I am delighted that my final public speech as High Representative in BiH should be on this occasion.

It has long been my belief that we have needed to develop a regional strategy for the problems of this area. It is thus that I claim a part in the conception of the idea of the Stability pact for SouthEast Europe.

All good inventions stem from the identification a need. "Necessity is the mother of invention". They thus have many fathers who all identify a need at the same time - the light bulb, the jet engine, television. Michael Steiner, myself and others saw the need, and the Pact is now a reality.

This is an historic occasion, so please forgive me some of the inevitable references to history.

The Stability Pact is the best chance for peace in the Balkans for over a hundred years.

The Congress of Berlin in 1878 created an explosive cocktail which led to the First World War; and, the spark which ignited it, as we know so well, was struck just down the road from where we are now.

The treaty of Yalta, at which Roosevelt, Churchill and Stalin agreed to the carve-up of Europe after the Second World War, was never intended as a permanent arrangement. The Stability Pact is, therefore, an opportunity to alter the legacy of Yalta by leading the Balkans to where the region naturally belongs: within the European family of nations.

Sarajevo has been at the center of European struggle throughout this century. It is thus fitting that it should be at the center of the solution. The solution is clearly what the Stability Pact should provide.

It is also fitting that Sarajevo should host the inaugural meeting as the problems of BiH are probably the most complex in region. The BiH as created through the Dayton Agreement establishes a country of three constituent peoples and traditions. As such it is the epitome of the problem.

Dayton was a turning point in dealing with this region's problems. Despite its limitations, it is at the core of the regional process - not just because it stopped the war, but because there was and is no alternative. The Stability Pact completes the Dayton process.

Respect for Dayton is thus fundamental,

It is working.

There is no room for modification - at least not in our generation. We owe it to the children of BiH to make it work and thus have no moral right to modify it.

"Render unto Caesar what is Caesar's and unto God what is God's." This is the essence of Dayton - the relationship between the Entities and the State.

The problems of Dayton are not of the Agreement itself, but of the region as a whole. The legacy of communism. The inefficiency of the economy and economic structures. Nationalism.

Nationalism is the scourge of democracy here. The answer to this is compromise, and in this respect let me plagiarize the words of G.K. Chesterton: "Compromise means that half a loaf is better than no loaf. Here it seems to mean that no loaf is better than half a loaf."

Nationalism is fueled by the manipulation of history for political purposes, and here I am reminded of the words of another man of letters H. G. Wells: "Human history becomes more and more a race between education and catastrophe"

The best education to prevent such a catastrophe is teaching democracy and respect for the Rule of Law.

Dayton actually, although understanding this, did not provide the mechanisms. There was no media annex, and Media goes to the heart of democracy and education. Similarly, there was no adequate mechanism for addressing the problems of Judicial Reform crucial both for democracy and the Rule of Law.

This is why my final act as High Representative will be to impose a package of legislation in both these areas.

Respect for borders is also fundamental. There should be no playing with maps as some have suggested. This is a genuine lesson in history, and attempts to do this in the past have led us to where we are now.

Minorities must be integrated within common borders - there must be respect for the cultural and linguistic heritage of all peoples in the region. Diversity is the richness and strength of BiH and the region as whole, and this should be put to positive rather than negative effect.

This is what European integration is all about.

For me, my time in BiH has been a fascinating and life-altering experience. I knew when I came that it was going to be difficult, almost impossible, but I leave much more optimistic than when I came.

The peace process is working. We have a State, we have Freedom of Movement, we have the beginnings of real refugee returns.

When I came, there was no heating, no regular water, unreliable power, fractured communications and broken windows. All these things have been rehabilitated.

Many things need still to be done - but the glass is half full not half-empty.

But the International Community must continue to be engaged. It must push, push, push all the time.

My successor Wolfgang Petritsch, to whom I wish all success, has said that much can be achieved by a kind word. With this I agree, but would wish to quote from another famous historical figure. Who said not just that much could be achieved with a kind word, but a kind word and a gun. This figure was Al Capone. Joke!!! I've been here too long...

I actually prefer Teddy Roosevelt's "Walk softly and carry a big stick."

The gun or the stick in this context is the continuing presence of SFOR and the International Community and not the mobsters of Mostar, Sarajevo and Pale.

In March of 1941 there was a famous phrase in Yugoslavia. Bolje rat nego pakt - Lit better War than Pact -, referring to the axis powers.

The catch phrase on the streets of Sarajevo today is Bolje pakt nego rat. Pact is better than war. If you like, a Sarajevan version of Churchill's famous Jawjaw is better than War-War, and despite all the road closures and security problems the ordinary people are genuinely glad that the Pact is coming to town.

Finally I would leave you with some more of the words of Winston Churchill, which are highly relevant to the people of this region at this moment in history:

We must look into the future. We cannot afford to drag forward across the years that are to come the hatreds and revenges that have sprung from the injuries of the past.

Sarajevo, 29 July 1999