The US has activated the Aegis missile defence system in Romania on 12 May, 2016. The land-based Aegis ballistic missile defence system has been equipped with long-range radar, and Standard Missile(SM)-3, which can intercept missiles and eliminate them, when airborne. The defense system was devised by the ex-US President George Bush. Later, the missile defense system was realised by Barack Obama in 2009. Phase II – construction in Romania was started in 2013. Construction of phase III site has also begun in Poland on the day after launch of the Romanian systems. In Poland it is scheduled to be completed in 2018.The activation of defense system in Europe has increased complications in Russia’s relations with NATO. The defence system has been observed by Russia as a threat to its national security. The Russian Military Doctrine 2014 explicitly notes ‘creation and deployment strategic systems’ of missile defence is major external threat to Russian Federation. The missile defence would undermine not only global stability, but also violates ‘the balance of forces in nuclear-missile sphere.’ Russia thinks it as a wider strategic programme of the US and it would affect the balance of the region. It has repeatedly raised objections to military escalation in its ICWA. More recently, Russian Prime said at the Munich conference of 2016 that NATO’s policy towards Russia is “unfriendly and generally obdurate.” He stated that Russia and the West are moving towards a “new cold war”, and Russia is being considered as the greatest threat to NATO and its allies. Various apparatus of addressing the concerns have died out and partnership initiatives are ending steadily.The NATO claims that the missile defense system is required to prevent hostilities against its allies from missile threats from outside the Euro-Atlantic space. According to the US as long as Iran keeps developing such missiles, the US will look out for its allies. Officials from the US and NATO state that the defense system is not targeting Russia. They talked about the Iranian missile programme. Jens Stoltenberg stated that the objective of NATO is to achieve complete coverage and protection for European Allies against ballistic missile attacks from outside the Euro-Atlantic area. Both put forward the argument that SM-3 could not change the strategic balance of the region because the missiles cannot intercept Russian intercontinental ballistic missiles (ICBMs) and do not carry any explosives. Technically these missiles are designed to destroy high-velocity targets by hitting them head-on. Russia was also assured that nuclear capable missiles will not be placed in the Romanian base.The construction of the site in Romania has not surprised Russia. Russia claims that it will fuel an arms race in the area.Thus, Russia will not stop re-arming its forces. Russia criticized NATO for the use of the Iran programme as an excuse to build the defense system in Europe. These missiles cannot reach any territory belonging to Europe. Iran has already signed the nuclear agreement with the P5 plus Germany in July of 2015. Russia blames the US for stepping up the military build-up on its borders in order to surround it. It voiced complaints over the installation of SPY-1 radars in the Romania site, which can be utilised for spying on missile tests. The Romanian system can also be re-equipped with offensive missiles.The start of the defense system will have multiple implications, for security dynamics in Europe, relations between Russia and US, the treaties between them, the war in Syria etc. Russia’s relationship with the US has worsened by NATO enlargement, unsolved arms control issues, policies of some East European countries and political trends in the region. These have been further tensed by the Ukraine and the Crimea crisis. Poland, Romania and other Baltic countries are voicing their complaints over growing Russian influence in the region. Poland wants increased military presence of NATO in the area. According to Poland, the only logical thing to do is to increase transatlantic security. NATO is steadily increasing its presence in the area. The US has also announced plans for an increase in European Reassurance Initiative funding after 2016. It might end up deploying more troops in Eastern Europe. The increased military presence will boost the US’s ability to conduct military exercises. In the meeting of NATO countries held on 19 May 2016, it was agreed that the NATO’s role has to be increased to maintain stability beyond their borders. NATO will also train the local forces. NATO has started supporting training of Iraqi security officers for developing Special Forces. At the meeting, it was also decided to do prepare for helping Libya. NATO conducted Anakonda 16 – a military exercise in Poland in the second week of June, 2016. More than 30000 troops from 24 countries were involved in the event.. It is one of largest military exercises in the post Cold War era in the Eastern Europe, with the US providing more than 14000 troops. On the other hand, Russia is repetitively accusing NATO of pursuing a policy which is aggressive and can alter the security balance of the post Cold War era. NATO has been breaking its promises by expanding towards Eastern and Central Europe. Vladimir Putin questioned the relevance of the expansion towards the East after the end of the Cold War. Due to this, Russia is also enhancing its military presence in the area. In April of 2016, the Russian Sukhoi Su-24 Fencers did close passes very near to the USS Donald Cook in the Baltic Sea. Russia has been developing its capabilities in Kaliningrad. It has already deployed the S-400 air defense system and Iskander-M missiles. Russia can also swiftly move its land – based anti-ship missiles to Kaliningrad, if they need to. The Iskander has range of up to 500 kilometers. Poland is in range of them. Due to persisting conflict and tension, devices of consultation and cooperation between the two sides have grown inefficient. Cooperation between Russia and NATO has been halted ever since the crisis in Ukraine. Although Russia and NATO did hold a meeting in 2016 almost after two years, they could not iron out their differences. The NRC meeting ended without any agreements on reducing the risks of close military encounters between both sides.