have documented information about the circumstances under which such contract, such mining rights were granted, unfortunately, we cannot work together. and i can assure you that it is efficient. all right? and i applaud any instances where authorities in africa or elsewhere actually have the courage to step up and to identify when they are shaky if not shady circumstances under which those rights are granted. >> good. gentleman, front row. yes, sir. with the glasses. thank you. >> alessandro -- [inaudible] from italy. there seems to be a different assessment on the risks of protracted low inflation or deflation in the eurozone between the fund and the european monetary authority especially on the timing of the

response. you just said that there was unanimity on unconventional measures, but several exponents of the ecb have also said these will not be imminent. whereas the ores said the -- the others said the sooner the better. so what is the message you're going to deliver to them later today when you meet them? >> well, i can -- i'm, obviously, on the same page as my chief economist, right? so the sooner the better's good. but, you know, we have an ongoing dialogue with the european authorities, and we highly respect the judgment of the central bank. they have a fingers on the pulse of european economies, and we were very encouraged to see the latest board meeting and subsequent press conference that they are envisaging any tools to

respond to the situation. and i think it's going to be a question of timing now. but we are encouraged. >> good, thank you. yes, ma'am. >> good morning, mrs. lagarde. >> good morning. [laughter] >> i'm from mexico. the question is about the imf. what will happen after -- [inaudible] increase of the quota to the imf? which one would be the schedule for the -- [inaudible] governance and quota issue? and the second one is about restructuring of sovereign debts. it is said here but it's a rumor that the imf is supporting the possibility of leaving out

agreement of the collective action classes that has ip included the southern debt contract -- sovereign debt contract and the probability of supporting some kind of default before helping the countries to stand up. could you please tell us about it? >> well, you know, we don't competent on rumors. but i'm -- comment on rumors. but i'm not going to leave you with that, it's a bit short. it's, i think it's clear to everybody that the collective action clauses, as they're applied, proved to have deficiencies, and we certainly realize that when we dealt with the greek sovereign debt restructuring. so what do we do? do we just sit and wait, or do we try to work in good

cooperation with other members concern with the membership first, of course, and in consultation with others -- to see how they can be improved? i think our duty is to do some work, to do enough consultation, enough iteration of how they can be improved and then submit them to board review and see how we move forward. we've been tasked by the board to actually explore that. now, i want to dismiss the idea that we would be heading in the direction of what some of you who have been around for a long time know as the, what is it, the sdrm which is that sort of extremely structured and organized ways of dealing with restructuring. we're not heading in that direction. let's be clear about it, okay? so if you hear rumors, you can tell them that i told you very specifically that we're not head anything that direction at all. but are we working on the issue of cacs and the efficiency of cac and how we can best and equitably deal with those

matters? yeah, we have to. we have to. >> i think we're almost out of time. last question. you, sir. >> [inaudible] >> i think on governance i've already touched on that issue, and it's, you know, i think i've outlined what my plan is. >> yes, sir. >> hello. please allow me, mrs. lagarde, to ask my question in french -- [speaking french] >> translator: i'm from -- [inaudible] and i wanted to know sense we've not had a lot of feedback how was your meeting with the head of government, the prime minister, and where is -- [inaudible] heading in your estimation based on the figures? you know that they're going to be doing a census, and it's first time in a long time since it will be doing this. so what action plan do you see

for 2014, and what do you say to those who are saying the imf is trying to impose the reforms on the country? >> respond in french, and then i'll summarize in english so that everybody understands what i tell you. [speaking french] >> translator: first of all, the prime minister's visit was a success as i see it because as a new prime minister, he was able to explain to us his plans, the reforms that he intends to put in place by his government on behalf of the country. it's not the imf's reforms, it's the reforms that the prime minister intends to implement. and i was quite struck by his determination to implement reform, to move the country forward, to modernize the country, to attract foreign investors including in new areas of activity. and i hope that we'll be able to

continue to work together. you know that tunisia has an imf program, but we also completed the third review recently, and substantial progress has been made. and i hope that we will be able to continue to see progress, and this will continue to be a success story. in terms of the figures, i take the opportunity to say that the imf uses a lot of multimedia for communication but does its research on the basis of fundamentals. so it doesn't mean that we review our figures from day-to-day. we do it on the basis of known figures and on the basis of figures that are in line with our international agreements. and this means that sometimes there's a slight gap between the latest developments in a given country.

but this is not called into question the underlying work that we do. >> i would just think that pram prime minister of tunisia's visit was very successful if that it allowed him to describe exactly his program of reforms for the country which is not a program of the imf, it's his program, that of his government for the population of tunisia. and and i was particularly struck by his focus on development, on attracting foreign direct investment in very strong growth sectors and in really moving towards investment for growth in tunisia, and i very much hope that as the reviews of the program progress and as tunisia matures into those programs, it will be a success story. i'm convinced of it. he called this country a democracy start-up which i think is a great, great name. >> good. and with that, we need to come to a conclusion. we're out of time. we look forward to seeing you over next few days, and thanks

again for coming today. >> world bank president jim yong kim also spoke with reporters and expressed his concern about climate change and the lack of action by the international community. he spoke for about 30 minutes. >> hi, everyone. good morning. thank you for coming. my name is john donnelly, i'm communications adviser to world bank president jim yong kim. the, as you know, this will be an on-the-record briefing. we'll start with dr. kim's statement, and then we'll take questions from you, thank you. >> good morning, everybody. i'd like to -- can you hear? yeah. i'd like to welcome you to the 2014 spring meetings of the world bank group and the international monetary fund. we're very happy to have all of you here. we live in a time of great contrasts when fewer than 100

people control as much of the world's wealth as the poorest 3.5 billion combined. but we also live in a time when many developing countries have the strongest growth rates in the world which each year helps millions of people lift themselves out of extreme poverty. our economists estimate that roughly one billion people around the world live in extreme poverty today in 2014. this is down from an estimated 1.2 billion people in 2010. this difficult-to-grasp number is falling steadily and surely, but reaching our twin goals of ending extreme poverty by 2030 and boosting shared prosperity won't be easy. developing countries will have to grow at a pace stronger than any time in the past 20 years. to end extreme poverty by 2030, the vast roles of the poorest -- those earning less than $1.25 a day -- will have to decrease by 50 million people each year. think about that number.

to reach our goal, one million people each week will have to lift themselves out of poverty. that's each week for the next 16 years. and we strongly believe that this can happen. economic growth has been vital for reducing extreme poverty and improving the lives of many poor people. but if this mass migration of people moving is really to gather strength, we need growth that is inclusive, creates jobs and assists the poor directly. growth, of course, remains critically important, responsible for three-quarters of the reduction in poverty numbers today. so when we rook at the global economy -- we look at the global economy today, growth in high income countries is accelerating and developing countries is growing as well, though less briskly than before. short-term risks to the global economy have eased. increasingly, our worries have focused on the medium term. our concern is that the pace of reform could be slowing in this post-crisis period. the focus must return urgently

to the structural reform agenda. even a small setback can result in leaving millions of families in destitution rather than escaping poverty. today we're releasing a report called prosperity for all which clearly makes the point that tackling poverty requires understanding where the greatest number of poor live. but it also shows that we must concentrate where hardship is most pervasive. many smaller countries have far higher shares of their people living below the extreme poverty line. in 16 countries more than half the population is living in extreme poverty. reducing poverty in these places is as important as making progress in countries where the absolute number of poor people is much bigger. we also must insure that economic growth in the years ahead is sustainable and takes us off the destructive path of climate change. climate change could reverse hard-won development gains and could stop our end-poverty efforts completely. we can't end poverty unless we

take serious steps to protect our planet. in tokyo 18 months ago, we promised to become a solutions bank. a year ago in this same room we announced our goal to end poverty by 2030 and boost shared prosperity. six months ago we announced our world bank group strategy for our twin goal goals. to implement in this strategy, we needed to become fit for purpose and secure additional finance. be -- starting in july, we'll be working differently. we'll have global communities of experts in all major areas of development whose work will be aligned to our goals and put us on the path to become a true solutions bank. our focus will be on providing the best services possible in countries by betweening a strong presence in country offices and by providing global solutions to local problems. there's good news on finance as well. over the next daled, our annual -- decade, our annual capacity is expected to grow from 45 to 50 billion a year now to more than 70 billion a year.

this is possible thanks to a record ida replenishment, our cost savings, our financial strength and clients willing to pay more for our knowledge and services. we are now more and more fit for purpose. this allows us to make a huge contribution to the global efforts to end extreme poverty in a generation. i'm optimistic that countries and their partners will take it on, seize this opportunity and erase the stain of extreme poverty from our collective moral copscience once -- conscience once and for all. thank you very much, and i'd be happy to take your questions. >> thank you. so please identify yourself and your outlets. the woman in the red back there. >> thank you. thank you. dr. kim, my name is -- [inaudible] i'm from china business news. i have a question on china's organization studies. the most recent report, the joint report by the world bank and china's state council, what are some of the key findings we have since last year's annual

meeting? and my second question is when we talk about organization, a lot of chinese people think about there will be more, bigger -- [inaudible] going to be viewed, so how can china implement organization without overheating in the housing market? thank you. >> thank you very much. the china urbanization report was one that was requested directly by the premier actually before he became premier. and it follows on the study that we did several years ago, china 2030. what we learned from this report is that when the chinese government takes seriously the process of writing a report, the outcome is usually one in which the findings in the report are taken very seriously. if you look at china 2030, that was the first time that i paper written jointly by the world bank and the chinese development research council said things like china will have to move its

growth strategy away from investment in exports and more toward consumption and services. and competition for state-owned enterprises will be important. it was the first time that was said. and what we see now is that the reform agenda continues, and despite lower growth rates, we see a tremendous resolve to continue down that path of reform. and so in shaping the urbanization study, we knew that whatever we wrote and whatever was in that document that the government would take very seriously and begin to move. and importantly, they've already begun to move. so there are fundamental issues like, for example, the hoku system which you know well where you can only receive services where you were born. and so what happens is that when people move to the cities, they can't receive services. but what the report showed was that if you reform that system and provide services in the cities, you can actually increase economic growth. and so in other words, a reform of something that people have

been calling for for a while will actually improve growth. the other thing i think that are in the reports are things like access -- land rights x. reforms clearly will help not only the process of urbanization, but farmers. and so the things that are in the report may have been thought of as revolutionary even four or five years ago, but what we know is that once the government takes these kinds of reports seriously and works with us, that these are reforms that are very likely to happen. the other things in the report is there are already tremendous renovations in china of cleaner, more livable cities. i think that's one of the reasons premier li asked us to do the study, asked me specifically to do the study. there are a lot of strategies in that paper that suggest how to build cities that will be much

cleaner over time. so on the one hand, i think we've in that report tackled many of the most important issues that china's facing. i think there's a clear path to reform. two, i think it's going to work because i think the chinese government will take it seriously. and the third and probably the most exciting thing about this report is we think it will actually help other countries thinking about how to build more cleaner, more livable cities in their particular context. >> next question. >> ian talley, wall street journal. wondering if you can elaborate or tell us how concerned are you about the potential for escalation of sanctions in ukraine over russia. >> well, you know, we, as you know, ian, we're not a political organization, and we're forbidden to be directly involved in political matters. but we have been working very

closely with the ukraine, and we watch carefully as, i think, talks are continuing. and our role right now is to maintain very strong relationship with both the ukraine and russia. so in ukraine we've put together a $3.5 billion package, about $1.5 billion of which will be provided in direct budget support. we're working very closely with the imf and are extremely encouraged by the negotiations and work that the imf is doing on the ground. and we suspect that the 1.5 billion that we'll put directly into budget support, part of that will be linked to the imf's financial stabilization package of, you know, very early infusion of cash to stabilize the economy. but then afterwards the rest of it, the rest of the two billion will be focused on infrastructure projects, will be

focused on direct support especially for the poorest; health, social welfare type programs. so we're right there working with the ukraine and hoping to help it down its path and get past this crisis period. at the same time, we maintain a very good relationship with the russian government. we're concerned about the impact of the ukrainian crisis on growth. if the impact is relatively mild and if the crisis is relatively short, the still we have reduced our growth expectations down to about 1.2%, 1.3%, excuse me. 1.3% for the year which is about half of what our previous estimationing was. on the other hand -- estimation was. on the other hand, if the crisis goes longer and has a deeper impact, we feel the russian economy could contract as much as 1.8% this year. so this is a very serious issue for russia, a very serious issue

for its growth prospects. and so we simply urge all of the parties to continue with negotiations and find peaceful means of moving forward. >> right here. no, no, down. down here, sorry. >> hi, my name is george, i'm from ghana. what should emerging markets like ghana be doing looking at the effect of u.s. tape perking? -- tapering? already our level has gone down by 18%, growth is likely to suffer as well. what should we be doing so that whatever happens in the u.s., the shock is minimized in a country like ghana? >> well, there's no single piece of advice that i can give. but if you step back and look at developing countries overall and ask a fairly straightforward question that once the announcement of taper happened in may, what percentage of

developing country economies' currency depreciated and which ones actually went up? it turns out that about 63% of developing country economies' appreciated during that period of time. so the impact was not the same across all the developing world. and what we see is that countries that have greater imbalances, greater weaknesses, for example, countries with high current account balances, countries with high debt ratios that were not well managed, countries that had high levels of debt and external currencies, these countries had the biggest problem with depreciation and currency. and so the advice to ghana as in most, to most of the world is to get the fundamentals right. really think about debt management, really think about your current account balances, build back your fiscal buffers, enact fiscal policies that are prudent and appropriate. you know, look at your public

sector spending so that it's more focused and effective. so those are pretty similar stories throughout the developing world. and it seems that the market is picking on countries with these weaknesses in a very focused way. so the more that countries focus on their weaknesses, the better off they'll be. now, our hope is that the taper will be garage, and right now -- gradual, and right now indications seem to be that everyone intends, including the u.s. federal reserve, to make this as gradual as possible. right now the inflow of capital makes up about 4.6% of developing country budgets, 4.6% of gdp of developing countries. now, what we hope to see is if there's a gradual tapering, that that number will go from about 4.6% of gdp to 4% of gdp by 2016. if that happens in a gradual fashion, which we hope it does,

the growth in the u.s. economy especially, but the growth in europe and japan as well should offset that decrease in capital flow so that developing country economies can continue to do well. you know, overall the story of developing economy growth is still a very, very positive story. that over the last six years, since the beginning of the crisis, still the growth numbers are better than anyone had expected. developing country growth was what kept global growth up during especially the most difficult years, and i think that part of the on the to mitt romney -- part of the optimism, cautious optimism, if you will, is growing, europe is growing and japan is growing, the emerging market economies have gone through some turbulence, but they seem to the also be on a very good path.

>> and whether we ought to go,

ought to remove that% 7% target. >> thanks, alex. let me just say for your read readers, i think that prime minister cameron's and finance minister oz born's decision to continue with the commitment was extremely courageous and extremely welcome. we work very closely with dfid, and dfid has continued to grow in both stature and reach. and their support has been critical both to us and the countries they impact directly. right now all of foreign assistance, all of the entire package of official development assistance is about $125 billion. compared to the needs which are so much greater than that. so africa alone has 100 billion a year in infrastructure needs. the brics countries are

talking about a $4.5 trillion infrastructure deficit over the next five years. so just in the area of infrastructure there's no way that official development assistance can ever meet those needs. and so what that means is that every dollar of official development assistance is needed, and every dollar of official development assistance has to be used in a way that will bring in other players into the game. i think the big story for economic development in the years ahead is that we will never be able to accomplish goals like ending extreme poverty unless the public and private sector work much more closely together. so if you look at those kinds of infrastructure needs, for example, in the brics countries, we are working very hard to make sure that every dollar of our lending is focused in some way on building a foundation for private sector companies to get involved. i think we have a very interesting situation right now. there's a lot of money more or

less sitting on the sideline. trillions of dollars or that are yielding very low returns. and at the same time, there are multiple, we feel, very bankable projects in the developing world that could yield much better returns for this capital. the task then is for us as a public multilateral organization to structure those deals so that not only does the infrastructure get built, but that investors receive a return. that's really going to be the story of the future. so the continuation is critical, and if we can keep that up, that's really where we're going to have to really use that money to, again, build the foundation so that the development of the future which will be much more public/private can really take off. so let me just -- and please quote me on in this -- let me register my own great thanks not only to prime minister cameron

and his government, but to the people of the united kingdom. i know there's a hot debate, but i want them to know that the, their generosity is having a huge, huge impact out if the world. and dfid is very much focused also on this idea that the development of the future is going to have to be multifaceted, it's going to have to really think about how these dollars really get us to the big, transformative outcomes that we know are possible. >> okay. in the far back, the woman -- >> [inaudible] covering for ap, kuwait tv. the major risks facing the global economy with respect to the middle east, any specific steps to help the staggering economies there -- [inaudible] >> well, as we look across the middle east, we have to, we have to be mindful of noting and applauding the successes where they happen.

with the advent of the national dialogue in yemen, i think we were very encouraged to see that happening in a country that's facing so many difficulty. i recently met with the prime minister of tunisia, and the passage of the constitution in tunisia, i think, is a source of great hope. as a result of the really impress e work that that government can be impressive work that that government has been doing, we have increased our rending to $1.2 billion a year, and that's compared to a rate of about $300 million a year before the tunisian spring and $600 million a year afterwards. so we're doubling our lending to tunisia. we continue to marvel at the generosity of the governments and the people of lebanon and jordan, continuing to accept refugees from syria despite enormous hardship. and so our strategy is focused on helping those governments

especially. we are working in many, many of the countries in the middle east, but we're especially focused on helping those governments who have shown a very strong commitment to reform, and we're also focused on helping as much as possible the countries that have done so much to bear burden of the crisis in syria. so we continue to be very active. we're looking for solutions wherever we can. the development of the private sector and the creation of jobs is critical. tunisia still faces a problem of having a very high percentage, over 50%, of college graduates being unemployed. we need to figure out how to spur growth in the private sector so that jobs can be created. >> when okay. in the far back. the person who's had his hand up the whole time. >> hello, my name is --

[inaudible] from egypt, and my question is about the country. currently, can you comment on the world bank's programs in egypt now in the light of transition and the upcoming presidential elections? >> we've had a, we've had a very extensive program in egypt, and much of it has been focused on helping to provide basic services. there was a time when we had stopped our disburstments, but we have -- disbursements, but we have continued them. and we watch with great concern as the political situation unfolds. but the vast majority of our work is focused on helping the poorest, on helping to provide basic services. and we want to continue to do that. we're very happy to be able to continue disbursement, but we're following the situation carefully, and we hope that it goes to a good resolution, perhaps even something closer to

what tunisia has been able to do. but anyway, the point is because so many of our programs are focused on providing basic services, we will continue as much as possible. >> i have the woman right here? i'm sorry? two in? right there. no, right there. >> good morning -- [inaudible] >> translator: may i speak in spanish? in paraguay the statistics from the government have reduced the level of poverty four points over the last few years and 10% in the terms of extreme poverty. what would you recommend to the government, and what should the people do who have emerged from extreme poverty, and how will the world bank continue to support paraguay specific

specifically? >> it's a great question, and it's one that many countries if latin america face. so, for example, in larger countries like brazil and mexico, there has been great success through so-called conditional cash transfer programs. they've been very effective in lifting especially families, women and children out of poverty. but then the next great question is how can those programs then lead to these women and these families entering into form allay boar market? and so -- formal labor market? so the big issue is job creation. it's the same, i think, throughout latin america. and we work very closely with paraguay, and so issues ranging from making sure that the quality of public spending is as high as it can be and then also doing what needs to be done to create a business environment

where, again, the private sector can grow and those jobs can be created. i mean, our report from two years ago, world development report, pointed out that in developing countries over 90% of all jobs are created in the private sector, and we've been especially focused on helping small and medium enterprises grow. locally-owned small and medium enterprises grow and create jobs. so that's really the issue. it's an urgent issue all over the world, job creation, but when you have success in reducing inequality and lifting people out of poverty, you have to really focus on making sure that they can have the good jobs everyone desires. >> okay. we have just, sorry, we have just four more minutes, so take one, possibly two quick questions. in the far back? ..

part of our change process has been very important is that without a capital increase we been able to increase our capacity to lend more than anytime. so in other words, is past change in the financial, in the financial situation of the world bank as a whole is the largest increase in history. we've done it without a capital increase. so the way that was done is that because of demand, brazil,

china, india, indonesia, mexico all asked for us to increase the single barber limit. we had a limit as to how much any single country could borrow but we were able to increase that limit for those five countries by two and a half billion dollars. the increase in fees is an increase over, so in other words, all of the money that would be loaned that's above the single barber limit has increased the fees by 50 basis points. in terms of direct advice we are giving, especially to the poorest countries, that's not been increased. and, of course, the concessional loans for the poorest countries are focused, or zero interest with a 40 your maturity eventually. that has not changed. for some countries especially the very, very poorest we still provide grants. so the fees of only changed for a very small percentage of countries. we are very grateful because

they had to approve that in our board. as you can imagine that was not an easy conversation. but we take this as a vote of confidence that despite the increase of cost of these countries are ready and willing to pay it because they like what they get from the world bank group. and in terms of financial -- it is the one for strategies that we use insurance of making access to finance a reality. so i can tell you that the vast majority of the financial intermediaries we invest in our local banks. this is our way of making financing available for even the poorest households and businesses. we are continuing to think about ways that we can improve access to finance. to give an example, in china, in india, we have invested in financial institutions that are making loans available to even extremely poor urban business.

i visited an apartment building in one of the cities, in a poor state in india. an apartment complex was built because the financing made available by one of our financial intermediaries. in china, one of our financial intermediaries made available, have built a branch of a local bank that was specifically tailored to women, to ensure that women have greater access to financial services. the problem of poor people in poor places, getting access to finance is a huge problem. it is one of the problems we have to tackle if you want to end poverty and boost shared prosperity. so this is the mechanism that we been using. if there are problems with particular financial intermediaries, i want to know about it. when there have been problems i have been very clear with my own staff, there are going to be

problems. there are going to be problems that arise. and when they do arise you have to face them directly and make amends as needed and continue to go forward. because this problem of lack of access to capital at that level is a major one, and we're trying to solve that problem. >> we have one minute quick question. quick answer. right here. >> him thank you. i am with norway business daily. i was when it could say a few words on climate change. u.n.'s climate chief said that up to three-fourths of all should remain in the ground. how would that affect developing nations? >> well, i have been very clear on the importance of climate change. i've been very clear on also need for a very clear, robust,

practical plan to tackle it. at the world bank group we are focusing on five main areas. the first and most important one is the one that's most controversial is establishing a price on carbon. we continue to work with many different groups on this. there are some very promising programs. there's a carbon trading scheme in china that's taking off. we continue to work with countries and regions that are trying to build those types of carbon trading programs, but it's difficult. another very clear issue, we've got to help countries remove fuel subsidies. we share the very strong conviction with the imf. it puts a drag on public budget and also very bad for the environment, but also politically very difficult to get rid of. we also are focused on making financing, long-term financing available renewable energy. again with china building

cleaner more livable cities. that's a fourth area that's critically important. we think we can make improvements in agriculture the both increase productivity and put more carbon into the ground. you know, we are quickly coming to the point where we are not going to be able to keep global warning below two degrees celsius. warming to two degrees celsius will have major implications. things that we have pointed out, 40% of the arable land in africa will be gone. at two degrees celsius. bangkok could very well be under underwater at two degrees celsius. so this is really serious business. i think the most important thing for us now is to find ways forward. tackling things like, everybody wants to live in cleaner cities but everybody wants more productive agriculture. everybody wants to build have access to finance for renewable energy. these are things we can all agree and. other things like fuel subsidies

and carbon tax is much more difficult. we've got to tackle them anyway. we are being very practical, very focused, looking at our entire portfolio to make sure we're doing everything we can to battle climate change, but this is just one of the things where i think the psychologists call the cognitive dissonance. we talked ourselves out of taking it seriously, but in 10 years, 15 years win battles break out because of lack of access to water and food we will all be sitting there thinking, gosh, why did we do more back then? one of the things i'm trying to do really think about my own children is to not have any regrets in 10 years, to do as much as we can today so that when that moment comes we will at least be up to look back and said we did everything we can. but i'm extremely concerned about it. i don't think the world is taking it seriously enough yet. >> thank you very much. [inaudible conversations]

>> and alive the southern we'll turn to pakistan with a discussion about the rise of islamic political parties in pakistan and the current state of u.s.-pakistan relations. we will hear from former pakistani ambassador to the u.s., live today at 2:30 p.m.-ish and i'm right here on c-span2. also today over on c-span, comedian lewis black will be of the national press club talking about politics and social issues. we will have that live at 1:00 eastern. the chair of the u.n. commission of inquiry will talk about human rights in north korea. the findings of a recent report on atrocities committed by the government. we will have that live at 3:00 eastern oath also over on c-sp c-span. >> the first thing i would do is not let the largest cable tv

company by the second largest cable tv company. that's where i would start. my job here on the judiciary committee is, at these hearings is to raise my concerns and what mr. cohen, mr. cohe mr. cohen s, i've really come seems like he iis a smart guy, a great guy i'm sure. he earns, i consider him he earns communal, sort of what he gets. but my job was asked some tough questions on the have -- see, they have 107 lobbyists on capitol hill. they are swarming capitol hill, their lobbyists. you know, but i've got 100,000 -- i have 100,000 people, more than 1000 people write me their

objections are and so the first thing i would do is stop this deal. i would not let this go through it i worked -- it set up to me. it's up to the fcc and the doj. >> the proposed comcast-time warner cable merger tonight on "the communicators" at 8 p.m. eastern on c-span2. >> and with the senate in recess we'll have highlights from booktv in prime time all week here on c-span2. tonight we'll take a look at the world of banking and finance. at 8:30 p.m. eastern.

>> assess the secretary of state for european and your ration of tears last week sai said russias actions in uganda's fundamental change the security landscape of eastern and central europe. victoria nuland made those comments at a senate foreign relations committee hearing focusing on transatlantic security challenges. the crisis in ukraine and nato's expansion to this hearing is about one hour and a half. >> this hearing of the singapore relations subcommittee on european affairs will now come to order. i'd like to welcome everyone here today, and explained our situation very briefly. we are in a quorum call to try to figure out a path for with respect to vote on the floor of the senate. senator johnson i've managed to escape that quorum call but others of our colleagues are likely caught him before. we may be joined by a few others but wein decide to move forward with the hearing notwithstanding some of the activity on thetivi. floor.

this is a hearing today on transatlantic security challenges in central andlenges eastern europe.. i'd like to welcome ouri would , witnesses today on our firstness panel. with two people who are noo thie strangers to this committee, iss assistant secretary of state victoria nuland and assistante secretary of defense derek chollet. on the second panel will hear from julian smith, ian brzezinski and edward chow, although i will introduce late'i russia'sll invasion and illegald annexation of grimy has callednf into question one of the key assumptions and underpinnings of 21st century transatlantic security strategy.ses a russia no longer poses a security threat to the alliance and the main challenge the allies emanate from beyond the euro atlantic region. the winding down of the afghanistan mission has led many to wonder if nato, which has been the cornerstone of transit lannett reliance, would cease to be -- of transatlantic reliance, would cease to be relevant. instead, russia's belligerence may serve to reinvigorate the alliance. nato has stood the test of time.

mr. putin has ensured that it will continue to do so. the most immediate security challenge in europe is the presence of tens of thousands of troops amassed on russia's borders with ukraine. it is clear that resident putin plans to -- it isn't clear that president putin plans to invade or send advance teams to destabilize ukraine until a friendly government can be installed in kiev. in addition to calls for increased this -- defense spending and the need to prioritize territorial defense, this is increasingly at the center of this defense when we talk about security vulnerabilities in central and eastern europe. we called this hearing to get an update on the response to the crisis in ukraine and to discuss how the united states and our allies handed her further russian aggression, reassure our allies, and continue to help countries in the region become

strong, prosperous, independent democracies. the goal of our strategy must remain as always to make europe whole, free, and at peace. let me suggest a few unequivocal steps we can take to increase security. an increasedt of nato response, i think the united states should consider increasing troop levels in the region. secretary hagel has already said that a third brigade is being considered. it is time for the united states to reevaluate our historically low u.s. or strength in europe. even a small increase will send a clear message to our friends and adversaries. a tripwire has the same effect as offense. it makes for more stable, neighborly relations. second, the united states and our european allies should zip -- should suspend arms sales to russia. i've done with my colleagues to call for our government and the relationship with the russians

-- with the russian weapons agencies. now is the time for nato to approve a membership action plan for georgia. fear has divided our allies in the past, imagine the message that it will send to mr. putin that not only will he achieve his objectives through threats and bullying, but that it is actually counterproductive. --ope that the prior ash the i hope the administration will make a map for georgia pority ating su >> thank you, mr. chairman. and, of course, when we were over in ukraine we saw the very sobering situation they were in, and they sort were facing the reality. i think that the primary thing when did you hear in the united states is where to face the harsh realities, and tough talk is fine but vladimir putin were response doing one thing, action. i'm glad kind to your laying out concrete actions we can take to

change vladimir putin's calculus. we need to deter vladimir putin, and we need to do that in a very forthright and resolve the way, the sooner the better because, ms. nuland, as you talk, spoke earlier, obviously making sure ukraine is successful is the best long-term strategy. we have a short-term problem. we need to change vladimir putin's calculus now so we doesn't go any further. so with that, just looking for to the testimony and appreciate you coming here to provide that testimony. >> both of our witnesses are well known to the committee so i won't trouble you to reduce your own files. we will start with the secretary nuland and then move on to mr. chollet. welcome again. >> thank you, chairman murphy, ranking member johnson, i'm honored to be her today to testify on the sector challenges facing the transatlantic community in central and eastern europe. before i do that i just want to

take this opportunity to congratulate my friend and colleague, assistant secretary on the arrival of his newest member of his family. for over 20 years the united states and our european allies have worked to integrate russia more closely into the euro atlantic committee to our bilateral engagement and organizations like the osce, wto and the nato-russia council. but russia's action in ukraine over the last month are an affront to this effort and fundamentally change the sector to landscape of eastern and central europe. today i appreciate the opportunity to discuss the impact of russia's actions on ukraine, our policy response to the action and other challenges in the region. russia's occupation of crimea robert dove by intelligent referendum conducted at the barrel of a gun has tarnished its credibility and diminish its international standing in the eyes of ukrainians and the world. this week's violent occupation

of government buildings deepen our concern. today, ukraine is a frontline state in the struggle for freedom and all the principles of the transatlantic community holds dear. the united states stands with ukraine in its effort to forge its own path forward to more peaceful, free and unified future if we are very grateful to the members of this committee including our children and our ranking member for their attention to ukraine and the travel and support for the people of ukraine. our policy approach includes four basic pillars. first, our bilateral and multilateral support for ukraine. second, the costs we are imposing on russia for its aggressive actions. third, our efforts to de-escalate the crisis diplomatically, and fourth, our unwavering commitment to the security of our nato allies who also live on the frontlines of this crisis. let me address the first three briefly and assistant secretary chollet will address the fourth

in his testimony. first, we support the ukrainian people and the transitional government in the courageous steps they are taking to restore economic health, democratic choice and intro stability and security to the country. landmark anticorruption measures, deficit reduction measures, and taken very difficult steps to reform the energy sector. many of these will be painful for the ukrainian people at they are necessary and the open the way to an imf package of up to $18 million in support. the united states' own $1 billion loan guarantee will help implement these reforms and will cushion some of the impact on the most vulnerable members of ukraine society, and we thank the congress for its support for that loan guarantee. we are also using more than $100 million in bilateral support to assist ukraine and strengthening anticorruption efforts, improving transparency, helping the ukrainian people prepare for free, fair elections on may 25. second, roche is paying a very

high price already for its actions and that costs will go up its pressure on ukraine does not abate. sanctions that we have already put in place are biting on the russian economy and we are now considering further measures in response to russia's continued sector on ukraine. at the same time we want to try to de-escalate the crisis diplomatically if at all possible. after many weeks of refusing to speak directly to ukraine, the russians have now agreed to sit down next week in a quantum level format, including ukraine, the eu and the u.s. to discuss the escalation, demobilization, support for elections and constitutional reform. we will see at that session goes. we are also concerned about the pressure this crisis is putting on moldova, georgia, on a meanie, and on other neighbors of ukraine. moldova in particular has been the victim of economic pressure from russia, intense russian sponsored propaganda against its

choice to associate with the eu and renewed separatist efforts. we are very grateful that you, mr. ranking member come are going to travel next week, or this weekend i think to moldova. they will very much appreciate the support. as you know we've intensified u.s. political and economic support to moldova and to the other states of the region in recent months, and this effort will be sustained. the ukraine crisis highlights another deep and growing challenge in the euro atlantic space. the maidan protesters have many grievances, but one of the most galvanizing across uk the pervasive corruption that has infused every aspect of ukraine society, its economy and its politics. as secretary kerry highlighted at the munich security conference, we are seeing a similar disturbing trend in too many parts of central and eastern europe in the balkans now where the aspirations of citizens are being trampled, they need to corrupt oligarchic

interests who use their money and their influence to stifle political opposition and dissent, to by politicians and media outlets and to weaken judicial independence and the rights and ngos. we are also seeing a growing league of these oligarchs and corrupt politicians are working together, putting across national lines to protect and help each other maintained that influence and to keep the cash flowing that feeds their preferred oligarchical system. corruption of this kind doesn't simply rot democracies from inside. it also makes a simple mobile to corrupting influences from the outside of the country who may seek undue economic or political influence over state policies and decision-making. in other words, in many parts of europe, fighting corruption needs to be a higher national priority in order to protect and defend democracy, and protect and defend state sovereignty. as we look to shore up security, prosperity and the values that

are so vital to our shared aspiration for a europe whole free and at peace, fighting corruption must be a more central line of effort, and they will be for our bureau going forward. similarly the ukraine crisis is a wakeup call to accelerate of the work we've been doing to promote a stronger, more prosperous transatlantic community. as assistant secretary chollet will discuss, the vigilance along nato's eastern border means our european allies must reverse the downward trend in their defense budgets. and as we revitalize the transatlantic security type we must also strengthen our economic ties and accelerate growth and job duration of both sides of the atlantic by competing and ambitious transatlantic trade and investment partnership agreement. finally, as you said, mr. chairman, we must do more to give as a transatlantic community to strengthen europe's energy independence and its internal energy market,

including by guaranteeing reverse flows of energy, ensuring great diversity of supply, and building into connectors throughout the continent. so this crisis has intensified are focused not just on central and eastern europe, but on a broad set of transatlantic security challenges and opportunities on the road to a europe whole, free and at peace. we're very grateful for the bipartisan and very active support of the subcommittee and the whole committee in that effort. i look forward to questions. >> thank you. secretary chollet. >> thank you, mr. chairman and country for having me here today to discuss the transit like security judges we face in central and eastern europe. and now we are working to strengthen our allies there. after russia's illegal actions in crimea, the united states to prompt steps to reassure our regional partners. first, we all banded nato's air policing mission by sending additional fighter aircraft. second we deplo deploy aircraftd personal t to poland to soap upo you as poland aviation detachment.

third we extend the u.s. as truxton state in the black sea to conduct exercises with romania and bulgaria. and forth we will deploy another ship next week, the uss donald cook to the black sea soon to build interoperability. nato has dispatched awacs platforms to fly orbits over poland and romania together with allies, the united states wants to ensure a continuous augmented presence along nato's borders at least to the end of the year in the air, on the ground and at sea. in addition to reassuring our allies, we've taken prompt action to support our nato partner, ukraine. the department of defense is working with ukraine to review and prioritize and create its defense assistance requests from itunes and supplies. the first round of this process was completed last week with the delivery of 300,000 mrv's to support ukraine's forces have been in the field an and in neef resupply the ukraine is as for this assistance and we worked hard to accommodate this request of the.

deny state has also maintained senior level dialogue on ukraine apart -- counterparts. just last week we had a senior team made up of military officers in kiev for defense talks investment secretary hagel talk to ukraine counterpart by phone. administration has asked for ways to support a richer of the important partners that feel threatened by russia's action including georgia and moldova. thank you russia's illegal military action i guess you ukraine, as their secretary-general rasmussen said, this is the greatest threat to european security and stability since the end of the cold war. nato of course has played a critical role. president obama reaffirmed during his recent trip to europe that our commitment to nato at its most important element the u.s. national security as well as european security. this alliance which sold its 65th anniversary last week is the organizing framework for

allies to work together to manage crises. it provides an integrated military structure to support outlines political decisions to take action and represents our common values. whatever other missions nato allies agreed to, collective defense, article v commitment remains the essential glue that holds the alliance together. keeping nato strong is critical to ensuring the alliance is prepared to make the nearly continuous crises that it responded to over the past two decades. russia's incursion in ukraine underscores this point. it comes at a critical time when allies are preparing for the nato summit this september and was. allies want to balance multiple competing issues and priorities. first we must transition to linux in afghanistan. nato's largest and most challenging operation ever to the train advice and his mission. we must work to strengthen relationship between native strengthen relationship between native and to those capable growers who have been treated to alliance efforts in place and lived from afghanistan. third and press most important we must we energize the

political will for allies to invest in defense capabilities. this will not only demonstrate nato's unity and resolve to do also love the alliance to meet the challenges of today and tomorrow. this goal is complicated. the ukraine crisis serves as a clear point as to why we all need the allies. so mr. chairman, ranking member johnson, russia's action undermines the importance of the transatlantic alliance and the benefit that come from many years of investment to ensure that this remains strong. this investment stance across administrations of both parties and many years of bipartisan support in congress has been indispensable. simply put, if nato didn't exist we would have to invent it. so as we head towards the nato summit this fall we look forward to working with is committed to ensure that we doing everything we can to strengthen the

transatlantic partnership. thank you and i look forward to your questions. >> thank you to both. i'm going to start with you, secretary chollet, and, frankly, just run through three questions to ask you to respond to the three points i made at the end of my opening statement. the first of which was suggestion that now is the time to mount a serious defense in congress as to why we need serious troop presence in europe. i voted on a number of amendments one of the number of the house to effectively hollow out our remaining force in europe and, of course, at the time that made a lot of sense to people. today circumstances have changed. as you look at troop numbers deployed throughout europe over the course of the decade, understand that sequestration is still a reality, what is dod's thoughts? >> mr. chairman, as you noted in your opening statement, secretary hagel said a few days ago that what we are looking at is our troop presence in your.

it's kind of significant action over the last few decades. we've got about 57,000 or so troops currently stationed in europe, and jonah breedlove, -- general breedlove was tasked to come up with for the reassurance steps we may take with our european partners to help reassure our central eastern european allies this would not be unilateral u.s. steps the steps we take as many of the nato alliance. and he'll be reporting on the plane next week and will be working that through the nato alliance. i don't foresee major changes in our government footprint in europe. i think that what we are trying to explore a ways that we can leverage some of the rotational deployment that we've undertaken. for example, the poland aviation detachment which is a relatively modest investment, and it's a very small permanent footprint but it's very significant for our polish partners

transitioning through f-16 or c-130 to put their training, the ways we can all get and build on that i think, the way we can have a forward presence and will close with a partners and help build the capability but it will also be efficient in these budget austere times. >> hole and had requested for to native brigade. what's our position on that request? >> that something general breedlove is working through so we will wait his assessment. >> second point i initially made with regarding military sales with russia. difficult to understand how the french could continue to sell ships to russia that are identical to the ones that were used in the illegal invasion and occupation of crimea. do we think our european allies are serious about ending military relationships or curtailing met terry relationships with russia in the wake of this crisis?

>> it's something we ha have vey frank conversations with our european colleagues about their dimension also suspended arms sales of russia overall, which the president has signed an executive order giving himself the authority to do. those are the sorts of things we would consider to we haven't done that yet but we have the authority to do so. the department of defense, department state across our government has had very frank conversations begin with our french colleagues, in particular about the report and the relationship with russia. >> out ask this one first to you, secretary chollet combatant talk to try for as well and thus ask you for little bit more color on what you believe to be a successful whale summit. i think you laid out three principles, but let me ask you specifically with respect to the question of enlargement. we've got -- i understand the position that george is in.

i know that they have some serious steps still to be taken before they are a candidate for full admission into nato, but a membership action plan can have lots of steps and caveats and hoops to jump through. it would seem to be a very strong signal to both russia and to our allies that we are series about keeping the open door policy in nato if we were to give a map to george. i know there are other countries that are interested in getting that status at wales, but if you could both comment generally on the issue of enlargement and then specifically to georgia. >> i'll take the first end-to-end and turn over. the door remains open, something we strongly support. and the specific case of georgia we very much support george's zero atlantic orientation and conditions. georgia from a dod perspective can this government as a whole perspective in georgia as a

trusted partner. they are in the fight with us in afghanistan. without caveats taking risks. they committed to remember this post-2014 in afghanistan and to the very strong partner, we, the united states, are supported of membership action plan. we've expressed that but as you know very well this is an alliance decisions. it's not a decision for united states will make a little we were close with our george and partners through this process and is something that could will be a subject of conversation in the months ahead as lead up to the wales summit. >> secretary nuland? >> as ever, derek has articulated beautifully. just to say that the georgians are well aware that they did not have consensus in the alliance and that they work to do to convince particularly some of our western european allies of their worthiness for the membership action plan. we have been supporting them as they make his case directly to individual allies.

one thing that happens very soon for georgia is it is on track to signed its association agree with the european union, which will deepen its relationship with many of these same countries. so we are hopeful that that will have a positive impact on how they possess its worthiness for map. >> i'm going to stay outside ukraine and maybe as a quick second round to talk about ukraine. secretary knew it, you just in moldova and i know senator johnson is going to be there, so preempting a question for him. as we try to perhaps learn the things we could have done, or the alliance could have done, in ukraine in the months and years leading up to this crisis, which i'm not suggesting anyone could have foreseen, what do you think are the most important steps to strengthen the transatlantic alliance with moldova to send the right message to russia and to perhaps prepare them for the

potential, some kind of offensive action? >> thank you, senator. as you know we have intensified our collaboration cooperation with moldova. secretary kerry was there in december. as you said i was there again a week ago sunday. our primary effort with moldova has been to support their preparations for an association agreement signing, and with the european union, and the deep coverage of free trade agreement because both of these will strengthen their trade and travel and links to europe and give them more options than simply a russian market. we are also working intensively with them on energy security and alternative sources. we are investing with the european union in interconnector's with romania. we are also helping them diversify their trade market. they are trying to import some

other spectacular wine, which i hope you'll simple, senator thompson, when you're the end to the mistake that reflect -- link them up with a number of key u.s. distributors. were also helping, they have a millennium challenge conduct as you know which supports bringing agriculture to market. a road and water support. so we're doing all those things, but also supporting their path to elections as well in the fall. very important set of elections for them. so it is a key moment. we are also trying to help them, one of the things that was somewhat distressing on my last trip was, were as there was very strong support within moldova for the association agreement and for tighter links with europe, the russian propaganda efforts have been particularly virulent across the country but in the russian speaking areas and the moldova new government

and the eu frankly have not done a strong enough job of explaining the benefits come what is going to feel like when citizens across the country in just a few months in the visa free travel to europe, cannot care for exports for the goods including the goods of many of these factories in -- this is a japanese more attention and will put more effort into ourselves spent i appreciate that answer. but i hope our friends in brussels heard your answer to that last question. there is nothing untoward about advertising yourself, and we know that the russians don't play either same rules that we do but the fact is that in moldova today, as you maintain, there is a battle for the hearts and minds of the people there as to whether they're going to orient toward europe or back towards russia. and the fact is that the eu is not doing a good enough job. in moldova, nor did h they do ia good enough job in parts of

ukraine explain what the true benefits of the alliance are while at the entire time the russians are investing all sorts of clean and dirty money in an effort to tell a very different story. there is a propaganda war being fought. there is only one side right now that is truly at a high level fighting it. we can surely be partners in that but ultimately this is not a matter of the united states inventing people in moldova whether they should or should not join the european union. it's really up to the european union. senator johnson. >> comcome on back let me pick p right there in terms of propaganda war. i a great its basic we one side to let me go to you, secretary nuland. are we doing anything to provide the ultimate view and try to provide information not into moldova but also ukraine and the other baltic states? >> thanks for that, syndicate. this is been a major line of effort led by secretary kerry but very much supported by the president as well over the last

two months -- one cannot match the kind of money and effort in a closed society that russia is putting into this, but we concert held -- help our friends and partners debunk lies, get the straight story. we have we directed a great amount of public diplomacy funds amounting our own truth telling campaign, which we are pushing out in ukraine, in russian, and all of the european languages but also in english across the united states and across allied territory. we have a number of products that we amounted to the united for ukraine campaigned on twitter, if you are not linked up to that, please link a. that will start at the state department and now has many thousands of users and repeat tweeters. we have a product called the daily playbook where twice, three times a week, sometimes daily we put out all of the positive news about what's

happening in ukraine. and we also debunk falsehoods from the russian federation, including this most recent one where the accused a u.s. company of having mercenaries across ukraine. when we called the company than it actually clear that no such thing was true and this is something that was put out on the foreign ministry website in russia. so this kind of thing. so we are doing a lot. we put an additional $3.3 million into support for the ukrainian government itself the we are going to redirect some money to moldova as well skip what about broadcast media, tv, radio? became door tension that was a tv station with an uplink that could a broadcast into russia. could've been purchased. is there any effort, expenditures being made to widen our ability to broadcast? >> we are supporting ukrainian broadcasting companies that are broadcasting in both russian and ukrainian. we're also supporting the media

center that the transitional government has set up to help them exploit available opportunities for broadcasting. we have very active in the space and all of its languages. we have not looked into buying tv ourselves. i'm not sure that is the best use of resource but rather we're trying to partner with folks in ukraine and in europe to active in this space. >> secretary chollet, first of all congratulations on the new addition to your family. you mentioned secretary hagel talk to defense officials in ukraine. could you tell me what the conversation was about? >> so, he has had many conversations over the last several months with his ukrainian counterparts. i should stress counterparts because i think this is the fourth defense ministry is talk to in the last several months. and this is mainly to ensure that we have at the highest level a channel of condition

throughout this crisis, and so we can hear from him directly about their needs and about ways that we may be able to help them. >> are they specifying the? >> yes and no. i mean, ukrainian military was not an extraordinarily capable military before this crisis, and it's been as imaging in my opening statement, has been and still deployed and under quite significant hardship over the last several weeks, given russia's behavior. so the most urgent need that they've identified to us have been in the more nonlethal humanitarian space, the mr ease and medical supplies in particular. we are working to try to accommodate those requests. >> when the primaries was here he made requests for small arms and a mission which was barely turned down. our rationale was we sorted it to do it to provoke vladimir putin. this was before the vote, before the annexation. guesjesse did need any provocat, just did it anyway.

are we rethinking our willingness to help ukraine militarily from the standpoint of supplying them the type of small arms and nation's the requested in? >> senator, we are counseled in a dialogue with them about what they may need. the team that was in kiev last week was, discussions on port-au-prince but his dialogue is great. are would rethink whether we're going to provide them that the support their request and the need if vladimir putin moves further? >> yes. but the priority right now is their own privatization that they present to us is mainly nonlethal at this point. as we're looking out of this media crisis when we're in an thing of the medium and long-term which is what we talked about last week in kiev, as they're seeking to further modernize the military, seeking to further professionalize the military, efforts were tried to work very close with him on in the last several years, long

before this crisis, and they still a long way to go. ways that we can be helpful. >> you mentioned nato's augmenting their presence along the borders. what is augmentation -- how many personnel are we talking about? >> we can get you the exact number of total nato personal but i can take from the united states perspective, in poland the aviation detachment and upgrade by adding some aircraft to that the catchment, i think a couple hundred folks have accompanied that. similar with the baltic area police mission and our augmenting of that effort. it's a handful of folks. part of what general breedlove will be coming back to nato and briefing next week is his proposals for the medium to long term, for the rest of this year, how whether by air o air, land,d sea, nato, united states under of the 27th allies can be posture differently, and particularly in central europe and -- >> code our response to the russian troop buildup of tens of

thousands, hard as it was exact number is, that tens of thousands of russian troop buildup along the eastern part of ukraine is a couple hundred, dozens? do you think that's going to change that improves calculation? >> i think what's most likely to change his catholic is what we've been seeking to do as again, not the department of defense but mainly with our colleagues at the treasury on sanctions and hitting the russian government -- >> isn't true the russian officials mocked the sanctions speak as i think secretary kerry said before this committee a few days ago, initially there was some chatter mocking that i think these sanctions hurt. there's no doubt. as the president made clear when he announced his latest round of sanctions, it's not the limit of what we can do. there are further things we can do, but as is clear from the further we go, the greater ramifications could also have on us. that said, we have made very clear to the russian government that we stand by article v

commitment when it comes to alice, that their behavior is unacceptable and that we are rethinking the things when it comes to our military posture in europe. >> thank you. >> i'm going to just take time for a short second round here. i would just in general associate myself with a marked of senator johnson but i think we're gone to point of treading lightly. beyond the point of worrying about provoking russia. i think they're going to make decisions about the future course of events in and around ukraine based on their own security needs. and as one neighbor of russia around the black sea came and told senator johnson and i earlier this week, that our response should be to do everything that russia does not want us to do. i have expressed skepticism about providing small arms, i think a successful nato summit with an extension of members of action plan to georgia and

continued ratcheting up of sanctions is exactly that medicine. two questions. one for you, secretary nuland. can you just give an update on the elections scheduled for may 25? maybe give us a sense of, i don't want you to be a public dig, but what is russia's capability to undermine these elections went today, they don't have a candidate at least is polling at any level that would suggest they are a true threat. so what do we worry about and what are the things that we and our ukraine allies can do to make sure that the ukraine is get a choice? if they have a free and fair election, there is no way the next president and ex-cabinet of ukraine is going to give the time of day to putin in the next administration. >> well, thanks, senator. first of all, as you may have seen, there are more than 20 candidates registered for the

presidential election on may 25, representing every single available color of the political spectrum in ukraine. so the creamy people will certainly have a very broad choice, and the election is likely to throw to a runoff, which is a very, very healthy thing. the immediate environment, the basic conditions for this election at this moment, absent security situation are as good as they've ever been in ukraine with a very, very supportive transitional national government with a very supportive -- with a vibrant public debate going on public media. and private media. we have a very strong response from the osce, they're planning tto do more than 1000 monitors across the country. ukrainians are also making provisions for crimean's to vote. they won't be able to vote in crimea because russia will allow but there will be polling places for the as i understand it a

test site for the helsinki commission yesterday and will have the biggest contingents as well. so that is part of the answer to have eyes all over this process so that it cannot be manipulated. but the number one concern we have now is efforts to destabilize the eastern regions, other parts of ukraine, the great either a pretext for declaring it too difficult to have elections, to create questions about it, and/or for a larger russian move into ukraine to protect citizens. so this is the real threat that these moves pose. the interesting thing is that none of this has any kind of significant support among the populations, including the populations of the east. there was recent ir there was recent iri bowling and there is

recent ukrainian polling indicating that less than 15% of those in the east want to join russia. they want to stay in the united ukraine but they want to have a choice of their future. that our candidates as i sit across the spectrum for people to vote for, including those who want a closer relationship with russia, but not to allow the kind of federalization that could cause the country to fall apart. i think you're going see a very, very vibrant debate by the number one risk is the security situation, and this aggressive effort with an address back to moscow to destabilize. destabilize. >> the iron is the more successful we are making sure that that election is free and fair, the more worried we have to be about russia's intentions once they see the writing on the wall. one question for you, secretary chollet. back to u.s. military support for ukraine, seems to me that one of the logical programs that

we could undertake, whether its units to go with nato is a longer-term project to rebuild the strength of ukrainian armed forces. they were hollowed out under the no coverage and even prior to that. and separate in aside -- you know coverage. about their immediate needs, what about a long-term commitment to help them rebuild their military? >> senator, absolutely agree. that kind of long-term thinking was what we embarked upon long before this crisis. and i think that this crisis provides an opportunity for us to think anew about how we can continue the efforts we started but really augmented for the arbiter relationship with ukraine, although important and they deployed with us in afghanistan and elsewhere was well to the modest. $4 million or so a year. so part of these discussions that we were having in kiev last week was the medium and

long-term, and that we can address the urgent need but more importantly perhaps over the long term ensure that they continued on the modernization and professionalization effort that we've helped with. >> i think in those who we are about the longer-term commitment, the better. senator johnson. >> i've been concerned, i've been hearing a term, i turn terms like red line. is a sunday our nato partners or are we using those terms in any way, shape, or form? >> senator, we are not. that term has driven me to get a people but it generally applies a constitutional neutrality of one kind or another. as you know, the transitional government in ukraine and you probably heard this from the prime minister, has said that they do not have any plans while they are empowered to change the quote non-block status of the country but obviously it is a

matter for future leaders of ukraine and the ukrainian people to decide how they might want to associate in the future. ..united states or any other country can make for ukraine or four ukrainians. >> we are standing by the by being -- assurance signatory to the budapest memorandum to do everything we can to maintain the border integrity of ukraine? signedou know, that was in 1994 as a political assurance that we would all support and defend the sovereignty and territorial integrity of ukraine. it did not have the status of a treaty commitment and, as such, has been brutally violated by the russian federation. our own commitments reigned solid. can i go back to your point whether sanctions are biting

it is easy to mock them. the numbers tell a different story. billion from the russian federation to prop up the ruble to defend it. capital flight in the first quarter of 2014 out of russia greater than capital flight throughout all of 2013, which was a significant year. economy, itnking was already shrinking, it is shrinking more, downgrading russia by major organizations. this is pinching, but you're not wrong that we have to maintain the pressure. >> thank you very much. thank you to both of our witnesses. yourpreciate your time and late start. you're thank you very to both of our secretaries.

[inaudible conversations] [inaudible conversations] let me welcome our second panel,

with one caveat. senator cardin is on his way and will be taking over the chairmanship of this portion of the hearing in about 20 minutes or so. i unfortunately have another obligation and we are going to try to wrap this up as quickly as we can, even what is happening on the floor. we are very excited to have our guests today a senior fellow and rector of the strategy in the centerprogram at for new american security. she previously served as that deputy national security adviser to vice president biden and also office of the secretary of defense. brings more than two decades in experience in

u.s. national security, including serving as deputy secretary for defense and native policy. a person who spent 30 years working in the energy industry, including 20 years with chevron. welcome to all of you. we will go into the order that i introduced you. >> thank you very much, chairman murphy, and thank you for the opportunity to testify. russia's recent annexation of crimea has raised a lot of thorny questions about the future of transatlantic security. statesand the united share three common objectives associated with this crisis. one is isolating russia and ed -- ensuring there are additional

costs imposed on russia. the other is supporting our europe, andstern also supporting the government in kiev. i want to start with reassuring our allies in central and eastern europe. you heard about some of the things the united states was able to do in the early days of f-16's to, providing poland and other plants that we have for the region to reassure our allies. europe, western europe in particular, was slower to respond to this crisis and to calls for reassurance. they have had a number of concerns about unnecessarily provoking the russians. they have look at public opinion data that does not support initiatives that would reassure our friends in central and eastern europe, and some of them lack the capabilities to do so. some of that has changed. o ministerial

where we saw a number of countries offer support. as you heard, a general is presenting options on tuesday that i hope will be supported not just by the u.s., but by the alliance as a whole. forward, the challenge for europe and the united states is to keep momentum going. and get to a point where we do not allow our policy differences to lead to policy for alice's. we do not want to find ourselves in the situation where we are breeding additional overconfidence on the part of the russians. in my written testimony, which i have submitted today, i suggest three things europe and united states should be focused on. the first is resented -- presenting a united front when we cannot reach consensus. you know better than i do that there are some cracked in the transatlantic relationship on this issue. we had times have disagree. we have some public airing of

our disagreements, especially over sanctions, which was not a wide mood -- wise move. as we weigh the pros and cons of initiatives moving forward, we have to ensure we keep what is actually at stake in the back of our minds and remember that crimea is not a bumper the road. this is not a hick up. this is not a short-term incident. or havepened in crimea lasting implications for transatlantic security and the region as a whole. we are not going back to this -- to business as usual. it is important to think about the long-term strategy that would include economic, the nomadic, and military measures. the second thing we have to focus on is getting the nato peace right. you heard from the secretaries that there is a nato summit coming up. we're going to need leadership to drive some of those

initiatives forward on some very difficult issues. , chairman, nato and large but as one issue. you are aware of the differences inside the alliance on that issue. if we do not take on nato enlargement, on cyber, if we do not take on missile defense, if we don't take on some of these tough issues nato will ultimately be unprepared to deal with what is coming at it in the 21st century and beyond, not just with this crisis, but with others. the secretary-general has been optimistic in recent days saying that ukraine is a game changer and will hopefully lead to increases in defense spending. i am not so sure. i would like to count on washington leadership to drive that date forward. also managing the debate we have had many times about article five versus expedition area operations. the last thing i think europe and united states eats to focus on is making sure they do not leave a great zone between nato territory and ukraine.

we need to look at the reassurance requirements not just in countries like poland and the baltic states, but also georgia, moldova, and in many ways these countries need more assurance than those already members of nato. we will have to look at things like defense cooperation and security corporation. people have to put everything on ae table to ensure there is united front there between europe and the united states. it just cannot be the u.s. alone. in terms of our efforts to support the new team in ukraine, we are trying to support the elections. we are working to provide financial assistance so their economy does not collapse. we are trying to address the security needs simultaneously. we have done all right in the first two categories, which try to ensure they have been tools they need for free and for elections. we have provided billions of dollars in promises of loan assistance, all sorts of expertise and all the rest. i think we have not done well in

addressing the security concerns. i know you heard dod is looking at some of those requests. we have had the good fortune of relying on incredible restraint on the part of ukrainian military. i do not think we can count on that in the long term. we are not so sure how much longer. otherularly given some protests we have seen in ukraine. moving forward the united states will have to ramp up efforts to review those requests, nonlethal and lethal, and determine if we can provide additional intel sharing and look at things like ammunition. to close, i want to say i think europe and the united states deserve kudos for the work they have done together in multiple categories of addressing different aspects of this crisis. but what they have done to eight should be seen as the opening act. we have to sustain this momentum, make sure we have a long-term strategy some and make

sure that that strategy is paired with real resources and real capabilities. we also have to think through the potential scenarios that we might be facing in the future. what happens if russia goes into eastern ukraine? what happens if the russians try to further destabilize -- and what happens if those may 25 elections to not happen? we need to be having that conversation with our european allies now to prepare ourselves for anything that might be dumbing down the road. thank you very much, and i look forward to your questions. >> chairman murphree, ranking member, i am honored to speak. russia's coercion and the invasion -- and invasion present a security challenge. the west has yet to generate response that will deter moscow from further aggression. the actions of the events dates should be guided by three reinforcing objectives. to deter russia from further

aggression against ukraine and other neighboring countries, to confidencekraine's in its capacity for self defense, and assist ukraine in its effort to become a modern, prosperous democratic state. allow me to review six rounds of initiatives that serve these objectives. first, we need former economic sanctions against russia. the current set of are clearly insufficient. they are overly -- their overly savages scope has created badges of kurds among the russian -- badges of courage among the russian elite. economic and diplomatic sanctions need to be complemented by a strategy to shore up allies in ukraine. nato's response to the invasion of ukraine has been underwhelming. it has been limited to a largely symbolically reinforcement of nato airspace, the testing of force posture studies. this reinforces concern about their ability to act

decisively and about the reduction of u.s. combat capability in europe. it affirms those who say washington and nato's commit mint has declined. the united states and nato should reinforce allies in the following ways. it should deployed now a ground combat brigade with air force support. it should appoint a special operation contingents to the baltic states. the alliance should rescind a 1997 nato-russia founding act. should freezetes reduction of u.s. forces in europe and direct -- to present options to make permanent the deployments i suggested. an hour west european allies -- and her western european house should be encouraged to do this same. we need to provide military assurance to ukraine.

haveand the united states unwisely drawn a red line on the eastern frontier that leaves kiev militarily isolated. that redline should be erased. we should grant ukraine's request for military equipment and include antiaircraft weapons. u.s. equipment would reanimate moscow's unpleasant memories. we should deploy intelligence and surveillance capabilities. this would force moscow to consider repercussions it acts. department of trainers to georgia after it was invaded by russia attributed to that country's security. we should conduct now a major exercise in ukraine to train their military. waiting until may and june as is currently planned by nato only incentivizes russia to take action earlier. under these initiatives would

threaten russian territory. they would introduce uncertainty in moscow's military planning and force the government to consider the risks of a military conflict. fourth, the west needs to reinforce resilience to russia's aggressive campaign, which is the most intense we've seen since the end of the cold war. the secretaryear outlined actions we're taking, but i wonder if it is sufficient. this campaign threatens the ability to conduct elections, and it creates opportunity for the provocateurs in moscow. ukraine'spport efforts to reform its economy. one area where we can do more is supporting diversification of ukraine's energy supplies. easternup exports in

europe word server as a priority. the west needs to reanimate a europe whole and free. the situation necessitates native make clear its policies. reaffirmation of this mission is a way to underscore commitment to security in central and eastern europe. for these reasons no decision or recommendation should be permitted or advanced that would in any way limit its applicability to any european country. that is what i think your concern about the -- is warranted. putin forreward th his aggression. it would violate the spirit of the maidan in which ukrainians articulated their desire to be part of your. those wings should not be clipped at this point. we could not trust putin to live up to any agreement regarding a neutral country, because it would encourage him to pick away at them.

let me conclude by saying the most effective way to counter their operations -- the presence of a secure and prosperous to miami in their neighborhood is not threatening, but can help their focus toward resting internal problems. it may provide momentum to russians who have grown wary of authoritarianism. in central and eastern europe has always been essential to the forging of a true hardship between europe and russia, and between washington and moscow. thank you. >> thank you. we will turn the panel over to mr. chow. >> thank you, mr. chairman, ranking member johnson, senator cardin. i am honored to return to this committee two years after testifying before you on a serious and growing energy vulnerability of ukraine. this is much in the news today.

my fellow panelists have covered the various hard and soft security challenges for central and eastern europe. since my own competence is limited to energy, i will focus on the threats and opportunities that sector presents to this region. the legacy of the warsaw pact left most of these countries relied on russia for their oil, gas, and nuclear fuel supplies. is conducted under barter and other non-market trading terms. transforming a highly inefficient and polluting energy economy necessitated a painful transition along with overall economic restructuring. historical suspicion and actual use of energy as a political tool by russia gave further impetus to the drive to modernize the energy economy. in general, countries that chose to a speedier path to transition, full privatization of energy assets, and

transparent regulation by independent bodies, adoption of european standards in is this practices, are in better conditions today than those countries with state-owned companies that retain old is this practices and relationships with their traditional supplier of imported fuels. state companies in these countries continue to dominate the energy sector so that politics, rather than market forces cannot determine outcomes. countries that have a coastline and better access to crude oil and petroleum product imports from international markets and countries with significant indigenous energy production, such as poland, with cold, and romania with oil and gas, are less vulnerable to cut offs. preemptive action also mitigated vulnerability to cut offs. the czech republic's decision to build an oil pipeline from is ana in the mid-1990's

example of a country that invested early on to reduce the risk of supply cutoffs. refineries tech as were -- decisiond lithuania's to commission a liquefied natural gas receiving terminals are more examples of committed actions to diversify energy's supplies. the potential for shale gas from a geological trend which extends from southern lithuania across poland and ukraine, romania, to bulgaria offers good prospects for developing energy supplies in the medium turn that are affordable and beneficial. european integration offers the best opportunity for energy marketer and is asian. the pathway to the european union includes reform and restructuring of the sector and to remove energy corruption by adopting european standards and business practices.

the eu also offers funds for important infrastructure improvements, such as pipelines capable of reverse flows. market integration is critical for smaller countries in this region to achieve under diversity of energy supply. the energy industry relies on economy of scale to justify multi-billion-dollar investments. therefore, it is difficult for individual entries to economically justified diverse vacation projects on their own without being connected to the energy markets of their neighbors. with pipeline and for structure, shared storage facilities, connected electricity grids, and arrangements.al unfortunately the process of market integration has been painfully slow them and results have been mixed at best for the free flow of gas and electricity. without market integration, the region cannot afford the energy supply diversity it wants. bulgaria is a prime example of a

country which is not a can full advantage of the splendid geographic location and opportunities to connect to their neighbors and energy. fund -- and is today not much better off than in 2006 and 2009 come of the between gas cutoffs russia and ukraine. since i testified previously before the subcommittee about the sorry state of ukrainian energy economy and this topic came up in my testimony before the senate energy committee two weeks ago, i will not spend time talking about ukraine here, and leave this subject to the question time if senators are interested. suffice it to say ukraine in its long troubled gas relations with russia remain the biggest supply vulnerability for the region. half of russian gas sales to all of europe still transit ukraine, in spite of russia's efforts to

bypass ukraine. ukraine is the dominant and in some cases the exclusive route centralimports for most and south european countries. the potential benefits of the energy sector reform and ukraine remain enormous, and is now more urgent than ever. there is much that countries in central and eastern europe, which has gone through a successful transition to modern energy economy, to offer ukraine in terms of sharing lessons learned and assisting in capacity building. there are also countries which will most be affected by the collapse of ukrainian state. in many of these areas it is natural for europe to take the lead, given its proximity and shared interests. the urgency and seriousness of the crisis in ukraine demand american leadership, and for us to coordinate our efforts with european friends and international financial institutions, while enforcing

strict compliance on the current and future government of ukraine to meet commitments to reform its critical energy sector as a condition for western aid. thank you for your attention. >> thank you for your testing. thank you all three of you for your testament. senator johnson? >> thanks, senator cardin. brzezinksi you are recommending a more robust response. you also recommended a more robust response that was implemented in georgia. can you go into detail in terms of what the u.s. did versus what is being reported in the press nowadays and how that had an effect? thehen i look back to georgia crisis, i cannot and say that was a successful example of the west are sponsored to the aggression by a great power. but some of the things that we

did do right include the following. one, we demonstrated a willing to take military risk. for example, in the united states called the russians and to fly back, going the russians threatened to shoot down aircraft in and so the chairman said that would be a mistake, they are coming in. that was a signal to the russians we were serious. the second he we did to help provide greater assurance to the georgians, we provided some military equipment, some arms, we provided trainers on the ground, so the marines were not whichir deployed, increased the prospect of them getting caught up and it was the actions that the russians would

take against the georgians. >> do you recall the numbers? >> no, i don't. they were not high. it takes demonstration commitment. today we have not done that. as you pointed out, at the beginning of ukraine crisis, the russians over lysed 100,000 troops -- the russians mobilized 100,000 troops in the front it. what has the was done? westernor so f-16's poland, and offensive flights on the poland frontier. also a company of marines to romania. that is about it. not as not significant, demonstration of resolve, that is a communication of hesitancy to the russians. >> in your testimony you are talking about the types of

military support you would provide ukrainian military. can you speak to that now? >> ukrainian military is about 129,000. 80,000 our ground forces. they are not the most highly equipped. they are not the most highly ready. they should not be underestimated. the event 20 years of independence. they have been in nato operations. a have a battalion of th brigades with poles. they're capable of taking on western equipment. i think they should be given equipment that would hit russia's current strengths, in armor and aircraft camusso antitank weapons would be useful, antiaircraft weapons would we useful. i would not guarantee the ability to survive a massive onslaught, but it would make it painful for the russians, and that should make the russians think twice. right now they do not have to think that way. smith, would you

disagree? >> as i stated earlier, i do think the administration needs to ramp up its review of the defense requests that come in to date. a mix ofote to date is lethal and nonlethal requests. i have not seen specific requests for antitank weapons. i have seen in addition, small arms, as you mentioned earlier, as well as some of the nonlethal support. i think specifically what would be extremely helpful would be on the intel sharing side them and training will be absolutely indispensable. is fromof the problem the prime minister himself, they are reluctant to ask for something they know would not be supplied. their intelligent enough about that. that is part of the problem. esthemr. chow, i read an intereg op-ed talking about permits and

applications for them here, and the point being made is allowing the application process to go through on thosel and g terminals. would send a pretty strong signal and have effect, even though the l and g would not be flowing for a while. would you agree or disagree? >> thank you for the question. from an l and g policy standpoint, there are plenty of reasons why the united states should pre-existin -- should re-examine its policy and rules given that they were written in the 1970's when a time when was a drivingy motivation for the legislation, and those issues are being discussed in congress and reviewed and should take its course. i am in favor of the idea of

looking at the level of l and g and other energy experts. toolncern is trumping up a that is in effect in the short to medium term they have counterproductive consequences. ukraine does not have an l ukraine does not have an lng terminal. and turks allow lng tankers to go through the bosporus it would take at least two years to build. we don't have any capability of sending any lng until maybe 2016. and, the volume of the capacity that the department of energy has already approved, is quite robust already. it is about 95 billion cubic meters of per year, more than the consumption of germany. so what we are d