NATO At 60 Symposium: Session II: NATO, Russia, and the Near Abroad

This session was part of the CFR Symposium on NATO at 60, which was made possible through the generous support of the European Commission, CFR's Program on International Institutions and Global Governance, and the Robina Foundation.

STEPHEN SESTANOVICH:  I'm not surprised that we've got a slightly smaller crowd this morning than we had for George Robertson.  You know, when you've got the rock star performers you bring out the crowds.  I'm Steve Sestanovich, I'm a fellow at the Council, and I'm going to be presiding at this morning's panel on NATO, Russia and Eastern Europe.  You note the slight title change from your program.

I'm asked to repeat what Charlie Kupchan said last night that our symposium is made possible by the generous support of the European Commission and the Robina Foundation; for some reason he also wants me to thank the CFR program on International Institutions and Global Governance -- which is to say thanking ourselves but I think what we're really doing is thanking our colleague, Stewart Patrick, for helping put the event together.  Also a reminder, which you had in Charlie's announcement yesterday that except for the lunch session today with General Eikenberry, which is not for attribution, the rest of the symposium is on the record.

MR.    :  Is it being videotaped?

SESTANOVICH:  Probably.  We're so modern in this new space -- anybody who feels that, you know, if you want to -- your stage presence will be more on knowing that we're being videotaped, I think the answer is yes.  

There was a lot of discussion last night about -- and yesterday afternoon -- about Russia and NATO, an attempt to steal the thunder of this panel, but I don't think they succeeded.  We have lots of topics still to be addressed.  We also had some discussion of the international economy and we have at least one member of our panel whose got a particularly strong view on that issue -- and I'm reminding myself with this introduction that I'm going to make sure that before we get to the end of our discussion we're going to let Konstantin Remchukov have some floor time to talk about that.

We're also going to pursue -- or follow a slightly different format this morning; not extended presentations from the lectern -- this is the last you're going to see, at least in this panel, of anybody at the lectern.  We're going to have a discussion within the group here on stage and then open it up for discussion with the audience.  Our panel is of the opinion that we can cover more ground that way and I completely agree.

At any rate, so we are now going to turn to the subject of this morning's panel.  I'm going to -- with my Blackberry here on the table I'm reminding everybody to turn off their electronic gear.  Our panelists are Ivan Krastev, from the Center for Liberal Strategies in Sofia; Konstantin Remchukov, the editor and publisher of Nezavisimaya Gazeta in Moscow; and Ambassador Victoria Nuland, just returned from NATO where she served her second tour and now at NDU.

I want to begin with a topic that was discussed in a number of glancing ways yesterday and that is the following.  In the past 15 years, the alliance has pursued kind of a two track approach toward Russia and Eastern Europe; that is, it has opened the alliance for enlargement and taken in many new members and it has tried to expand cooperation with Russia.  The assumption in this period, and one that was backed up by a considerable effort by the alliance, was that those two policies didn't have to conflict with each other.  You see that in the creation of new institutions and of initiatives both between the alliance and Russia, between new members of the alliance and Russia but I think it's obvious now that there's greater stress on the pursuit of those two policies together.

They may or may not be irreconcilable but they're at least in greater tension and I think there's a reexamination of both of them -- and I want to start with that question.  How do you see the relationship between those two policies going forward?  And we'll, of course, want to review a little bit of the past record in answering this.  Why don't I start with you, Ivan, and let you offer your thoughts on this?  We've got a lot more territory to cover but this seems to me to be an important one to start with.

IVAN KRASTEV:  Thank you very much for the invitation and I do believe that the first step for resetting the battle with Russia is when you're replacing the Pole with a Bulgarian on a panel like this -- so you always can expect a kind of a different tone.  (Laughs.)

SESTANOVICH:  You're our reset button, is that -- (laughter)?

KRASTEV:  Yes, so I'm -- (inaudible, laughter).  But secondly, I do believe it's a very fair question because rhetorically it's very easy to say that the enlargement of NATO with respect to Central and Eastern Europe and the kinds of institutional reservations with Russia were not conflicting with each other -- in the real world they have been conflicting.  

And this is not about the interests, it's about the perceptions and that way it's extremely important because now there's going to be a lot of talk what can be done differently about the Russian NATO policies?  In my view, I do believe we have been talking for too long about values and interests but perceptions matters and perception matters on all sides.  What you believe is your interest in a certain way is very important in trying to define the interest of the others on the basis of kind of much more clear picture matters.  So from this point of view I do believe that there was a conflict and the other question is, was it right, even if there was a conflict, to go with the enlargement?  

And of course being a Bulgarian -- and Bulgaria and Romania are part of the most critical part of this package, being the last to join -- I do believe that even now if you should face this dilemma as a dilemma and not as an easy reconciliation I do believe enlargement makes sense.  I do believe that now when the financial speculations are not so popular, people probably are back to the geopolitical speculations but if the enlargement of NATO has not taken place, first, I don't believe that EU enlargement was going to take place so easily with respect especially to countries like Bulgaria and Romania.  Secondly, I do believe that countries in central and Eastern Europe can have looked much more as the Ukraine than the way they are looking now.  And from this point of view it's easy to say that if the enlargement would have not taken place the relations between Russia and NATO were going to be totally different.  But I do believe this is an interesting hypothesis which cannot be tested.  

Probably the sources of Russia policies are slightly more complicated and complex than simply to be understood as a response to western policies -- and of course when we are talking now about NATO at 60 everybody has his joke to say.  And I do believe that the good thing about NATO is the following.  Now NATO is at 60, being a western institution; if NATO was a Russian male, it was going to die at 59 years and seven months because this is the life expectancy of the Russian male today.  I'm making this point because I do believe that there are very important internal problems on the level of democracy, on the level of the state building in Russia, which are much more important when we are going to decide why Russia take one or the other type of decision than simply believe that all Russian policies in these years have been in response to NATO.

My last point is the following.  Nevertheless I do believe that everything that had been done in the 1990s was strategically right I do believe that NATO got one thing wrong, and the wrong is that NATO got wrong when the 1990s ended because it was an exceptional period and the EU can achieve certain things.  But I do believe the 1990s ended at some point and trying now simply to continue with the policies of the 1990s is not the proper strategic response to the new environment.  So this is -- I am going to stop here.

SESTANOVICH:  I'm going to just press you on this one point.  When did the 1990s end?

KRASTEV:  It -- basically it ended three times.  For the Russian public opinion, which has been perceiving itself very much as still trying to integrate with the West, the 1990s ended in March 1999 during the NATO bombing in Yugoslavia.  If you go in the public opinion polls you're going to see that 38 percent of the Russians changed their opinion on the West as the result of the operation.  The second type of, I do believe, ending was very much with the Colour Revolutions.  It's not basically an exaggeration to say that for Russia the Colour Revolutions have been their 9/11.  Russia felt basically very much threatened by the spread of democracy on its borders and basically decided to react on this.

But certain in my view, the symbolic ending of this was the Russia-Georgia war because basically the Russia-Georgia war set a totally different concept; it was quite obvious that Russia is trying to reinforce its red allies.  And from this point of view, looking at the result of this war, it's very interesting because this is one of these cases where everybody lost.  Georgia lost territory, infrastructure, its economic model -- basically Georgia lost the war.  NATO lost credibility.  I do believe that now it's obvious that being in talks with NATO is not the same as being secured.  But also Russia lost to the extent that Russia discovered that it does not have soft power; and in a certain way, nevertheless that Russia has won the war, its political resources to dominate its neighborhood appear to be quite limited.

We saw something which, at least in my view, could be discovered as the sovereign neighborhood.  Countries between Russia and NATO, Russia and the EU started to behave like a collective -- (inaudible) -- who is using the competition between Russia and the West as a resource for their own sovereignty-building and this, in my view, was an interesting process.  For me, the biggest question is to what extent the financial crisis that is now going around is not destroying this and to what extent we are not seeing now in the post-Soviet space much greater strategic exit and not a real competition between Russia and the West?

SESTANOVICH:  Konstantin, on these two -- on this question of the relationship between these two policies that NATO pursued -- cooperation with Russia and enlargement -- how do you see the relationship between those two -- particularly as governments in the alliance and in Eastern Europe and in Russia take stock of what the future relationship should be?

KONSTANTIN REMCHUKOV:  I'm a publisher of the only private political daily in Russia and I was preparing to do the same thing I do in Moscow -- to be very critical of Russian government.  But then I discovered that I'm the only Russian person on this symposium and, you know, I had to go --

SESTANOVICH:  Ambassador Kislyak is not here today.

REMCHUKOV:  -- he's not here today and so -- normally there should be someone official to defend the Russian stance.  I had to go to important offices in Moscow to find out the position of the Russian foreign minister or a couple of his deputy ministers.  And I had a chance to talk with Putin, with Medvedev on some of the issues.  So I must tell you that -- and we also publish an independent military review weekly, which the defense ministry and the Kremlin read all that we publish.  

And I must tell you, I didn't expect that so much unity exists on this issue in the Russian elite.  The NATO strategy to expand is an instrument of U.S. policy to dominate and to encircle or surround Russia.  This is an overwhelming belief that all the strategic initiatives to create a third strategic area in -- with Poland and the Czech Republic will be interconnected with some western Pacific communication system.  So it's the U.S. against Russia.

And there are no sound arguments to the Russian ear about the reasons why you have to expand if the Cold War is over and there are a lot of other institutions in Europe -- open institutions which Russia is a part of -- and institutions such as NATO, which is a closed institution, closed for Russia, and is developing and is more and more changing into a kind of global "taking care of" organization -- having in mind Iraq, Afghanistan, and other  --  Iran  --  points of tension.

So yesterday Lord Robertson nicely responded why Austria is not going to be part of NATO because public opinion in Austria is against that.  And this issue is never raised about Ukraine because it is well known that 70 percent of Ukrainians are against NATO accession but if it is for the sake of democracy in Ukraine then it is against the majority of people. If the consequence of Ukraine's admittance to the NATO organization will be a split of the country and increasing political tension and against it and not in the favor of the goals.  So I think that the general attitude of the Russian political elite is that expansion is that -- it is the instrument of American influence and an America which began to lose its influence on old NATO members through the blood of the new members who have a lot of sentiments against Russia made the organization much more aggressive.  And over the time of NATO expansion after the Cold War all this time was, at the same time, a time of increasing tension and the loss of trust.

And so at this point of relations -- or relationship, I must say that most probably we are at the lowest possible level of mutual trust.  We don't trust any arguments you put forward, you don't trust our arguments.  And that is because you ignore the principle which we believe of indivisibility of security -- that means that you increase your security at the expense of our insecurity.  

SESTANOVICH:  Victoria, you've served at NATO and in Washington during periods when this dual effort was pursued.  What was the -- does it seem to you as though that is just an unsustainable pairing of policies now and is it based on what Konstantin says now a matter of choosing one or the other?

VICTORIA NULAND:  Well, at the risk of sounding naive, I think we have to go back to how this whole NATO-Russia relationship started with the Permanent Joint Council and then the NATO-Russia Council in 2001.  And I would argue that at the time maybe we were all naive -- myself included.  We didn't think it was two policies, we thought it was two tracks of the same policy -- that essentially the idea was that all of the Euro-Atlantic states in a democratizing Europe would come closer; that their interests would converge; that they'd be able to cooperate more; that some would choose to join NATO and see that as enhancing of their security; that others like Russia would want as rich a partnership as possible to do things together in our common interest but would choose for their own reasons not to be members.

And in fact, in '93 I remember sitting with Strobe Talbott in a meeting with Yeltsin, and Yeltsin said, what if we wanted to be in NATO?  And Strobe wasn't ready for the question but he appropriately tap-danced and said, well, it would be a different NATO; it would be a different Russia, but why not?  And then that idea very quickly faded away.  And I was interested in what George Robertson had to say yesterday that Putin raised it again with him in his tenure because my memory of early American meetings with President Putin were that he was quite dismissive of the idea that Russia would ever be on that trajectory -- that it was exceptional, that it didn't see itself as a co-equal with the other members at the table; that it saw itself as a counterbalance to the other side of the table.

So I guess we thought at the time when all of this started -- and frankly we thought in 2001 when we restructured the relationship from a bilateral relationship between NATO and Russia to the NATO-Russia Council where Russia sits just like a NATO member in its chair in alphabetical order -- that by working together we would converge in values, in interests, in our ability to cooperate not just and not even primarily beyond the Euro-Atlantic area but in the Euro-Atlantic area itself.  And I think if we had had a Russia that made that its primary priority, doing as much together as we could, that structure, particularly in 2002 when we reconfigured it, might have resulted in a very different NATO today.  

More and more of the work that NATO does would have migrated to the NATO-Russia Council.  More and more of the strategic approach that those nations take to things like Afghanistan, to the Balkans, frankly to even issues like Darfur or Iran could have migrated to the NATO-Russia Council.  But what we saw instead was a development of a significant -- as Konstantin has said -- profound fear of encirclement which revived zero-sum thinking; that somehow if NATO wins Russia has to lose; and this perception that the enlargement of democracy on Russia's borders was aggressive to Russia, was dangerous to Russia.

I guess I would just ask, with the exception of our disagreements over Kosovo, which are profound and which might have worked better with a different NATO-Russia relationship both in '99 and last year, what it is that NATO has done to Russia to deserve the kind of suspicion that we feel we see now?  And I guess my question is the relationship is of value whether or not we are continuing to converge but it'll be a very different relationship.  

If, in fact, there is a zero-sum perception by one or many participants around the table, we should still talk, we should still use it.  But it's not going to have the impact that we all wanted, which was to create a Euro-Atlantic community that does far more together than it does separately -- and that, in fact, presents leaderships and opportunity and strength to the world in solving larger problems.

SESTANOVICH:  Lord Robertson said that his response to Putin was, okay, you're not going to stand in line but let's see if we can develop a cooperative relationship that benefits both sides, and that will transform the outlooks of both sides and make it possible to go forward addressing these other questions like membership and the question of who's threatening whom.  

Can you say a little bit more about the kinds of cooperation that you felt were available to the alliance and to Russia that have been under-exploited and is it possible to go back -- to rewind the tape -- and actually pursue those?

NULAND:  Well the truth is -- and the untold story in Washington, in Brussels, in Moscow, in Paris, in Berlin, in London is that on the practical cooperation level, when we put our experts together, NATO-Russia has done an enormous amount.  Over the 15 years that we've worked together, our civil emergency planners have learned to work together; our missile defense experts have learned to work together -- we've actually developed ways to ensure that if we deploy PAC-3 type systems to protect our troops in a peacekeeping environment NATO and Russia missile defenses don't hit each other, they hit the incoming missile -- the kind of test that could serve for more cooperation in the future.

We've had a whole generation of military officers do annual exercises in peacekeeping in nuclear safety and security, in search and rescue.  So from that point of view in terms of the prospect of changing -- of creating interoperability, of changing enemy and Cold War mindsets, I think you've had an enormous impact on a whole generation of military officers, civilians, et cetera.  The problem has been at the political level where what's happened at the NATO-Russia table has been a complete mirror reflection of the difficulty in bilateral and multilateral relations between the countries of NATO and The Kremlin.  So, here again, I think we could have done more with sugar than with vinegar at that table and I do think that if Russia had come in more strongly to the NATO table with more ideas, more alternate approaches to some of the challenges, including things like Kosovo, including things like missile defense, it would've won a lot of votes at that table and would've changed the conversation among NATO members in a way that didn't happen.

So for the future, you know, I think there's still huge potential if the capitals want it and areas would include, as I said, missile defense.  Regardless of where the administration decides to go, there are already missile defense assets in the form of radars, et cetera, that we could link in a common picture to be able to know what was happening and to share that knowledge with all of the member states of the NATO-Russia Council.  

I think on Iran we have never really used the NATO-Russia Council to talk about the full array of tools we have to work with the Iranians -- whether you're talking about our political dialogue, our economic instruments, carrots and sticks, or the potential that we will need to deter a nuclear Iran someday.  So I think the NATO-Russia Council could be a forum for that -- obviously Afghanistan -- obviously -- and not only how we get our forces into Afghanistan but how we strengthen and promote a peaceful democratic society there, which has got to be in everybody's interest.

SESTANOVICH:  Konstantin, you talked about your consultations with senior Russian officials before coming to this conference and you heard a lot of complaints, grievances, objections to things that NATO has done.  Do you hear a conception of what the relationship between Russia and NATO ought to be or could be as opposed to identifying the reasons for strategic distrust?

REMCHUKOV:  I'd think that what the officials would love to hear as an example that our relations could improve is that you indicate at least a single time that you understand our concerns because when we speak about the NATO expansion it is not only an abstract thing -- NATO is expanded and emotional thing.  It is also a practical thing because it is a practical handling of the territories -- military handling of the territories.  You begin to use infrastructure, you improve airports, you have air control and it is very close to our borders.  And if you dismiss right away these concerns and say you don't care about it, so what do you expect from Russian officials, that they don't care about increasing military potential on the borders, very close to our security centers?  

And we don't hear this.  They hear, no, forget about it; it has nothing to do with your security.  We are concerned about Iran, a potential threat some time, in 10 years' time.  But on the 18th of August, 10 days after the Georgia war, Poland finds not only 10 NATO anti-missile rockets but 96 Patriot rockets as well and it is in connection with Russia's aggression.  No, I think that it is not a linear relationship between us and you; it is -- and there are several factors.  Number one, the illusion was created in the 1990s that we could be strategic partners.  From my point of view, it is a mistake.  We can never be strategic partners; we have too many differences and goals and aims.  We could be partners on strategically important issues -- and that is the principle difference -- never a strategic partnership between us and you because so many stakeholders inside our country have so many vested interests which will not allow to delegate any of the powers as strategic partners very often do.

Now -- and when something happens, it's not like strategic partners should do, it's like between lovers.  We get insulted.  Why do they behave like this?  Why do you recognize Kosovo?  Why do you do that?  Why don't you do that?  And this is an emotional thing.  Number two, I think that -- yesterday you mentioned generational issues concerning NATO's future.  And I must tell about the generational issue in Russian leadership.  It seems to me that you missed a point: when Russian government elite has changed in the 2000s.  People who came with Putin were older than people who were under Yeltsin -- (inaudible) -- and they had different mindsets.  All of them are coming from the military or paramilitary institutions, where from their very young years they are taught that the power of the state is everything.  You are thankful to the state which gave you money to be a cadet or a soldier or officer and everything.

So if you talk with these people, they think in terms of strong state, and strength of the state is, again, like it used to be -- it has a lot of influence.  Government intervention, state-controlled corporations and companies in the economy -- and that was a drastic turn away from the philosophy of the '90s.  But you still employed the concept of value approach.  You talked about the values, common values, and it appeared that a lot of values stopped being common in the perception of our leaders and yours.  And the policy was not adjusted equally.  And I don't see what kind of values, common values -- if you put value approach in your NATO-Russia agenda, it is going to be tough.  

The guys like Lavrov are very eloquent; they will prove immediately that your so-called values have double standards; there is no one value for Iran, one value for Pakistan.  Pakistan has a lot of Talibs and al Qaeda and everything but still they have nuclear arms and you close your eyes on that.  The danger from Pakistan for proliferation is much greater than from Iran but they're your allies and you call -- the value talk will be over the moment you begin to preach on values, especially that your values prove not to be that glorious these days and many other things.

So I think that you should look more carefully to what Dmitry Medvedev proposed -- the new Pan-European architecture of security.  And, briefly, they call it -- (Russian term) -- the golden standard of security.  Golden standard of security means that all European countries, not only NATO members, should be included into this security system.  Governments should have legally compulsory obligations to implement certain principles which will be discussed over there; the organization should be open, unlike NATO; and they think that it is the first basket of European security cooperation process because the third and the second basket are with humanitarian issues and political issues, that they are taken care of properly, but they had hard security issues that were neglected for many years.  

So actually it is an attempt to call on you to look at this possibility because the very strong proof from Medvedev and Putin and Lavrov is that existing institutions -- European and NATO institutions -- failed to prevent the Georgia crisis.  Although everybody was aware of the tension, but the institutions and the mechanisms didn't work.

We have to proceed from this very particular fact.  It didn't work.  We have to create something which will work.  So I think this is the logic of the --

SESTANOVICH:  Thank you for raising that because in the time that we continue this discussion within the panel, I want to touch on two questions:  one is, what's the potential, what are the pitfalls of the Medvedev initiative and how should the alliance handle the commitment that it has made to Ukraine and Georgia in particular that they will at some point be allies?  Those two questions and then we're going to let the audience have at us.  

Let's start with the Medvedev initiative if we could, Ivan.  How should NATO respond to this initiative?  It's an initiative that proposes a European security architecture.  One of the odd things about that is that I think a lot of people thought European security wasn't a problem anymore, but it seems as though it is.  What is the right response and what has to be avoided in that response?

KRASTEV:  First of all, I do believe that they should be responsive and we should start to talk and engage with this, and the reason is if one of the major players believe that the institution does not work and if they are going to show that they don't work, they have the way to do it.  Because telling me that in a certain way the institutions didn't work in the case of Russia and Georgia, you can show in another place that this did not work too.  So from these points of view, obviously we have this and I do believe we have also one major problem, which is this type of perception problems.  Russia perceives NATO as a revisionist power.  More and more NATO perceives Russia as a revisionist power.  This clash of revisionisms, in my view, starts to be slightly dangerous for both sides, so from this point of view going and talking not simply on concrete issues but on the agenda makes sense for me.

But here comes at least four problems which I see and I do believe it's not going to be so easily to be reconciled.  First, talking about, of course, the Medvedev initiative, it's very nice because it's vague and charming.  And so on this (surface ?) level everybody can imagine what he wants.

SESTANOVICH:  The endearing initiative, as someone said yesterday.

KRASTEV:  Yeah, exactly.  So from this point of view everybody likes it.  The problem is that this moment -- and this is true for NATO, it's especially true for the European Union -- the European Union and Russia have a very different idea of what a European order means.  Russia -- at least this is my view and I will be glad to be corrected -- is very much now with the world view of the 19th century power which believes in the balance of powers.  They believe it worked in Europe.  In a certain way, Russia does not believe anymore in the post-national type of political formations because they have the bitter experience also with the Soviet Union and the post Cold War architecture is there.  

So if this is the case, who is negotiating -- other member states of NATO?  Is it NATO as the alliance?  Okay, of course post-Soviet states should be there -- Turkey?  Where is the European Union in all this?  Because I do believe what we can see is that it's much easier to negotiate with Russia on the global issues and Russia is much more responsible as a global partner than it is as a neighbor.

The second problem has a lot to do with the financial crisis itself because the financial crisis, in my view, unfortunately is going to have a very strong impact to both Russia and the European Union because this crisis is a kind of existential threat to both projects.  If I decided to simplify -- in Russia, you slightly have a leadership without institutions and in the EU we have institutions without leadership.  But as a result of it, because of the very complex nature of the projects, for both projects if the financial crisis is going to have a political implication, it's going to be very difficult.  And when we see also the post-Soviet space, where state failure is not excluded it is going to make the timing of these negotiations very difficult.

Because when I do believe Mr. Medvedev came with the proposals, he believed that Russia is negotiating from the position of strength -- basically making a very clear signal that Russia is not going to tolerate the policies of the 1990s.  So from this point of view, yes, let's go on to negotiations but I am afraid that people, when they said there are going to be new pragmatic policies, they try to imagine that this policy is going to be much easier to be achieved and it can be achieved in reality and also divisions within the European Union also are very strong when it comes to the Russians.  

And I do believe that it goes directly to the problem of the Ukraine and Georgia.  Obviously -- and here, the American government was very active -- there was a kind of a response to a closing window of opportunity.  I do believe that as a result of it, the outcome of this was very ambiguous and probably there should be a (stent ?) on this were overtaken by events.  Just to believe that the enlargement of NATO could be the major instrument at this moment for stabilizing the post-Soviet space I do believe is slightly risky.  And yesterday when Radek Sikorski said that Russia-Georgia were in a way disciplined our thinking, I hope it also disciplined Russia's thinking because it showed that the post-Soviet nationalism are anti-Russian in their nature.

What struck me -- and this is the major difference between the Russians and the Soviet Union -- if the Soviet Union had been attacking one of its neighbors, they are always going to be the communist party of this country -- making a shadow government and welcoming the Soviet troops.  What happened in Georgia, you have a successful military operation and no political support on the ground at all.  And I do believe from this point of view we're reaching a kind of a difficult moment, in which even talking about its spheres of influence is not so easy because I'm not sure that Russia has a capacity to keep the post-Soviet space in its sphere of influence and I do believe this is also true for NATO.

What you said about the Ukrainian public opinion -- this is the reality.  Ukraine is divided on this, it's discussing it, basically trying to make the decisions which are going to have far-going consequences in the lack of public consensus and political consensus, in my view, could be dangerous.

SESTANOVICH:  Ivan, some of the things that the Russians have said -- and Konstantin has said some of them just this morning -- about the indivisibility of security; no country can increase its security at the expense of another.  Other things that haven't been mentioned involve, you know, a kind of subordination of NATO to the United Nations.  I think what you're saying is those aren't formulas that the European states are going to be able to agree on now -- or at least they aren't going to be able to agree on how to implement them in practice?

KRASTEV:  I think on the level of principles I don't believe this is the problem and in a certain way for the European Union the major problem is, is Russia interested now to reconsider some important things like, for example, the supremacy of international law when it comes to Strasbourg and the Council of Europe?  Because this is the key issue.  Certain things have been achieved and for some of the European countries the nature of the European order was very different than the nature of the world order; it was very much based on some of the values which are predominantly European Union; it is very much on the idea of the shared sovereignty and others.  

The problem is that Russia is strongly sovreignist when it comes to itself.  At the same time it is my feeling is that Russia is not so strongly sovreignist when it comes to some of its post-Soviet neighbors.  So how is this going to be reconciled?  Who is going to be the enforcer for this new European architecture?  Is there are going to be some, for example, conflict settlement mechanisms -- not on the level of principles but on the level of who is doing this?  

I do believe it's going to be a much tougher conversation and it's going to be back to some of the issues that I do believe the idea of the Medvedev proposal is to reframe and to reshape.  But in generally, what I totally agree -- and I do believe that the European Union made a mistake not going first with the suggestions for a kind of a re-discussing the institutions of the European architecture even before Mr. Medvedev did it -- (inaudible) -- Mr. Medvedev is right, organization for security and cooperation in Europe is blocked.  You have the problem of some of the even Cold War agreements concerning conventional weaponry and others.  So from this point of view, the reason he posed strategic talks -- what is not, you know, certainly clear for me is what Russia really wants to achieve, not on the level of principles but on the level of concrete policy.

Putting it differently, even if Russia does not want what it wants probably it's very clear what it does not want.  And it's interesting to discuss this.  For example, is the marginalization of the United States as a factor in the European security one of the objectives of Russian policy?

SESTANOVICH:  Victoria, how should NATO respond to the Medvedev initiative?

NULAND:  Well, first of all, I think listening to both Ivan and Konstantin, we obviously should take Medvedev at his word and have a discussion about what he means, what he wants, what the concerns are that this new structure might be able to address that other structures -- OSCE, NATO-Russia, Russia-EU, Russia-U.S.-EU -- haven't been able to address.  Russia needs that now.  Putin needs it.  Medvedev needs it.  Our hope for understanding where Russia is going, what it wants both in the transatlantic space and globally depends on having that conversation being open to it.  

I think the question is going to be what does Russia want this structure to do that existing structures can't do?  First and foremost, can it achieve an easing of the growing tensions in the community of nations that would be at the table because that would have to be its first mission if it were going to add value to what we already have.  We have central and eastern Europeans increasingly concerned about Russia's direction and potential threats emanating from Russia.  We have concerns about Russian military bases that they haven't been invited to have in sovereign territory.  We have the CFE treaty that is not working.  We have energy security concerns.  We have Balkan security concerns.

Can this new structure ideally on top of what we've already got actually bring us constructively to the table or is it a way to try to block or checkmate action in other fora that Russia hasn't liked?  Might it be a way for Russia to talk better with her neighbors in the presence of the rest of us or with the help of the rest of us?  I think if any of those positive things could be done it would certainly be worth trying.  But if, as Ivan has worried, it's really about checking the ability of the United States and its allies to act together when we perceive our security or economic interests demand it, then it's a different conversation.

SESTANOVICH:  if I were to apply George Robertson's answer to Putin to this problem I would be skeptical about a big architecture agreement but might think there are specific areas where sub-architecturally you might be able to make progress -- maybe arms control.  There is obviously going to be some attempts to address the issue of missile defense.  There is, as you mentioned, the CFE treaty -- I mean, these are building blocks of European security that don't necessarily presume an entire structure.  Is that a promising approach or is it blocked by a disagreement about basic principles?

NULAND:  Well I think we will have a conversation.  We'll have a transatlantic and Russian conversation about arms control -- I think that's important.  I guess the question is the major countries that need to be involved in that are present at the NATO-Russia table as equal partners and the same is true probably of missile defense.  Does it help to have Ukraine or Switzerland or Finland at that table too?  Well, they're also present at the Euro-Atlantic Partnership Council table and Russia has not chosen to use that forum to pursue a larger conversation.

So I guess I'm wondering what the value-added is.  Maybe there is value added and when we hear about it we'll understand it and it will make a lot of sense.  And, frankly, if it makes Russia more comfortable working with us and helps ease this sense of encirclement, maybe it will be worth it.  But, you know, we have structures that can do a lot of these things already if there's will -- if there's political will.

SESTANOVICH:  Konstantin, you obviously talk to your Russian colleagues about this initiative and you've said to me that one of the things, dead-smiling, is there is no content and that that's an invitation to the West.  For many westerners, it's read somewhat more unnervingly.  That smile about how there is no content is read as a suggestion that there has to be -- that there's a hidden agenda that's going to be very difficult to accept.  Can you say how Russians view this?

REMCHUKOV:  When I said that there is no content, there is no specific content and the Russian side views it as an invitation to open discussion -- just put on your content proposal and let's start discussion.  But on principle matters I put down my talks with the top level, for example.  The deficit of adequacy of the common instruments to adopt mutually acceptable decisions -- indivisibility of security, creation of the open space of collective security, golden standard on security for all in the Euro-Atlantic zone.  The new system should be based on the principle of supremacy of international law; that was indicated as a major and respect of the charter of the United Nations and the desire, step-by-step, to reestablish trust between us.

SESTANOVICH:  You're convincing me there is no content. (Laughter.)

REMCHUKOV:  Substantial things which they put down in front of me to confirm in legally compulsory form the agreed principles of international relations; number two, to work out instruments and mechanisms and practical application of those mechanisms; number three, reassess the situation in control of armaments because they think that the real assessment is obsolete and based on the previous approaches; number four, to agree in the common criterias and mechanisms how to prevent and how to manage the conflicts by peaceful means; number five, the new equality, the cooperation in fighting against global threats.

And the conclusion -- in order to avoid the necessity to protect yourself exclusively by your own means -- we don't want to exclusively spend on security, we want to be a part of the common -- so those two pages which I put down when I talked with them.  But I must tell you that now, let alone the Russian officials, I'm...for many years... watching our foreign policy, and they're not -- I'm not all the time admired with our foreign policy; it is weak, it is not conceptual; it is not consistent.  And the very simple fact of that is that we don't have allies.  We don't have true allies.  

What is a foreign policy for?  To have allies.  And in the last, our post-Soviet era, we lost everyone.  So whatever the words are about Russian foreign policy priorities -- we don't have them.  And we write every year that our priority is CIS countries in strategic papers.  And I have five people in my newspaper who every day write on the CIS and the foreign ministry in different analytical centers -- our CIS page is considered to be the best.  And I told the -- (inaudible) -- the deputy foreign minister the other day when they exchange, we'll build (inaudible) ...  and Alexi Benediktov, the general manager of Ekho Moskvy, said they have the best CIS coverage and said because they draft Russian strategic papers -- you said that is a priority, which is not true.  And -- (inaudible) -- said, did they say that?  And that is -- and of course, I think that we are not prepared.

We've demonstrated very weak strategic approaches to foreign policies and we are inconsistent.  And of course if you have the staff, if you have institutions, you just move forward your plans and we didn't have adequate and eloquent defense.  And by that I'll finish now this idea.  

I think that the problem with the Russian initiative is that from my point of view we don't have tier by tier support for any of those initiatives and we have to take into account this very superficial thing because everybody is obsessed with internal politics more than the foreign politics.

SESTANOVICH:  Victoria, you wanted to come in here?

NULAND:  I had another thought.  If you're looking for a pilot project, which seems to be where you were going, Steve, for this idea; a number of us have been talking for a while, informed by our Afghanistan experience, about the need for NATO and the EU to have a far more strategic and operational partnership -- particularly when transatlantic countries deploy together.  If you're looking for gaps in the system now, you have a NATO with a political and military functionality.  You have an EU with a strong economic governance police functionality and an aspiration for military; and then you have the OSCE which tries to support values et cetera, et cetera; but you don't have any place where all these things come together.

So in the context of conversations some of us have been having about the idea of a combined NATO-EU operational center, where you could plan both the military piece and the development piece, and the governance piece of operations -- whether they were Kosovo or Afghanistan, et cetera -- I don't see any reason why partner countries, led by Russia, couldn't be invited to participate equally in such a center.  And you could see whether bringing all of the instruments of national power together collectively with the institutions might not get us better effect on the ground out there.  Anyway, one idea for a pilot project.

SESTANOVICH:  Very, very quick comment since you -- ?

KRASTEV:  Yeah, just have a minute.  When there is no clear content, the context is the content and from this point of view I do believe that the East -- fore example, Russia -- are interested in things like demilitarization of the Caucuses because kind of a new basis has been planned.  On the other side, Russia has been very much claiming, probably legitimately, that rebuilding of the Georgian army they perceived as a kind of a threat.  Probably some of these types of approaches would be interesting to be discussed because I agree totally -- if we are going to be on the level of principle this can go first for 10 years and this is going to be a much more universal department and a kind of a new architectural decision.

SESTANOVICH:  A 10-year-long discussion sounds like a welcome sedative.  We've had a --

NULAND:  The diplomats need work, you know?

SESTANOVICH:  We've had a discussion here in which we've hardly talked specifically about how the alliance is going to handle its enlargement candidates and I want to make sure that we touch on this but I also want to open the floor to the audience for their comments.  If they don't do the right thing and raise that question, we'll have to help them.

Right now I want to recognize -- well, I'm not going to make a list, you're going to have to keep putting your hands up again and again.  Please identify yourself and state your affiliation when I recognize you.  Andy Marovchek?

QUESTIONER:  Yes, Andy Moravcsik from Princeton and yes I want to raise that question.  Let me be provocative; I don't really have a horse in that race but from what I heard you could draw the following conclusion that the only country in the world where there is strong support for NATO enlargement is the United States.  Everywhere else it seems like -- even in Ukraine -- people don't' want it; certainly in Russia people don't want it; in Europe they're at best unevenly enthusiastic about it.  

Policy people might say that the effects of NATO enlargement are not as impressive as the effects of EU enlargement. So you might say, shouldn't the West be leading with other instruments -- less controversial instruments, from the Russian point of view -- instruments that play less into the Russian psyche, which was characterized as a 19th century view of the world, and stay away from NATO enlargement?  That would seem to be the conclusion that one could draw from the facts that were laid out by the panel.  

I'm wondering if the panelists draw it.

SESTANOVICH:  Okay, I think you've succeeded in being provocative.  Who wants to respond to this one?  You don't all three have to respond to every question -- we'll make more progress that way but I certainly -- I think someone does.

NULAND:  I mean, I start where Robertson ended last night.  When the charter of NATO says:  open to any Euro-Atlantic democracy, how can we unilaterally decide some are eligible to try to meet the standards and others are not eligible to try to meet the standards -- Russia included if she so chose?  I really don't think we're in a position to slam the door if there are countries that desire to be members of NATO -- and, again, remember that we don't go out and recruit.

So, in the Ukrainian case, they're going to have to want it before they'd ever get an invitation -- including having what we've insisted that every other NATO-aspiring country have, which is more than 50 percent popular support but we have at least six members of the alliance today that started the process of getting ready down at the 25- to 30-percent mark in popular support because their leaders wanted it and the people remained to be convinced.  So I don't see how you say Serbia yes, Georgia no, or Bosnia yes, Russia no, frankly.  I think the issue is more any country that wants to meet our very, very high standards, it's good for us when they do meet them, and they are enhancing when they're part of the club.  I think the bigger issue is to try to convince Russia that her own future can benefit from thinking openly about these kinds of things.

SESTANOVICH:  Either of you?

KRASTEV:  I believe that there is a two-sided answer.  One is should NATO give a guarantee to Russia that it's not going to enlarge in the post-Soviet space, and my answer is going to be no, exactly for the reasons which the ambassador said.  I do believe that you simply cannot do this.  The second question is, do I believe that now, the enlargement of NATO with respect to the Ukraine and Georgia in the next year is the best that NATO can do to stabilize the post-Soviet space, my answer is going to be no.  And this is one of the answers that has a lot to do with the lack of public and political consensus in Ukraine but not Georgia, to be honest.  In Georgia you have a huge consensus.

But the second is -- and this is interesting -- some of the -- for example, German argument has not so much to do with Russia's position than with the very functionality of NATO.  As a member of German government asked me, he said, are you really ready to give Mr. Yanukovich a veto in NATO?  And I do believe from this point of view the political consensus is very critical.  If NATO is so much dividing within the political community of a country, it could be a problem.  So this is going to be my two-side answer.

But also with the European Union, let's be very open also on this.  For Russia, getting into the NATO is part of consolidation of the West sphere of influence.  Nevertheless, Russia is not protecting European Union.  In a way, for a country joining the European Union, this is much more consolidation of the sphere of influence than with NATO, so let's not basically buy the rhetoric which I don't believe is so much of a policy but a rhetoric.  I don't believe that Russia is going to be happy having also Ukraine in the European Union.  Nevertheless, they are not going to claim this now.

SESTANOVICH:  Konstantin, do you want to add something here?

REMCHUKOV:  I want to remind that the first time the Soviet Union applied for NATO was exactly 55 years ago in Vienna, 1954, and they waited for the response, then they got the "no" answer.  And January 1955 I think you accepted Germany to NATO, and later, in May 1955, there probably was a treaty.  So it's a 55-year-long story of Russia's application and "no."

SESTANOVICH:  Well, enlargement sometimes takes a long time.  (Laughter.)  Yes, Angela?

QUESTIONER:  Thank you very much.  Angela Stent, Georgetown University.  I do have one comment and then a question, and the comment is of what Lord Robertson said last night about the younger Russian generation, and I would beg to differ with him slightly.  I taught a course on U.S.-Russian relations at MGIMO, the Moscow State Institute of International Relations in the fall, and my students, though we had great discussions, very much had the views that Konstantin has talked about, the views of the leadership, that Russia is encircled by the West, that we don't respect Russia, that NATO enlargement is an existential threat to Russia, so we have to remember that if we're dealing in these -- some of these people are going to be future diplomats.

And, by the way, the question of sort of legitimate interests in this area which we default, called the post-Soviet space, that could be an issue if there is an all-European security conference, son of OSCE.  We should maybe have, as they used to say in the Communist times, a frank and businesslike discussion about what our interests are, our allies, those of Russia, those of its neighbors.  There has to be some fora where you have a structured discussion about an issue that we have never really talked about or confronted head on really since the breakup of the Soviet Union.

But my question comes back to the question you raised, Steve, and wasn't answered, and that is, what is the impact of the global financial crisis likely to be on this series of issues that we're discussing?  Russia has been quite badly affected by the global financial crisis, I think more than it realizes.  So has its neighbors, and Russia has now offered assistance to a number of its neighbors; we don't know whether it can deliver on it.  But it maybe changes the entire strategic picture, or could, also from our point of view and that of our allies.  So I know that that's something wanted to discuss.  Could we come back to that?

SESTANOVICH:  Yes, impact of the global economic crisis on these problems.

KRASTEV:  Just first, the factual stuff, which could be interesting for the people.  According to the public opinion poll, the two most anti-American parts of the Russian societies are people older than 65 and younger than 25.  So from this point of view, the generational story, the idea that the youngest are much more westernized and so on, should not be overplayed.  What we have in Russia is the convergence of lifestyles and the divergence of world views when it comes to the West.

The second -- and this is also going to be interesting -- there was a study which has been done by the Center for National Strategies, which was done for Kremlin, and there was a question being asked to 3,000 decision-makers, who are the most important threats that Russia faces.  It was done two years ago.  It was an open question.  Number one, democracy; number two, corruption; NATO enlargement, 23.  So from this point of view we have also very pragmatic leadership, and underestimating, basically, Russian leadership does not make sense.  

But going to the global crisis, I basically see three important impacts.  First, because Russia rediscovered its vulnerability -- everybody knows the figures: 70 percent of the stock market basically is collapsing, what's happening with the prices of oil, and the possibility of social unrest.  I do believe at this moment Russia is going to be very kind of tough in order not so show weakness, because a return to the 1990s and the way Russia was treated in the 1990s is something that Kremlin basically fears, and I do believe is going to oppose.

The second, I do believe we can face a state failure in the post-Soviet space.  It's not simply the default of some of the countries, but also the level of the social and political dysfunctionality which is going to redefine basically the type of the threat that people talk about.  

And the third is two months ago the major talk was how the West and Russia are competing in the post-Soviet space; now the basic problem is because the crisis is global.  Both the West and Russia have its problems.  I do believe that we can end this benign negligence where everybody is trying much more to withdraw from the post-Soviet space than to try to compete there.  And this could be, in my view, a major risk coming from the financial crisis.

SESTANOVICH:  Konstantin?

REMCHUKOV:  We squeezed America frankly, from the Kyrgyz base for $2 billion,and with the TAPA Fund for $10 billion for other Central Asian Republics, I think it is our response to financial crisis that we begin to use some of our resources and reserves to buy loyalty, if we couldn't get them ideologically.

I'm puzzled with our society, and last week I was a part of the TV political show, debate, on should Russia assist foreign countries, and people vote on television.  It is 80 minutes prime time and TV show about a year ago.  And I put on the table all the statistics how we write off the debt.  We can't convert debt into political influence -- 4 billion (dollars) to Ethiopia,, 8 billion (dollars) I don't know who whom, 11 billion (dollars) to Afghanistan, 12 billion (dollars) to Iraq, and the 20 billion (dollars) debt of Cuba.  And I found the deputy foreign minister of Cuba who said that Russia, because of closing their military bases, caused such damage to Cuba that we do not owe Russia 20 billion (dollars); Russia owes us some more.  (Laughter.)   

And like in Iraq, when we raised the issue of debt, they said, no, what debt?  You supported this Saddam Hussein regime.  You should be fined for that.  And then somebody in Ethiopia, the same.  And I said that we wrote off $70 billion in the last -- it started from 2004.  And people voted like 66 percent to continue foreign aid, and 34 percent that, no, we should concentrate on our own things.  I think that this reflects the controversial state of mind.  We still think in terms of great superpower influence, and people are ready -- still ready to sacrifice for the sake of assistance -- can give 2 billion, 10 billion to Central Asia, and the republics also.

But this is the beginning of the crisis only, and let us see, because my perception of the economic crisis for Russia is that it is going to be much more difficult to come out, because there is no substantial debate on the origin of the crisis, on the type of the crisis we face.  Because last month I was very often in the U.S. and I would read the newspapers and see, and they say every day you have some value added to understanding either the stimulus package or it is a spending bill, either this or that, and you go step by step closer.  In Russia I'd ask questions to all top people who are in charge of economy:  What is the specific feature of this crisis in Russia as against Americans or Europeans?  Do we have financial crisis?  Do we have banking crisis?  Do we have cycle crisis?  Do we have structure crisis?  And what kind of proportion of all this?  What to do with debt?

Because what I understand from all what I read and learned about the Great Depression, your methods of FDR, New Deal didn't take you out of the Depression for 10, 13 years, until the Second World War started, and then you began to grow.  The Dow Jones restored in 1954 the level of 29th of October, 1929 -- 25 years.  Are we ready for 25 years, to have the spending practices of state-owned intervention?  

And I think that the major missing part in Russian economists with who I talked is that they don't understand that the major goal for the companies now is to minimize debt rather than to maximize profit.  And when the stock market burst, the debt holes in the balance sheets of the companies are such huge -- as I said, 70 percent dropped, and all the debts were taken against the collateral of those high values.  The value will not come up very soon.  What to do with debt?  Any money you spend will be going to repay the debt rather than to reinvest into new jobs or anything.

So this is the problem and there is no such understanding in Russia.  So what are they going to do?  At this point they're waiting for China to come up and America will come up and then we'll come up with our oil and gas, but this will not work.  At this moment I think that the foreign policy issues will go dramatically far to the periphery of our public opinion, because already now Medvedev is unpleased with the government because it is difficult to be a ceremonial president when the crisis took $200 billion in the last three months without his control, and the money evidently went to the companies close to Mr. Putin, and the prime responsible person will be the president.  It's how it happens in Russia all the time.  Only one person is responsible for everything -- for good, for bad.  And this increasing tension in elite will very soon be dominant factor of our decisions, and I think that foreign policy issues will fade away.

SESTANOVICH:  One extra point on this.  The 2 billion (dollars) that everybody talks about for Kyrgyzstan had a kind of American-style smoke qualities.  There was 150 million (dollars) that was supposed to match the American payment, and the rest is "investment," unspecified, for the future.  You know, good luck to Bishkek in getting it.

Yes?

QUESTIONER:  Avis Bohlen, Georgetown University, also former ambassador to Bulgaria.  My question is whether there is a prospect for an improved relationship between Russia and the U.S. if we do not move this -- if we do not change the shape of the NATO issue.  I think many of us hope that there is -- that this administration can improve our relationship with Russia, but when I listen to the dialogue this morning, I really hear a dialogue of the deaf between the U.S. and Russia.  And, Toria, forgive me, but it's what we all thought during the '90s:  If we talk slowly and loudly enough to the Russians we will explain to them that NATO is fine and they should not be worried, and never mind that we're on their borders with radars and the like.

I think what is missing from that perception is the great sense of resentment and violation that is felt on the part of the Russian elite, which we've heard from Mr. Remchukov.  And it seems to me that Mr. Medvedev's plan -- I mean, some of us who were -- with our feet in the Cold War thought we had a new security architecture for Russia -- I mean for Europe in the CSCE.  That obviously has not worked out the way Russia had hoped at the time, and I wonder if a new architecture will as well.  And I think one thing is for sure; it is not going to replace NATO, at least in the immediate future.  I think everything that's been said about Georgia, Ukraine -- talk about pushing the reset button I think for Eastern Europe -- NATO just took on added value.

And so my question is, I mean, even if we accept that Ukraine and Georgia are not issues that are going to be pressed right now, for a variety of different reasons, is it possible to move ahead on the other issues like nuclear arms control, terrorism, et cetera, without really changing the NATO piece of the puzzle?

SESTANOVICH:  Quick answers.  I have a lot of hands here.  I think we'll have to start taking questions two or three at a time.

KRASTEV:  First of all, great pleasure to answer two areas but I just want to make one point.  When you said U.S.-Russia starting negotiating, especially on global issues, it also makes Europe slightly kind of dizzy because the basic problem is I do believe now for the United States it's much easy to make an agreement with Russia, especially when it comes to some of the global issues than for the European Union, where basically the problem is Europe.  In a certain way, for the U.S. it's much easier to disengage with Ukraine, with Georgia, with all these places because of other priorities.  For Europe, it's like the Balkans; there is no exit strategy.  And from this point of view, for me the first question is, who is negotiating?  Who is shaping positions on the Medvedev proposal?  Is it NATO?  Is it United States and EU taken separately?  Is it the member states?  Because I'm also interested basically with whom Russia is interested to negotiate.

REMCHUKOV:  In answer to your question, number one, I think that a serious problem in Russian-American relations is determined that we do not have stakeholders on both sides who are fundamentally, materially and pragmatically interested in good relations.  It is always in the sphere of security, threat, or personal good relations of the top two leaders.  You look at the eyes of Mr. Putin or Mr. Medvedev, what do you read there, KGB or freedom or whatever, and then the relations --

SESTANOVICH:  You still get to make jokes about those eyes.

REMCHUKOV:  Yeah.  No, I mean it used to be like that.  It is very subjective.  Only the relations between the Soviet Union and America, Russia and America are based only on developing good -- if good relations exist between the first two people in those countries.  I remember in 2003 when the Iraq War started and you spoiled relations with France and Germany on that, particularly with the leaders.  Schroeder and Chirac had a lot of jokes here, angry, but relations existed because there are a lot of stakeholders in all different spheres -- economy, bank and finance, political -- who will not allow their relations to disappear because two elected people just don't like each other.  In Russia-Soviet relations we don't have anything.  Then if you look at the agenda of our relations, it has -- from my point of view it doesn't have any substance between you and us.  There is nothing Russian-American.  It is always in regard with concerns -- North Korea, Iran, Iraq, Afghanistan, whatever -- but it is never between us.  I think it is a huge problem and I don't see how to fill this gap.

And one thing we should tell, which I got from the foreign minister of Russia wants to invite for this dialogue on the new architecture of security in Europe NATO, Organization of Security in Europe, European Union, CIS and -ODKB [CSTO in Russian] which includes four Central Asian Republics --

SESTANOVICH:  CSTO, as we call it.

NULAND:  CSTO.

REMCHUKOV:  -- Armenia, Byelorussia and Russia.  And I think that this is the idea, that we don't touch NATO.  And my advice:  If you work on new European architecture in this format, NATO could develop, because we all think that everything will be solved with a new architecture and we'll forget about NATO.  

NULAND:  I think Konstantin's points sort of link the last two questions, the economic piece and the NATO piece, in the sense that can we create -- does the economic crisis result in more stakeholders or less stakeholders for cooperation, and I think it's a completely open question.  You could argue that if there are folks in Russia feeling the pinch in the business class or whatever, they might work a little harder to protect Russia's ability to be part of the open system and cooperate well, or you could argue that in times of internal crisis you've got to blame somebody else, as we're seeing, and you've got to race for the goodies in your neighborhood, as we've also seen.

So I think unless we have more stakeholders -- I think we do have stakeholders on the U.S. side -- we've seen it -- who are trying and speaking now and offering areas where we can start.  Are we going to have more or less stakeholders on the Russian side?

SESTANOVICH:  Okay, I'm going to take three questions -- here and then in the back.  Yes?

QUESTIONER:  Robin Hessman, documentary filmmaker and Harvard Davis Center.  I have a question for Konstantin.  I couldn't help but notice yesterday, I believe it was Lord Robertson who said that with the election of Obama, America has restored its moral credibility, at least in the sphere of NATO, and you had a rather extreme reaction to that comment, and I was hoping you could perhaps talk about that a little bit.

REMCHUKOV:  But I was quiet, yeah?  I didn't say anything.

QUESTIONER:  Quiet, yes, but --

REMCHUKOV:  What do you mean by extreme reaction?

(Laughter.)  

SESTANOVICH:  Okay, we're going to take two more questions and then I'll allow the panel to respond.

QUESTIONER:  Zoltan Barany from the University of Texas.  I'm interested in your view of the advisability or the prospects of some sort of enforcement mechanism for NATO.  The recent enlargement waves brought up the issue all the more that some of these new members have been far more active in NATO than others.  In fact, some of them, for instance Hungary, have become unabashed free riders.  Now, this is just about the new ones.  Of course there are a lot of older members who are also free riders.  

Now, the EU has some sanctioning authority, and I noted just recently money was withheld from Bulgaria because of its corruption that seems to be unrootable.  But I was wondering, as the alliance is getting larger and larger, would it not be advisable, would it not be something that would strengthen the alliance, to actually have some sort of enforcement mechanism that would encourage members to live up to their obligations?

SESTANOVICH:  Okay, and, Stefano, I think you had your hand up.  You're supposed to turn off your BlackBerry, though, before you ask a question.

QUESTIONER:  Thank you.  I had two or three points, but they can actually merge into one.

SESTANOVICH:  Good.

QUESTIONER:  Are you entering a new phase?  I mean, look at three factors -- one, the Georgian war, the economic crisis, a new American administration.  Item one, a leading advocate of enlargement, American -- but we don't recognize; I'm not going to name names -- American -- (inaudible) -- is not running for a position in the administration.  I heard him say in public, we've moved from enlargement to partnership -- partnerships, sorry.  

Item two, we've heard again yesterday about something which has always been sort of sleeping, about this disinterest of Russia toward one day NATO membership.  The last part of this, I've heard in town here a lot of concern, not about the relationship but about Russia and the distress of the financial crisis, how Russia is going to fare.  And this, again, is quite new.  So my question is, does it make, to some extent, even the debate that we were having a few months ago -- like not business as usual, et cetera -- somewhat overcome?  Are we in a new phase?  

And I just want to -- just a small comment to what Toria was saying about Russia and Putin bringing to the table the NSC ideas.  I think we're seeing, in a way, affairs where there were too few ideas and another one where there are maybe too many ideas.  That might have to do a lot with personalities, but, you know, you've got to wonder what is also behind a change of mindset in Moscow.

One very, very general point.  I was wondering about commonality of values.  Are there more common values between NATO and Russia or NATO and the Shanghai Cooperation Initiative.  Thank you.

SESTANOVICH:  You can pick up the question of American moral authority, and Toria can talk about enforcement mechanisms quickly, and you can respond to Stefano.

REMCHUKOV:  Okay, American leadership in NATO-Russia partnership.  You pick this; you do that.  

(Laughter.)  

SESTANOVICH:  I want to make my multiple question system work.

NULAND:  You could do NATO enforcement mechanisms if you'd like.  

REMCHUKOV:  Yes, I watch television and I see enthusiastic speeches of Obama, and then I read the substance of proposals, then I heard his first press conference where he missed the question of one guy I think from NBC when he said about this balance sheet debt, which I am so close to, and Obama missed the question and he began to talk about something.  And he resembles Mikhail Gorbachev the first month, excitement.  Unlike the previous government of Chernenko, the general secretary, he could speak without a paper; he's eloquent and he's inspiring.  He talks about what he can do for America.  But it was such a drastic shock when very soon, like six months one year of speaking every day, people lost trust in words.  And Obama is speaking, from my point of view, too much, and this will have to be encountered by the public opinion later.

And substantially I think that I am going to write an article about my American impressions, which I will name, we thought that American elected a black president, but he turns out to be red.  It is a very socialist president, and I don't believe that a socialist president from the U.S. could be a moral or spiritual leader for the rest of the world, because socialism is a good thing and I know a lot about it, but the diversity of the world requires liberal thinking -- less government intervention, more personal freedoms than anything.  So I don't think that America will be a moral leader in NATO, at least in Europe.

And we know that the Georgia thing didn't get eloquent condemnation from many European capitals, and that suggests that economic interests of Europe and Russia dominate the American interests in NATO and some of the alliance in the relations with Russia.

SESTANOVICH:  Well, after that I'm not sure you're going to want to talk just about NATO enforcement, Toria, but try to respond.

NULAND:  Obama as Gorbachev and a socialist I don't think is the best line of the morning.  Wild.  

REMCHUKOV:  New face of socialism - a human face.

NULAND:  I'm not sure he'll be very happy with that idea.  

There's no divorce clause in NATO, and I think probably if there had been one, the United States would have been divorced by its allies at least once a decade since the alliance started.  What there is is peer pressure, but peer pressure only works when the preponderance of allies are really putting out and are feeling that there are just a few that are hanging back.  So it speaks to the fundamental principle that you've got to have that sense of shared risk, shared responsibility.  You've got to have it at the beginning of the mission and you've got to have it through the mission in order to sustain it as a group effort.

But I do think that allies in general are doing far more in Afghanistan, for the African Union, in training Iraqis, in the Med than they would have done were they not in NATO at all, than they would have done as members of a coalition, and they do it because you can't come to the family dinner table with nothing.  

SESTANOVICH:  Quick response.

KRASTEV:  There was this -- it seems like a very important question.  To what extent what we have been discussing -- even now, because this was the agenda of the last month -- is now going to be totally irrelevant in one or two months.  Think of Bulgaria -- if you remember 1989.  I remember a situation in which things that were very important three months ago, three months later were simply a joke.  And I do believe this is real.  When Paul Volcker said that the financial crisis is going to have similar implication to the dissolution of the Soviet Union, if he's right, most of the things that we're talking here probably are going to be a second-ranking issue.  He made this statement in the Columbia University on Friday.

So basically my point on this is the following:  Russia and the West had a totally different experience with the 1990s, and their leadership has been shaped in a totally different way.  By the way, 1990s Russia lost 40 percent of its GDP, which is more than America lost during the Great Depression.  Russia was five years down life expectancy for the population as a whole.  As a result of it, the Putin generation is absolutely traumatized by instability and insecurity.  This financial crisis is going to increase the uncertainty and insecurity, and one of the responses could be the marginalization of the foreign policy, but the other could be much portraying to keep legitimacy for the foreign policy actions.  In a way, foreign policy is the only thing that Mr. Medvedev and Mr. Putin can control.  They cannot control the prices of the oil, and of course the modernization of the economy is a very difficult and tough process for everybody.

So I do believe we're entering a period where the risk is so high in the next one year that it's much higher than any other period during the post-Cold War, at least what I remember.

SESTANOVICH:  The last time around, the international response to the Great Depression was not, we're all in the same life boat.

KRASTEV:  Yes.

SESTANOVICH:  You're absolutely right.  New questions.  Yeah?  I'm going to take three again, so please identify yourselves, and you can also keep your hand up.

QUESTIONER:  Todd Lindberg from the Hoover Institution.  I particularly enjoyed Ivan's comment about converging lifestyles and diverging worldviews, because it more or less captures the desire to go to London and eat sushi as well as the desire to go to London and poison your enemies with sushi if need be.

The question that I wanted to ask, though, is one that I've been asking around, and the reason is because I think if I knew the answer to it I would know something important.  So your proposal is on the question, why did Russia stop before the Saakashvili government fell?

SESTANOVICH:  Okay.  Yes?  Yes, in the back.

QUESTIONER:  Miriam Umsque (sp), NAD (ph).  I want to push on that question.  A lot of people, for instance Edward Lucas, who was here a couple of months ago, talk about the possibility of increasing authoritarianism in Russia and a resort to war -- a possible resort to war, particularly in Georgia.  And in that context, would it make sense for NATO to consider its more original mission of trying to contain Russia and counter Russian aggression?  Are we looking at that kind of scenario?

SESTANOVICH:  Yes?

QUESTIONER:  I'm from the embassy of Azerbaijan, and my name is -- (inaudible).

SESTANOVICH:  Please speak up.

QUESTIONER:  I have a question.  You speak about NATO -- actually about blocs in the region.  One is the NATO bloc. the second is, I mean, President Medvedev's suggestion on European security, but what is the place, what is your advice for the kind of neutral countries like Azerbaijan or Moldova, who do not join one of these blocs?

SESTANOVICH:  Okay.  Russian strategy -- why didn't they go to Tbilisi -- authoritarianism and neutrals.  I'm not going to assign answers this time.

REMCHUKOV:  Okay, I think that Russia, at least my perception from speaking for many hours with Putin, Medvedev and Lavrov proves to me, and these guys looked at my eyes -- (laughter) -- and said that they didn't expect the war to start.  It was absolutely unexpected for them, and they missed a lot of things, and they couldn't give -- generals wouldn't fulfill orders.  So now this huge army reform, which started suddenly with a lot of generals, was caused by the fact that the defense minister gave the order, go there, and the generals said, could you give us a written order on that?  He said, what?  It is the war!  And they said, yeah, but you still give us a written order, and they began to attack without having the strategy, and it causes unrest in the army because a lot of people are fired and the social stability in the military is a question for them.

Putin, when he said about the Georgian tanks, and Bush on Georgian tanks, and -they asked, Vladimir Vladimirovich [Putin] I am not an expert on this thing, but when I watch American movies, I see how from the satellite they could identify a person, girl -- (inaudible).  How could you need so many tanks?  And he said, the sky was cloudy, and when the skies are cloudy we can't follow the tanks, and everything.  And I say, is it a serious answer?  He said, yes, for several days it was bad weather.  And in the Arctic, he said, in Antarctic when there -are no skies, you could see any submarine under the ice and everything.  

Then Lavrov said that they really wanted Saakashvili and Medvedev to do something together.  So my -- and actually I was in Helsinki that night, and I received at about 11:00 the SMS from the managing editor of the newspaper that our correspondent called from Kodori Valley saying that it is shelled and she is sitting with the peacekeepers.  And I still keep this SMS.  And she said, what to do?  And I said, call Foreign Ministry.  So she called Foreign Ministry at 50 minutes past midnight and the person on duty said that the minister is already asleep, what to do?  He said, well, wake him up; they're shelling.  So the foreign minister, at zero hours, 50 minutes didn't know about what our correspondent just said, that it is a war, she said, literally, because it is a constant fire and people are being killed.

And my perception is that since we lost the propaganda stage -- initial stage of war, and Georgia was prepared -- because I, the next morning, was flying from Helsinki to Moscow and I read in Financial Times the article which said, Saakashvili requests Russia for a ceasefire.  What ceasefire?  When they wrote this article the war didn't start.  So he prepared that ceasefire - the word would be used for the news of the day.  And I think that public opinion in the West was so much against Russia, and we felt that we got into the trap which Saakashvili made, before that it was -the conflict between Georgia and South Ossetia, and Russia was on top.  Now it is all the Russia-Georgia conflict, so we became part of the conflict and we were not prepared.

So, I mean, to go further to Tbilisi, we didn't have political will, moral will, military will because this war was unprepared.  And Putin also said that he was in Beijing, and when the information began about the war, he thought the group of leaders like Bush and Sarkozy and other guys -- and then Sarkozy left and came up to him and said, why don't you stop for two days, and in two days we will be back to our capital and we'll handle the matter.  And he said, two days of Georgian attacks on this level will ruin it.  It will be absolutely different -situation.

So in Putin's eyes, they wanted Russia to stop immediately so that later on it will be like Golan Heights -- you know, that they captured territory and the negotiations will be different. And actually he said, look, there is no even communications with them.  Call Moscow because Medvedev is now president.  Let him decide it.  Because in Beijing they stopped telephone signals.  And he showed -- he said, Sarkozy, look, I don't have connections with Medvedev.

But I think that -- my general perception after talking with them, nobody wanted, nobody expected the 8th of August, and nobody had any plans to go, because I asked Putin a very simple question:  Mr. Putin, please tell me, Yeltsin, who was so different from you, for eight years didn't recognize Ossetia and Abkhazia.  You were the president for eight years.  You didn't recognize those republics.  So there was a huge political pressure.  Why did you recognize after this war?  For 16 years you thought it contradicts our national interest, and now, as if Georgia made what -- it is not in our interest.  And he didn't answer me, actually, because he said -- and I was the only one who wrote an article just in the beginning of September which said, "Pandora Box for Russia," because I really believe the recognition of those republics was a mistake.  To respond to Georgia was the right thing -- we stopped this thing -- but to recognize, with what purpose in mind?  What to do with those republics, with money, with a lot of problems with their population?  So I think we were not prepared to stop in Tbilisi.  

(Audio break.)

KRASTEV:  I just wanted to say that in a certain way Russia put itself in the position which you simply could not recognize in South Ossetia and Abkhazia, because even if the recognition was not there, it is going to mean the internationalization of the conflict, and this was Mr. Saakashvili's objective.  And I do believe this makes much more -- (audio break) -- of all this conversation.  If Mr. Putin cannot have a connection with Mr. Medvedev, the situation is in certain ways more dangerous than if you have an aggressive foreign policy based on the authoritarian nature of the regime.  If the financial crisis is going to make the dysfunctionality of the state even stronger, if these type of accessions are going to increase, I do believe we're going to have a mixture of the two tiers that the West has for the last 20 years -- on one side kind of an aggressive Russia, but on the one side weak Russia, which is much more responding, trying to make a point.  

I do believe that the major point which Russia wants to make is we're not in 1999.  We're not simply going to return to the plane and fly back to Moscow.  And this is the new reality.  And probably we're also misreading this because during the Kosovo negotiations -- (inaudible) -- have been part of the International Commission on the Balkans, Russia has been insisting we're not going to recognize Kosovo.  When we talk to the negotiators, they always say at the end of the day they're going to recognize it, because in the 1990s this is how it worked.  But this is not 1990s anymore.  I really do think that the basic problem is to understand that the content has not changed but the context has changed totally.

REMCHUKOV:  Just very briefly -one joke -- Chernomyrdin told me once when he was retired that -- he was the prime minister for many years and he had this case - a nuclear case -- president, prime minister and defense minister -- and he said that very close to the end of his term he just wondered what it is inside.  So he called his assistant and said, please, you are wearing this case and I want to know what is it?  He said, it's very simple.  He opened it, and he said that three people have the same thing: president, defense minister and you.  So you raise the telephone and you just agree what you're going to do.  So he said, how to do it?  So he raised it except it was busy.  (Laughter.)  I mean, communication is a major problem in Russia.  

NULAND:  At least it wasn't unplugged, right?

SESTANOVICH:  It's going to be a prepare-three-envelopes joke.

I've got time for one more question.  All right, yes?  Yes.

(Audio break.)

QUESTIONER:  -- Council.  One of the things that you haven't discussed very much is the nuclear question as it relates to NATO.  There's a lot of people who feel that a good way to reset the relationship between the United States and Russia is to replace the about-to-expire START I arms control agreement with a new arms control agreement.  And setting aside all the complexities of that -- and I'm quite a skeptic that this either makes sense or can be done in any reasonable timeframe as just a replacement as opposed to all of the negotiations.  But in any event, it won't cover the tactical weapons, of which Russia has got a large number, and by changing its doctrine and getting rid of no first use and saying these are meant to substitute for conventional weakness, there is no place they can really be used -- I guess you can argue China, but not much -- except in Europe.  And given the U.S. nuclear guarantees to the allies and to NATO and so forth, how do you see this fitting into this already large complex of problems that have to be unraveled if we're going to have a proper relationship?  In other words, Russia's return to something of a Cold War approach to its nuclear doctrine with regard to Europe and NATO?

SESTANOVICH:  Responses?

NULAND:  Well, I think, you know, tracking with our overall theme all morning long, I think we're sitting on a fault line here where either things can really begin to get better and we can get back to a perception -- economic crisis is one of the wake-up calls, that we need each other, that we have more in common than what separates us, that the zero sum thinking doesn't help anybody on both sides, and something like a new agreement on arms control, doing as much as we can to keep the levels coming down, doing as much as we can to give all our populations assurance through verification has the ability to change the tone, to be that symbol of resetting that gives everybody confidence we're coming back together rather than driving apart and allows leaders who want to reengage and who want to change the conversation a positive indicator that it's possible and sets the table for all kinds of other things, whether it's helping each other through the financial crisis, whether it's Afghanistan, whether it's Iran, whether it's energy, whether it's sharing our technology to deter rogues.

But the opposite is also true.  If we try and it breaks down to acrimony, it will also be a symbol of the fact that we are in a period where we're back to -- we're obviously not back to a Cold War, but we're back to a relationship where we see the world differently and we need to do what we can, but we also need to ensure that we protect our own interests and our friends as we do it.

SESTANOVICH:  Okay, I'm going to wrap up by asking each panelist to give me a very quick answer to a big question, which is, as you mentioned, we're on a fault line.  Four years from now, at the beginning of the next presidential term, are we going to be talking about the continuing Cold War mindsets of each side?  Ambassador Kusack (ph) last night said, you know, you guys have got it so bad and American officials always say Russians have it so bad, is this going to be our discourse into the future?  And as part of that, which I think is a separate part of it, is security going to seem like a big problem between Russia and NATO, Russia and the United States?  People say, you know, the relationship has never been worse, and yet I find a lot of people who say if they look ahead that far, they expect the relationship to be transformed.

KRASTEV:  I'm sure that the relations are not going to be the same, if you are asking me this.  If you are going to ask me, is it going to be better or worse, this is a guess it gets better, to basically guess when the recession is going to be over.  But my feeling is one thing -- this is the following:  In a certain way, this crisis can remake both the West and Russia in a big way.  For example, in Russia you have the return of the disintegration of the state.  In places like the European Union, it's going to work either one way or the other.  Either this is going to strengthen the union, give much more political unity, or it's going to contribute to the dysfunctionality.  But the balance, which we know, is not going to be the same.  

For the United States -- I'm not an economics specialist, but I don't believe it's simply recession.  If this is the case, probably we're going to discuss an agenda which is not going to be simply the agenda of a common cooperation.  So it's not going to be back to the future with business as usual.  Probably there is not going to be business as usual hopefully at all.  

SESTANOVICH:  Okay.  Four years down the road, depending on -- I mean, Ivan says it depends on the economic crisis.

REMCHUKOV:  Thirty-five, 40 years ago the key element of American-Russian-West agenda was confidence-building measures.  And the nuclear arms treaties were an important instrument of building that confidence because -- through the procedures of checking for increased mutual trust.  I think that on the agenda of Russian-American and Russian-NATO relations is confidence-building measures too.  We have to go all the way up, considering the operation and saying, if we stick to this idea, what will improve?  If we don't do the specific, concrete building confidence procedures and negotiations, they are going to be bought.  And the financial crisis, you know, everybody dies alone, and we'll have -- each country will have their own problems.  I mean, a fundamental thing about the reduction of nuclear arsenals, should we reduce 80 percent and stay with obsolete conventional weapons, or should we stick to that?  So without confidence building about treaties, we will not succeed.

SESTANOVICH:  Okay, macro-economic answer, micro-diplomatic answer -- Toria, you get to have the last word.

NULAND:  I think the opportunity is certainly there, in this panel, for things to be better.  I think it's going to depend a lot on the choices and the lessons that Russia takes and makes.

SESTANOVICH:  Good.  Thank you very much.   I want to thank all of our panelists.  I probably have some advice to give about what the next move is, but I'm sure Charlie can handle that better than I can.

CHARLES KUPCHAN:  Thanks very much, Steve, and to all the panelists for a great session.  Lunch awaits you.  

(Applause.)  

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