to california voters coming and you have to take that risk away from them. they basically retreat from that proposition and it only appears on pages 107 and on 108 of the brief that they filed, and basically they are now saying that it might -- if a marriage were permitted this is what they say on page 107 or 108 or 100 line of the brief, the proposition needs to be enacted because the existence of same-sex marriage would somehow -- they don't use the word somehow, will make children prematurely occupied with issues of sexuality. that is nonsense that you can enact a proposition that walls of the citizens of the state from a fundamental right because you are worried that other wise children might be prematurely

preoccupied with issues of sexuality to be that of course if that was the justification, it would equally warrant comic books, television, video games and conversations with other children. [laughter] >> in deciding whether the rational basis saves this proposition, what do we look to? >> well, i'm not sure question is asking whether it should be a rational basis for what would be the -- >> let's assume it is a rational basis. to be looked to the record that is made in the district court or to the cases suggest to us that we imagine one of the inconceivable rational basis and apply that? >> the answer is that is attenuated just to imagine that someone might conceivably

imagine and the city of claiborne and though rover case makes it and justice kennedy for the court in the case says we must look further than that. we must look into the reasons, and they must make sense and they can't be attenuated and they can't be motivated by fear of people that we don't like or minorities. it's got to be more than that. and most of all, it has to be rational. and that's why i was looking for the reasons that they had advanced. one is to protect our children and we have seen at least i think it is manifestly clear that that is not a rational basis because you cannot do that because basically that is based upon the idea that there's something wrong with these people. we must protect our children from them. that won't work. >> suppose and just assume this for the purpose of my question that we were to conclude that this accidental pregnancy argument is in fact a rational

basis have the proponents of the proposition for the imperial clerk given up that argument because of the arguments they made in the political process leading up to its passage? >> no, but life and the court has to look at all of that in the context of the court house said you have to look at the context in which the measure was passed. i will say if i moved to that point, the concept of rational appropriation there is no way that proposition 8 prevents by keeping individuals of same-sex from getting married have anything to do with heterosexual marriage. same-sex marriages not going to discourage heterosexual people from getting married. it's not going to keep them from getting divorced. it's not going to have any effect at all on their choice of having children to be on either hand, the elimination of the

proposition 8 cannot possibly hurt the heterosexual relationship at all. but in this case the evidence was clear from the witnesses in this case that there would be no harm as a result of but elimination of the proposition 8, and mr. cooper quite candidly when he was asked that question repeatedly by the district court would harm can they be today if he said i don't know. now, what he meant, and i will let him speak himself on this but what she was saying is we don't know the impact of allowing same-sex marriage and how it might affect this institution of marriage. it's an important institution of marriage because it means a great deal to the citizens of the state. >> people in the popular election campaigns and all sort of arguments not to vote for

someone -- i didn't heard that. [laughter] or to vote for someone but my point is this. my reading of the cases suggests this is a matter of what is referred to as legislative facts that really matters not what a whole bunch of people might suggest one way or another. this is a sort of legislative fact and if we can see it can be conceived and argued that there is a rational basis to uphold the constitutionality of proposition 8, that satisfies the test. >> i have several answers to that. one is the idea of the legislative facts means the witnesses that talked about the history of discrimination that damaged the discrimination has done, the immutable characteristic that we are talking about, people don't choose to become gay. they have a characteristic that

is talked about, and with respect to the inability to have a slight digression is all of the plaintiffs and other witnesses in this case and the experts and the judge's findings this is a characteristic that is immutable and the long history of the discrimination which mr. cooper stimulated to the trial, the damage that is done as a result of the discrimination all of this requires heightened scrutiny. but if you look to go to and imagine that that a rational basis standard articulate along the lines than you did, which i don't think is the test, i don't think that is at all consistent with the city of clyburn or roemer at all but if you were to say that, what is -- what can we imagine? conceivable thing can we think of that would justify doing the damage that is being done to our citizens in california? what is it? i don't know what it is.

>> just a minute. maybe i could suggest a couple of things. do you believe that the idea of distinguishing marriage from domestic partnerships name only in order to promote a vehicle for procreation, responsible procreation, and inclusion of one group promotes legitimate government purpose all things being equal children are most likely to thrive when raised by father and mother who brought them into this world to do you believe that the but survived a rational basis review? >> would be flatly inconsistent with the evidence in this case, number one. number two -- >> slightly inconsistent with the evidence in this case if you naturally jump the conclusion that the only evidence in this case is that which suggest the

judge suggested it is in the record rather than that legislatures do things for their own reasons and then the judge might find if there's evidence for eight or against it. but i am suggesting now just the question the idea of distinguishing marriage from domestic partnerships name only to promote it as a vehicle for appropriation all else being equal, children likely to thrive when raised by father and mother who brought them into this world that it is irrational? >> yes. >> in the first place mr. cooper specifically said just a few moments ago the name is the institution. those are his words virtually verbatim. the name is the institution and the witnesses at this trial, the witnesses that came forward and are willing to be cross-examined and are willing to testify under

oath not the review articles and so forth that were put in by the proponents, but the witnesses came forward in this case and the plaintiffs and all the witnesses in this case talked about what management to them and what it means in this society as an institution, not just what the supreme court said we have, but with the plaintiffs said, the experts said, but the supreme court said and the district court found and there's nothing that would suggest that children thrive in a better way in that environment. in fact, the kind of proponents mr. blank and hon testified that children in most relationships would be better off, that we would be a better country, we would be closer to the american ideal if same-sex marriage were permitted. now it's easy to see those things, but you have to have -- you have a better situation where a child is in with a mother and father but allowing the of the problem with that is

that the remedy doesn't fit the so-called problem. in other words, restricting marriage to people of opposite sex doesn't mean that there won't be people in same-sex marriages. that california permits that, and the court, there's something like 37,000 children a missing six households in california today. there's also 18,000 same-sex marriages which are not at issue in this case. it's easy to say that children would be better off in that relationship, but if you have heterosexual relationships permitted in california and marriages between persons of the same sex it doesn't change where the children will be raised. if a child is a product that will buy a logical relationship between a man and woman, that is up to that man and that woman to keep them together. i think judge reinhardt

suggested that a better remedy for that would be to prohibit divorce. but that isn't something that californians are interested in doing. >> are we free to do -- is their anything other than of rational basis in the circuit? >> i believe very strongly that's right. the hernandez case talks about the in the devotee. the extent that you are referring to any of aspect, but the doctrine of the heightened standard lighting has been ventilated and the issues that would support the heightened scrutiny our present and you'd be found by the supreme court has set. >> how about the case? >> i think the case supports exactly what i was just saying. >> the circumstances are

different the high-tech, but do you have authority to the factual circumstances alone would allow us to make a different holding than a prior-year three judge panel? >> i think that the hernandez case which is a subsequent decision already addresses that issue and the case of judge reinhardt focused involving the public defender i think was levenson also address that point. >> the administrative ruling. >> the reasoning in that i couldn't do a better job in answering your earlier question the anbar reasoning set forth in writing in that case and with that case the supreme court has made it very clear that when the

facts are different and the precise issue is not the same sexual orientation is not in that case. it is strictly a gender case, not a sexual orientation case. the facts are different not just the situation where california has recognized same-sex marriage and then has taken it away but california has an interesting crazy quilt system of laws in the state with respect to marriage. some people may be married because they are heterosexual and some people may not be married because they wish to marry someone of the same sex. some people who were married may stay married but they were to get a divorce they couldn't even read mary the same person. and some persons are out of state and there it is legal outside then they are recognized in california. we have an irrational system here and finally with respect to the baker case but the doctrinal ground has changed because of

the supreme court sex discrimination cases, and the change with respect to the rover case and with lawrence versus texas with this case comes down to, and it seems to me california has built a fence around gay and lesbian citizens and it's built around the institution and marriage which the supreme court says not based upon sex or appropriation or anything else is the most important relation in life and the citizens of california with a net 1 cents because of their sexual orientation are denied access to what every citizen in california has the door in post within the other france. that is a violation of equal protection and a violation of the due process clause. >> are we free in view of the supreme court has told us to

decide the constitutional issues that they should be avoided and adopted or wheat free to do anything other than decide the issue of whether california's repeal of an initiative constitutes the violation? you're closing speech would require holding that any state that did not admit the marriage would be in violation of the constitution. there's a possibility i think in this case of saying proposition 8 would draw the right of gay marriage today and lesbian is unconstitutional under the circumstances that they enjoy that right and they are given any other aspect of marriage and always taken away as the

designation to we are we free to go beyond the holding if we were to rule in your favor holding that the repeal of the right to manage to label marriage and receive the certificates that under those circumstances it's a violation but can we in view quote and similar cases to go for the demand? >> if you mentioned i was involved in that case i don't think that case in any way should inhibit you from doing but i think is -- i think the answer to your question is that you could decide this on a narrow ground that the case gives to you and puts into conjunction from the california supreme court. and i don't think anything in the united states supreme court jurisprudence in putting the case or anything else that you

can't just look at the larger -- the constitutional question which that earlier question is assumed within. what has california done? california has taken a class of citizens and put them in a separate category. whether they had a different category before or not, and that act of discrimination, there is no doubt that it is discrimination. and there is no doubt that it does great harm. the only question is can it be justified under any standard of constitutional analysis, and i submit that it cannot be justified under any standard of constitutional analysis because at the lowest standard, the rational basis you have to know what is rational and all of the arguments that my opponent is making with respect to how valuable the institution of marriage is are not rational when it comes to the question of

well why did you draw that line? heterosexual people were different than their different to use the vernacular but that doesn't mean you can classify them to use justice kennedy's words and then disclose them from this part of society. so, the rational basis analysis has to go to the justification for the exclusion. what dole is california trying to accomplish, and what it has accomplished in the proposition does it pursue those in a proper way? that's where the pressure will basis falls completely down. you might say color blind people or make some distinctions. but if you are saying they can't participate in a bright because of an immutable characteristic you have not only a due process violation but an equal protection violation, and ultimately that is the decision that i would like to see the

court issue. >> thank you pure islamic thank you. >> ms. stuart? thank you. may i please the court. i want to focus on the circumstances in the context particular to california that showed housing dillinger irrational proposition 8 really is. first, there are four things that the first i want to talk about is that it imposes a special disability on gay people for reasons that california has disavowed and it doesn't intend to pursue any other arena. california regulates child rearing and parenting support from marriage and proposition 8 has nothing to do with trying to promote one family for raising children over another. besides that, california 12 deutsch govern children in every

way. they will continue to recognize same-sex couples and opposite sex couples are the same purposes of family and child rearing in every way that matters. as the california supreme court held, proposition 8 didn't change any of that. it didn't talk about children and had nothing to do with the rights of gay people to perform and raise families. >> are we talking about a legal? >> we are talking about illegal but it's a very important legal. it does have great meaning. and i think on both sides of the table would stipulate to that and the amount spent on this measure is testament to it. so that's my second point which is the proposition -- >> the reason i ask that question is -- and it follows on the question that my colleague judge smith announced the other side, and that is as a state which allows an ounce california apparently does everything short of the label in a better position to enact proposition 8

than a state that allows none of it? >> your honor, i don't think it is in a better position were worse position but what i will say is this. we agree with the plaintiffs and tried the case with them that treating couples different with regard to family is unconstitutional across-the-board. but what happens here in california when you have the panoply of percentage laws and family related that treat couples exactly the same that underscores the irrationality of the measure, and here -- >> how? >> because family law in california but recognizes that gay people do procreate and allows them to do is assisted reproduction in the same way that heterosexual people do and it treats families the same way for establishing percentage. benet figures out who are the parents of a child, the sex and sexual orientation is irrelevant to the determination. it recognizes that both heterosexual people and suddenly the people as well can be a

responsible and what we from their children it doesn't matter how the child comes into the world. parents do that all the time and the state interest is exactly the same. >> but nonetheless, if the rational basis is to do this and name only this to promote simply as a vehicle for the procreation then doesn't that survive the rational basis test? >> it does not, your honor, for two reasons. one, first of all same-sex couples to procreate they don't do it to the old-fashioned way to use terminology from one of our cases. but they do procreate, and so california doesn't discourage that in any way was a one is preferable for the other. but if we are to think that excluding same-sex couples would somehow encourage couples to procreate in a different way or to be more responsible for their children, you have to assume there is a reason that including

the people will make heterosexual people less likely to carry out their parental duties. and the only way that you can get there is to assume some of the association of gays and lesbians in the institution, and that is not a basis on which the protection allows the state to enact all. i don't think it works. it isn't rational, and it is the only way it can be understood is saying there is something so wrong with gay people we put a stain on marriage and a white heterosexual people there for avoid being married. equal protection doesn't allow that. so proposition eight regulates the title and the satchel only as the pamphlet point that out, and, you know, william eskridge filed a brief on behalf of law professors and said something that i think releases a better than i can which is that the fact that proposition 8 is largely symbolic and in place while eliminating the stature mix the insult that the measure

does its on lesbian and gay couples obvious the state commanding that we call dave relationships different even as it treats them the same command that is kind of the quintessential classification undertaken for its own sake. the third point is that they held the way that proposition 8 did what it did is it carves out an exception to the equal protection privacy and due process clause in the constitution, and that's pretty extraordinary. it made our equal protection clause in the constitution on equal. and roemer tells us that discrimination over the unusual character you have to be especially careful to consider whether it is obnoxious to the equal protection. now any of those features i mentioned along would make i think the court have to have paused in looking at proposition 8 but when you take them together they leave it inexplicable by anything other than animus towards the class. but here there is a fourth point and that is that the court

doesn't have to infer animus. the context of the measure itself and the campaign really demonstrates the purpose of the campaign is to be sure that proponents avoid associating marriage was a lesbian and gay couples because it would deem the institution. was biased. the voters amended the constitution, the state constitution, to incorporate the measure after the california supreme court rejected the constitutional ground why? because it the means the people and treated them as second-class citizens and a will dated them to an inferior status the campaign didn't say to the voters the court got that wrong. the campaign said to the voters we have to put them in an inferior status because if we don't, everybody will -- we need children and that devotee of to recognize that same-sex couples are different. they are not the same as opposite sex couples and they are not okay. and it portrayed opposite sex couples as traditional and audio and as a lifestyle that should

be kind of kept in private. and the campaign leaders after the campaign wrote an article in which they said they deliberately tapped into the voters limited tolerance for gay people. the campaign went about portraying -- it's been another 40 seconds. you are over. you voluntarily gave up some time to get >> proponents say that in order to affirm the district court, this court must find that the majority who voted for proposition 8 are bigots and that is not so. prejudice which is defined as the belief that one group is less what you are deserving of fathers is always one of hatred. it may as justice kennedy said be the result of a sub for want of careful rational reflection or an instinct to guard against people that we think are different from ourselves. that sort of intent is always wondered if proposition 8 is

claimed on the base from the campaign and equal protection doesn't allow the state to enact a measure based on the view that some people are unworthy. thank you. >> thank you. mr. cooper. >> thank you, your honor, just a few moments of you will indulge me. first, mr. olson spoke of the land, but we know that if mr. loving had desired to mary mr. jeter the case wouldn't come out the same way. we know that with certainty because baker against nelson rejected that claim and rejected that claim on the heels of building where the day couple who brought the 14th amendment claim rely on loving very heavily. we also think that mr. olson is

simply wrong when he suggests that the case did not involve the classification, claimed classification based on sexual orientation the was just gender. here is what the plaintiffs and baker said. there is no justification and this is true of the jurisdiction statement, your honor. there is no justification for this commission against homosexuals. of olives are being deprived of the basic right to marry as a result of this thing is been denied numerous benefits awarded by law to others similarly situated to a for example, childless heterosexual couples. this is clearly the case where they challenged the classification as one based on sexual orientation as well as one based on gender. a loving case would have been on all fours, and what have come

out -- excuse me, the case would have been on all four with loving if it were a fact that same-sex sexual relations produced children the same as opposite sex sexual relations to. then mr. olson would have a lead down case. there would be no basis to draw the distinction to identify the distinguishing characteristic with respect to any interest the state has the authority to implement. it would be no different. so the question is does the state, does the society have no interest in that distinct characteristic? we submit to you. >> the case would suggest that. do you have a case to suggest that the distinguished characteristics or good

argument? .. >> i would like to also refer the court very quickly here -- well, let me just --

>> nothing's been done very quickly here. [laughter] >> i'm sorry? >> i said, nothing's been done very quickly here. [laughter] >> and when you're in the red, that doesn't mean you have that much time remaining. [laughter] >> fair enough. if the court would just give me 30 seconds because this is a point that is clearly on the p mind of the court which is the romer case, and i want to share this passage from you. yet amendment ii in explicit terms does more than repeal or resend these provisions. it prohibits all legislative action at any level of state or local government designed to protect the named class, a class we shall refer to as homosexual persons. the point is that amendment ii was unprecedented, it was extrord narks and whether -- extraordinary, and whether it had repealed anything or not, standing -- essentially in its

own shoes without regard to what the history behind it was, it was unconstitutional. it would have been unconstitutional if it had -- it singled out and made a stranger to the law any class of persons. thank you. >> thank you all for the fascinating arguments. the court will stand adjourned. >> all rise. [background sounds]

>> the most important point on who should run and who the republican leader is, we can't tell them. it would be better if a month before the election, we announce who is running for president because -- [applause] i mean, the media's obsessive desire to know who is your leader, is it michael field, rush limbaugh, glenn beck? they want us to tell them who the leader is so they can destroy that person. [applause] >> this year's conservative political action conference begins thursday and c-span will cover the events through the weekend. watch past speakers online at the c-span video library all archived and searchable at c-span.org/videolibrary. >> where treatment is made real

for all without regard to race or belief or economic condition. [cheers and applause] i need a new america that everlastingly attacks the ancient idea that men can solve their differences by killing each other. [applause] >> as candidates campaign for president this year, we look back at 14 men who ran for the office and lost. go to our website, c-span.org/thecontenders who see who had lasting impacts on american politics. >> the liberal left continue to offer only one solution to the problems which confront us. they tell us again and again and again we should spend our way

out of trouble and spend our way into a better tomorrow. >> c-span.org/thecontenders. >> this event was cohe'sed by the financial times and the broader european alliance foundation. following her remarks, she answered questions from the students in this one hour program. [inaudible conversations] >> translator: professor, mr. peel, ladies and gentlemen, i hope all of you can see me behind the lectern, and it seems

like it's a good place to be. dear students, especially, i'm happy today to have been able to answer the invitation that has been sent to me and to come here to talk to you about the future of europe. europe has always been at the cross road of history at many points, but i think today is a good time because we have to answer the question, what is the direction that we want to take for the future? this place is perfect. it's the new museum in berlin and for our subject, it is really a good frame work, it's a good place to talk about the future of europe since it's a place that reminds us of the origin of our culture. we see the greek classics. we see the wounds of world war ii #, and we see modern

architecture as well. like we see in a lot of modern newseum, and it's a place where the old and the new mix in a very creative way. about five years ago in march 2007, in berlin, we had the great anniversary, the heads of state and government, under the german presidency of the european union came to berlin to celebrate the treaty of rome that took place 50 years before, and back then, we took advantage of that to talk about the lisbon treaty and to underline what europe is all about, what means the european union, what we owe the european union, and what we expect from the e.u..

we summarize all of this in the berlin statement which mentioned first that war and aanymorety in europe is over. we talked about freedom, about good living standards, about friendship, that this would be our new normal. we talked about multiplicity and diversity, and we talked about the conviction that the great question of the time can only be solved together. that was the basis of what we wanted for the future in the 21st century. we can only answer the questions if we are together. i think in this berlin statement, we summarized very well what we wanted for europe, and we concluded, and i quote, "the citizens of europe are

fortunately united." we are fortunately united. europe defends freedom, democracy, freedom of the press, all of this is anchored in our freedoms. thanks to the economic successes in unity, and when we read this, we see a human rights democracy, freedom of the press. we can see that in a world of 7 billion people, there are many people who still have to fight for all of this. it doesn't go by self. we shouldn't take it for granted. there are countries in this world, of course, who have huge economies, but they don't have our values. they are far from having our

living standards and our freedoms. europe has the model that is now in a world in complete change. there's a question that we have to ask ourselves. in 1950, just coming out of world war ii, and little by little brought germany back into the community of the world. in the other germany, it was not the same. back then, we were on the planet with 2.5 billion people, 20% of the humans were europeans. last year, we hit 7 billion people in the world, and today, the europeans are only 7% of the world population. even if we are still 20% of the world's gdp, but when we see

each other again 20 years from now, you will see that the numbers will have changed even more. our societies are aging in europe. we are in a rapid demographic change. they are more and more retired people, less and less active people among europeans. what does that mean? it means that if we want to keep our living standards, we have to change our policies. if we want to keep our values in the globalized world, we have to work together and speak with one voice, and we have to convince the others with one voice, so it has to do with our living standards, but also it's all about our values. of course, europe is in the middle of a difficult crisis

right now, and i think we'll only come out of it if we go back to the origins of this crisis. is ce -- if we look at the origins of this crisis, we will see immediately we cannot overcome this crisis overnight. we have a lot of structural problems. we have a lot of debt and some member states. the competitivivity is different from one country to another, and there are lots of problems still in the construction of the common curtesy. three problems that must be solved together. what does it mean? it means that it would be too simple to say, oh, the only problem is the international finance market.

the crisis of 2008, no, that financial crisis revealed our structural weaknesses in europe. shed light on it, and, therefore, for me, this crisis is more of a wakeup call. it's wakeup call that tells me we have to look in the face at our problems, and it's not going to be easy to find a solution, but i'm fully convinced that the only solution is when we all work together, and if we are successful in the new globalization, i think we will, that's what we want; otherwise, we'll not be a successful continent. this means that what we have

already achieved in europe can only be prereceived if we re-- preserved if we renew europe with strength. therefore, we consider this crisis as a chance for us. it's a chance for us to create a stability union, a stable union worthy of the name. the question of finances, very often it's summarized in cut, cut, cut. well, that's too simple. no, it has to do with the fact that we have to live in a sustainable way, and we also have to think about the next generation. if we were not able to have a sustainable system, well, we would be in a very difficult situation that we could never overcome in the future, and the financial markets wonder if we

can come out of this crisis, and therefore, one of the elements is to consolidate our budgets. we can say that we have started, we have started the beginning, if you want. the facts, the treaty's clear we had the stability backed with very clear rules. the problem and the truth is that the rules were never respected. nobody checked them, and therefore, the reality was different from what was on paper. we need solid finances, solid budgets, sustainable budgets among others for a generational justice, but now all of this rules in the stability pack have to be binding, and that's why in this new pack it will be binding. this new treaty, if you want, which was first sought for the

euro zone countries now has been signed by 25 # countries, and, today -- today, this very day, is the 20th anniversary of the treaty, and we have taken an important decision. we have decided to go the right way in our common currency. the rules of the stability packs were neglected, and now we must say in the future there will be applied and respected, and otherwise, we won't have a free and independent economy, but so lidty is one -- solidity is one aspect. in order for that, we have to be competitive, and lack of

competitiveness is linked together. if we are not competitive, we'll have less job, and therefore, our debts will go up. that is to say that budget consolidation and growth must go together. one is the condition for the other. if you look at europe, and if you look at the youth unemployment problem, then we must say one thing. the average youth unemployment is over 20% in europe today. in some countries, it's way over 40%. if you think about the future, imagine where you want to invest your funds, where you want to place your money. i'm thinking about life insurance for instance. are you going to place your money in a country that has very high youth unemployment? that is very profound

demographic change and huge debt? are you going to place your funds in a country that is in a better situation? therefore, i think, it is important here that we be competitive, that we improve our competitiveness so that more people have a job, and so that we can maintain our living standards, so we need structural reforms, and, of course, there's the question of fairness, equity. in germ tie, we -- germany, we had the hearts for reform. it was very tough. change is always difficult, but when i became chancellor, the reform was still fresh. we had 5 million people unemployed in germany. today, we have less than 3 million people unemployed. youth unemployment has been cut in two in the last couple of

years. i think that for people, now especially for the young people, they have a new chance. of course, we can still talk about wages, wage levels, and fairness, but at least we have undergone some profound changes for the better. that's why i'm saying in the e.u., let's learn from countries that have made changes, and nothing's asking too much, even if there are no competentness in europe and see who's done well and see what countries have done well. that's what we thought about in the what's call the euro-plus pack, and a year later, we have reached the point that we were aiming for with most solidarity

and also how much do i invest in research, in innovation, and in 2000, mind you, the heads of states of europe said in 2010, we want to be the continent of innovation. the old promise to invest at least 3% of gdp in research. today, in europe, it goes between 0.7% and 2.3%. of course, nobody did what they said. in germany, we are still far from the 3%, but it is not very good image for competitiveness that we have left in europe. the president of the european council said, and i quote, "we are not facing a choice between community methods and the

methods of the member states. the choice is different. it is between coordination among member states and nothing." these are the discussions we must have today. the economies of the different member states of europe are so tightly interwoven and especially with the single market that political decisions take it in one country always impact all the others, more today than ever. this is true of the whole e.u., and even more for the eurozone. that is to say a european policy will always be domestic policy. we have to understand that. this is different from classical policy. here we always thought, well, you're talking among yourselves, but we do the same thing in our

countries. we are trying to find the best recipe in our countries, but everybody's taking different policies. that is to say we must work closer with each other if we want to strengthen our economic and monetary union. we must always give a piece and part of sovereignty to europe. we've always done it in the past. in germany, there was always difficult in terms of the silent policy, the immigration policy to always accept that we were giving up some of our sovereignty. it's easy for no country, even for germany. especially now that in the european union, we have adopted the majority principle, no country has a veto right anymore. we have given a lot of our sovereignty, but in order for the whole to function, that is

what we have to accept. we have to go step-by-step. we have to understand that little by little giving up our sovereignty to europe is going to be better and better for all of us. it's a question of trust. we have to trust each other in the end. trusting means that, of course, if somebody's in a crisis, is in a difficult position, we all have to help them. the future european stability mechanism is going to see to that so-called esm. also, we have to trust each other and trust that the other is also going to make a big effort for better competitive ness and there's european responsibility that goes together hand-in-hand, and

if we do that, we'll go in the right direction, and i will quote also courage in adversity, that's what schiller said, and it's, of course, as you know, the words the european anthem, courage in the middle of adversity, and europe has had worse problems in the past than the ones we're going through today. all of this for freedom and solidarity. in the old days, we had economic crisis, economic crisis led to lack of trust, to distrust, to isolation, and unfortunately, very often to war. today, fortunately, it's no long to like this. we, european, are much closer together than we ever were. now the basis of all of that is

trust again. germany knows the importance of such a trust. the western allies after world war ii saw to it that germany would be a democratic country. we owe their trusts to what we have become. it's allowed us to start again, to be friends with the rest of europe again. without that, we would not have had the re-unification of germany nor the transatlantic organization. german re-unification and european unity are two sides of the same coin. i spent a lot of many years of my life in the non-free part of germany. i know what happens for all of us. for the generations after world

war ii, it was almost a miracle that we were able to overcome this mountains of hatred and misunderstanding. the european union has made borders less and less important. we have the sing the market and for people your age, it's normal, you've always been in that situation. you've always seen this. it has not always been like that. trust has also made the euro possible, and, of course, we had to trust each other when we widened europe. we had the justification, we accepted new countries, and thousand we are all the -- now we are all the same members of the same history. we are now 28 member states.

we now that the rest of the volcans want to join us. we need the new european perspective, and therefore we know it's important that we all trust each other, that everybody makes an effort so that this trust remains. the berlin statement of 2000, that i mentioned earlier, is still important. we want to transmit to the next generation, this happiness, this luck of being together and being europeans. the european union has always been a very peculiar structure. it's not always understood on the other side of the atlantic, by the way, but it is not a classical image. now we are in a world that is constantly changing. we are part and parcel also to population of this planet keeps

growing. if we want to bring our values to this globalization, we need to have more europe rather than less europe if you want to do that, so we have to give shape to the political union, the euro didn't make it yet, but, of course, not everybody agrees on the shape that europe should have in the future, but we have a commission that functions as a government of europe. we have a strong european parliament which is becoming stronger and stronger throughout the history of europe, with council of heads of state which is the second chamber. we have european court of justice, which is our supreme court. many of you will have to keep on

building this house of europe for us. i can promise you, your generation has a lot of work to do, and for me, it's going to be interesting to have this discussion that we're going to have. what do you think of europe? what are your concerns? what are your expectations? what is your vision? what do you want to add, or do you think that everything functions ideally and well? therefore, it is good that not only i was able to talk to you, but that i also have the possibility to have a discussion with you. thank you for listening. [applause] >> translator:

mrs. chancellor, thank you very much for this very interesting expose. now, it is my job here to be the moderator of the discussion. for me, i think my job is more like to provoke the discussion. i want to widen, what you said, but we have many, many questions coming from our students, and i hope that in the 30 minutes that we have -- >> translator: no, we can talk for a half hour. >> translator: thank you very much. [applause] >> translator: i hope that we're going to have some answers because i know that the young people here have already discussed in groups that

prepared the questions, that prepared the theme, and i think there's a fear among them. they wonder if this europe that we've already built, is it going to last for the rest of their life or not? that's a big question from them. i apologize for my poor german grammar, but i'm hoping that you will see that my very un-british passion for europe is better than any german grammar. i have a question myself, and then immediately after that, i'm going to defer to the students' questions. recently, you have said often, mrs. merkel, if germany fails, europe will fail, but yet at the same time you said the solution

of the crisis is to go towards more europe rather than less europe, more integration -- you mentioned that today -- and i would ask you, you mentioned fiscal union. what do you think exactly when you say "fiscal union"? suspect can what a -- isn't it what a lot of germans say when they mean a transfer union, and can you convince your own citizens to accept a transfer union? >> translator: the fiscal union is not the transfer union. what we mean when we talk about the beginning of a fiscal union is what we've already decided, that is to say stability and growth, in fact; which now is going to be binding, so we talk a lot about reducing the debts,

people want to put that in their constitutions sometimes, but for the first time, the european commission has the right to come and check whether the member states have really translated the stability pack in their legislation. if they have not done it, the european court of justice can sue them. it's the paradox if you want. we have a state and growth pact which is like european legislation if you want. for all the other european legislation, for all the directives, the supreme court, the european court of justice, can sue a country that would not have applied the directives and the country must supply them, but in the lisbon treaty, we said, okay, we're going to do the same with the stability

pact. all the heads of states, and they said, oh, no, no, no, we're not going to do that. it's fairly important because it's hitting our budgets, so we don't want the european court of justice to meddle with that, and we saw that it doesn't work, especially when you have a common currency; then it should be more binding. it's not a question of transfer. it's a question of finding a way to apply what we have already committed ourselves to, and if we don't, we'll be sued. within every country, there are transfers. in germany, you have transfers. >> translator: you asked if it's a transfer union, and i said no. you're asking for transfers within europe and within countries? of course, in every country there's transfers. in germany, we have a history of

60 years old where we compensate the finances from one land to the other. there's a huge discussion right now in germany because a small number of lenders in germany are paying for the vast majority of the lender, but as i said, we have a european community which is not a lender. they are national competencies, and they are competencies that have been given to the community. so in 2005 until 2013, the project is to transfer 350 billion euros within the e.u., so some countries are paying, germany, britain, and a lot of others, and then you are countries that receive in order to bring up their structure to the level of the rest of europe.

of course, we are giving these funds to eastern europe and to spain, greece, portugal, so the question that we have is what happened? the euro's ten years old, we gave a lot of the 350 billion euros. what happened? the difference in competitiveness is worse than it was before, so my question is did we use well this 350 # billion euros? and these funds of the structural fund are not all spent. there is some left, so what should we keep on spending it to build more roads and tunnels? you would be completely convinced it is great because you see lots of nice tunnels on the island and lots of freeways, but what happened? are they more competitive? no, that's not the case.

i think we have to re-think all of this. have we given this compensation fund the right way? >> translator: all right. thank you very much. now i'm going to defer to the students and there are many students from different european countries, from the south, from the east. first question comes from germany. it comes from anna. >> translator: you talked a lot about sustainable policy coordination, coordination of the economy policies, but in the last ten years, and balance got worse between member states, don't you think that maybe we should tell the germans to work a little bit less, to export less and through the coordination to be a little more like the south europeans?

>> translator: so pushing south wards, huh? >> translator: so do you think that we should go more towards the north and more towards the south? no. first, in the stability pact, we talked about the unbalance between member states. the question is when we have the same currency, should we see each country individually? when we all have a single currency, the answer is no. in germany, we have never said, oh, well, the baa -- barvarians have more money. let's do like the people to rebalance the whole thing. no. in germany, people who give the

funds, don't have to be more like the people who receive the funds. i mean that would be a really strange thesis. no. what we have to do, and it's true for the european union, we should not aim for an average so that everybody's the same towards the middle, so perhaps that would please the financial markets because then we could all have euro bonds and common responsibility and the countries would be more like each other, but your living standards would be jeopardized because we would no longer be competitive on the world stage. the fact that we have the living standard that we have is because we are very competitive worldwide, and so we have to pull the others towards us and not try to bring ourselves down towards the average. that's why i talked about best practice, and not about

convergence. we have discussed a lot about that. should we be more competitive or be more like each other? i think we have to look at the best in europe, the average will not be enough to maintain our living standards in the world. if you compared us with the rest of the world. >> translator: second question from poland, young jacob. >> translator: i've gathered all the questions. if you have a question in the back over there, you have to really wave your hands because we don't see you very well. you can make a little airplane and send it to us.

>> translator: i have the impression that the narrative of the founding fathers after world war two no longer applies. people don't understand in europe, especially young people in europe and people who are not members of the elite. >> translator: who? >> the people who are not part of the elites. don't you think we should have a stronger social dimension in the european union? that is to say we could have european unemployment insurance. that would be a new narrative that would be much more understood by the population of europe. >> translator: well, you know, today and in the future, even less, we can no longer base

ourselves only on the roots of europe and mention the foundation because we are in a totally different situation. that's why today i insisted on the fact that for me the justification of europe, besides the historical justification, remains true is that if we want to maintain our living standards, our way of life, our way of life in europe, we have to be more competitive, and because we are together, we are worth more together than individually. of course; we have to defend our interests, especially freedom. europe must defend itself and be itself in the world of 7 billion

people since we're only 500 million. now, you're talking to me about the social dimension. in the lisbon treaty, we have signed on the social market forces. everybody has its own interpretation of what that means. i don't think that the only pillar of europe should be social. i think it can be one of the pillars of yiewmp, but also we need -- europe, but also we need community and research in our development policy. we also must make the same efforts to reduce our national bureaucracyies. we have a lot to create. we have to create a european public, a european space. we don't have that today.

during the european crisis, for instance, everybody talking about countries. we talk about greece. everybody pointing fingers at greece, but when you look at the press in europe, everybody in europe talks about this crisis in a different perspective, and we need a europe with the mobility of workers. it also means that we need transfer possibilities that everybody can have portable pensions, for instance. if you work in five countries, you need to be able to take your pension with you, and also, we have to harmonize the retirement age. in some countries it's 55. in germany, it's 67. we have a lot to do, but it's to say the social dimension is one of the aspects, but it's far from being the only one. what we have to create is, of course, as students you are more

together than our workers, for instance, but we need more of a european public. we have to know that we all belong to the same area, for instance. >> translator: thank you. now i have a question about the relations between germany and the others. what about the image of germany abroad, and a student from france was going to ask the question. >> translator: well, you can speak without a microphone. i can hear you well. you have a good voice. >> translator: many in europe have a positive image of germany with all of the reforms you've already gone through. germany is add -- admired in many countries, but in other places, people resent germany. what can we do? you said earlier we have to learn from each other, but

germany already did its home work, so don't you think that the rest of europe has to catch up? that doesn't give you a very good image. >> translator: well, first, i've talked about a european public. i have noticed the crisis started that now we tend to talk about them, the germans, the french, the spaniards, the greeks, and so on. well, we have germmans who are very active, others that are very lazy. we have germans on the left, germans on the right, germans who like to visit museums like this one, others who don't. it's the same in every country, and the big achievement in europe was that we had stopped saying that. when somebody showed their passport, oh, we knew exactly who. oh, it was a french person, and

others -- i'm completely against that. oh, the germans. the germans, they are federal minded, and the french, oh, the french, everything is in the central. they are centralists. that is exactly what europe should take us away from. we had to overcome all of this, and in greece, they are people who did not always agree with the governments. they have suffered under their governments. it was not always wonderful either, and in germany, not everybody's happy either. it is true. we did our homework. it depends what you are looking at. if you look, for instance, at our budgets, at our capital needs and many other things, our homework is not completely done. when i look at the family policy in france, they have had it for

25 years. they are far more advanced than we are, and in germany, we are still discussing of how are we going to feed the kids at lunch when we all at work? i mean, the french have solved that. we have done a few things; it's true. it was not easy. the germans were not all that pleased with the changes we went through. of course, we have to change a lot of things because of the reunification of germany. we changed a lot of things in eastern germany, and personally for me, coming from east germany, i have the experience that change can be good. change can be beautiful. for most people, they think change means their situation is going to worsen, but i assure you, change can be nice, can be good, can be positive. ask the eastern european countries who joined europe if change is not good.

we brought them freedom, so we have to avoid to saying that one country is already done its home work and the others have to catch up. if you see in germany how long it takes to build mile of road or a new train station, you'll see we're still far from our goal. >> translator: back to poland. you've seen them. >> translator: mrs. chancellor, you talked a lot about trust, and fortunately, a lot of young people have lost their trust in the euro, they have lost their trust in europe. what kind of vision can you give us? are we going to the european dream? what is the vision that you hear about in the european commission? is there one vision? is there -- are there many visions? what can we expect for the future, let's say, ten years

from now? >> translator: you have to build with us to build europe with us. you can always decide what party you're going to vote for. are you going to give your vote to a party that is in favor of the european construction or to another one? i mean, it's up to you. i told you what my vision was. my vision is not the only one. we can dream even more. look at, for instance, defense policy. we have a lot more to do. we have some countries in europe that are not nato members, some are nato members. this always causes problems. for instance, germany's not an easy partner either because in germany, we have a law in the

parliament, and every time you want to send soldiers abroad, you have to pass a new law in the parliament. we are not easy to deal with, and i don't want to create headlines in the press, and make people believe that i want to go run the parliament or cancel that law. that's not what i'm saying, but, i mean, we have a lot of personal problems, but who will have more trust among each other when we all do our homework on the one side and also when we all decide to have more europe. i'm happy to have europe friendly british journalists. i know it doesn't represent the majority on the british isles. we need great britain in the european union. i'm going to say that. europe is always a little more competitive thanks to britain.

britain is always one of the best in the single market, and, of course, they are not always very happy when we ask for more sovereignty to be given to europe, but we're going to work on that. we're going to see how we can find a balance so that it's not always the same who are disappointed, and yet, to go towards more and more integration. >> translator: we are here in this wonderful building, the architect was an englishman, and it would be very nice for europe, we could also find a few british architects, but at this time, there are none. >> translator: well, let's not be too mean, -- great britain is a country that is -- that tykes the single market very seriously

and among others for the service director, you have always been the program. it is not britain that slows europe down, so if we want more innovation, more research, freer trade, for instance, look at the position of europe at the world trade -- at the wto -- britain is always in the right position, so i must say we cannot do without britain, and very often, britain is more pro-european than a lot of other countries. >> translator: i have a question from greece. in the back. >> translator: we are under these greek columns. i hope it's a symbol of so lidty

and solidarity. i have two short questions -- >> -- >> translator: no, one question. >> translator: let's say less than two. [laughter] >> translator: do you believe, really that if greece applies all the measures imposed, we will solve our problems? i'm not representative of the greek people, but i want to represent my generation in greece, and we really don't know what to do. there are many greek people who want to go back it greece, but they can't. the up employment is enormous in greece, especially among young

people. it's so bad. i've tried to see what jobs i could find in greece so that i could go home, so i checked out the greek employment agency, and you know what? i found jobs for germany and for the rest of the world, but none at all for greece. >> translator: yes, i think that right now greece is in a very difficult, very complicate ed situation, which is the result of several reasons. one, the political system in greece and in the past whatever government you had, none of your

governments had reached the transparency that was necessary for the rest of the world to see where greece was at. it's a long tradition. perhaps it's difficult for the greeks to be transparent. it's not their tradition. they were not bothered. they didn't wish, perhaps to be transparent, and all of the sudden, of course, we expect that you show us everything. we want to find out everything. you don't have the structure for it. number two, second reason, the job markets in greece, in some places, is very narrow. there's many professions that are reserved, that are closed. as a normal citizen, you have no access to the jobs. they are granted among people

who have them already. what i regret in part is that the people who already have a job do everything to protect it. we know from experience that only full opening of the job market will bring more chances. we have to work with greece so that one of the objectives among everybody is that the greeks, themselves, open up because if it's a person from the outside, the greeks will resent it, of course, and we have not reached that point yet. we can help, but we will not impose anything. i do not believe that things are

going well for the greek people. the situation is extremely difficult right now for them. in the end, you cannot go without the reforms. you can't avoid them. there's no other way. i hope that together we'll have a nice future. we do not want particularly to make life more difficult for people. we have no interest in that. we are not interested in making your life hard. we have to come to a point where with european help and the few changes we come to a situation where greeks can live on its own, and that greece has a lot more chances than today. >> translator: if greece were to decide to step out of the

euro, would that be a disaster? >> translator: greece, as far as i know, have not left the euro, don't want to leave the euro, and therefore, the question does not exist. >> translator: anyway -- >> translator: i can't give you a political answer because it's not in the order of the day. as i said, the euro is not an economic project. it's a political project. i'd never do anything to push greece out of the euro. that would have unexpected consequences.

that makes politics today

legitimate. >> yes, in the lisbon treaty there's the possibility of sending petitions to europe you could create a mass movement give an idea and give it to the european parliament if you have enough signatures in my party and you say that perhaps we should have direct election of the commission president so that it would be more identified with the voters but i think we have a much simpler task. the european parliament has become extremely powerful, but the mps in europe do not realize how powerful they are they do not feel powerful. it's interesting to watch. the imet in the party in europe would present a totally different positions than the

positions of the defending their home parliament. and the american president said what happens in the european parliament because they take decisions that are completely different from the decisions taken by the german parliament or the french parliament. and for instance in germany we have very tight links between the parliament of the lender and the federal parliament, they defend the same position. for instance in my party all the representatives of my party or engage and assuming the lender but it's not the case in the european parliament. that's why there is no identification between the members of the parliament of the european parliament and the voters. i go to the european council a

lot so i know what's going on in europe. but the parliamentarians in germany goes back to the constituency and is less aware of the european level. and so i think we should have much tighter links between the european parliament and the national parliament. we already have meetings of the speakers of the different parliament but we should go much deeper. we should go much wider in to them. but you will see there are huge differences between parliaments. in germany you have to go through the houses in order to do something like this. in france it goes much faster. he would hit a lot of restrictions, but i think we have to overcome this space deficit, and it's true maybe ngo's could do something to try to bridge the gap.

>> thank you very, very much. you have been very generous with your time, especially at the moment where i know you work 24 hours a day. that's not true, that's not true. no. thank you very much. it was really grateful. all of us. we would have liked to speak for two more hours to devotees happy to have hurt you. thank you. [applause]

when i started the book and thought this must be an american story. this is about a country that worships the religion of self-reliance and individualism. this is the legacy of emmerson, but it turns out that we are laggers when it comes to living alone and it is much more common in the european nation especially scandinavia and it's even more common in japan.

british minister of parliament alistair is undersecretary of state for the middle east and south asia. he recently spoke about the british perspective on the air of a democracy movement and energy security. his speech at the world affairs council is 45 minutes. [applause]

>> good afternoon. thank you for the warm welcome. it's a great pleasure to be here. mauney connection goes way back. and 1964i was nine years of age and beginning to get consciousness of what politics was all about. some of you may remember as a communications satellite telstar was the first method we have receiving live pictures from each other across the atlantic. and 1964 some of you gentlemen will remember, none of you ladies in the remarks course are old enough to remember 1964 but some of you gentlemen may remember it was a presidential year so they are the conventions in full swing so for a small boy in england watching the live woodring pictures where there are balloons and hats and

streamers and grown-ups beating badly. and nobody minding this looked to me like a career path. [laughter] so america, thank you for that. my next connection with the united states was when i was a oxford i get the chance to come over to the u.s. as the counselor and i went to coach soccer at the camp at the ways of in the berkshires where i'd understand they all go and american youth none of which is repeatable but they gave me the opportunity afterwards to do some traveling and sample for the first time the extraordinary hospitality and generosity of american people where their families would make us incredibly welcome to go well and see a little bit of our

country which is wonderful for the warmth and kindness of that. perhaps my third connection most relevant here is i'm scott. my understand there are a lot of scholars here. we will talk about your views on independence leader. and of course the central connection through the alamo sam houston was a student of robie brooks and knew his work well and was able to quote them famously. scotts way to those who were defending. who would be the treatise naim, who would fill the grave based to be a sleeve and it's all about people not turning free

and people stuck together in many places all over the world. thank you very much for giving the opportunity to speak to you and i look forward to your questions. i have the responsibilities for a few bits of the world beyond texas in the country to bangladesh, and the way i characterize them you know it is not africa or south asia or afghanistan, iran, iraq, 27 countries 11 have some form of a minor trouble and i am being generous with one or two, one is thinking and you can never quite trust the canadians. [laughter]

and again the point is stability in my life so thank you for all that. i'm told the cities to energy as london is to finance, and i am very pleased to be here at the behalf of the global energy industry. my thanks to the world affairs council for their efforts in pulling this together and to all of you for taking the time to get here. this is a busy year to the united kingdom in the world. we give her majesty the queen's jubilee in june and then in july the allies of the world will turn to london for the olympics and the paralympics games. it's been a huge and challenging task to get ready for the greatest show on earth and put on the most sustainable olympics ever. the u.k. project management strength to be coming in ahead of time and on budget, i'm not sure whose budget but it's on budget is yet another reason why the u.k. is a place where you really can get business done. 2012 is also an important year for the united kingdom in texas

it we will commemorate the 170th year of the united kingdom representation in texas. the first consul general and my colleague following now captain charles eliot arrived in galveston in 1842 and this accreditation was not to the united states but to the republic of texas. so, watch out for agents commemorating the anniversary throughout the year. i am here today to talk about a different part of the world, the middle east and north africa, they've seen me from one momentous change. it's well represented and encourage a positive outcome in the region. today i like to share the government perspective and hopes on the impact of this movement to the energy security. that eruption of democracy movements across the middle east

and north africa is even in these early stages the most important political development of the 21st century. with potential long-term consequences greater than the global financial crisis in 2008 and historic change which at its core is about people demanding their rights. a year ago to this very day the crowds were gathering the eighth consecutive day in the square. over 100,000 protesters their bravery and their beliefs and space rights as a date around the world. ten days later president mubarak announced he was moving to chicago. but his act would become a defining moment. the naked optimism in the west reflected in the air with that of the art of spring has been ebbing. commentators suggest the spurring has moved into winter a phenomena not uncommon in the british isles. as far as we are concerned

playing with the season is a bit of an analysis. it is more and not and the worst tyrants to be toppled the citizens could demand that the democratic social they could take their destiny sent their own hands, all familiar. it isn't an w. leading treatise adjusts both opportunities and challenges and understanding these is the key to your understanding this outcome. since the account, violence has repeatedly cut the headlines. as people demanded the right, the regime retaliated sparking the symbol war. in egypt the expectations of the political reform led to violence in the square. attempts by the syrians to plan their legitimate political rights have led to some five balls and deaths. commentators point to these and argue the powerful release will

never relinquish the power while the robbers make change, systems with centralist power structures will always be autocratic. across the region the fear has been demolished. people know that together they can have the right to control how they are governed and by whom. by the first time in the 1950's larocco conduct of elections on the renewed constitution. egypt is in the process of the freely and fairly electing government so that so far has been under mubarak's regime. after the dictatorship libya has the new government in jordan and yemen. the ambassador speaking to me the authority in london said there are four key things that he took out of the arab spring. the first is the arab

exceptional was on the sense that somehow people in the arab world did not look for what we will looking for the chance to control their own destiny. that is being squashed. second, islam is not compatible for the democracy and whether we have had elections appear to be so. third, the sense is important all of us that the connection between the west and the arab goal wasn't simply based on our interest, the commercial interest but was not last based on values. and the big loser in all this has been the advocates of the violent terrorist ideology al qaeda has played no part in the revolution people have inspired themselves. they haven't been a winner after the with this and in fact they have seen movements turned back in this respect is very important for all of us. politics cannot be seen in isolation from the wider trends

while the awakening was largely political and triggered by economic realities and the corruption and adequate public services. the economic challenges continue to play out across the region. quite rightly improve their economic prospects. regardless of political reform, countries in the region will still face the challenges growing, well-educated, populations with high aspirations and the job prospects social unrest could continue. some in the region rely on the natural resources making the currency on competitiveness and competitive limited. the fundamentals in the mog rebel are particularly weak but even with political change, changing economic trajectories can be the slow process.

the young and growing populations have the potential to try the economic growth and can immunize against the problems of the aging populations. and with the load factor productivity to a large extent caused by the investment decisions to the policies there's real potential for growth for the distortions, trade barriers and lamarca of regulations reduced on privatization has given a push. the wheel and gas sectors will undoubtedly play a major part in this economic reconstruction in the region. the but the stench north africa account for almost 6% of the global oil reserve and there are 40 per cent of the gas reserves. this wealth properly invested to drive the the economic rejuvenation across the region can match the region. but we must also look to the white picture. a global trend is and energy consumption cannot be ignored and the middle east as a vital role to play ensuring the stable and secure supply of energy to the world market. the recent figures predict unchecked global demand for energy will reach over

17 billion tons of oil by 2030 and increase some 40% of the current production. meeting this demand while simultaneously tackling the challenges of the climate change is one of the great tests of our time that we need a stable and affordable energy supply is beyond question to how we achieve it is the key. the middle east has always played a leading role in leading the global energy demand and this isn't going to change. the traditional heiberg carbon has increased in countries like iraq and libya in the region. the oil and gas sectors should be the lifeblood that drives economic regeneration not only within their borders after 70 years of oppression, but across the global economy. the industry as a whole is transforming rapidly and profoundly. technological innovation is creating new opportunities and unconventional hydrocarbon and other resources. the rejuvenation of the

reduction in the u.s. for your investment in the technology has transformed the global energy output. similar developments and renewable by wind, solar and biofuel and the global energy mix traditional hydrocarbon will continue to be important but the supply will become more diffuse and demand will move away from historic hubs in europe and the u.s.. so the world is at a turning point. the political reform a sweeping the nation. the economic certainty of energy will four in flux. western countries need to recognize how their relationship with the middle east and north africa is changing and measuring. new energy sources develop and the demand for the east increases energy will be based less on the one side of oil and the economic trade and exchanges. as of the awakening has many new uncertainties but it doesn't mean we can overlook the old challenges.

it seems to have had an impact on iran. it's regime continues to oppress its people and isolate the country from an increasingly globalized. they defied six evin security council does solutions that call on the regime to suspend its uranium enrichment program and entered into the initiation carry the reza decision to enrich uranium to 20% is an underground site that demonstrates the urgent need to intensify the diplomatic pressure to return to the negotiations. the necessity of the collective global response is clear in the united states and the european union it is implementing further sanctions. the e.u. brought into force last week a comprehensive oleum and the central bank of iran measured against the petrochemical sector and the ban on the transactions involving gold. the aim is to bring the guerini inspected the negotiation table and urgent and pressing needs. no future can be complete

without considering might be ahead for the middle east peace process. let me say up front we cannot have the luxury of 20 years for the israeli-palestinian conflict. on my visit to the palestinian territory just two weeks ago i thought to myself the pace of the settlement construction which would soon land in the impression that remained to the establishment of the palestinian state. unless both sides can agree on a peaceful settlement that guarantees the security of the israelis and sovereignty of the palestinians and israel will be faced with a series of an appealing choice is. a one state solution that preserves the space nature the distress of the central character of a once did solution that preserves the jewish nature of israel for its space credentials. neither of these options would threaten the security of the israelis and as friends of the middle east and particularly of israel we need to say this on queerly now is the time to resolve the issue. during the period of change

israel had the opportunity to redefine its relationship in the region. the two-stage solution is not just the guarantor and the foundations for the normalization of relations with its neighbors which can help facilitate the regional trade and prosperity. this kind of agreement recounts courage, kind kurdish simplified by sadat. finally, i don't think i can or should address the audience by saying little on the bilateral relationship between the two countries. first the united states is the most important ally. our relationship is rooted in history but it is as strong today in the 21st century as it has ever been. the scope of the cooperation of a globalized world is fast from combating violent extremism to address in the address and conflict from promoting human rights to supporting development and economic growth in the poorest countries from advocating free trade to campaign for global energy and climate security the united kingdom and the united states

shared priorities. there is no better example of the parts are shipped in britain and the united states than in afghanistan where we both result to stand shoulder to shoulder with our parties to help afghanistan become a stable and secure state able to control its own national security and for that to protect hours. only second to the u.s. british deutsch on the ground and we've taken the lead and helmand one of afghanistan is most difficult promises and i've seen for myself a remarkable work being done by the british and american soldiers and by their civilian counterparts. i salute the extraordinary bravery of the forces seeking to create a better afghanistan. so in conclusion it has drawn some conclusions at this stage but there are many questions remain. we cannot be certain of how the situation will unfold in each country and each country is indeed different. the concept to the arab world has to get a that a change and

maybe it's less united than we thought. all these countries are different and have responded differently. there are signs however the problem is positive. what we can be certain of is how the united kingdom and the united states and the energy sector can play a part in supporting the positive outcome that we could to see. as a parting and embedding the institutions that we would expect to see in the flourishing democracy come strong civil society and the minorities, robust plans for growth and prosperity, employment opportunities and human rights. these will help the countries in the region get back on their feet and to travel in a new direction. we face many challenges together in the past. we face new challenges. one thing that is constant and remains is the relationship between us, the understanding that we face in the world from a similar point of view i suspect will always be there. this is a new chapter to us. many of you will have experiences in the region might spoken about.

in the next few moments when we have the question and answer session and please don't be afraid to share the insights. ministers and politicians, we haven't spent a lifetime in these areas. some of you would have spent many years there and refresh me give me the benefits of your insight and at least one british minister will return from the united states better informed of not wiser. thank you very much. [applause] no pictures, please. [laughter] >> we do have time and will take some questions so we have our usual pads of paper on the tables. islamic and there is a good lawyer in the house. [laughter] its whiplash isn't it? >> as a favor i will handle both sides of the case for you and

will make it much more efficient at what point xm mengin sanctions and do you believe there's a point at which the world has to give up on sanctions in iran and consider the action for the military and otherwise against the country? >> well both the united states and the united kingdom have said no option is off the table so let's be clear that preference has got to be for the sanctions to work in negotiations to be successful. iran, the regime has got to turn back from where it is. what are the other alternatives? one is that iran becomes nuclear capable. the rest of the proliferation in the gulf, one of the most volatile areas of the world would be a mess and the number of countries have already said they would have to follow suit.

so the nuclear nonproliferation treaty of the sixties which has been one of the world's most successful international treaties has kept the nuclear nonproliferation to effectively a minimum would be destroyed overnight and we would be the poor so the nuclear capable of iran is a worrying prospect. the strike on the facilities would be clear it wouldn't just be a strike it would be a prolonged period of activity in order to destroy the facilities and the end of only delaying rather than fully destroying. the consequences are equally incalculable. iran will retaliate in some way. iran may find itself put on the right side of the argument instead of the wrong one so the consequences of that are incalculable. accordingly, after the alternative, the best one is to pursue the negotiations in the road and that is what the world powers are genuinely doing. we are not doing this and carry him on something covert in the background. we are very determined.

it's a difficult thing. iran doesn't have a monolithic leadership. there is a tension and split between hammami and mahmoud ahmadinejad. we faced the scenery as devaluation having a run on them and people are buying gold, the banks are not honoring their commitment, so it is tough. we have close contact with people and don't mistake the regime for the people. they are happy, they are interested in the world. they know what's going on. i described them as a people held hostage by their government and with no argument with the people, so we hope the pressure works. it's a point after which something is a concentrated that may have been but it isn't the wish of the space government who are engaged with iran and continue those made by all of us including china and russia to give iran. so we will see.

>> of these have the questions are about iran but i will ask one more related question. you see any possible become a reasonable possibility of an iranian spurring? >> being frank, it would be nice. but the cruelty with which the regime put down the revolution after the elections of a few years ago was intense. this is a regime with one of the worst human rights records in the world. this is a place that executes more people than china. they've kept a very, very brutal control of their people. you see some of the pictures from last year those who were executed standing on a bus and the bus was driven away and they were left dangling from the bridge. this is a country that has the regime that keeps a grip on its

people incredibly tight. now and syria it wasn't much of an opposition movement until things got going in libya there wasn't much of an opposition in the movement, so you don't know, but ultimately of course the best solutions must be homegrown so we will wait and see the opposition has been repressed in iran and we will hope something will change the situation. >> several questions regarding the other countries the easiest way to consolidate them is to ask if you might compare and contrast your view about tunisia, libya and egypt and how they differ where they are after the arab spurring. >> and no particular area i did a program on television this time last week about the arab

spurring and we didn't mention to nisha of wants which i thought was telling at how far the come first in the field and we didn't talk about it because we concentrated on egypt and libya and syria. to nisha, it is a structured country, they've had their elections, there's a minority in the government's and the after party that has the coalition with a number of partners. i saw the minister for education a couple of weeks ago and he was from a secular party that was in collision and the news there is what they had campaigned on which is domestic stuff about the economy. they were seeking to deliver the secular party had no problem with the coalition and so far, so good. but the basis structure is

something to work on in terms of their capacity in the government and at present they are doing the right things. we are engaged with them and have a partnership of bilateral support and international solutions are supporting. all these countries are not because of what happened. tourism for instance is important to these countries and that's got to be rebuilt. so far it has started its new life well. egypt is slightly different. it's much more important. bigger, much more of a regional player through history in the influence is the key to the future. there's been much more context. the removal of the president by citizen power produced the situation which the military held the wind for the forces and crucially choosing not to fire people with the military have an

interest in the governance and eject. the rulers of egypt of course have come from the military. the of privileges, the of the close connection with the economy which is another of the books. they are conflicted with how to move forward. so wanting to work to the civilian government the have their own privileges to consider and this is producing some tension that there's been an election process. it's been long and drawn-out but it's ended up better than some critics imagined. the number of people voting was high and second reading is the result of the will of the population, and the muslim brotherhood party, the freedom and justice when the majority of votes about 46% of the vote. the surprise was to the more extreme muslim ideologues to

about 23% of the vote. now the muslim brotherhood looking not to go in alliance with them but again looking towards the center they campaigned on the economics, they campaigned on the social rights for people and other things you need to get the economy going, health, welfare issues and so they did not campaign on the extremist ideological platform. it remains to be seen how they can put that into practice. their economy has taken a bigger hit but the civilian government has been much more open to the imf and others coming in to offer advice. study egyptians understand the sovereignty and one of the keys to all of this has been locally led the city don't want to be told what to do. they want to work with others on the inclusion but that the present it's perhaps a little bit better than it looks a couple of months ago but it's still difficult.

there are the forces who have seen taking violence in the square and there is a clash. we worry that the integrity of the nation and the christians many of you in the room will be aware of have been protected under the old regime under more oppression now stood shoulder to shoulder with people during the revolution and now feel under pressure again from extreme elements, not from the population that from extreme elements. very important to all of us that those rights are reserved, so egypt and in the balance, but the impression is good and we have yet to see the new government. lydia, a different situation again emphasizing how different they are. there is the capacity of the government extremely low. this hasn't been a functioning government. this is been a dictator's rule and some of the department's i was told by one of them you don't know who is on the other end. you have to get things done there used making decisions

themselves and running the state for the capacity is low that means they can't get a grip of the issue of the militias that are running different things in different places and bring them all together under the central command. the force and create a revolution must be young people want to see that their interests are represented by the political class or older so there are internal struggles going on but they are working very hard and involved in capacity building but they are further behind in the process. they are talking about elections and constitution hoping to have the elections by june which will be very bold if they can do it. the intent is good. they are working very hard and again the capacity is low. they are all welcome. the expectation should be realistic. they will go through. our democracy did not bring up overnight. it took time and i think we have to be a bit patient and realistic with with a seven in these countries.

>> last turn to another area at this time if you will. if you could tell us what the government's position is with regard to syria and how you see things playing out and were there any fundamental differences with your understanding of the u.s. position and how those aligned. >> in the past 18 months i've been in office i have to say the closest relationship by far ahead with your colleagues in the state department you have some exceptional public servants. my foreign secretary understandably deals with the secretary of state the assistant secretary of state public bill burns, grossman, blank who cover the areas like cover have been great partners. there are one or two differences i think that not many. essentially we see the world and a very similar way and we are looking for the same things and they've been great partners. in syria we are absolutely

identical. many of you will be aware that a big united nations security council meeting the importance of syria was emphasized by the fact that they still are having a permanent ambassadors of the security council table. we set our foreign minister, use and mrs. clinton, we showed how important this was to all of us, senior people with a drive and a genuine debate. we are seeking to back the arab league hasn't been conflicted for some time over syria in a way that wasn't in relation to libya has been forcing the pace recently sending the calling for the transition of the government but do not underestimate how significant this is for the first time breaking with the other singing you are doing things here that our kinship will support. so it's the values that are at stake are actually more important than that. this is a profound turning point for the world.

another turning point is we are getting behind this not leading it, we are getting behind it. this is their revolution. the last thing they want is to be characterized to doing the bidding of the best which is what the russians are trying to make of all of this. they are conflicted. a long relationship with syria and the commercial and political terms they know what is going on is wrong and doing what they can behind the scenes that they can't quite bring themselves the support of the resolutions so what is happening yesterday and today to try to get the resolution. it's got to be syrian lead at the end of the day. this isn't capable of the solution like libya no western intervention deutsch on the ground. if anything it's got to be arab inspired. the syrian opposition comes together in a way in which they haven't done come supports what the league is proposing by the transition and dialogue but the united states has agreed this cannot be done through the

president who's lost his legitimacy and he must go so we do see the power was are working together with the lady and others to try to produce the solution. >> it's a tragedy and i'm afraid it will get worse before it gets better. >> staying in the general geographic area we have a few questions interestingly. i guess that is to say can you comment on the distinct and in some ways the situation having al jazeera come having our u.s. military alliance and not taking a different course in the least? >> they are the surprise jack in the box and all of this. this is a little country punching way above its waste in international terms from sudan

and afghanistan providing the address for the taliban to their engagement in libya supporting the elements militarily as well as diplomatically and the strong engagement if you saw the remarks of the foreign minister yesterday you would see how strong they feel about this and other opinion. our sense is that they are looking to be noticed. they are a small state. they've got strong opinions, and our sense at the moment is that they've seen an opportunity for the world to do better and to be decisive. the intervention in libya they told us was because they wanted it to work. they were not prepared to see things drift onto the support of people on the ground they thought could get things done

and they had the ability to do that in a way in which perhaps we didn't so they got things done. their engagement of around the region is very powerful. they are emerging, they want to be a player and the way in which they are promoting themselves is being a force for good in these different places. al jazeera as much as people were commenting this time last year as a facebook revolution, the social network revolution that the people around the world are able to talk to themselves and get people out on the street all of that was true probably it was marty al jazeera. ten years now al jazeera has been talking to the arab leaders dealing with the news broadcasts in a way that the world hadn't known. something much more than we are all jews to, the serious questioning and the criticism. a world away from the state television many of these

countries have and al jazeera have the ability to what is the great matter i'm not taking it anymore or whatever may be. it is basic and it is in doha so that is the connection. interestingly, we talk regularly so far it is a push for the good and we will watch and see how this develops but all these things are so new no one is quite sure qatar intervention has been in a number of different areas and positive and helpful. >> turning to another country that plays a role in the area have they played a constructive role in your opinion or the government's opinion, and what other things would you like to

see them do? what more can they do to make things better? >> probably the most effective and well expanded foreign policy in the recent times, the turks took up the world around them and maybe they felt a bit robust. i'm sure you are all aware the have applied for the membership of the european union and the european union as conflict on this. the united kingdom supports the membership of turkey not supported by some of the other players. the negotiations have been pending for a long time. there is the sense that some in the turkish government said okay if they don't want us to its meager when a different direction and they set out a very strong start. they look back at the past where they were a significant influence in the region and think we come out to do this again and they've made their presence felt. the very able foreign minister pervvijze very good and very clear, honest and direct and

they've been a profound influence for the good in this work. they have a different relationship to iran than we do and maybe that isn't a bad thing. there's a door open and that's so important in all this business people don't necessarily see themselves boxed in and they are working for the good and working a slightly different way. they were very much a part of the contact group on the work that's done their. they are the center for international conferences. i've been to a stumble five times in the last year. i've been to this city wants. you go to the hotel, you go to the palace where they have these wonderful conferences and then they packed into a car back to the airport and you go back home. it's one of the biggest tragedies of my work. [laughter] we got one afternoon off which is just wonderful.

but again they are key players that then come here and talk. one thing i would like them to do to reestablish the relationship with israel. the break with israel is very serious. israel could do with turkey backed as an ally and as a friend a difficult state of affairs between them because of the incident over and he rego and would be good if it finally back to each other and we are encouraging both to try to do that. >> turkey is a member of nato. the u.s. has announced some potential reductions or consolations of troops throughout europe and other areas. can you give us some views on where nato is going and where the relationship from the military stands on the basis and impact the scene from the u.k.? >> one of the easiest thing is i get to do is not comment on other policies. because that way lies in

trouble. so i won't make any direct comment on your defense budget which is very much you're own affair. it also enables me to avoid questions about the primaries. [laughter] as the current entertainment on your television screen. otherwise the consular general will haul me off and i would be in deep trouble. nato as strong and came this year i think well in terms of its ability to act a net libya and the clear direction. we've turned a bit of a corner from some of the difficulties over iraq and again i don't want to go into that too deeply but i think the audience will be well aware that the conflict and the questions over iraq and engagement in iraq have not been raised in relation to libya because the u.n. direction was clear, the arab league position was clear and the actions taken by the collisions were very precise. the truth is in a situation like this there's only three

countries that can actually deliver, the united states, france and great britain. the of the air force is capable of defending the civilian populations in a manner that we saw in libya, and the work they did together was terrific. so the work is -- that's been a good year. it is the essential we all maintain sufficient force to be doubled to do the job that we need to do. and that is a matter that the defense chiefs discussed between themselves. i don't envision a world without that american power. i think there's a book coming out later this month by robert on america's strength so to say looking at america's responsibility in the world, the counterpoint that maybe america's strength wasn't as it was and he is looking at a slightly different perspective to river think that is one that we did instinctively share. the world doesn't have america as a cornerstone and is taking a

terrible risk and we see when you do and how you handle late in being able to support the values and partnership helps to do that and nato has proven its way and i am no expert on nato but it is again a fundamental part of the jigsaw that we believe helps to keep the world safe and perhaps give an opportunity for those who were taking their own regions in the direction they want to do to feel that they have some support for doing that. >> we are going to meet with some of our students immediately after this, but -- >> i don't know if it's true but i did have one question, a quick one and you know more about this please comment on president obama's returning bobos to churchill.

[laughter] >> the author of the question -- >> i think i'm aware of the story. >> the beginning of the presidency i don't know. if it is unwise to talk about you are way ahead of me. >> let me rephrase the question. what are we getting back in return? [laughter] >> all right. that's good. thank you. [applause] let me in pos on you for one more thing. i suspect you have a message for them you may be hoping to impart some of the members to the community. those of us like to think for ourselves as a youngster can you share that kind of message with us what would you like us to take away as great friends of

the u.k. that are important to know at this time? >> i just think the sense of go for it to really spend most of this year in a part of the world where the aspirations that we take for granted for our children in terms of education and job prospects, their ability to control their own destiny and to have a say in the governments of their country has been denied them and in a place where it was rumored that no one really cared about it and they didn't care about it and their must have been several generations that have been through those areas in despair. if you look at the ratings if the people in those areas characterized by the world that sees particular examples that don't relate to their experience of life and say that is with that bottle was like. that's who those people are paid

that's the muslim communities like when the reality is different. and by their own efforts, they've got themselves to the position where the world is seeing them differently and they have a new opportunity. it's not over yet, but they've got something and it is all because people just didn't do it could did come said we can do this. i would say this in to any youngster i come across. we are engaged and in the political representation is a good thing. politics isn't the easiest. we have our view of politics and politicians but somebody's got to do it. and the youngsters are interested in being engaged in political life, the decision that comes through being a representative, just do it. they are interested in being engaged in the wider world away from the united states looking at the responsibilities and their shared challenges involved with people of other countries, just do it and as they think i don't know anything about this

my dad is and in politics and my dad -- my mom doesn't do this. i've got no -- it's not for the likes of me, just doing. that's what i would say and i suspect most of you in this room achieve things because you have just done it. it's not about slogan. let's keep it. [applause] [inaudible conversations]

[inaudible conversations] [inaudible conversations]

in his testimony on capitol hill today, federal reserve chairman ben bernanke urged senators to resolve differences over people tax cuts. the senate budget committee hearing is just over two hours. ..

the. >> hot

>> i hope the chairman feels better and we value his leadership with this committee as i know you do. good morning chairman bernanke i am eager to hear your thoughts about our financial situation. the cbo outlook confirms the deficit will top $1 trillion for the fourth consecutive year. we have never seen anything like that. in just three years we have accumulated almost $5 trillion of debt during which time the total number of americans working has decreased by a 2 million people fewer people are working today than 11 years ago actual working americans is down that goes across the

administration of both parties. the deficit we face in the out years over the next decade is more relentless and systemic. federal spending in real dollars has increased 53% in 10 years wrote while real wages of americans have declined. the government is getting bigger the middle class is getting smaller. the problem i have or the concern i wrestling with this even the financial experts are often wrong as to the danger facing the american people and the economy. but yet to some say we should delay reforms and for example, the secretary of the treasury at the fed reserve meeting this seems to indicate we cannot always

be sure those positions of leadership see the problem clearly. 2006 as america verged on a massive meltdown to tell the colleagues that we don't see troubling signs of collateral damage and we're not expecting much" . then looking at the fundamentals of the san chin going forward look good. therefrom the bay was more enthusiastic and the the situation in new handoff is a lot like dead tennis racket with a gigantic weak spot" . i also recall 2001 chairman

greenspan testified before this committee beaver looking at more than a decade of surplus for what we voodoo have to repay down the debt? what do we do with their surplus at that time? we're not always a good as predicting the future as we would like to be. but they were wrong. and the you were wrong also. it tells me that more borrowing and debt will make this week your comment at stronger as the last financial crisis proves the future is hard to predict but while we cannot predict where the debt crisis would be wrapped what might said enough we know we're on a collision course with

reality. the laundry way to change the course to develop a plan for a future they graver the danger becomes. but then he says a democratic senate will decline to offer a budget resolution for the third straight year. i am glad chairman konrad has said he will have the committee but it it is a doomed exercise if the majority leader decrease the budget process is shutdown. and to declare of budget is dead on arrival. to be, if we don't have a different approach from the

fundamental requirement basically asks if the leadership should be taken from them. producing a good budget on money will be a defining test they will rise to the occasion and again shirk his duties do accelerate the debt course the choice is his stand their president at this time will not lay out a serious budget plan for a future to get us off of the unsustainable debt path come up path of declined and did that even mentioned this in his third state of the union address, the dangers of said that. chairman of the joint chief admiral mullen calls the greatest threat to our national security.

with the lack of leadership real change will not occur cahal without leadership from the president and he has not led by the tax those who has led zero have tried to. we must look at his budget at this late date will change the unsustainable that chorus based on history i am not optimistic. year in a difficult challenge. we have a number of difficult problems and i am hopeful the president's budget would do what it could do to lay out a sound course for the future. it has not yet but i hope he will this year although i am not confident. thank you for letting me share the remarks.

chairman bernanke we value your opinion and you could help us to work our way through the most dangerous systemic that challenge the nation has ever faced. thank you. >> think you senator sessions. i am optimistic. you said you are not. i am for about about the lab president? >> that is different. said i am not optimistic view buyout plan to get us out of the unsustainable debt course. >> i am optimistic. of the president's budget will come out and will reflect the overall optimism that is rising in the country with regard to the economy. is all summed up in this chart.

this is a private sector jobs. you can see for about a year and a half there were massive job losses in the private sector in each of the months and of course, is only starts january 2009 you could take a back even further into 2008 when but prices started. this tells us and through march 2010 the jobs picture to radically change. and there is the trendline 257,000 in the past month on job increase is. to me that shows a trend

that did is reflecting the optimism that starts to bubble up across america. this year chairmen bernanke, your job has been tough over the last few years with the consumer confidence and has been shaken in the events threaten to the real our economy and of course, the partisan victory we have seen on the national stage from time to time and i truly believe when the history of this period it is written, and that you will be remembered as a critical figure because to help the complete collapse of our financial system and for that we are e enormously

grateful. we continue to have major fiscal challenges facing the country with the long-term budget crisis brought on from the racing cost of health care and outdated tax system and years of political expedience. and s slow recovery as the chart indicates from the 2008 financial crisis that if it was not floor by the way the bipartisan cooperation, after september 2008 to when we went into a financial death spiral andy co-operation to of the outgoing republican administration with the

incoming democratic administration, the two of them working together to reverse that death spiral. cbo reports last week some new light on the long term with the budget challenge with their estimates if we continue on a current path without letting loss come into effect gross federal debt expected to reach 100 3% of gdp than rising at 120% of gdp by a 20s 22. as farha the economy we have come along way from the deaths of 2008/2009 and the recovery has shown the science of the upward trend of strengthening but it is a

long and difficult road. this is a frustratingly slow pace of the recovery and the economists have testified they found recession's caused by are accompanied by a severe crisis like we have had in in particular in the housing sector came to last longer with a greater amount of recovery efforts. not only the chart has shown the positive signs but we also see the unemployment rate coming down, 10 consecutive quarters of real gdp growth, consumer confidence shows signs of

improved -- improvement u.s. auto manufacturers return to profitability and state revenues show signs of improvement. it is amazing how two-minute commercial doing it -- during the super bowl can generate such political controversy when in fact, to the celebrating the fact the recovery of detroit and the auto manufacturers. so in all of these signs we cannot become complacent. there is a serious risk. unemployment remains too high and housing continues to pose with red and time after time they have only been partially successful at best.

of the sleeve the political deadlock many of us have tried to break to come together with the bipartisan approach. what a lot of us urge the super committee to do in by the way, as senator sessions there was a budget act that was in the budget control act that set the course 10 years of caps to have a discipline process that was this two per committee budget it was there. the imbalance of budget cuts that could be a drag on this economy and then of course, the situation of the metal used could result in the us disruption of will supply. the european dead and fiscal

crisis. all of these elements are uncertain elements to disrupt the recovery. two of the most important steps we could take too short of the recovery is the tax cut in the unemployment benefits for the remainder of the year than locally

economic activity appears to be slow him apart from the spill over from financial developments in europe. the combination of high debt bubbles and growth prospects appear pink countries has raise significant concerns leading to substantial increases the borrowing costs about the health of the european banks and associated reductions of the availability of credit in the euro area. resolving these problems requires concerted action on the part of european authorities and they're working hard to address challenges nonetheless the developments of europe could unfold favorably to worsen the economic prospects at

home. we are in frequent contact and we will continue to monitor closely to take every available s death in our economy. let me turn to and from setian as the anticipated moderated considerably over 2011 the first half of a surge pass these nine have pushed inflation higher. around the same time supply disruptions associated put upward pressure on vehicle prices. as expected two these faded in the second half of the year leading inflation to decline from the annual rate 3.5% to about 1.5% in the second half close to the average of the preceding two years and in the environment

of well they occurred expectations we expect inflation to remain subdued. against the backdrop -- backdrop fomc holds a stance on the monetary policy and they decided to continue the program with the average to charity to maintain the existing policy with the portfolio securities and to keep the target range it now anticipates economic conditions are more obtain federal funds rate through 2014. as part of the ongoing effort to increase the effort of monetary policy following the january meeting fomc releases a statement intended to provide greater clarity of the long term goals of policy strategy.

the firm can and it to pursue the congressional mandate to foster a stable prices. to clarify how it seeks to achieve the objectives it has a collective view that inflation at the rate of 2 percent measured by the annual change of the price index is most consistent over the long run with the statutory mandate. indicating this sentral tendency is between 5.two and 6% the statement noted this session tory objectives are complementary but when they are not they will take a balanced approach in return to the desired levels of play to briefly discuss the fiscal challenges facing your committee and the country the federal budget deficit widened 23 chevy

averaging 9% of gdp this increase has mostly reflected the revenues and spending as well as those fiscal actions taken as the economy continues to expand and policies are phased out of bet deficit should narrow. unfortunately even after conditions have returned to normal it still has sizable structural gap and using information with the recent budget outlook assuming most provisions of our extended and others who but the current level under these more than 4 percent negative of gdp assuming the economy is close out full employment.

of the been greater concern based some plausible assumptions of the abolition of the economy showed the structural budget that increasing significantly over time the ratio of outstanding debt to gdp rising rapidly. this dynamic is clearly unsustainable. the structure of fiscal and balances did not emerge overnight as a result of aging population of the health care cost post of which have been predicted for decades for the cbo projects health care entitlements which were 5% des gdp 2011 rising with an 9% by 2035. although we have been warned the time when it should become reality comes closer. have made a large and increasing debt runs the risk of serious economic

consequences. over the long term trajectory threatens to crowd out capital formation and in to be devoted to interest payments the availability of policy makers with future shocks and other adverse events. and as we have seen a number of countries interest rates could soar prickly and peoples is confidence in dutch government to manage fiscal policy. although the theory does not indicate the exact threshold of the perceived risk we could assure that without ever closer to that point*.

of fiscal policy could be placed on a sustainable path to assure that debt there national and come and it shows that it should be a top priority. even as they address the urgent issue of sustainability they should take care to not necessarily in the the current economic recovery. fortunately those two calls of avoiding had wins are fully compatible. and on the one hand a more robust recovery leaves to less debt however plan to put fiscal policy on a path to sustainability but help to keep long-term interest rates low and improve household and business confidence thereby supporting the economic performance today. fiscal policy makers could also promote stronger