I am delighted to be with you today. Since its founding fourteen years ago the Deutsche Nationalstiftung has done a great deal to help people in the east and west of the country to feel in their hearts the reality of German unity. By last summer at the latest we realized that a shared positive commitment to Germany does exist. There is such a thing as national feeling rooted in responsibility for and love of our country. Our neighbours have followed this changing self-perception with keen attention and for the most part with great good will. That is good to know.

The work of the Deutsche Nationalstiftung has made an invaluable contribution to our political culture in Germany. And it is a tribute to the Foundation's sound judgement that the 2007 National Award should go to EUSTORY. Its choice this year has fallen on a very special kind of network with an international credo - EUSTORY now links up a total of 19 national history competitions. The idea behind this whole venture is to raise awareness that national history takes place within a broader European context. This is not just in tune with the times, I believe, but also exciting. EUSTORY is striking out in new directions: national history narratives feed into a cross-border Europe-wide debate.

The Körber-Stiftung, which has been involved with the Federal President's History Competition for some 34 years, deserves great credit for its splendid work in initiating and supporting this History Network for Young Europeans.

EUSTORY has a wide radius extending well beyond the borders of the European Union. Its member organizations include national history competitions from Russia, Belarus, Ukraine and Serbia. The enthusiasm young people in these countries, too, bring to exploring their nations' history is ample proof that the idea of the nation is anything but dead and is a powerful factor in creating identity.

That they pursue their explorations within the EUSTORY framework, however, shows how keen they are also to engage in cross-border debate about history. They feel it is exciting and enriching to debate their views with others, to try and help others understand also what makes them different. That makes for a climate of good neighbourliness in Europe that will endure.

If we in Europe are to enjoy good relations with one another, we cannot overestimate to my mind the importance of face-to-face contacts. I well remember the visit I paid to the Baltic states shortly after taking office and the German students I met on Tallinn's market square. Brimming with enthusiasm, they told me about the city, their studies and the new friends they had found. And I realized the European adventure these young people had embarked on would change and enrich their whole lives.

I would like to see a similar enthusiasm in political and institutional Europe. When it comes to European policy-making, we should learn from these young people what we could do better, I think.

For there's no denying it, ladies and gentlemen. At present Europe no longer makes hearts beat higher. My impression is that for many people it inspires not so much enthusiasm as disaffection and unease.

The main reason, I suppose, is that Europe has become more complicated and hard to understand. The evolution of the Union's institutions has failed to keep pace with its rapid growth. A community of six original members was successively enlarged at an ever faster pace and now has a membership of 27. There were good reasons for this. Right from the start the European integration project was intended to be Europe-wide. And it is cause for rejoicing that the unnatural, decades-long division of Europe is now history.

But the rapid enlargement of the Union also brought qualitative changes in terms of diversity. Sometimes I wonder whether European institutions and the older member states, too, have really come to grips with these changes. The new members include countries which for decades were unwilling partners in a Soviet-dominated bloc and which watch over their newfound freedom and national sovereignty with an eagle eye.

Given their history, it is entirely understandable that some are wary about ceding even a measure of their sovereignty. Pride in such hard-won national sovereignty is a force to be reckoned with. Have we not found also in Western Europe that people look above all to the nation to provide some kind of anchor in a world of flux and change?

Feeling at home is a source of inner strength - and that's true everywhere in Europe. That's why I believe the nation states will remain the core component of European cooperation. The European institutions would be wrong not to recognize and make the most of this. Yet in this increasingly shrinking world we inhabit we can also clearly see how limited the nation state's scope for action is. No nation state today can safeguard its long-term welfare at other nations' expense. A new, multipolar world is emerging and the epochal challenge for us all is to cooperate in making this new world a better place.

The tasks facing the international community are immense: poverty reduction and action on climate change; combating international terrorism and the proliferation of weapons of mass destruction; the fight against organized crime and drug trafficking; the prevention of pandemics.

We need to recognize that we are all in the same boat. And people in the same boat have a duty to help one another. That's not something I made up myself, that's the motto of Tongji University in Shanghai, which I've just visited.

The magnitude of the task may be mind-boggling. Nevertheless, I believe it is possible and therefore absolutely feasible for humanity to change the world for the better. And the circumstances have never been more favourable. If this goal is to be achieved, I believe Europe must make a contribution worthy of its talents and abilities.

A Europe conscious of its heritage and spiritual roots and which draws on them in a constructive and creative manner can do much to support the emergence of a learning community of nations striving for progress in freedom.

But there is one thing we should bear in mind: Europe is shrinking, whereas by mid-century the world's population will have increased by 50 per cent, from 6 to 9 billion. Today 500 million Europeans sounds quite impressive. But in 50 years we will be barely 6 per cent of the world population. That's not a negligible quantity, but it's important to be aware of the overall scale. The countries of the southern hemisphere are young. And most young people in these countries are eager for knowledge, enthusiastic about education and keen to make a better life for themselves. Who could possibly blame them?

So Europe will have to work hard to earn its place in the world. And we're not going to earn our place only by making speeches and coming up with new ideas. We can earn it more effectively if we are willing to join forces in some areas. That means we have to convince people in the member states of the political value added of European integration. There's no point in deceiving ourselves. So let me state this very plainly: the only way to generate this value added is to convince people that, in the light of the global challenges we face, national interest may demand the renunciation of some elements of national sovereignty.

What we have achieved since the Treaties of Rome in 1957 should give us self-confidence and faith in the future. Take the internal market. It was hard to persuade people that in the long run tariffs and trade restrictions cannot make their jobs any safer. And even now the struggle against protectionist tendencies is still not won. Yet we also recognize that Europe's good performance in the world economy is to a considerable extent due to the internal market.

Take the euro. Its introduction required us to give up sovereignty in the area of monetary policy. In Germany we had to give up the D-Mark, something that in the eyes of the nation was far more than just a currency. At the time this was a matter of hot debate.

But in retrospect this renunciation of sovereignty in matters of monetary policy was the right decision to take and was by no means premature. Thanks to the euro the financial crises that hit Europe, too, right up to the nineties are now history. The euro is the world's second principal currency. Especially in view of the enormous volume of international liquidity - and its volatility - the euro is a bastion protecting growth and employment in Europe.

I would point out, by the way, that the euro's success to date is also due to the fact that the European Central Bank is independent. And that's how it should remain, if you ask me. Beyond that, I would like to see the ECB acquire still greater expertise in analyzing and forecasting developments in international financial markets. That would give it considerable clout in the whole debate on financial market regulation. There is a need for action here.

I believe we have to clearly understand that we are now at a crossroads. Europe must decide whether it wants to help shape this new world order in the making or whether it is content to take a back seat. As a "free trade zone plus" Europe's influence on the crucial process of managing globalization would in my view not amount to very much. Nor would it be sufficient to defend national interests, as they are rightly understood. Nor to preserve our European model that combines freedom and economic progress with social justice.

The world has expectations of Europe. We are believed to have strength and drive, but also to treat our partners with respect and give others a fair chance. This was the message that came over also on my recent trips to Latin America and Asia. I for my part am convinced the world would be a poorer place without the European perspective on things. We have a duty to share this perspective with others.

That is why it is so important now to give the European political project new direction and momentum. And it is up to us to do so. A new treaty basis is needed.

For only a Europe that is itself in good shape can help shape the future. So we must not put off the institutional reform of the enlarged Union any longer. We must ensure that also such an enlarged Union remains able to act effectively and becomes more democratic, transparent and citizen-friendly.

Its citizens will have confidence in the future of European integration when they see the Union taking the subsidiarity principle seriously - in other words, when it takes on only those tasks that cannot be effectively tackled at the local, regional or national level and keeps out of everything else. By the way, the citizens' initiative envisaged in the draft treaty would be a good way to involve Europe's citizens more closely in European policy-making. That is something we urgently need.

My impression is that young people want Europe. And in my experience anyway they will have no time for an also-ran Europe on the margins of world events.

This is something I have sensed time and again in intensive discussions with students from practically all over Europe. And the same goes for the young people who participate in EUSTORY.

They stand for a Europe that is increasingly growing together, that is keen to learn from the past and make common cause to meet the challenges of the future. And they are well equipped to do so: they have knowledge, inquiring minds, enthusiasm and also the right measure of scepticism.

In the past three years in Dresden, Tübingen and Riga as well as just last week in Siena I and fellow presidents were involved in discussions with students from a host of EU countries. Every time I came away with the strong impression that Europe is very important to young people and they have very clear ideas about where it should be heading. They want to see Europe doing much more for education and research, because these sectors are the key to the future of both the continent and its young people. They want to see a process that promotes the emergence of a European public opinion with a common European credo. They want a European history museum, a European television channel and common history textbooks. Moved by the plight of young people in Africa, they also want a common European policy on migration. They want uniform electoral laws for elections to the European Parliament, a European army and some even call for a directly elected European president, because they want Europe to have a real face.

What this all adds up to, as I see it, is that Europe's young people want its present leaders to ensure European integration goes forward. They want the chance to go on learning with and from one another, they don't want once again to be separated. They want Europe to set itself goals and assume responsibility in the wider world. I think we should regard this as a mandate and do our best to fulfil it. And I very much hope the upcoming European Council will take the decisions that will enable us to do so.

The participants in national history competitions and the EUSTORY network stand for a Europe that is aware of its common roots but also knows the value of diversity. A Europe which owes its strength and identity to our nations' diverse history and heritage.

EUSTORY is a worthy recipient of the 2007 National Award. I congratulate everyone involved in the network's invaluable work as well as all those who have made it possible.