I would like to express my gratitude to the Bohemia Foundation for giving me the opportunity to speak in these historical surroundings.

We are experiencing a historic period of profound change in international politics. Innovative thinking and solutions are needed. In this respect, research institutes have played a valuable role in promoting international interaction between scholars and politicians alike. The Bohemia Foundation has become one of the most respected institutions in the field.

The last few years have seen the Czech nation regain its place, resume where it was forced to leave off half a century ago. I would like to pay tribute to the citizens of this country for their indispensable role in what became known as the Velvet Revolution. During the difficult years of foreign repression you showed civic courage and determination. The fire of freedom was never extinguished.

Among the reborn European democracies the Czech Republic has shown the way in the difficult process of transition. It has been able to create dynamic growth and minimize the problems of changing the system to a market economy.

History is marked by continous change. Today, however, the pace of change seems more rapid and the consequences more profound than ever before. This transformation consists of the countervailing forces of integration and disintegration. It is a complex process that we have to manage with an innovative and open mind.

On the whole, the ongoing change is peaceful; a new security order Europe has already emerged in Europe. The disappearance of the ideological division, the democratic and market reforms in Russia, the treaties on nuclear and conventional arms control and the process of European unification are some of the basic factors of the new Europe.

Local military conflicts in the Balkans and the Caucasus have cast a shadow over this peaceful development. The international community has gradually been able to find and create means of crisis management. This would not have been possible without the change that has occurred in the role of NATO. And I refer here in particular to the Partnership for Peace Programme and IFOR.

Russia and its further development is of crucial importance for European security. The country may have reached another historic turning point during these summer months. In the presidential election the Russian people rejected Communism and embraced continued reform. That outcome was not preordained, considering the country's economic and social woes.

The task now is to manage change and strengthen stability in order to build a common security space in Europe. I want to discuss two aspects of this task:

(1) how to strengthen the economic and political foundations of peace and gradually develop the European Union as an increasingly important actor in this context, and

(2) how to support unity across the continent by strengthening cooperative security through the OSCE, the Council of Europe, the PfP, NATO and the WEU.

Immanuel Kant and Woodrow Wilson believed that democracies were not warlike because war never served the interest of the public as a whole; when the public could check the wishes of the rulers, it would therefore prevent bellicose behaviour. We cannot, however, take democracy for granted. Democracy has its economic and social foundations. European integration aims at eradicating the root cause of war, lack of democracy, from Europe. After World War II Europe was too weak to act alone. The American partnership was needed from the outset of the process of restoring peace. Unfortunately, the Central European states found themselves under the rule of Stalin.

Finland was able to make a different choice. Never occupied by the Red Army, we retained our independence and democratic institutions. On that basis, we managed to build good relations with our Soviet neighbour and successfully pursued a policy of neutrality. We developed a Nordic welfare state and participated in Western economic integration through the OECD, EFTA and the European Economic Area. We also promoted cooperative security arrangements, for example, by initiating and actively contributing to the OSCE process.

The end of the Cold War opened the way to the enlargement of the European Union . Like the Marshall Plan it is a historic effort to create a common social and economic basis for stability and lasting peace in Europe. Finland, Austria and Sweden joined the Union in 1995. Now we face the enlargement towards the reborn democracies of Central Europe, the Baltic States and the Mediterranean states.

The further development and enlargement of the European Union is the key task that must be accomplished to achieve lasting security in Europe. The European Union is not and should not become a superstate in which the various nations, states, ethnic groups, cultures and regions would gradually dissolve. President Havel puts it well when he says:

"I see the European Union as the systemic creation of a space that allows the autonomous components of Europe to develop freely and in their own way in an environment of lasting security and mutually beneficial cooperation based on principles of democracy, respect of human rights, civil society, and an open market economy".

Enlargement is a demanding challenge for the European Union. One of the first tasks is to strengthen its identity and institutions. These issues are being addressed at the Intergovernmental Conference (IGC). However, they transcend the IGC and touch directly upon the future of the applicant countries.

The financial framework, the common agricultural policy and regional and structural policy must be adapted to future requirements. A successful transition to the third phase of Economic and Monetary Union will be an indication of the EU's ability to respond to new challenges, such as enlargement.

All applicant countries should have the opportunity to start negotiations simultaneously. Progress and successful conclusion of the negotiations will depend on the candidates' own efforts to reform their societies and solve problems in their external relations.

The European Union today is an increasingly influential actor in international relations. The Union will have a central position in the future development of the international trading system. The global economy continues to become more integrated and interdependent. The European Union needs more trade liberalisation. Free trade with west, east and south is the answer.

The Union, facing continuous change, has also to develop as a political actor. This process should continue on the basis of intergovernmental cooperation of the member states. A more unified and influential European contribution is needed for combating new threats to security, such as ethnic disputes, organized crime, nuclear and environmental hazards, for the creation of crisis management capabilities as well as for political dialogue and cooperation with other global actors.

For the European Union, Russia is a particularly important partner. Only by continuing and intensifying cooperation with Russia with a view to furthering economic reform and democracy, can stability on our continent be ensured. Neither must we forget that Russia possesses vast economic potential. The old wisdom applies: the more economic ties, the firmer the relationship.

I want to emphasize that international security would increasingly benefit from cooperation between the enlarging European Union, the United States and Russia. We have to work with determination towards that end.

Our task is a challenging one because we have to create something new. The Cold War dominated our minds for decades. Now we have to rest primarily on new foundations.

For obvious reasons, enhancing stability and cooperation in Europe is our political priority. The role of the OSCE and the Council of Europe is indispensable. The OSCE provides principles and structures for common security and involves all the countries responsible for security in Europe. It is an important partner for various European organizations and the UN.

Today we know that the OSCE has been one of the key agents for ending the division of Europe. The OSCE provided a reference point for human rights fighters in the former

Soviet Union and in the Central European states. In Prague, the human rights provisions of the Helsinki accord found a powerful echo in the monitoring group Charter 77. Founded on the first day of 1977, its "declaration" called attention to the International Covenant on Civil and Political Rights and the Helsinki Final Act as instruments by which the state had "the duty to abide". The declaration noted that these instruments were listed in the government's official Collection of Laws and were therefore binding. Yet, the Charter 77 document noted that freedom of expression and of religious confession were being violated contrary to the state's obligation to adhere to these international agreements.

The forthcoming Lisbon summit of the OSCE takes place at a moment when the process of building a new European security architecture is entering a crucial stage. The principles and objectives of the OSCE are the ground rules which any new development should respect. The challenge is to find the political will to use the OSCE for stability promotion, early warning, conflict prevention, political crisis management and post-conflict rehabilitation. Operative capabilities of the OSCE have to be developed accordingly.

The OSCE has a major task in the rehabilitation of the area of former Yugoslavia. It should also continue its constructive role in defusing crises in Nagorno-Karabakh and Chechnya.

I attach importance to the work done by the Council of Europe. In this organization European parliamentarians and government representatives alike meet and mingle, thus learning to share the same values, "the European Space of Common Values". Its implementation machinery should be further developed.

Europe must focus on building a cooperative security order. The goal is the establishment of a common European security space where no country feels militarily threatened.

Finland maintains an independent and credible national defence. At the same time we have been open to cooperative arrangements which promote common security. These efforts are taking place on two levels: in the EU and the WEU as well as in NATO. We want to strengthen the common foreign and security policy of the European Union. Finland and Sweden have proposed that the Union be given capability in military crisis management which calls for a strengthened link between the European Union and the Western European Union. We have welcomed the efforts of NATO to redefine its role. We value highly the cooperation with NATO, particularly within the framework of the PfP and in IFOR.

For some countries, like the Czech Republic, full NATO membership is a priority. We believe strongly that every country's right to choose its security arrangement must be respected. NATO enlargement will be a major new development in the European security architecture. Directly and indirectly it will affect the security of the whole of the continent. In Finland we attach special importance to the Baltic region in this context.

NATO has committed itself to enhancing stability and security for all of Europe. It is of crucial importance in this respect that NATO and Russia develop a productive relationship. Obviously, any such structure needs to respect the principles of the OSCE. Any establishment of spheres of influence is unacceptable.

Partnership for Peace should be further developed as a framework for military cooperation in the whole of Europe. Without PfP, no IFOR in its present form would have been possible. This lesson is encouraging.

IFOR has become a major success in the field of military cooperation in the post-Cold War Europe. We have to build on this experience.

An international military presence in Bosnia, even if on a reduced scale, is needed beyond the Dayton deadline. It is needed to safeguard the transition of the war-ridden region towards a lasting peace.

The totalitarian thinking of this century was seeking one big solution for all human problems. Goethe said to Eckermann: "Man is not born to solve the problems of the world but to search for the starting point of the problem and then to remain within the limits of what he is able to comprehend".

Today we are in the process of searching for something new. The vision has emerged. It is a peaceful vision for our era in Europe. I believe we are now able to comprehend it properly.