European balance of power and the creation of NATO

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As you know, I cannot write the answer for you. I can, however, give you a bunch of ideas and sources to get you started.

The first thing is to define the balance of power - this is a fairly simple idea where states within a specific system of states have reached a security equilibrium. Each member of the system has just enough military power to keep the others from impinging upon its territory or rights. The cost of such a move would be too high. When one member gains more power than the others (usually very rapidly), this balance breaks down and war is almost a certainty.

The second is to understand NATO - this is a group of states formed in 1949 that served as a military alliance against Stalin's Soviet Union. The initial organization comprised Belgium, Portugal, the Netherlands, Luxembourg, Britain, Canada, France, Italy, Norway, Denmark, and Iceland. Turkey and Greece were added later. The purpose here was to create a single, overarching defense mechanism against the Soviet Union and its possessions in Eastern Europe. The USSR responded a bit later with the creation of the Warsaw Pact to balance NATO.

Given these two realities, the main issue is that the older balance of power was obliterated, and a new, smaller constellation of powers was created after the destruction of World War II. Prior to the war, the European balance of power was a shifting movement of the major powers: Germany, Russia, the Ottoman empire, the Austrian empire, Britain, and France. Spain, Italy, Serbia and Bulgaria were lesser members, but they could have influence under specific circumstances. After 1949 therefore, this complex balance was upset, and a new one created - one made up of two powers only.

Now, let's look at a few scholarly sources on this topic:
The Role of Deterrence in NATO Defense Strategy: Implications for Doctrine and Posture
David N. Schwartz
World Politics, Vol. 28, No. 1 (Oct., 1975), pp. 118-133

Part of the argument in this paper is that the shift in the balance of power meant that any war between the WP and NATO would be especially bloody. Since the two powers were so large, a long, drawn out war would be so costly as to make it impossible to complete. It would, in other words, keep the peace. Therefore, NATO's main strategy had been (during the Cold War) to contain the WP on a very large scale. The strategy was to follow the new balance of power - two huge blocks that would create such slaughter so as to make war inconceivable. (And now, in 2012, we see that it worked, there was no major European war between the two powers).

How the West was One: Representational Politics of NATO
Bradley S. Klein
International Studies Quarterly, Vol. 34, No. 3, Special Issue: Speaking the Language of Exile: Dissidence in International Studies (Sep., 1990), pp. 311-325

This paper is significant because it deals with the more 'political' elements of the new balance of power NATO created. The older balance had many nations and empires following their own specific interests. NATO changed all that. Part of this change was to slowly develop a 'Western European' cultural space that did not exist before. Something else matters here too - the creation of this new political and cultural entity developed because the early NATO assumed that the Soviet posture was one of a) strength and b) aggression against the west. Hence, the issue here is that the new balance of power was partially caused by a mutual hostility itself deriving from 'imagining' the intentions of the other.

Testing the Theory of Collective Action: NATO ...