Could you characterize the transatlantic relationship between the United States and the European Union?

To start with, no other relationship in the world rests on such a solid foundation: the United States and the European Union are each other’s number one partner. For the past 60 years the transatlantic relationship has been the world’s transformative partnership. America’s relationship with Europe—more than with any other part of the world—enables both of us to achieve goals that neither of us could achieve alone. This is what makes the transatlantic relationship unique.

When we agree, we are the core on any effective global coalition; when we disagree, no global coalition is likely to be effective. Transatlantic trade and investment outnumber all similar relationships by a wide margin: US$4 trillion per year in commercial sales. Over this decade, US companies invested three times more in Germany than in China. And the Euro became one of the world’s strongest currencies—as Americans sadly discover when traveling to Europe these days.

How have US-European relations evolved since the days of the Cold War?

Politically, Europe has progressed. The Lisbon reform treaty greatly improves EU decision-making. It will make Europe an even more capable partner for America. Our partnership and our friendship remain strong. But today we are facing a whole range of new issues. We are seeing the rapid emergence of new powers and new problems—whilst the Western nations are not always in top shape to cope: economic slowdown, questioning US global leadership, political uncertainties. Also in Europe, new opportunities have appeared, but so have new threats. September 11th was the most obvious proof of this. The clarity of the bipolar world—reliable yet cynical as it was—belongs to the past.

Cold War concepts such as “bloc building” or “containment” are gone, too. Instead, a new global complexity dominates the picture. Our partnership must adjust and transform to address these new global opportunities and challenges. Our military alliance remains essential. But in today’s world, security can neither be ensured by hard power alone nor by any nation alone. Only together do we have a chance to tackle the most pressing challenges of mankind: scarce resources, people left behind by globalization, changing relations in Asia, dealing with political Islam, and fighting terrorism. No single nation can solve these problems on its own—not even the most powerful, not even the United States. “Smart power”—as Joe Nye so appropriately called it—is the synonym for what we needed today: new concepts, a revitalized alliance and particularly renewed American leadership in the world. “Smart power” is George Marshall’s vision in a nutshell. “Smart power” is the key to serving America’s interests, to serving Europe’s interests and—I would argue—to serving the world’s interests. To use “smart power,” America, with its global reach, needs allies; and Europe, for its global contributions, needs America.

Where do climate change and sustainability fit into the transatlantic agenda?

Building a sustainable world is a chief element in securing our common future. Climate change and energy security are the keywords here—topics which directly determine whether we can live safely in tomorrow’s world. Here, the US and Europe can and must be pioneers. We are among the most innovative economies; we have top technologies, top researchers, top universities; we have the two most integrated markets worldwide. Together, we must turn the tide and jointly tackle the twin challenges of climate change and energy security.

We have already started: In 2007 Secretary of State Condoleezza Rice and I set up an EU-US technology initiative in order to intensify research cooperation and to trigger energy innovation. Later last year, the International Carbon Action Partnership was launched to harmonize and finally link regional emissions trading systems. ICAP turned into a very active cooperation framework between the EU and its members, several US States, and countries from the Pacific. It is a testament to the power of cooperative action. My vision is a “transatlantic climate bridge” that brings together like-minded people and institutions in the United States and in Europe. The “MIT Fraunhofer Center for Sustainable Energy Systems” launched in April of 2008 is an excellent example of joint action.

How should the transatlantic agenda incorporate relations with Russia?

Of course, a safer world means that America and Europe must engage with Russia. Both the NATO-Russia summit and the subsequent meeting between Presidents Bush and Putin have shown that we all, Europeans and Americans, share a vital, strategic interest in keeping Russia as an active, constructive partner. Indeed, without Russia’s cooperation, many pressing issues we are facing around the world will be harder to resolve—Iran, the Middle East, and arms control are just a few examples. This does not mean we should turn a blind eye to shortcomings in Russia’s political system. But I am deeply convinced that change towards a more democratic and pluralistic society in Russia will come through dialogue and engagement, not through confrontation and containment. That is why we should hold the incoming Russian President to his remarkable words about “placing freedom in all its manifestations at the heart of government actions.”

How do Germany’s international commitments extend outside the European continent?

Modern Germany’s and Europe’s responsibilities do not end at Europe’s borders. Helping to overcome the conflicts in the Middle East is a top priority. In Israel-Palestine, we continue to actively engage with the Palestinians and Israel’s other neighbors in the region. We continue to work towards a two state solution, allowing Israelis and Palestinians to live peacefully side-by-side in secure and internationally recognized borders. In the case of Afghanistan, Germany stands firm by its commitments to NATO. We have assumed responsibility together. And together we will bring our mission to a successful conclusion. Germany has come a long way over the last ten years in terms of international support to conflict regions. In 1998, we had zero troops on stabilization missions; today, we have over 7200. We supplied the largest contingent in Kosovo and the third largest in Afghanistan. Obviously some would like us to do more. But let me assure you: this is a quantum leap for us—for both policy-makers and the wider German public. We have stretched ourselves quite a bit. Our resources are not unlimited. But we remain firmly committed—politically, and with our highly professional troops on the ground.

How are the transatlantic partners addressing the issue of nonproliferation?

Creating a safer world necessitates doing much more on arms control. We must not allow the disarmament architecture that has been set up over the last decades to collapse. The West should take the initiative, with the United States front and center. At this year’s Munich Security Conference I asked for support for a determined effort on the Non-Proliferation Treaty. There is a strong link between the nuclear powers’ willingness to disarm and the willingness of the non-nuclear states not to build up their arsenals. This is why Germany is so intensively engaged, together with the US and the other P5 countries, in trying to prevent Iran from acquiring a nuclear weapons capability. Smart diplomacy has successfully brought about three unanimous UN resolutions, sending via sanctions a clear signal to Tehran. At the same time, our offer of generous cooperation with Iran stays on the table, should Tehran change course. Germany is determined to continue this dual-track approach with others.

How can America and Europe find an appropriate balance between openness and national self-interest?

America and Europe are currently involved in a serious debate and process of soul searching as to how much openness we can afford. But we are not the only ones. Everybody in the world wants to profit from globalization and to have a fair share of the cake. Together we must find balanced solutions to these conflicting political strategies. The question “What’s in it for me?” is a legitimate one. We must sit down together and work on convincing answers; otherwise, economic differences and despair will increase.

Even more fundamentally, a growing number of people in the world will question the benefits of globalization. And not only that: They will question whether the values we cherish and want to spread have any meaning for them and their daily lives. I firmly believe that, if we envision a sustainable and secure world, we must also create a more open and just world. Our values as democracies; the openness of our societies and our economies remain the foundation of our success. Together we stand for the rule of law and respect for human rights, at home and abroad—and especially in the fight against terrorism. We also share a major interest in further advancing a rules-based system of open global trade through the reduction of barriers to trade and investment - amongst ourselves and with the rest of the world. This is a core transatlantic project. In Europe and in the United States, there are siren songs of protectionism coming from left, right, and centre. I see this with great concern. As we all know: Siren songs are very tempting—and very dangerous. On the contrary, cooperation pays off, politically and in the bank accounts of the people. This is the right course: engagement, dialogue, institution building, global governance.

How can international cooperation be used to handle the current global financial crisis?

Financial difficulties were triggered by neglect of credit risks and market complexities. A remedy requires swift political action, nationally and internationally, within the G7 and the EU, and international institutions like the IMF and World Bank. On a broader scale, globalization with all its benefits and challenges needs rules and regulations—like it or not. This is the only way to break the divide between winners and losers. We need to see these efforts through, together. In the long run, everybody at home and abroad must profit from globalization, otherwise we risk a serious backlash that undermines the case for market solutions and free trade in our societies and casts the political foundations of our democracies into question.

We must enable the key institutions to provide effective global governance. Global governance must be good governance. Global governance must also be just governance. I do believe that transatlantic relations matter, that we can make a difference together. Certainly, different circumstances require new concepts and new leadership. But we, as transatlantic partners and friends—the United States, Canada and Europe with modern Germany at its heart—can make our world a more sustainable, a safer, a more just and open place.