Press Briefing by Press Secretary Jay Carney, Deputy National Security Advisor for Strategic Communication Ben Rhodes, and Deputy National Security Advisor for International Economic Affairs Mike FromanBy USGOV
Thursday, November 3, 2011
Press Filing Center
12:50 P.M. CET
MR. CARNEY: Good afternoon, ladies and gentlemen. Thanks for being with us here today. I have with me for the briefing, on my immediate left, Mike Froman, Deputy National Security Advisor for International Economic Affairs; and next to him, Ben Rhodes, Deputy National Security Advisor for Strategic Communications. They can give you a briefing on events so far here at the G20 and what we anticipate to happen in meetings as the summit continues.
With that, I'll turn it over to Ben to start. And I'll remain if you have questions on other subjects. Thanks.
MR. RHODES: Thanks, everybody. I'll just make a few comments and then turn it over to Mike, who can do a bit more of a setup of kind of where we think things stand and what we expect over the course of the next couple days in the very important G20 summit.
What I'll say by way of introduction is, as you know, this morning the President met with President Sarkozy and with Chancellor Merkel. This continued, again, very close consultations that the leaders have had for many months about the crisis in the eurozone and about the steps that are being taken to address that crisis, leading up to the G20, and the role that the G20 can play, again, in supporting the implementation of a plan that can deal with the eurozone crisis as well as a number of other aspects of the G20 agenda that Mike can speak about.
So, again, I think the meetings focused overwhelmingly on the economic agenda, on the G20 agenda. Both leaders were able to brief and update the President on their discussions yesterday and how they see things in the aftermath of the agreement they reached on October 27th, while also discussing and sharing ideas, as they have for many weeks, about what the best way forward is in terms of the implementation of their agreement as well as dealing with, again, the broader G20 agenda that Mike can walk you through.
So that was the dominant piece of both meetings. There were brief conversations at the end on some other political and security issues related to Iran and the Middle East. But again, I think we're here primarily to deal with the need to get the global economy on a firmer footing. And Mike can speak to you about the global economic agenda that we have here, and then we can take your questions on the President's meetings or anything else.
He's going now into obviously the G20 sessions throughout the remainder of today and tomorrow. And then after the G20 concludes tomorrow, in addition to his press conference, we have a bilateral meeting planned with the President of Argentina, and then we have a bilateral event with President Sarkozy that's going to honor the service of American and French service members in the Libya operation, which came to an end this week, as well as honoring the alliance between the United States and France over many years.
MR. FROMAN: Thanks, Ben.
The President, as Ben said, is just starting the G20 session as we speak, and the first session will focus largely on the situation in the global economy. Obviously the eurozone crisis is at the center of that discussion, but there will also be discussion more generally about the broad G20 agenda that was launched in many respects in Pittsburgh, around the framework for strong, sustainable and balanced growth, around financial regulatory reform and further steps to further that — further steps to implement new regulations globally, as well as a number of other global issues — development, food security, et cetera.
I would say, over the last couple of days, there's been a lot of preparation for this meeting — finance deputies have been meeting, sherpas have been meeting — and I think we're making very good progress and expect to continue to make progress over the course of the next day and a half across the whole series of issues.
Just to flag a few of them, you will recall that last year there was a debate around growth, and I think you'll find this year there's been movement towards a strategy on growth and jobs, including specific actions that countries will take to try and spur on growth and jobs in the short run while addressing over the medium term the need to have sustainable fiscal situations.
On the regulatory reform side, following up on Dodd-Frank, there's a number of developments to help internationalize the race to the top on the regulatory reform agenda, and those will be discussed as well.
And with regard to the eurozone crisis, obviously there's a great deal of interest. It is a European crisis and our European partners are very much focused on addressing it and taking steps to resolve it, took very important decisions last week, and there will be a lot of interest among the other leaders about the further elaboration and the full implementation of the plan that was launched last week and that we expect to form the basis of much of the discussion over today — including how the G20 as a forum for bringing countries together can be supportive of the European efforts.
So with that, why don't I open it up.
Q There's a lot of talk that the Greek Prime Minister might actually resign today. Can you tease out for us what the consequences would be potentially for Europe and for the U.S. if that were to happen?
MR. FROMAN: I'm not going to comment on internal Greek politics. I'd only note, of course, that he was here last night and met with President Sarkozy, Chancellor Merkel, and others to discuss how best to take forward the eurozone plan.
Clearly there's been developments over the last couple of days around the referendum that underscored the need for the further elaboration and full implementation of that plan as soon as possible. And I can say from the meetings that the President had this morning with President Sarkozy and Chancellor Merkel, they are very much focused on the steps that need to be taken immediately and in the near future to ensure that plan is successful.
Q Can I ask something you might be able to comment on, which is the President, in his meeting with Sarkozy, said that they discussed developments with Greece and how "we can work to help resolve the situation" — we, I assume meaning the U.S. So what help is the U.S. offering? What can the U.S. offer?
MR. FROMAN: Well, I’d put it in a larger context. One of the functions of the G20 — and when the President advocated for the G20 to become the premiere forum for international economic cooperation in Pittsburgh and that was accepted — is that this is a forum for bringing countries together to deal with global economic issues and other global challenges. Clearly, the eurozone crisis, while it’s a European crisis and it’s for the Europeans to solve, does have global implications. And there is a great deal of interest here by all the members of the G20 in seeing what they can do to be supportive.
From our own experience, the U.S. experience, from two years ago with dealing with the 2008-2009 financial crisis, we have a number of lessons to be learned that we have shared with the Europeans — the fact that the U.S. and the administration acted with overwhelmingly force in terms of putting up the necessary resources to deal with the crisis; that we insisted on robust stress tests and then insisted that financial institutions dramatically increase — in fact, double their capital. These are all lessons that are relevant to the current crisis.
And one of the themes of the conversations that the President has been having with his European counterparts over many, many months has been to share the lessons of our experience with the Europeans as they work through their own issues. So one of the many things that we’re contributing to this process is our experience, ideas for moving forward based on that experience, and support in doing so.
Q What is the administration’s view of the European demand that the Greek referendum be tied to Greece staying in the eurozone? Do you think that’s a good way to go? Have you taken any steps to prepare for the worst outcome of a Greek default triggering another wave of global financial turmoil? And President Sarkozy mentioned after his meeting with President Obama that Washington was coming to sort of his way of thinking on a financial transactions tax. Could you talk a bit about that?
MR. FROMAN: Well, again, on the Greek issue itself, let me just say that the situation there underscores the need to move rapidly towards the full elaboration and implementation of the plan, including having a firewall that is sufficiently robust and effective in ensuring that a crisis does not spread from one country to another. And that has been a consistent message that the President and Secretary Geithner shared with their counterparts here in Europe throughout this period.
On the financial transaction tax, I’d say the following — and it came up in conversations this morning both with President Sarkozy and with Chancellor Merkel. And the President made clear that he shares the objectives that Chancellor Merkel and President Sarkozy have in ensuring that the financial sector contributes an appropriate share to the resolution of crises.
We have, in the U.S., and the administration has proposed one approach to that through the financial crisis responsibility fee. The Europeans have another approach. Both share in commonality the idea that the financial sector has an appropriate role to play in contributing to the resolution of the crisis, and I think there is broad consensus between the Europeans that the President met with this morning and ourselves about the ability of each to go — to each pursue this in their own way in whatever way they see to be most effective.
MR. RHODES: I just had one thing on the — your — on the Greece part of this, which is that, again, I think it’s important to note that the program that was agreed to by European leaders last week had several different components. One of them was dealing with the Greek situation. But there were additional components to include a firewall that would be sufficient to prevent a contagion to other countries and markets. And that’s why we supported this comprehensive package that needed to be fully implemented across the board.
So there’s an interconnection here between the efforts that are being undertaken as it relates to Greece, but also the efforts that are being undertaken to establish a sufficient firewall that can deal with potential contagion beyond that.
So what the President was able to do in his meetings this morning is get an update from the leaders about their discussions with the Greek Prime Minister and their plans — which they made very clear as it relates to the Greek referendum and how that impacts the implementation of the agreement — but also to discuss these other components as well, including a sufficient firewall to prevent that kind of contagion.
Q The President said that there was progress in Europe but there is a lack of detail in the plans. What kind of details are you looking for in these meetings from the European side? I mean, many things have been discussed — the EFSF, the $1.4 trillion, and different approaches. So what kind of details are you looking for to consider that this summit will bring some progress?
MR. FROMAN: Well, I think what the President said is that the decisions last week were very important in terms of making progress and laying a foundation, and now we needed the further elaboration and their full implementation. And the Europeans, of course, themselves, are very much focused on that, and they have been meeting around the clock with technical experts and others to flesh exactly how the EFSF would work, how it would relate to other institutions; the bank recapitalization plan that was also announced; and of course working with the creditors of Greece to come up with a solution there as well.
So the Europeans have taken the decisions that they took last week and have been working to flesh those out. And I imagine the leaders today will be eager to hear further details about how that process is going.
Q But what could be progress from the U.S. viewpoint?
MR. FROMAN: The progress is the further elaboration and the full implementation of the decisions taken last week. But it goes to everything from how will the firewall actually work, to what are the details behind the bank recapitalization, to how well the Greek issue will be resolved.
MR. RHODES: And I’d just add to that — what we want to see here, again, is, as Mike said, the details as it relates to the implementation of the European agreement, understanding that this is important to the American economy as well; that what we’ve learned over the course of the last several years is just how much we have a stake in one another’s success. And so, therefore, that’s why the President has been in such close contact with close friends and allies alike — Chancellor Merkel and President Sarkozy — as they’ve been developing their plan, as they announced their plan last week, and now as they work towards fleshing out exactly how they’re going to implement it — because we believe that forums like this are necessary, because even as the Europeans are dealing with a very specific crisis in the eurozone, we know that the global economy is one entity and that all of us as members of the G20 have a stake in one another.
So that’s the perspective that we bring to bear on this, and we also bring, as Mike pointed out, the experience of having dealt with a very significant financial crisis of our own in 2008-2009.
Q You sort of addressed this, but how important is what happens here over the next two days to the U.S. economy? And last month the President said that the uncertainty in Europe was the biggest headwind facing the U.S. economy. Do you guys still believe that that’s true? And what leverage does the U.S. have in the talks over the next couple days?
MR. FROMAN: As Ben said, I think it’s quite important what happens at the G20 for the U.S. economy because we are so interconnected. Europe itself — which is one of our largest trading partners, or our largest trading partner as a whole — Europe’s success is key to our success here. So we want very much for them to be successful as they work through these issues.
But I’d put it in the broader context as well. As you recall, there is the rebalancing agenda about how to ensure that there is a recovery and that the recovery is balanced, and the countries are taking actions to ensure that we avoid crises in the future. And that’s going to be very much part of the discussion in terms of what countries can do to achieve balanced growth. And that goes to countries that have surpluses and are moving towards more domestic demand; countries that are committing to or determined to further liberalization of their exchange rate; countries that are taking action to spur growth and jobs in the short run, even as they pursue fiscal consolidation in the medium term. And those are all — those all affect us in the United States as well.
There will be a discussion of trade issues, which very much affect us and our ability to export from the U.S. and grow jobs in the U.S. as well.
MR. RHODES: I’d just add one thing, Carol, that — you used the word “leverage,” for instance. There is no country or group of countries that has a greater interest in resolving the eurozone crisis than the Europeans. Insofar as they feel a sense of urgency and a sense of pressure to act, it’s because they need to put their economies on a firmer footing — and they understand that. And that’s why they’ve announced the very significant steps that they announced last week, and that’s why they’re working here to flesh out the implementation of those plans.
What the U.S. has is a significant amount of experience in dealing with a financial crisis where we took very aggressive and robust action to rescue our financial sector and to help rescue the global economy back in 2008 and 2009. And we’ve been sharing that experience over the course of many weeks and months.
As the world’s largest economy, of course, the U.S. remains an influential and important voice in all the discussions at the G20. But also, we were a leading actor in making the G20 the forum to deal with precisely these kinds of issues, because we wanted to see a full range of countries around the table. We want to see our traditional allies in the developed world at the table, but we also want to see emerging economies as well, because they have a role to play in terms of making sure that the global economy is moving forward.
So, again, I think the sense of urgency comes from the situation itself, and the fact that everybody has a stake here in the success of a plan that can deal with the eurozone crisis, that can stabilize the eurozone, and that can continue the global economic recovery. And different nations are going to play different roles in supporting that effort. And the U.S., again, as a key partner and ally to the Europeans, plays the role of offering ideas, drawing from our own experience, and also being a full participant in groups like the G20 and the IMF that have a critical role to play here as well.
Q Can you address really quickly the specific question on what the President said last month about the headwinds — the crisis in Europe being the biggest headwind facing the U.S. economy? Do you still believe that’s the case?
MR. RHODES: Well, what I would say is, right now the fact that the global — that the G20 is focused very much — as Mike said, there is an ongoing agenda that involves how do we work towards sustainable growth; how do we foster free and fair trade; how do we foster economic development that benefits the international community and of course our own markets and countries. But also, the G20 is a place to deal with the preeminent global challenges and crises of the day. And right now, the eurozone situation is front and center.
And so certainly, that’s why it's a focus here in Cannes and has been a focus of the President's in his interactions with his counterparts. So it’s certainly the preeminent issue as it relates to the global economy in terms of a challenge that we need to be dealing with right now here in Cannes.
Q Ben, could I ask you a question about the President’s statement on Iran that he made at the beginning of the bilat — or the statements at the bilat with the French President? What is the signal to Tehran from that statement? And how does it relate to the buzz that’s out there about talk about possible military action?
MR. RHODES: Well, I mean, I’d separate it from any type of speculation or hypothetical situation as it relates to military action. I think what the President was underscoring is there’s been an ongoing concern in the international community about Iran’s nuclear program.
Iran, over many years, has been unable to demonstrate the peaceful intent of its nuclear program. It’s precisely for that reason that the United States and France have really taken the lead in applying very aggressive pressure on the Iranian government — by passing a U.N. Security Council resolution that put in place the toughest sanctions regime to date, by working to build out on those sanction through our own individual actions as nations, and again, by isolating Iran economically and diplomatically in the world.
That said, what we expect and what the President was referring to is another report on the Iranian nuclear program from the IAEA next week, which will, again, speak once more to whether or not Iran is meeting its international obligations. And that will be another important point for the international community to assess whether or not Iran is meeting those obligations. We, of course, don't believe that they are, so we'll have to be continuing to build out the pressure on the Iranian government going forward from there.
Q Iran is already thumbing its nose at the requirement next week, so how do you think it's going to play out?
MR. RHODES: Well, I wouldn't put a lot of credibility into the Iranian government's statements on these matters because they have not been able to prove with their actions the peaceful intent of their nuclear program. So how this has played out in the past is Iran has not been able to build the confidence not just of the United States but of IAEA and of the international community that their program is peaceful.
They're the only treaty member of the NPT that cannot convince the International Atomic Energy Agency that their program is peaceful. And that's precisely why they're facing the type of international pressure that they're facing. That's why the sanctions that they're under for the first time have slowed the Iranian economy to a halt, again, for the first time in decades. And that's why we're going to have to continue to be ratcheting up that pressure on the Iranian government as long as they can't meet those obligations.
Q How fragile is Europe's banking system? And are you concerned that, depending on how Europe asks its banks to raise this $106 billion in capital, it could make it harder for some countries to borrow, make it harder for people to get credit, hurt the economy, hurt the world economy?
MR. FROMAN: Well, I think the decisions that the eurozone leaders took last week on creating a strong firewall, dealing with Greece, and very importantly, dealing with bank recapitalization, demonstrated their commitment to ensure that their banking system has what it takes to withstand any developments throughout this process. So they're in the process now of implementing that plan, and it will be important, as part of this overall firewall, that that recapitalization be done and be done in a robust way.
But I think they're right now in the process of implementing that, and we're monitoring that as it goes into place.
Q And related to that, specifically, how vulnerable do you think the U.S. banking system now is to the destruction in Europe — not just direct exposure, but indirect exposure — and are we going to be taking any steps that kind of make us less vulnerable?
MR. FROMAN: Well, I think Chairman Bernanke may have spoken on this yesterday or earlier this week. We think our direct exposure is modest and we think that we have the tools to take measures if necessary if there's any indirect exposure.
Q You mentioned the need for Europeans' overwhelming force, and you all have both said the U.S. has good examples in dealing with its own crisis in 2008-2009. Does that point to a Fed-like role for the ECB? And if not, in what ways can Europe use overwhelming force other than they've already discussed in their October 26 agreement?
MR. FROMAN: Well, in the case of the financial crisis in the U.S., there was obviously close cooperation between our Treasury Department, our financial authorities, and our central bank — the Fed. And that proved to be very effective in our case.
The Europeans will have to make their own decisions about how best to erect an effective firewall. And I think they have focused on the EFSF and are now working to elaborate that plan and discuss its relationship with other institutions.
I think there have also been comments out of the European Central Bank, including by the incoming chair Draghi — Mario Draghi — about its intent to continue to potentially play a role in the markets as necessary.
So that's for the Europeans to decide. We have experience from our model and they are working through those issues themselves.
Q In terms of some more specifics of the interaction between the President and world leaders in these bilats, what do they say about their conversation with Mr. Papandreou, and can you give us a sense as to what their view is of things going forward in the immediate future?
MR. RHODES: I'll just make a couple comments and then turn it to Mike. I think as it relates to their conversations yesterday with Prime Minister Papandreou, I think they track very closely the comments that they made publicly yesterday about how they reacted to the announcement of the referendum, about how that was going to affect the implementation of the Greek plan.
But again, I think what they really focused on was this underscores the need to implement the full comprehensive plan; that, yes, Greece is going to have to be dealt with, but even as that is moving forward, they're moving forward on recapitalization, they're moving forward on building a sufficient firewall, they're moving forward on the full program they agreed to on October 27th.
So, again, Greece is one part of a broader strategy that is being implemented and that what they're working through here at Cannes is both how do they identify the way forward in the implementation of that plan, and then how does the international community, as represented in the G20, support their efforts. So that very much drove their conversations.
And I also think just in terms of their interactions, as we said a couple times, the President — there are probably no two leaders I think that he's spoken with more in the last three years than Chancellor Merkel and President Sarkozy. At the very least, they're near the top of that list. He's been through a lot with these leaders. They've been through the London G20, when we were dealing with an urgent financial crisis. They've been through our shared efforts on security challenges, like Iran, Afghanistan, Libya. And for the last several months they’ve been through the efforts that Europeans have undertaken to deal with this eurozone crisis.
So when he speaks with them he very much picks up essentially an ongoing conversation. They have been speaking independently as leaders on basically a weekly basis. They met by videoconference as a quad with David Cameron as well recently. And so when they begin discussions on these matters, they pick up where they left off and they have a deep understanding of one another's thinking, of one another's interests as it relates to dealing with this challenge, and one another's ideas. So it's a very free-flowing discussion that builds upon, I think, the type of relationship that they have with one another and the type of conversations they've been having for many months. So, again, it lifts it out of just whatever the news of the day is and into that broader picture.
But, Mike, I don't know if you have anything? Okay.
Q Is the President, coming out of these interactions, confident that they are moving expeditiously enough to deal with whatever fallout could occur from Greece? Does he feel that the second, third, fourth tracks that are going ahead in terms of their planning is at the moment occurring with the appropriate speed?
MR. RHODES: Well, again, first of all, I think he has great confidence in their leadership and he has expressed support for the agreement that they sketched out last week. But again, I think he's also made clear that that doesn’t complete our efforts to deal with this challenge and that while there have been substantial progress, both he and I think Europe's leaders would acknowledge that more work needs to be done because this needs to be implemented in a decisive way and a clear way in order to move beyond the current situation of crisis. So, again, I think he has confidence in the steps that have been taken but also believes that more work needs to be done, and I think, frankly, that tracks very much with the views of both President Sarkozy and Chancellor Merkel.
Q What is the level of confidence that they will do this in the coming days?
MR. FROMAN: Well, I would just add to what Ben said, I think he's also confident that they are seized with the urgency of moving forward. They are working around the clock — they, themselves, and their teams — to try and work through these issues. And that holds the best prospect that they'll be successful in achieving those objectives.
Q You mentioned firewall and you mentioned the banking, but no mention of growth. Europe has not prepared a growth plan, which seems to be very important. What is the U.S. feeling about that?
MR. FROMAN: Well, obviously we think growth and jobs are critically important. That's why the President put out the American Jobs Act and his proposal to spur jobs and growth in the short run and to achieve fiscal consolidation over the medium term.
And I think you'll find in the context of the G20, in fact, that there's been a good discussion of growth, the importance of growth, the importance of job creation, and including specific actions by specific countries of what they could do to try and achieve those objectives. So that is very much a part of the G20 agenda, as the President has been talking about for some time.
Q Could you elaborate a little bit more about the question — because a lot of the distress that you're seeing in Greece is because so much of this plan does not account for growth. There's the belief that it puts a lot of onus on the regular Greek citizens as opposed to the banks. When you say to the Europeans, look at how we did it, and you guys have the capacity to do this yourself, what specific steps that address growth are you recommending?
MR. FROMAN: Well, there are countries that are in different situations. In some cases, countries need deep fiscal consolidation right now in order to achieve stability in the markets. In other cases, countries have room to spur growth. They can engage in structural reforms to spur growth. They can allow their automatic stabilizers to kick in if they are not achieving their deficit targets. There are a number of things that countries can do to ensure that they are able to grow.
And very importantly, in the emerging economies where you may have surplus countries that can shift to greater domestic demand, that’s a critical role for them to play as part of this effort as well. And that goes back to the rebalancing agenda as well. So there are things that different countries in different situations can do. And part of the discussion that the G20 will be having this afternoon, and that I think you’ll see reflects it in the final result, is a growth and jobs strategy, which includes specific actions by specific countries.
MR. CARNEY: One more.
Q Answer this question as it relates to Greece, since that’s the country that’s in crisis right now, and if they go, are you worried about the contagion effect?
MR. FROMAN: I think right now the highest priority in Greece is stabilizing the situation. But the program that Greece has is also about reforming its system and engaging in structural reforms so that it could become more competitive and therefore grow as part of the euro area.
MR. RHODES: I just want to make one very quick point, which is that you’ve seen at these other G20s often this discussion of growth and fiscal consolidation. I think what’s represented at this G20 is a broad understanding that you need both; that there are going to have to be steps to promote growth and job creation in the global economy, and there’s going to have be, again, that kind of deficit reduction over the medium and long term that many of the leaders have worked on.
And similarly, in the United States, President Obama is pursuing an approach where we have an immediate growth package represented in the jobs act, and the other steps that we’re taking to promote growth and job creation at home. And we have a plan for significant deficit reduction in the medium and long term as well.
MR. CARNEY: Let’s take one more for Mike. Christi.
Q Just quickly, do you know yet if the Chinese are planning to contribute money to the bailout? And can you say anything about the U.S. intent on that point?
MR. FROMAN: I'm sorry?
Q And can you talk about the U.S. intent on that point?
MR. FROMAN: Well, I think the discussion is likely to be how the G20 as a whole, how the international community can be supportive of the European countries as they deal with their crisis. And there are many different ways to be supportive. As we’ve talked about, one of the ways in which we’re being supportive is by sharing our experience and sharing ideas. And I would simply say that virtually across all of the issues on the G20 agenda, countries look to the U.S. for ideas, for advice on issues that they’re working through. And that’s one of the many things that we can contribute there.
We’ve seen no announcement about China’s intent to contribute to the euro crisis, and you’ll have to ask them for specific things there. But I think, very importantly, it’s our belief that our ability to contribute, our ability to lead, and our ability to influence the outcome of these sorts of issues is not tied necessarily to having the American taxpayer pay for every problem.
Q Do you agree with the special vehicle — this idea of a special vehicle for the contribution of China? The special vehicle –
MR. FROMAN: Oh, the special — there are many ideas out there in terms of how resources might be mobilized. That’s one idea that is out there. And these are the sorts of things that technical experts are currently working.
Q What are those –
MR. FROMAN: Well, there are many ideas that people are working through, and each of them has pros and cons.
Q BBC and Reuters are reporting that Papandreou is resigning within the half hour. We have it that he’s going to the President’s office now, and the opposition is agreeing to form a coalition government. Can you comment on the implications of all this?
MR. RHODES: Well, again, we’ll have to let the Greek government make announcements about their future. The implications remain the same as it relates to the need to take action on a range of fronts. So, again, the plan that the Europeans agreed to last week involves action to deal with the Greek situation, but it involves a range of other steps, too, on recapitalization, on building a firewall — all of which are going to need to be done irrespective of individual political circumstances in different countries. So I think we know what the roadmap is. We know that there needs to be implementation, and this reinforces that.
Q This doesn’t threaten the deal in any way?
MR. RHODES: We’ll have to see what the specific announcement is out of the Greek government. And we’ll have to see — again, this is something that was reached within the eurozone. So I think it’s — European leaders and Greek leaders will be working through those issues in the days and — hours and days to come.
MR. CARNEY: I’m going to let Mike go, but Ben can stay, and I’m here if you have something on other topics.
Q The event on Friday, do you see that as a "mission accomplished" type of moment for President Obama — Libya support?
MR. RHODES: It’s a unique opportunity to do two things: In the first instance, I think there has been — frankly, we have not had the opportunity, at least in the United States, to pay appropriate tribute to the service members who participated in the Libya operation, which we believe is a hugely successful operation, saved thousands of lives, gave the Libyan people a chance to end the Qaddafi regime. And we’re going to have U.S. service members at this event. We’re going to have the U.S. military leadership that helped lead this effort at the event, together with their French counterparts.
So, in the first instance, I think it’s an important chance for both the United States and France to acknowledge really tremendous work done by pilots, by sailors, by commanders, by many people who participated in what was a very unique endeavor.
Secondly, it’s a chance to underscore the alliance between the United States and France. I think Libya underscored the seamless way in which we can coordinate both as bilateral allies and through NATO. We’ve worked together at every level of this operation, whether it was carrying strike missions or providing refueling support, intelligence support, command and control. The U.S. and France were able to work together seamlessly, and that’s a testament to a broader relationship that we’ve had for centuries with France as our oldest ally.
So I think it’s a chance for the two leaders to, again, mark the fact that this NATO-led mission certainly achieved all of its objectives. And it is also a testament to the strength of NATO, the strength of the U.S.-French alliance, and the service of the people who will be there tomorrow.
Q — who is coming?
MR. RHODES: From the U.S. side, we can get you the specific list, but I think we anticipate some of the military leadership at NATO will be in attendance. So we’ll have a specific list, but we expect our senior uniformed officers at NATO will be participating.
MR. CARNEY: Anybody else?
Q Just curious — again, it’s speculation, but if Papandreou offers to resign, if there’s a coalition government, is there a feeling that we might not have a referendum, and would that be a positive thing at this point? And is the President — did that come up at these meetings? And did the President support any effort to try to — not effort, but any — did he say that it would be better if we could come out of this G20 without a Greek referendum?
MR. RHODES: Well, again, I’d say a couple of things — and this is what I was alluding to with Jessica as well. I think the steps that need to be taken are clear, again, irrespective of the political personality or situation at any given moment. In other words, what needs to be done as relates to Greece, what needs to be done as relates to stabilizing the eurozone was outlined last week. And those steps are going to need to be taken going forward, irrespective of, again, where we are at any given moment in a country's politics.
Now, obviously, as the leaders said last night, as Chancellor Merkel and President Sarkozy said last night, their implementation of their agreement with Greece was going to be affected by the referendum. Their ability to, for instance, provide funds while that was a point of uncertainty affected their ability to implement in the near term, but it didn't change the fact that the basic agreement and outlines of the way forward from last week hold.
So I think that's why it's important to reinforce that the broader program is one that still needs to be implemented. The Greek situation still needs to be addressed but, similarly, whichever way it goes, you still need to be taking these other steps on recapitalization, on building a sufficient firewall that can allow the eurozone to be stabilized and to move forward, irrespective of whatever may be happening in one country at a given time.
Q Ben, a slightly different topic: The President and others have said all along, Europe has the capacity, Europe has the capacity — keep hearing that word. Particularly in the meeting with Merkel this morning, any discussion of the possibility that Germany could be putting up more than they are in this situation?
MR. RHODES: Well, I think they're discussing — we certainly believe that Europe has the capacity to step forward and to provide the kind of resources that can work through this period of time. The international community can provide other types of support; the IMF can provide certain types of support. And so I think what they'll be flushing out, not just in their discussions this morning but over the course of the next couple of days, are what are the types of steps that individual countries can take on their own, and what are the kinds of steps that the international community can take as a whole that can, again, move the implementation forward.
So, again, for some countries that will — that could entail specific commitments. In other cases, it could involve discussions about the role that the international community can play through the G20, through the IMF and other actors.
MR. CARNEY: Let's get Fuji TV –
Q Thank you very much. It's a question about the agenda of G20 meeting. Will an expansion of IMF resources still be on the agenda of G20? And in my understanding, United States is opposed to an expansion of IMF resources. Would you please tell me the United States' stance? And then would you please tell me the reason? And also, I'm wondering whether President Obama talked about it during the bilateral meeting with Germany and France. Thank you very much.
MR. RHODES: I'd just say a couple things. First of all, we believe the IMF has a substantial amount of resources to deal with a range of challenges in Europe and around the world. One big reason it does is that the United States, together with other countries, took significant steps in 2008-2009 to make sure that the IMF was appropriately resourced.
I think as it relates to the discussions here at the G20, the IMF is certainly part of those discussions. I think what was discussed by the leaders was more so the role that the IMF plays, rather than some accounting of resources, I think, what can the IMF do to support stabilization in the eurozone specifically.
So the discussions flowed much more towards what role the IMF plays. And the U.S., of course, as the largest stakeholder in the IMF, has an important view on those matters. But again, we believe that the IMF, in large part because of the steps that were taken in 2009, has a significant amount of resources that it can bring to bear. Thus far, I think the discussions have focused far more on the role that it plays as one element of a response to the eurozone crisis rather than an accounting of specific resources it might need.
Q The U.S. is still opposed to an expansion of the IMF's funding?
MR. RHODES: Well, the United States has made significant commitments as it relates to our contributions. There are not plans for the United States to provide additional resources from — again, from the U.S. to the IMF. But again, we can't speak to what other countries may do. What we do want to address is what is the role of the IMF, what type of steps does it take to help address this crisis — because it's one element, I think, of the response that will be in place going forward.
Q Ben, so two questions on the Greek situation, especially on referendum. So what kind of message or explanation did the two European leaders provide to President Obama this morning? I mean, was the tone serious, serious? Or did they assure the President that the Greek situation could be resolved eventually? Or can you give me a sense of that tone?
MR. RHODES: Yes. Again, I think — well, yes, just on the Greek question, I think the European leaders were very clear about this last night when they said that, again, there's a plan that is agreed to that is necessary to deal with the Greek situation in the context of the broader effort now to stabilize the eurozone; that insofar as there's a referendum introduced, that that affects their ability to implement that plan and the timeline upon which they implement that plan, but it doesn't affect the basic premise of what needs to happen going forward to deal with Greece and to deal with the broader eurozone.
So, again, I think their message very much tracked I think what they were very clear about to the Greek Prime Minister, to the public last night, and again, with the President in discussing how this affects the implementation. But the point I keep underscoring here is that this is one piece of a broader picture in the eurozone. The steps that need to take place remain the same ones, whether it relates to dealing with Greece, whether it relates to building a sufficient firewall.
And again, this is where I point to some of the points we've made about how the United States dealt with our crisis — that there are — when you're dealing with a financial crisis, obviously the situations are different. There are lessons that can be drawn from the way in which the United States brought significant resources to bear, mobilized many different sectors and levers that we had available to deal with that challenge, and were able to restore confidence and restore stability in the financial markets. Those are the types of challenges that are confronted now by Europe's leaders, and they're going to have to — they're going to be committed to the program that they laid out last week, whatever the particular situation is in Greece at the moment. But their ability to implement the Greek part of it is going to be affected by whether or not there's a referendum.
Q Did the possibility of resignation by the Greek prime minister come up this morning?
MR. RHODES: No, it — there was not, like, a detailed discussion of Greek politics. I think there was a broad recognition that Greece is going through a very difficult period and very difficult challenges, that we all recognize, I mean, the very seismic economic and financial challenges faced by Greece that affect the way in which they approach these decisions. But that doesn't change the fundamental steps that need to take place that were agreed to last week, and that's the plan of action that the leaders are committed to when they have confidence again. As they said last night, they wanted to — they're going to have to adjust the timeline of their implementation around a potential referendum.
Q Ben, if you're also taking non-G20 questions at this point, there's a report out that the U.S. is considering moving into an advisory role for its military mission in Afghanistan as soon as next year. Is it correct that this is — that that is being considered? Is this is a decision that's been made? What's actually going on here?
MR. RHODES: No, I would not suggest and it's inaccurate to say that there is some — that there's any specific timeline beyond what the President has already laid out, which is we're going to bring 10,000 troops out of Afghanistan by the end of this year; we're going to bring 33,000 — the full West Point surge — out of Afghanistan by the end of next summer. That is nested within a broader transition in which we are handing over security responsibility to the Afghans. That transition will be concluded in 2014, as agreed to in Lisbon.
So as related to troop numbers, all that the President has said and made clear is that there will continue to be reductions in the numbers of U.S. forces in Afghanistan at a steady pace after next summer. But we don't have a specific timetable yet, beyond the one that the President has already laid out.
As relates to the advise and assist mission, certainly a part of transition, as we've seen in Iraq, is the role of the U.S. changes in the country. So just as in Iraq we transitioned to Iraqi security forces and then we ultimately moved into an advise and assist role, similarly, in Afghanistan we anticipate that as the U.S. undertakes a transition, at a certain point the Afghans will be fully in the lead for security in their country, and the U.S. will be in an advisory role. But we don't have a specific date that has been identified for when that transition will take place.
Q And just also on the IEA — the international nuclear agency and Iran –
MR. RHODES: This is one of those rare occurrences where the acronym is harder to say than the full –
Q Than the actual thing.
MR. RHODES: Yes.
Q Is there any preparations being taken for direct Western action if Iran were to move ahead next week, as has been reported is possible?
MR. RHODES: Again, I think what we're focused on is a diplomatic strategy, which, insofar as Iran continues to be outside of international law, outside of its obligations, increases the pressure on the Iranians through financial pressure, through economic sanctions, through diplomatic isolation. So that will continue to be the focus of our efforts. We'll want to ramp up those efforts in response to Iranian failure to meet their obligations — as we have done, steadily, in building up our own sanctions with likeminded nations over the course of the last couple of years.
But again, I would underscore that what we'd be focused on is continuing a diplomatic effort to pressure and isolate the Iranians.
Q Out of Greece, there was any specific discussion regarding other vulnerable countries like Spain and Italy? And if I may come back to IMF — there is any specific position on the possibility that the fund will finance in the future not only sovereign governments but also organizations like the EFSF?
MR. RHODES: In the first instance, I think, yes, insofar as there was a discussion of the need to build a firewall so that you didn't have a contagion that could spread across the eurozone area. Obviously there are banks that have risk; there are countries — Spain and Italy among them — that have risk. So it was discussed in that context of how do we move forward in a way in which the Europeans are implementing their plan of recapitalizing or building that firewall that can give sufficient confidence that they are addressing the crisis in the eurozone area.
With the IMF, I think it didn't get into that level of — I think it was just a broader discussion about what role the IMF can play both in supporting reforms that need to take place and being a source of support going forward. And so I think it was — the IMF is going to be a piece of this; it's not going to be the whole solution, obviously. And so therefore, given the IMF's role, given its expertise, given its resources, I think it focused on what is the IMF's role as an element of implementation and an element of the plan that the Europeans have agreed to in October.
MR. CARNEY: Let's just do two more.
Q Ben, just to elaborate on that if you could — what role can the IMF take that's different than it's already taken, it being a member of the troika, giving out cash to Greece, Ireland and Portugal? Are we talking about a more senior role in determining what the programs are than Europe has already given it?
MR. RHODES: No, I'd put it in the current context, which is, the IMF has played a role in dealing with different solutions and different countries. And going forward, it's going to continue to be a resource and a part of a response, but it's not going to be the sole element of a response. So I think it was in the continuum of the role that the IMF has played and will play going forward, recognizing it is a source of resources and expertise and can provide impetus for very important structural reforms that need to take place in a number of places.
Q Thank you. Tomorrow, the President will do a joint TV interview for French television with the French President, Nicolas Sarkozy. It's the first time, according to our researchers, that an American President is doing this kind of thing with a French President in power. Are you aware that it can give a boost to President Sarkozy in this very sensitive political French year?
MR. RHODES: Well, I think what the — the fact that they're doing both the event tomorrow and the interview underscores the very close partnership that they've developed over the course of nearly three years now, and the friendship between the two Presidents. I think that what we’ve seen over the course of nearly three years now that President Obama has been in office is we've had to deal with extraordinary economic challenges at home and then we've had to deal with extraordinary global challenges that include economic ones as well abroad, and as the President has traveled the world, as he's attended summits like this, he has developed very close relationships with a number of leaders that I think have been an important resource so that they can pick up the phone, have very frank and candid discussions, as they have over the course of the last several months leading up to this summit; as he has with Chancellor Merkel, as he has with other leaders.
So I think it speaks to the fact that the President has invested a lot of time in making sure that the United States is postured to play a leadership role in the world; that part of that effort is the relationships that he has with his counterparts; and that among those relationships, there's none more important than his relationships with our core allies, be they European allies, Asian allies.
So I think the events flow out of that, flow out of the very natural cooperation that they've developed, whether it's on something like Libya or whether it's on something like the global economy. Obviously, the French political calendar is what it is. But this is very much more rooted in just the fact that we wanted to, with the French, underscore the partnership between our nations as we deal with a very tough set of challenges.
Q But with the popularity of President Obama in France, it’s a huge boost for a French leader to do that tomorrow. I mean, it’s a dream for President Sarkozy to have President Obama with him on a TV interview.
MR. RHODES: Well, again, I think President Obama’s — insofar as President Obama has a great deal of popularity in European countries, in Asian countries, African countries, Latin American countries, what we focus out on is how can we develop better partnership abroad; how can we work and develop relationships with countries to deal with challenges like the global economy, like Libya. And I think, frankly, that the President’s efforts at building back the standing of the United States in the world has had a direct benefit to the United States in dealing with security challenges, like terrorism, like Libya, and dealing with economic challenges through the G20.
So, again, I think as it related to President Sarkozy and the President’s standing in France, we see that as a sign of the health of the alliance, the importance of the alliance, the importance of their cooperation to deal with a set of very difficult challenges at a very complex time in terms of both the security and political situation in the world. And that’s I think the message that they’ll be able to underscore tomorrow. We’ll, of course, leave it to the French voters to make decisions about their future.
MR. CARNEY: Thank you all very much.
1:49 P.M. CET
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