This report identifies strategic options available to the Bulgarian government and its defense industry, as well as the United States and its NATO partners, for transforming and repositioning the industry for the 21st century and facilitating its integration into the NATO and European Union industrial base. Since other Partnership for Peace (PfP) countries that are aspirants to NATO membership face similar difficulties concerning their defense industries, many of the recommendations herein apply to these countries as well.

The economic relationship between the United States and the European Union (EU) is in the midst of a significant transition. In the past, the dominant element of that relationship was trade. But in recent years, several new elements have become more prominent in the transatlantic economic relationship, bringing with them both challenges and opportunities.

The revival in the late 1990s of intense political discussion in the United States about the near term deployment of a national missile defense (NMD) system found the European NATO allies generally unprepared, and reluctant, to confront the strategic developments to which the U.S. debate was responding. In this situation, the Atlantic Council decided that it would be timely to send to European capitals a team of respected leaders and experts involved in the missile defense debate in the United States.

Just a couple of years ago very few people in the United States, Russia or Western Europe, beside experts on the Balkans, would have recognized the name Kosovo and still fewer would have known anything about this obscure Serbian province. Since early 1999 all the world’s attention has been concentrated on the events in this hot spot.