would be a message, strengthen the transatlantic relationship and besides making economic sense would create jobs both sides of the atlantic. the transatlantic cooperation on energy should result in a more courageous energy mix in europe that should include all sources including shale and nuclear. europe needs to support the building of interconnectors and port facilities to make sure u.s. lng is an important factor n. this, the u.s. private sector should be actively engaged. we need to use all opportunities to shape transatlantic energy agenda intrucluding the tpp pros and the fourth coming nato summit should deal with the issue and by reinventing u.s. european dialogue and cooperation on energy. sometimes we feel that's a bit too slow. the united states and europe must also lead the international efforts on the future of the arctic, sometimes neglects

issue. finally, the united states and europe need to get serious on alternatives. practical projects that reinforce cooperation can help u.s. and eu approaches to climate change. i hope congress will find a way to allow the government to issue lng export licenses in a sufficient number for u.s. lng to make a difference under an allied energy security act ian while not have an immediate impact it will not solve europe's problems on the energy security it will be a very, very important political message. it would send the political message it would send is incall clabl especially to vladimir putin. by the way, i hope senator johnson in the course of the debate you will ask me what i think is ahead of vladimir putin when he's stopped short of invading the whole of the ukraine but maybe at another

time. what really is at stake here in conclusion i would say is the cohesion and resilience of democratic and free societies. this is really an enormous task. and i do feel the united states must lead. thank you. >> thank you. mr. lucas. >> good afternoon. and thank you for inviting me. it's an honor and a privilege as a european to be invited here to talk. i got some written testimony which i should just summarize briefly. i would like to thank chairman murphy and ranking member johnson for the opportunity. european security really matters to the united states. europe's your largest trading partner and force plult plier, the apply and under attack, under attack from vladimir putin's russia. in ways that we haven't completely understood because we tend to compartmentalize and this is an energy problem, military problem, diplomatic

problem. you have business, state craft, intelligence, organized crime, energy, military force, all overlapping and interlocking. as you referred to in your opening remarks, russia's a revisionist power and understood that they're trying to tear up the european security order. that's what it did with the invasion of crimea. it's perhaps less understood i think rurp yeah's also trying to tear up the european energy order. it regards the eu's ability to be the rule setter in european energy as an existential threat because vladimir putin's home and abroad depends on the abuse of energy markets particularly through the way he manipulates gas exports and the european union's been doing a pretty good job to stop that as we have heard with the third energy package, the growth of interconnectors and storage and things like that and putin doesn't like that. as you saw on your visit to

bulgaria, he's keen to push ahead with a head 46 on challenge to the european energy order and he's imagined to get six eu countries now lined up in support of south stream and that's pretty bad so the revisionism affects more than the conventional military thing. rush why's got the means to be revisionist. i think we're still mentally in the 1990s where russia is a poor country and people say it is declining but it can do a lot of damage. and it's not just the military build-up which we have seen and the willingness to use force which gives it an edge over european countries who basically don't want to. but it's been able to use the energy weapon over a period of years to constrain europe's decision making ability. european country that is worry about russian, their supplies of russian natural gas don't want to offend russia. they feel vulnerable and used the money off of energy and

other things to foster very powerful lobbies, commercial, financial, economic lobbies of people with a direct business interest in having good political relations with russia. we see this in germany, the netherlands, particularly i'm sorry to say in my own country of city where london is a biggest laundry machine and there's a pushback to do things to offend the russian government. i should also mention information warfare and something that we have neglected. i'm happy to go into that in the q & a and sophistication and intensity we didn't see in the cold war. using techniques of social media, youtube and other things against us and we don't really have an answer and of course willing to use force. i think we values to be agree that russia is winning. regardless whether there's a pause in ukraine or not. the fact is they got away with it. they got away with crimea aen they're getting away with it on

the pshback of energy and particularly good example of that is the eu is put on hold what would have been potentially a devastating response to russia which is the complaint against gasprom. if anyone told mr. putin in 2005, 2006, 2007, 2008 that eu officials with search warrants would be kicking down doors and going to gasprom affiliates across europe building up a compelling picture of market abuse that could lead to hundreds of millions of dollars in fines for gasprom, enormously changing the business model and possibly class action lawsuits and goes on inside putin and not pretty and that's what happened. the eu got to the stage with a loaded weapon pointed at the crekremlin then and flinched pulling the trigger. we need to deal with the military dimension and the baltics, prepositioning, all that sort of stuff.

we need to send the message that -- that crime doesn't pay. do the sanctions on the much wider thing and much wider scale. i think we -- american lng is a vital part of the picture and glad you touched on that even before molecule of lng arrived, thank to lit wanian lng terminal, they were able to drive a harder bargain with gasprom and a much lower gas price and one has to see lng and lng infrastructure as national security times and from that point of view vital for europe and the american export licenses already granted there, very important psychological component in that even before any molecules flowed. finally, i would just touch on energy market reform. russia abuses the energy market, the sething of benchmarks, the trading companies abuse the market. a lot of stuff is very difficult to write about publicly because

of english liable rules and i refer in the written testimony to the role in the economist liable defense sued by someone now on the u.s. sanctions list. this really deserves the full attention of the american criminal justice system. you have all sorts of evidence about money laundering, market abuse and insider trading that goes on. you have the ability to clean this up. and the more open, the more transparent, the more liquid world energy markets the better everybody is and the safer europe is. i'll stop there. >> ms. shaffer? >> chairman murphy, ranking member johnson, thank you for convening this hearing this afternoon. very important topic. the 21st century is era of natural gas. 19th century -- >> is your microphone on? if it is not, just pull it towards you. there you go. >> the 21st century is the era of natural gas. in the 19th century, coal was the dominant fuel.

20th cent oil and now resources discovered in vast new locations. natural gas has many benefits. and most any other energy sources. natural gas is the fuel that's most come partible with the use of a base load and power generation. however, security of supply and natural gas is more challenging than any other fuel source. as natural gas is physical qualities make it complicated and difficult to ship. there's meticulous policies and government involvement of security of supply of natural gas. a number of measures to improve european natural gas energy security. first, policy should focus on improving the security of supply in the vulnerable markets. observers may speak of a single european energy market but this is an illusion. states on europe's periphery have a higher energy prices and challenges than in the west and center of europe. the european council's endorsed security strategy recognizes the uneven nature of the situation

in europe. natural gas sectors must be properly organized for supply regardless of the origin of the gas supplies or the political situation. supply disruptions most frequently result of technical glitches, natural disasters or extreme weather and a biggest security challenge of supplies in recent years in europe is winter 2012 due to extreme weather. next, the united states and europe should make sure that kiev gets the natural gas sector in order. the unpaid gas bills to gasprom are legitimate russian concern. ukrai ukraine's the major point of tranmission. political elites across the political spectrum have engaged in siphoning of gas, disregard for payments and subsidies of runaway consumption. this behavior endangered security of supply to europe. additional natural gas supplies can also improve the security of supply in europe. most promising new source of gas into europe is southern gas corridor.

beginning in 2012 this project to bring natural gas into southern europe. this project is the first in decades to bring new volumes into europe and not just rerouting existing volumes and reaches the specific gas markets of southern europe that relied on the single source and are the most vulnerable. the southern gas corridor can facilitate increased of volumes of gas of different sources such as iraq, such as eastern immediate trainian and any new sources in the region. spurs can be built to additional markets in europe. the project will bring thousands of new jobs in the construction phase to southern europe such as greece and italy. as ber shan sold the gas to europe instead of local markets and probably more profitable and russia and iran noticed the choice. this project needs continued eu and american support to make sure that russia doesn't undermine it along the route. russia may attempt to reignite

the conflict or destabilize georgia to thwart the development. continued u.s. interest is important for removing the potential means to destabilize the region and another potential new source of natural gas into europe from israel and sigh press. eastern immediate trainian is too modest for a source of mainland europe unless they're found. but this can be very useful for the region itself. and the ability of these resources to serve as peace pipelines i believe are overstated. energy trade reflects existing relations, it doesn't create them. in fact, dispute over energy resources or commercial conditions can kprexasperate existing conflicts. although the gas volumes can eradicate conflict in the middle east over water as a source for desalination and essentially remove any water shortages in the region. it is increasing water supplies

to israel, jordan and palestinian territories, at least removing part of this conflict. the new resources can improve reliability and affordable electricity in the middle east which is important as a basis for future prosperity and peace. in recent months there's been speculation that if a deal on iran are's nuclear program was reached with the west, tehran could be a supplier of gas to europe. this idea is far-fetched. while iran holds the second largest reserves of natural gas in the world, today iran is surprisingly a net importer of natural gas fed by the huge domestic subsidies and inefficiency at home. russia would surely block it. over many issues despite allies their strategic competition. throughout europe moscow has

policies don't as a dominant energy supplier. and block efforts if europe and rival supply projects. moscow's sponsors and funds bogus movements to oppose shale gas production and new gas projects. professional government analysis should disrupt sophisticated organize zags that moscow useses to remove the tax status nonprofit status for organizations that receive funding from moscow. in addition they should look at russian companies that make untransparent alliances with russian are companies and bar this behavior. another mechanism moscow can explain is gas hub trade in europe are. this should be countered. last, washington and brus sell s should clarify to nato and e.u. members in the organizations it entails obligations to protect

energy security. bulgaria's reluctance to improve its own security supply are worrying. until this year, brussels increasingly pulled out of the business of ensuring energy security and delegated the job to the market. the market pace alone will not be enough to encounter a relentless russia. national and e.u. institutions must take an active role and the united states should support it. thank you. >> thank you. mr. chow? >> chairman murphy, ranking member johnson. i'm honored to testify on european energy security and the impact on the crisis in you cane. when it comes to energy security for europe we focus on natural gas supply. it's interesting to ponder why when europe is more dependent on oil imports than gas imports. there's been major global oil supply interruptions in the past

year, but not in gas. yet the level of anxiety is higher with gas than the oil. why? the root causes are in part related to incomplete market integration in europe when it comes to gas and electricity. the gas markets has been dom mated by long-term contracts at fixed volumes with prices indexed to oil. supplies have restricted competition and the free flow of gas with destination clauses in control over pipelines. the business practices were supported by major foreign suppliers and by incumbent european gas companies that control distribution networks in their home countries and pass on the higher cost of gas to consumers. european harkts in gas and electricity distribution infrastructure are not well connected for a supposed common market. what can the united states do to

help our european allies and trading partners? the first point is that we have already done a lot through the shale gas boom. these supplies became available for western europe. despite initial denial of the lasting nature of the shale gas phenomenon, gas prom was forced to adjust downward all major supply contracts under more flexible pricing turns. as a result european imports increased last year. western european import facilities are working at low utilization rates. even if u.s. ong exports were available today they would not be imported by europe but east asia with gas prices about double european prices. when the united states begins to

export in a few years the benefits to europe lies not in the quantities but in future price formulation in global gas markets. international gas priceses may no longer rise and fall with oil prices. with prices in different regions converging as a result of u.s. exports. the competitive advantage to shale gas revolution provided the u.s. economy with lower gas and electricity prices coupled with reduced greenhouse gas migs caused european s to re-examine energy policies with renewed effort for further market liberalization, enforcement of competition rules and rethink on the use of domestic energy resources. in the meantime, the crisis in ukraine caused by russian action a presents a clear and present danger for european energy security. the risks are borne by eastern european countries since they rely on russia for almost all

gas imports. much of which is through ukraine. ukraine's weak, corrupt energy sector createses vulnerabilities for itself and neighbors. the previous ukrainian government left the current government with mounting gas debt to russia. this debt and the failure to agree to new gas prices led to the cut-off of supply to ukraine on june 16. ukraine depends on russia normally for 60% of the gas demand and is the major transit corridor fors gas through europe. in either case there are ready substitutes. if the gas into tra teenagecally located storage facilities doesn't begin soon, ukraine will rub are out of gas before the start of winter. if nothing changes the government would be left this winter with a choice of either letting its own population freeze or taking gas from russia destined for european markets

for its own use. if russia's intent is to further destabilize ukraine and prove to europe that ukraine is an unreliable transit partner it is in russia's interest to prolong negotiations. to date, european mediations has not led to real results. the european gas market is surprisingly complacent about the situation. spot gas prices dropped significantly, although gas storage capacity has risen. extra storage isn't as high as it could be. the risk of miscalculation is high. meanwhile russia is pushing the south stream gas pipeline to bypass ukraine all together as an alternative supply route to europe. as someone more comfortable with negotiations i question economic negotiations brokered by political leaders. the e.u. mediated russian are negotiations has become serious when negotiators stop talking to

the press. long-term sustainable economic transactions cannot be based mainly on political conditions which tend to change as we discovered with the russian ukrainian gas deals of january 2006, january 2009, april 2010, and last november. raising matters to the highest political level as europe has done only invites russia to make political demands like restrictions in urine ukraine and stopping further western sanctions resulting from russian aggression against ukraine. the only real solution to the crisis in ukraine is to strengthen ukraine. president po areroshenko observ the blunders made by previous ukrainian governments on energy policy. business as usual is no longer an option.

concrete policy action is required. we have seen precious little so far. what needs to be done for the energy sector reform in ukraine is well known especially in natural gas. what's been missing are the professional financial capacity to execute reforms in a systemic way. true reformerers deserve and require assistance to be success canful. it is an open inare vi tags from adwregs and a source of instability in the heart of europe. neither ukraine nor the west will have another chance better than the opportunity created by the current crisis for energy reform. the situation cries out for american leadership working closely with europe and the donor community by injecting needed resourceses with strict conditional ti on assistance. the policy must be performed by sound analysis, not wishful

thinking, followed by hard work. thank you. >> thank you very much. thank you all p for your testimony. mr. chow, i wanted just to ask you a question about the effect of a are prolonged crisis in ukraine. you posit it would accrue to russia's efforts because it would under mine faith in ukraine on behalf of the e.u. in my mind there are three possible outcomes. i'm sure to them. one is that it will under mine european faith in ukraine and compromise enthusiasm for marrying together ukraine and the e.u. or nato. second, it could increase enthusiasm for alternate routes of gas to europe, south stream as the primary example. but it could also be a tremendous wake-up call, the

straw that break it is camel's back in terms of prompting europe to do things truly necessary to become much more energy independent of russia. why is my third alternative not just as plausible as the first two? >> thank you for that important question. i hope you're right. you're sitting in russia's news. you got a wake-up call in january 2006 when gas was cut off to ukraine are. it got another wake-up call in january 2009 when instead of a three-day cut-off, europe suffered a three-week gas cut-off. it's done precious little except for the steps i have mentioned. its response to the invasion of crimea as well as russia's

adventurism in southeastern ukraine has been relatively weak. i think -- i guess it's a parlor game mow to get into vladimir putin's head. from his standpoint, the way he sees it, and he may be miscalculating, the time is on his side, not on europe or ukraine's side. >> let me ask a question of the other three panelists. a simple question. it isn't simple. does a prolong crisis harm ukraine more or russia more. with respect to future dynamics over e.u. membership or future continued reliance european energy. i'll go to you, mr. lucas. >> europe frequently gets wake-up calls and then goes back to sleep again. i think the question here is the time frame.

i slightly disagree with mr. chow. i think the previous criseses have stimulated quite a lot of activity in europe. we now have pretty are much complete north-south gas grid. we have better storage. we have had the third energy passage which reduced russia are's monopoly power. if they cut off the gas now we probably got threes months before it would start tonight. that's quite nice. this is stuff you were talking about to make it different. we're talking years. if we start now in five years' time webb we could have a resilient energy, if not independent, a europe with lots of energy capacity, lotses of storage. new interconnectors and all these. it's the vulnerability. they could threaten stuff which scareses politicians like here.

we have a are fragile recovery and politicians are desperate to have stuff. an energy interruption worries what it does. that's a powerful weapon. they have to threaten the stuff. we start thinking of ways to try to make this conflict go away rather than win it. >> i think the last moves of russia, they set up a perfect strategy. they set up ukraine against europe. the gas flows to europe. if the only way for ukraine to get gas is to disrupt the supply is to europe and not taken to storage for future commitment. as winter approaches it's pinning kiev to europe. if we look at previous european response was north street meaning building a pipeline from russia to germany that circumvents transit states.

you might see the answer being south stream or might be the southern corridor. there is another alternative. while the third energy package is great in terms of principles and in a perfect world where lawyers ran all the gas trade, it's very nice. in the reality of russia behavior as we pointed out, whether it's manipulation at gas hubs, price are. gas promised the biggest trader in european gas hubs. of course they can flood the market, deny the market. really affect these prices. what we need in europe is a paradigm change. they base the third energy passage on the american model. you have the market has done a great job at increase creasing energy security. the u.s. has thousands of gas buyers, hundreds of gas producers where the largest has only 3% of the market. three of them are external to

europe. each has about a third of the market. it's a different game. europe needs a paradigm shift that gas is not a commodity. it is a utility. we called gas a utility, not something that you just trade. when you think of it as a public good which needs more public involve: >> may i add that i do think what's really at stake is a competition of two systems. our liberal societies and an idea that he's going to use the time before we get our act together to liberate the ways of running a society. the size you encountered in bulgaria is exactly this. he is targeting the weakest link within europe and within the

nato alliance. one of the big problems is not directly related to energy but that the perception of the russian threat is very, very different in western europe and northern your, southern europe. let me say europe. in eastern europe, i'm really worried that russia with the multiple tools in the tool box, putin using energy, other tools to influence the eastern european and central european countries that he feels was once part of the fear of influence. it's not fair that they are now on the other side. >> senator johnson? >> you asked for a softball. so what is puts in thinking? >> i think what putin is thinking right now is that, first of all, he says my goal was to destabilize the ukraine

enough so that it's definite that the ukraine will not be part of the western institutions, the european unions or nato. this is his first goal. he's achieved that. he's going to resort to all kind of means to stoke trouble when the moment comes and it looks like things are too smooth. i think for now he's totally satisfied with running, owning, quote/unquote, crimea. i have no doubt that, of course, at any moment he can turn the switch on and we'll be back to a lot of trouble. the fact that we don't see him visibly present in the eastern ukrainian conflict at this moment doesn't mean he's not fully in control of the

insurgencies. >> mr. lucas? >> yeah. i think he thinks we're weak and he's winning. >> i agree. >> i was always in support of strong sanctions. hopefully targeted ones that were painful to putin, not us. when we were talking about sanctions, they are a double-edged sword. i wanted to stop talking. i thought it was a delaying action. they had no effect. when we were in poland, i don't want to identify the individual telling us this. we have had this since confirm ed. certainly being from the outside in, hearing how effective the sanctions were against north koreans, just top leaders. denying them access to the banking accounts and travel to

macao and that type of thing was the most effective sanction. why don't we target in a far more robust fashion the hundred to 110 individualses in russia that rely on the west for banking and wealth dispersion, that type of thing. mr. lucas, i will go to you. >> i couldn't agree more, senator. i think we are looking for magic sanctions that don't hurt us and do hurt putin. unfortunately there aren't such things. every country's got something to lose. because russia has done a good job building up dependencies. i think the visa sanctions and asset freezes are poourful weapon. we have laws against money-laundering in this country. in my country and yours, banks are supposed to know their customer before they start taking deposits. how is it possible these people on their modest official salaries and sons, daughters,

wives and parents and the rest of it are coming and putting hundreds of millions of dollars through the payment system and financial system. how is it possible that it was listed on the stock exchange when it feasted on the corpse of the big withest oil company. dismembered because of a political fight with the kremlin. $8 billion of western shareholder money goes down the tube. this company which is effectively taking property is allowed to list on one of the oldest, most reputable stock exchanges. the ruk russian distance had a great slogan which is the powers that be enforce your laws. i think we should start by enforcing our own laws. on visas, we had to start withes these people. the most terrifying thing isn't the secret police. it's an angry russian woman. if people are going home at

night finding their wives, grandmothers and daughters saying we can't study in the west, shop in the west, go on vacation in the west anymore because of the visa sanctions, that hurts. >> doesn't it threaten the oligarchs when they can't spread money around the world sfl. >> absolutely. >> >> the first thing is foreign passports. they move assets offshore and diversify. they real arelize the mess russia is in. >> mr. ambassador -- >> i just want to ask. we know there is much more grumbling in the inner circles of putin about the sanctions than meets the eye. >> why don't we do it? >> that, i don't know are. >> i think putin thinks he can

count on it between u.s. and europe. >> more weakness play into their hands. >> what is the e.u. thinking by not dropg. not revealing what they found. what does the e.u. think? >> what would be a more perfect, totally directed sanction to a certain extent when putin is invading crimea and threatening eastern ukraine. what are they thinking? >> it was too perfect. it was scene as an escalation which is wrong in this country and in europe. we need to find an exit ramp. we don't want to escalate this. we are trying to apply judicious, moderate sanctions, raise the cost of putin and give him a chance to back down launching the equivalent of a

cruise missile at the kremlin. wasn't seen as part of that. it was wrong. the russians always hope there will be a political solution to this. they have said again and again, don't go down this quasi judicial role. let's agree are to stop doing stuff and maybe pay a little bit of fine tuning there. we don't want a big public fight. i fear the argument has begun to fight. it's a pity. would have been a wonderful thing to see that. i wonder if we are going to see it. it looks to me at the moment it will be past it. >> i'll complete the next round. >> sure. >> you have said twice you think russia is winning, mr. lucas. i want to pursue that rath arer simplistic rendering of geo

politics. i guess if the measurement is levels of testosterone and bravado he's winning. if it's the expected approval ratings of putin versus obama, he's winning. when we look at other metrics it's hard to understand how he's winning. he has less friends than before. former republics are climbing over themselves to sign association agreements with the european university and are stopped by invasions and illegal tactics. his economy is in recession. he's no longer a member of the g-8. he's not an international paare

riah, but has less influence. we are debating how fast they are going to move about russian energy. there is no debate about whether the next ten years will see reliance. it's what pace. he's in worse shape, kicked out of international institutions and his reason for existence being an energy supplier in peril. >> it's like asking tony soprano if he wants friends and he says the people who need to be scared of me are scared of me. a few years ago are, couple years ago, puts in was in trouble in russia.

the putin modernization program hasn't worked. russia hasn't diversified. the infrastructure is rubbish. he was becoming a bit of a figure of ridicule. that's changed now. the opposition knows the ratings are high. he's distracted russian public opinion. through these foreign adventures, yes, you're right countries like kazakhstan, georgia and so on. he sees he's got more influence in western europe than he ever dreamed of. the atlantic alliance is weak. the success of the strategy. you only have to look at countries signing up. the enormous way of anti-americanism in germany now with the snowden stuff is a

range of things that must make him think the sun is shining. >> i wanted to add to this. he's -- look, he doesn't necessarily want to be seen winning. he wants to win. meaning that while we are debating ukraine. while we are debating energy, at the same time he's doing other things in europe. buying up banks. buying up companies. what he wants is a long-term influence within the european union within nato. in that sense, i think in a way he's winning. he's not winning in the sense that we consider winning, but he's winning in his own world he's going to gain a foothold that will be difficult to counter if we are not careful. >> that's an enormously important distinction. i don't care if he's winning according to his terms.

we have to conduct our business according to our understanding of winning, losing what benefits us, what's to the detriment of u.s. security interests. let me turn the topic to another more specific issue. that's this intersection of production and transmission. when we were in romania, there was some very positive discussion about the ability to move romanian resources into maldova save to the fact that the russians owned a controlling stake in the transmission lines inside maldova. so all of the work that was going in to moving the product to the border of maldova was potentially for naught. once you got into the country, it was still up to russia.

the third energy package speaks to this in trying to separate the two. how important is the control of transmission to russian energy and what are the prospects to dislodge transmission of the control. is there anything the united states can do about that. asking that to the panel. so, ms. schafer, you seem most eager to answer. >> okay, great. senator murphy, thank you for the question. in a sense the third energy package created opportunity for russia to get hands on the transmission systems. the producers, other shippers or distributors can't own it. these things have gone for sale. with financial crisis and a number of countries in the region, there's privatization. thises has given them leverage within europe. for instance, as the southern corridor made a decision to go

through southern europe and go through on the route of greece, albania and italy, we see a small russian unknown company pop up and try to buy the transmission system in greece. they are aware this is a way that if you can't beat them with a south stream, try to buy a chunk from within. something has to be done. the third energy package will enable this kind of behavior and not the opposite. in the case of maldo are va, russia is constantly taking payment for gas in national infrastructure. in january, armenia lost the last stake in the gas transmission infrastructure. in the end, this might be more hurting a state's independence than its gas supplies. this becomes an actor in the local economy. gives it a lot of leverage in one of the major financial

forces domestically in a are country. >> mr. chow? >> i would support what dr. schafer said. the idea of piling up debt in order to have a debt equity swap later, it's a longstanding russian are business model since the collapse of the are european union in russia. it applies in maldova as well. controlling equity is for all the gas that is owed, including gas debt that was utilized. and not paid for. this is quite a common practice by russia. the e.u. leverage on paper that could be applied is the fact that these countries including maldova and ukraine are signatories to the community

treaty. as opposed to to comply over time with the energy key of the european union. that's been observed mainly in breech in the case of maldova until now. this is certainly something within the e.u.'s power to police over time. it has chosen not to do so for reasons that my european colleagues may know more than i do. >> if we don't understand what tonight tifs of adversaries are, we'll misjudge. i don't believe putin is acting from are a standpoint of improving his economy. this is not in russia's best interest long term. i think this is all about vladimir putin. about his ego. about his power. about his control.

we didn't draw up plans for military defense of the new members because we assumed russia was a friend. we all hoped that. i wish russia are was a friendly rival. i want to ask you again. what is putin in it for? >> he wants to weaken the west to the point he doesn't think we are a threat to him. he's doing a good job of it. he worries. successful tris on his borders

might give his people ideas. it is happy to make ukraine into a category. we thought they could have a large, prosperous, law abiding neighbor with the prepress and so on. this would be great for russia. if we try to make a threat to ukraine, that's also to putin. they said we don't believe in geo politics. i said, but geo politics believes in you. >> explain why that's a threat to puts in. if he has successful democracieses that are western-leading, reduced corruption. his citizens are are seeing it in ukraine. is that the reason? >> yes.

if you have tens of millions of people consuming russian media and a culture of oh debate and inquiry, they will touch russia and russians watch that. he needs to be able to tell russians that my way is the only way. nothing else works. >> threaten his control. when i first made my trip to the region. they were all talking about how vladimir putin at that point in time was doing everything he possibly could to under line their success. their democracies. >> you have put your finger on an important point. these front line stakes have been warning us in the west about the this even before putin. >> we just refused to acknowledge it. why would anybody doha?

we want with integrated economy. we want to lift up a lifestyle. >> they have been proved right are. we should ask them for advice. say what should they be doing? what's your suggestion? >> what's the concept? >> i can't resist to cut in here. this has been in the making for the last 12 or more years. i eep telling people just because i'm hungarian, i still might be right about vladimir putin. i would like to echo what was said.

what you are talking about is a difficult, painful, bloody process are. at the end of the day which will be best. he wants to stay in power for 20 years. we are the biggest threat for his continuous remange in power. transparency, accountability, rule of law means he will end up. that's something he wants to prevent. >> understanding his goal -- and i totally agree with that. >> what's the best way to blunt that? what is the first thing we can do and implement quickly? >> let me say that -- i've still got the light on. let me say that it's

counterintuitive. the harder we react, the stonger our reaction, the more determined we are, the more likely he is to back off. >> when we were in po lant, i don't want to name the official. they said the main reason vladimir putin didn't go into eastern ukraine is he was generally surprised at the west's reaction. there were delegations. the west actually covered what fs the doing and basically this official credited the west reaction that surprised putin for having him hold off which bolsters your point. >> it could have been a little bit harder. >> oh, absolutely. >> senator, i just say this because that would have given us a lot more time to fix the problem. >> the reaction has been totally weak, lacked resolve, inadequate.

>> first of all, i want to agree with my fellow panelist that mr. putin has different metrics for success than we hold. he's not insensitive to the down sides of what the action has caused. i see the deal he signed with the shanghai on may 21. for example, as a reaction it won't help him in the short run. s as a reaction to the to show russia can't kwoth be isolated and his win in the foreign policy and tradesfear. he may think he's winning doesn't mean we should give up. polts -- policy is the most important thing. i will repeat what i said, that strengthening ukraine. helping it become a democratic

and prosperous free market country is the best thing we could do in the short to medium term. >> we should be doing what we can to bolster it. i mean real military equipment. >> we should equate russia's actions with his specific goals. i think any russian leadership would try to invade crimea. there was an interesting debate in the united states. is this the return of geo politics. to my ear it is idea is like saying, oh, the return of the pacific ocean or the return of the caucasus mountains. of course it's always there. the only thing that changes, we tried to ignore they will.

the most dangerous weapon is the world as you would like it to be versus what it is. left the fleet outside the jurisdiction of russia. this was like leaving the pacific fleet outside. if california broke off from the united states, leaving the pacific fleet outside the jurisdiction of the united states, it was a ticking bomb. the only problem is some panelists pointed out we didn't learn lessons about how countries react. there is something connecting the panel hs in terms of natural gas. states expand as much as they can until they hit a container. this was the opportunity and timing. invading crimea was something that would happen. this is the russian playbook. i think why there seemed to be pulling back from ukraine is we are focused on eastern ukraine,

forgetting about yiem crimea. it seems like there is no intent to invade it. it seems like they will invade and then you see they are happy to stay in the region as peacekeepers. this is their play book to focus on getting them out of eastern ukraine. >> we refuse to deny reality. rely on hope as a strategy. we have to be brutal in our assessment of the reality of the situation. i keep going back to having to recogni recognize the power and control. it makes no sense for the citizens of russia. it makes total sense to maintain his own personal power as long as he lives. >> to respond senator murphy,

every day thousands of people try to enter the united states. not only to enter here i don't see thousands of people trying to break through to russia. in the end of the day, we have to stop the defeatism in our policies. >> p i thank the witnesses. thank you, ms. schafer, for that comment as well. senator johnson and i agree on much more than people think when it comes to a lot of the topics. we do disagree on right now the score card between the east and west. i will close with this this comment. there is irony to putin's actions. we agree there is short-term calculus made here. russia made its name over the last 200 years by being anybody else at the long game. kutizov emptied moscow in order to allow napoleon to stretch the

troops so far into the russian territory that eventually his forces collapsed. i think it is important for us to remember that the long game is creating real contrasts. what it means to align yourself with free market and what it means to be beholden. this is asymmetrical warfare. they are willing to use tactics we aren't are willing to use. that means we lose a couple of skirmishes in battles along the way. they are willing to ebb gauge in bribery and corruption. ultimately it probably means we will be able to win the long gail. thank you very much for being here. our hearing is adjourned. the record will be open until

friday at 5:00 if we have other questions from committee members. we hope you will turn around answers as quickly as possible. >> watch us in hd, like us on facebook and follow us on twitter. >> and now live to london for british primers is question time. each week the house of commons is in session we bring you prime minister david cameron taking questions from members of the house of commons live wednesday

mornings here o here on c-span2. we invite your participation via twitter using hashtag pmqs. prior to question time members are finishing up other business. live to the floor of the british house of commons. >> does my honorable friend agree that nato summit coming to newport this september provides an ideal opportunity for wales and the uk to showcase our defense industry, a vital part of our economy and weaken show that off to a global audience? >> i totally agree with my honorable friend. one of the key reasons that the prime minister made the decision to bring this to wales is to showcase all that is good. it is true that the defense and aerospace sector are some of the jewels in the crown of the welsh economy and the nato summit provides an excellent opportunity to showcase those. >> questions to the prime minister.

>> number one, mr. speaker. >> the prime minister. >> thank you, mr. speaker. i'm sure the whole house want to join me in thanking all those involved in the start of the tour de france in britain. >> here, here. >> from the it organizes to all the cycles. disc showcases the best of yorkshire and the whole of britain has to offer and i was glad to see such incredible support throughout the race. mr. speaker, this morning i had meetings with ministerial colleagues and others, and in addition to my duties in this house, i shall have further such meetings later today. >> thank you, mr. speaker. i will join with the good news the prime minister has just named. the northern island quality commission is threatening legal action against a family-owned bakery because they wouldn't print a political message on a cake. the requested message was completely -- with the company's christian values. does the prime minister agree that so-called equality is an

oppressive threat to religious freedom? does you further agree that such freedoms should be protected by the introduction of our conscience clause? >> well, i'm not aware of the specific case the gentleman raises. of course, i'll go away and have a look at it but if you think a commitment to equality in terms of racial equality, in terms of equality to those of different sexes, in terms of people with disability or in the tolerance of the quality of people who have different sexuality, all of that is an important part of being british. >> with the prime minister like to welcome the president -- >> order. i want to question to be her. i want all questions to be heard. >> with the prime minister welcome the president, in piece and others of german parliament to sing a joint concert with our

choir and westminster hall tonight to commemorate -- and the monarchy? >> very happy to join my right honorable friend in welcoming this german choir. i suspect after last night results they will be rather in good point i think. i think it is important on a serious note that we properly commemorate the outbreak of the first world war, the key battles of the first world war and, of course, armistice day as we come up to these vital 100th anniversary. i'm determined that in britain we will mark it in appropriate ways. there will be a service in glasgow and a number of different events. i think it's very important women the lessons of that conflict and we commemorate those that fail. >> ed miliband. [shouting] >> mr. speaker, at like to join the dry miniature in paying tribute to the way the the organizers and the noise of fans by the tour de france such a brilliant success for britain.

i was proud to watch it on the street as i know he was. i was in leeds with hundreds of thousands of people lining the street. let me say, tried to all of us have been horrified by the instances of child abuse that had been uncovered into the allegations that are being made. all of the victims are not just code to justice but are owed an apology that it took so long for their cries to be heard. does the prime minister agree all inquiries including by the police and those you set up, must go wherever the evidence leads them in whatever institution of the country, including our own, to get at what happened the? >> i also be agreed with the right honorable gentleman. child abuse is a despicable crime and the victims lived with a whore for the rest of their lives. it's absolutely vital whether it is the to increase announced by the home secretary or indeed the final police inquiries that are being carried out that no stone is left unturned. i think the whore of the jimmy

case -- the horrors, almost on occasion they were committing crimes in plain sight and it took far too long to get to the bottom of what happened and for justice to be done and that is absolutely what this government is committed to achieving. >> can the prime minister clarify where the ministers were first performed and what action they took which disagreed that it cannot be reviewed into the original review but must seek to what happened to the file, who knew what about the file, and whether activation was covered up? >> first of all it was parliamentary last year that revealed the points about the 2013 in quite the what i say to ms. it's absolutely vital that he will carry out this year in the right way, that he is all the powers he needs and lesbian absolutely clear he wants more

powers and if that inquiry once to have a greater powers and ability he can ask for it and the moscow exactly the evidence leads. were determined to get to the bottom of what happened. >> ed miliband. >> the most important thing in relation to these files to clarify what happened to them and why they went missing. i welcome the overarching inquiry that's been set up at home secretary. candi prime minister to say more about what the terms of reference of that inquiry will be? can ask whether he will consider the very sensible recommendations made today by the coming up with a view of criminal offense and ensuring there is an obligation on institutions to report abuse where it occurs the? >> we are taking the right honorable gentleman's second first. should we change the law so that is a requirement to report a naked comeuppance not report. the government is looking at that and, of course, both were usually able to examine this particular point advice is according to a figure may well be time to take that sort of

step forward. on the issue of the terms of reference of the wider lessons reviewed, we're happy to take suggestions from other parties in this house. the main aim is as i said before you've got a number of inquires being carried out in the specific hospitals including the stafford inquiry, within the bbc, and other inquiries including into welsh children's home and also but what is vital is the government learns all the lessons of this review. where i think the source review can help is by having a panel of experts that can advise us about all the things that need to change in order these institutions. for instance, the church, the bbc, the nhs but also if necessary in this place and in government, too. >> i welcome what he said including cultural change in this. it's crucial in all institutions. i want to turn to another matter, the health service. last week he said that the waiting times has gone down but

within 24 hours the house of commons library called them out. average and waiting times have gone up. willie now corrected the record a? >> what i said last week at prime minister's questions is absolutely right, if he goes on the website -- you to go to the website of the organization -- i also come if you remember, mr. speaker, the end of prime minister is questions there were some point of order and i said very specifically that the number of people waiting longer than 18, 26 and 52 weeks to start treatment are lower than they were at any time under the last government. now that was directly contradicted by the shadow health secretary images want to give the figures to the house now so people can see that i got my facts right. first, in april 2010 there were 217,000 people waiting over 18 weeks. it is now 186,000. lower. in march 2010 there were 92000

people waiting 26 weeks for treatment. it is now 59,000. lower. andrew kuchins awaiting 52 weeks, 52 weeks for treatment, in april 2010 there were 21,000 people waiting that long. the figure now is 510. lower. [cheers and applause] >> mr. speaker, it's very obvious -- it's very obvious he doesn't want to talk about what he said on accident and emergency with house of commons called him out. let's go to the commonsense definition of what a waiting -- >> order, order. as always doesn't matter how long it takes. the question will be heard. they yelling at the calculated shouting might as will cease. we'll keep going as long as is necessary. mr. ed miliband. >> let's get to the definition of what a waiting time in a&e

is. it's the time between our writing at the a&e and leaving the accident and emergency. the number of people waiting more than four hours is at its highest level in a decade. why does he just admit the truth which everybody in the country knows, people are waiting longer in a&e? >> the figures i gave last week are correct, you are published by the health and social care information center which is the average waiting time was 77 minutes when the shadow health secretary was health secretary the average waiting time is now 30 minutes. but the fact is, mr. speaker, we can trade statistics across the floor of the house and i'm absolutely are the health service is getting better, but there's a reason why it's getting better, if we took too big strategic decisions. we said let's put more money into the nhs. they said that was going to fall. we said cut the bureaucracy in the nhs which they wanted to keep.

and that is why the our 7000 more doctors, 4000 more nurses, and he is made a massive mistake keeping a failing health secretary as a shadow health spokesman. [shouting] >> i would read every shadow health secretary than their health secretary any day of the week. and i'll tell you what, i'll tell you come up a with seven in health service, although he what's happened in the health service, we have a top down reorganization that nobody wanted and nobody voted for and it's diverted millions of pounds away from patient care. and mr. speaker, the contrast we see is between the complacent claims of the prime minister and people everyday experience. people are spending longer in a&e and hospital a&e, as a&e missed their target the last 50 weeks in a row. mr. speaker, while he tries to begiget the things are getting better, patients, nhs staff and the public can see it is getting

worse right before their eyes. >> he still has to defend a man who provide over -- [shouting] were standards of patient care were so bad yet patient's drinking out of dirty bases because of standards. look, but the point is this. the reason we been able to cut bureaucracy and the reason we been able to put more money into the nhs is because we have taken difficult decisions, including having a 1% pay cap in the nhs, which, of course, labour said they would support but this week they have decided they will back strike. and, mr. speaker, mr. speaker, i have here, i have your the labour breathing of strike. and it says this, do we support a strike? no. will be condemned the strikes? no. they are we have it. [laughter] that is his leadership summit up in one go. how they got a plan for the nhs? no.

hohave begun plan for our econo? no. is remotely up to the job? no. [shouting] >> thank you, mr. speaker. is the prime minister aware that british airways are to seize the link between aberdeen and london city in favor of increased services to already -- glasgow, edinburgh and london quickly support the campaign to maintain this link which is vibrant to the visit economy of the north of scotland and? >> very happy to look in this issue with the honorable gentleman. it is a vital service, particularly when you consider how strong the economy in northeast scotland is performing so i'm happy to look at this issue with him. >> tomorrow i will be in -- summit firefighters, the backbone of local committees.

[inaudible] >> the point i declared that it don't think the strikes all right and i condemn these strikes and i think that people should turn up for work. it's a pity would've so much clarity on that issue from the party opposite or indeed from his party. but let me just give one example. the national union of teachers is proposing a strike based on a ballot that they had almost two years ago on a very small turnout of their members. no really, is a right to continue with the situation when so many children's education is going to be so badly disrupted? >> mr. david nussle. >> thank you, mr. speaker. speaking from the opposition backbenchers on the ninth of december, 2002, the prime minister said i find the european arrest warrant highly objectionable. i still think it seems highly

objectionable. does the prime minister? >> the point i make to my honorable friend is we made a series of changes to the european arrest warrant so that you don't have the problem people being arrested, for instance, for things that aren't a crime in this country. but the question we all have to ask ourselves as having achieved this vast opt out from justice and home affairs which is the biggest return of power from brussels to britain, which are those few things we need to go back into in order to fight crime and terrorism, and obvious i think the home secretary and the justice secretary judgment has been absolutely right. >> the head of the civil service says the business case for universal credit has not been signed up to the department of worker pensions has. who is telling the truth of? >> the budget for universal credit has been signed off in each and every year by the treasury and ugly will continue to disappear for good news on universal credit is that next

year we will have one in eight of job centers rolling out universal credit. now i thought we find the party opposite would be in favor of a system that makes work to pay but what we can see today is they have gone back into the hole of being against every single welfare changed and everything that is getting this country moving. >> up to 30 websites has pornography, another form of sexual abuse to does the primers agree that posting such material has to be recognized for what it is? a criminal sexual offense against its victims? >> i think by right honorable friend is right. this is an appalling offense and a dreadful thing for someone to do, and declared has criminal intent and i'm glad she is championing this cause and help have been looked in detail at the amendments she is suggesting that we can take up this cause.

part of bush achieved in government in terms of making sure we do far more to do with internet pornography and the very good work she did in offi office. [inaudible] why is the head of the home civil service saying he hasn't signed it up? >> what has happened is universal credit has been signed off in each and every year by the treasury. i make no apology fo for the fat that we're rolling it out slowly. we have learned the lesson of the last labour government in which he played a prominent part where tax credits were introduced in one go and was a complete shambles. >> the north west air ambulance as three helicopters and has logged thousands of missions since 1999, one of which saved

the life of a friend of mine after horrific car crash. cost 4.2 million pounds a year to win. there are 27 such bear services throughout the whole of united kingdom and did one of them may soon become a royal air ambulance service. will he pay tribute to those who man the helicopter saving lives throughout the country? and also praise on the thousands of people who raise funds every week on street corners so they make sure they carry on flying and carry on saving lives of? >> my honorable friend is absolutely right. our air ambulances provide a completely invaluable service. i think we should all be true to the men and women who staff and support them, who often have to undertake very difficult landings and takeoffs and noted to rescue and get people to hospitals. he is right up and down the country people are giving charitably in order to fund these vital services. >> i'm sure the prime minister

will agree that dealing with terrorism and violence, peaceful and democratic means were fundamental in moving northern ireland forward and and taking us from where we work to where we are today. and will the prime minister agreed a new northern ireland of 2014 republican -- must only be deplored by that everyone, government, governmental bodies in northern ireland and in the community will stand up against such threats, must commit themselves to fundamental freedoms and upholding democracy and the rule of all? >> all threats to violence in northern ireland are unacceptable and should be condemned on all sides. i'm very clear about that. what i hope we can achieve in the coming weeks and it will take compromise and brave decisions on all sides is to get the talks process on going again with commitments from his own party as well as from the unionist party and from others to si sit down and discuss thesa thing so we can make some

progress. my fear is if we don't make progress on these issues, you leave space open for extremists on all sides of the debate to start pushing their ideas which would be deeply unethical to the future of northern ireland. [inaudible] >> can i invite my friend joining me this august by promoting -- a fantastic a charity. >> i wish my other friend will but he's making and enticing invitation, and i'm a big fan of what the district has to offer and the very difficult to say but i think it is notable in his constituency the claimant count has fallen i-40 2% since the

election and the youth claimant count has come down by 39% in the last year. what we are seeing is this economic revival and we need sector plan to get the deficit down to a people with tax cuts, make it easier for firms to employ people chew produced schools and schooling and to reform our welfare and immigration system. that is the plan we mistake and it's a plan is delivering for high peak. >> thank you, mr. speaker. a 62 euros man -- year old men sought an appointment for his wife. he was told it would be five weeks to see her gp, two weeks to see any gp. if this is the way the nhs treats a person with dementia, does the primers agree it is time to get patients like that the right to a gp appointment within -- [inaudible] spent first of all what i want is is there are 1000 more gps today than they were when i

became prime minister. i also think what we are doing is reacted to seeing the name to gp for frail, elderly people which of course labour got rid of. that is one of the reasons combined with the disastrous gp contractor labour introduced that there is so much pressure on her accident and emergency system. we need to learn from the mistakes that labour made rather than repeat them all over again. [inaudible] to several thousand pounds a year to get education because the labour control council has reversed, has reversed the support given by the previous democratic administration? will be -- will he see what

central government can do to promote their access to education? >> my friend makes an important point. as he noticed the developer transport, for education and training rests with local authorities, clearly this local authority now controlled by labour have made this decision to of course we've introduced the 189-pound fund to support the most disaffected young people and perhaps that is something his counsel and his family to make the most up. but i can combine in agreeing with him this is another example the fact that labour cost you more. >> mr. speaker, its estimate of the each day 179 british girls are at risk of being subjected to sgmp are joining a total of 170,000 ending the kingdom who have been cut. next week he holds a summit on this issue. does he agree with me that sgm is not cultural, it is criminal? it is not tribal, it is torture.

would you please, please read the report, implemented in full so we can eradicate this horrific abuse from our country? >> can i can be on will jump in for the work home affairs select committee has been on this issue. i think he's absolutely right this is a brutal, a polling practice that shall have no place in the world but certainly no place here in britain, and it's appalling that people living in our contracting subjected to this appalling practice. i will study the report very closely, but the whole aim of the conference which i'm very keen on us holding is to make sure these two practices of early enforcement and female genital mutilation are wiped out on our planet. >> mr. speaker, does my right honorable friend except it would be totally unacceptable to have a statutory limitation on overseas aid without having a similar statute covering

expenditure to guarantee our native commitment to? >> what i say to my on will bring is that we are in a have a position in this country of meeting the 2% spending on defense which nato members are meant to undertake and women hold at the nato conference in wales in september we should be encouraging other countries to do the same and, indeed, to meet some of the new targets for spending on new equipment that can be used in nato operations which we certainly made in this country. but as well i think we should be proud of the fact we are meeting the promise we made a spending more on overseas aid and that is saving lives all over the world. i wouldn't divorce it from our defense spending because the money that we spend in places like somalia or mali or nigeria or indeed in pakistan is about reducing the pressures of asylum and immigration and, indeed, terrorism making our world safer. that is what our defense budget should be about and i would argue it's what our aid budget is about as well.

>> does the trend to agree that all conditions -- primers agree, therefore -- [inaudible] i agree with honorable lady. minus 10 is they did have to work but look closely at the particular condition she braces and perhaps write to her about the approach to it. >> thank you very much, mr. speaker. businesses report high skilled workers benefiting from the tax cuts which this government has introduced and hard-working apprentices and joined the sort of opportunities they couldn't have had just a few years ago. does the prime minister agree the plans of our and yet more money while keeping tax on british business and make it more expensive for employers to our young people and no more and no less than a long-term economic stance?

>> i think my friend is right. what we've got to do is stick to the plan and that plan peshawar on track to hit too many apprentices train under this government. the worst thing to do would be to start spending and borrowing and taxing more which is exactly the proposal made by the opposition. >> with the prime minister it's going to does what it is the only people who feel that the problems in the national service our members of the conservative party? >> what i say to the honorable gentleman is every single health system right across the developed world is facing huge challenges and pressures. the pressures of an aging population, the pressures of new drugs and treatments coming on stream, and the pressures of children surviving with conditions that will need to be treated throughout the lives. the question is how to respond to those pressures? fund to help serve the protected

from cuts and to reform the health service, getting rid of 5 million pounds of bureaucracy so there's more doctors, more nurses and the biggest fee for themselves because you could see more people being treated. that is one main were being treated every year an accident and emergency, 40 million more people getting gp appointments. but it's only because we taken the difficult decisions that frankly labour have not taken in wales and that's what in wales you see longer waiting lists and real problems in the nhs. >> should taxpayer money be used to gather information on mps which is then repaid or shredded a? >> if my honorable friend is referring to the situation that took place in the welsh assembly which is reading about overnight, that does seem to be a very worrying development if he's referring to something else, he might have to be a bit

less -- right to me and i will get back to him. >> thank you, mr. speaker. with the prime minister look into the case of a young man in my constituency who has a significant spinal injury that has left her unable to walk? or gp has referred her to an urgent appointment with an or a surgeon. cookie prime minister explained to her and no country why surgery on his watch means a four-week weight lying in pain and? >> i will absolutely get the case that he raises and the most up to look at individual cases but the figures i quoted earlier werlegitimacy when you look at e people waiting 18 weeks, 26 weeks or indeed 52 weeks, they are lower now not just when this government came to office but are lower now than at any time under the last labour government but i'm happy to look into the case he mentioned. >> thank you, mr. speaker. is the prime minister aware since 2012 when he made his promise to increase access to patients for cancer patients,

the number of -- has decreased in some hospital by 70% and state of the art machines have to remain idle? can ask intimate with me and other cancer care campaigns to discuss this a scandal before more patients are refused a trade and? >> i read the report that she was referring to over the weekend and i'm happy to meet with her and, indeed, with them to discuss this. what we have done is introduced they cancer drugs fund which is not just for drugs but also for innovative treatment. i know there have been changes as well in the way that radiotherapy is carried out and the new technology that is being used which may be part of the explanation for the figures that she does but it happened to discuss them in more detail. >> jobs growth wales has been huge success in tackling youth unemployment. outperforming similar streams,

schemes across the united kingdom. will they prime minister, therefore, join me in congratulating welsh businesses and enterprises, the welsh government and, indeed, the young people of wales who have made it a success? and in doing so he can end his agenda of attacking wales, and who knows tha, he might even gea welcome to the hell side. >> -- hillside. spent i want to do it again to support economic recovery in wales and that is why, for instance, i think in september when the nato conference comes to wales, which is entirely initiative launched by me, it will get a huge, very strong welcome in the valleys and i'm pleased this will be i think the first time that a serving american president has ever been to wales. so i'm looking forward to that. we are doing everything we can to help business in wales to employ more people and to grow the economy. >> question 14, close question. >> fourteen, serve.

>> i met with the chair on monday what hosted a meeting in birmingham to mark agreement of the growth of deal which will see over 350 million pounds invested in greater birmingham. the projects and the deal will help create up to 19,000 jobs, live up to 6000 homes to be built and generate up to 110 million pounds from local partners and from private investment. >> with employment just 1.5%, and down by over 28,000 across the whole region, doesn't that demonstrate that the model bolstered by those growth funds awarded on monday is working? but how does my right honorable friend plan to build on the success and encourage the most ambitious lift which includes the greater birmingham lived to promote the local economy still further? >> as i said at the meeting with the greater birmingham, i think it's a big step forward for birmingham and the west.

it will reach your in more jobs, houses but it will see more railway stations, new transport links built but i think we need your ambitious both in terms of the money we can find and central government to support these schemes but i also local councils going birmingham city council will look at every piece of unused brownfield land, look at every extra bit of development they can put on the table so these growth fields get ever more ambitious. [inaudible] offering this huge region 10 pounds per head just 37 days before the junta election, may be too little, too late. >> i think you can probably tell the difference between a ray of sunshine and the honorable gentleman on this issue and also on many others. [laughter] this is an excellent deal. if he doesn't think so he might want to explain why sir albert, the leader of birmingham city council, the labour leader of

the birmingham city council said this is good news for birmingham. a number of major projects will not be accelerated. of the money will go to developments which will give much new jobs to the city but i think he needs a bit more time with sir albert. >> thank you, mr. speaker. tomorrow britain faces damage and destruction from strikes. it's taken 39 from united alone saying he will not stand up to union barons. will be prime minister to make clear we are on the side of the public who by three to one voting for us to stop this sabotage the? >> i think my honorable friend makes a very good point and, frankly, i think the time has come for looking at setting thresholds in strike balance. i mentioned the strike earlier which was a ballot that is taking place to sure i know

they're paid for by the union so they might want to listen to this because it will disrupt our children's education. the strike balance took place in 2012. it's based on a 27% turnout. how can i possibly write, be right for our children's education if it disrupted by trade unions acting in that way? it is time to legislate and it will be in the conservative manifesto. >> order. >> here on c-span2 will now leave the british house of commons as members move on to other business. you have been watching prime minister's question time aired live wednesdays when parliament is in session. a reminder you can see this week's session id. sunday nights at nine eastern and pacific on c-span. and for more information go to c-span.org and click on series to do every program we've entered from the british house of commons since october 1989. we invite your comments about

prime minister's question via twitter using hashtag pmqs. >> forty years ago the watergate scandal led to the only resignation of an american president. throughout this month in early august american history tv read this it's 1974 and the final weeks of the nixon administration. this weekend is the supreme court oral argument united states versus nixon as the watergate special prosecutor contest the president's claim of executive privilege over his oval office recordings. >> the president may be right and how he reads the constitution, but he may also be wrong. and if he is wrong, who is there to tell him so? and if there is no one, then the president, of course, is free to

pursue his course of erroneous interpretations. what then becomes of our constitutional form of government? >> watergate 40 years later sunday night at eight eastern on american history tv on c-span3. >> mexico's government recently passed reforms to open up its oil and gas production to private companies. for 75 years, pentax has had a monopoly on energy production in mexico. at the center -- center for strategic and international studies, analysts talk about what these reforms will mean for mexico's economy once they go into effect next year. this is one hour 45 minutes. >> okay, everybody. welcome t to csis. minus john hamre, president of csis and so happy everybody

could get you on such a hot day. this is washington, and this time of year but hopefully the a condition will hold out. i which accounted make sure we'll are okay. delight of everyone here and decided to have an opportunity to explore this topic. was talking with the ambassador, medina mora come just a few minutes ago and he said you step in mexico program, didn't you at csis? we get. she did a terrific job of greed and mexico program and we are really not caught our balance since and it's warm are making up for today by taking pieces of mexico. we need to get together and talk with how we do all of mexico together. i'm glad we could do this part. we have all been anxious to hear how mexico is going to do with the reform agenda. and it is coming. we thought our time you would let us talk about the details of it but we know it's going to be

coming and it's an exciting thing force. it's part of this -- we want our neighbor to do well. we think energy is a big part of doing well and were going to listen and talk more today about what it could mean for all of us. but i think all of you for coming and joining us today. and could ask you with your applause to welcome ambassador medina mora it will really kick this off a real? thank you, ambassador. [applause] >> thank you very much, delighted to be here. it is important to have csis to restart mexico program, and we were just coming through lunch that we take each other for granted and we should actually, mexico is the second largest customer of the u.s. just after canada.

in business school they teach you take care of your customer. you are our first, number one customers, and we have to -- there is no accident in this success, ongoing. but i would like to congratulate csis for hosting this event and for promoting the very timely and necessary dialogue. i am very excited to be here and to be able to listen to the experts and understand their points of view on mexico's to build on the energy front and where energy in north america is headed. just last month i was invited to a conference in new york organized by goldman sachs on the north american energy summit. and there we have the opportunity to have different perspectives on considerable economic easement of these unconventional revolution. it is a growing consensus that north america has the capability to unlock a great potential and

become an energy self-sufficient region in the next 20 years. but there are very important challenges that we need to address to return to potential into our reality. including the infrastructure, issues and skilled workers and is it. where to start thinking in the region about how we are going to address this together in order to facilitate this transformation within our rights to estimate it is already here because our energy sector is very much integrated already in north america. and one of the beauties of this successful integration in terms of how we trade with each other and what we produce together is that it's not coming from a political statement, which would have been sort of difficult to

manage, but from market realities. just in essence, it happens, the basis for companies and business people to actually go after the opportunities and make decisions and make things happen. but one of the main conclusions in this conference from new york was the importance of having framework that is up-to-date. and the same time can be effective in the decades to come. mexico, with a long overdue package of reforms, has dramatically updated its framework with a series of far-reaching reforms that we conclude legislatively, congressional terms, with the approval of the secretary legislation in energy sometime this summer. there is no doubt in our minds

that reforms will be approved, and, of course, but there are many challenges in how these are actually structured in the funnies. the structural reforms encompassing labor, education, telecommunications, financial services, competition policy, and, of course, the mother of all reforms, the energy sector. that will transform our economy in the years ahead, provided of course limitation is successful. the energy reform in mexico is certainly important but before it takes place the sector remains a center component of u.s.-mexico trade. let me give you a couple of examples. in 2013, the united states was the destination of approximate 72% of oil exports from mexico which arrived via tanker. the value of crude oil exports to mexico to the us is more than two times the value of auto

exports, which were roughly $18 million. mexico was the destination of 44% of u.s. exports of gasoline in 2013, 600,000 barrels per day of all product the price of is the third largest supplier after canada and saudi arabia. we have benefited from the lower natural gas prices in the u.s. and pipeline exports to mexico rose by 6%, a record level. most likely natural gas will continue to grow in all sectors, mainly in industry -- [inaudible] but the source of great potential to use it as a transportation fuel. natural gas export am used to mexico will continue to increase in the years to come. we are expanding the natural gas pipeline network with two main projects now under construction

which will bring natural gas from use to mexican territory. three more projects are scheduled to be in operation by 2015-2016. geography has blessed the north american region with significant energy research. according to the latest energy outlook north america will be the only region of the world that moves from being a net energy importer to a net exporter. so while china and europe become more dependent on energy imports, north american is becoming self-sufficient. by 2035, north america will be a net oil exporter, accounting for 6% of global energy exports, and by 2017 the region will become a net exporter of natural gas. north america has necessary energy resources to fuel economic growth for a long time. and reliable and affordable energy will be a key component

in ensuring a very competitive north american manufacturing base. indeed, the most important component of competitiveness looking towards the future. though energy reform to mexico will be redefining its role in the energy sector while the u.s. is adjusting to a new reality, potential exporter of oil and gas. increasing its energy efficiency, decreasing its consumption and developing technology that is often a new frontier of energy research. this is an exciting time for the future of mexico in the region. with our reinvigorated economic engagement with the united states, a high level economic dialogue, for the most bilateral relationship in terms of trade and investment and production and integrated value change the last 20 years has been driven on automatic pilot.

now you are not for the first time in many years addressing these from a public policy perspective as well, and this can of course be transformational. bilateral -- [inaudible] international engagement in latin america through the pacific alliance and with asia, the tpp, mexico is already significant growing in the world economy. a critical part of boosting prosperity and along with reforms currently underway in mexico and the changes i just mentioned, will be the basis for mexico to achieve more rapid and sustainable economic growth over the next two years in the coming decades. i am looking forward to hearing your thoughts so i would just conclude by thanking that i'm very optimistic by a new chapter of our shared vision for the region. mexico has to address the energy

reform in a very smart, intelligent way. and i'm very optimistic as well that we will be able to do so. thank you very much. [applause] >> [inaudible conversations] >> well, let me add my welcome to john hamre, to all of you for coming out, such a good crowd to

welcome our visitors today. we are going to talk about mexican oil and gas, and we are very pleased at the energy and national security program to cosponsor this event without america's program, and so i'm guy caruso, senior advisor to the energy and national security program. and the mexican oil and gas reform has been something that i think has been in the works for a number of years that we are going to hear from three of i think most knowledgeable people i can think of to talk about that in the order in which we will go. we will start with jesus rails -- jesus rails, former director

general of pemex and now in the private sector as ceo of structure of public -- private company in mexico city. he's going to start and talked a bit about some of the basic elements of the oil and gas reform come and he's been right there on the ground as this has developed. we will start with jesus and then followed by pedro haas. pedro has extensive experience first evolved with mx as a member of the team that was part of the gas marketing -- pemex, back in the day. and then with the private sector and then he had a number of years in senior position with mckinsey and company. so he is very deep insights into the private sector may respond

to the reforms. i think he will talk about some of the reforms and that the private sector might react and what the implications would be. then finally and morris -- ed morris, at citibank and, of course, focus on oil and gas. and he has been one of the most i think i would call it most optimistic analyst, most optimistic among those who've looked at the north american energy scene and put into the global context. i think ed maven the first person who actually -- may have been the first person who projected north america would be the next oil and gas exports of years ago. some sure we will hear even more

from ed about how these new mexican oil and gas reforms feed into that kind of analysis in his latest outlook for north america and its integration in its global oil and gas markets. we talked a little bit earlier about, you know, how the unconventional oil and gas perspective we've had in the u.s. and canada, certainly part of this story and now we're going to hear how the mexican oil and gas reforms, they fit into that north american picture. and certainly we're going to about it from some of the most knowledgeable people i can think of, and we're going to start

with jesus and then we will follow without delay to pedro and then ed, and will have plenty of time for questions and answers from the audience. >> i would like to also lay the ground for the discussion we will have later on. for some of you, some the things i would will present maybe knows but it may be basic for all of us to know what is the essence of the reform and then proceeding into the exchange. [inaudible] >> do i use this one, or what? okay. this is easy.

all right. first, in terms of discussing energy issues in north america, really was very difficult. many friends in this room and i discussed or tried to discuss about these four years. it was basically an empty discussion to it was a dramatic discussion and there was impossible to discuss further interaction in energy. any kind of point for the future, because mexico couldn't, basically it had no leeway, no state to discuss in a more market oriented and from a business perspective the future of energy relationships in north america. however, the constitutional a

minute that was backed by president pena ols december. now private investment would be allowed in mexico energy sector, and delete possible in any aspect come and further energy sector. this opening of mexico of long discussions since 1938, happens when there is a revolution going on in the u.s., also in terms of energy with all the shale hydrocarbons, and also in canada is sort of collecting some of the benefits of the consistent, what i would call relatively consistent and steady energy policy over the past decades i would say. so here's a major change that in

north american scenario. these mexican energy reforms, reach out for energy sector but it is more than that. mexico's energy reform is actually central for mexico's energy, economic, economics. mexico has been growing very slowly over the past 10, 15 years. it's a paradigm. you have -- were inflation is low, financial stability for so many years of simply the country is not growing and the government knows we will about one of the critical factors is to increase significant investment in mexico, oath public and private and both domestic and foreign. and for that to happen, obviously the energy sector is critical. the energy sector has the

capacity to attract a lot of investment. and also for a higher growth to happen in mexico you need a more energy efficient sector because -- in the rest of the economy. so both, because it is central to increase total investment and both because it has potential, applications from energy reform is central are mexico's, for mexico and for the presidents administration. now, what is the essence of the reform? it is a very deep and far-reaching reform. it's basically, it's simple but it's a complete change, historically speaking. some of us got probably we could get some reform, but nobody

really dream about this. this is really getting as far as possible. it's opening up to the extreme, the sector. you will have private parties in concurring with the public sector. pemex will not disappear, and that is not the purpose. the purpose is basically saying we want to maximize their resources allocated to the hydrocarbon sector of mexico. and the inevitability because mexico's framework, legal framework, constitutional framework basically said only one agent will be responsible in mexico and that agent is pemex. understanding, and even the constitution was further, it was not, it is you who have this privilege but at the same time you have to do it all by yourself, which was a complete

anomaly in the world. you see of the national own countries, they don't have the prohibition of partnering with somebody else to do some of the many things, integrated national oil company. very limiting to develop hydrocarbon sector in mexico. now it allows pemex to partner with whoever it wants. in some cases with a majority stake, not establishing the law but according to interest of commercial and business interests, and it can do it in a very flexible way. completely flexible way that is really what the reform come one of the issues at the reform encompasses. and then this change is so radical that they will obviously

shake up the pemex and it will transform it and make it really move much faster because now change is a matter of life or death to pemex. and the past it was really impossible to make pemex move the protection, the company was so big. the incentives for the company and for the people in the company to move in a different direction were limited. now come in my view is a caveat in the reform, and something i still don't understand why the government did not include that, and that is that they kept pemex wi ..