Ukraine crisis: Nato is at a crossroads. Where does it go from here?

Russia is back in its role as an adversary. When the alliance members meet this week, they must rise to the challenge

Ukrainian loyalist fighters from the Azov Battalion stand guard on a hill on the outskirts of Mariupol on August 30, 2014 (AFP/Getty)

This week's Nato summit at Newport will determine whether the long peace we have (western Balkans excepted) enjoyed in Europe since 1945 survives. Vladimir Putin's adventurism does not presage a new Cold War. It is more dangerous than that, for we are back in the 1930s: demilitarised Western democracies and weak leaders for whom the risk of war is literally incredible facing an aggressor who has no hesitation in changing borders by force. Nato is at a crossroads and our political leadership must rise to the challenge.

The alliance has not helped itself. In particular, Nato's promise of membership to Ukraine and Georgia at the 2008 Bucharest summit was seen by Russia as an attack on its vital security interests. Collectively, the West ignored the signals sent by Russia's invasion of Georgia in 2008, returned to business as usual with Russia and, in doing, so sent a green light that Russian aggression would go unpunished. Subsequently, Nato has been assiduous in attempting to develop a strategic partnership with Russia.

Long term we have to live with Russia. However, the invasion and annexation of Crimea and events in Ukraine have shattered any thought of partnership; the reality now is that Russia is a strategic adversary. Russia's build-up of force on Ukraine's eastern borders, its continued destabilisation of the situation illustrated so brutally by the shooting down of MH17 and now the invasion of south-east Ukraine are clear evidence of this.

But the logic of this grim dynamic was set some months ago in Putin's bizarre and hyper-nationalistic speech in the Kremlin on 18 March in language which would not have sounded out of place at a Nuremberg rally in the 1930s.

Effectively, that which Putin has previously described as the greatest tragedy of the 20th century, the collapse of the Soviet Union, can be put right only by re-establishing Russian power in the former republics of the Soviet Union under the pretext of reuniting ethnic Russian speakers under the banner of Mother Russia.

At the same time, Putin has sought to neutralise Nato and the EU by exploiting Western disunity on the severity of sanctions, the sale of French-built amphibious ships, German dependence on Russian energy and the UK's welcome mat to Russian oligarchs in London. It has been a Machiavellian display of divide and rule.

This poses a real and present threat to European peace because three Nato nations – Latvia, Estonia and Lithuania – have significant Russian-speaking populations. So to avoid Russia setting itself on a collision course with Nato, the strongest possible message needs to be sent: "Thus far perhaps, but absolutely no further".

Nato must refocus on collective defence, the foundation on which Nato is built: Article 5 of the Washington Treaty, an attack on one is an attack on all. It means a return to deterrence, both conventional and nuclear, with credible, capable armed forces and the will and means to communicate that capability so that Putin is left in no doubt that if he steps over the Nato line, he will get hammered. It means forward defence in the Baltic states with a continuous, persistent presence. It means a regular cycle of training and exercising in order to demonstrate that Nato is capable of defending its member states by land, sea and air. Nato's forces must be restructured to fight high-end conventional warfare, a skill and capability lost in two decades of stabilisation in the Balkans and counter-insurgency in Afghanistan and Iraq.

Above all, it means increases in defence spending by all Nato members. Currently only four Nato allies spend more than the minimum of 2 per cent of GDP on defence signed up to and agreed by all allies. This must change; the European dependence on the US to pick up the bill must be reversed – and quickly. Given the extent of disarmament in Europe, this means rearmament. Nato Secretary General Anders Fogh Rasmussen says now is the time to plan for greater investment when economies pick up. "Failing to plan is planning to fail."

As important as rearming is, thinking through what collective defence means in the 21st century, we still look at Article 5 through Cold War lenses. State-on-state war no longer means Soviet tank divisions sweeping across the central European plain. What we saw in Georgia and Crimea and are seeing in Ukraine is the breaking of the integrity of the state under that threshold which would trigger a response from Nato if targeted against a Nato ally.

Through the sophisticated integration of unconventional, asymmetric warfare and manipulation of minorities backed up by the threat of massive conventional force, Russia aims to break its adversary without having to invade. I suspect that Putin's hand may have been forced into invasion by Ukrainian success against the Russia-backed separatists. Nato needs to develop the muscle memory and the lateral thought to ensure that Article 5 is proofed against such a threat. More profoundly, the entire construct of the alliance needs to change: decision-making, the principle of consensus, funding, organisation, command and control and force structure.

Finally and most important is will – sheer, blood-minded, Churchillian moral courage, guts and determination. As Napoleon said, "The moral is to the physical as three is to one." Here our Western political leadership is starting 40-love down. Putin will have taken heart from the vacillation and loss of nerve of the UK's political leadership in the face of the brutal violence of IS in northern Iraq and Barack Obama's stepping back from the red line over Syrian use of chemical weapons.

In particular, what price the credibility of collective defence when a British Prime Minister demeans himself by writing in a Sunday paper that "we should avoid sending armies to fight"? Such flaccidity may, one day, be seen as an equally damning statement of appeasement as the Oxford Union's 1936 motion: "This house will not fight for King and country."

Dmitri Trenin, director of the Carnegie Moscow Center, told me on Thursday: "War in Europe is a real possibility." Putin has thrown down the gauntlet. Will Nato's political leadership pick it up and throw it back? Will a dragon once again spit fire from Wales? We shall see.

General Sir Richard Shirreff was, until recently, the Deputy Supreme Allied Commander Nato Europe. He will be reporting on Nato at the crossroads for 'The World Tonight' on BBC Radio 4 at 10pm on Tuesday