I would like to thank Ambassador Oakley and all of you for providing such a warm welcome back to NDU on such short notice. I have a very high regard for NDU as well as many friends here, some around this table today, and that is why I chose this venue for delivering my last speech in the US as Secretary General of NATO. After four years, I will be passing the torch to Lord Robertson, who is as fine a successor as one could wish.

These were four truly dramatic years for the Alliance - as exciting as they were rewarding. During this time, we made tremendous progress towards a safer, more secure Europe and towards a more mature transatlantic partnership between Europe and North America. And we have risen to challenges to our shared values by reversing serious humanitarian crises in the Balkans. We have been able to do so because of the effort, capabilities and resolve of the North Atlantic Alliance. The results of our efforts in crisis management and adapting the Alliance to new challenges have exceeded our highest expectations. So much so that making history has become an almost routine matter.

Let me recall some of NATO's achievements:

• We have welcomed three new members, a development that ended Europe's Cold War lines of division and which has proved a powerful incentive for many countries of Central and Eastern Europe to overcome long standing differences among neighbours;
• We have kept the door open for further accessions, giving the aspirants a strong incentive to continue on their path of reform;
• We have developed an entirely new relationship with Russia, through the Founding Act and the Permanent Joint Council;
• We have constructively engaged Ukraine, to help this important nation to find its own place in the new Europe;
• We have created the Euro-Atlantic Partnership Council to give a stronger political dimension to our military partnerships;
• We have made the Partnership for Peace more operational, in order to enhance the pool of resources for joint crisis management, the benefits of which we are already seeing in Bosnia and Kosovo;
• We have made an effort to be more transparent and to extend our co-operative outreach and dialogue to the Alliance's southern neighbours in the Mediterranean;
• We have established the foundation for the European Security and Defence Identity within the Alliance, enabling the European Allies to play their full role and to share the responsibilities of securing peace and stability with their North-American Allies;
• And we have adopted a new Strategic Concept that strikes a new balance between NATO's traditional mission of collective defence and its new mission in crisis management;
• But most importantly, we have engaged ourselves in the difficult task of bringing peace and long-term stability to the Balkans.

In Bosnia, and now in Kosovo, we have demonstrated that the Atlantic community is able to make progress where many thought it impossible. And in the course of our military operations we have demonstrated that what keeps this Alliance together is more than common interests or common aims: it is common values. Ultimately it is our shared values that allow us to stand together through good times and bad.

In Kosovo, these values were violated in ways we believed had become unthinkable in a Europe at the end of the 20th century. That is why we decided to act - and we prevailed.

Our work is not done, however. We have now embarked upon the difficult road of helping bring all of Southeastern Europe back into the European mainstream. The EU's Stability Pact is key. Its focus on political, economic and security issues reflects the need for a comprehensive approach.

NATO will play an important role in support of the Pact, most actively in the security field. That is why NATO launched its Southeastern European Initiative at the Washington Summit. It will support the Stability Pact. And there is quite a lot we can do.

[For example,

• We will use our new Consultative Forum on Security Issues on Southeast Europe, which brings together Allies and seven countries of the region, to develop practical cooperative initiatives;
• We will also work closely with our Partners in the Euro-Atlantic Partnership Council to develop additional practical ideas for regional cooperation in Southeast Europe;
• We will use the Alliance's new Membership Action Plan to help aspirant countries from Southeastern Europe to prepare their candidacies for NATO membership; and
• We will maintain the long-term goal of membership in EAPC and PfP for Bosnia-Herzegovina, Croatia and, ultimately, for a democratic Yugoslavia.]

Again, long-term stability for Southeastern Europe remains a challenge. But we will master this challenge, just as we have mastered the other challenges in this Alliance's 50-year history. We will work closely with other organisations to ensure that this is so.

We will also continue to work with institutions such as NDU and welcome your advice and views even if they do not always coincide with our own! The informal transatlantic dialogue we have developed is fundamental to maintaining the dynamism and adaptability of the Alliance in the 21st century.

In the next century globalisation will make our societies more creative and prosperous, but also more vulnerable. The spread of weapons of mass destruction may turn from a concern into a serious threat. And regional conflicts will again and again confront us with a cruel choice between costly engagement and costly indifference.

We have started to address these challenges. Over the course of this decade, our forces have become far better tailored to their new missions. Last April, at our Summit here in Washington, we took other decisions that will make NATO better prepared to face the future:

• We have launched an initiative to cope with the spread of weapons of mass destruction. This initiative will ensure that NATO has the political and military capabilities to address the challenges posed by proliferation.
• We have also launched the Defence Capabilities Initiative (DCI), designed to ensure better coordination and harmonisation of NATO defence and armaments planning. The aim is to improve our capabilities and the interoperability among Allies in the age of high-technology.

Russia is another challenge that requires our continued attention.. Russia and NATO may have their occasional ups and downs, but they cannot afford to ignore each other. Indeed, Kosovo has been a case in point. We had major disagreements with Russia, up to the point of Russia suspending her formal cooperation with us. On the other hand, Russia became an important partner in the diplomatic end game.

So Kosovo proves that even if Russia may sometimes appear as being part of the problem, she can be a major part of the solution. Clear objectives and firmness on our side, coupled with the willingness to keep the door open for a constructive Russian role, has paid off.

But there is yet another challenge we have to face - more difficult, perhaps, but in the end even more rewarding: the challenge of building a stronger Europe. Here, too, we have made great progress over the last few years. Most importantly, the new NATO command structure now includes the option of European-led operations. But Kosovo shows that still more needs to be done in developing the potential of the European Allies to respond to crises without relying on the US to take the lead in each and every case.

I am aware that the idea of a stronger Europe in defence and security matters still encounters scepticism. Here, in the US, whenever you talk about making Europe stronger, people raise eyebrows - and questions. Do calls for a stronger Europe amount to an assault on transatlantic solidarity? Has Europe become tired of the US? Does it even want perhaps to file for divorce?

The answer to these questions is clearly "no". What is needed in European security is not "less US" but "more Europe".

A stronger Europe is in the interest of the United States. It has been so ever since Dean Acheson urged the Europeans to achieve political unification, here in Washington 50 years ago. In the years that followed, European integration and transatlantic partnership have evolved together. Today, ten years after the end of the Cold War, and with the introduction of a European common currency and deeper political and economic integration in Europe following the Maastricht and Amsterdam Treaties, we can now state the new reality. Only a strong Europe can be a viable strategic Partner for the United States in our joint efforts to manage an ever-broader transatlantic agenda.

Creating such a stronger Europe, therefore, is about creating a more viable Partner for the United States. It is not about European self-assertion for its own sake. Europe and America will - and must - remain a team. But each member of the team must feel that the bargain is a fair and equitable one. And let us not overlook a political imperative. A stronger European role, a re-balanced transatlantic relationship, will help the US public to sustain its own commitment to the Alliance.

No one should harbour any illusions about the difficulties of this challenge. We will still have to live for a while with an asymmetry between what the US expects from Europe and what Europe can deliver.

But I remain confident that we can make the progress we seek. If there is one thing that I have learned in my four years at NATO, it is that this transatlantic community can make anything work if we set our minds to it. We can overcome any challenge, because our community is based not only on common interest, but on so many other virtues - virtues which abound here in the United States. Trust, friendship, and common values.

Thank You.