Why Markets Need NATO
Ladies and Gentlemen,
Today is an entirely appropriate day for us to meet, because April 3rd is the anniversary of two very important dates in the history of trans-atlantic relations. On this day, in 1948 and on the same day in 1949, the United States took major steps to lay the foundations of today's Europe -- and by extension, of today's discussion.
The first anniversary is better known. On April 3rd, 1948, the United States Congress enacted Secretary of State George Marshall's five billion dollar "European Recovery Program" -- the Marshall Plan. The aim of the programme was simple -- to provide seed money for the reconstruction of a Europe shattered economically by the Second World War.
But there was a wider political goal as well. As General Marshall put it, during that famous Harvard Speech, the plan's purpose was to revive Europe's economy "so as to permit the emergence of political and social conditions in which free institutions can exist."
The second anniversary is less known, perhaps, but certainly no less relevant. It is a conversation which took place in Washington on April 3rd, 1949, on the very eve of the founding of NATO.
That evening, U.S. President Truman and his Secretaries of State and Defence met with the Foreign Ministers of the ten European nations with whom they would soon sign the Washington Treaty. And in remarkably blunt words, Truman and Acheson told their future Allies how the U.S. saw the purpose of this new Alliance.
It was not just about defence against the Soviet Union. It was also about helping Europe to develop, as Acheson put it "a new sense of unity."
Nowhere else has the link between economics and security been more explicit than in the twin project of the Marshall Plan and NATO. Indeed, as Truman later put it, the Marshall Plan and NATO were "two halves of the same walnut".
And when you look at how far we have come, this twin project has brought spectacular dividends.
Today, the United States and Europe enjoy the strongest economic relationship in the world. Europe is the largest foreign investor in the U.S. and the total value of U.S. investments in Europe has grown faster than investments in Asia. They now amount to over $250 billion. Commerce and trade supports over 14 million jobs on both sides of the Atlantic.
We thus have a huge stake in each others' prosperity - and in creating the right environment for maintaining and reinforcing this prosperity.
This brings us to the other part of the equation: security. The United States and Europe not only enjoy the world's strongest economic relationship; they also enjoy the strongest security relationship on this globe. And this is no coincidence.
NATO -- the core of this security relationship -- has provided a sense of total security for its member nations for one day short of fifty-one years. Under NATO's protective umbrella, trade and commerce flourish -- and so do our common values.
Some may argue that the end of the Cold War has changed the equation - that in today's world, the security part is not as relevant as in the past. They say we should focus on economics alone and spend our defence dollars on other things.
A seductive idea -- but a flawed one, because democracy and prosperity depend upon security.
Let us also not forget that in the Cold War the success of our twin project has been confined to Western Europe only. Today, the countries that once were behind the iron curtain are back on the political map; but they are facing daunting challenges of political and economic transition.
We must make their transition successful -- and irreversible. We must lock in their progress - not just because it is the right thing to do, but because it is in our own strategic interest to do so.
A divide between a secure and economically prosperous West and a less secure, less prosperous East is neither safe nor sustainable. Europe's Western half simply cannot shield itself indefinitely from the negative effects of poverty and political instability in the continent's East. In the small European pond, the ripple effects bring waves to distant markets and doorsteps.
And neither can the United States insulate itself. In the age of globalisation and even the internet stock market the Atlantic Ocean is no longer a shield. It would only be a matter of time until political or economic turmoil in Europe would be felt here in the US as well.
So the challenge ahead is clear: we need to create economic prosperity and political stability in all of Europe. We must re-apply the formula that worked so well in Europe's Western half: building stability through NATO, to help foster economic prosperity.
Is NATO delivering on its part of the bargain? We certainly are.
We have opened NATO's doors to new members. Last year, the Czech Republic, Hungary and Poland walked through that door. And many more want to follow.
To those nations who join, NATO membership delivers the security and the Atlantic identity they desperately seek. To those who want to join, NATO membership provides a powerful incentive to get their house in order.
This strategy of the "carrot" works. Over the last few years we have seen a major momentum throughout Central and Eastern Europe to undertake the necessary political, economic and military reforms, and to establish often historic good-neighbourly relations.
In a few years time, the European Union will also open its doors and thus deliver its own part of the bargain. Once again, security and economics are two halves of the walnut -- and the new democracies in Central and Eastern Europe are hungry for both halves.
NATO has also engaged Russia, to create the very necessary bridge with that major European power. Since 1997, there has been a NATO-Russia Joint Council, and an agreed work plan of cooperative security activities.
Russia suspended these relations during the Kosovo air campaign, but they are getting back on track. I recently made a visit to Moscow to meet with President Putin, and I was very pleased to hear that he does see Russia as part of Europe. That is an assessment we share, and an inclination we have to encourage.
Clearly, Russia's economic well-being is just as important as her increased cooperation with the West in security matters. We all have an interest in seeing Russia's economic reforms succeed.
As with the rest of Europe, Russia's economic prosperity, political stability and military security go hand in hand. In terms of natural resources, Russia is potentially the richest country in the world. A vibrant, free, and dynamic Russian economy will be a boon for Europe and North America alike.
Through the Partnership for Peace, NATO has also developed bilateral security relationships with 25 non-NATO countries in Europe and Central Asia, including former Soviet Republics, Warsaw Pact members and neutrals. These partnerships are helping us to create a continent-wide pool of trained and interoperable forces for crisis management.
But we also seek to give assistance to those states coping with the challenge of their post-communist transition. For example, we can assist them in their defence reforms -- to help them get rid of their oversized and overpriced military establishments and reduce the burdens on their still fragile economies.
NATO's engagement of Central and Eastern Europe has been a phenomenal success. The old divisions of Europe are disappearing.
And even if many nations to our East are still struggling, they have embraced the basic tenets of democracy and market economy. They are determined to make it.
The remarkable project of extending stability and prosperity after the Cold War is well on track. Marshall and Acheson would have to have been starry-eyed optimists to have imagined such success for their efforts. With the other pioneers, we owe them so much.
But we have also witnessed that there can be convulsions. We have seen it in Bosnia-Herzegovina and more recently in Kosovo.
Some people wanted to turn the clock back. First, they drove their economies into the ground. Then, they orchestrated ethnic hatred and crude nationalism just to remain in power.
The results are only too well known - a legacy of bloodshed and the theft of a generation's future.
So the Alliance stepped in. We stepped in because we did not want to see the project of building a stable Europe mocked and subverted by ethnic cleansing and violence on a scale not seen since World War Two.
We stepped in because what was at stake was the wider stability of a region that sits right along major political, ethnic, and religious fault lines.
In both Bosnia-Herzegovina and Kosovo, it took NATO to stop the violence. In both cases, NATO is now creating the basis for a self-sustaining peace. And despite the difficulties, these operations will succeed.
They will succeed because again we are applying the same formula that served us so well: security and prosperity going hand in hand.
NATO troop provides the secure environment needed for economic measures by the European Union and others - and not least of all the peoples concerned - to take firm root. Again, prosperity will follow security. And this combination is bringing Southeastern Europe back into the European mainstream.
My conclusion is simple and based on real experience as well as plain common sense: for prosperity you need security. And for security in Europe, you need NATO, because it alone creates the secure environment for economic growth and free institutions.
As one of my distinguished predecessors, Lord Carrington, NATO's sixth Secretary General, once said: "security is the oxygen of prosperity."
Our mission, my mission, is to ensure that this oxygen supply is kept running. And we will.
Thank you.