Lorenzo di´Medici, whose family ran Florence in the 15th C. is credited with being the first person to coin the phrase “balance of power”. It is a principle that became one of the key foundations of the European disorder for five hundred years. The logic of the balance of power between competing nationstates led to a state of perpetual war in Europe and beyond. This has been the curse of European history.

The British philosopher, Bertrand Russel, in dissecting the malignant cancer of extreme nationalism, often tied up with missionary religious sectarianism, came up with a proposal for a radical solution. He proposed the outsourcing of history.

With the memory of the First World War fresh in his mind he proposed that the French be assigned responsibility for writing German history. The Germans should assiduously write and teach history to the French. The British, with their long experience of imperial conquests should critically analyze Russian history and the Russians should duly reciprocate. The Poles, having born the brunt of the curse of history more than most – their state having been repeatedly wiped off the map in the name of the balance of power – should be trusted with the task of teaching history to the rest of us.

Thus, the philosopher hoped, the danger that history would repeat itself by perpetuating past enmities and wrongdoings, should be averted. It was a proposal conceived in the philosophical ivory tower and presented to the striving politicians down below as an attempt to brake the vicious circle of national hatreds and mutual resentments: A highminded but utopian attempt to break the curse of history.

Europe´s state of perpetual war ended with the Second World War. During that fateful conflict every belligerent nation in Europe had suffered the fate of invasion and occupation (so called neutral nations not being spared either), with the exception of the United Kingdom and Finland.

But that was not the end of the story. Whereas Western Europe rose from the ashes of ruins in 1945, the Eastern part of Europe was permanently occupied by the Red Army and turned into Moscow´s satellites or, as in the case of the Baltic States, stripped of their sovereignty and annexed into the Soviet Empire. For those countries the Second World War did not come to an end until the dissolution of the Soviet Union in 1991. Then began a new era for both, victors and vanquished.

This year the whole of humanity has every reason to celabrate the allied victory over Nazism and Japanese militarism, because that heroic effort spanned the whole globe. We should also pay tribute to the heroic sacrifice made by the Russian nation in defence of her fatherland against the Nazi onslaught. At the same time we should not forget the fact that for the nations of Central- and Eastern Europe and for the Baltic nations, deliverance from the consequences of the Second World War, was not brought until almost half a century later, in 1991.

We should be eternally grateful for the fact that the liberation of Eastern Europe and restoration of independence of the Baltic nations was achieved, for the most part, peacefully. That was by no means a foregone conclusion. Far from it. For a precarious moment in January 1991 we were indeed on the brink of disaster. Things could have gone terribly wrong but, fortunately, reason prevailed.

Now let us look away from the past and turn our sights to our present and future prospects. How can we escape the curse of history? – How can we avoid being the captives of our past mistakes?

As a matter of fact such questions sound rather rhetorical for the simple reason that the generation, who survived the horrors of the Second World War, lost no time in seeking new answers to those age old questions.

They came up with no grand design. They proceeded pragmatically, step by step. They started by asking a simple question: How can we make sure that the age old enmities between Germany and France will not once again erupt into a new war? And they came up with a simple solution: Pool together the resources of those old enemies for was making, making them interdependent.

The rest is history. Then came the European Community of the six. The idea was for each state to give up, voluntarily, a fraction of their traditional sovereignty, gaining instead the enhanced intra-national power they shared between them. The smaller nations liked the idea because it gave them enhanced influence on an eqaul footing with the major powers. For the major powers this was a new insurance policy against war. It was rule-based and mutually beneficial.

Thus started what John Hume, the Northern-Irish peace advocate called in his acceptance speech, on receiving the Nobel Peace Prize “the most successful peace process in history”. It is still an ongoing process. It is a uniquely successful experiment in building security for peaceful developement. In just fifty years, war between European states has become unthinkable; European economies have caught up with America; and Europe has brought successive waves of countries out of dictatorship into democracy.

What is it that has transformed Europe in a fundamental way from being an incubator for world wars into a transmission belt for peace and democracy? The short answer is: The Rule of Law. The law, rather than military force, is Europe´s weapon of choice to transform international relations.

In this way Europeans have at long last learned the lessons from their destructive past. Instead of the balance of power there is interdependence. Instead of an arms race, deterrence and war, there are legal treaties, willingly upheld by nation states, for their mutual benefit, with the ultimate recource to the European court.

A new era has begun. No one fears a rising Germany anymore, because all the nations of the European Union have joined into a single network that is bound together by laws and regulations. We even hear complaints from Germany´s neighbours, that the German economy is underperforming, instead of being the locomotive of economic growth for Europe as a whole.

A new kind of power has evolved that can not be measured in terms of military budgets or missile technology. It works in the long term and is about reshaping societies from within, rather than imposing reform by force from the outside. Europe´s power is “transformative power”.

All of this has been achieved without firing a shot. Indeed the community has no direct means of enforcing its authority. It has no police and, until recently, no military force of its own. It has only a small administrative center; and it relies largely on the willing cooperation of the member states for the implementation of laws and regulations, but subjects them to constant monitoring and surveillance.

Just imagine Europe without the European Union. It would hardly count for much on the global political scene. With the current US hegemony and the foreseeable shift of power to the East, to China and India, Europe would be receeding into insignificance. But look at Europe now: It is the largest economy in the world and it has the largest share of international trade. It provides its members and neighbours with access to the world´s biggest market. And it provides its partners with the biggest source of credit, foreign direct investments and developement aid. It provides its members, large and small, with the advantages and clout of the economy of scale, while retaining the flexibility and agility of the smaller member states.

The new Europe, through her unique social contract, can offer the best of both worlds: A synthesis of the dynamism of a competitive market economy with the stability and social cohesion of social democracy. As the world becomes richer and moves beyond satisfying basic needs such as hunger and health, the European way of life will become increasingly attractive.

In 2005 the three Baltic states are in an incomparably better situation than they were in 1939. That applies to their security and future prospects in general. They are not alone. They are members of NATO, the collective security organization, which offers its members a “security garantee”. And they an integral part of the European Union, “the most successful peace process in history”.

When the leaders of Estonia, Latvia and Lithuania decided, in the early nineties, that their commin goal was to return their nations back to the family of European democracies, they created a consensus that cut across the whole political spectrum. It gave them a firm sense of direction that sustained them during the turbulent period of transition. It gave them a road-map on how to reach their common goal. And they have been eminently successful. They have all earned their reputation for being the Baltic tigers.

They are on the right track. If not pushed off track by external events there is no reason why they should not catch up with the rest of Europe in a few decades. They too have broken free from the shackles of their historical past.

As members of the EU they share in the clout that the biggest economy of the world has in its dealings with the ouside world. And the European Union is a work in progress. The boundaries of Europe are no longer fixed by geography – but by values. Nations that earnestly show their commitment to the principles of democracy, the rule of law, human rights, freedom of the press and protection of minority rights as well as a functioning market economy under democratic supervision, are welcome to join. And once they are in they are transformed permanently, from the bottom up. They feel less threatened and they are a threat to no one.

Bulgaria and Rumania are next in line. Then Croatia and the Southern-Balkan republics. And the Orange Revolution has set Ukraine on the same path, with her connections to the Caucasus. And secular Turkey has proven itself eager to transform itself from the inside to fullfil the criteria laid down for ultimate membership. These are momentuos changes. If they are successfully implemented in the next few decades the political landscape of Europe will have changed beyond recognition.

But what is the future relationship between this new Europe and Russia? Some people are worried that after the anarchy and chaos of the Yeltzin era, Russia may be reverting back to her authoritarian past and the habits of her imperial mindset. There are some alarming signals that are a cause for concern. But Russia is faced with some different possible scenarios. Russia´s choice will be influenced, not only by domestic developements, but also by outside realities.

There are those who say that Russia without Ukraine simply cannot re-emerge along the imperial path. And in assessing her future options Russia must take account of increasing pressures from the frustrated Islamic world on her southern flank and the rapidly rising power of China in the east. Where does orthodox Russia belong in the future constellation of major powers and civiliazations taking shape before our eyes in 21st C?

Russia is a vast continental nation with no past experience of Western traditions of democracy and the rule of law. She has been undergoing tumultous changes, marked by instability and uncertainty. It is to be expected that it will take Russia a long time, perhaps a matter of generations, to find her bearings again in a radically changing world order. What Dean Acheson famously said about the British after the war, may also apply to Russia: “They have lost an empire, but not yet found a role”.

Russia can hardly stay content with remaining a supplier of raw materials to the rest of the world. As she begins applying the talent of the Russian people into transforming Russia´s natural riches into more sophisticated products, with more value added, Russia will need access to markets, sources of credit and foreign direct investment on a large scale. To achieve this Russia needs first and foremost peace and stability. Although Russia is huge, the new realities of an inter-dependent world, also apply to her. In the long-run, Russia may find it in her own national interest to be a part of the transformative power of European integration. That can still be Russia´choice.