Following are excerpts from a CNBC interview with NATO Secretary General, Jens Stoltenberg, and CNBC's Steve Sedgwick.
SS: Jens, really nice to see you again. Look, one of the most extraordinary things I've seen in the last year was your breakfast meeting with Mr Trump, and I have to say, the way he ambushed you was quite extraordinary. And-, and what I thought was also quite ironic is I think you actually probably agree with most of the sentiments from the President of the United States, that actually, Europe does need to do a lot more to defend itself, especially in the current situation.
JS: So I agree, but not only I agree, but all allies agree that we need fair burden sharing within NATO. And that's the reason why we have been so focused on how can we make those allies, who are spending less than they should, to invest more? And the good news is that, since 2016, NATO allies in Europe and Canada, have added 41 billion extra for defence spending, and by next year, they will add 100 billion extra for defence spending, so European allies and Canada are really stepping up, so the strong message from the US, from President Trump, has-, is having an impact.
SS: It is, but it's at a snail's pace, and Russia isn't mobilising at a snail's pace, and therein lies the issue, if the Germans are only going to get to 1.5% by 2024, what hope is there for the poorer countries?
JS: Well, this is the biggest reinforcement of NATO since the end of the Cold War-,
JS: For the first time in many years, we see a significant increase in defence budget, 100 billion, over four years, 2016 to 2020.
JS: Second, we have increased the readiness of forces, for the first time in our history, we have combat-ready troops, in the eastern part of the alliance, and we have totally modernised our command structure. So, things are really happening in NATO, reflecting the fact that we live in a more dangerous world.
SS: Yeah. Are we in an arms race? When I see that you're concerned, and NATO's concerned, about SSC-8 cruise missiles on the continent of Europe, as well, I wonder whether, despite everything you've said, we're actually in an arms race, and perhaps most of us don't even know it.
JS: So, we do what we can, to preserve the INF treaty. This treaty has banned a whole category of weapons, intermediate range weapons. Russia is in violation of that treaty, they have developed and deployed new missiles which are mobile, hard-to-detect, short warning time, and-, and they are therefore reducing the threshold for any use of nuclear weapons. So we call on Russia to come back in to verifiable, transparent compliance with that treaty, because this is really important for all of us.
SS: Secretary General, I believe you said NATO will respond. Can you just give us some of the options you have, and how you will respond, if Russia continues to manufacture, test and deploy these class of missiles?
JS: As we have-, we have asked our military authorities, our military commanders, to look in to the consequences, we will go through many different options, but I will not speculate now, because this is really serious, and we do have to do this in a measured-,
JS: And responsible way. We continue to work for Russia coming back in to compliance, tomorrow, there will be a meeting in Brussels, in the NATO-Russia Council, where we will-, where we will meet Russia, and, once again, call on them to come back in to compliance.
SS: I'll come back to that extraordinary breakfast, again, I-, I don't even know how you knew-, you knew-, well, could respond to when the President of America is lambasting you about German energy policy, it was the most extraordinary thing, as well, but-, but he had a point, we are taking a vast amount of our energy from our potential enemy, as well. He had a point about the contradiction, didn't he?
JS: Well, on energy, and on this pipeline from Russia, there are different views, uh, between allies, and I think you just have to accept that, when we are 29 allies, from both sides of the Atlantic, with different history, different political parties in government-,
JS: There are differences. So, there is no way to hide that. But the strength of NATO is that, despite those differences, we have had them for many years, uh, the Iraq War, or the Suez Crisis-,
JS: In the 50s, or whatever, um-, uh, despite these kind of differences, we have always been able to unite, in NATO, around our core task-,
JS: That we protect and defend each other. This is good for Europe, but it's also very good for the United States, they have 28 allies, friends, Russia doesn't have that, China doesn't have that, so this is a great advantage, for the United States, to have allies and friends.
SS: Does Brexit represent a potential issue for you? We know that the British have been a huge part of NATO, they have very large defence spending, as well. When I hear the rancour, on both sides, of the EU and the United Kingdom, I hear about-, uh-, uh, the Europeans talking about an EU army, or-, or some kind of parallel force to NATO, as well. Would that diminish NATO?
JS: First, Brexit will change UK's relationship to the European Union, but Brexit will not change the UK's relationship to NATO, on the contrary, I think it makes NATO even more important, as a platform for bringing European allies and North America together. Second, we welcome EU efforts on defence-,
JS: But not as an alternative to NATO, but something that can complement and strengthen the European pillar within NATO. After Brexit, 80% of NATO's defence expenditure will come from non-EU allies, there is no way the EU can replace NATO.
SS: Final question for you, Jens, I want to draw on your experience. The first time I met you, as the Norwegian Prime Minister, as well, on many occasions, as well, do the British-, should the British go down a Norwegian route? I mean, give us some help here on this one, as well, you-, you can give us comment, where a lot of EU leaders can't.
JS: No, I think it would be very wrong, if I start to give advice to, uh-, to-,
SS: You don't think we need it?
JS: I think the best thing, now, is that, uh, British politicians, and the people, solve that issue themselves-,
JS: Instead of NATO trying to give advice, uh, on an area which is actually not our mandate.
SS: Nice to see you, sir. Thank you very much for your time. Good to see you again.
JS: Thank you.
SS: So diplomatic.