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Good morning and welcome.

Let me especially welcome Minister Bronislaw Komorowski of Poland, as well as the Supreme Allied Commander, Atlantic, General William Kernan, to their first formal meeting of Defence Ministers.

We have a number of important and wide-ranging issues to address at our meeting today.

We will start this morning with a review of the situation in the Balkans, and consider in particular the NATO-led operations in Bosnia and Herzegovina and Kosovo.

There have been extraordinary changes in the region since our last formal meeting in June: There is a new, democratic government in Yugoslavia, and new elections are schedule in Serbia for 23 December.

The people of Kosovo have elected their own municipal government in Yugoslavia, and the people of Bosnia and Herzegovina have again held successful federal elections.

The overall level of violence in the region has continued to drop, and we ca reasonably hope to see a continuing increase in stability.

Although there continue to be setbacks and challenges - the situation in Presevo Valley being the most acute at the moment - the broader picture is one of renewed hope throughout the region, and the new opportunities for cooperation with NATO and the broader international community.

This afternoon, we will review progress on implementing Washington Summit decisions on Defence Capabilities and European Defence. One and one-half years into the project, the Defence Capabilities Initiative is showing meaningful results.

The trend toward lower defence budgets, evident for most of the nineties, has been reversed. Several NATO Allies are now looking at substantial defence increases.

Just as importantly, the NATO countries involved in collective defence planning have made the buying of key equipment and technologies - things we wished we had more of during Kosovo air campaign - part of NATO's force planning process. The decisions being made now - especially in giving DPC Ministerial Guidance to NATO defence planners - will have implications for years to come.

On ESDI, we are continuing our work on ensuring that NATO is able to support the European Union with assets and capabilities, as the EU acts to strengthen its own role in European defence in a way that benefits both organizations. We look forward to the EU Summit meeting in Nice, which will also take the work forward in this area.

We will also meet this afternoon with the Russian Defence Minister in the Permanent Joint Council, and tomorrow with our Ukrainian colleague in the NATO-Ukraine Commission. We will also meet tomorrow with NATO's Partners in the Euro-Atlantic Partnership Council.

As we have a long agenda, I recommend we tackle it without delay. I therefore ask the press to leave the room.