Thank you very much for that introduction. And in this fast-changing world, we need leaders with a steady hand and a clear vision for the future. General, you have demonstrated both, and I very much appreciate that.

I also want to thank Larry Baucom – thank you, Admiral, for your leadership of the World Affairs Council of Greater Hampton Roads – Mayor Paul Fraim and the city council for helping to host this event. I’m delighted that Congressman Bobby Scott and Congressman Scott Rigell could join us, and I thank them for that.

It is for me a great pleasure to be back in Norfolk. When I was representing New York in the United States Senate, I was asked to serve on a committee advising the Joint Command. It was a fascinating experience, and I have many very wonderful memories of the meetings and the hospitality that we were afforded here. And it’s especially timely that we would meet, since tomorrow marks the 63rd anniversary of the signing of the Washington Treaty, when 12 countries pledged to safeguard each other’s freedom and committed to the principles of democracy, liberty, and the rule of law.

From those earliest days, Norfolk served as a crucial naval base and training facility for the alliance and our partners. And today it is home to ACT, where staff from every nation in NATO are taking on one of the most important challenges we face together – how to continue transforming our alliance so that it can champion those principles just as effectively in the 21st century as we did in the 20th century. And there can be no better place and no better time, as you celebrate another Norfolk NATO Festival, to discuss the greatest alliance in history and the future we are shaping together.

This morning, I had the great privilege of going to VMI and addressing the cadets and members of the community there. And I talked about General Marshall, an extraordinary American whose life of service still is unique, not only as a military leader but as the secretary of state and the secretary of defense. And I was reminded, as I looked through the pictures in the George Marshall Museum after speaking with the cadets about George Marshall and our vision of how to take those eternal values that he so well represented and bring them forward into today’s time and then projected into the future, of the challenges faced by that generation when they began this great enterprise known as NATO. There was nothing certain about it. NATO and the Marshall Plan were extraordinarily visionary. They were smart power, the original form of that phrase, in action. And it set the future on a firm foundation.

So I think we live in a similarly challenging time. And it therefore is incumbent upon us, citizens and leaders alike, to chart a similarly firmly-founded future, based on the values we cherish and the direction that we seek for the kind of country and world we want to leave to our children.

It was extraordinary, 63 years ago, when this enterprise known as NATO started. Now, some will say the world was a simpler place, divided into that bipolarity of freedom and communism, the West and the Soviet Union and others. And it was dangerous; there was no doubt about that. I grew up during that period and can still remember those drills of going under our desks in case we were attacked by a nuclear weapon. (Laughter.) Looking back now, it seems a little strange – (laughter) – but at the time, we all understood that we were in a battle, a battle for the future.

Well, we are now in a battle for the future. And one of the great attributes of our country has always been how we preferred the future, how we planned and executed in order to achieve tomorrow what we hoped to see happen, and also how we came together for the common good around common goals, and therefore representing in a historic arc the success of this remarkable nation.

Well, as we live in this period of breathtaking change, we are called upon to respond similarly. Democratic transitions are underway in North Africa and the Middle East, whose outcomes are not known. Syrians are undergoing horrific assault by a brutal dictator. The end of the story has not yet been written. The United States has ended combat operations in Iraq, but the future of Iraq is not secure. And in Afghanistan, NATO and our ISAF partners have begun transitioning responsibility for security to the Afghan people.

Now, these and other shifts are taking place in the context of broader trends – the rise of emerging powers, the spread of technology that is connecting more people in more places, and empowering them to influence global events and participate in the global economy like never before. And this is all occurring against the backdrop of a recovering economy from the worst recession in recent memory.

Now, amid all this change, there are some things we can count on. One is the unbreakable bond between America and Europe, a bond created by shared values and common purpose. In virtually every challenge we face today, Europe is America’s partner of first resort. We’re working together in the Middle East and North Africa, in Afghanistan, and reaching out to emerging powers and regions, like those nations in the Asia Pacific.

Now, we will always work together, Europe and America. That won’t change. But the way we work together must change when the times require it. We have to test ourselves regularly, making sure we are focusing on the right problems and putting our resources where they’re needed most. At the State Department and USAID, I started a process designed to do just that: the Quadrennial Diplomacy and Development Review, modeled on a similar review that the Defense Department undertakes every four years. We finished that first review more than a year ago, and it continues to drive our effort to become more adept at responding to the threats and opportunities of our time.

Now all of this should sound familiar to those of you who are following the transformation of NATO. This alliance is no stranger to change. Fifty years ago, it was created to lay that foundation for the reemergence of Western Europe and to stand as a bulwark against Soviet aggression.

After the Cold War, NATO’s mission evolved to reforming and integrating Central and Eastern Europe as they rose from decades of Communism. Then two years ago in Lisbon, the leaders of NATO set another new course for our alliance by adopting a strategic concept that takes on the security threats of the 21st century from terrorism to cyber attacks to nuclear proliferation. Next month, we will take another step in this evolution when President Obama hosts the NATO Summit in Chicago. Now, we are both eager to show off Chicago – I was born there, and he of course calls it home, and we’re looking forward to making concrete progress on a number of important issues.

First, is the ongoing transition in Afghanistan. I understand that your own and Maria Zammit came back yesterday from leading a WAC mission to Afghanistan and will be reporting to your fellow group members throughout the country on what she saw there, and I’m glad the State Department could help make that trip happen.

In Lisbon, we set a goal of transitioning full responsibility for security to Afghan security forces by 2014, and they’re making real progress toward that goal. Al-Qaida senior leadership has been decimated and its relationship with the Taliban is fraying.

Meanwhile, the Afghan National Security Forces are becoming stronger and more capable. Today, roughly 50 percent of the Afghan population lives in an area where they are taking responsibility for security. And this spring, the number will go up to 75 percent.

Now, I’m well-aware we’ve had a very difficult period in that relationship. And there is certainly a lot to be learned from the incidents that we have watched unfold. But it should not (inaudible) the fact that we have made progress and are continuing to do so. In Chicago, we will work to define the next phase in this transition, in particular, we will look to set a milestone for 2013, when ISAF will move from a predominantly combat role to a supporting role, training, advising and assisting the Afghan National Security Forces while participating in combat operations when necessary.

This milestone is consistent with the commitments we made in Lisbon because it will ensure that ISAF maintain a robust troop presence and combat capability to support the Afghan people as the transition completes. By the end of 2014, Afghans will be fully responsible. In Chicago we will discuss the form that NATO’s enduring relationship with Afghanistan will then take. We also hope that, by the time we meet in Chicago, the United States will have concluded our negotiations with Afghanistan on a long-term strategic partnership between our two nations. We anticipate that a small number of forces will remain, at the invitation of the Afghan Government, for the sole purpose of training, advising, and assisting Afghan forces and continuing to pursue counterterrorism operations. But we do not seek permanent American military bases in Afghanistan or a presence that is considered a threat to the neighbors, which leads to instability that threatens the gains that have been made in Afghanistan.

It is also essential that the Afghan National Security Forces that we have worked so hard to train have sufficient, sustainable funding for the long run. We’re consulting with allies and partners to reach a unified vision for how we can support these forces. We want to make it clear to the Afghan Government and the Afghan people, as well as to the insurgents and others in the region that NATO will not abandon Afghanistan.

Now, clearly our relationship with Afghanistan has its share of challenges, from the killing of American and allied troops by Afghan security personnel to the unintentional mishandling of Qu’rans and the tragic murder of Afghan civilians by Americans. People on all sides are asking tough questions about whether we can work past our differences. And while these such incidents have tested our relationship, they have also shown how resilient it is. So the transition remains on track and Afghan officials have worked with us to lower tensions. We have maintained communications at the highest levels and continue having productive discussions on complex issues, like a plan to transition detention operations. We believe a stable Afghanistan is in America’s interest, in NATO’s interest, and we remain committed to working to achieve it.

We also remain committed to supporting Afghan reconciliation. Our goal is to open the door for Afghans to sit down with other Afghans and work out the future for their country. The United States has been clear about the necessary outcomes of any negotiation. Insurgents must renounce violence, abandon al-Qaida, and abide by the laws and constitution of Afghanistan, including its protections for women and minorities. If Afghanistan is ever going to reach its full potential, the rights of women, minorities, and all Afghans must be protected, and their opportunities to participate in their society must be preserved.

We’ve also been clear about the steps the Taliban must now take to advance the process. They must make unambiguous statements distancing themselves from international terrorism and committing to a peace process that includes all Afghans.

So the Taliban have their own choice to make. We will continue to apply military pressure, but we are prepared to work with Afghans who are committed to an inclusive reconciliation process that leads toward peace and security.

Now, as we proceed on these diplomatic and security fronts, we’re also promoting economic development. Afghanistan’s political future is inextricably linked to its economic future, and in fact, the economic future of the entire region. That is a lesson we have learned over and over all over the world: People need a realistic hope for a better life, a job and a chance to provide for their family. And to that end, last year in Bonn, ISAF partners adopted a vision for what we call the Transformation Decade – the period stretching from 2014 through 2024, when international assistance will encourage growth and development in the Afghan private sector. Part of that effort is an idea we call the New Silk Road, a web of economic and transit connections that will bind together a region too long torn apart by conflict and division. We’re partnering with the World Bank and others to help Afghanistan integrate its economy with others in the region, to begin trading and investing with one another, and developing new sources of growth. The private sector will be crucial role in this effort.

On each of these fronts – security, diplomatic, and economic – we are helping the people of Afghanistan strengthen their country and ensure that it never again becomes a safe haven for terrorists.

Our second goal in Chicago touches on a subject that is at the center of ACT’s work, our shared effort to update NATO’s defense capabilities for the 21st century. Two years ago in Lisbon, our leaders laid out a vision for the alliance for the next decade. That vision commits us to ensuring that NATO can deter and defend against any threat. Yet we are taking on this challenge at a moment when the budget of every member country is stretched especially thin. So in Chicago, we will outline a clear vision of how NATO will maintain the capabilities we need in line with the resources we have. This approach works hand-in-hand with Secretary General Rasmussen’s concept of smart defense, which is designed to make sure our alliance remains agile and efficient as well as strong. And I appreciate the work that has been done from ACT in building political support throughout NATO for this innovative approach.

Here’s an example of how it works in practice. We are collaborating on a new Alliance Ground Surveillance system, which uses drones to provide crucial intelligence, surveillance, and reconnaissance information to our forces. If each country in NATO had to buy this system separately, it would be prohibitively expensive. But by pooling our resources and sharing the burden, we can provide better security for every ally at a lower cost. And in Chicago, we’ll decide how to use this system as a hub for joint operations.

There are other ways we will look to strengthen our work together. In Lisbon, for example, we agreed to deploy a missile defense system to provide full coverage and protection for NATO European territory, population, and forces against the growing ballistic missile threat. In Chicago, we will look to advance that goal by developing our plans for NATO to exercise command and control of missile defense assets. We will also seek a commitment to joint exercises and training programs that deepen the habits of cooperation we have developed through our work together in Afghanistan. And we will highlight NATO’s decision to extend the Baltic Air Policing Program, which reassures our Baltic allies and frees up resources they can contribute to other NATO efforts, including Afghanistan.

Finally, our third goal in Chicago will be to cement and expand our global partnerships. Now of course, NATO is and always will be a transatlantic organization, but the problems we face today are not limited to one ocean, and neither can our work be. More than 20 non-NATO countries are providing troops and resources in Afghanistan. Elsewhere, we work with non-NATO partners to fight piracy, counter violent extremism, keep peace in Kosovo. And when NATO moved to enforce U.N. Security Council resolutions on the protection of civilians in Libya, it did so in lockstep with non-NATO partners from Europe and the Middle East.

And let me pause here for a moment to celebrate the role so many of you at ACT played in that effort. Operation Unified Protector was a massive and complex undertaking. It succeeded because our allies and partners collaborated smoothly, and that cooperation was made possible by the training and interoperability planning that you do here. It’s no exaggeration to say that thousands of Libyans are alive today because of your work.

In Chicago we will build on these partnerships, as promised. We’ll recognize the operational, financial, and political contributions of our partners across a range of efforts to defend our common values in the Balkans, Afghanistan, the Middle East, and North Africa. We want to learn what worked and what didn’t, and I do believe in evidenced-based planning. And what we see in NATO is a very impressive example of that. It’s not only the planning that looks forward, but it’s the lessons learned that help us look backward to make that forward planning even better.

Now, the three areas I’ve outlined today – defining the next phase of the transition in Afghanistan, outlining a vision for addressing 21st century challenges in a period of austerity, and expanding our partnerships – shows just how much NATO has evolved over the past six decades. But they should also remind us that we must continue to evolve. Transforming any institution isn’t easy, and it doesn’t happen overnight. In fact, it is a project that never really ends. But we have strong leaders and the right strategies in place. And everything we have accomplished so far points toward how much we can achieve in the days and years to come. If we stay nimble and work together, we can continue to make the world more peaceful and secure.

So let me end where I started, with George Marshall. Now, I’m not sure that even someone as visionary as he could have imagined that NATO would be working together in Afghanistan, or protecting civilians in Libya from a ruthless dictator, or keeping the peace in the Balkans, but I don’t think he would’ve been surprised. Remember, this was a man who played a part in preparing the United States for war in the First World War, rebuilding the Army between the wars, and then rebuilding it again for Korea. This is a man who always understood that our military strength was necessary but not sufficient, that what America stands for, the values that we’ve all (inaudible) and practiced, are really what is most attractive to the rest of the world about us.

And he was also someone who took on himself the task of selling the Marshall Plan to a country exhausted from war. I often just wonder with great admiration how he pulled it off. Here was this idea that he and President Truman and Dean Acheson and Senator Vandenberg and others decided was crucial to America’s future. But just put yourself back into the mindset of someone like my father, who had finished his time in the Navy and was really only interested in getting back to business, raising a family, just having a peaceful future. And all of the sudden, the leaders of his country are saying, you know, we’ve just spent our blood and treasure defeating enemies that we now want to tap you to help rebuild. What an astonishing idea.

And it took visionaries (inaudible) both parties who understood what was at stake in the world that existed after the end of that horrific spasm of violence that took so many lives. And George Marshall went about the business of making the case, coming to organizations like this, speaking to civic clubs across the country, explaining why it was in America’s interest. And thankfully, I would argue, he made that case. And in today’s dollars, it cost about $130 billion, so that people like my father, a small businessman, kept paying taxes that went to rebuilding countries that he had trained young men to go and fight in.

So as we look at the future before us, as complex and unpredictable as it is, we need to be guided by our own very clear-eyed view of what is in America’s interests, and then to chart a path along with our partners in NATO and other nations who share the values that we believe represent the best hope for humanity – freedom and democracy, respecting the dignity and human rights of every person. And as we do that, we of course will have no guarantee of what the future holds. That’s never been possible. But we will once again make the right bet, a bet on America’s leadership and strength, just as we did in the 20th century, for this century and beyond.