I wish to begin by expressing our sincere gratitude to our host country Portugal for its efficient organisation of the meetings in Lisbon as well as for its warm hospitality.

I would also like to state that Taoiseach John Bruton of Ireland, as the President of the European Union, was also speaking on my behalf.

When the CSCE was set up as a negotiating forum during the Cold War more than 20 years ago, our continent was sharply divided, and there was little interaction across the dividing line. Finland, for one, was not satisfied with that situation and the Helsinki process was created.

The OCSE has been a vehicle in that process. It created a line of communication between the various states, and it penetrated societies and contributed to a democratic change.

Today, Europe shares common values. Democracy and the rule of law are gaining ground where authoritarian rule once prevailed.

We have witnessed, however, the consequences of disintegration and war on our continent. The most elementary human rights are being violated. War has brought out the worst in humankind. New risks and challenges have emerged. They require innovative security management.

Now the OSCE area is free of open warfare. Yet, a number of conflicts still await political settlement. The shadow of extreme nationalism still looms over Europe. We must lay the foundations of peace deep enough to prevent conflicts from erupting again.

Today we have a better chance to sustain security in Europe than before. The overall military threat has been significantly reduced, and the OSCE has been instrumental in this. Cooperative structures are manifold. A comprehensive and integrated approach has been adopted in pursuing security and stability. The international effort in Bosnia is one proof of the capacity of the international community to pool its efforts.

Security today covers not only political and military stability, but also respect for human rights, economic initiative coupled with social concern, responsible environmental policies and respect for cultural diversity.

The OSCE has over the years developed a wealth of measures to provide for common action. It continues to set standards and norms. It helps in preventing and resolving conflicts and in rehabilitation. It provides a forum for security dialogue. And it will continue to review the implementation of commitments.

Flexibility has been a key characteristic of OSCE action. The organisation has remained free of bureaucratic structures. Yet, its way of functioning is becoming increasingly operative. Its tasks have broadened. The organisation remains dependent on the resources put at its disposal by the participating states. That is why we have to make sure not only in word, but also in deed that the organisation can rely on the active support of its members.

The OSCE has a central role in the management of security cooperation. It is well placed to do so as it already provides the principles and structures for common security and involves all the countries responsible for security in Europe. We attach special importance to cooperation between the OSCE and the Council of Europe. Both organisations contribute to democratic security in Europe. Close coordination of efforts is needed to ensure that scarce resources are used efficiently.

Management of security cooperation can be improved without infringing on the respective roles of relevant European and transatlantic organisations. We should gradually create a genuine partnership between various actors. The Declaration on the Security Model is a step towards a functioning common security space.

Recent years have seen significant progress in military security. The implementation of the CFE Treaty has been instrumental in strengthening security and stability through openness and transparency. Finland welcomes the effects of the Treaty in providing for predictability, limitations and constraints. These should be strengthened in the ensuing process of adaptation. We also welcome the moderation that is guiding defence policies in today's Europe.

The NATO Partnership for Peace programme is a major contribution to peace and stability in our continent. The benefits are particularly evident in the effective conduct of the multinational IFOR operation in Bosnia. We support further enhancement of the programme.

This Summit will endorse further efforts towards arms control and confidence-building. Finland will actively support arms-control measures and military confidence-building that help increase predictability and keep military activities at lower levels.

A fundamental principle of common security is the right of every state to choose or change its security arrangements. Today, cooperative structures in Europe are evolving. New circumstances call for changes and adaptation.

The European Union is preparing for the next stage of reform and enlargement. We believe this will contribute to prosperity and stability in the whole of Europe. Consequently the international role of the EU will have to be strenghtened.

The opening of NATO is a reflection of the new situation in Europe. It is important that this process adds to stability and avoids creating new divisions. Here, the future relationship between NATO and Russia is a key factor. New arrangements should enhance stability and security for all of Europe and not diminish security for any state or region.

A negotiated settlement of the Nagorno-Karabakh conflict remains one of the continuing challenges for the OSCE. A solution can only be brought about by balancing the vital interests of all parties to the conflict. This requires also that they all talk directly to each other.

The outlines of the settlement have emerged. Indeed, most of its details have been worked out. The will to compromise is, however, the ultimate test of statesmanship.

For the past eighteen months Finland has acted as Co-Chairman of the OSCE Minsk process. Our term is now nearing its end. We agreed to serve as Co-Chairman in order to ensure, together with Russia, the implementation of OSCE principles in the important South Caucasus region. Finland has enjoyed close and fruitful cooperation with the Russian Co-Chairmanship. We are grateful for the support of our EU partners and the United states.

I wish to congratulate Switzerland for excellent chairmanship of our organisation in the past year. And I am happy to welcome a Nordic and EU partner, Denmark, to the helm of the OSCE. We can rest assured that the organisation will remain in good hands in 1997.

Thank you, Mr. Chairman.