MR. GEDMIN: Good morning, and welcome. My name is Jeffrey Gedmin. I'm resident scholar at the American Enterprise Institute, and I'm the executive director for the New Atlantic Initiative. It's my pleasure to welcome you here for a very timely discussion, two issues that in some ways drive the transatlantic debate -- one perhaps more from Washington -- and that's the subject of ballistic missile defense; and the other perhaps more from certain European capitals, and that's the topic of European security and defense policy.

Senator Thompson is our co-host -- we've worked a lot with you, Senator Thompson -- it's great to be here with you again. And I would like to turn the floor over to you to kick us off and get us started. Thank you.

SEN. THOMPSON: Well, thank you very much. I want to thank the American Enterprise Institute, and you, Dr. Gedmin, for inviting our friends here, for organizing this important and timely event. Looks like the provocative nature of the title, "Is the Alliance Pulling Apart?," worked its purpose, and got a lot of people here and interested today.

I think that most of us would agree that NATO is the most successful alliance of its kind in the history of the world. But a lot of things have happened since its inception, such as the demise of the Soviet Union; the rise of threats of weapons of mass destruction in the hands of a score of small and potentially hostile nations; the war in Kosovo which showed strengths and weaknesses with regard to the alliance, with regard to the various countries, ourselves, the European allies, our disparities in terms of military capability, and so forth.

The United States, to greatly overgeneralize I am sure -- but the United States' response to all of this has been a missile defense program. The European Union's response has been in part at least the European Security and Defense initiative and the proposal for a rapid response force. I believe it would be accurate to say that each is met with lukewarm response on the respective sides of the Atlantic.

Questions of course arise for both the United States and our European allies, both in and out of NATO. What does the missile defense system do with regard to our relationship with Russia? What does it do with regard to a potential new arms race? What about the ABM Treaty? On the other hand, with regard to ESDI, who will control what? Whose views are going to prevail? If you look at the details of Nice, is it all that clear? Is there a French view, as opposed to perhaps our friends in Great Britain? How is this going to come about when there seems to be maintaining of defense budgets with regard to some of our European allies an actual decline in defense budgets with regard to some of our major European defense allies? And is it simply a check -- designed to be a check on American power? These are all important questions, and of course the underlying question is: How does this impact NATO? Are these simply discussions among friends to be quickly resolved, or do they reflect something going on that's more fundamental than that?

Fortunately we have the gentleman here today who can answer all those questions. (Laughter.) And I am very pleased that NATO Secretary General Lord Robertson has agreed to share his views with us today on these matters. He has been at the forefront of this discussion, and I may say in the middle of the storm, since assuming his current position in August of 1999. And his efforts to find common ground on these critical issues not only between the United States and its NATO allies, but with Russia and others, are well known. Given his distinguished career -- member of parliament, defense secretary, et cetera, Lord Robertson is eminently qualified to handle these difficult and complex matters, which is why his presence here today and his presence in Washington this week is so important.

I am also pleased to welcome Dr. William Schneider, president of International Planning Services, Incorporated, who will provide a response to Lord Robertson's comments. Bill also has a very distinguished background, having served as undersecretary of State in the Reagan administration, a member of several renowned advisory groups and commissions, a scholar at the Hudson Institute, and an author of several books on national security affairs.

So welcome, ladies and gentlemen. And Lord Robertson.

LORD ROBERTSON: Thank you very much, senator. Mr. Schneider, Dr. Gedmin, ladies and gentlemen, it's a bit intimidating being back in parliamentary surroundings. I used to say, I hope you'll forgive me for being nervous -- I'm a Labour politician, and I am not used to big crowds. (Laughter.) But I'm not a Labour politician, or a British politician anymore. And I was described in a Moscow phone-in program a couple of weeks ago when I was in Moscow, they said, "Mr. Robertson, they say that your grandfather was a policeman, your father was a policeman, your brother, your son and your nephew are all policeman. How does it feel to be the world's policeman?" (Laughter.) Well, I -- it's an interesting question to be asked in Moscow. And certainly as secretary general of NATO I have an interest in international law and order, and that is I think one of the abiding values that unites both sides of the Atlantic.

And it's very pleasant to be here in the home of the United States Senate -- and I can't think of a better place to discuss the challenges facing NATO, and my thoughts on how we get through them, in ways that actually leave NATO stronger and better for the effort.

I am also very pleased to speak with you under the auspices of the American Enterprise Institute's New Atlantic Initiative. It's gratifying to have a dedicated political and think tank effort in renewing American support for NATO.

Eight years ago I believe the Carnegie Endowment was the primary waiting zone for filling the ranks of the then-new administration, and Carnegie was seen as a top think tank with the right connections. Now it appears that the same thing is happening to the American Enterprise Institute, and I am very pleased to be among the first visitors to recognize not only the tide of government but the tide of think tanks is also changing here in the U.S.

But I am here today not to talk about the tides of political survival in Washington, but instead the tides of renewal in NATO relations. It seems that every few years we have to go through a period where the continuing vitality of transatlantic ties are yet again called into question, with some mutual recriminations on both sides. And then we realize that the differences that we have are not as big as they seem, and that the tides that link Europe and North America are deeper and much more fundamental than we often realize.

Just over 10 years ago there was a strong transatlantic consensus that the principal threat to NATO was the USSR. If you were to ask the question today, What is the principal threat to NATO? -- well, there are at least some Americans who would say ESDI, and some Europeans might even say NMD. But at least we continue to agree that the principal problem is an acronym. There is a pattern here, because the other main challenges that I am dealing with at the moment are the situations in the FRY and in the FYROM. And I can tell you, having tried yesterday to do sound bites about the former Yugoslav Republic of Macedonia, you only have to actually say it twice and you have used up the standard American television sound bite. (Laughter.) But acronyms are the plague of us all. I remember as defense secretary in the United Kingdom saying I am going to have a war on acronyms -- I will eventually get rid of all acronyms. And General Sir Charles Guthrie, the chief of the defense staff, looked at me across his glasses and said, "It will be easier to solve Bosnia." (Laughter.) And so it turned out -- Bosnia is doing rather well, and the acronyms are still proliferating.

But I raise these two issues -- European defense and missile defense -- just as you did, senator, because they are two of the major sources of the current following of those in transatlantic security. There are many American commentators who continue to see ESDI as some latent threat to NATO. I think Mr. Gedmin's argument in the Senate here just last week that ESDI was indeed a threat, but since the Europeans won't really do anything about it anyway, it's less important than many of the other issues that we face. It wasn't exactly a rousing endorsement.

But many Europeans meanwhile continue in some ways to feel the effects of the United States proceeding with the deployment of a missile defense system, feeling that since such deployment is inevitable anyway it's better to stop discussing whether it will happen and start discussing how. And that's hardly a resounding call for dealing with the missile threat either.

In my view, both of these negative attitudes towards ESDI and missile defense are wrong -- wrong in substance and wrong in the prescriptions.

I want to begin with missile defense. But, before I do, let me just recall the fundamentals that underlie transatlantic relations. First and foremost, we share common values -- freedom, free markets, human rights and the rule of law. And together North America and Europe are stronger and better able to promote our common values than we are doing it separately. Two other principles that underlie our connection are shared risk and shared burdens. In NATO there is not balance, or where it's members are not engaged equitably in addressing common security concerns, is at long-term risk. And this is the fundamental logic of transatlantic relations, and I believe that it still holds true.

So these debates, as tough as they can be, are not about first principles. The first principles still hold, are still strong, and still endure.

For its first 40 years NATO's job in protecting and promoting our nations and their shared values was dominated by the need for us to defend against the Soviet Union. Today the threat comes from very different quarters. Clearly the most immediate risk to peace we are facing in Europe today is in the Balkans, and that's why NATO is engaged in keeping the peace and pushing for the political resolution of the conflict there. And the KFOR and SFOR operations are good examples of burden-sharing, where the United States accounts for only 15 percent -- 15 percent of the troops on the ground.

The other new type of risks for NATO countries comes from the proliferation of weapons of mass destruction. And NATO itself recognizes that the requirement to address WMD threats is in the 1999 NATO strategic concept. And NATO is already conducting its own theater missile defense feasibility studies, and some NATO nations have already joined the United States in plans to deploy theater missile defense systems in Southern Europe.

When I was in Moscow just the week before last, Defense Minister Sergeyev handed to me his plan for non-strategic missile defense in Europe, a plan that identifies missile threat, and acknowledges that a military solution is part of the answer. The details at the moment are still pretty sketchy, and of course part of the Russian impulse may well be about driving wedges between Europe and America. But when I met with President Putin in the Kremlin, he mentioned four states by name, and actually used the terror rogue states. So I believe that not only the NATO countries, but also the Russians agree that the missile challenge is real and it must be addressed. The question of course is: How do we do it?

The concerns previously expressed in Europe about NMD are focused on decoupling and strategic stability. A national missile defense for the U.S., says its critics, could risk decoupling American and European security, and a defense system they claim that tears up the ABM Treaty, but offers clear concept on nuclear strategy to augment or to police mutual deterrence is a great worry.

But the new Bush administration's approach, which aims to include allies and fielded forces in the (NED ?) -- another one dropping the N from NMD, and to put missile defense into a larger strategy of nuclear and WMD security has helped to address these concerns. And the commitment to close consultations with the NATO allies by both the Clinton and the Bush administrations has made clear that decisions that so fundamentally affect the security of the NATO allies will not be made over their heads.

So I am very confident that instead of seeing a major transatlantic row over whether America should deploy the national missile defense system, we are actually going to see some very serious consultations on how a broader missile defense system and strategy will come into effect. And this will reflect again our commitment to common values, common security and shared risks and burden.

Now, concerning these shared burdens, the United States has long argued, and I listened to it over all of these years that Europe needs to produce more defense capability and take on more of a role in the common defense. And while the KFOR and SFOR peacekeeping operations in the Balkans are good examples of burden-sharing, the Kosovo air campaign was conducted squarely on the backs of the United States, and many people in Washington resented that fact, as indeed did many Europeans. So Europe knows that it can and it must do more to take on a greater share of the defense effort. It can never replace NATO, and it doesn't want to do so. But the imbalance that we have between European and American capabilities at the moment is simply not sustainable. So that is the logic behind ESDI. Europe is finally preparing to deliver what the United States has rightly said for so long that it wants: a Europe that can shoulder more of the burden and be a better partner of the United States. As long as the European allies deliver on the capabilities that they promised, then this will be good for NATO and good for Euro-Atlantic security overall.

And I ask you and the American public to trust me, because if I did not believe that that was true, then I would not just be not supporting ESDI, I would oppose it and denounce it.

Now, bear in mind that we are currently in a trap, and that trap I call "NATO or nothing." For any security challenge in Europe larger than a forest fire, there are only two options: NATO or nothing. There's no in between. Yet we all know that the United States does not want to engage in every minor European security problem. And Americans argue -- quite publicly sometimes -- that the Europeans are rich enough, and they ought to be able to take care of problems in their own backyard. And the Americans who say this are absolutely right. But if the option is NATO including the United States or nothing, then the pressure is automatically there to press for the United States to become engaged. And I put it to you that in these circumstances if the United States was to say no then there would be a genuine crisis, and one that we want to avoid.

So we have to see a new option. Building European military capabilities has to be matched with building the institutional role distinct from but closely linked to NATO, in order to create a European option for handling small-scale crises. That is why ESDI is focused on the so-called Petersburg tasks, defined in a town called Petersburg in Germany, and they are humanitarian operations, peacekeeping and crisis management. For the bigger jobs than that, NATO is still the only game in town.

Now, you will have heard me saying "closely linked to NATO." Now that concept, to me and indeed to the European allies, is truly indispensable. Nations after all only have one set of forces, so they cannot have separate and unrelated NATO and EU systems for defense planning. They simply can't afford two multinational centers for planning multinational operations -- one at NATO and one at the EU. And they must find the right ways to include and reassure NATO allies that are not members of the EU that they can participate in the European defense efforts. These are the key challenges within the European Security and Defense Identity, and we are currently working hard to address them.

And as with missile defense, the need to strengthen Europe's defense role was explicitly recognized in NATO's new 1999 strategic concept. So as with NMD, the question is not whether but how we take ESDI forward in a way that ensures it will leave a stronger and better balanced NATO.

In 1999, the American Enterprise Institute published a paper on the development of European security capabilities, and the paper was entitled, "How to Wreck NATO." Well, two years later, happily NATO is still going strong. And it's going strong because we've moved beyond debating whether change is actually necessary, whether it be in European security or in missile defense; but we are now managing that change, taking advantage of change to strengthen our common security. That has been the mark of NATO's success throughout its history, and the main reason why the transatlantic relationship will continue to remain as strong and as vibrant as it is today, as it has been over the last 52 years of its long and successful history. Thank you very much.

SEN. THOMPSON: Thank you very much. Bill Schneider. (Applause.)

MR. SCHNEIDER: Thank you very much for those remarks, Mr. Secretary.

You have offered a very rich diet, and I think it reflects the intensity and sophistication of the transatlantic dialogue to address the security issues that we face in common in the front end of the 21st century.

You have mentioned a number of points, and will just pick out a few to comment on that I think deserve some commentary from the American perspective, I think you've correctly observed the notion that the "N" in "national missile defense" needs to be abandoned. The threat we face in common is the threat from ballistic missiles, and we need to find a constructive way to deal with that that reflects the transatlantic threat that we share in common. The ballistic missiles can be launched at the territory of the alliance, whether the United States or European territory, where U.S. and NATO forces are deployed, as well as to nations upon whom we have come to share the common burden of the common defense. We know that the threat of proliferation is intensifying -- diffusion of that threat within the alliance. The London Daily Telegraph a few weeks ago published an article reporting on the Libyan acquisition of Rodong missiles. And if that turns out to be true, all of Western Europe is in the path of these types of missiles, especially if they are equipped with a biological payload, because then they would have sufficient range to cover the entire continent. This is indeed a threat we share in common, and one we need to find a way to address. Indeed, if there was a shortcoming in the U.S. national missile defense proposal that had been so much the subject of the transatlantic debate, it was the decoupling that was ultimately implied by that, the "N" in that national missile defense. So I think we are in a process of getting past that, and the president has focused on providing opportunities for a revised national missile defense program in the United States that would address these common threats.

One of the issues that I think needs to be addressed, and I think can help engage this problem that you referred to of the difficulties over the acronyms relating to missile defense and ESDI in Europe is to in general have a more sophisticated and mature understanding of the security environment that we are likely to face in common during the 21st century. Yes, there will be threats of the kind to which the Petersburg principles are intended to address; but there are also larger threats that are going to need the support of full weight of NATO membership. And indeed if there among the concerns that exist in the U.S. relates to the question of whether investment will be made in NATO forces that will permit NATO to cope with some of these more sophisticated threats. The investment that is required to address the so-called Petersburg tasks tends to be at the low end of the threat spectrum. But other investments are likely to be needed to cope with the 21st century security environment, including missile defense for the alliance, efforts to achieve a common understanding of the threat picture in Europe, such as airborne ground surveillance, and similar programs such as this that tend to bring the alliance together, are not necessarily sustained by the kind of investment that would be associated with the implementation of the ESDI. This of course is a work in progress, and the U.S. government has not made any decisions concerning that, and will undoubtedly continue in consultation with both NATO as a whole and member governments on the manner in which ESDI spins out.

Another aspect I want to engage us is the question of arms control, since this is likely to be an issue that will be engaged in the United States as well. The infrastructure of bilateral arms control that was created during the Cold War with the former Soviet Union is generally seen as agreements that were structured during a period when we had an adversarial relationship with the Soviet Union. As we stand now, not only is the Cold War over, but Russia is not longer the Soviet Union. It has a constitution, it has an elected leadership, and it is on the path to modernization and the creation of democratic institutions. So sustaining on life support systems the infrastructure of Cold War arms control is probably not appropriate to the management of the relationship with Russia, and we need to look to new ways of dealing with this. President Putin's acknowledgement of the growth of threats that don't necessary engage the Russian-American context I think is a constructive recognition on his part, and there may be some ways in which we can move further in that arena to recognize Russia's acknowledgement of those kinds of threats. But I do think we need to move to a more appropriate way of dealing with the arms control environment.

Just finally, I think one of the worries that continues to prevail in the U.S., and we look forward to having more discussion on this, is a concern that Secretary Rumsfeld heard from a number of European leaders during his meeting at Wehrkunde in February; namely that many in Europe believe it is easier to raise money for euro- centric institutions dealing with security than transatlantic institutions. And if that in fact the case, some of the concerns about the investment in Europe being vectored off in a way that may weaken transatlantic institutions is a source of concern and something we need to remain close on if we are going to be able to cope with this problem. I'll stop here.

MR. GEDMIN: Bill, thank you very much.

I would like to propose the following. First, Mr. Secretary, why don't we give you an opportunity to respond to Bill's response, and then we'll open it up to wider Q&A. Okay?

LORD ROBERTSON: Well, thank you, I'll be brief because it will be interesting to hear a wide range of views. Bill and I are not disagreeing about fundamentals. Therefore I have deprived you of some of the entertainment that might have come from a more robust exchange. And it's actually worth recalling that here is a lot of common ground here.

But he's right to ask the question about whether the Europeans will provide the quantity and quality type of investment in security that is going to be required for the future. If of course all Europeans did was to focus on the Petersburg tasks and on the infrastructure required for that, I think that criticism might be valid. The reality at the moment is there are something like two million troops in uniform in the European NATO countries, and yet we are struggling hard to get the 30,000 troops required for the Kosovo peacekeeping operation. So there must be something wrong in principle with the structuring of European forces if you can only actually mobilize under two percent of those that you have actually got in uniform. So making more of your troops mobilizable is actually a prerequisite not just for dealing with the Petersburg tasks and low- level activity. They are fundamental to what NATO might have to do itself in the future.

Similarly, the drive to create these capabilities will encompass things like strategic lift, the large airplanes required for both troops and equipment, where there is a shortfall; the acquisition of air-to-air refueling, where there is a big European gap; the acquisition of accurate day-and-night capable bombing facilities with precision-guided weapons -- and again there is a big gap in that capability. And all of these are things where the NATO force goals are also short.

Now, in terms of the bigger ticket items, like air-ground surveillance and some of the other things that have been talked about at the moment, then that proceeds as part of NATO's defense capabilities initiative. The commitment is still there to provide for NATO, just as it is there to provide for the headline goal. And I don't think that there is a concern that should be raised about the fact that there is a broader constituency being appealed to in terms of defense investment at the present moment. If some of the European countries are willing to give public support for increased and better capabilities through a new European initiative, then so be it -- we all look for different constituencies in order to raise the profile. It's not unusual in the United States, where these constituencies can be gathered right across the country. The fact is that NATO for most of this country, and indeed for most of the European countries, is seen as being for the majority of its life as a Cold War instrument -- the counter to the Soviet Union. And that was its raison d'etre, and that is where the constituency of support was gained. That has now changed, and that is much more visible to the Europeans than it is to people who live in the United States of America. So it is actually necessary to remind people of why they need NATO, why they still need to have the transatlantic relationship, and why they also need to have the capabilities to deal with new threats and new problems of the future.

But I don't see any irreconcilable differences between raising the broad consensus for defense expenditures in whatever way you can actually achieve it.

In terms of arms control, I think that Bill is right in saying that so much of the arms control infrastructure relates to a bygone era, although it is fair to say that the Soviet Union is not yet a decade dead, and therefore we have to bear in mind the fact that things are moving very quickly indeed.

But what I found interesting about my conversations with President Putin in Moscow the week before last is that he is moving along exactly the same tram line -- distancing himself from the legacy of the Soviet Union, trying not to look at new threats and problems in light of the new circumstances. And I think that that has now provided us with a new opportunity for dealing with the whole gambit of arms control in a radical and maybe a different way of thinking. So it is true that there is still a strong affection for some of the foundation stones of the existing arms control structure. And I think that that is right and natural, because these foundations have actually made the world safer over the years. One doesn't have to go all that far back to remember I think a collective sigh of relief when Ronald Reagan and Mikhail Gorbachev at the Hofti (ph) House in Reykjavik signaled that there may be a diminution of the sort of perilous high alert state that both sides were going to be in at that time. So foundation stones are important. But where they are not relevant, then they have got to be reexamined.

I put a question to President Putin himself at the meeting that I had with him, which was, Given that they presented this missile defense system of their own, however sketchy, I said, Why is it that you recognize that there is a threat of ballistic missile proliferation, and that it relates to Europe and to Russia, but at the same time you expect the United States of America to be constrained by a 30-year-old treaty? Though the answer to that was not a sort of polemical one; it was a practical answer where he said the threat faces the Europeans and the Russians now by states who have already acquired these weapons that can strike at European and Russian targets. At the moment the threat of inter-continental ballistic missiles to the United States of America is further down the road, and we can almost neutralize that threat in different ways. But the answer was interestingly enough a practical answer and not a theological answer. And I think that that allows us some hope to think that the whole architecture might well be looked at afresh, given the fact that the challenges and the threats have also changed.

MR. GEDMIN: Let me follow up with one question before we open it to the floor. You said, Mr. Secretary, in your remarks, that many Europeans fear the effects of American deployment of ballistic missile defense, but they think it's inevitable. And I would like it if you could tell us a little bit about the current climate, discussion, debate, understanding in Europe about the threat assessment. You just described it in connection to what the Russians have said, or what they have said of late. But it seems to me that there's been a pretty vigorous debate in Europe about capabilities, but also intentions of people who possess these weapons. I would like to suggest that you relate it to the larger issue that Bill raised. Bill talked about the need for us and you together as an alliance to be prepared for, as he put it, the 21st century security environment. It seems to me part of that has to do with capabilities, but part of that also has to do I think with nurturing, cultivating, maintaining, growing a common strategic culture and outlook. If Europeans think missile defense is coming, but it's largely undesirable, has there been a growing consensus, as there has been here, that the threat is real, that the capabilities exist, but that the intentions also exist to do harm militarily or through political use of these weapons?

LORD ROBERTSON: The first part -- I meant to address this -- when you say the need for "us" and "you" -- I'm "you." I'm the secretary general of NATO. I'm not a European anymore, or British anymore. I'm still Scottish, but I'm not European or British. (Laughter.) I represent the United States of America in Europe. I represent the Europeans here in Washington. This is one of the 19 parliaments of NATO, and I've got to -- (inaudible) -- keep it. I keep telling people what Lord Carrington, one of my British predecessors said. He said, "I am based in the Midatlantic and, as you would expect, I am cold, I am wet, and I am very, very lonely." (Laughter.) So there is a certain juggling act that is required of any secretary general to make sure that I test the fuel and the temperature on both sides of the Atlantic, and fairly represent it.

I think the first thing that needs to be said is that the debate on missile defense has not really started in Europe. You know, it's maybe an open question as to whether it has really started here. But it has certainly been going on for a bit longer. And so long as it was national missile defense, in many ways I think we Europeans felt that they weren't part of it; hence the worries about decoupling and the problems associated with creating a shield that affected only the United States and not Europe. The fact that there is now a plan that would spread the cover to the European states, to the European allies and to field its forces, I think is going to change that debate.

A second point is although the debate raises high emotions -- and it does so even in the United States Senate, so it is not a consensus position even in the United States, it arises high emotions. But it is nothing compared to the debates of the mid '80s over missiles at that stage. You know, the debate on missile defense in Europe has barely spilled into the newspapers, still less into the streets. So it is really in many ways in its infancy. And I believe that when people start to address it, both in terms of what the threats are, what the risks and dangers are of proliferation and how they might grow and increase and become immediate, then it may well be that a different approach will be taken.

But one of the other aspects that I think may well raise concern might come to the fore as the consultation goes on. And let me say that the consultation by the last administration was very deep and very intense, and did much to reassure the allies that they were part of the process, and did much in many ways to counter the high emotions that may have been engendered by the debate. But as the consultation goes on, one of the questions that may well be raised is the issue of costs. You know, Bill Schneider rightly points to the fact that European defense budgets are on the whole now starting -- well, they have now stopped falling, broadly speaking, and they are now starting to rise, albeit it slowly. If on top of the demands being placed on them for deployable troops, for more mobile and more sustainable troops, and the equipment that goes along with it, was to be added another huge invoice for the United States of America for missile defense, then undoubtedly that is going to make people so collectively -- (inaudible) -- but it may be that we are some way away from that point coming as well.

But a genuine debate that deals with the threats and the problems of the missiles and who has now got ballistic missile capabilities, what they can deliver -- because again there is a tendency to think in terms of WMD, which is an acronym which means nothing whatsoever to 99.9 percent of the general population. But a description, as Bill Cohen used to do about Sarin gas and about anthrax and what can be delivered into the centers of cities, I think would bring the debate alive. But the debate in many ways has still got to start. But it starts on the basis where most of the European allies say that a decision has been taken to do it -- let's now discuss the best way of doing it and when it can be done.

MR. GEDMIN: Thank you. Here's what we'll do now. We have about 20 minutes for discussion. Would you please mention who you are, your affiliation, as best you can -- there is a microphone here -- if not, and you are positioned in the back, please yell from the back. Last but not least, would you please formulate your question in the form of a question, and not a long, long monologue, to prevent me from interrupting you? And let's take a round of three, maybe even four, succinct questions, and then we'll give Senator Thompson, the secretary general, and Mr. Schneider a chance to reply.

Q (Off mike.)

MR. GEDMIN: Let's take a couple others. Yes, please.

Q I'm Pam Hess (sp). I'm with United Press International. One of the bits of shorthand that we use in the press to talk about international concern about NMD is the frequent threats or warnings you get from Russia, North Korea and China in their own ways, that this could trigger a new global arms race. Does Europe think that it actually will? And if it does think that, what effect is that having on your acceptance of NMD?

MR. GEDMIN: Thank you. Yes, sir.

Q I'm Alan Remus (sp) of the Lithuanian-American community. Could you share with us your views on the prospects for NATO enlargement?

MR. GEDMIN: Good. Let's take one more. Yes, sir.

Q (Name and affiliation inaudible.) Senator Thompson mentioned the ABM Treaty. I wonder if any on the panel would elaborate on the effects of the ABM Treaty on NMD.

MR. GEDMIN: Good. Thank you. Mr. Secretary, do you want to lead off?

SEC.-GEN. ROBERTSON: Yeah. Let me just clarify what I said at the United Nations yesterday about what NATO is looking at in relation to the area in southern Serbia, northern Former Yugoslav Republic of Macedonia, and southern Kosovo. There's a ground safety zone that has been established that is five kilometers wide right around Kosovo as it borders with Serbia, which was created as a buffer zone to stop or inhibit any return of Yugoslav troops to Kosovo after the end of the conflict in 1999.

That is now being used, much to our regret, by some ethnic Albanian armed groups as a launching pad for provocative attacks on Serbia. Deputy Prime Minister Covic of Serbia has proposed a plan whereby the Yugoslav forces take back that ground safety zone and responsibility for it. And NATO is looking at that and has decided in principle that it will become the ground safety zone for Serbia, but in a phased and conditioned way.

As part of that process, it has been broken up into different segments. There is a small part of that ground safety zone, one kilometer deep therefore by five kilometers, which is on the Serb- Former Yugoslav Republic of Macedonia border. And NATO is considering but has not yet made a decision to allow Yugoslav troops back into that part of Serbian sovereign territory.

There is no intention, no debate, no likelihood of any Yugoslav troops being allowed back into Kosovo on whatever border until such time as Resolution 1244 has been satisfied. But it is not part of the coming debate, and that should take place. And there was a misunderstanding of what I said yesterday when I gave a press conference after meeting the U.N. Secretary Council about that.

But what we're trying to do is create stability in an area where a small number of extremists are trying to create violence, trying to create trouble. And we are dealing here with the Kosovar Albanian leadership, with the Albanian leadership in southern Serbia, with the Serbian authorities, as well as with the government of the Former Yugoslav Republic of Macedonia as well.

The question about the worries about a potential arms race that missile defense might create. Well, that is not a worry that is confined to European NATO allies. It's also a concern and has been all along a concern of the United States of America as well. The net increase, the net improvement in security, is what all of this project is about.

And that is why the Americans have made it clear that a limited shield is all that is being talked about to deal with accidental firings or the firing by what used to be referred to as rogue states in the United States. And they're still referred to as rogue states by the Russians, but it's not clear what everybody else is calling them at the moment, but by a number of states who may well have that weaponry.

So it is obviously one of the imperatives that any effective missile defense put in place would not stimulate a further arms race or an attempt by other countries to add to their missile stockpiles simply to overcome the defenses that are being put in place.

But I would underline again the Russian initiative. For whatever its motives, it has now recognized that there is a threat, and secondly -- and this is new -- that there is a potential military solution to that threat. They have now accepted that, so the debate can at least take place now on a much more common ground than it was taking place before the Russian offer was made.

On Lithuania, the prospects for enlargement, I'm very weary about giving any forward-leaning answer on enlargement other than to say that there will be a summit meeting of NATO and its heads of state and government in Prague next autumn on a date that has not yet been determined. The nine applicant members will all be treated equally as part of the membership action plan process started here in Washington two years ago.

The countries who apply for NATO membership are expected to be contributors to security and not just consumers of security, and that is a principle that we hold very strongly. And therefore, the standards laid down for NATO membership must be applied strictly to all of the candidate members who are putting their names forward.

There can be no veto on a sovereign NATO decision, or indeed on a decision of individual countries to exercise their own rights and their own security arrangements. But no decision has yet been taken and no decision will be taken until the heads of state and government meet in the capital of the Czech Republic next year.

On the ABM Treaty, the question is asked on what the effect of missile defense would be on that. Well, in certain respects, national missile defense, as originally conceived, would have been a challenge to the ABM Treaty. But the ABM Treaty has been amended before. It is perfectly possible for the ABM Treaty to be amended again. It is a treaty. It is amendable. And if there was an agreement to amend it, then the treaty can be amended.

The Russians, as I say, are now proposing something that will mean effective missile defense for Russia and the Europeans based on a theater missile capability. Purely coincidentally, it appears to be based on Russian technology. I'm sure that's absolutely coincidental. But it does imply that there is a need to look at these things, even in the context of a 30-year-old treaty. So if there is now a solution being offered by the Russians that they claim would not have an effect on the ABM Treaty, then let's have the debate about what the threats are, what the potential solutions are, and then see how that might affect the existing security architecture.

MR. GEDMIN: On the subject of ABM Treaty, arms race, Bill, do you want to add to that? Or Senator Thompson, would you like to say something about that?

MR. SCHNEIDER: Just a footnote on Lord Robertson's remarks. I think one of the ironies that needs to be attended to here is the role that Russia has played in contributing to the problem they are now proposing to address. Russia has played a leading role in providing Iran with its ballistic missile capability, a role that was acknowledged by President Khatami in public in September of '99, and then the correspondence that was revealed during the 2000 election campaign in the U.S. that showed that Russia has made available technology that contributes to the ability to produce fissile material in Iran.

So I think that somehow the dialogue on managing the proliferation problem needs to be erased here, because the threat that's being posed to Europe as well as the United States by these developments is now out of the bag. This technology doesn't just end with the country that it goes to, because, as was shown in the Rumsfeld Commission report published in July of 1998, we have seen that the technology that gets to Iran, for example, tends to go to other countries that have different political objectives but similar aspirations with respect to the acquisition of nuclear, biological or chemical warheads for long-range missiles.

I think the problem that has been created is part of the 21st century security environment to which we in the United States and our alliance partners in NATO need to adjust.

MR. GEDMIN: Senator?

SEN. THOMPSON: Yeah, I would add to what Bill just said about Russia the situation with China, which is usually referred to as the country most likely to build up. It seems to me that they're building up anyway, and we can't make our decisions what they might not have done otherwise. But they are still identified by our national security people and intelligence people as leading the pack in terms of proliferation -- Iran, Iraq, Libya, North Korea -- while they decry our missile defense system.

I think this raises also another issue that has European-American implications, and that is the whole dual-use question. I think you can't discuss weapons of mass destruction without getting into that eventually. We could certainly do better among ourselves. The Bosinar (ph) arrangement is very inadequate in many respects. We have disagreements among ourselves -- the Europeans, the United States -- concerning what is dangerous, what is not.

It reflects, I think, on something that you mentioned, too, and that is a bit of difference in terms of world view, bit of a difference in terms of assessing how much of a threat there really is out there and what the intentions of people are. So we could do better in terms of having a no-undercutting agreement, things of that nature, which we can't even agree among ourselves on. So these are all problems that pour into the whole proliferation issue.

In terms of ABM, it seems to me that it's probably doubtful that we could ever reach an amendment that would allow us to do what we will ultimately decide we need to do in terms of a multi-layered system. For many of us it becomes -- it's an issue of national security and not a treaty. It's a question of the nature of the threat, which, of course, is different. It's a non-state threat. It's an accidental threat, and that there should be some ability to make a decision other than nothing or total response.

I would like to bring up, if I may, a question that I think kind of goes to the heart of the SDI question. I'm still uncertain as to what the latest is in terms of exactly what the rapid-response force would do and where command and control would be. My understanding is that the idea would be NATO would have a first refusal on matters.

I wonder what kinds of significant problems worthy of the name would the United States not be called upon for, but that they would have planning and command responsibility. But then I read where the French foreign minister is talking about separate intelligence operations, separate staffs. The European MPs apparently recently said, "We're not going to fund the separate staff for this operation unless it is independent of NATO" is my understanding of what they were saying.

So I wonder, Lord Robertson, if you could clarify a bit as to what the state of play is in terms of the extent to which there is a consensus as to where the planning is going to lie and where command and control is going to be and how these various other administrative issues are going to be resolved.

MR. GEDMIN: Senator, I would like to take the liberty of adding a follow-up. Last week here in the Senate, Mr. Secretary General, at the same hearings that you referred to earlier, General Clark testified. And General Clark said that on some of these issues, there's a tug of war within Europe. And adding or amplifying what Senator Thompson said, is there a tug of war, or is Europe speaking with one heart and one voice on these things?

SEC.-GEN. ROBERTSON: I believe that Europe is speaking with one voice, and that is a growing recognition that Europe may have to do things in the future and that there will be occasions where the Americans will not want to be engaged in something that is very limited to the European backyard.

Now, rather than sort of postulating forward -- it's very dangerous for me anyway to give scenarios about the future -- but let us look at what actually happened in the past. In early 1997, the pyramid banking system in Albania failed. Large numbers of people lost money as a result of this particular confidence trick. Law and order in the country broke down. Civil war essentially broke out. Vast amounts of weapons were liberated from the stores where the former communist regime had hidden them. And a hideously dangerous situation then arose.

NATO decided that this was not for NATO. Too small, too local, the use of NATO forces not relevant, and handed it over to the then- European institution that should have taken control -- the Western European Union. The Western European Union sort of froze in its tracks, felt unable to do it, and the issue was handed over to the Italians, who very quickly had to cobble together a coalition of the willing -- the Italians, plus two or three other countries offering forces. And they went in there, first of all, to rescue European civilians and not Albanian civilians who were in danger from the conflict and the conflict spreading, and secondly, to try and bring back a little bit of order to that unfortunate country.

They were very successful in doing both. People were rescued, people were evacuated, and law and order was maintained. And Albania has recovered dramatically since that time. Now, there is a situation where the Americans actually made the decision and NATO collectively that NATO was not going to be engaged as a whole.

Now, if that was to happen again, there is no Western European Union. Effectively there wasn't a Western European Union in 1997 either. My colleague, Robin Cook, the British foreign minister, at one meeting summed it up in that brilliantly understated way of saying. He said, "It is possible to exaggerate the success of the Western European Union" -- (laughter) -- which was, you know, code for saying that it was a pretty dismal failure.

So there will be situations like that. And what is seen as being necessary is to have a minimal organization that would then be able to handle these situations in circumstances where the alliance as a whole was not engaged. Now, that does not mean to say the alliance as a whole opt out, because under the provisions laid down at Washington two years ago, if the European Union needs to call upon NATO for assets and capabilities that have been offered to the European Union to do its job which were not offered to the Western European Union before, then obviously the North Atlantic Council has got the right to say precisely what assets and capabilities will be given. So there is a veto by the North Atlantic Council on any decision that is taken by the European Union.

At that point there will be very low-level operations where the European Union countries can go ahead on their own and deal with some very small eventualities. And they can do that just now. Coalitions of the willing can be built up based on the planning capabilities of the British permanent joint headquarters, the French ministry of defense, the German ministry of defense. Even the Italians can cobble that together. But it's not going to be capable of dealing with something that might easily get out of control.

We're still working on the details of how the connection is to take place between the European Union and the NATO planning capability. But it is not envisaged that the European Union would have operational planning capabilities or defense planning capabilities. The European Union would use NATO's capabilities in that area, and therefore there would be full visibility of everything that the Europeans were doing at that time.

There is a slight hiatus in the situation at the present moment because we have still not resolved the method by which we will involve the non-EU NATO countries, and that is holding up the final sort of establishment of the working arrangement. But there is no intention to create something that is a mini-NATO.

There is no intention by the European Union to go it alone and start World War III with 60,000 troops; not a possible scenario anyway. The whole project is based entirely on an umbilical connection to NATO -- to NATO assets, to NATO capabilities, to NATO planning procedures. And it's only on that basis that the whole system can work. So it does not in any way, should not in any way, undermine NATO or NATO's strengths or NATO's integrity.

I'm sorry if that took slightly longer than I intended, but it's actually quite a complex process that is being undertaken, and undoubtedly the most complicated and in many ways the most important development that NATO has been involved in in its 52-year history.

MR. GEDMIN: Thank you very much. Senator Thompson, I want to give you the final word. I would like to take the penultimate word; first, thanking you, Bill Schneider, for doing what you always do, which is to help us raise the level of the conversation to a point that is both deep and sophisticated and succinct. And thank you very much.

Mr. Secretary General, you alluded to the fact early in the conversation today that there was a distinct lack of tension and provocation in the room. And there may be a number of reasons, but I can think of at least two. One is we like you, and the second is you are so bloody good and effective at what you do. And so that's why we're glad that you're the secretary general of NATO. So thank you very much. And Senator Thompson, thank you for hosting us today, and I'll give you the last word.

SEN. THOMPSON: Thank you very much. I think you've summarized the situation in the morning very well. We appreciate your attendance.

It seems to me that the real question, as I listen to the discussion as to whether or not there are perhaps some underlying pressures that we need to be mindful of and concerned about, it seems to me that when particular issues come up, we will find a way to resolve them among ourselves. We always have and I think that we always will. But perhaps there are a couple of underlying factors that might be working in the future that have not in the past.

One has to do with the political pressures that are there. It seems to me that there are substantial political pressures in Europe against engaging in conflict certainly out of the European area; increased pressures on defense budgets. It's certainly, I think, a valid point to make; get your constituency where you can for perhaps any additional mission. But does that not take away from the possible overall effort? And what about those out-of-Europe efforts?

Europe is going to be more dependent upon oil from the Persian Gulf over the next decade than the United States will be. Is there going to be an issue perhaps there? The demographic situation, the pressure on the social programs, retirement and so forth in Europe, are even greater than they are here in the United States. So that to me points toward a continued squeeze on the defense budget, and therefore potential pressure toward, if not political isolation, then certainly toward not involving itself in anything outside the area.

The other one seems to be perhaps a different view with regard to the nature of the threat. And I think that's been adequately discussed. I think that can be resolved by additional discussions. I think the prior administration did go a long way toward that end. Bill Cohen certainly did. We need to continue to talk about the nature of the threat, perhaps do more in terms of intelligence-sharing and that sort of thing.

I do not think our European friends will ultimately feel more safe if the United States feels less safe. So, however, those two pressures not withstanding, as I say, I see no reason why we can't resolve those issues in the future the way we always have in the past.

Thank you, Lord Robertson and Bill. Thank you very much. Thank you, ladies and gentlemen.