Romania , Bulgaria , Five More East European Nations to Join NATO

March 29 (Bloomberg) -- Romania , Bulgaria and five other former communist nations join NATO today, sealing the military alliance's shift from defending the West against the Soviet empire to fighting global terrorism.

Prime ministers of Romania, Bulgaria, Slovenia, Slovakia, Estonia, Latvia and Lithuania meet in Washington today to mark the North Atlantic Treaty Organization's biggest expansion ever, to 26 members. A ceremony is scheduled for April 2 at NATO headquarters in Brussels .

``We've been seeking this more than 60 years and preparing at all levels for a decade,'' said Lithuanian Prime Minister Algirdas Brazauskas , 72, in an interview in Vilnius before leaving for Washington. ``We are ready,'' he said, adding that Lithuanians ``realize how much effort fighting terrorism requires.''

NATO, created 55 years ago to counter communism during the Cold War, is adding 200,000 military personnel to its existing 2.8 million as it seeks to fight terrorism in places like Afghanistan . New members will spend a combined $4 billion a year to meet NATO standards, boosting sales at companies including Lockheed Martin Corp., the No. 1 U.S. defense contractor, and European Aeronautic, Defence & Space Co., Europe 's biggest aerospace company.

NATO aims to create a rapid-reaction force, to reach full operational capability by October 2006, that will be able to move 20,000 troops anywhere in the world in as little as a week.

``No other organization has proven as dynamic as NATO, and as capable of adapting to changing circumstances,'' Secretary General Jaap de Hoop Scheffer said in a speech in Warsaw this month. ``NATO is already doing its part'' to fight terrorism and weapons of mass destruction, ``and we will do more.''

Closer to Russia

The last expansion occurred in 1999, when NATO added Poland , the Czech Republic and Hungary , who will join the European Union on May 1. Today's enlargement moves the alliance Eastward to Russia 's border near St. Petersburg , making all Eastern European EU entrants also part of the alliance.

Russia has opposed the expansion, which also leaves its Kaliningrad enclave on the Baltic Sea surrounded by NATO countries. Russian Defense Minister Sergei Ivanov called the expansion ``offensive'' and warned that it considers the inclusion of former eastern bloc countries a threat, press agency Interfax reported Thursday.

Romania , Bulgaria , two Balkan nations along the Black Sea coast that plan to join the EU in 2007, and Slovakia , which was created in 1993 with the breakup of Czechoslovakia , give NATO a direct land link between European allies and Turkey , something NATO lacked until now. Turkey is NATO's only predominately Muslim member.

Faster Response

That means troops and supplies can be transported to operations in the Middle East and Central Asia not only by air, but also truck and rail, according to Andrew Brookes, an analyst at the International Institute for Strategic Studies in London .

That's important for the organization's goal of being able to move troops rapidly beyond Europe to battlefields anywhere, in line with its evolving mission, Brookes said.

``This enlargement brings in people who are keen to show their credentials and want to cooperate,'' he said. ``And the alliance's broader support, which now includes essentially all of Europe, means its decisions will carry more weight.''

The new allies already contribute to missions in Kosovo and Afghanistan and to the U.S.-led campaign in Iraq .

NATO enlargement tops the agenda for the biannual ILA air show in Berlin on May 10-16. Hundreds of companies, including Lockheed Martin, Northrop Grumman Corp., Airbus SAS, the Eurofighter , and Thales SA will attend.

Rivalry for Contracts

European defense and aerospace contractors will be vying with their U.S. counterparts for contracts in the new members, said EADS spokesman Rainer Ohler .

``The European defense industry for too long ignored the market opportunities in the new countries, while U.S. competitors were quicker,'' Ohler said. ``Now we've learned the lessons.''

Still, money is limited. The new members' combined defense budget of about $4 billion a year is about the same size as Poland 's alone and less than 1 percent of total defense spending by current NATO members.

The largest contract from an Eastern European NATO member is Poland 's $3.5 billion agreement in December with Lockheed for 48 F-16s fighter jets. The country is getting $470 million from NATO to upgrade military facilities.

Hungary will pay the Swedish government $16 billion through 2015 to lease 14 JAS-39 fighter jets made by Gripen International, a joint venture of Saab AB and BAE Systems Plc, Europe 's biggest weapons maker. The Czech Republic plans to lease 14 JAS-39's, while Gripen is negotiating to turn the leases into sales and win valuable follow-on orders for spare parts and upgrade work.

New Systems

New members also need to buy precision-guided missile systems and heavy-lift aircraft, improve defenses against chemical, biological, and radiological threats, and retrain Cold War-minded forces to focus on the threats of terrorism.

``It's a fascinating time for the defense industry,'' said Mark Joyce, a NATO analyst at the Royal United Services Institute, a London research organization that conducts studies on defense and security for the British government. ``Even if budgets are limited, these countries have to transform their forces.''

Romania , the largest of the new NATO countries, has already upgraded 90 Soviet-made fighters to NATO standards under a $500 million contract with Israel 's Elbit Industries. It is upgrading dozens of helicopters, and buying used carrier planes from the U.S. Navy and warships from the British navy.

The Baltic states of Estonia , Latvia and Lithuania plan to pool their resources for such items as aircraft that can benefit all three former Soviet republics, Jurate Raguckiene , undersecretary for procurement at Lithuania 's Defense Ministry said in an interview in Vilnius .

``We're swamped with Western defense companies touting their wares,'' she said. ``It's good to learn what's available and plan how long it takes from order to delivery.''