The skills of the captains and sailors, although vital to success, were less significant than the genius of Columbus and the vision of Queen Isabella. Though beseiged with serious challenges, the Spanish throne overcame the doubters and cynics and thus opened a golden age for Spain and a new chapter in human history.

It gives me great pleasure to be with you this evening to applaud another decision of courage and vision, the decision to chart for Spain a course to democracy. The Spanish Crown played a significant role in this historic turning point as well. Your dedication and ideals, Your Majesties, have earned the respect and gratitude of freedom-loving peoples everywhere.

And since your national journey to freedom began, talented leaders have emerged, and the Spanish people have nobly risen to this occasion. Your Majesty, we know that the President and the other leaders of Spain in and out of government have brought Spain peacefully and, yes, gracefully into the family of democratic nations. The American people admire you, and they admire your great achievements. Having been a republic for 200 years we Americans know full well that the road of freedom is not always easy, yet there is every reason to be optimistic. As Sancho proclaimed in Cervantes' ``Don Quixote,'' ``A stout heart breaks bad luck.'' After seeing your nation make dramatic and fundamental change, remaining ever true to the humane values at the core of representative government, no one can doubt that Spain indeed has a stout heart and that because of it your luck will be good.

Because of the efforts of your generation, Spain is no longer isolated on the Iberia Peninsula but is now a vital and growing influence among the free nations of the world. New doors of opportunity are opening, especially in the area of trade and international investment. During these last 40 years, the Western nations have enjoyed tremendous benefit from a relatively free and open trading system. That's why I'm pleased to see Spain becoming a full partner in the European Community, moving to further open the door of economic cooperation with other free countries.

Your Majesty, we would like to work with Spain to keep international trade open and fair. America believes in free people, free markets, and free trade. Increasing the level of exchange between countries serves the interest of all. Trade and investment create a healthy interdependence between free peoples and expand opportunity and unleash new potential. The benefits of trade have been particularly clear as we've seen a vigorous American economy help serve as an engine for progress, pulling the economies of Europe into better times.

Of course, ultimately, whether a country prospers will depend on its domestic policies. Each nation must follow its own path, but I hope the progress that we've made in the United States might encourage others. Instead of trying to redistribute existing wealth, we've tried to produce more. Instead of imposing more controls and regulations, we've sought to free our peoples entrepreneurial spirit. Instead of channeling more of our resources into bureaucracy, we've sought to expand private investment.

The result has been solid growth and low inflation. Almost 8 million new jobs have been created in the United States in the last 2 years.

Your Majesties, the United States has much for which to be grateful to Spain. Our Southwest was settled by pioneers from your country, and a rich Hispanic heritage is still part of our way of life in my adopted home State of California. Today, as Spain takes its place with the democratic nations, I predict the relationship between our peoples will grow and bear fruit as never before.

One of the reasons for my visit to the European Continent is to commemorate the end of the Second World War, that monstrous conflagration that engulfed much of the world. It would be easy to talk in times like this of the heroism of battle and the sacrifice of those who died. Well, instead I've tried to mark this as an anniversary of the beginning of 40 years of peace. For free people, peace is the most precious possession, second only to the preservation of their own liberty. Peace magnifies the joys and meaning of life; it permits the resources of a country to be directed to those productive endeavors that add to well-being and happiness. Everyone is better off when the blessings of peace are enjoyed by a free people. As Cervantes said, ``When God sends the dawn, He sends it for all.''

But peace doesn't happen on its own. All free people share the responsibility of maturing it, nurturing it, investing in it, taking careful thought, and doing what is necessary to preserve it.

As is fitting, the choice about Spain's contribution to Western security is wholly in Spain's hands. Your decision will be respected. I would say only that the people of the United States would be proud to have the people of Spain continue to stand beside us and the other members of the alliance in our collective, noble effort to preserve the peace and protect human liberty. We believe the peace can and will be preserved by the collective strength of the Western democracies. And if we're strong, we need not be afraid to negotiate with any potential adversary.

The United States is now engaged in arms talks in Geneva. We're seeking not just arms control but an actual reduction in the level of nuclear arsenals. I'm pleased to note that Spain is part of the Western efforts in Stockholm to negotiate a lessening of the tensions between East and West.

The United States is also moving forward on a research project that could use new technologies to diminish the threat of nuclear missiles and lead mankind into a happier and safer time. Our Strategic Defense Initiative is aimed at finding new means for deterring war. It's not based on the threat of nuclear retaliation, but on the contribution of a nonnuclear defense system that would be capable of destroying missiles and incapable of threatening people. By making missiles less of a threat, we hope to make them easier to give up and thus make arms reduction agreements more likely.

Ortega y Gasset once wrote, ``Nations are formed and are kept alive by the fact that they have a program for tomorrow.'' Well, the program for the future of the Western democracies is peace, progress, and freedom.

Today Spain is moving forward in a voyage of freedom and democracy, every bit as courageous as that of Columbus. Spain can be confident of the outcome because the future is on the side of the free. Things that are today beyond the imagination of dictators and tyrants will be conceived of and made reality by free men and women. This we can count on. It is when people can speak and pray, work for themselves, live without fear of repression that the most potent force on this planet is energized -- the genius and power of free people under God.

Your Majesties, today let us be grateful for that love of liberty deeply rooted in the soul of our people. Yes, its fire will light the way to a future more glorious than the golden age of yesteryear. We're building a new world of peace, progress, and freedom.

And I now ask all of you to join me in a toast to His Majesty the King and to the people of Spain, all champions of democracy.

Note: The President spoke at 10:48 p.m. at the Royal Palace in response to a toast by King Juan Carlos I. The following day, the President traveled to Strasbourg, France.