Dear Ladies and Gentlemen,

Honorable guests,

First of all, I would like to thank the organisers for making this conference a reality and bringing together so many national, European and trans-Atlantic decision makers together. For me it is a great honour and indeed I am very glad to address you today because the topic of this conference is very relevant.

We are in times of crisis and this could be felt across the board - from NGOs to big business to SMEs to the government sector. Everybody understands that the times of rising defence budgets and low borrowing costs are gone.

In some spheres tangible results take long years and lack of political will at the beginning can postpone the outcomes with a generation.

Defence is a sector where traditionally we have very targeted spending but we are currently squeezed by the circumstances to make it even more targeted. Many say that this means trading some capabilities for others. I do not think so. We have smart solutions which can help us mitigate the negative effect of the crisis on our budgets and lay the foundations of the future of the armed forces both in Europe and across the Atlantic.

Smart Defence, or Pooling and sharing - the way we call it in the EU - is an intelligent way to strengthen cooperation and maintain technological and military supremacy globally. However, there is a catch - it is called trust. We need more than ever to trust into our transatlantic and European alliance to pool resources together and share their use in times of need. This can happen only through further developing the political and institutional cooperation we have built so far. Again, conferences like today's one can only facilitate this process.

No country in the world can deal alone with the multitude of security challenges. Our friends from the US often remind us that Europe should take the lead in its own neighbourhood and become a security provider, rather than a security consumer. At the same time the US is still engulfed in various operations worldwide, notably in Afghanistan, while it is shifting more and more focus on East and South East Asia, in particular the South China Sea.

The current economic crisis is a huge challenge for our defence sectors, but if we act smart, if we act together, we can find ourselves even stronger after the crisis. Today's challenges should wake up Europe to the fact that we have neither the time nor the means to maintain our global supremacy. Let's be honest - it is in the past and we need to spend much more cautiously and targeted, especially in sensitive fields such as defence.

We should have no doubt - Europe can be a global player only if it has the institutional and military capabilities for this. And it can happen only though pooling resources together.

Indeed, some steps have already been made. Despite the lack of permanent staff and multi annual budgetary framework the European Defence Agency has achieved progress and concrete cooperative initiatives such as on Air-to-Air refuelling, Medical Support, Training and Maritime surveillance.

          The Ghent and Weimar initiatives from the end of 2010 and the beginning of 2011 gave a strong push to the idea of pooling and sharing in the European Union. Since then there has been discussions at highest level in the Council and EEAS to intensify work in this direction. I hope that the last doubtful member states will soon overcome their reluctance and give a way to a more integrated Common European Security and Defence Policy.

Further steps are needed to strengthen the European Defence Agency and its cooperation with member states and NATO.

The Common Security and Defence Policy needs to reform its financing mechanism and to strengthen its strategic autonomy. In this respect I welcome very much the current decision to activate for the first time the EU operation centre, which will bring together command and liaison  elements of two existing and one planned mission in the Horn of Africa (operation Atalanta, the EUTM Somalia[1] and the Regional Maritime Capacity Building mission). Much time and know-how is lost when the Headquarters travel around Europe, so it is high time we opened and sustained a Joint operations Centre at a European level, which can be used for operations in the Balkans or in ones like that in Libya.

Currently there are several CSDP operations in different stages of preparation - in Libya, in the Sahel region and in the Horn of Africa, and many ongoing ones. The economic crisis has not stop EU's policies, and in some way it may even stimulate them to deepen integration for the sake of the common good.

         Altogether the EU member states spend around 200 billion euro for defence each year. This is less than one third of the US defence budget. Despite this large sum the EU faces serious difficulties in executing complex military tasks. The US still pays for 75% of the expenses for NATO military operations

         The defence market in the EU is very fragmented and still does not function as a single one. France and the UK spend about half of the money in the EU for defence and 75% of the funds for research and technology.

There are more than 1 million men and women in boots in the EU and this costs a lot to the European tax payer. We cannot afford to pay the price for non-Europe and the missing common security and defence policy.

And while we are preoccupied with how to defence budgets most efficiently, budgets skyrocket elsewhere. China doubles its defence expenditures every 5 years. This year alone India raised its defence spending with 17% to nearly 40 billion euro, close to that of the UK. Singapore accounts for 4% of the world's total arms imports.

Military analysts say the defence spending of South East Asian countries together increase in 2011 by 13,5%. Indonesia's budget on defence grew 3 times since 2006. With the same dynamics in a few years it will spend as much as Italy. In some new EU member states such as Bulgaria and Poland defence budgets have grown with up to 50% over the last 5 years. Yet this is not enough to keep Europe on the fast track. Moreover EU spends only 1% of its defence money for research and technology while in some countries 85% of the spending go to personnel only. Overall, figures show that this year Asia overtakes Europe in defence spending.

Let's imagine a hypothetical situation in which this arms race in Asia heats up. What can we do if our major trade routs and supply chains are interrupted and the operations of our businesses are jeopardised. Can Europe do anything apart from diplomacy? Yes, diplomacy is the best tool to solve disputes but as Carl von Clausewitz advises diplomacy is sometimes continued with other means.

The Arab spring brought and it is still bringing fresh examples that diplomacy is not almighty. Crimes against humanity and massacres against one's own people can sometimes be stopped only with force.

The operation in Libya showed many deficiencies in European defence. First and foremost, it continues to be very fragmented between different member states. This is the reason we lack enough surveillance and reconnaissance, satellite coverage and smart ammunitions. Another area, where Europeans should work more is a more efficient common and control structure for the Common Security and Defence Policy.

Media and academics often portray the military establishments as very conservative and unwilling to change. I recall my visit to the Headquarters of Eurocorps in Strasbourg, where I learned that military leadership is sometimes ahead of politicians. Common defence structures, such as the one in question, are in existence already and can represent embryonic European forces. The battle groups of the EU remain unused, but their concept has laid the groundwork for intensifying military to military relations in Europe.

I have to underline that NATO remains the backbone of the Trans-Atlantic relations. This backbone has to carry the increasingly heavy burden of international security not only in Europe, but globally. I recall the words of then US secretary of Defence Robert Gates who last year said it clearly in Brussels: NATO needs more from its European allies. For me, and I can say that this is the predominant view at the European Parliament, the European allies can deliver more only if they work together, when they carry out optimisation plans in close cooperation, when they pool together resources for new technologies and have joint procurement under unified rules. Member states of the EU and NATO should work more to find synergies and to create common pools of resources for joint programs and research. In the long run joint technology will bring together the fragmented military-industrial base and eventually will deliver common standards in more types of capabilities.

Dear colleagues,

we should welcome the initiatives in smart defence and pooling and sharing because they indicate the right direction for developing and modernising our armed forces in the twenty-first century. We have to take resolute steps now if we want to be a credible security provider tomorrow and to be able to act efficiently and swiftly away from home. I hope the EU and NATO have the courage and political will to take these necessary steps because their results will be visible only after years.

         Here lies the difference between a politician and a statesman. A politician looks to the next elections. A statesman looks to the next generation.

         Thank you for your attention and good luck to the conference.