Ladies and Gentlemen, recently Federal Chancellor Schmidt called for a "pause for thought" in the conduct of world affairs. This is certainly appropriate at the end of a most eventful year and at the beginning of a period of significant change in the international situation.

You may recall that even before the Soviet invasion of Afghanistan, on December 27, 1979, it was clear to the Western Alliance that something had to be done to counter ever growing Soviet military strength. In May 1978 at the Washington NATO Summit the Allies responded by committing themselves to a number of steps to enhance their own military posture. These included a commitment to increase their defense budgets in real terms by at least 3% each year. Then just prior to Afghanistan, the NATO Allies meeting at the Foreign Ministerial level in Brussels agreed on December 12, 1979 on a recommendation of two aspects: first, to begin to build long range theater nuclear weapons (LRTNF) for eventual deployment in Europe; and second, to pursue arms control negotiations with the Soviets, focusing on theater nuclear weapons, in hopes of reducing or eliminating the deployment by the Soviets of LRTNF weapons, notably the SS-20's which already were appearing at sites in the USSR. Then came Afghanistan - a massive act of foreign aggression, which continues unabated.

In July of this year, in Poland economic problems led to labor unrest with far reaching possible political consequences, bringing with it the menacing possibility of Soviet armed intervention - that is, aggression - there as well. In October, the German Democratic Republic began a series of steps to "delimit" Western, especially West German, influence in the GDR and to signal strongly to its own people that it would repress any spreading of the Polish drive for freedom.

Thus, détente as it has developed over the last decade appeared to be coming under severe strains. Inevitably, the Madrid Conference on Security and Cooperation in Europe (CSCE) which opened in November became a confrontation between East and West. The West insisted that the conference abide by its charter to review compliance with commitments made by the signatory states under the earlier Helsinki Final Act, notably on human rights, and the East sought to sidetrack or at least curtail such considerations and promote a European Disarmament Conference. Whether the plenary meeting could even convene came into question as Soviet tactics at the preliminary organizational session prevented agreement even on an agenda.

In this period a new world crisis zone developed in South West Asia. 52 American diplomats have been held hostage for over a year in Tehran. A major war has developed between Iran and Iraq. These and other potential sources of instability in the Middle East could open the way for significant new Soviet advances toward the Persian Gulf, upon which the Western world depends so much for oil, its primary energy source.

Finally, of course, the United States has elected - with a large majority - a new President, Ronald Reagan And, for the first time in many years, the Republican Party gained a majority in the Senate.

In this short time here today, I wish to focus on the future, with these developments as backdrop, and in particular on the future of relations between my country and the Federal Republic of Germany. I will speak under two rubrics: change - and by that I mean a real shift, in American internal politics; and continuity - by that I mean real continuity in America's basic role in the world, in the unshakeable American commitment to the NATO Alliance, and in America's relationship to the Federal Republic of Germany as a great bulwark of that Alliance.

The election of Ronald Reagan represents a change in American politics which is being described as a shift of the political pendulum in the conservative direction. There will now be for the first time since the 1930's a strong conservative (and Republican) majority in the United States Senate. Even in the House of Representatives, where the Democratic Party retains its majority, there will be a conservative majority if one includes conservative Democrats from the South with the Republicans.

There are many reasons why a new - or a revived - American conservatism has come to power in Washington at this time. Perhaps most fundamental is the decline of the great American "liberal" movement which took power in Washington with Franklin Roosevelt's "New Deal" in 1932, and continued through. Harry Truman's "Fair Deal", John Kennedy's "New Frontier", Lyndon Johnson's "Great Society", and the Carter Administration.

It would be wrong to think of the election results as nothing more than a rejection of an incumbent President or as a reaction growing out of economic and foreign policy difficulties. Similarly, it would be a trivialization of events to regard the election as nothing more than a milestone of success of certain new political forces in the United States, such as, for example, the conservative and religiously oriented "Moral Majority".

To understand the election of Ronald Reagan, one must first recognize that he won a majority of the voters in every definable social group in the United States, with the exception of Black Americans and Jewish Americans, and even in these traditional Democratic strongholds he made some inroads. He won majority support from the working class - the "blue collar workers", or organized labor - which for fifty years had been the bedrock support of Democratic Party liberalism. Mr. Reagan was elected, not by this or that special group or combination of forces, but by the American people as a whole.

It would also be a mistake to think of this renewed American conservatism as the outgrowth of an intellectual movement, comparable to the "nouveaux philosophes" in France. American conservatism, to be sure, has intellectual roots, and my country has a number of conservative intellectuals of increasing prominence; however, Mr. Reagan was elected by the people, with little reference to the academic and literary establishment.

The election of Ronald Reagan is a very typically American phenomenon. What we see in this election is not a "new America" or an "old America", but another face of the same America. What has happened is not a shift in public opinion towards the right so much as a reactivation of conservative political forces in the face of problems and, in the view of many Americans, of excesses of liberal and statist political philosophy.

The Underlying Bipartisan Continuity of American Foreign Policy.

Let me say a few words about the continuity of American foreign policy under the coming new Republican" Administration. I believe that certain threads of our foreign policy will remain constant. The history of the post World War II era reinforces this judgment of what lies ahead.

Although the Republican party of the United States has not been isolationist since the Japanese bombed Pearl Harbor in 1941, the view is occasionally still heard in Europe that the Republicans somehow are isolationists. Nothing could be further from the truth. In fact, the revival of some isolationism in the United States in the aftermath of the Vietnam War was almost entirely associated with the most left- radical wing of the Democratic Party.

A second misunderstanding concerns the commitment of Ronald Reagan and of the Republican Party to peace. The new American Administration will be as dedicated to peace as the current and previous administrations. There is, of course, some difference in perception between conservative Republicans and liberal Democrats on how to go about securing the peace. Many of the former traditionally favor greater emphasis on military strength.

This view corresponds to the view of many respected experts on Soviet affairs. They assert that the Soviet Union fundamentally pursues an opportunistic foreign policy which seeks to exploit weaknesses in the Western world (and in the third world) wherever they may occur. To demonstrate this thesis one need only look, for example, at the origins of the "cold war" in Europe: the Soviet absorption of Czechoslovakia in early 1948, the Berlin blockade later that year and other events which followed a too hasty withdrawal of American military forces from Europe. NATO was created as a response to the Soviet challenge; as an essentially defensive alliance with a defensive strategy it was not in itself then and has never since been intended as a challenge to the Soviet Union. NATO, of course, has been a great success story; behind its shield Western Europe has enjoyed an unprecedented period of peace and stability.

The North Korean invasion of South Korea in 1950 occurred at a time when Soviet leaders had reason to believe that the American security perimeter, as then Secretary of State Dean Acheson called it, in the Pacific passed between Japan and the Korean peninsula. More recently, the Soviet invasion of Afghanistan followed the collapse of the regime of the Shah in Iran, which for many years had been a pillar of stability in an otherwise highly unstable region of the world.

It is clear that history since the end of World War II has demonstrated that the Soviet Union respects the West and modifies its behavior according to the extent that the West is strong and prepared militarily to defend itself.

Looking Ahead: The Future of U.S. Foreign Policy

It would be imprudent of me as a diplomat and unenlightening to you to speculate on details of the future Reagan Administration foreign policy. However, I would like to offer for your consideration some of the things that Mr. Reagan and the Republican Party have said of particular relevance to foreign policy and German-American relations, which broadly suggest where the emphasis will be in Washington in the months and years to come

- A central Republican theme is that America has not been devoting enough effort and resources to defense. They want to spend more on what they judge to be critically needed programs. (The Carter Administration it must be noted, has also proposed more money for defense.)

-The Republicans believe that the United States has in recent years been moving from a position of "essential equivalence" in nuclear armament vis a vis the Soviet Union to one of inferiority. To rectify this situation, they have advocated improvements in our strategic weapons systems.

- Focusing on European security, the Republicans want deterrence against all levels of attack, and to strengthen credibility with our European allies. The Carter Administration, too, has sought to broaden the credibility of the American nuclear deterrent under various strategic scenarios.

- Like every President since NATO was created, the President-elect has vigorously endorsed the NATO Alliance as serving the vital interests of the entire Western world. Like President Carter, Ronald Reagan has urged that the United States lead a concerted effort to maintain a strong, confident Alliance to meet the challenges of the nineteen eighties.

- While fully asserting the interdependent nature of the Alliance, the Republicans also draw the conclusion that the Allies must contribute their fair share. As you all know from the press recently, this has also been a major concern of the current administration, and is a theme about which, no doubt, we shall hear more.- The new Administration, like the Carter Administration, gives every sign of being committed to promoting détente and to continuing negotiations on arms control with the Soviet Union. This was clear in the Republican Party platform, and President-elect Reagan has restated it since the election. I have no doubt that efforts to curb and reduce arms will continue through the SALT process and in other fora.

Since the election, President-elect Reagan has stressed his intention to reestablish the earlier bipartisan character of American foreign policy.

Also since his election, Mr. Reagan has stressed the theme of consultation with Allies, particularly the NATO Allies, and said he wants to strengthen Alliance confidence in the U.S. as its natural leader.

Of central concern to Germans and to Europeans, as to Americans as well, is, of course, the SALT process mentioned above. President-elect Reagan was and remains a critic of the SALT II treaty as it stands. He has at the same time unequivocally committed himself to the SALT negotiating process. As Chancellor Schmidt indicated before and after his visit to Washington last month, the important thing is that the SALT process must be kept in motion. As you know, the President-elect told the Chancellor that he agreed with this position. The Soviets have given some informal indications that they are prepared to listen to suggestions from the new American Administration regarding the handling of SALT negotiations in the future. I believe there is good reason to hope that arms control efforts will retain the same high priority as in recent years.

The similarity then, Ladies and Gentlemen, between the Carter Administration and the Reagan Administration on negotiations with the Soviets, is not only on the need for contacts and continuing negotiations with the Soviets. But they also agree on objectives. The difference is on how best to achieve successful results. Peace based on a strong defense has been newly emphasized during the campaign but this is not a new concept, and it is certainly not a dangerous one. I know from my own experience that the Soviets respect hard bargaining, and are not intimidated by bluffing. Only in the face of Western resolve will the Soviets be prepared to engage in serious and mutually advantageous negotiations.

The Role of Europe

Finally, I would like to mention one factor in the world situation to which I have not yet alluded. It is the phenomenon of the gradual reemergence of Europe, particularly of France and the Federal Republic of Germany, on the world scene. There has been a change from the situation in the post-war years when Europe was recovering from the devastation of war and it was necessary for the United States to bear the major part of the burden of its defense. Today, Europe, particularly the Federal Republic of Germany, is economically strong. A United Europe, of course, not yet a political reality. However, all of Western Europe benefits from the Alliance, and much of Europe is committed to it. It is therefore appropriate, as we together face new challenges to our interests in other parts of the world, particularly in the Middle East, that the Europeans make a greater contribution to the defense of Europe. I would be less than frank if I did not tell you that there is a perception growing in the United States that the Europeans have too much of the benefits and not enough of the burdens of the Alliance.

This is not a Reagan Administration position. Indeed, the new Administration has not yet spoken on the European contribution to the mutual defense. The outgoing Carter Administration, has, however, made itself quite clear on this score. We can anticipate that the United States will be prepared to spend more on defense. It would not be surprising therefore to see the new American Administration take the same, or even a stronger, view on the question of an expanded European contribution.

The United States is prepared to undertake the major share of the new burden of developing a Western military strategy to ensure the security of the oil life-lines from the Middle East. However, this is in the service of all the Western nations, and particularly to Western Europe - which has so few oil resources of its own and few alternative energy sources. The 3% growth commitments made two years ago were based on security needs in Europe. These have increased in the meantime, and the events in the Middle East and Southwest Asia have added a new dimension to the requirements.

Conclusion: Challenge and Continuity

In this "pause for thought", then, Europeans and Americans must ask themselves and discuss together the question: What is the appropriate response to common European and American security concerns, particularly out- side of the NATO area. Together, we must develop an agreed strategy. As a point of departure, you may be confident that in the 1980's the American commitment to the security of Europe through the NATO Alliance, and at the same time the American commitment to arms control, remain unshakeable. As we met the challenge in Europe together, beginning 35 years ago, I am confident that together we can meet the new challenges in Europe and in other parts of the world.

The global situation has changed but our common values, common interests and common purpose have not. The under- lying foundation of the Western Alliance and of German- American friendship must continue on a steady course. I am confident that they will.

Source: Special Pamphlet. U.S. Embassy