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Council on Foreign Relations
Washington, DC
CHARLES KUPCHAN: Ladies and gentlemen? Ladies and gentlemen? Thank you. Please continue with your lunch, but since we're at 12:30 we're going to start our post-lunch conversation. My name is Charles Kupchan. I'm a senior fellow here at the Council on Foreign Relations, and I'm delighted to welcome all of you to the Council this afternoon.
I'm also delighted and honored to welcome our two guest speakers. To my right, Ambassador Jean-David Levitte, who is currently the French ambassador to the United States. He brings with him a long and distinguished career in the French diplomatic service, having served as the permanent representative to the United Nations before coming to Washington. Prior to that, he was a senior adviser to President Jacques Chirac back in Paris. To my left is Richard Burt. He is currently with Diligence— chairman of Diligence— and since the early 1990s has served with a host of prominent private-sector firms, including Barbour, Griffith and Rogers, Carlyle Group, and McKinsey. Prior to moving to the private sector, he served in the U.S. government as the chief negotiator in the START [Strategic Arms Reduction Treaty] talks, as the ambassador of the United States to the Federal Republic of Germany, and also as assistant secretary of state for European and Canadian Affairs. He had yet another incarnation before that as a reporter for the New York Times and also as assistant director of the International Institute for Strategic Studies.
Our plan for the next hour is as follows: I'm going to start off by posing a few questions to Jean-David and Rick. We will then move to a Q&A at about 1:00. We'll end promptly at 1:30. Unlike most Council meetings, this meeting is on the record. And let me remind all of you to turn off cell phones, beepers, or any other electronic devices that may interrupt our deliberations.
Let me ask the first question, and I'll start with Jean-David, but perhaps Rick would also like to comment on this. On the minds of many Europeans as well as Americans is the upcoming French vote on the constitutional treaty, the referendum. And it's unclear at this point what the French will do. But I think that there is a broader question that lies behind this particular vote, and that is, what is causing what one could call the recent re-nationalization of politics in Europe? If you look at Germany, for example, four years ago the foreign minister [Joschka Fischer] was talking about a federal Europe, an upper house, a lower house, a vision of a federal Europe. Today they're talking about a seat on the U.N. Security Council. That's Germany. You could also find in the last election to the European Parliament those individuals that were more skeptical of deeper integration faring better than those that were envisaging a federal or deeper EU [European Union]. Where is this re-nationalization coming from? And also, how serious is it? Is this just another pause, or do you think that we are witnessing a more secular decline in the enthusiasm of Europeans for the EU? Jean-David.
JEAN-DAVID LEVITTE: Well, thank you very much. I'm delighted to be with you this afternoon. And I start by strongly disagreeing with what you just said. I don't think that there is re-nationalization of the European polity. We don't know what will be the outcome of the referendum which will take place on the 29th May. If you ask the French people one question, they will give you 10 answers. The question is: Are you for or against the constitution? And they'll tell you what they think about the president of the French Republic, the prime minister of France, the government, the Socialist Party, the situation of the economy, the social affairs, and so on and so forth.
Now the debate is more and more focusing on European Constitution, but it is interesting to note that nobody is against Europe. All those who vote against in the political spectrum say that they are for Europe, but they do think that the text of the treaty in the form of the constitution does not bring enough— enough of a social dimension, enough of the economic model of Europe, and so on and so forth. So nobody dares to say, "I'm against [the] European Union." Everybody— of those, among those who answered "no" say, "If you vote no, you have an opportunity to get a better text later on." It is of course not true, because it took a lot of time and skill to prepare and adopt by consensus among the 105 members of the convention a reasonable proposition, which is on the table.
Let me add one last comment: It's difficult in America to understand how fast the European Union has been moving forward. The euro is a transformation of Europe. The dollar is, in a way, the pillar of your sovereignty. Would you accept to abandon the dollar in the context of NAFTA [the North American Free Trade Agreement], to have the [inaudible], let's say, shared with Mexico and Canada? I see your smiles. Well, that's exactly what we did in Europe. We abandoned the franc, which for 800 years was our currency. The Germans abandoned the deutschmark. The euro is now in the pockets of 300 million Europeans. It is the symbol of shared sovereignty.
But it was not so easy for the Europeans, the Germans, the Italians, and so on, to decide to jump into the unknown. Nobody knew at the time if it would be a success or a disaster. And let's not forget that the Maastricht Treaty about the euro was adopted in France by a razor-thin majority of 51 against 49. Since then, we had last year, one year ago, the most ambitious expansion of the European Union. We were 15; we are now 25. And the 10 newcomers, most of them are coming from what was only 15 years ago the Soviet bloc— Poland, the Czech Republic, and so on and so forth. And three of the newcomers were part of the Soviet Union, the three Baltic states.
When we have meetings of the ambassadors of the European Union, now I'm seated between the ambassador of Poland and the ambassador of Estonia. And that's the family. But this big expansion is, again, a jump in a new world— thank God, a peaceful world. The European Union is now the [inaudible] most of Europe united in peace and in democracy with the support of the United States. But this is two big jumps in a few years' time.
And now we add one more, which is a constitution. And don't forget that the U.K. [United Kingdom] never had a written constitution. We had more than 20 written constitutions. Out of all these differences, we are trying to adopt one text. It is another jump. And it doesn't mean that there is re-nationalization— on the contrary. I do think that we are moving forward and very fast, and that's where you see the hesitation. Aren't we going too fast? Are we sure where we should stop? What are the borders of the European Union? And so on and so forth. These are the questions about the European Union, which are in the minds of the French people right now.
KUPCHAN: Rick.
RICHARD BURT: Well, just a few brief remarks. I think, fundamentally, I agree with Jean-David. I think there are some other issues at work. I think the tremendous support for the European Union that grew up in the ‘70s and into the ‘80s and the ‘90s was predicated on an understanding about prosperity. I think there was a tendency for many Europeans to view the transformation of their lives— the increasing standard of living, the increasing leisure time, the job security, all of these things that became a kind of fundamental badge of being a European, were viewed as— in large part as an accomplishment created by the prosperity generated by the EU. I think a lot of those issues have come into question in recent years, particularly, I think, in— I won't call it the old Europe; I'll call it the core Europe, the continental Europe that was the original foundation of the EU. Those countries have gone through a period of low growth. We're familiar, of course, with the various problems that governments are facing in terms of sustaining a welfare state at a time of low growth, that have been exacerbated by the broadening of Europe, the subsidies that the older EU countries have had to pay as new countries have come in, the challenges of immigration. And I think that there is a kind of reevaluation going on in many parts of Europe about whether or not the original equation of the EU to prosperity was the correct one. And so I think it's natural in some of these countries that you're having some second thoughts. I don't see this process of thinking about the future course of EU development as ending this process.
The whole development of the EU has been a kind of process of a great leap forward and then maybe a small step back, and then moving forward again. And I think we may be at one of these times where the Europeans have placed too much on their plate. Jean-David is correct. They have accomplished a remarkable amount in the last five or six years, and it's— to both go forward with deepening and broadening simultaneously was perhaps too ambitious. But that said, I think I am still basically optimistic about the future of European integration, only because I don't see an alternative that Europeans really have than continuing this process.
What is a little bit dangerous, though, is that some, I think, politicians in Europe may, in order to support this continuing process, may attempt to create threats to the European process that are really, I think, misguided and fictitious. And this is not meant to be overly critical, but I was in Paris a few months ago— maybe only a month ago or so— when Jacques Chirac was speaking at— in a television format with a group of young French people basically supporting the notion of voting for the new French constitution. And one of the strongest arguments he made was— for supporting the constitution— is the idea that, if the constitution failed, not just France but Europe as a whole would be overrun by American capitalism. And rather than trying to, I think, kind of work through a process that would argue that a European constitution would make the United States stronger— I mean make Europe stronger and that that's a partner they could work with— with the United States. I think that it— the one danger here is that if Europe is thrown into doubt, then politicians could be led to appeal to dangerous tendencies in different countries.
KUPCHAN: Thank you. The meeting today is called "A Fresh Look at the Transatlantic Partnership," and I want to ask both of our guests to share with us their views of what's transpired over the last four or five months in that we're coming off a very troubled period in Atlantic relations. We seem to have turned the corner and to be headed in a better direction, with Bush having gone to Europe twice, the first trip apparently having been quite successful in winning back goodwill in Europe. The Europeans, the French, and the Germans, in particular, don't seem to be as dead-set as they were over the last few years in opposing Washington's policies. What's happened? How did this shift come about on both sides of the Atlantic? And do you think this is a serious course-correction that will put things back on a better keel or something that is more tentative and perhaps short-lived?
BURT: I guess my overall view on this is that it's not a serious course-correction. I think the seeds for further discord within the alliance are still there. I think that political leaders on both sides of the Atlantic have worked very hard to try to improve the chemistry of the relationship. And as you mentioned, Charlie, I think both the president and Secretary [of State Condoleezza] Rice have had very successful visits, I think, to Europe. I think there has also been a clear decision on the part of the major European capitals to try to improve the chemistry, the atmospherics of the relationship, because I think both sides recognize that it's counterproductive to engage in the kind of really intense acrimony that existed in the post-Iraq period.
What I don't see, though, is any sort of fundamental changes in strategy and structure in the European-American relationship that I think are necessary to change that relationship. To begin with, I don't see the kind of political— broad political deal that is required to get the relationship on track. What do I mean by political deal? I don't see a willingness on the part of the United States to demonstrate that it is prepared, in a sincere way, to take its key allies' interests into account in making U.S. foreign policy. And in return, I don't see a reciprocal willingness of the Europeans to get as engaged as I think they should be in addressing problems with the United States outside of Europe.
In terms of the EU itself, I don't see the United States strongly supporting the process of further European integration within the EU. And on the part of the Europeans, I don't see the willingness of the Europeans to forswear the idea that somehow, somewhere, the EU or some combination of Europeans could be a kind of counterweight to the United States. Until we sort of resolve those big political issues, it will be hard to put things back on track.
I also think we need a project, a fundamental strategic project to work on together. I don't think we can reinvent the Soviet Union and have a Cold War that drives us together. But I do believe that the combination of interrelated problems in the greater Middle East— whether it's the Palestinian-Israeli issue, the problem of Iran and nuclear proliferation, the issue of Islamic fundamentalism and terrorism, fragile states in Saudi Arabia and Pakistan— and that set of issues together can be a— I think can be addressed much better jointly by the United States and Europe than individually.
So I think we have such a project. That means, then, that we have to have the institutions for addressing these problems. I'm very dissatisfied with the current institutional framework for Europeans and Americans to sit down and talk about these basic issues. NATO [North Atlantic Treaty Organization] has a very important role to play. It will continue, in my view, to play that role. But NATO cannot be the forum it once was for strategic convergence between the United States and Europe. Some other mechanism or mechanisms are probably necessary. Informally, in the 1970s and ‘80s, the [inaudible] group played a very important role. That was the United States, Britain, France, and Germany, beginning at a fairly junior level in governments all the way up to the top. The four powers were able to not just have a dialogue, but were able to actually coordinate and harmonize their policies. The [inaudible] group is probably no longer the right group at this point. Maybe it could be reinforced and enhanced by having some form of EU participation, maybe other members as well.
Formally, we need to talk about a way of arranging a better political and strategic discussion with the EU itself. Washington, in my judgment, needs to discover the political character of the European Union and devote some time and energy to working with the EU. And the EU has to be on its side prepared to open up to the United States to have such a dialogue.
KUPCHAN: Jean-David, could I ask you to respond specifically to Rick's point about U.S.-EU institutional ties? If not NATO, what?
LEVITTE: Sure. May I start with two quick notes about the remarks of Rick before? I do think that one of the problems we have in Europe is the image of the EU. Why? Because each time we need to engage in the structural reforms, which are so necessary in Europe, we say, "Let's do it for European Union; we need to do it because of the European Union." And these reforms are very central. You have in front of you the reform of the pension system and so on; that's done in France. People by [the] millions were on strike. But when there is a reform which is necessary, we always say, "Let's do it for the European Union, for the European Union, because of the European Union." And at the end, after years and years of that message, it's not a surprise to see that the image of the European Union is quite negative with the public.
Second, when President Chirac says that we need to be organized, it's not necessarily against the U.S.; it's simply the recognition of the facts. France alone doesn't weight enough in two days' work if you compare its weight with the one of the U.S., or tomorrow with China or India or a few others. And so we need to organize Europe to exist economically. Take the example of Airbus and so on. So that, basically, is a mistake. It's not organization against; it's organization necessary for all the Europeans to continue to exist on the world scene with the giants of the 21st century.
Now, to answer your question: If the constitution is adopted, it will be the answer to Rick's remark. Because the problem we have is that NATO will remain the cornerstone of our security, but it's devoted to security problems, military problems. And we need to have a very global dialogue between the U.S. and the EU covering problems of the global economy, global challenges— environment and so on— and also problems affecting our security. What do we do in the greater Middle East and so on?
If the constitution is adopted, what will happen? We will have the end of the rotating presidency. Today you have for six months Luxembourg, then the U.K., and so on and so forth. We cannot continue like that because we are 25, with the 10 newcomers without any experience. Let's take my neighbor on the left. Estonia is a small country, newly independent. It would be a big challenge for them to be in charge of 450 million Europeans without knowledge of the 50 years of past history that we all have as the nucleus, the founding fathers.
So if a constitution is adopted, you will have a president for the European Council, a kind of president for the EU, for five years, with a team helping him or her to prepare well the meetings, and it will be for you the face and the voice of the European Union. He will be the interlocutor of President Bush. And President Bush will not have to look on the map— where is Luxembourg, who is the prime minister of Luxembourg, and so on, and the moment he knows, then we switch to the next presidency.
Second, we'll have a real foreign minister, merging the functions which are now devoted to the commissioner in the commission in charge of foreign affairs and they are all devoted to the high representative, that is [High Representative of the Common Foreign and Security Policy if the European Union Javier] Solana. And the foreign minister will be Solana, but with a strong team of European diplomats. And he will chair the ministers' council of foreign ministers all the time. So this will mean for the U.S. the answer to what you need— that is, interlocutors organized, well-prepared.
It doesn't mean that we will have a foreign policy immediately. In my view, it will take one or maybe two more generations, because we come with very different backgrounds, 2,000 years of different histories made of wars more than periods of peace. We are in the longest period of peace in Europe since the Roman Empire. So it will take time to merge all this into one foreign policy. But that's our goal. And with one foreign minister you'll have an interlocutor. So we will be more organized.
Now, to answer your first question, I'm more optimistic than Rick. I do think that, of course, your foreign policy has not changed in substance. President Bush has been reelected; he feels vindicated in his choices. It would have been surprising if he had changed his foreign policy. And the same is true with Jacques Chirac or [German Chancellor] Gerhard Schroeder. But style is important in foreign policy, and his style has changed. The moment he was reelected, President Bush extended a hand of friendship and cooperation to what somebody [Defense Secretary Donald Rumsfeld] called "old Europe." And this movement was warmly greeted in Europe, because we need to be together to confront the threats of the 21st century and, as you said, Rick, to deal with the problems of the greater Middle East. That's exactly what we are doing. Look at the [inaudible]. It's a great success story. Look at the Middle East peace process. Look at Iran. You mentioned the quad. Well, Iran is [dealing with] the three Europeans, and we are discussing, hand in hand, with the United States to see what we should do for the next steps and so on.
So I'm a bit more optimistic because I think that style has changed. And we are helped in a way by changed circumstances. The Iraq elections took place and they were better than expected, and it helped to turn the bitter page about who was right and who was wrong about the necessity of the war. Middle East peace process— for four years the Europeans were complaining that the U.S. administration was not doing enough. The answer was always [that] until the day [Yasir] Arafat leaves [there is] nothing to do. Well, he died. A new president of the Palestinian Authority [Abu Mazen] has been elected. Together, we are helping the two parties to move forward. Lebanon, the tragedy of the assassination [of former Prime Minister Rafik Hariri] helped us to help the Lebanese people and so on.
KUPCHAN: We have time for one last very short question. I'll ask you both to be brief in responding. The realm of finance and trade has been relatively protected from the political difficulties of the last several years. To the degree that I hear concern about the future, it focuses on the euro-dollar exchange rate and concerns that we could see a precipitous fall in the value of the dollar, given the deficit situation here. Some people think this is a question of when, not if; other people say forget it, everything's fine. What are your thoughts, Rick?
BURT: Well, I guess I am not a supporter of the everything-is-fine school. I think we may be living on borrowed time, here. I don't see it merely, though, in terms of the European-American trade or financial relationship. I think I'll let Jean-David talk about the exchange-rate issues, because I think it makes the Europeans much more uncomfortable than it does the Americans. But I think our fundamental problem— and it does tell you, by the way, some very interesting differences between if not the American-European psychology, but the American-German psychology. And during a recent trip to Germany, I was with some bankers and they were talking to a German banker. And the Americans were giving the German banker the standard spiel about what's wrong with the German economy. And everybody does that these days to the Germans. And of course, one of the things that the Germans were told to do was to lower their taxes— you know, the standard solution to every problem. And the German banker said, "But don't you understand that, in Germany, if we lowered taxes for Germans, they wouldn't, like Americans, go out and spend all that money. They wouldn't go out to the malls and buy stuff which would be good for the German economy. Germans put it in the bank." [Laughter] And I said to myself, now this is a very curious state of affairs. I mean, the German consumer is being beaten around the head because he won't spend, and the American consumer is— spends too much, but is, in a sense, the linchpin of the world economy.
And so, the real issue comes down to: How sustainable, in the long term, are the twin deficits— the budget deficit and the trade deficit? And to what extent, with 55 [percent] or 60 percent of the foreign investment in U.S. T-bills [Treasury bills] coming from Japan and China, how long is Beijing and Tokyo— how long will they be prepared to support this situation? It's in their interest in the short term to do it, because it's necessary for their growth because, again, the American consumer buys the stuff they make. But a perturbation, a serious discontinuity in the world economy— a serious terrorist attack in Saudi Arabia, an Iranian announcement that they were close to testing nuclear weapons, some financial collapse in Asia or potentially elsewhere— could trigger uncertainties that could— would be terribly calamitous to both Europe and the United States.
KUPCHAN: Brief intervention, and then we'll go to the floor.
LEVITTE: Yes. No, not much to add to Rick— simply some comments to support his analysis. If you wanted to join the European Union, you couldn't do it because your deficits are too high. [Laughter] We have a ceiling of 3 percent for the budget deficit, and when you are a bit beyond, then you are confronted with the risk of paying fines— huge fines— to the European Union. And we are going down now below 3 percent, because that is the pity. I think you'll have to address the twin deficit and the savings, or the absence of savings, in the U.S. And Rick is absolutely right; we have a problem in France. Our savings are 15 percent of our revenues, and it's too high. And the government is trying to convince the French to spend the money, and it's difficult to convince them. Your savings is 0.4 [percent], and going down. And there are limits.
And so I think on this Rick is right. I would simply add one dimension. I think it's a big triangle. We cannot discuss the euro and the dollar without mentioning the Chinese yuan, which is one factor, for the reasons that Rick mentioned. Thank you.
KUPCHAN: And now move to your questions. And I ask you to wait for the microphone, state your name and affiliation, and a brief question to the panel. Please, straight ahead. [Inaudible] Could you wait for the microphone? Thank you.
QUESTIONER: Just to introduce myself. By occasion, we are here from the European Parliament, and I'm the chairman of the biggest group in the European Parliament. My name is Hans-Gert Poettering. I'm the chairman of 268 members of the European Parliament. If it's allowed, just to make a short comment— I have not a question— because I would like to make a comment what you said, Charles, concerning re-nationalization in Europe. There is not a re-nationalization, but Europe is complex. In our group with 268 members, we are the Christian Democrats party, Liberals, the British Conservatives— but they are a little bit different. But anyhow, so you'll see how complex it is. Those 268 members come not only from all 25 countries but from 45 national parties. And to bring all those people together is enormous work, and everybody can realize this.
I'm just making two short remarks. I agree what the ambassador from France has said that we are not in a process of re-nationalization. But I really hope that France says yes to the constitution. And yesterday, when I arrived with our members of the presidency of our group— and we have one friend from Hungary here, then a colleague from Belgium, then a colleague who will join us from Spain— we arrived at John Foster Dulles Airport. And [former Secretary of State] John Foster Dulles was asked in 1954, "Will the European defense community fail in France?" He was asked. And his answer was, "I will not give you the answer what will happen afterwards, because if we would accept that it fails then it will fail." And so we wish our friends in France— and we are supporting them— that the constitution gets a yes.
And Richard Burt, you mentioned Jacques Chirac, who belongs to our political family— I hope he always knows. [Laughter] If one— and I would not comment to your argument anti-American— but if we define Europe, the European Union as anti-American, then we would split the European Union. Not only the Christian Democrats from Germany like myself, but our friends— even if they are Socialists from Poland, from Hungary— they would be immediately near the United States and they would not go this anti-American way in the European Union. And so I say— and it's our deepest belief— that we in the European Union want to be an equal partner of our friends in America. We are not in a competition situation. We are not enemies. We are friends, and we share the same values. And for the first time— and this is the important thing of the European Constitution— we describe as Europeans our European values. And this is enormous. And you Americans have helped us, sending your soldiers to Europe during the wars to defend the right values. And we are defining that.
And my last word is, I agree; we need— the Americans, the Europeans— a project. And if I could give an advice, my project would be peace in the Middle East— a stable country, Israel, a stable country, Palestinians, and a stable Middle East. And the dignity of the persons is everywhere the same, whether they are Americans or Europeans or Jews or Arabs, Palestinians, Christians. We have— and this is our ambition to defend the dignity of the human beings everywhere in the world. I think this is a great ambition we share.
KUPCHAN: Thank you. [Applause] Please, in the front row right here.
QUESTIONER: Hi, Barbara Slavin of USA Today. I wanted to ask about looming challenges, among them Iran. [British Prime Minister] Tony Blair, President Bush have spoken about referring Iran to the [U.N.] Security Council if it resumes efforts to enrich uranium. [U.N. Secretary General] Kofi Annan, who I spoke with last week, said he's not terribly eager to have this come to the Security Council; he's afraid of a deadlock. Does France support this wholeheartedly? And do you think the Security Council is going to be the answer if Iran does resume enrichment?
LEVITTE: Well, first, why did the three European countries— Germany, the U.K., and France [the EU-3]--take the initiative nearly three years ago, now? Simply because inaction was not an option for us. So we negotiated, and we obtained a number of successes. If you compare it with [the nuclear threat from] North Korea, North Korea is out of the Nuclear Non-Proliferation Treaty; Iran stayed in. North Korea ousted the IAEA [International Atomic Energy Agency] inspectors that are deployed in Iran. North Korea proclaims that they have bombs; Iran claims that they are building a peaceful program. What we obtained on top of that is, first, that they signed the Additional Protocol, which is being implemented now with the inspectors, deployed beyond what the entity says. Second, we obtained that they suspend, without limitation in time and totally and in a very verifiable way, their enrichment program and their processing program.
The question today is: How long will it last? Because they've threatened to start conversion, which is a bit lower than enrichment in terms of the program's one plant. So far, they have not done that. And the three ministers from Germany, U.K., and France sent a letter together with Solana— that's the European Union— to [chief Iranian nuclear negotiator Hassan] Rohani, the man in charge in Tehran. And probably there will be a meeting between the three ministers, Solana, and Rohani before the end of this month. And we hope that, in the meantime, nothing will be done.
If they were going to take this initiative, breaking the [inaudible] and stopping the conversion process, what will we do as the three Europeans? Would we, as we should, to ask for an immediate meeting of the board of the IAEA? Because it would be a clear violation not only of the agreement that was adopted between Iran and the three Europeans in November last, but also of the resolutions of the board of the IAEA adopted by consensus at the end of November last. And it would be for the board of the IAEA to decide what would be the next step, either to take an initiative by themselves or to confer the matter to the Security Council.
KUPCHAN: Rick, do you want to add something?
BURT: Yeah, just very briefly. First of all, I, of course, compliment the job that the EU-3 has done in working the Iranian problem. I wish there had been four people at that table. I think maybe earlier on, had the Europeans— together with the United States, had a harmonized or coordinated strategy, both benefits and also costs very clarified defined for the Iranians— that we would have probably achieved much more. I think there's not a lot that the Europeans can offer the Iranians beyond the existing economic and technological relationship. There's a huge amount that the United States can put on the table in terms of trying to normalize that relationship, and I think that would have— we would have been able to exert far more leverage in that negotiation, but that's water under the bridge.
I think the administration has symbolically put some things on the table— WTO, spare parts— but I doubt that at this stage that's enough. And I suspect that the negotiations will— without any judgment on European diplomatic prowess, but I suspect those negotiations will fail. We will then face a very serious set of decisions.
One, as Barbara pointed out, is taking this through the IAEA on to the Security Council. Will we be able to get a vote in favor of taking sanctions against the Iranians? I tend to doubt it. I mean, I don't know what the Europeans will do. I think there might be another very divisive debate between the United States and Europe on this issue. I'm not sure, despite what [Russian] President [Vladimir] Putin has said, whether the Russians would support it. He may find an excuse not to go along with it. And it's hard to determine what the Chinese would do under those circumstances.
And then we will then be faced with the possibility of taking some military action against the Iranians. An invasion is out of the question in my judgment. We don't have the forces. Fighting the Iranians in Iran would be a qualitatively different sort of situation than Iraq. And so we're probably looking [at] possibly some form of air strike, which wouldn't end the Iranian program, but it could, possibly. The argument would be made by the supporters of an air strike that it would set it back substantially.
The Iranians could retaliate in some very disquieting ways. They could retaliate in Afghanistan. They could retaliate, given their position, in Iraq. They could retaliate in Lebanon through Hezbollah. That would— it would further exacerbate the U.S. position in the region and lead to major turmoil in the European-American relationship.
So we may— Europeans and Americans alike, facing these very unpleasant options, may have to start thinking of plan B: quietly thinking about how to not get rid of the Iranian nuclear capability, but how to live with an Iranian capability, and focusing on normalizing the relationship with Iran. [This is] particularly hard for Americans because that history is so tortured. But I'm hearing slogans in Washington about this being another Cuban Missile Crisis. If it's a crisis that we can't win, it's a crisis where there are no good options, I think we'd better start thinking again.
LEVITTE: If I may add one footnote, I think it's important for you not to underestimate the determination of the three Europeans. We started this negotiation eyes wide open, without any illusions, but with a clear view that it was certainly the best option, and probably the only option, at least. But what is important at that stage, as we did in detente, is to make sure that at each step we move forward, we not only have the understanding, but the support of the whole international community.
And when I said a few minutes ago about style changed, style may lead to change in substance, that's exactly what happened with President Bush when he shifted his position from a great skepticism, to say the least, to clear support with the announcement of support to Iran in WTO [World Trade Organization] and [inaudible] out of place. This is a shift, and it's welcome because it gives, as you said, Rick, more leverage to our negotiation.
But you have to know that we act in full transparency also with the Russians, with the Chinese, with others, to make sure that at each step, the whole international community is with us, on board, backing us. That's exactly what happened in the IAEA with the board, where all of the resolutions on Iran, and there were a number down the road, were adopted by consensus. And if there is to be a transfer, which is a possibility, from the IAEA to the Security Council, we hope that it will be for a unanimous decision, and then that the Security Council will remain unanimous in the decisions which will have to be taken.
KUPCHAN: Next question, from Elizabeth.
QUESTIONER: Elizabeth Becker with the New York Times. This is for Ambassador Levitte. You had mentioned that the Chinese yuan is important to the U.S.-euro exchange, and the administration is under strong pressure from Congress and the business community to get China to revalue or float the yuan. What would Europe's opinion be if this was a bilateral decision? Are you still looking for something that would mean a graduated change of value with the euro, the dollar and the yuan, or would you be happy with the U.S. just doing a bilateral deal with China?
LEVITTE: We do think that it would make sense for the Chinese authorities to let the yuan move upward, and it would be good news also for the Chinese economy. And I had a fascinating conversation with [Federal Reserve Board] Chairman [Alan] Greenspan. He explained in numerous ways why it would be good news for the Chinese economy, and I told him you should explain that to the Chinese government, because you are probably in the best position to do so and be convincing.
But don't forget, for instance— and I am speaking in front of a German president of the most important party in the European parliament— but for years, we had devaluations in France and you had the rise of the deutschmark, and you were the winners of this game. The rise of the currency is not necessarily a disaster, and at that moment, the rise of the yuan would be good news for the world economy, and most probably for the Chinese economy altogether.
KUPCHAN: Next question, from the gentleman all the way along the wall there. Sir? Yes, you with the blue, and then the next one will be you.
QUESTIONER: Thank you. [Inaudible]. What role does Turkey's EU membership play in this debate, both within the EU and in transatlantic relations? Thank you.
KUPCHAN: Would you pass that along to the gentleman in front of you? He'll be next. Thank you.
LEVITTE: Very shortly, not much anymore. It was a big debate months ago, but not anymore. Now the French have understood that the question is about the constitution, and that there will be a referendum about the membership of Turkey in 10 years or 15 years, because we will start the negotiations in October.
What you have to know is that it's not, contrary to what I hear in the United States, a debate about a Muslim country. After all, Albania is a Muslim country. Probably Albania will join, as all the Balkan countries, the European Union, and we don't have a debate about the religion in Albania.
The problem is the size of Turkey. You will be, when you will join, probably the most numerous country in Europe. It would mean two things in terms of economy and institution. First, in terms of economy, it would mean more financial transfers to Turkey alone than the ten newcomers together. And the ten newcomers, as we've said, receive a lot of money. It's kind of a Marshall Plan to help the newcomers to catch up. Ireland has benefited from it, Greece, Spain, Portugal. Now it's Poland, the Baltic States, and so on. And it's around $40 billion a year. That's massive. For Turkey alone, it would be much more than that because of the standard of living in Turkey.
Second, the day Turkey would join, Turkey would have the No. 1 population. If you look at the new constitution— the constitution— you'll discover that the voting system will be very simple. A decision is adopted once it is approved by 55 percent of the states, members of the European Union representing 65 percent of the total population. It's a kind of merger between the House of Representatives and the Senate, if you wish. Now it means that, in terms of population, the blocking minority will be at 25 percent. And Turkey alone, when Turkey will join, will have around 17 [percent] or 18 percent of the total population of Europe. Would you give California half of the blocking minority in the House? That is the question. And I'm not answering the question; I'm just asking the question because these are the kind of questions which will be addressed/debated in the years to come. But it's not a question of Muslims or not Muslims; it's the size of your great country. And as you know, President Chirac is very much in favor of the membership of Turkey inside the European Union.
KUPCHAN: Rick?
BURT: Well, I think it's very timely that this question has been brought up, and it was brought up in the context of not just Turkey and the EU, but Turkey and the transatlantic relationship, and a couple of points are worth making here. First of all, of course, Turkey became a member of NATO at the behest of the United States, and was Turkey's closest and most reliable partner within the alliance for over 40 years. And I think it's a sign, I think, of American foreign-policy vision that the United States strongly supported Turkey's accession to the European Union throughout the 1990s up until the decision that was taken last fall by the Council of Europe to begin the accession process sometime this year. So it's, I think, a very good example of European-American cooperation on a vital, strategic country.
That said, I think we may be on the verge of a who-lost-Turkey debate within the transatlantic relationship, because if we're going to be candid with ourselves, things are not going well. They're not going well between Turkey and the EU. There are a lot of issues and problems that are already boiling up in that relationship. The U.S.-Turkish relationship has plummeted faster than the 1929 stock-market crash. I saw a report just the other day that said, as a positive amongst a poll taken in Turkey, one of these worldwide surveys of attitudes towards the United States, Turkey had the lowest positive— Turkish voters had the lowest positive views of the United States of any country in the world. I think it was 12 percent of the poll expressed a positive attitude towards the United States.
Now, we all know the reasons and some of the background to that, and the mismanagement of the debate over the introduction of U.S. forces meant to move into northern Iraq and other— U.S. support for the Kurds in northern Iraq— and so on and so forth. But I am at a loss right now to understand what Prime Minister [Recep Tayyip] Erdogan's vision of Turkey is, where he wants Turkey to reside. Does he want Turkey a European or EU power? Does he want to sustain the special U.S.-Turkish relationship? Is he finding some other role for Turkey in the broader Middle East?
You mentioned the world "re-nationalization." That's seems to be the driving force in Turkish politics today, is a kind of nationalism without a kind of guiding vision. It's a very disconcerting development, and I hope the Europeans and the Americans alike can spend some time talking about how to reengage with Turkey so we can stop this process of deterioration which seems under way.
KUPCHAN: Sir?
QUESTIONER: Can you hear me?
KUPCHAN: Yeah.
QUESTIONER: Zbigniew Brzezinski, Center for International Leadership. One of the items which is missing from the discussion is Russia. I want to go from Turkey to Russia, and would like to see how you assess [inaudible]--it was from a Russian tune. [Laughter] How do you assess the recent trip of President Bush to Russia? In yesterday's issue of the Washington Post, there were two photographs juxtapositioned— one at Yalta, with three participants: [Joseph] Stalin, [Winston] Churchill, and [Franklin D.] Roosevelt; and the other one, Putin and Bush in today's situation— implying that perhaps lack of knowledge of who really Stalin was and lack of knowledge who really Putin is was a common denominator between the two meetings. Would you be willing to say anything about that?
BURT: Is this to me?
KUPCHAN: No, you get the first shot, but we can't let Jean-David off that—
BURT: Well, you know, I have been bemused by this debate over Yalta, and I guess— well, first of all, I do agree with the great French historian and analyst, political scientist Raymond Aron, that one of probably the chief American strategic flaws when it goes to war is to worry more about ending the war and not so much about [how] the peace is going to be constructed, the political framework following the conflict. And that was his criticism of Roosevelt and his dealings with Stalin, and perhaps ignoring some of Churchill's concerns.
All of that said, military forces create strategic facts, and I've been either listening to the talking heads on the cable news channels who are sort of discussing this— Yalta as some kind of strategic blunder, not recognizing not only the losses that the Soviets suffered during World War II, but more importantly the positioning of their forces, where they were. It kind of suggests that the only way you could have really resolved that problem is through moving through Germany and then to attack the Soviet Union. It's kind of— I mean, it's naivete, I think, of the first order.
I think the situation we face with Putin is fundamentally different. I thought that Putin was engaging in a kind of grand exercise in nostalgia in Moscow during the ceremony. I think this is a people who have gone through a post-communist period that has been very volatile. Some people have succeeded during that period; a lot of people have suffered during that period. The one thing that I think most Russians would agree on, that they feel a little abused by the international system. And it was a great morale-builder, I think, for many Russians to be reminded of the glories of their great patriotic war, and Putin was engaging in good politics— good domestic politics— to remind them of this great, great victory that they could all justifiably take pride in.
Unlike Stalin, though, I don't think Putin has an anti-strategy. He seems to be, in my view, an improviser. He has certainly taking advantage of Gerhard Schroeder's offer of a special German-Russian relationship, and they seem to be building a kind of bridge between Berlin and Moscow, and I think [this] plays on a little bit of German romanticism about their understanding of the Russians. I think it disconcerts other Europeans that this process seems to be going forward. But Putin seems to be capable of making mistakes, and as soon as he recognizes it's a mistake, he just then improvises again and moves on. He did it in the [December 2004 elections in] Ukraine. He has made mistake after mistake in Chechnya, and continues to be sort of bent on that path. And he's mainly, I think, the beneficiary at this point of high oil prices. The best thing— and you're talking about revaluing the Chinese currency— the best thing, I think, for Russia and Putin would be— actually, it's not going to happen— but a decline in oil prices, where then Putin and his government would be forced to make some very tough decisions; decisions that he's been able to put off by benefit of the high oil prices. But I don't see this guy as having a— as having a strategic plan, or having an ideology as Stalin did that allows him to take the next step.
KUPCHAN: Jean-David, the last word.
LEVITTE: Russia is our neighbor now. When I say our, it's the European Union through the three Baltic States, Finland. And we are cautious not to recreate an Iron Curtain simply displacing the place of the Iron Curtain inside Europe. We don't want any more an Iron Curtain. And for us to engage Russia and to build Europe as one and in democracy is our goal. We share the same goal. The miracle happened 15 years ago, with the fall of the Berlin Wall, the fall of the Iron Curtain. Let's not isolate Russia. That's the motto all over Europe. And we understand that for the Russian people, the loss of the Ukraine, Belarus, and other countries is the loss of part of themselves. If you are in Kiev, you visit the monastery of [inaudible], it's the place where Russia was born, and then it moved from Kiev to Moscow. So they still feel the pain of the loss, as Rick said very wisely so. But they suffered also the loss of the state structure with the collapse of the Communist Party. There was the collapse of the communist order, the communist structures, and they still have to rebuild the state structures, a country which can work. And it seems to us that this is the No. 1 priority of President Putin.
Does it mean that he is not in favor of democratic values? No. We do think that he wants both to rebuild the state structures and to develop democratic values. We are not suspicious, and we want to help, and we do think that the relations between the European Union and Russia will be key for the future of the continent. We just signed a few days ago, the day after the visit of President Bush and all this nostalgia that Rick mentioned, four agreements to build the future in terms of economic cooperation, in terms of travel of citizens from Russia to the European Union, in terms of technological cooperation, and so on and so forth. And this is very important to help Russia build a better future for its people. Thank you very much.
KUPCHAN: Our time is unfortunately up. Please join me in thanking Jean-David Levitte and Rick Burt with the Council. [Applause]
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