For 50 years, the political unity and military deterrence of the North Atlantic Treaty Organization (NATO) has kept Western Europe secure, peaceful and prosperous. But this year's engagement with Yugoslavia revealed that NATO's military capability -- while powerful -- doesn't match its political solidarity.

NATO's successful air campaign against Yugoslavia and the subsequent deployment of 50,000 peacekeepers to Kosovo revealed some serious military shortcomings. The United States relied heavily on precision guided munitions to hit targets with high accuracy and low collateral damage and used unique electronic countermeasures to defeat enemy air defenses. But supplies of some of our all-weather munitions fell to uncomfortably low levels, and our jamming and reconnaissance assets were stretched. We are moving to correct these and other shortfalls.

For our allies, the lessons of Kosovo were much more sobering. Kosovo revealed a huge military disparity between the United States and our 18 NATO allies. During the air campaign, many allies found that they lacked the equipment necessary to gather detailed intelligence, to strike targets with precision and to sustain their forces during 78 days of high-tempo operations.

When it came time to deploy their peacekeeping troops to Kosovo, they found it more difficult than expected. George Robertson, NATO's secretary general, recently described this problem: "There are around 2 million people in Europe's armies today, and yet the European allies frankly had to struggle hard to get some 40,000 troops together to serve in Kosovo. That's about 2 percent of the armies on paper that we have in Europe, so clearly there is a problem with deployment."

Not only have the European allies failed to invest enough in capabilities, some of their investments have yielded inefficient results. Italian Prime Minister Massimo D'Alema recently noted that "Europe spends over 60 percent of what the U.S. spends on defense but gets only 10 percent as much" either because Europeans aren't buying the latest technology or because they are duplicating one another's investments.

Critical self-examination, however, is not a prescription for despair, but rather the basis for repair and reconstitution.

I just returned from Europe, where I addressed the leadership of the German military in Hamburg and attended a meeting of NATO defense ministers in Brussels. Our European allies are in the middle of a spirited defense debate, one that may strike many Americans as contradictory. On the hand, European allies want to create a regional defense structure -- called the European Security and Defense Identity -- that would make it possible for them to operate in situations in which NATO itself is not engaged. On the other hand, Europeans recognize that they lack the military capability to sustain such a force.

This debate is encouraging because it is focusing attention on Europe's need to strengthen its defenses, and a stronger Europe means a stronger Atlantic alliance.

NATO's deployments to Bosnia and Kosovo suggest that future missions to protect European security may require countries to move forces rapidly, to sustain them outside their national territories without preexisting communications, logistics, headquarters or other infrastructure and to equip them with modern technology that will enable them to be highly effective and precise in combat.

Not every NATO member enjoys a dynamic economy and can secure large defense increases from its parliament. But some countries can unlock money for modernization by reforming their procurement practices, reducing the size of their forces and eliminating excess infrastructure. Other countries may be forced to pool resources and rationalize capabilities with their neighbors and partners. In fact, allied efforts are underway to establish a regional mobility command and a rapid-reaction force, called the Eurocorps.

But in the final analysis, allies will have to spend more on defense, if they are to measure up to NATO's military requirements and establish a European Security and Defense Identity that is separable but not separate from NATO.

NATO Secretary General Robertson was direct at last week's meeting of defense ministers. "The time for a peace dividend is over because there is no permanent peace in Europe or elsewhere, and if NATO is to do its job protecting future generations, it can no longer expect to do its job on the cheap," he said.

The challenge Europe faces today is to turn words into action.

The writer is secretary of defense.