Applicant nations: Bosnia, FYR Macedonia, Montenegro, Serbia. Formed in 1949 to counter the threat of post-war communist expansion as the Soviet Union sought to extend its influence in Europe, Nato-the North Atlantic Treaty Organisation-is the world's most powerful regional defence alliance.evelopment. Nato was set up in the post-World War II atmosphere of anxiety, largely to block Soviet expansion into Europe. The collapse of the Soviet Union in 1991 and subsequent demise of the Warsaw Pact, therefore, left Nato with no obvious purpose.