One week on, and the concentric waves from the "Crisis in Kosovo" are beginning to affect us, lapping gently against our shores, to the extent of 1,000 possible refugees. We mock our grandfathers for calling the second World War "the Emergency", but our arguments over 1,000 or 5,000 refugees may seem as much missing the point in future.

The likely effects of the war on our public purse are becoming clearer, even though they could have been predicted some time ago. The cost of refugees in Ireland or Kosovo is immaterial and should be met graciously.

The main effect is that our defence policy is being thrown from the balmy waters of a heated indoor swimming pool into an ice-cold plunge pool.

It may be a coincidence that the question of the Republic's participation in the NATO-led Partnership for Peace is being addressed by the Government in spring of 1999, just as NATO launches what is, according to analysts, its riskiest venture since its foundation. It may also be a coincidence that the question of Partnership for Peace membership is being addressed just as a White Paper on Defence is in the works, with all public submissions now deemed to have been received.

There are strong opinions among a few people over the compatibility of partnership membership with neutrality. No-one has yet said what the cost of joining Partnership for Peace would be. The Minister for Foreign Affairs might say that the costs cannot be estimated because the nature of a State's engagement in Partnership for Peace has to be negotiated in detail. Only the principle of the matter is being decided.

But at some stage a change of public policy requires a price tag, even an estimated one. And this is why the Balkan War is going to affect us, at least as taxpayers, if not quite as conscripts to any European army.

Joining Partnership for Peace is not just make-work for the Defence Forces. It is a signal of what is to come. The medium-term effects of the Balkan War will doubtlessly lead to increased attention on the EU defence capability. The security of the Republic or the EU is not just about defence against military attack; it is also patently about the forceful prevention of murderous tyranny in and near Europe, broadly defined.

NATO will be involved for the foreseeable future. The European left-wing, like the impassioned Claire ShortE News at One last Tuesday,, is determined to win this war and have now found a use for NATO.

The Republic's defence policy must be analysed against the background of this escalating military engagement.

The Department of Defence's main strategic objective is to maintain Defence Forces that are "a conventional all-arms combat force to undertake the roles set by the Government". Combat, not UN peacekeeping, is fundamentally what Defence Forces are designed for. The Department goes on: "The international defence and security context [of national security] is defined by Ireland's policy of military neutrality, our active political and operational role in support of the UN, and any possible security or defence developments at EU level."

The first part of that statement is now shown to be unreal. The Republic's policy of military neutrality defines nothing in the international context, has no influence and does no good in a situation where genocide is being perpetrated. The latter part of the statement is where the pointer to the future is.

In the Amsterdam Treaty, we signed up for participation in the so-called "Petersberg Tasks". These include "crisis management", which could mean some of the present operations in Serbia and Kosovo.

We should either scale back our Defence Forces radically and say our policy is not to have conventional combat forces, or be prepared to contribute even a small part to the appropriate use of military force. However we want to define or limit that, through United Nations' mandates or Organisation for Security and Co-operation in Europe resolutions, it will happen through the EU and NATO's Partnership for Peace. This is the reality of the world. The alternatives are to work with it, or to state honestly what we want smaller Defence Forces to be and do. The cost of our Defence Forces will fall or rise rapidly from this year's £425 million (#534 million). My bet is on the latter.

Oliver O'Connor is an investment funds specialist

Defence policy must be analysed against the background of this escalating military engagement