At The European
Round Table
Of Industrialists

17th May 1998

Dinner Speech

by NATO Secretary General, Javier Solana

Ladies and Gentlemen,

First of all, I would like to thank you for your kind invitation to attend this dinner.

It is a pleasure for me to be here with such a distinguished group.

The underlying premise of my remarks tonight is that today we have a unique opportunity to apply a broader approach to security - an approach in which we also can re-cast the relationship between economics and security matters.

The key to this new, broader approach is captured in the term architecture. This term has a particular meaning.

It means that only if different institutions cooperate closely will the full range of instruments - political, economic, military - be available to deal with new security challenges.

NATO can help create a new security architecture.

Indeed, its primary purpose is to create the conditions of long-term European stability.

Over the past years, the Alliance changed drastically adapting itself to the new challenges. It has developed close relationships with virtually every country in the Euro-Atlantic area.

NATO has reached out to the wider Europe, drawing dozens of countries into a common framework of cooperative security throughout this continent.

Our key mechanisms are the Partnership for Peace and the Euro-Atlantic Cooperation Council.

Both respond to clear-cut requirements. They provide a practical mechanism for working together, developing common procedures, and sharing knowledge. Practical assistance is channelled through the Partnership for Peace, whilst the Euro-Atlantic Partnership Council provides a political forum for consultation and discussion.

Through the Partnership for Peace, we have established military ties with 27 non-NATO states, from Russia to neutral Sweden, and from Ukraine to Switzerland.

Through the Euro-Atlantic Partnership Council, we consult with our Partners on issues that go from regional security cooperation to disaster relief.

We have also changed our military structures to be more responsive to the challenges of the new strategic environment.

And, above all, we have downsized our armed forces.

Overall, the proportion of GDP allocated to defence has fallen by about 30% in the last 6 years.

US troops in Europe have been reduced by over 60%.

And readiness levels have been lowered.

NATO's nuclear forces have been cut by over 85%, and all land-based nuclear missiles have been withdrawn from Europe.

In undergoing its own transformation, the Alliance is also helping transform European security at large.

Indeed, I tend to describe NATO today as a catalyst of wide-ranging political and military change across the entire Euro-Atlantic area.

Let me describe four areas in which NATO is already acting as a catalyst. Together, they show how the new NATO is contributing to a new security architecture, based on a broad concept of security.

The first area: re-juvenating the relationship between Europe and North America.

NATO, today as yesterday, is based on the recognition that Europe's security and stability are indivisible from North America's security and stability. In an age of interdependence, Europe and America need to tackle challenges together.

But the end of the Soviet threat and the dynamics of European integration are affecting the transatlantic relationship in many ways. The European Union has a higher GDP than the United States and has become a serious economic competitor on the global market. The European Monetary Union will turn the Euro into the second-strongest global currency.

In security terms, however, Europe is still far from being a coherent player.

Such an imbalance cannot be in the European interest.

Nor can it be in the interest of the Americans, who look to a strong security partner.

They, too, expect Europe to play a security role commensurate with its economic strength.

Thus, if the transatlantic relationship is to remain healthy in the longer term, Europe must be willing and able to shoulder more responsibility.

We are currently introducing flexible arrangements in NATO for such a stronger European role.

Our new command structure will enable future European-led coalitions to act with NATO's support where a European response is deemed more appropriate.

In sum, a stronger Europe will not only make a more coherent contribution to security in Europe - it will also be a more attractive partner of North America in managing global contingencies.

The second area: enlargement.

The enlargement of our major institutions - NATO and the EU - is a major prerequisite for a more stable Europe.

By enlarging NATO and EU, we are enlarging the zone of security and prosperity enjoyed by only one half of Europe over the past fifty years.

Clearly, enlargement poses a considerable challenge to all institutions.

Yet not to enlarge would lead to a permanent division of this continent into a prosperous, self-confident West and a stagnant, frustrated East.

For example, the GDP of the Czech Republic, Hungary and Poland (with 60 million population) is only about one-half of that of The Netherlands (with 15 million population). I leave it up to you to speculate how long such a development could be left to run its course before major social and economic crisis in the East would spill over to the West. So the choice is clear. We either export stability or import instability.

As you all know, last July, at our Madrid Summit, we invited the Czech Republic, Hungary and Poland to join the Alliance. If all goes well, they will join as full members in April next year, at NATO's 50th anniversary. To admit new countries will certainly inspire confidence in their further development, including their economic development. It will further consolidate stability in this region of Central Europe, thereby contributing to business and investor confidence.

Like the enlargement of the EU, NATO enlargement is a process, not a one-time event. Other countries may join at a later stage. So while the timetables and mechanisms for enlargement are different, NATO and EU enlargement serve the same strategic interest - creating long-term stability throughout Europe.

Several Allies have already ratified the accession of the three future members, most recently the US Senate. The Senate's vote in favour of enlargement was overwhelming. It sends a powerful signal of hope and confidence to the new democracies in Central and Eastern Europe. And it encourages future aspirants to continue on the course of reform. In short, NATO's enlargement process - like that of the EU - remains a powerful incentive for Europe to get its house in order.

A word about the costs. The costs of NATO enlargement are manageable. Today, neither the old nor the new Allies need to spend excessive sums on defence. The new members will have to make some challenging adjustments, that is true.

But they know and we know that the costs of ensuring security on their own would be far greater than within a solid multinational defence framework.

Let me now move to the third key area of our agenda: the Alliance's new relationship with Russia.

How Russia settles herself in this new Europe is perhaps the single most important issue of European security today.

That is why our major Western institutions must seek to constructively engage this country.

NATO has established a bilateral relationship with Russia. It wasn't easy and took a long time to prepare. But ultimately, Russia realised that we are destined to cooperate.

We both share an interest in building a peaceful and democratic Europe. And we both share an interest in responding more effectively to new security challenges - such as instability, nuclear proliferation or civil emergencies in and around Europe.

A year ago in Paris, we signed the so-called NATO-Russia Founding Act. In this document, we agreed on the basic principles of our new, cooperative relationship. We established the Permanent Joint NATO-Russia Council - that is, a permanent body in which NATO and Russia can consult on all issues affecting their common security.

Since then, our relationship has gained momentum. We have monthly meetings at all levels. We have already had several meetings of Foreign and Defence Ministers. And we have agreed an ambitious work programme. To put it bluntly: our relationship works.

Building on the superb cooperation we have achieved with Russia in Bosnia, we are confident that this kind of close cooperation can be extended across the full spectrum of security-related issues.

Clearly, Russia's economic well-being is just as important as her increased cooperation with the West in security matters.

Here, too, I see encouraging signs. Complaints about Russian isolation are not borne out by the facts. For example, in 1996, 77% of Russia's trade was with countries outside the Commonwealth of Independent States. Since 1992, total Russian trade has increased by over 50%. Foreign investment in Russia is also on the rise, suggesting a growing Western confidence in Russia's economy.(1) To me, all this suggests interdependence rather than isolation.

This interdependence is bound to grow further: for example, with globalization putting pressure on our economic competitiveness, the importance for secure energy supplies is increasing. There can be no doubt that our future energy needs between now and 2015 will increase by about 55% . They can be satisfied much easier if Russia and the West also cooperate in this area, to address together huge challenges, such as for instance exploiting the oil of the Caspian Sea.

My fourth point: building peace in Bosnia.

Current events in Kosovo demonstrate once again that Europe's consolidation will be seriously undermined if the Balkans remain volatile.

Without a comprehensive strategy for the Balkans, our continent will not find the tranquillity it so urgently needs.

I believe that such a comprehensive strategy can be devised. We now know we can make a difference. We can apply military pressure that works. We can offer economic incentives to encourage people to realise that their stakes in peace are higher than their possible gains in war.

Look at the progress we have made with our stabilisation forces in Bosnia. Refugees returning from overseas; a common currency in circulation; a gradual move to political pluralism; and the isolation of political hardliners in favour of more moderate leaders.

The economy is also on the upswing. The GDP of Bosnia and Herzegovina grew by 50% in 1996. Employment doubled. Thousands of kilometres of roads have been repaired, and airports have been reopened.

Much of all this would not have been possible without NATO's contribution in providing the necessary security and its direct practical assistance.

This economic reconstruction is crucial for the long-term reconciliation.

All in all, the re-building of Bosnia shows many encouraging signs. It demonstrates that our perseverance is paying off. We have not yet reached our goal of a self-sustaining peace. But we will not squander the progress we have made so far by abandoning Bosnia. We - NATO and non-NATO nations - will stay until the job is done.

Today, we are facing another potential crisis in the Balkans, in Kosovo.

It is our hope that increased economic and diplomatic pressure will ensure that the regime in Belgrade engages in a constructive dialogue with the Kosovar Albanians.

The first meeting of President Milosevic and the Kosovo leader Rugova last Friday should serve as a first step in the right direction. By the same token, we have stepped up our military assistance through Partnership for Peace to neighbouring Albania and FYROM to avoid a spillover of the crisis. We are advising them on how best to guard their borders. We are organising exercises and training activities for their armed forces. And we are offering advice on how to deal with the possible influx of refugees.

Ladies and Gentlemen,

As I said in the beginning, to state that security and economics are interrelated is hardly a novel thought. Indeed, when NATO was formed in 1949, the Alliance was seen very much as an Atlantic community designed to promote what the Treaty of Washington describes as the well-being of its peoples.

We have a great opportunity of starting the 21st century with institutions that will guarantee stability, security and therefore prosperity.

Today, we are able to return to that larger, and more all-embracing, concept of security that inspired NATO's Founding Fathers. Together with the EU, the OSCE, UN and other key players, NATO can make a contribution to a security architecture where political, economic and military instruments can be brought together in a coherent way. To me, this is essential if we are to achieve our objective - a stable Europe within a vibrant transatlantic community.

Thank you.

  1. According to ECE Geneva foreign direct investment in Russia went from $0,6 billion in 1994 to $2.4 billion in 1995 to an estimated $2,5 billion in 1996.

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