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I am very pleased to be here to join you for a discussion of foreign and security policy strategies for the 21st century. The trans-Atlantic partnership stands at the heart of a new developing international reality. This partnership includes NATO, our relationship with the EU, and our relationship with the individual countries. It has gone through dips and troughs including some tough slogs but over the years, the enduring strength of our relationship has been greater than any single dispute -- political or economic.

Franz Josef Strauss, a great leader of your party, wrote in August of 1988, shortly before his untimely death, what still holds today: "Confronted with new global developments the transatlantic Alliance is sure to face new challenges. Yet there is no reason for faintheartedness or resignation. For this alliance has for decades brought forth truly historic achievements in preserving peace, liberty and happiness for its peoples."

Today, perhaps more than ever, close, ongoing and pragmatic cooperation between transatlantic partners, and between the European Union, United States and NATO must be maintained if we are to advance the many objectives that we share. With over 40% of the world's GDP and a similar share of world trade, we have a responsibility to exercise our respective but also our complementary roles as global players, in support of peace, security and prosperity.

In this context, I would like to focus on US Administration thinking about security cooperation, and related issues such as military and defense transformation and our global posture realignment.

I want to use this opportunity to underscore that in most regards I believe that the United States and Europe continue to share the same strategic goals. The National Security Strategy of the United States and the Security Strategy of the European Union have both mapped out major policies to address the challenges of the 21st century. Some of these new policies have already been deployed and are indeed reflected in day-to-day close cooperation on a wide range of issues.

The Trans-Atlantic Partnership – The Past and the Future
During the Cold War, security was defined within the context of the global political rivalry between the United States and the Soviet Union. An important chapter of our shared history – and one upon which we reflect with pride – documents how Germans and Americans stood together in the last half-century, united in purpose to promote freedom and security. The 15th anniversary of the fall of the Berlin Wall, coming up in a few weeks, is a symbol of why the German-American partnership in the last half of the 20th century is one of the greatest success stories in modern history.

In dealing today with the efforts to bring liberty, prosperity and unity to Afghanistan and Iraq, we need to reflect on a bit of European and German history. We forget how long it took to begin to turn around the situation in Europe. Just six months after Eisenhower's great victory in Europe, people were heard to say, "We've lost the peace." In 1946, The New York Times editorialized, quote, "In every military headquarters, one meets alarmed officials doing their utmost to deal with the consequences of the occupation policy that they admit has failed." More amazingly, Life magazine was able to write also in 1946, "We have swept away Hitlerism, but a great many Europeans feel that the cure has been worse than the disease."

It was a full two years after the end of the war when the situation looked so desperate that President Harry Truman courageously proposed the Marshall Plan. The idea that we could eventually win that struggle after an effort that would extend over four decades was something that few dared to predict.

Freedom was the glue of that alliance. At the same time, it was the solvent that dissolved tyrannical rule. President Reagan liked to tell the story about how British Prime Minister Harold Macmillan was delivering an address at the United Nations when Nikita Khrushchev took off his shoe and started banging it on the table. With a typically British unflappability, without missing a beat, Macmillan said, "I'd like that translated, if I may." Of course, no translation was required. The Soviets wanted to bury free societies. The defense of freedom was the core value that held the NATO allies together over the course of four decades of what was often contentious debate.

Similarly today, a problem that grew up over 20 or 30 years or longer is not going to disappear in two or three. We know what has happened in Europe. We know that success can be achieved when leaders are determined to persevere, when the American people and its allies are resolved to stand firm for freedom.

9/11 and the Threat of Terrorism
We have again come to a decisive moment in history, where freedom and liberty are again at stake. When freedom was attacked on September 11th, 2001, Americans fought back for the same reasons Americans have responded in the past. During a recent hearing before the Senate Armed Services Committee, Senator Joseph Lieberman described it well, reminding us all that when America goes to war, I quote, "it's not for conquest, it's for security and for a principle that has driven American history from the beginning which is freedom and democracy."

The terrorist attacks of September 11 will forever remain a dramatic and tragic reminder of how the challenges of the 21st century differ from those of the past. Future dangers will less likely be from battles between great powers, and more likely come from enemies that work in small cells, that are fluid and strike without warning anywhere, anytime -- enemies that have access to increasingly formidable technology and weapons.

A terrorist need only be lucky once or twice; but civil society needs to be prepared always. Terrorists can attack at any time, in any place, using any conceivable technique. It is impossible to defend at every moment against every conceivable technique, in every conceivable location. The only way to win this global struggle, campaign, war -- call it what you will -- is to collectively put steady pressure on terrorist organizations and all of their enablers that sustain them. The struggle will be long. It will require commitment, sacrifice and perseverance. But as in the past, the forces of freedom will prevail.

Transformation
Given the new challenges we face, it is clear that national and international defense doctrines, institutions and alliances will have to change to reflect not the reality of the past, but that of the present and future.

Transformation has become a buzzword. Some talk of transformation as though it were primarily about hardware - about applying high technology to our weaponry. But when we talk about transformation, the main issue is the requirement to deal quickly and effectively with this strategic uncertainty. We must do all we can, together, to identify planned attacks, and prevent them from occurring. We must plan to be surprised, and be prepared to respond.

Transformational initiatives include (1) deploying our forces abroad for greater flexibility; (2) creating lighter forces that can be transported long distances quickly; (3) exploiting technology so that light forces can strike with precision and be as lethal as only heavy forces were in the past, and (4) promoting defense ties with allies and partners around the globe so that the United States can fulfill our commitments, build support for our policies and create coalitions for our future military operations. All of these initiatives are designed to give us flexibility to address those situations where military involvement may be needed in the future.

Transformation reflects a readiness to adapt, a rejection of fixed ideas. It’s the willingness to take on new missions as required. For example, organizing, training and equipping the full range of another country's security forces - including the police – did not used to be considered a military mission. Now it is.

Transformation is a willingness to change our acquisition plans as necessity dictates - for example, making some products operational, to some extent, even before they've been fully developed and tested. That's what's been done with some unmanned aerial vehicles and with our missile defenses. In other cases, we must be prepared to discontinue planned acquisitions of systems that no longer address the security challenges of today and the future.

Transformation reflects a comprehensive set of changes in the way we train, equip and employ our forces; the way we position those forces around the globe; the way we conduct procurement and related activities; and, the way we work with our allies and partners around the world.

Capabilities
We have moved away from "threat-based" planning to what we call "capabilities-based" planning. Though we don't count on predicting precise threats, we are reasonably confident that we can identify the kinds of capabilities that enemies may use against us. Our planning focuses on those capabilities.

It is planning that does not assume crystal-ball powers on the part of intelligence or other analysts. It is planning that appreciates that no complex human activity ever goes according to plan. It is planning that is flexible and adaptable - that is ready for modification as preconceived notions are contradicted by real-world events.

We want to help our partners to increase their capabilities and to transform their own defense establishments. We want them to have the capability and willingness to take on missions that serve our common interests. These efforts range from spurring allied transformation efforts with NATO through acquisition and combined command-and-control programs, to security assistance activities that help professionalize the militaries of key partners in the war on terrorism or in peace operations.

The President's Initiative to Realign the U.S. Global Defense
In August, President Bush announced a new initiative to realign the U.S. global defense posture. The term "posture" comprises size, location, types and roles of forward military forces and capabilities. It ties together transformational strategic thinking and tenets of security cooperation. Taking advantage of 21st century military technologies, the plan will increase U.S. military capabilities and combat power in every part of the world, improve our ability to defend allies, and strengthen our ability to deter aggression, while reducing the number of U.S. forces stationed overseas. With the help of our allies and partners, U.S. forces will be positioned forward in regions to enable them to reach potential crisis spots quickly.

There is obviously a relationship between what we're talking about in our global defense posture and our plans for realignment and closures of our domestic base structure. They are two sides of a coin. There are 230 major U.S. military bases in the world, 202 of which are in the United States and its territories. But there are 5,000 individual installations, some as small as a radio transmitter.

Defense Department planners are not just looking at Germany in the European theater; they are looking at these things globally. We know from our experience of the last 15 years is that when we've been challenged, we've had to move to the fight. And so planners are taking these lessons and saying if we have to move to different parts of the world, what would be the kind of arrangements we'd want to have in place? Mobility is very important. Forces need to either be along major air, rail and sea transportation routes or near to some of those major transportation hubs. That puts a premium on not only the strategic lift of our sealift assets and our airlift assets, but also the intratheater lift.

There will be base closings in Germany. Much of that will be embedded in the return of the two heavy divisions that are in Germany. But the U.S. military presence in Germany will continue to be the largest in Europe. Ramstein will remain of global strategic importance. EUCOM will remain in Stuttgart. Training venues in Germany – like the world-class training facility in Grafenwoehr, here in Bavaria – will be very important and will be places where US rotational forces – and in some cases NATO partners -- can receive state-of-the-art training.

We plan to station a Stryker Brigade combat team in Germany as part of the posture realignment, a move that will increase our ability to operate with our NATO allies by providing them exposure to the latest doctrine and equipment on the battlefield. All this is being conducted with close coordination and consultation with German officials at both the national and local levels; and whatever changes are made will be done carefully and over an extended time period to allow affected communities time to adjust to anticipated changes.

All this is in context with what some other countries, including Germany, are doing to consolidate and streamline their own forces.

Security Cooperation - Common View of Problems and Solutions
Combined transformation with our allies and partners is crucial. But unfortunately there are obstacles to be overcome.

Defense Minister Struck has announced ambitious plans to transform the Bundeswehr to make it more deployable and more able to meet the challenges of the 21st Century. If successfully implemented, Germany will be a forerunner in NATO transformation and a key contributor to the new NATO Response Force.

However, the German government is spending less than it was spending a decade ago - and much less than France and Britain or even most of Europe. There are some highly capable German force elements but the current financial commitment is simply far too little to modernize its forces. Germany, unfortunately, is politically committed to under-spending for defense through 2006, and perhaps longer.

And so, the question for Germany, and indeed for the whole alliance, is: Will the necessary resources be dedicated to successfully transform NATO forces? This is, of course, ultimately a political decision, and regrettably, both the financial and political commitment necessary to ensure a fully capable German military force and full NATO participation appears to fall far short of what is needed. For the sake of the alliance, for the future of NATO, we, of course, hope this will change.

The gap in military capabilities between the United States and the rest of its allies is persistent and growing. Europe cannot afford to replicate anything like the U.S. mix of intelligence, surveillance and reconnaissance assets, precision long-range strike systems, infrastructure for power projection, and development of network warfare capabilities. But, if NATO's transformation and long-term missions are to be successful, our European allies will need to spend more – but also more wisely -- on defense.

I opened my remarks with some observations made by Franz-Josef Strauss, let me conclude my remarks by returning to his vision of a strong Germany within a strong Europe. As a young man, he served as one of the Federal Republic’s first Defense Ministers. Charged with the build-up of the new Bundeswehr, he was guided by that vision. He saw clearly the necessity of a Europe as a federated, cohesive force, engaged in a transatlantic relationship where both America and Europe would be partners of equal weight.

The geopolitical climate of the world has changed. The vision that Franz Josef Strauss shared with so many dedicated Europeans and Americans has been fulfilled. The transatlantic ties of history, commerce, and of friendship that have served us so well will help us to address the challenges that lie before us. Together, as President Bush said at the Bundestag in the spring 2002, " Our conscience and our interests speak as one: to achieve a safer world, we must also create a better world.” The U.S. and FRG, as the world’s 1st and 3rd largest economies, share a unique post-war relationship, a common heritage and values, and have a special responsibility to partner together to address the challenges of the 21st century.

As I indicated on my arrival in Germany on September 7, 2001, together Germany and America can be a powerful voice for peace and prosperity. We must commit ourselves to improve the existing US-German partnership to make it better able to respond to the challenges that confront the peoples of both our countries.

I have tried to present an overview of some of the strategic issues that we face in this dramatically new century. Many current, specific issues need to be discussed, and I trust we will have an engaging and constructive dialogue in the panel discussion that follows.