO, however, is above all a military alliance. If greater ties to the West are what Central and Eastern European seek, there are other organizations that can serve this purpose more effectively.

The European Union represents 15 European countries. It enabled its members to form a unified trading block and to coordinate foreign and economic policies. This led to an explosion of trade in Western Europe in the past decades. Virtually all former Soviet states and satellite nations would like to join the Union because they recognize that only membership in this organization will make them an equal partner on the continent.

The European Union, however, did not greet the idea of enlargement with enthusiasm. Arrival of new members means more parties to share the money the Union hands out in the form of subsidies. The Union also requires that the new members have strong and stable economies. Most Central and Eastern European countries cannot satisfy this requirement. The European Union's response to inquiries about membership of Central and Eastern European nations has been lukewarm.

Reka Szemerkenyi is a research fellow at the Hungarian Institute of International Affairs.

REKA SZEMERKENYI: When we're asked the same question on behalf of the European Union, their question is, 'Why don't you first start with defense? NATO is a lot more strict way to get inserted into the Western democracies.' So, I think there is an evident effort of pushing the responsibility back and forth between the different groups of nations.

NARRATOR: NATO and the European Union are very different organizations, and while they can complement each other, they should not substitute their roles.

Both proponents and opponents of NATO expansion claim to want to create a single, undivided Europe. Another cause of divisions in Europe are economic differences. This gap can and is being closed partially through economic aid from the West.

NATO expansion plans, however, are likely to hamper this progress. NATO membership would require Central and Eastern European nations to substantially increase their spending on the military, in order to catch up to the level of technology used by Western armies.

Secretary EAGLEBURGER: If the three countries we're taking in are really going to be members of NATO and meet their military responsibilities under the treaty, it's going cost them an arm and a leg.

NARRATOR: The situation is also aggravated by the fact that most post-communist economies are in a state of flux and still relatively weak. The levels of spending required by NATO membership would take a huge bite out of the Eastern European budgets. The total estimated tab runs into tens of billions of dollars over a decade. Central European leaders are confident their countries can afford the costs.

Ambassador PETRIC: We have made some preliminary studies of the possible costs. It seems to us that we are capable of carrying the costs of Slovenia's joining NATO.

NARRATOR: Critics point out, however, that there simply isn't enough money in Central and Eastern European defense budgets to pay for military modernization. This calls into question the timing and wisdom of joining NATO.

In order to pay the bill, new members would have to tap into social programs or borrow money. Membership would force newly democratic countries to focus on building up the military rather than on economic transition. It can thus halt the progress of post-communist economic reforms.

Moreover, the United States, a principal source of economic assistance to Central and Eastern Europe, has been shifting money allocated for economic aid into military aid. NATO expansion is intended to erase divisions in Europe, but it can have an adverse effect. The combination of increased military spending and the cuts in economic assistance means that NATO expansion will likely perpetuate the divisions between the standard of living in the East and in the West.

ADM EBERLE: The fundamental problem of Europe at the moment in the Eastern Europe part is the transformation from communism into economies which are market-driven and into democracy. And therefore, there are problems of politics, there are problems of economics, there are problems of social change, and not problems of the military.

NARRATOR: NATO expansion is not the only option for a new security arrangement in Europe. Another avenue involves strengthening the role of the Organization for Security and Cooperation in Europe, known as the OSCE, and the Partnership for Peace.

Unlike NATO and the European Union, the OSCE already includes all nations of Europe, plus the United States and Canada on equal footing. Moreover, it was designed to contend with the security concerns facing Europe today.

Most Central and Eastern European countries are members of the Partnership for Peace, which was created by NATO in 1994. It has been very successful at assisting its Central and Eastern European members with reforming their Soviet era armies and building cooperation with Western militaries.

NATO expansion plans are proceeding without much discussion. Doubts and uncertainties remain on critical issues, such as the support of our allies for the expansion of NATO.

ADM EBERLE: When essentially the realization came that this policy, driven from Washington, was actually serious, there have been very, very few experienced people in Britain and in the rest of Europe who really had anything but very severe doubts about the wisdom of this policy.

NARRATOR: Lack of public debate and difference between NATO's rhetoric and actual mission arouse suspicion the alliance is hurtling toward the expansion without clear motives and objectives.

Secretary EAGLEBURGER: I still believe we ought to expand -- NATO ought to expand in Eastern Europe, but I am substantially less enthusiastic about that than I was a couple of years ago because I think there are some serious problems. Having said that, what I think is important is that the Poles, the Czechs, the Hungarians, and particularly the Poles be reassured that the world has changed.

ADM EBERLE: We got the cart before the horse. The military cart is leading the foreign policy horse, and that's not a combination that has been normally known to win races.

NARRATOR: When NATO leaders in Madrid select countries for inclusion in the alliance, they will be shaping the future of relations among the European nations. Such an important step deserves thorough critical consideration.

ADM SHANAHAN: The expansion of NATO as currently planned carries serious implications. The mid- and long-term impact of keeping Russia outside NATO and the European Union -- thus, excluding her from both a security and economic relationship with the rest of Europe -- has not been carefully weighed. Furthermore, expansion could be well create a group of second class nations and cost US taxpayers billions of dollars as other current NATO members are not prepared to carry their fair share. In the end, it can foster instability in Europe and not the stability we desire.

For "AMERICA'S DEFENSE MONITOR," I am Jack Shanahan.