As prepared for delivery.

Dr. Keck, Ambassador Boden, thank you very much for inviting me to speak with your graduate seminar on security policy. I am convinced, as I know you both are that this is indeed a group of future leaders. I have been looking forward to meeting you all.

The world that we live in today is complicated. It is a world of unforeseen challenges and amazing opportunity. It is a world of rapid technological change. We are interconnected as never before. Traditional national borders have lost their old significance. A new map of international relations is being drawn, but one in which the contours and parameters are uncertain. As Wally Schirra, one of America’s first astronauts, said on one of the first space missions, "I can't see any borders from up here."

The world will need people like you who have taken the initiative in programs such as this one to learn more about forging and fostering international links. Just as borders have become more blurred, so has the distinction between domestic and foreign policy. There are also no clear dividing lines between those whose business is international relations and those whose primary business is domestic. It doesn't matter whether you plan to be diplomats, politicians, economists, journalists, lawyers, or professors, the world will depend on the commitment of people like you – whatever you do, wherever you are – to help guide the international community.

It was a very different international landscape in the fall of 1984 when I joined the Foreign Service. The Cold War was still the dominating political reality. Borders were anything but blurred. One of my first posts was East Berlin. That was in 1985. On the one hand, it was like working on a fault line that could be the tripwire for a nuclear war. On the other hand, as the historian John Lewis Gaddis wrote in 1987, the Cold War had become a "way of life." In many ways, it did not occur to us to “think about how it might end or, more to the point, how we would like it to end." Ronald Reagan admitted that when he declared, "Mr. Gorbachev, tear down this wall!" in Berlin in June 1987, he never dreamed that in less than three years the wall would indeed come down. Now, those times seem almost like another lifetime. When I talk about what it was like to serve in East Berlin, I find myself trying to explain what the Cold War was all about, a bit like the generation of my father talking about the Second World War. So quickly has history moved on, that a new generation of Germans is growing up that knows only one, united Germany.

The Cold War was a good war to win, all the more so since we won it peacefully. It was the result of common purpose and common resolve, sustained over more than four decades. It was a triumph of multilateral cooperation working through multilateral institutions. One central lesson of the Cold War was indeed that multilateralism works.

In that spirit, since unification, successive German governments have continued to exercise a foreign policy based on a fundamental commitment to the multilateral process. Germany has asserted itself as a driving force behind the EU’s enlargement eastward, deeper European integration, increased European foreign policy coordination, the development of a European Security and Defense Policy, and increased EU-NATO cooperation. As both Chancellor Merkel and President Bush have often stated, a more cohesive European foreign, security, and defense policy apparatus will in fact enable Germany and Europe to be more effective transatlantic and global partners to the United States.

When I fast forward from my first diplomatic post in a divided Berlin to my last assignment before returning to a reunified Berlin, that message is very clear to me. From 2003 to 2006, I was posted at the U.S. Mission to NATO in Brussels. In my day-to-day work, I saw a NATO of 26 members and 31 partners working effectively and providing security in eight different operations. I was involved in efforts to expand NATO’s Afghanistan operation from Kabul to the north, west, and south of the country, in launching NATO’s support for the African Union Mission in Sudan, and in activating the newly created NATO Response Force to lead a disaster relief operation after the October 2005 earthquake in Pakistan. What a change from the NATO of the Cold War – a security alliance of 16 countries that had never conducted military operations.

What has not changed, however –and NATO’s ongoing commitment is one proof of that – is the strength and vitality of the community of values that champions the rule of law, democracy, and the free market.

Recent polls show that, after the divisions and disagreements of 2003 and 2004, there is increasing consensus among Europeans and Americans about threat perception. This includes the threats of international terrorism, violent Islamic extremism, climate change, economic downturn, an Iran armed with nuclear weapons. Large majorities on both sides of the Atlantic said they wanted to see more transatlantic partnership and cooperation, not less. Both German Marhsall Fund and Bertelsmann Foundation polls substantiate these findings. Nowhere was the change in public attitudes more pronounced than here in Germany. I believe that speaks to what leadership can accomplish.

Under Chancellor Merkel’s leadership, Germany has sought to boost transatlantic cooperation in areas ranging from economic and trade relations, climate change policy, and global counter-terrorism and non-proliferation policy, to peacekeeping, reconstruction and stabilization efforts in Afghanistan, the Middle East, Africa, and the Balkans. During Germany’s six-month presidency of the European Union in the first half of this year and its corresponding G8 presidency, Chancellor Merkel distinguished herself both as an advocate for strong U.S.-European relations and as an internationally respected leader within Europe.

There has also been a conscious decision by the Bush Administration to reach out to Europe – moving beyond the divisions of 2003 and 2004. We have worked methodically, issue-by-issue, to build a strategic consensus between the United States and Europe on what it is we are trying to do in the world together. We have worked to find the right mechanisms and formats for how to sustain this. If you look at Kosovo, you find the Contact Group. If you look at Israel and Palestine, you find the Quartet. If you look at Lebanon, you find UNIFIL, and so on and so on. We have built up common approaches to all these problems – approaches that will live beyond current political administrations.

We stand, however, before an unusual number of challenges that require action right now. I will give just three examples - Kosovo, Afghanistan, and Iran – and then turn to discussion.

Kosovo

Kosovo cannot remain in legal limbo forever. We brought the issue of a settlement between the Kosovar Albanians and the Serbs to the UN Security Council in June, and following a proposal by French President Sarkozy in Heiligendamm, we set a new Troika framework for negotiations and a timeline. That proposed timeline ended last week, on December 10 – unfortunately, without a settlement.

We stated then that if the parties could not reach agreement by this date, then the plan put forward by UN Special Envoy Ahtisaari, including his recommendation of supervised independence for Kosovo and package of measures to protect Kosovo's minorities, was the best way forward. We continue to believe that implementation of the Ahtisaari Plan will promote stability in the region and enable both Serbia and Kosovo to move forward on the Euro-Atlantic path. Over the next few weeks the United States will work closely with our international partners to resolve this issue. The people of Kosovo and the region urgently need clarity about their future.

A decision on the final status of Kosovo must be reached that will enable the entire region to move forward in a future based on democracy, market economy and rising prosperity, regional integration, and integration into Euroatlantic institutions. One cannot look at the issue of a Kosovo status settlement in isolation.

NATO enlargement is part of this larger picture. The Bucharest NATO Summit in April 2008 is likely to invite at least one country from the region to join the Alliance, and possibly all three candidates, Croatia, Albania and Macedonia. NATO is developing its relations with Montenegro, Bosnia and Serbia, through the Partnership for Peace, which was offered at last year's NATO Summit in Riga. The European Union's outreach to all the countries of the region - with Bulgaria and Romania already members, discussions with Croatia proceeding apace, and progress on Stabilization and Association Agreements elsewhere can also contribute to advancement in the region as a whole.

Afghanistan

The second opportunity that I want to mention is Afghanistan, where the transatlantic community has worked together very well so far. The United States welcomed the Bundestag’s decisions to extend the mandate for German participation in Operation Enduring Freedom and NATO’s International Security Assistance Force in Afghanistan.

There is still a very long way to go in Afghanistan but much progress has been made. Afghanistan's economy is today three times the size that it was in 2001. There is a constitution and there is an elected government. Nearly 6 million kids are back in schools -- over a million and a half of those are girls. Under the Taliban, girls were not allowed to attend school. In 2001, only 8 percent of the population had access to medical care. Now it is over 65 percent. Back then, there were only 50 kilometers of paved roads. Now it is over 7000, with more due for completion this year.

There is a commitment among the international community to support the reconstruction and development of Afghanistan. The EU has provided substantial reconstruction and development assistance. The U.S. has made a very large commitment to development – about $14 billion so far. Based on that international commitment, we mounted a diplomatic, financial, reconstruction and development offensive in 2007 to counter the Taliban, instead of a military offensive. A psychologist once said, "if the only tool you have is a hammer, you tend to see every problem as a nail." Clearly, we need to expand our tool set beyond the "military hammer." That is the basis of NATO’s "Comprehensive Approach". We are developing new operational concepts to incorporate a broader range of "tools" that transcend all the elements of national power and influence. The heart of this concept is collaboration across our governments and within each government structure to identify, plan for, and apply the full range of military and nonmilitary capabilities to the business of providing security, rebuilding the country, and helping to create an environment that supports good governance. The military arm cannot be the sole or even the principal means to achieve political and economic ends.

Iran

In conclusion, let me turn to Iran. The latest results of the National Intelligence Estimate shows how effective the international community can be in solving problems diplomatically - without the use of force. The NIE, however, confirmed that we were right to be worried about Iran seeking to develop nuclear weapons. It documents that Iran had an active nuclear weapons program and that they decided to halt the program in 2003 – primarily as a result of international pressure and scrutiny.

But the report also raises more questions. There is no assurance that Iran could not re-start its weapons program. Iran continues to develop a range of technical capabilities that could be applied to producing nuclear weapons. They have the delivery system, and they are continuing their uranium enrichment program. Iran’s obligations under Security Council Resolutions 1737 and 1747 remain, especially those regarding suspension and cooperation with the IAEA in fully resolving all outstanding issues. The NIE emphasizes that more work by the international community is necessary to convince the Iranian leadership to forgo the eventual development of weapons.

The ball is in Iran's court. To instill international confidence, Iran needs to come clean on its past nuclear activities, including its covert nuclear weapons program. It also needs to suspend uranium enrichment and reprocessing. The choice is theirs to make. Our offer to engage Iran directly on the nuclear issue remains on the table. Meanwhile the P5-+1 continues to move forward on a third resolution for the U.N. Security Council. This is the best possible way to maintain the pressure on Iran to make a full confession of its past and present nuclear activities, submit those activities to IAEA verification, and ensure that Iran s nuclear weapons program remains halted. IAEA Director General ElBaradei has said Iran should come clean by the end of 2007. If Iran meets its obligation to suspend, the Council will suspend sanctions to allow for negotiations.

The key question in all of these examples is how to harness the political, economic and civil dimensions of our collective power to ensure our success, and what does "success" look like? The process of institutionalizing liberty and democracy is untidy, difficult and takes extreme patience and wisdom to build. We have had our difficulties in the history of transatlantic relations, some of them serious, but have always managed to work through these challenges to uphold and defend the principles of freedom and democracy.

Thank you. I look forward to your comments.