"The way in which the alliance's peacekeeping missions are financed are better suited for the more static defense and reactive alliance we had in the 20th century," Jones told the International Herald Tribune from Munich.
When NATO was established nearly 56 years ago, military operations were confined to Western Europe and were concentrated on large and static territorial defense armies to defend Europe against a conventional attack from the former Soviet Union's Warsaw Pact.
It was funded in two ways: the first being a common fund into which all countries contributed; the second known as "costs lie where they fall," meaning any country that contributed troops or equipment to a NATO mission was obliged to pick up all the costs.
Jones said new demands facing NATO such as peacekeeping in Afghanistan require financing arrangements that involve more common funding.
Notable deaths of 2014 [PHOTOS]