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- Good morning everyone.

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It's indeed a beautiful day here in Budapest

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and I've already thanked the minister for

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providing us such lovely weather over these past days

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and I understand it will continue until tomorrow.

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But truly, it's an honor, Minister,

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to share the podium with you.

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Thank you for your hosting of this meeting

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and thank you to all your colleagues from your ministry

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and across the Hungarian government who have

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helped to put this meeting together.

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I also wanted to thank General Mercier for

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putting it together and being the intellectual powerhouse

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behind these annual Transformation Seminars.

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They are so important, I think, to driving NATO forward

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in a way that really helps to ensure that we are

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a vital institution constantly on the cusp of adaptation.

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It's appropriate that this year's NATO

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Transformation Seminar is taking place in Hungary,

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a country that has produced transformational inventors,

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innovators, and out-of-the-box thinkers

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from its very founding.

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Over the years, inventors and engineers of Hungarian origin

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have given us, among other things, the helicopter,

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the Model T Ford, the assembly line.

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I thought Henry Ford invented those, but it was

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apparently a Hungarian.

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Holography, color TV, and last but not least

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the Rubik's Cube which has frustrated and fascinated

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millions of people around the world over the years.

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That same spirit of innovation and transformation

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lies at the core of ACT's mission, and is reflected

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in the theme of this seminar: Improving today,

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shaping tomorrow, keeping the edge by bridging the two.

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Keeping our edge sometimes requires going out

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on a conceptual ledge so to speak.

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It means considering novel ideas and thinking in new ways.

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I salute the entire team from ACT for your ongoing

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determination to push the envelope in

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the direction of change, and also continuous adaptation.

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As General Mercier will discuss with you today,

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ACT is focused on adaptation, exploring innovative ideas,

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outside-the-box concepts, potential new technologies,

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and strategic approaches.

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That's exactly what this NATO Transformation Seminar

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is all about.

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This is the time for barrier-free brainstorming

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and unfettered creative thinking.

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That is why I so truly welcome the role of the

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International Institute for Strategic Studies

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in this endeavor.

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The IISS is a place where I am also an alumna.

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I served there as a research associated in the mid-1980s

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and as deputy director of the institute in the mid-1990s

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so I'm actually delighted to see the way in which

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the institute is returning to its roots

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in the transatlantic relationship.

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I was very interested to read the paper that the IISS

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has produced, about a persistent federated approach

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for us to consider and discuss over the next two days.

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As I understand, it's about turning NATO into Uber,

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or Uber into NATO.

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I think it's up to us over the next two days

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to decide which is which.

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So that's a very worthy challenge I would say.

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But joking aside, the paper is about enabling NATO members

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to connect more closely, more flexibly, and

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on a more persistent basis.

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A topic well worth discussing in the coming two days.

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I want to thank the IISS for this contribution,

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as well as for helping us to organize this seminar

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and for providing us with a number of the

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moderators and speakers.

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I want to underscore another thing that's

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important about ACT.

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It is headquartered in Virginia, and in that case

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ACT is NATO's home in North America.

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So in addition to everything else, ACT serves as

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the vivid symbol of NATO's enduring transatlantic bond.

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Since our founding in 1949, NATO has adapted time and again

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to changing security environments.

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During the Cold War, NATO focused on

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collective defense and deterrence.

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After 1989 we adapted to the changed circumstances

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by including crisis management beyond our borders.

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The mantra then was "Out of area or out of business."

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In the 1990s, NATO indeed went out of area

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and helped to stop large-scale bloodshed

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in the Western Balkans.

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We adapted in other ways, too.

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Before 1990, NATO had zero partners.

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Now we cooperate with a network of 41 partners

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in Central Europe, Eastern Europe,

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Central Asia, and beyond.

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Many of those partners are represented at our meeting

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here today, and I truly welcome their presence

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and look forward to them enriching and contributing

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to our discourse.

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As a result of working with our partners,

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today NATO is smarter, more agile, and more effective

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as an alliance.

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Our evolution included the addition of 12 new NATO members

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between 1999 and 2009, beginning with Hungary,

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the Czech Republic, and Poland.

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This infusion of new members and new perspectives

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has spurred organizational change and new thinking.

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In response to 9/11 we invoked our collective

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defense clause, Article V, for the first time,

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and we adapted even more.

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We deployed our largest combat mission to ensure

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that Afghanistan would never again become

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a home and a platform for international terrorists.

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After the watershed events of 2014 with Russia's

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aggressive actions in Ukraine and the rise of ISIL,

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it became clear that NATO must engage in both

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enhancing collective defense and projecting

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greater stability beyond our borders,

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and we must do both at the same time.

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Over the past two years, following decisions made

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at our Wales and Warsaw summits, NATO has implemented

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the biggest reinforcement of our collective

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defense capabilities since the end of the Cold War

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and we are sharpening our focus on additional steps

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we can take both to project stability

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and to fight terrorism.

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I am chairman of a new group at NATO, the

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Projecting Stability Policy Board, and I wanted to say

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just a few words about what we are trying to accomplish

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with this group.

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We all knew that when our neighbors are more stable,

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we are more secure.

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NATO projects stability in various ways,

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through our partnerships, through our training

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and capacity work, and through crisis management.

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Projecting stability is a broad and cross cutting effort.

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To do this most effectively, we need to do it as one NATO.

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To that end, foreign ministers endorsed a report

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in December of 2016 that set forth a number of objectives

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and taskings, and the Secretary General appointed me

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to lead the new Projecting Stability Board

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which draws together all civilian and military divisions

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and the strategic commands at NATO.

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Last week, the board began our work, concentrating

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on three main areas.

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First, to bring coherence, prioritization

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and clear objectives to current efforts

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related to projecting stability.

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This will include taking an in-depth look at

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neighboring countries that we consider to be our priorities,

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and working to harmonize all of our stability building

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efforts for those countries.

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Second, to make better informed resource decisions

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which may require institutional adaptation to ensure that

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we coordinate work across all of our divisions at NATO.

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And third, most importantly, to generate

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new policy proposals.

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If we find that we need to change our approach,

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we should do so.

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That is the essence of NATO's adaptability.

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Next week I will present the early results of our work

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on the Projecting Stability Policy Board

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and set forth a detailed plan for the board's work

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in the months to come.

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Projecting stability is an extremely

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complicated undertaking.

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It requires close cooperation with many different partners

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over an extended period of time.

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There are no quick fixes.

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Projecting stability and increasing our role

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in fighting terrorism are central to NATO's agenda

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and will be for years to come.

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All of our efforts to adapt to changing security challenges

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will require a combination of determination,

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unity of purpose, innovative thinking,

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and increased defense spending.

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But on this point, I want to really emphasize

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a favorite point that Secretary General Stoltenberg makes.

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We not only need to spend more,

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we need to spend better as well, and that is an

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important, I think, contribution that both ACT makes,

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helping us think about how to spend better,

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but I challenge you to help us on that important road

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in our meetings over the next two days.

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NATO faces serious challenges to our security

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and to the stability of our neighbors.

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Our alliance remains strong and united as we

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continue to adapt.

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So I encourage all of us to explore bold new ideas

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and challenge old assumptions.

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What happens at the seminar over these two days

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will not stay in Budapest.

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Our deliberations here will influence our decisions

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at the upcoming meeting of the heads of state

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and government in Brussels, and at our summit in 2018.

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Perhaps you've heard, yesterday the Secretary General

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did confirm the meeting of heads of state and government

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in Brussels on the 25th of May.

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So we are looking forward to that and indeed

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your deliberations and the outcome of this meeting

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will flow quite nicely into the discussions there.

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I am confident that this year's seminar will

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inform NATO's policies today, help us to creatively

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shape tomorrow, and keep our edge for many years to come.

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NATO has been so successful for almost 70 years

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because we have continuously adapted,

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and today as we face the biggest challenges in a generation,

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we must continue to drive that adaptation

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for generations to come.

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Thank you very much for your attention,

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and I look forward to our discussions.

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(applause)