Experience has demonstrated clearly the need for the European Union to develop a more effective foreign and security policy. It is vital to act more decisively internationally. We have been making a big effort to do so.

A good example is the Balkans. Together with the European presidency, European Commission and member states we worked hard to offer greater support to the democratic opposition in Serbia and to contribute to the pressure for change. I am glad the people of Serbia have declared themselves so decisively in favour of change. We will do all we can to help them complete that change. But the challenge goes beyond the already demanding area of foreign policy. We must improve our performance in the field of security and crisis management. As well as needing rapid and effective decisions on international issues we must have flexible armed forces available to back up those decisions.

A more effective foreign and security policy begins with the political will to use all the available instruments in a more co-ordinated and coherent way. We must make the best use of all the resources at our disposal. Collectively these are substantial: as the world's largest aid donor we already make an important financial contribution to aid programmes and to humanitarian and reconstruction assistance. We have a global diplomatic network more than twice as big as that of the US State Department. We can use our diplomatic, economic and financial muscle to influence the behaviour of recalcitrant parties and aggressors. But until now we have been unable to add military means to the measures available.

This is now changing. Our aim is to integrate our military forces into a global crisis management strategy. It is important that this initiative is not misunderstood. It is not a move to militarise the EU. Nor is it a threat to Nato. The aim is far more simple. It is to allow the EU to tackle crises better, whether they require a humanitarian or full-scale military response. We want to do more to prevent crises in the first place and to provide a rapid response before they spin out of control. By acting together, and providing the facilities for pooling our military assets, we shall be able to exploit our militaries' unique organisational attributes, such as the capacity demonstrated in the Balkans last year to build camps for refugees. What the EU will offer, unlike any other international organisation, is the capacity to deliver the fullest possible range of crisis management measures within a single framework. This new capability will help the EU to advance its core objectives: the alleviation of poverty, the promotion of democracy and the rule of law, and the protection of human rights. It will allow us to make a greater contribution to the development of international stability and the preservation of peace and security. This will serve our own interests: a more stable, safer world helps create buoyant markets, together with the scope for greater trade and fewer displaced persons.

A more effective European foreign policy and crisis management capacity need not cut across the important bilateral relationships of the member states. Nor should it cut across our existing alliances. The EU only envisages applying a military response to a crisis if the Nato alliance as a whole is not engaged. If Nato and the US want to tackle a crisis, all the better; the collective capacity is substantial and not to be scorned. But if the US does not engage, as we saw in the Balkans from 1991 to 1995, someone else may need to, and it is better for our overall security if we can do so effectively.

Our plan is modest: we are not building a defensive alliance; and there is agreement on both sides of the Atlantic that the territorial security of Europe is so important to all of us that it must continue to be guaranteed on a transatlantic basis by Nato. Nor are we building a European army or another European institution. Decisions to commit military forces to a European crisis management operation will be taken by the EU's member states. Too often the EU is criticised for being introspective, for devoting too much energy to internal institutional reform to the detriment of the real interests of its own citizens. Not in this case. Our goal is to ensure that the values we support are actively promoted. We shall be able to work more effectively abroad for the benefit of the less fortunate.

This is also in the interests of our citizens, who increasingly call for action in the face of crises. They do so because Europe's own history has clearly shown the disastrous effects of war and the tremendous benefits of reconciliation and peace. They know that 50 years ago our leaders turned their backs on war and chose reconciliation. We have all reaped the benefit of that choice. Peace and stability throughout the world is in all our interests. That is why we are determined to do everything we can to help guarantee it.

I have mentioned five principles for Partnership. Let me conclude with the sixth - that partnership should be fair. Of course, this applies to all of NATO's relationships, but today, it is most relevant to the Partnership within NATO: the transatlantic relationship. This is truly the foundation of Euro-Atlantic security. Europe and North America together remain the foundation of global stability, the engine of the world's economy, and the nexus of technological innovation. North America and Europe represent the world's strongest community of like minded nations: not only successful democracies, but also outward-looking nations with a culture of pragmatic problem-solving.

But for this relationship to remain healthy, it has to be fair. And this means that a secure and prosperous Europe has to assume a greater share of the burden of maintaining Euro-Atlantic peace and security. Kosovo made it very clear to everyone that Europe might be an economic giant, and it might have real political influence but when it comes to doing the heavy lifting on issues of peace and security, Europe still isn't pulling its weight. When push comes to shove, the United States still has to carry a disproportionate share of the burden.

That is why the European Union and NATO are now working together to enhance European capabilities. As Europe becomes more capable, the burden on North America will ease, for two reasons: first, because Europe will be able to contribute more to NATO operations; and second, because Europe will be able to take the lead in crisis management operations when NATO does not wish to.

Will this help enhance Euro-Atlantic security? Definitely. The relationship between North America and Europe will remain balanced, and therefore more healthy, over the long term, on the most fundamental issue of all: peace and security. We can have all the transatlantic arguments we want over bananas but we have to get the security relationship right. Because only a Partnership that is perceived as fair by both sides will last. And a healthy transatlantic relationship is the foundation for the success of NATO's entire agenda of building security across the Euro-Atlantic area.