I have to say that in listening to the wonderful musicians, I'm half tempted instead to sit down and perhaps try to play -- (applause) -- my selection.  But given that there's been no time to practice, perhaps I should talk instead about German-American relations.

As I sit here and I see many friends, I want to thank this great organization, Atlantik-Brücke, for its vision for German-American relations, for its vision for transatlantic relations, for all that it's done over the many years to fulfill the vision of Eric Warburg and the vision that transatlantic relations would not just be strong in and of themselves, but that they would be a pillar for democracy and freedom worldwide.

As I look out, and particularly as I see Chancellor Kohl and Joe Joffe and some other friends from the time, I realize how really very fortunate I was to be a part of that time.  I was lucky enough to be the White House Soviet specialist at the end of the Cold War.  And I can tell you it really doesn't get much better than that. 

But when I look back on those remarkable events, what I really realize is that we were all just harvesting the great decisions that had been taken by people like Adenauer and Truman and Acheson and Nitze and others in the early Cold War:  The decision in 1947 -- 60 years ago this June -- to aid a suffering people and a suffering continent with the Marshall Plan.  In 1948, to assist the people of Berlin with an airlift that none really thought possible.  And in 1949, to join together in forming what still remains the greatest alliance ever, the North Atlantic Treaty Organization.

We were harvesting, of course, the work of future leaders like John F. Kennedy’s commitment to freedom, made clear here in a then-divided Berlin.  And of course, as several have noted tonight, Ronald Reagan’s courageous decision 20 years ago to call upon Mr. Gorbachev, a courageous man in his own right -- I agree with you, Mr. Chancellor -- to tear down that wall.

Now in that there's a vital lesson for our times, and that is that Americans and Europeans achieve great success together and that's certainly true.  But the real lesson is how we succeed together -- neither by seeking power for its own sake, nor by pursuing our principles apart from reality, but by uniting power and principle together to achieve great purpose and enduring purposes. 

We deal with the world as it -- we all have to do that -- but we strive to make the world better than it is:  more just, more free, more prosperous, more peaceful.  Not perfect, that is beyond our reach, but better is not beyond our reach.

I don't expect the United States and Europe to agree on every point and policy.  We've been through our differences, perhaps most recently in the years between 2002 and 2003.  But I have to say that in some ways -- and I see the Ambassador smiling -- who was in Washington at the time.  But, you know, as I look back to that time, what really strikes me is that we somehow got into a mentality of mostly analyzing ourselves:  how was our relationship doing?  Could our relationship be saved?  Could our differences be overcome?

Well, two years ago, President Bush came to Brussels after his reelection, and he said "as past debates fade, as great duties become clear, let us begin a new era of transatlantic unity.”  And I think we have begun that.  It should be clear that we are doing it in places like Iran and Darfur, in Afghanistan, to the peace that we seek in the Middle East, we’ve gotten our alliance off the psychoanalysis couch and we are now putting it to good uses in the world.  Tonight, I'd like briefly to focus on what I think are the two great goals of our partnership -- one near-term and one somewhat longer term.

First there is the goal of harvesting those good decisions that were taken at the end of the Cold War by people like the Chancellor and Margaret Thatcher and President George H.W. Bush and indeed Gorbachev.  It's a task of realizing, once and for all, the vision of a Europe whole, free, and at peace and of realizing with our strongest partners, partnership in leadership, a phrase that came to characterize German-American relations at the end of the Cold War, and we're close. 

Croatia is on the path to membership in NATO and the EU.  Albania and Macedonia are going to follow soon.  Georgia will take steps toward this goal and Bosnia too.  And should Ukraine choose, that path will be open to Ukraine as well.  And as Turkey continues to integrate its Muslim traditions with its secular democracy, I hope that its inclusion in the European Union will be forthcoming because it would strengthen Europe, not weaken it. 

But of course, our most pressing challenge right now is Kosovo.  The status quo there is unsustainable, and independence, supervised at first, is the only realistic and desirable course.  Delay will bring little but the threat of reality of instability.  We need to resolve Kosovo’s final status now.  At the same time, we need to show the citizens of Serbia that they, too, have a democratic future in Europe.

And there is one more step.  Many of you will recall that your friend, Chancellor, George H.W. Bush, in his speeches about “Europe whole and free,” always affirmed the importance of a positive relationship with Russia, both for Europe and for America.  Today, we are still working out the nature of that relationship.  And as we go forward, it is important that we be realistic.

Russia is a great nation, deserving of respect; a nation with whom we want to and need to cooperate, and a nation whose citizens now enjoy greater security, opportunity, and even more personal freedom than at any other time.  Russia today is not the Soviet Union.  I knew the Soviet Union.  This is not the Soviet Union.  But this is, of course, not the standard to which Russia wants to be held, nor to which it should be held. 

We want Russia to be strong, but strong in 21st century terms -- not just with a strong center, but with strong, independent institutions, both in and out of government; a strong, independent judiciary and legislature; a strong, independent society with a strong, independent media; and free and fair elections with access for monitors.  Democratic institutions and an open society are not a source of weakness.  Nor is freedom of speech and freedom of press a nuisance.  They are pillars of modern society.

When we differ with Russia, we will consult, we will address their views seriously, and we will express our own views candidly.  In that regard, I have to tell you that I find Russia’s recent missile diplomacy difficult to understand, and we regret Russia’s reluctance to accept the partnership in missile defense that we have offered.  We also think that Russia should work with us to ratify the Adapted CFE Treaty, not suspend its obligations under that treaty. 

But for both Europe and America, our relations with Russia will, of course, remain large and complex – a mix of cooperation and competition, of friendship and friction.  This has always been the case.  But we have achieved great things together before.  And we are doing so now in the areas of nuclear nonproliferation, in the fight against terrorism and in the Middle East.  This must be our goal, to continue to achieve progress in partnership with Russia.

The first goal then that I've outlined, the short-term one, is to harvest the good decisions of the previous era -- completing a whole -- a Europe whole, free and at peace, and with -- working with Russia realistically and in partnership as much as we can.  But there is a second goal.  And that is to lay a foundation of good decisions that others can harvest in the future.  And I would define that challenge this way:  To expand the circle of well-governed democratic states that can provide for their people and act responsibly in international politics.

For six decades, America and Europe have been at the center of an open international order; a system of free minds and free markets rooted in our common ideals of peace and prosperity, human rights and dignity.  A system that has turned communists into capitalists, global rivals into emerging partners, and that has enabled more people worldwide to live in hope and opportunity.

Today, that international order is under stress.  For our alliance, the greatest threats no longer emerge within Europe, but beyond Europe.  They are global threats that could cripple our open international system:  threats like climate change and energy security, failed states and the spread of weapons of mass destruction, and of course, the rise of violent extremism, particularly in the wide arc from North Africa, across the Middle East, and into Central and South Asia. 

This region is in the midst of historic transformation.  From Morocco to Afghanistan, many countries are trying to define for themselves a modern social contract; a constructive relationship between politics and religion, tradition and modernity, Sunni and Shia, society and the state. 

This is a tectonic change.  It is a generational challenge.  And it is made all the more difficult because violent extremists -- of every sect and every ethnicity -- are determined to tear down the progress that the majority of people want to build.  These extremists have nothing positive to offer.  Nothing -- just the perpetuation of grievance, the stoking of hatred and the murder of innocents, which is against the principles of Islam itself.

Yet, despite this violent extremism, despite attacks on their lives and those of their families, reformers and modernizers are standing up all across the region.  They are saying that they want to build democratic governments, not tear them down; that they want to join the global order of free minds and free markets, not attack it.  Many of these people are risking everything for a better life, and they are doing so often with little more than hope itself -- a faith that the civilized world will take their side, support their aspirations, and help them realize a future of dignity for themselves and their children.

All they ask of us as nations of great power and privilege is that we do what others did for us in times of need -- to stand by them, because it is the right thing to do, and also because we have a profound stake in the success of all who seek to build a tolerant, peaceful Middle East.  We have learned this lesson, and we've learned it the hard way. 

The central challenge today for the people of the Middle East is to build modern, successful states.  For some, like Lebanon and Iraq, the goal is to strengthen weak democratic states so that they can fulfill the basic responsibilities of sovereignty.  For others, from constitutional monarchies to more authoritarian regimes, the goal is to reform excessively strong states so they can liberate the talent of their people, not stifle it.  And of course, for the Palestinians, the goal is to create a state where none has existed before -- a democratic state that can live side by side in peace with Israel. 

In the face of violent extremism, responsible leaders, both Israeli and Palestinian, are working to realize their desire for peace and a better life.  Prime Minister Olmert and President Abbas are now taking initial steps to accelerate that progress.  They are working together on immediate issues like improving moving -- movement and access, and preventing arms smuggling and rocket firing into Gaza.  But they are also working to develop a political horizon that can end the conflict, end the occupation, and lead to the creation of a Palestinian state. 

This process is critical to build an environment of confidence.  Palestinians must know that their state will be viable.  Israelis must know that a future state of Palestine will be a peaceful neighbor -- and that every Arab state will finally accept Israel’s place in the Middle East.  Both sides must have confidence that normal economic and trade relations will exist between them, and that they can contribute to the welfare of both their populations.

America and Europe have a vital role to play in this vital region.  We must help parties to overcome obstacles, develop new ideas, and rally regional and international support for their efforts.  And I want you to know that peace in the Middle East is one of the highest priorities for the President and for me.

Our alliance is being tested.  It's being tested in many places around the world.  It is being tested in ways that its founders would never have dreamed, and that seemed quite impossible even just a few years ago.  The new circumstances are forcing us to transform our traditional alliance structures, and to reach out and to -- do jobs in places that once seemed far-flung from our areas of responsibility. 

And perhaps the greatest test of the moment is in Afghanistan, where we need to do a better job of aligning our civilian and military operations.  That doesn't mean a division of labor.  We both need to fill -- we need to fill both roles together, because when NATO troops clear the Taliban out of a town, our civilians need to move immediately in to rebuild it -- not to run feasibility studies; to rebuild it.  And when the schools and hospitals and roads that we do build come under attack, we must defend them, as well as the innocent Afghans who need and want our protection.

Ladies and gentlemen, the challenges we face -- from fighting disease and poverty, to stewardship of our environment, to helping to create well governed states, to helping people to make the difficult transition that is being made in the Middle East -- are indeed significant.  Sometimes, they may even seem overwhelming.  But in retrospect, they are no more daunting than the ones that we have faced before and overcome together.  In the ruins of World War II, our alliance built an international order that has spread peace and prosperity and freedom across the world.  We now have an opportunity to put this global system on a firm footing for the 21st century.  And we should have no reason for doubt or despair.  To the contrary, we should have every reason for optimism because we need to remember that history's judgment is almost never the same as today's headlines.

After all, who could have imagined -- in 1947, or 1948, or 1949 -- that France and Germany would never go to war again?  Who could have imagined -- in 1987, or 1988, or even early in 1989 -- that Europe would be now whole, free and at peace, and that the last NATO summit would have been held in Latvia?  And who would have thought that we would meet tonight in Potsdam to celebrate our democratic partnership and the strength of our alliance?

So as we do our work together -- my friends, my allies -- as we lay a foundation of good decisions, of power and principle, that others can harvest after we exit the stage, a day will come when our successors will look back on these times and they will ask themselves:  Who could ever have doubted the success of freedom and peace and prosperity for the people of Iraq?  Who could ever have doubted that Afghanistan would become a thriving and democratic part of a dynamic and secure Central Asia?  And who could ever have doubted that two states, Israel and Palestine, would live side-by-side, in peace and security, at the center of a better Middle East?  Not a perfect Middle East.  But a better Middle East. 

Because you see, my friends, it is the nature of a historic sweep of humankind; that that which seemed once impossible in retrospect seems to have been inevitable.  Let us act on that legacy.  Let us act on it together.  And let us act with the confidence of our forefathers to honor their memories and to honor the system and the values that they sustained.

Thank you.