The Future of the Alliance

When I was a student, East-West relations were dominated by ideology. Throughout much of my political career, they have been dominated by weapons and military balances. But now that I am Secretary General of NATO, I have the impression that they are more and more dominated by economics; which means that you, the young but accomplished representatives of our Western business community, are now in the front line of East-West relations.

You are being appealed to from East and from West to use your resources and enterprise culture to aid the Eastern reform programmes; to set up joint ventures, invest in Eastern countries, re-schedule debt, establish private enterprise trusts and the like. When you contemplate the changes underway in the East, I imagine that your thoughts are not all that different from those of our Western political leaders. After all, the situation is a confusing patchwork of different circumstances in different countries. Some Eastern European countries are relatively static -but only at the price of loading greater problems on to the future. Others are going through great upheavals - but at least they seem to be finally grappling with their political and economic short-comings.

So how should you in the business community, and we in the political community, respond to these changes? What do they imply for us in the West, for our political goals, our business interests? Clearly we can see considerable opportunities, yet they seem to be long-term; and we can see considerable risks, which are all only too immediately apparent. We need an approach that can lead us safely to the long term opportunites across the minefield of short term risks. For the businessman, as for the political leader, an investment or policy can only bear fruit in a context which is stable and predictable. So how can we have the necessary changes to make Western involvement in the East bear fruit, while having the necessary stability to give our actions time to work? This is the fundamental question.

And it is not an academic one. You only need to look at what is happening in Eastern Europe today to see that Communism has failed. Its leaders no longer have answers to their problems. Their systems are falling further and further behind the West, like dinosaurs caught out by climatic change. Its citizens are no longer prepared to tolerate its inadequacies - the mounting industrial and ethnic unrest in Eastern Europe proves that. And many do not believe it can be reformed - as we can see from the increasing numbers who will take any opportunity to flee to the West. Marxism provides no guidance on the problems of modern industrial and high technology societies. So the East is turning to the West for help, inspiration and expertise. We cannot sit passively on the sidelines and watch a human tragedy unfold. It is our humanitarian duty to help all peoples who aspire to our values. For they know as we have learned that only democracy and market forces provide prosperity, dynamism, creativity and human happiness. But it is also in our interest to help. More failure, more despair would produce shockwaves that could well engulf us. Thus it is urgent that we tackle these questions today, while we still have the time to evaluate our options and boldly define our course.

Today also our challenge is still our opportunity. If we are wise, we can use the failure of communism to build a new Europe, more just, more open, more humane, more peaceful; a Europe in which no one would be forced to accept second-class status. For freedom, self-determination and prosperity would be available to all peoples. In such a Europe our Western values must apply throughout, not come to an arbitrary halt in the middle of my country, Germany. It is not sufficient for Mr. Gorbachev to speak of a Common Euro-pean Home as if it were only a matter of physical architecture. What counts is the rules that apply inside this construction, the spirit, the values. Only they, not its external form, can make it inhabitable. Which is why I prefer the term a "European order of peace and justice". This would be in all our interests. Universal democracy, human rights and market forces would give a tremen-dous boost to our goals - whether they be in business, culture, education or communications. Change and movement are necessary to build this new Europe but they alone cannot bring it about. So I come back to my fundamental questions. How do we make of necessity virtue, of challenge opportunity, of confrontation co-operation?

The answer is not an easy one; but all of you who observed our NATO Summit meeting last May will know that this Alliance is now fully grappling with the question and that we are giving the West the conceptual leadership it needs. Our answer is:

• an offer of economic co-operation;
• a policy to fundamentally restructure East-West political relations;
• a security framework that will stabilize the East-West military balance at a much lower balance of forces.

Let us take each in turn. First, our offer of economic co-operation. We have offered the forces of reform in the East the fruits of our productive societies. Help such as debt rescheduling and food aid to solve their immediate problems; and proposals to deal with their long term structural problems -greater access to Western technology that cannot be exploited for military purposes; training of managers and scientists, scholarships for the study of democratic institutions; technical exchanges, help with environmental pollu-tion. We have stated clearly that we will leave no stone of beneficial co-operation unturned.

Our framework for the Western strategy vis-a-vis Eastern Europe is clear and solid. In the months since our meeting, its ideas are already being implemented by Alliance governments and other Western institutions. Take for instance:

• The German-Soviet Declaration of June 1989 which provides for places at German universities and business schools for Soviet managers and post-graduates, for cultural and scientific exchanges;
• The actions that Western governments are now taking to look anew at the debt burdens on Poland and Hungary;
• United States and EC countries' assistance to Poland and Hungary in the creation of private enterprise trusts and to help with pollution;
• The initiative of the Paris Economic Summit to bring the Western nations together, under the co-ordination of the European Community, to provide emergency food relief for Poland.

Yet, the Alliance also has made it clear that there are stringent conditions attached to such assistance programmes. The Communist forces that still cling to power in Eastern Europe must, at the very least, not impede the natural development of democracy. Indeed it is in their interest to encourage such a process. They must decisively choose between guns and butter; they must create the conditions which will attract Western investment. For no private investment (I am certain all of you here today will confirm this) will go into economies that show only limited prospects for growth, innovation and free enterprise; and no Western government will pour resources into centrally-planned bureaucratic and inefficient systems. The aim of Western help to perestroi'ka is not to rescue Communism, but to enable it to transform itself peacefully into a more pluralist, more creative and dynamic system - to achieve what you call in the business world "a soft landing". Yet on this point I must also sound a note of caution. Western goodwill and finance will not be enough to make the East prosperous. Nor can significant improvements be achieved overnight. Our success depends on the ability of the Eastern leaders to make their reforms work. And here - even with all our readiness to help - we have to face facts. After four years of perestro'ika, the Soviet economy is still stagnating - our NATO studies show only a small increase in production, mounting supply bottlenecks, accelerating inflation and growing budget deficits. Large question marks also hang over the economic futures of Poland and Hungary. So let us be optimistic, but also realistic. And, above all, let us have a sober eye for results.

All the same, the Alliance will help those countries that sincerely wish to move in our direction and embrace our values. We are not seeking a quid pro quo. We are pointing out that it is in the regimes' own interest to promote political and market reform. Government to government assistance can pro-vide immediate relief; but only the opening up of these societies, the separation of the executive, legislative and judicial branches of government, the abolition of central planning mechanisms and receptivity to outside ideas and influence will provide the stimulus that Eastern Europe needs to narrow the gap with the West.

Yet our policy is not predicated on economic changes alone. We have seen recently in China what happens when economic reform is attempted within a rigid one-party system, and when the aspirations of peoples are not quite the same thing as the intentions of leaders. This Alliance will, in particular, not tolerate human right abuses. The liberalisation that has occurred in Hungary, Poland and the Soviet Union is welcome; it must continue, but it must not obscure the dark practices elsewhere in Eastern Europe - over three hundred thousand ethnic Turks forced to leave Bulgaria; villages bulldozed in Romania; peaceful demonstrations brutally repressed in Czechoslovakia, and the pressure East Germany has placed on Hungary to dissuade the Hungarian government from allowing thousands of East German refugees to travel to the Federal Republic. These East Germans wish to leave not because they lack food or jobs or housing, but because these things mean nothing without freedom and hope. Human rights are not only morally correct: they are the basis of all social progress. Regimes that repress them have ultimately more to fear from their own peoples than the West.

The Alliance strategy towards Eastern Europe is thus predicated on a simple formula: the more they reform and liberalise, the more we will be willing - and able - to do. Yet this Alliance is not seeking only a rescue formula for Eastern Europe. I come here to the second track of our Alliance strategy for the nineteen nineties: restructuring East-West political relations - fundamentally and permanently. The old ideological antagonisms of the past must give way to peaceful competition; confrontation must give way to co-operation. And if there is much that we could do economically to help the Soviet Union and its Allies, there is much that they must do politically:

• they must reduce their military forces to a level that eliminates all threat to the Alliance countries - and they should conclude arms control agreements with us that will make this restructuring permanent;
• they should teardown the Berlin Wall, and implement to the full all their human rights obligations under the Helsinki Final Act;
• they should not interfere with the desires of neutral countries, such as Austria, to move closer to the West;
• they should join us in combating international terrorism, the drugs trade, environmental pollution;
• they should help us prevent the spread of dangerous weaponry - such as nuclear or chemical weapons to the world's trouble spots;
• they should help us to solve the regional disputes that threaten to involve East and West directly.

The economic rescue of Eastern Europe will take a long time. But this new form of East-West global co-operation can begin today and produce results tomorrow. Again it is in the interest of both sides - for much of this agenda is a common one. I am indeed hopeful for this new form of East-West relations. President Gorbachev has referred to it too in his speeches. And the Soviet Union has moved recently to solve some regional disputes, to play a more constructive role at the United Nations, to accept international legal standards and to condemn recent instances of terrorism directed against the West. We will be engaging the Soviets directly to strengthen this global co-operation - out of it will come the trust and reliability to facilitate our economic relations.

And finally, we must address the third track of our Alliance strategy: building in Europe a security framework with less weapons; one which will be more stable; one which will make future wars on our continent a virtual impossibility. For forty years, for far too long, we have lived with a situation of military imbalance. Soviet forces have overshadowed Europe; they have maintained its division, limiting the sovereignty of the nations of Eastern and Central Europe, giving us legitimate anxieties regarding Soviet intentions towards the West.

The Alliance will not rest until it has transformed this situation. We have a proposal on the negotiating table in Vienna that, if accepted, will start to reduce and then in time eliminate the Eastern capability for surprise attack and large-scale offensive operations. Our proposal is designed to achieve parity in numbers of key items of military equipment: tanks, armoured carriers, artillery, aircraft and helicopters. While reductions in numbers in themselves will be necessary for a more secure balance, they will not in themselves ensure the stability we seek. Changes in force structure and military behaviour are needed also to achieve that. So the Alliance is now hard at work on a related proposal that will bring about these changes. In particular, we will be seeking:

• limitations on equipment in active units - more equipment in storage;
• limitations on exercises and out of garrison activities;
• exchanges of information;
• intrusive and round-the-clock verification.

Above all, our objective of greater military stability is not a distant dream. The Alliance has proposed reaching agreement on these proposals in one year. And if recent Soviet flexibility in meeting our positions is anything to go by, we believe that we can.

NATO is on the move. We are not a military coalition wedded to the status quo. We are a political Alliance striving to transform the status quo. For forty bitter years we were forced to accept it, but we never wanted to accept it. If weapons do not cause wars, it is equally true that peace is not simply less or no weapons. Peace can be built only on freedom, equality of opportunity, social justice in a Europe where all peoples enjoy the benefits and the responsibilities of the democratic citizen. You are young entrepreneurs. You believe in the value of free markets. You have the dynamism and confidence to plan boldly for the future. This is the spirit that resurrected Western Europe from the rubble and ashes of World War II. It is the same spirit that will play a decisive role in bringing prosperity to Eastern Europe. Our political strategy of stimulating change while managing its consequences can prepare the way for your future efforts. Its policy of offers and challenges is a bold but sensible way forward. NATO alone brings the combined weight of Western Europe and North America to bear on this awesome question of Europe's future. Neither continent, whatever its strength, has the resources, the political power or the ability to maintain international security which are the key to success. United, others will move in our direction. Divided we will move in theirs.

And there is another equally important contribution that NATO makes to the success of this venture. It can maintain stability in a period of international turbulence. For real change is never calm, always stormy. Forty years ago, Western Europe could not begin its economic recovery until political circumstances both at home and abroad were more settled. The Alliance provided the protective shield behind which confidence was restored and people began once more to plan and invest in their future. The Alliance's framework of stability now extends across the whole of Europe, embracing ally and neutral alike. Such a framework will be needed more than ever in a period when our Eastern partners are less predictable, more disturbed. We will continue to live next door to an unruly and overarmed superpower. Certainly we do not need to permanently suspect his intentions or base our planning on worst case scenarios. But we cannot wish away basic facts either:

• even if we can achieve all our immediate arms control objectives, the Soviet Union will still possess enormous military power. To date, we have no indications that it is spending less on defence or producing fewer new weapons;
• we have no evidence that the Soviet Union is going to withdraw from Eastern Europe. Even with unilateral reductions and a positive result at the Vienna negotiations on conventional forces in Europe, its military presence in Eastern Europe will still be considerable;
• the Soviet Union is still ruled by very few men; their actions are not yet subject to democratic control; they do not wish to renounce Communism and they are not pacifists; their intentions can change.

Mr. Gorbachev speaks of a future Europe in which "a balance of interests" will replace the balance of power. It is an alluring prospect; but it all hinges on how the Soviet Union defines its interests in Europe; if they are compatible with our security; if they can allow the inherent right of self-determination of the peoples of Central and Eastern Europe; if they can facilitate and not stand in the way of fruitful East-West co-operation.

We must maintain a secure defence. It will convince the Soviet leaders that there is no easy return to Cold War diplomacy, no realistic alternative to internal reform and external accommodation. On the other hand, our secure defence, because it is minimal and non-provocative, cannot impede political change in the East, nor be an obstacle to the eventual reunification of Europe.

So vigilance is still required, not inflated expectations nor complacency. We must oppose the structural, unilateral disarmament that these can engender. It is the enemy of real arms control. It is a false economy. And arms control too is not about saving money; it is about having more security. Protection is never cheap, but it is a tiny investment when one thinks of the risks and dangers we face without it. Every businessman knows that he or she needs insurance against unlikely but potentially dangerous risks, and he or she knows that a percentage of the profits have to be re-invested to ensure future growth and success. It is no different for us in the Alliance. If we allow our secure defence to rust away, we will be relying on two hazardous assumptions: that Soviet intentions will always be benevolent, and that perfect arms control agreements will solve all of our security problems. Just as seriously, we will undermine our political strategy towards Eastern Europe by taking away the scaffolding from around the building before the cement has set.

But I am confident that we in the West have the wisdom to recognise these pitfalls and avoid them; and I know that we have the courage and dynamism to seize our great opportunities. Within the protective framework of the Atlantic Alliance our peoples are more creative, our economies more prosperous, our societies more open and productive.