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The German EU and G8 presidencies come at a very critical time for the international community. The Chancellor has put forward an ambitious agenda for both these leadership roles. Under Chancellor Merkel’s leadership, Germany is looking outward and accepting its global responsibilities.

The meeting last month between President Bush and Chancellor Merkel was open and free-wheeling. The President and Chancellor Merkel mapped out areas for cooperation during the German EU and G8 presidencies. They share many of the same ideas and political aims. President Bush very much appreciates the Chancellor’s contributions towards strengthening the transatlantic partnership. The U.S. needs a strong global partner. The combined presidencies provide an excellent opportunity for the United States and Germany, and all the members of the transatlantic partnership to move forward -- as partners. We share common values. We have common concerns. It is appropriate that we respond accordingly to our shared global priorities.

I spent this past weekend at the Munich Security Conference and had an opportunity to speak with a number of MdBs from the CDU and CSU among others. All of us were surprised and disappointed by President Putin’s speech. I think President Putin’s remarks in Munich made people on both sides of the Atlantic reflect on the nature of our partnership: what we have accomplished in the past and how we are working together – now and for the future. One U.S. senator half-joked that Mr Putin’s remarks regarding a new Cold War did "more in a single speech to unite Europe and America than anything we could have done in a decade.”

Looking back, as Defense Secretary Gates pointed out, it seems clear that totalitarianism was defeated as much by ideas the West championed as by ICBMs, tanks, and warships that the West deployed. The strategic challenges of the environment has challenged the mission and identity of the Atlantic Alliance but, then as now, our most effective weapon has been our shared beliefs in political and economic freedom, religious toleration, human rights, representative government, and the rule of law.

That commitment is quite obvious if you look at some of the issues that we, as transatlantic partners, are working on. This is not the “unipolar world” that President Putin presented with "one single center of power, one single center of force and one single master."

With respect to President Putin's concerns about ballistic missile defense, the capabilities of the system that is being installed provides essentially no protection against Russian missiles. We are doing this frankly in support of our friends in Europe, as we look at the potential for the development of longer-range missiles, not only in Iran but perhaps elsewhere. It is not directed against undermining the Russian deterrent whatsoever. The irony is that it is to provide protection for our friends and allies. We are being as transparent as possible within the alliance. We are reporting on developments and on the emerging negotiations with the participating partners within NATO. We believe this umbrella of protection unifies the alliance, rather than divides it.

The defense secretary used Afghanistan as a primary example of how NATO military action is being conducted in conjunction with economic development, construction and the development of civil society in this era of unconventional and often global threats. We share the same approach in Afghanistan. In NATO, we call it a “comprehensive approach.” Germany calls it “vernetzte Sicherheit.” But is the same, an approach based on coordinating security and development, drawing on contributions from NATO, the UN, the EU, NGOs, individual nations, and of course the Afghan people and their government.

On that note, we commend Germany for its support for the Afghan people. The U.S. is proud to serve alongside such a strong ally. We very much appreciate that the German government would like to provide reconnaissance aircraft. We appreciate the fact that NATO countries have stepped up. But clearly more is needed. We need more troops from our European allies. We need to remove all the restrictions that individual governments sometimes place on the NATO forces. These can inhibit the ability of a NATO commander to redeploy them tactically. We need more creative thinking about what can be done in key areas, such as police training, development assistance, and counter-narcotics.

We are hopeful that 2007 will be a better year for Iraq. Earlier this year, President Bush announced a change to our strategy but our goal remains the same – to help the Iraqis achieve the objective of a country that can govern, sustain and defend itself. The United States appreciates support from the EU, including funds for reconstruction and training initiatives for Iraqi police, administrators, and judges. We may disagree about how we got to where we are in Iraq, but we all share an interest in preventing failure – a failure whose consequences would be felt in Europe as well as in America.

The United States and Europe share similar goals with respect to Iran including encouraging reforms and curbing Tehran’s nuclear ambitions. We appreciate Chancellor Merkel’s strong support for the United Nations Security Council resolution on Iran. It was an important message to send Iran, that the free world wants there to be a peaceful future. We need to do all we can to apply sanctions that will turn Iran toward a path of peace and away from nuclear weapons.

At their meeting in January, the President agreed with the Chancellor’s suggestion to re-convene the Mideast Quartet. A meeting of the United States and its partners in the Quartet – the United Nations, Russia and the European Union – was convened in Washington on February 2. A follow-on Quartet meeting will convene in Berlin next week after a trilateral meeting between Secretary Rice, Israeli Prime Minister Olmert and Palestinian President Abbas. Beyond a reaffirmation of the Quartet principles for a two-state solution to the conflict, these meetings are opportunities to discuss how each of the members can best work with Israelis and Palestinians on concrete programs designed to build institutions to that end.

The end of the Cold War changed our strategic goals but it has also had an effect on our economic relationships. Since the end of the Cold War, no two parts of the world have experienced economic integration faster and more intensely than the U.S. and EU. Increased investment, deeper economic integration, and more corporate partnerships all tie our business, people, consumers, workers, and farmers together.

The United States and the EU share the largest trade and investment relationship in the world. Forty percent of world GDP and over one-third of global trade take place between the EU and the U.S. But we need to build on the large U.S.-EU effort already underway to integrate the transatlantic economy, speeding up regulatory cooperation where possible and encouraging modernization in EU rulemaking: to employ greater transparency, stakeholder input and scientific analysis of risk, costs and benefits.

U.S.-EU cooperation has been a driving force behind efforts to liberalize world trade on a multilateral basis. Trade is the best way to help poor nations develop their economy so that people can realize the benefits of wealth moving throughout their society. The President and the Chancellor have agreed to continue to further the dialogue on Doha. As outlined in the Chancellor’s EU presidency program, Germany will maintain its efforts to further open the international markets for European goods, services and investments and continues to attach great importance to a successful conclusion to the Doha Development Round. Time is very important to achieve a breakthrough toward an agreement. We will need to see flexibility on both sides of the Atlantic, as well as from key emerging countries. There have been some positive signs recently: Germany and the U.S., as the world’s largest exporters, share a particularly strong interest in the success of the Doha Round.

Another goal that Chancellor Merkel has set for the German EU presidency is to advance new technologies to promote energy efficiency and environmental protection. This was also an issue that the President and the Chancellor discussed in Washington. Both President Bush and Chancellor Merkel agree that the bottom line in any energy debate is the need to diversify our energy supplies in a cost-effective, environmentally responsible manner. We’re on the same page here. We have come a long way from the days of seeing environmental protection and economic growth as being mutually exclusive.

The German EU and G8 presidencies provide an excellent opportunity to foster serious and informed discussion about strategies and actions to advance new technologies to promote energy efficiency and environmental protection. Around the world, but especially here in Europe, the issue of climate change shapes public attitudes about the United States. Unfortunately, for many people the debate begins and ends at the Kyoto Protocol. But that is not the end of the story.

As Secretary Gates said in Munich, we need to do a better job of explaining what we are trying to do. We need to strengthen the reputation that America is a force for good in the world. The best way for us to do that is to work together in partnership.

Thank you.