This report is presented prior to the NATO Summit at Bucharest in April 2008 and examines the status of NATO in dealing with the security environment that exists in Europe today. The situation in Afghanistan offers a key test of the strengths and failings of the NATO Alliance. To bring stability and encourage development and reconstruction in this region requires a long-term military and financial commitment on the part of the Alliance. Failure in Afghanistan may diminish the effectiveness of NATO and undermine allied unity, perhaps pushing the United States to question the purpose of NATO itself. The Bucharest Summit will have to address a number of issues in respect of Afghanistan, including the need to generate sufficient military forces to carry out operations. NATO faces broader questions about its role and relevance in the 21st century, and the Defence Committee believes it needs to launch a far-reaching review of its strategic concept, setting forth a future role and purpose. NATO's willingness to fulfil a global role is critical to the continued support of the United States. NATO has shortfalls across a range of specific military capabilities which are seen as compromising its ability to mount and sustain the expeditionary operations that underpin the Alliance. The creation of the NATO Response Force is seen as representing a significant achievement but it needs to be financed out of NATO Common Funding. The Committee states that NATO's biggest shortfall is a lack of political will, where a large and growing gap exists between the United States and the European members in defence spending. The Committee further states that the relationship between NATO and the EU is plagued by mistrust and characterised by unhealthy competition. Improving communication and cordination between the two is seen as essential. The Committee views NATO as indispensable to the Alliance.