NATO - North Atlantic Treaty Organisation

Ladies and Gentlemen,

Let me first of all thank Giles Merritt and the SDA for organising this event. Brussels these days does not lack think tanks, policy institutes or political foundations. But the SDA has always had a particular place in my affections. I appreciate all the work that the SDA has done, under your leadership Giles, to raise interest in, and improve our knowledge of, defence and security issues, not just in this city but well beyond. As those issues become more diverse and more complex, the creative policy thinking and bridge-building roles of the SDA become ever more necessary. NATO will continue to support you, and work closely with you.

Less than a week ago, a new US Administration took office. President Obama assumes office at a time of enormous challenges. Above all, he must take America out of its deepest financial and economic crisis since the 1930s. Quite rightly, he has made the first priority of his Presidency. But he has also made it clear that he doesn’t intend to be distracted in any way from America’s responsibilities on the international stage.

Listen to the words he used in his inaugural speech. “America is ready to lead once more…and must play its role in ushering in a new era of peace” This is a President, and a country, that intends to lead from the front in the international arena as well.

I welcome that – and I think we all should. The world cannot afford an inward-looking America, economically, politically or militarily. If I can draw one historical analogy, that’s very much what happened after the last great economic crisis in the 1930s—and the results were not very positive, to say the least.

So let us first welcome this US engagement. And let us also welcome President Obama’s determination to work with Allies as closely as possible. I believe that Europeans have good reason to look forward to a new era of transatlantic dialogue.

But dialogue means that when Washington calls, Europe should have a unified answer, backed up with the resources to match. Let me put it more bluntly. If Europeans expect that the United States will close Guantanamo, sign up to climate change treaties, accept EU leadership on key issues -- but provide nothing more in return, for example in Afghanistan, than encouragement – they should think again. It simply won’t work like that.

. Because the problems we face today have not magically gone away. The world is not suddenly more peaceful. Nor can President Obama wave a magic wand and make it all better. And it is important for Europeans to realise this as much as Americans do.

The fact remains that international terrorism, the proliferation of Weapons of Mass Destruction, and the growing number of failing states are not just obsessions of a few.

And that list gets longer. South Asia needs urgent attention. Afghanistan remains caught between the forces of progress on the one hand, and violent extremism on the other. But that challenge is not confined to Afghanistan. The turmoil in Pakistan, and the Mumbai attacks, have demonstrated that these fundamentalist forces threaten to fuel a much wider crisis throughout the region. And we must be absolutely clear: a victory for these extremists in that region, in Afghanistan or in Pakistan, would be, simply, a disaster for international security, and a legacy we cannot leave our children.

The nuclear non-proliferation regime is eroding before us. North Korea is challenging the balance of power in Asia, and Iran is threatening to provoke a nuclear domino-effect in the Middle East. Again, effects we simply cannot afford.

The security implications of climate change are also becoming clearer and more pressing. This used to be a subject for environmentalists writing in obscure journals and websites. No more. In a few days, I’ll speak at a conference in Iceland on the security implications of the melting of the polar ice cap. More immediately, political tension is already rising in many parts of the world over diminishing arable land and water supplies.

We are also witnessing new forms of conflict. Cyber attacks against a country’s electronic infrastructure have now happened, against Estonia – and they can be crippling. Piracy, long believed to have been eradicated, is back as a major international concern – and in more than just one essential maritime route on which our trade and oil and gas supplies depend. This is not Johnny Depp with a parrot on his shoulder – this is RPG-wielding thugs threatening sea lanes on which our energy supplies depend. We will need a fresh look at how we deal with this problem as well.

Finally, we have seen how the need for reliable energy supply is transforming from a mainly economic question into a central security issue. For many nations, being cut off from energy is a matter of national survival. The recent quarrel between Russia and Ukraine was only the latest reminder of this. This latest crisis showed how a bilateral dispute can have a powerful knock-on effect, both in terms of the heat in houses and a chill in international relations.

These are all fundamental changes – to the international system in general, and to our security environment in particular. And while Europe and North America are certainly not the only actors on the stage any more – that train has long left the station, and for the better I believe – they need to work together if we are to have any hope of shaping this new environment in the right way. Transatlantic action alone may no longer always be sufficient -- but it certainly remains necessary.

What does that mean? It means sharing analysis. Developing a plan of common action. And – let me stress this point – actually stumping up the resources to carry it out.

When our Heads of State and Government meet at our 60th Anniversary Summit in Germany and France next April, they will no doubt highlight NATO’s achievements. But in light of all that is happening around us, our next Summit cannot be confined to self-congratulatory statements. Nor can it be only a get-to-know-you session with a new US President. On the contrary. This Summit is a key opportunity to move NATO’s evolution another major step forward.

And I believe that we need to use this opportunity to be more ambitious. To recognise NATO’s value as the only permanent transatlantic forum for consultation on political and security issues, with the hard capabilities to act as well. But also to have the courage and the imagination to explore NATO’s potential to do more than it has done until now, in the interests of Euro-Atlantic security.

What does this mean in concrete terms? I’m not sure President Obama has a copyright on the term “change”, so let me set out a few areas of change that I feel NATO must embrace – some immediate, some looking more to the future.

The first relates to Afghanistan. Let me begin by saying that I do not share the doom and gloom from which some seem to suffer about this effort. I don’t deny the challenges. They are huge

But it has only been 8 years since the Taliban was toppled. Afghanistan was, at that moment, in the Middle Ages. Today, half the country is relatively at peace. Access to education is up tenfold. So is access to health care. We are preparing for the second round of national elections. The Afghan Army, and increasingly the police, are growing and improving -- slowly, but clearly and steadily. And when I saw an Afghan fellow pull out his Apple iPhone in Kabul, while I was talking on my 5 year old NATO mobile, I saw another symbol of progress.

But there is clearly a lot to be done – and that includes continually looking at how we do business. It means we need to stop looking at Afghanistan as if it were an island. Afghanistan’s problems cannot be solved by, or within, Afghanistan alone, because they are not Afghanistan’s problems alone. There is a regional network of extremists, including, yes, the Taliban and Al Qaida, but also many others, which respects borders no more than they respect human rights and the rule of law. There is also a transnational narcotics issue to deal with.

If we are going to succeed in this game, we need to be playing on the right field. And that means a more regional approach. To my mind, we need a discussion that brings in all the relevant regional players: Afghanistan, Pakistan, India, China, Russia, and yes, Iran. We need a pragmatic approach to solve this very real challenge.

.That broader approach is something we need inside Afghanistan as well. Simply put, our international effort is still too much of a patchwork – militarily, politically and in terms of development assistance. We need to break these walls down. Within ISAF, we need to drop caveats and coordinate better between national contingents. But the same must apply to the international development effort, which is quite possibly even more rigidly compartmentalised than the military one – and, might I add, from the military effort as well.

One final point on Afghanistan. Of course, I welcome the intention by the United States to send more troops to the mission. It will help us to hold where we couldn’t until now, block off infiltration, and let development take root. But I cannot accept that the US has to do all of the extra heavy lifting. Europe, too, has to step up – with more forces, and where that is not forthcoming, then with substantially more on the civilian side. For the political balance and sustainability of this mission, this has to be a true team effort.

The second major area of change we need is in our relationship with Russia. The conflict in Georgia last August has invited many different interpretations, and I don’t want to add yet another. One lesson, however, is obvious: we and Russia need to find our way to a new, more trusting and more rewarding relationship.

Clearly, no one gets a veto over NATO enlargement. That process is central to our aim of consolidating Europe as an undivided and democratic security space and it is not negotiable. The pace and direction will be of our choosing. But the NATO-Russia relationship is too valuable to be stuck in never-changing arguments. We need a positive agenda, one that befits the importance of both Russia and NATO.

I believe there is plenty of potential. Cooperation on Afghanistan is one important area. Piracy, where Russia sent a ship to the Gulf of Aden recently, or cooperation on terrorism are clearly issues that we can and must address together. And I believe that there is a discussion to be had on arms control, to address long-standing Russian concerns.

As part of the Alliance’s measured approach to re-engagement, we met with the Russian ambassador informally this morning and I have to say that the meeting was positive. Next month, I’ll meet with the head of the Russian delegation at the Security Conference in Munich, to re-engage at the political level. I hope it will be the first step in a fresh approach to NATO-Russia relations.

At our Summit in Strasbourg and Kehl in April -- in just over two months -- we have an opportunity to demonstrate that we are ready for change. That Summit must deliver on all the issues that I have just mentioned.

But it must do even more. With a new US Administration settling in office, and with the prospect of France taking its full place in NATO’s integrated military command, the Summit is also the right moment to take a fresh look at what NATO will do in future.

As a first step, I am drafting, for the Summit, a “Declaration on Alliance Security” to set out some fundamentals. This Declaration should reaffirm NATO’s core purpose, and sketch out the broad lines of NATO’s role in today’s world – in plain language. When the Washington Treaty was drafted 60 years ago, the drafters wanted language so clear and straightforward that “a milkman from Omaha” could understand it. They succeeded. And so should we.

I hope that the Declaration can also set the stage for a new Strategic Concept which, I hope, will also be tasked at the Summit. I think that the time has come for that. Because, as I said earlier, I believe we need a discussion of how to get even more out of our Alliance.

Of course, a new Strategic Concept will have to reaffirm some enduring fundamentals – from NATO’s core purpose of collective defence, to its responsibility to project stability through out-of-area operations. It will need to emphasise NATO’s role as a unique community of common values and interests. And it will need to make clear NATO’s strong desire to engage with the UN, the EU and other international actors, as partners, in a comprehensive approach to the security challenges of our time.

But I hope that the drafters of the new Strategic Concept also lift their eyes from what NATO does, to look also at what more it could and should do. I have always said that we should, once again, use NATO for much broader political consultations, including on issues where NATO is not engaged, simply to keep Allies informed and on the same page. Discussing the Middle East, for example, or the latest security developments in Africa – something that used to happen during the Cold War on a regular basis. Another example: considering the political, security and energy issues that run through Central Asia and the Caucasus, I believe we need stepped up focus on those regions as well.

I think NATO should consider its role in energy security much more seriously. There is, to my mind, clear added value for the Alliance. In cyber defence, as well, I know from my discussion with the EU that there is much for NATO to add here, and we have not come close to our potential.

These are only some ideas. Others have their own. My suggestion, to those who will draft and then approve a new Strategic Concept, is simple: aim high.

But I add a note of caution. After my five years in this job, I have seen too many Summit decisions founder on the rocks of bureaucracy and insufficient resources. It is simply not enough to have Heads of State and Government provide NATO with a mandate in energy security, yet to have Allies hesitate to use NATO as a forum for discussion during crises. It is not enough to identify proliferation threats, but then refrain from taking adequate counter measures, for instance through missile defence. And it is not enough to lament helicopter shortfalls in Afghanistan, yet shy away from creative solutions that could help to overcome these shortfalls.

Analytical discussion is a good thing – that’s why we’re here today -- but only if it allows us to move forward from theory to practice. For NATO to deliver on its promise, Allies will have do deliver on theirs.

Ladies and Gentlemen,

At a time when the whole world is facing economic hardship, calling for more resources for security might seem like swimming upstream. But it remains true that security is the foundation for economic confidence. Especially in times of crisis, we can’t afford to forget the fundamentals.

But we can certainly be more efficient in how we do business. Which is why I believe a strong, effective EU is in the interests of NATO and the United States. As America remains prepared to lead, it will not be able to lead alone. Europe should be both willing and able to be the partner that the new American Administration is looking for, including in the field of security and defence.

The Transatlantic security partnership is evolving, with new missions and new tools. So it should. At our NATO Summit in April, I’m quite sure we will demonstrate to all that NATO is indeed ready to meet the challenges, but also the promise, of the 21st century.

I thank you very much for your attention and I'm open to answer your questions and comments. Many thanks.

Questions and answers

GILES MERRITT: Thank you very much indeed, Secretary General, for an extremely interesting statement. Could I get an idea of how many people, this evening, would like to come in with a question or a comment to the Secretary General of NATO?

One person there, two... three. Okay, four. Five. Fine, we've got plenty of people. I wonder if I could just salt the mine, Secretary General, by first of all, saying that the key message it seemed to me was resources, that this time it’s really serious and Europe must start to put the necessary financial and manpower resources at the disposal of NATO, especially in Afghanistan. My question is: how are you going to convince member governments in Europe this time, because this is a familiar refrain amongst Secretary Generals of NATO over the years, but this time it does seem to me, with a new Obama administration, we have to give the Americans something to cement a new transatlantic relationship. How are you going to persuade the member governments in Europe of this?

DE HOOP SCHEFFER: The problem, Giles, is that half of the people... I cannot see them, so might it not be a good idea if I simply... why don't I get up here, because otherwise it is a bit impolite, not to look people in the face who might have a question.

First of all, as a general remark, that many of my predecessors have asked for more resources and I do this again, does not make the message less relevant. The only thing I realize, as I said, is that in a time of dire economic financial crises this message will be a rather complicated one. That is why I started on the other side.

I think, first of all, it is a matter of politics and political will. You cannot simply applaud President Obama and say we have been waiting for change. And when that change comes answer the United States, excuse us, the family is not at home tonight, ring the neighbour's doorbell.

In other words, it is a combination of, first of all, political will, and yes, indeed, I think we need more forces in Afghanistan, and I think we do not only need more American forces in Afghanistan, difficult as that may be.

Yes, we do need, not only a military surge, but a civilian surge. As important as the military surge, in my mind, is a civilian surge. And we need less patchwork. But it starts for me, Giles, with political will and political will should be, in my opinion, be backed up with the necessary resources.

But if we do better what we're doing now, if we do it in a less compartmentalized way, I think even if the extra resources would be limited, and let's praise our American friends, the resources they put into Afghanistan are huge. What I want to keep in the Alliance is the political balance between the United States and the 25 other allies. Because Afghanistan is a not a United States' mission or operation. It is a NATO UN-mandated operation. And that means that NATO and its partners, and I see representatives of a number of very important partners who are in there with us—do not forget the coalition is at the moment 41 nations strong, 26 NATO and partners—that we can do a lot better than we do.

But at the end of the day I daresay even in a huge financial economic crisis that if that crisis would be the argument to even further substantially and severely cut in defence spending, I do not know how we're going to win that crucial battle in that area.

I came back for Pakistan just last week... last Friday. And if there's one thing I learned in Pakistan, and that's why I was so much pressing for the regional approach, the problems there are the same. While the Pakistanis are battling the Pakistani Taleban, we are battling the Taleban in Afghanistan. And they are, from time to time, not always, the same people.

In other words, in other words, Giles, I'll stick to my message about political will in the interests of the balance in the Alliance, of the manpower and of the civilian development reconstruction resources I'm asking for.

Q: Secretary General, Julian Hale... is that working? Okay. Julian Hale, writer for Defence News. I've got two questions. One, you mentioned the energy security role. Could you explain a bit more what your idea, specifically, that NATO might be able to do in terms of energy security? Are we talking about protecting pipelines, for example?

And the second question, about enlargement fatigue that we hear from the Polish Foreign Affairs Minister, for example, but I'm sure he's not alone. How long do you foresee before Ukraine and Georgia could join and what do they need to do to join?

DE HOOP SCHEFFER: Well, if you ask me for a year or a month or a week or a day I cannot possibly deliver, I'm afraid, for the simple reason that this is very much a performance-based process.

The Bucharest decision was rather clear, or was very clear, I should say, and as I said in my introductory remarks, we will set the pace and we will decide upon the moment. But the moment is performance-based. So I cannot give you a timeframe. It is not around the corner, I would say, as we speak, as far as, of course, Ukraine and Georgia are concerned.

We are intensifying our relationship, as you know, through the NATO-Ukraine Commission, the NATO-Georgia Commission, but I do think that enlargement in this sense is not around the corner, but I can't be more specific here in that regard.

On energy security, I was lamenting a bit, perhaps, in that part of my speech. We have a clear tasking, as we call it in our jargon, clear instructions, more undiplomatically, from the Heads of State and Government in Bucharest on energy security. And that goes from creating benchmarks to the protection of critical infrastructure, which is, of course, first and foremost a national responsibility to indeed, in my opinion, a discussion and we have that, of course, in the piracy discussion very much on our table already where it is not exclusively energy security in the Gulf of Aden and in other places in the world. But certainly also energy security. And it was the oil companies which already quite some time ago approached NATO—not exclusively NATO, also the European Union—to see how these international organizations could be helpful.

My point simply is that you ask me about energy security. The security element is already there, and I can tell you that the present strategic concept of NATO, of dating back, as you know, to 1999, is already talking about the free flow of energy. So you cannot possibly state and argue that this is a subject alien to NATO.

My only thing is, and ambition would be, that we discuss it, given the fact that the Heads of State and Government have given us a clear instruction, and that, as I said, the heat is going off and the heating going off for nations concerned could be very well a security issue as well, apart from an economic issue. Let's be glad that the gas is flowing again.

Q: Thank you. Nick Witney, European Council on Foreign Relations. Secretary General, you mentioned that today you'd begun the process of re-engaging in dialogue with the Russians. If they didn't today, then I guess next time they'll probably bring up their perhaps slightly imprecise, but rather insistent ideas on a new security architecture for Europe. I wonder if you could tell us a little about your reaction to those ideas?

DE HOOP SCHEFFER: Let me start by answering your question that I'm quite happy with the security architecture as it exists. I'm fairly happy with that. I think it functions well. We have NATO, we have a European Union, as I said, and you know my position which should further develop, I'll support that, its security and defence identity in the framework of ESDP and CFSP.

We have the OSCE functioning, with some difficulties from time to time, but we have a security architecture which is, I think, fairly well balanced.

Nevertheless, as happened in Helsinki last December, as you know, and I think the OSCE is a good framework in this regard, there was a, may I say, careful beginning of a discussion on the proposals made by President Medvedev. I hope that the Russians will be able, in the near future, to be a bit more specific in those proposals. I have not yet seen a comprehensive package on what exactly President Medvedev is proposing.

I would like to know, for instance, when we discuss a new European security architecture, and NATO by the way, NATO is not the primary forum to do that, but in my opinion the NATO-Russia Council, if it reconvenes again, is certainly an adequate forum to discuss it. But I think the main discussion we'll see taking place in the framework as the OSCE, as I could understand the European Union would discuss itself these proposals as far as they are relevant for a developing ESDP and CFSP.

So first of all I would like to see... I would like to have some more concrete information, but then NATO allies would certainly be ready to discuss it. But I would, for instance, I would be very much interested in what does the notion territorial integrity means when we are going to discuss a new European security architecture. What does it mean? What is the Russian interpretation of such a notion.

In other words, there is a lot to discuss, but my general reaction would be that I'm quite and fairly happy with the structure as it exists, but I think if our Russian partners are making concrete proposals and want to discuss how we can improve that structure, I think the NATO allies will not say no we should not discuss it.

But, again, we'll come back to discussions we have had, certainly, for instance, on as I mentioned territorial integrity, on the future of the CFE treaty, which the Russians have suspended, so there's a lot on the plate already. Where we do not agree, in principle, but where I think, given the fact that the NATO-Russia Council is not a fair-weather institution, where we should discuss these kind of issues with the Russians. It will not be easy, by the way, because, again, NATO is functioning extremely well for almost 60 years now and there's certainly no intention with any NATO ally to have NATO seen abandoned or disbanded or what have you. So if that would be the ambition—I don't know, and I don't expect it is—it would be dead on arrival, but you would not expect any other answer from a NATO Secretary General.

Q: Good evening, my name is (inaudible...) of the Dutch newspaper Trouw. I was struck by the fact that you mentioned Iran as one of the countries, let's say, involved in stabilizing the region around Afghanistan. And I was wondering, in what way you would suggest to approach Iran or maybe even to cooperate with the regime there in stabilizing the region?

DE HOOP SCHEFFER: I have not yet any concrete suggestion to offer to you. But the notion, as I said in my speech, that if you look at the theatre in Afghanistan, and you look at Iran as Afghanistan's western neighbour— and I know the complications of talking to Iran, of course I do—then I do think that if you talk about a real regional approach you cannot mention all the nations I mentioned except for Iran.

What structure that exactly will take I would not have an immediate answer to that, but I think starting with the notion that we need this regional approach, is already something. And I'm launching this because I think that really, and if you look at the history of Afghanistan by the way, if you study the history, then you see that Afghanistan over the years has always been a sort of country where other nations played certain power games, to put it rather mildly now.

Iran is a factor in Afghanistan. So are others. I underline Pakistan of course. Not for nothing I went to Pakistan last week. I think I had a very constructive and good visit with my Pakistani interlocutors. It's crystal clear that the border, or in Afghanistan they'll say the Durand Line, between the two nations, and what's happening at the border, demands of all of us to have as close a cooperation as possible in the military sense, but with Pakistan my visit was also to have a more serious political dialogue with them. And I do know that when I launch in this group a suggestion about the regional approach including Iran that some people might have to swallow once or twice, but I do think that at a certain stage we might want to find a formula which includes Iran. What that formula exactly will be I do not know yet, but you have to start throwing a ball into you as an audience for a beginning.

Q: I'm (inaudible...) from the EU Observer. My question regards the cooperation with the EU and especially on mission planning and pooling of resources. You basically draw on the same countries and armies in the EU, so how do you see the situation now and what needs to be improved in this, especially regarding Afghanistan and other missions that are ongoing from the ESDP?

Thank you.

DE HOOP SCHEFFER: Well, if you look at the different theatres let me start a bit closer than Afghanistan in Kosovo where EULEX has taken over some responsibility, as you know, but KFOR is still there. KFOR will have to stay there because KFOR has a special responsibility and a special role on the basis of Resolution 1244.

But Europe is playing an important role in Kosovo. So you see NATO and the European Union working side-by-side there. If I say side-by-side I'll not hide the fact that in that relationship between NATO and the European Union not everything is easy, for political reasons, which are not so easy to solve. But we try to be, and I try to be as pragmatic as I can. So does Javier Solana, basically my European Union counterpart, but in the institutional framework it is difficult.

I'm not going to finger point to any capital because I think it's a combination of factors which makes this a rather intractable and difficult problem. But finger pointing doesn't help.

If I look at Afghanistan there is the European Union police mission. I hope, and that is I think in the cards, that that mission can be reinforced because the police is lagging behind in Afghanistan. NATO is focusing on the Afghan National Army. There are many nations who are very active in the framework of training police. Canada, Germany and others, to name but a few. And the Americans, of course, are hugely active in training the Afghan National Police.

But I hope that the European Union will slowly, but certainly, build on its police mission, expand and enlarge its police mission.

I know that Benito Ferrero-Waldner, the European Commissioner, has grown much more active in Afghanistan over the past years. The EU is, of course, a very important player on the civilian side here. And identifying what is necessary on the civilian side, in my so much wished civilian surge, to a large extent, of course, comes in the domain of the United Nations and the European Union; other major bilateral donors. Let me identify Japan, for instance, here tonight as a very important donor nation of Afghanistan.

So indeed in these theatres NATO and the European Union meet each other, and will go on meeting each other in the hope that a solution can be found at a certain stage, because institutionalizing this relationship, at the moment, has been proven too difficult, I must say, and I'm sad that at the end of my mandate as Secretary General, I have not been able to bring this relationship more forward than on the pragmatic basis.

And I hope that after the end of July my successor could have a fresh look and the European Union could have a fresh look; NATO could have a fresh look, to see how we can bring the parties together, because I do think that NATO and the European Union really need as close a strategic partnership as is possible. After all, we share 21 allies as we speak, and after hopefully Albania and Croatia will join NATO and you know that Croatia also has its European Union ambitions, so has Albania. The number at a certain stage of allies and EU members we share will grow so I sincerely hope that this relationship will mature. Also on the institutional side.

MERRITT: Thank you very much. Let's go there and then to the back.

Q: Mr. Secretary General, (inaudible...) from German Television. You said a few minutes ago we should use NATO for broader consultation. Did you see any lack of consultation, and in which field did you see this lack in recent history? And let me just add another question, can you imagine that Russia would become a NATO member one day?

DE HOOP SCHEFFER: Well, you have 20 minutes?

(LAUGHTER)

As far as your first part of your remark, your question's concerned, I said it in my speech, I said from the very beginning, since January '04 when I came into this NATO building, for the second time by the way. The first time was during the Cold War. During the Cold War when I attended the North Atlantic Council as a second secretary, that was not always a given, I can tell you. But when I did, there was the subject under the heading Statements on Political Subjects and that was by far the most interesting subject on the council agenda, because there was a discussion about many political subjects so that the allies knew from each other on which sheet of music they were.

I have said from the beginning, and I think we have seen improvements, but I'm not, as you heard in my speech, entirely happy yet, that this is a political military alliance. Not only a military alliance, but a political military alliance. And that does mean that allies, in my opinion, also in theatres where NATO does not have any high profile role to play... I mentioned, I think, the Middle East. NATO is not engaged and NATO should not be engaged, in my opinion, in the Middle East peace process. We have the Quartet, the European Union plays a role, not NATO. NATO should certainly not do that.

But that does not mean that when there is a crisis in the Middle East that the allies cannot discuss and profit from each other's position on an important dossier like the Middle East. That is what I'm trying to say.

The same goes for energy security. If there is a Russian-Ukrainian dispute on energy security I think NATO allies should pick that up. Not because we have any ambition, or we pretend to play any role. Please, no! There was a Czech presidency which immediately was proactive and involved. That was the European Union involved. Other people were involved. Certainly not NATO.

But that does not mean that those subjects are irrelevant for NATO, if you agree with me that NATO is a political military organization. 

Secondly, on Russia, I have up till now never seen or heard Russia as having the ambition to become a NATO member. So your question is a virtual one. That does not do away with the fact, and I tried to indicate that in my speech, that despite the fact that we have some fundamental differences, and they are fundamental differences, and the Medvedev proposal/discussion, as Nick Witney was referring to, is not an easy one, and will be a very complicated one. I can assure you but let's discuss it, within the framework I have given to you. So I think this question is a virtual one.

Let's first now try and see how we can repair the dents, if I may use that expression, the dented relationship, after the events in Georgia of last August. Let's discuss it and let's consider the NATO-Russia Council, as I said, not only as a fair-weather council.

We have declared no business as usual after Georgia. Foreign Ministers said, Secretary General, you start to re-engage. I had lunch with the Russian ambassador, we had an informal coffee meeting this morning. I'll meet the leader of the Russian delegation in February in Munich. I'll report back to Foreign Ministers when they'll meet here in Brussels in March in their preparatory meeting for the Summit. And I hope that our political masters then will map out the course. And I hope, but I have... I do expect that Russia then is willing and able to engage in an open discussion as well. No parti pris from their side, to use the French expression, and no parti pris from our side.

It will be a complex and complicated discussion, but I do think that at the end of the day, if I look at Iran, if I look at the Middle East, if I look at a host of other issues confronting us on the world political scene, we do need proactive Russia participation in the solution to those problems.

And in that scenario I think Russia cannot afford to have a non-dialogue with NATO, and NATO cannot afford to have a non-dialogue with Russia. That is how I look at it, but the question on membership, I think, is a virtual one as we speak.

MERRITT: Thank you. Brooks. (Inaudible).

Q: Yes, Brooks Tigner, Jane's Defense. You mentioned helicopters in Afghanistan, which is a very interesting topic. I mean, if there's any piece of kit that's probably more needed than any other it's helicopters to handle the terrain there and ferry soldiers away from IEDs et cetera. But we've made no progress really on upgrading helicopters, which points to a wider question, and that is, what to do with the Security Investment Programme, the Security Investment Fund. 

The allies danced around this subject of throwing that open to wider operational spending last year, it never went anywhere. In your view, isn't it time for them to throw that open to a real debate, that could help the smaller allies deploy and it could upgrade the helicopters that soldiers need? Thank you.

DE HOOP SCHEFFER: Allies have a tendency to dance around certain subjects. I take that point. I could mention a few more. I will not, of course.

On the helicopters let me start on the positive side. We are engaged, as you will know without any doubt, I'm looking at the Czech ambassador to modernize Mi helicopters for Afghanistan, because as you know, from your profession, helicopters in Afghanistan in that climate is such a difficult issue. To have them fly there under those conditions in summertime and wintertime with the necessary protection and what have you.

So you cannot say we are not at all successful, but we are by far not successful enough. I take your point. And I also take your point that there still is a very serious helicopter shortage. And I say again, we cannot only rely on our American allies to fill the gaps in the helicopters we need there.

Now there is this, I think, highly appreciated French... U.K.-French initiative, but I have to say that the fund, which should form the basis, is still not adequately filled. And I'm sad about that, and I'll try to hope to be instrumental in convincing more allies to realize that this is a very serious proposition and that we have to do a lot of things better.

To come to the question in principle: I do think, but that will, of course, fall to my successor. I do personally think, and this is, of course, not a consensual approach in the Alliance as you well understand, I do personally think that we should have a very critical look at how we finance our operations. And what is the relationship between the principle, the "costs lie where they fall", which as you know, is the dominant principle, and I say other ways of funding. Not necessarily NSIP, not necessarily common funding, but other ways of funding, as we have now relatively successfully tried to do and are doing on strategic lift in the so-called C-17 initiative, and I hope there will be other initiatives of this kind. We have SALIS as well.

So let's be inventive in how we can pool our, by definition, limited resources. How we can be more successful. But the principal question, yes, I think we should have a good look at how we finance our operations.

Let me give you an example and let me use my own countrymen, the Dutch. The Dutch have a relatively modern armed force, including Apache attack helicopters. We do need Apache attack helicopters in Afghanistan, so what does a NATO Secretary General do, and what do the allies do?  Dutch Defence Minister, could you please bring some of your Apache attack helicopters to Afghanistan?

Yes, say the Dutch. Here they go. I've seen them. They stay there for two years, three years, four years. They have an incredible wear and tear in that climate. So after those four years basically you have either to refit them and modernize them completely, or you have to invest again in new Apache helicopters.

Other allies who do not happen to have Apache helicopters will not be asked for Apache helicopters. So there is an imbalance in the system and I do think personally that we should have a very critical look at the "costs lie where they fall" principle, starting with the crucial shortage in every operation in the sphere of enablers. And you quite rightly mentioned helicopters. I could mention C-130, C-160, hopefully A400M equivalents, C-17 equivalents and yes, first and foremost helicopters; medium-lift, heavy-lift, in operations like that.

I do think personally, but I say again, not consensual, that we need to have a good look at how the "costs lie where they fall" principle first of all relates to the common funding, and how, secondly, it relates to more innovative ways we can pool resources, we can collectively fund, not necessarily all the 26.

The C-17 initiative is not an initiative by all the 26 allies. No problem. No problem. The U.K. Royal Air Force decided to buy C-17s because they need it for their operations. But a nation like the Czech Republic or The Netherlands will never buy a C-17 because they simply cannot afford it.

In other words, I make a strong plea to be more innovative on how we fund our operations, but I can tell you this is of between the most difficult issues you can start in an Alliance because it concerns money, but if somebody... if not somebody mentions it, like the Secretary General, it might never start, so this is my answer.

MERRITT: Secretary General, if I could just add to that, placing this issue squarely on the table, should that be your leaving present?

DE HOOP SCHEFFER: Well, as a Secretary... I'm usually on the receiving end of presents because before I'm successful the allies have to deliver. The Secretary General is... what's the phrase, an emperor without clothes. I have no forces. NATO has no forces apart from the AWACS and now this hopefully soon the C-17... the three C-17 aircraft. So the allies have to deliver.

But I do think, if I look at Afghanistan, and that was the question, if I look at the huge cost, the investment some make, others do not, let us find the niches please, like for instance we have a Czech CBRN Battalion, we have other nations,  smaller nations finding other niches. But let's in the enablers, let's try to pool resources as much as we can and let's have a look, Giles, at the relationship, "costs lie where they fall," common funding and innovative ways of thinking of funding our operations.

MERRITT: Thank you very much, Secretary General. One person here. How many other people have I here? Have a look. One, two. I'm going to group up the interventions and then I'll ask the Secretary General to... Okay.

Q: Martinez de Rituerto with El País. Could you please elaborate, Secretary General, on your visit to Pakistan. That I think is crucial element in this crisis of  Afghanistan and Pakistan. And in particular since last week... or a few days ago you were emphasizing the lacking of the Karzai administration do you have the feeling that the Pakistanis are, as well, lacking and that they are friends that is very difficult to have playing confidence on them? Thank you.

MERRITT: Thank you. Secretary General, I'm going to take one more question and group them up.

DE HOOP SCHEFFER: Yes, of course.

MERRITT: Let's go over there. This lady at the back.

Q: Theresa Fallon, energy analyst. I have a question. Wen Jiabao will be in town very shortly. Does NATO have any planned meetings with him to discuss China's regional cooperation on Afghanistan?

And you mentioned also earlier, and I'd like to follow up on an earlier question about energy security issues. Isn't it a lot of it because the new member states of the European Union are 100 percent reliant on Russian gas? For example, Bulgaria and Hungary are 100 percent reliant on Russian gas. So it doesn't matter if you guard a pipeline if they have that kind of strategic reliance on Russia it's really a weakness in the system and I don't think if you guard the pipeline it won't make any difference.

And the last point I'd like to make is, if China does become involved in these issues with Afghanistan NATO could maybe tie up a nice neat package because there's the long pipe dream of having a pipeline built through Afghanistan, so that would combine your idea of security and energy. Do you have any comments on that pipeline? Thank you.

MERRITT: Thank you very much. Secretary General, I'm afraid your line of sight was blocked at the last question.

DE HOOP SCHEFFER: No no... no no...

Q: You could see it fine? Perfect.

DE HOOP SCHEFFER: No no, we could, yes absolutely.

All right, on Pakistan and Afghanistan, let me first of all underline once again that my op ed in the Washington Post contained five lessons, four of which were for ourselves and only one for the Afghan government. And I stick to my line there, that from the Afghan government we may ask more serious things in the fight against corruption, establishing the rule of law.

In other words, what I wrote there I think is relevant, as I do accept that President Karzai and the Afghan government does criticize the international community and NATO when we are not careful enough with civilian casualties. I accept that. And I think between friends one should, at a certain stage, accept that there's criticism as well, and that it's not only sunshine and being nice to each other.

We should be extremely careful that we avoid as much as we can civilian casualties and President Karzai quite rightly, and for very good reasons, makes a point. I make a point, given the fact that we have a substantive force there and many of our soldiers are paying the highest price in Afghanistan. I think I'm entitled to make the point to ask for more responsibility from the side of the Afghan government as well.

In Pakistan it's different, in the sense that I got the impression during my visit that my Pakistani interlocutors, and I spoke to all of them, are, indeed, serious in going after those forms of extremism, on their side of the border, which is basically trying to destabilize their country, Pakistan, as they are trying to destabilize Afghanistan.

What they asked for, of course, and quite rightly so, were closer forms of cooperation. Military-to-military, although I should underline that ISAF's mandate ends at the border, ends at the border. ISAF's mandate is showing and should show full respect of Pakistan sovereignty. There can be no question about that.

But at that border, at that line, as we are doing in the so-called border coordination centres, work much more closely together, help them with technical forms of assistance, to prevent that border being porous, as it is, to exchange intelligence with them. So they were, of course, to train, let me add another element, to train Pakistani officers at NATO schools and institutions. Very important, I think. There the problem is that, again, that of course we have to find the money for that. But as a principle it was brought forward with priority by my Pakistani interlocutors.

But to answer your question, I do think that the Pakistan government is serious in the FATA, in fighting the fight with us, but I do think that we can, A, deepen our political dialogue and B, deepen our practical cooperation, given the fact that there is already a military-to-military so-called tripartite commission, Afghanistan, Pakistan, ISAF, which is functioning very well.

By the way, I underline the word tripartite. This is, of course, not an exclusively NATO-ISAF-Pakistani issue. It is a tripartite issue which should very much involve our Afghan friends and partners as well.

I have no intention, and I think he hasn't either, for a meeting with Wen Jiabao. There is a developing NATO-China relationship, but it is not... or not yet, at the level of a political leading figure from China meeting the NATO Secretary General, but Assistant Secretary Generals, plural, have gone to China. We have regular visitors group from China, so the relationship is developing step-by-step and I think that's right, because we should not overdo this, but China being the important player and important actor, as it is, I think it's, of course, extremely relevant for the region, but meetings at this level do not take place... or I should say perhaps, do not yet take place.

If you're asking me about protecting pipelines, of course I'm discussing protecting pipelines in times of crisis. I said protecting pipelines is first and foremost a national responsibility. And it should stay like that. NATO is not in the business of protecting pipelines.

But when there's a crisis, or if a certain nation asks for assistance, NATO could, I think, be instrumental in protecting pipelines on land. I already made the nexus between piracy off the coast of Aden and energy security, given the fact that the oil companies, of course, are extremely worried. Not exclusively, by the way, in the Gulf of Aden, but on the other side as well. But I'm not going to say here and now that you see NATO flotillas going "tous azimut" to all the parts of the world suddenly fighting piracy everywhere and protecting sea lanes of communication.

But in scenarios of political tension in scenarios of terrorist attacks or a threat of terrorist attacks, I do see the 21st Century navies, as the European Union by the way is proving as we speak, in their role off the coast of Somalia, I applaud that role. That is, for me an example how ESDP is developing. That in times of terrorist attacks or threats for terrorism or crises we could not, we could not protect the pipelines.

Finally, I say again, NATO is not in the energy business, Madam. So if in a situation like we had over the past weeks NATO allies are totally deprived of gas you will not see a NATO Secretary General stepping forward, raise his finger and tell the Europeans or the Russians or the Ukrainians for that matter, listen, guys, you have to stop this. We have other international organizations, other people to do this, and certainly not a NATO Secretary General, the European pres... the European Union presidency, rather, or others.

So we are not in the energy business, but of course when a nation is for a long time deprived of all gas, or all energy, in the North Atlantic Council, and quite rightly so, when a nation raises its finger and says, Secretary General, we would like to discuss the energy situation, should NATO then say no, that's none of our business? I don't think so. Although you'll not see us in the forefront in  the energy business because we are not in the energy business. We're in the security business.

And I say again, we usually use the word energy security. And that's our business. Thank you.

MERRITT: Thank you, Secretary General. Now, I'm going to group up, I think there are three questions here, and I'm going to group them all up, if I may.

DE HOOP SCHEFFER: We still have five minutes. (Inaudible...).

MERRITT: I know, I'm afraid we're running out of time, I'm well aware.

Q: Martin (inaudible) representing the British Council and European Union National Institutes of Culture.

Secretary General, how important, in your view, is the role of cultural relations and cultural diplomacy in the rebuilding of countries in the post-conflict situation?

MERRITT: Quite an open-ended question for the end of the discussion. If we could pass the microphone forward I think there are two other people here. I'm anxious to...

Q: Robert Cox, board member, Friends of Europe.  I'd like to return just for a moment to the institutional relationship between the European Union and NATO, which seems to slip your grasp, and I can see why. Are not there perhaps two preconditions which have to be met before that can happen? One is that we see clearly one way or another what is the fate of the Lisbon Treaty, and secondly, irrespective of what happens to the Lisbon Treaty, do we not have to wait until we finally go towards a hard core solution in Europe, in a concentric circles of the future sort of development of Europe, a hard core solution where defence is concerned.

DE HOOP SCHEFFER: Excuse me, I missed your last words of...

Q: A hard core solution where defence is concerned, among the member states of the European Union themselves.

DE HOOP SCHEFFER: I see. Okay.

MERRITT: Thank you. If you could pass it just to the right here.

Q: Gianlucca Cazzaniga of the Italian Daily Avvenire and the Italian Defence Review. Just a question about NATO's ambitions. You mentioned that NATO should be more ambitious, but European forces are already stretched, if not overstretched in Afghanistan and European public opinions are not really supportive. Can you comment on that, please?

DE HOOP SCHEFFER: All right, first of all, of course cultural diplomacy is of great importance. It's not NATO's business though, but I underline the importance of culture in developing a society.

During my visits in Afghanistan I've been in touch, for instance with artists in Afghanistan, young painters, and other people who try to develop that nation in another sense than we usually discuss in a NATO framework. So I consider that extremely important. The more security you have the more free those artists will feel to do what they are doing, and I saw wonderful examples of not only traditional Afghan art, but also modern Afghan art. So I take that point.

The only thing is, of course, NATO is not in the cultural business. NATO is perhaps too much in business in Afghanistan given the fact that from time to time I can't resist the impression that everything which is happening in Afghanistan, or everything which is going wrong in Afghanistan ends on the plate of the NATO allies, which is not entirely fair and justified I think. But I understand it, because we were there first, the military were there first. So I'm not blaming anyone, but simply a cri de coeur.

Lisbon, it might play a role, but I do think, as you know that the present stalemate in the institutional relationship between NATO and the European Union will not be solved automatically by the acceptance of the Lisbon Treaty. I sincerely hope that the Lisbon Treaty will be accepted and will come into force, but I do not think that that would be, let's say the medicine this relationship needs. Neither, to be quite honest, what the European Union might decide or might do about the hard core.

I do think, I'm of the opinion, and that brings me to the final question of our Italian colleague, I do think, as I said at the end of my speech, that a strong European Union, including strength in the framework of defence, hard core. Not only soft power, but also if and when necessary being able to apply a hard power, that Europe, I say again, that European Union is a U.S. interest and a NATO interest. And I'm sure that President Obama will follow the same line and will stimulate this development.

But coming back to my speech, coming back to answer your first remark, it does mean that Europe has to deliver. You cannot only say we want more U.S. leadership, we want more transparency, we want more in Afghanistan, we want more here, we want more there, Guantanamo, Kyoto, what have you, but we Europeans, we are... stay in our own cocoon and will not deliver.

So, again, I come back to the question of political will, plus the availability of forces. I take your point, by the way, that as we speak, given the fact that every Defence Minister has only one single set of forces, and either a NATO batch or a European Union batch, it's the same soldier, that these forces are fairly stretched, and that is exactly why, coming back to the Jane's Defense Weekly question, that is exactly why we desperately need to be more effective and more efficient in how we use those forces.

What we buy, how we buy it, how we use it, that is absolutely essential, because I do not expect, with you, as you said in the beginning, Giles, I do not, expect defence budgets to go up substantially. I'll already be very happy if we can, in one way or the other, the good exceptions, of course, are there, to prevent a further slide. And that's, of course, a risk in the huge crisis we're finding ourselves in.

So let's then try to do better with the buck we've got or the euro or the dollar or whatever currency we've got, and that should really be a priority. And Europe plays a role there, and I do think, and I do hope, that that discussion will continue in the European Union framework as well.

Thank you.

(APPLAUSE)

MERRITT: Secretary General, thank you, once again, for coming to us, to the SDA and for an extremely enlightening and stimulating tour de force. Thanks a lot.

DE HOOP SCHEFFER: Thank you.

(APPLAUSE)