It’s a great pleasure to be here in Berlin.
A city I first visited some 40 years ago.
And one which I got to know well in the 70’s and 80’s.
The Berlin I knew then was - of course - a completely different city.
And it’s wonderful to see the modern, vibrant, reunited city of today.
But with reunification of the city, many of the old certainties and familiar features have gone.
In some ways, this is a metaphor for the wider changes that have taken place in the 20 years since the Wall came down - not just in Germany, or in Europe, but across the globe - and in the strategic security environment in particular.
The Cold War imposed order and a degree of certainty.
A brutal order, but order nonetheless.
The world was divided; Europe was divided; this city was divided.
But, at least the dividing lines were clear.
The enemy was known and was pretty predictable.
In divided Europe, NATO and the Warsaw Pact understood the boundries and operated by a set of rules and understandings.
The paradox of the 70s and 80s, particularly in contrast to what has followed, is that while the West still faced, in theory at least, an existential threat, the stand off with the Soviet Union had become ritualised.
While there was always the scope for miscalculation, it had become, in Europe at least, a more or less stable balance of power.
Of course, that balance, on one side, was based on an unjust and unsustainable repression which ultimately undid it from within.
But in pure power-balance terms, we have swapped the certainty of a known and predictable enemy, posing an existential threat, but held effectively in check; a world in which all actors were clients of one side or the other; for a world of shifting power balances, emerging, independent challengers and diverse non-state threats.
So that even as that existential challenge wanes, a myriad of lesser, but none-the-less potentially devastating threats emerge to make our societies in some ways less safe, less secure, and less certain in facing the future.
FACING THE FUTURE
This unpredictability and rapid change in the threat picture we face makes it all the more important that our respective Armed Forces, and our collective defence arrangements, are correctly configured to meet the requirements of today - and prepared, at the same time, for what is around the next corner.
And this is what I want to talk about today.
How our nations - Germany and Britain - two of the world’s largest economies, despite the immediate the economic difficulties we face - how we are responding to the security challenges that now confront us.
And why we have both embarked on an ambitious and essential transformation of our respective Armed Forces and Defence postures, not just to meet our own national security requirements, but also to meet the responsibilities we have to our allies - and more widely, to international security.
My central argument is this:
The responsibility of European nations to defend their citizens can no longer be discharged by a strategy of homeland defence and a Fortress Europe.
The threats we face are no longer territorial, so a passive defence of national territory is no longer adequate protection for our citizens.
Our security requires that we do not sit back and let threats come to us - but that we project power to meet them - wherever in the world they are forming.
So, we need to take that final step up from the defensive posture of the Cold War, to respond to a future in which threats can originate thousands of miles away, yet can be swiftly felt at home.
Much better to prevent, contain, and tackle threats at distance, than to confront their consequences on our own streets.
So the NATO Alliance, and the European part of it in particular, must continue to develop together the capability and the political will to act when necessary - to project power, including, but not limited to, military power, and to deploy it rapidly when we must.
We must do this together because no country, not even the United States, can hope to tackle successfully all the threats we face in common, by acting alone.
This is about European nations being producers of security, not merely consumers of it.
Leading from the front in our own region - and taking responsibility for what happens in our backyard.
Facing up to the future - not living in the past.
And it has become clear over this last year, particularly following the operation in Libya, just how urgent the need for transformation has become.
THE NEED FOR TRANSFORMATION
Operation Unified Protector was a coalition success, and for the people of Libya, a liberation they can justly claim to have seen through themselves.
It has reconfirmed the utility of NATO as the most successful tool for collective defence ever created.
When sustained multinational action was required by the United Nations, NATO was the only effective available coordinating mechanism.
But the Libya operation also cruelly exposed the imbalances and weaknesses in the Alliance and thus the scale of the task facing European NATO nations.
Even with the very limited nature of the Libyan campaign, the nations of Europe could not have undertaken this operation without the US shouldering much of the weight.
This should have come as no surprise.
We know what the problems are.
Too many allies are failing to meet their financial responsibilities to NATO.
Too many countries are failing to build and maintain appropriate capabilities to meet the new threats we face, or to make them available for operations.
We have known about these deficiencies for many years, and we have fretted earnestly about them.
But this time we cannot afford to brush them under the carpet and carry on as before.
Because the United States has made clear, that it intends to reflect in its strategic posture, the growing importance of the developing challenges in the Pacific.
Let me be clear about this - it is in Europe’s interest that the United States rises to the challenge that the emergence of China as a global power presents and we should support the decisions the US has made.
But that means we, the nations of Europe, must take on more responsibility for our own back yard.
Shouldering the major burden in the Balkans and the Mediterranean, but also being prepared, if necessary to take a bigger role in relation to North Africa and the Middle East.
This isn’t about the United States walking away; this is about the nations of Europe taking more of the strain of our collective defence in our own region.
Responding to the threats that most directly impact on us.
But while the need for transformation in our collective defence capabilities has now become urgent, so too are the fiscal challenges.
The debt crisis should be considered one of the greatest strategic threats to the future security of Europe.
Economic integrity is the well-spring of strategic strength.
That, surely, is one of the primary lessons of the Cold War.
The Soviet economic system could not sustain the investment in Defence required to match NATO’s power.
Military power and economic power are inseparable.
Without strong economies and sound public finances, it will be impossible to sustain in the long term, the military capability required across Europe to maintain collective defence and, when necessary, project power to confront threats as they form abroad.
But I am a realist.
And the reality is that, across the alliance, aggregate defence expenditure is certain to fall in the short term and, at best, recover slowly in the medium term.
Yes, in the long run, all NATO members, if they benefit from collective defence, must contribute appropriately to it.
Each of us must live up to the responsibility to fund national Defence properly as a contribution to the Alliance - a responsibility which we reconfirmed as recently as 2010 at the Lisbon Summit.
But in the short term - when pressures on national budgets are so severe - it is frankly a waste of breath to call for more Defence Spending to bridge the gap between what the Alliance needs and what the Alliance has.
So, for now, more money is not going to be the answer.
But the problem remains; and if we can’t spend more, we must do things differently.
Maximising the capability we can squeeze out of the resources we have.
Prioritising ruthlessly; specialising aggressively and collaborating unsentimentally.
Investing in capability that is fully deployable, and available for collective defence action - if necessary, outside Europe’s borders.
Working together to do more, with less.
The UK’s National Security Strategy and Germany’s Defence Policy Guidelines come to the same conclusion: to tackle the threats we share in common, we need to act in common - through all the institutions that exist to provide us with a collective response - the UN, NATO, and the EU among them.
As well as being a realist, I am a pragmatist.
What matters is what works - and what is affordable.
The challenge is to produce extra military effect, and do it swiftly, without duplicating effort or reinventing proven structures that already exist.
Because institution-building consumes resources that are in short supply and deflects energies better spent making the current architecture work more effectively.
That is why, as it is for Germany, NATO is ‘the centre-piece’ of Britain’s collective defence efforts.
And, again as it is for Germany, making NATO’s Smart Defence initiative a success is our priority.
The Chicago Summit is our opportunity to define more sharply what we intend to do to make it a reality.
To look beyond a limited set of short-term equipment projects, to a new way of thinking on Alliance-wide capability planning and development.
This will need to begin with a clear-sighted assessment of the current state of NATO’s collective competence, taking account of what we know of reductions already planned and how these will impact on current capabilities.
And a willingness to recognise the gap between that capability and NATO’s stated level of ambition.
This will provide a baseline against which to take the right decisions: greater pooling and sharing of capabilities; mission, role and geographic specialisation; greater sharing of technology; co-operation on logistics; and more collaborative training.
For Britain, Smart Defence is also about making the Alliance more flexible, encouraging collaboration among groups of Allies and with partners outside the Alliance.
Both Libya and Afghanistan have shown how agile NATO can be in incorporating the contributions of outsiders.
We should capitalise on this experience in making it easier for non-NATO nations and key potential partners to contribute to NATO’s operations.
We need an approach that allows natural bi-lateral partnerships or regional groupings within the Alliance and across its boundaries, to flourish - adding value to the capabilities available to the Alliance as a whole.
Britain is actively pursuing such collaborative initiatives.
The new Northern Group of nations, which includes Germany, the Baltic and Nordic countries (including Sweden), Poland and the Netherlands, as well as the UK, is part of this process.
The Franco-British Defence Treaties, signed last year, herald another deepening partnership for the United Kingdom.
A model for bi-lateral co-operation that allows the production of greater capability between nations of similar ambition and similar approach to the generation and deployment of armed force.
But the Franco-British relationship is not exclusive. It is structured around the areas where Britain and France can most effectively and logically co-operate.
BRITAIN AND GERMANY
Similarly, the United Kingdom would welcome an enhanced defence and security relationship with Germany. Based on the areas where we can best add to Alliance Capability through bi-lateral co-operation.
A new and stronger defence relationship, based on the challenges we will face in common in the future, not those that we shared in the past.
A relationship that delivers practical benefits and enhances our mutual security.
Building on the structured dialogue that currently exists to produce concrete results based on the guiding principles we have set out together, focussed on support to operations and force deployability.
We should work towards common positions in NATO and the EU; identifying reasons for any disagreements and tackling them head on, while building on the many areas or agreement as a foundation of our future co-operation.
CAPABILITY & DEPLOYABILITY
In the United Kingdom, we have had to make some tough decisions to tackle a Defence programme that was over-heated and unrealistic, as well a fiscal deficit that was unsustainable.
The British Armed Forces that will emerge from our Defence Review will be formidable, flexible and adaptable - equipped with some of the best and most advanced technology in the world, supported by the fourth largest Defence budget in the world, meeting in full our NATO responsibilities.
They will be smaller, but more relevant to addressing the real threats to our national and collective security, and still one of the world’s most capable fighting forces.
Throughout the process, the watchword has been capability not size - capability that can be deployed swiftly within a force posture that is inherently adaptable and configured to tackle a wide range of different circumstances.
This focus on capability rather than size is one of the most positive outcomes, I believe, that is emerging from the German transformation programme.
During the Cold War, a posture of homeland defence, with a large citizen army, was the right response to the conditions Germany faced at that time.
But the decision to end conscription and move to an all volunteer force is the right response to the conditions that Germany faces now, recognising that across Europe, we cannot afford a surplus of high-cost manpower, when the deficit is in deployability.
A new phase, and a significant step forward in Germany’s post-cold war reconfiguration to face the future Symbolised by the commitment made to the mission in Afghanistan..
As the third largest contributor, the Bundeswehr is working alongside, and sharing the risks with, 49 other nations, including Britain, to ensure that Afghanistan does not again become a safe haven for the international terrorism and radicalisation which is the most immediate threat we all face.
For both Britain and Germany, the test of transformation will be the ability to generate the level of military capability set out in our plans.
But it will also rely, in Germany in particular, on the ability to generate the political will and public support for the deployment of military resources more widely in the future in support of Alliance operations beyond our borders.
By re-focussing existing budgetary resources on more deployable capabilities, Germany has probably a greater capacity than any other European NATO partner to contribute to short-term enhancement of the Alliance’s capabilities.
It is in all our interests to encourage Germany to realise that potential. I agree with Minister de Maiziere that the posture of the cold war- preparing to meet threats as they come to us - cannot deliver the security Germany needs in the 21st century.
With the US, rightly, turning to focus more of it’s attention on the pacific, we Europeans need now to step up to the plate to deliver security in our own neighbourhood, but also to project power to meet threats to our citizens as they arise abroad.
In the long run, we need to see all NATO partners meeting their financial commitments to defence.
But in the short-term, with no additional resources realistically available, we have no choice but to do things differently; focussing relentlessly on the production of deployable capability.
And developing the political will within our Nations, to allow the projection of power, including military force, to confront threats to our security, wherever they arise, and whatever form they take.
Building a European contribution to collective defence that effectively responds to the challenge articulated by Secretaries Gates and Pannetta.
And in so doing, strengthening NATO as our vehicle of choice for multi-lateral military action.
So maintaining the transatlantic link which is the ultimate guarantee of our security, even as we resolve to do more for ourselves in Europe.