negotiations. and secondly -- oh oh. yes. we have communication with the u.s. side. i can report to you from the very beginning i brief u.s. official. white house official for china's proposal china's intention. and just one issue that u.s. asked china apply the big law in international affairs. and the u.s. beginning to show. but frankly secretary and on behalf of president obama made very clear the expectations. now we are deepening the communication. >> thank you. i just want to take note, if i understood you i don't want to read too much in.

but your expectation that the transpacific partnership will happen this year. >> professor. >> let's give him a call in a minute here. we only have have a few more minutes. i'm going to take your questions quickly from the back. first of all is it your expectation this will be concluded this year? secondly, on the b.i.t. did i understand you correctly to say that you would hope and expect that the b.i.t. will be

completed and ratifyied before the end of the obama administration? and my question related to that is since next year, obviously it's a very political year in the united states, if it cannot be are the faed by the end of the administration by the end of this administration do you think it's very important to have it completed by the end of the administration. >> yes. >> and then have a completed agreement come up in the next administration? >> yes. yes. >> very good. go ahead. >> four tpp, because that's very frankly yesterday treasury briefed us, enena big debate in congress. # and if they can be approved most likely in june and some discussion to clon collude in september. so that's information we god from officials. and based on the reality we

think they told us the real story. and now tpa in june can conclude by congress. that's not being discredited by the u.s. administration, but indeed brief us that the tpa is very, very deepening debate. now happened in congress. so about the second issue, professor, you are an expertise. intention is not ratify before and after obama administration. this concludes. so as the treaty needed. approved by a senator. both sides seriously discuss and

negotiate on that. >> very good. i'm going to ask the forgiveness of the audience. we're at 3:00. i mean 4:00. we promised you promptly we would adjourn because you have other commitments. so let me just express appreciate to you on behalf of everyone everyone. i must say your can-do positive, happy warrior outlook is inspirational. and we have high regard for you as one committed to a highly independent and very healthy bilateral relationship. so thank you very much for being here. it's been our great pleasure.

today the senate and house budget conference meets to consider the budget bills passed by both bodies. you can see it life beginning at 3:00 p.m. eastern on c-span. the white house correspondence association annual dinner is scheduled for the 25th. we expect remarks from president obama and entertainment from saturday night live's cecily strong. we spoke about this year's choice and the history of entertainment at the dinner. >> for a while they used to do like musical acts and believe it or not, it was a juggling act at some point. that was a long time ago. but since the association

started having comedians come and serve as the entertain, she'll be the fourth one to have done that. i don't know why it's always a late night white guy. which is great. those guys are really funny. i think she's funny. i think shees sharp and cunning and will bring us down to size a little bit. that's part of the fun. >> again our coverage of this year's white house correspondence association dinner will begin april 25th at 6:30 p.m. eastern on c-span and c-span.org. on thursday greek finance minister yanis varoufakis spoke at a forum hosted by the brookings institution in washington, d.c. where global finance ministers are attending the annual spring meetings of the international monetary fund. he talked about his country's economic challenges, including his debt crisis and the negotiations between his country and the european union for

financial assistance. this is an hour and 15 minutes. >> good evening all of you, ladies and gentlemen, good evenings. this was a much expected event. we had trouble accommodating everyone who wanted to listen to you. i'm really grateful that you took the time out of the very busy meetings here of course to share your perspective with you. you're a well-known phd in economics. many books, 15 books. i don't know all of them, but i know the two in particular. the future of the world economy two years ago. a modest proposal for solving the euro crisis, two years ago. so you were elected to the parliament in january 2015. i welcome you, very deeply, on the part of brookings, the whole brookings community, the various programs that are hosting you today. it's really all of us, the

whole brookings family. i welcome the minister mr. ambassador. not yet. also personally. i can't help saying that i also welcome yanis as a neighbor. okay, it's your floor. then we'll have a discussion. >> thank you. it's with the deepest gratitude that we should thank you for this honor and privilege, to be addressing a fine institution. at the crucial moment when our government is shouldering a momentum task, that of completing successfully, and as soon as humanly possible, the current negotiations with our partners, both european and international. the reason i shall be focusing

on these negotiations is their global significance. not so because of the risk of contage contagen through the financial circuits that frightened them between 2010 and 2012. but because the outcome of our negotiations, the greek government's negotiations with the institutions, would influence, i believe, europe's attitude toward a larger problem. located in the fiber of our democracies and within the foundations of our real economies. after all, lest we forget, the greek debt drama of 2010 was followed by large sways of europe. its resolution, one way or

another, in 2015, now, will surely prove equally influential at the global level. one may be excused to think, influence by the dominant narrative, that europe is on the mend. it's overcome its crisis. that the combination of large bailout loans and stringent austerity has worked. and only greece has failed to jump on this band wagon towards recovery. for reasons that have to do with our own greek, peculiar failures. the sectors have been complete with malignancies which require extensive and intensive treatment. indeed, the greeks themselves

were so incensed by lack of reform, that they even went as far as to elect us, the party of the radical left, to lead the country. nevertheless, greece's chronic malignancies cannot explain the depth and stubbornness of our current crisis. of what has become, sadly, greece's great depression. our seven-year-old and long winter of discontent. to explain this, one needs to cast a critical gaze upon our monetary unions design folds, and how they went. they design folds of the eurozone went into an unholy alliance with the greek nation's failings to produce a monster of a crisis in greece. one that has degenerated into a humanitarian emergency. and one crisis that has global significance, as i was saying before. now, take a look at the rest of

europe. even in nations portrayed as the shining lights, the beacons on the hill, what you will find is investment, productivity growth, and improvement in living standards. they can only be described as dismal, even when compared to the american recovery of the last few years. europe's powerhouses -- forget greece for a moment -- europe's powerhouses, the surplus economies of northern europe, countries that are turning the corner, we lie exclusively for doing so on building up services. either in relation to other eurozone member states, this is an intra-european, neighbor. or against the rest of the global economy. a global neighbor, zero-sum game.

of the kind that we thought was confined to the distant past around the conference. the combination of savings in europe, of high public and private debts, of low investment, of low interest rates and generalized austerity, it's causing europe to address its crisis by exporting it to the rest of the globe. while undermining further the real economy of its own peripheries. periphery of the eurozone and peripheries within the states. quite simply, the current policy is increasingly turning europe into a force that behaves as an

exporter of savings, an exporter of deflation. even more simply, if china's balance was a problem a few years back, think of europe as a graver concern for the global economy. neither of these work well either for europe or the global economy. and likely as it may sound at first, i submit to you, ladies and gentlemen, that the outcome of greece's negotiations with the imf, the european central bank, the european commission, our fellow europeans, the outcome of this negotiation will play a major role in determining whether europe aids or impedes the rest of the world's efforts and united states' efforts to put behind them the crash of 2008 and its stubborn repercussions. within this context, context of the global significance of greece's negotiations with european institutions and the imf, our global partners. let me turn to a couple pertinent questions. i'm often asked, why are you being so difficult with these negotiations? why can't you just settle it

quickly? rest assured, ladies and gentlemen, that our government is keener than anyone to bring these negotiations to a successful and quick conclusion. and that we certainly do not believe that we have any kind of monopoly on good ideas regarding the kind of reform program which is necessary in our country, and in the rest of the eurozone. the longer these negotiations go on, the greater the asphyxiation of our economy and greater the delay of essential reforms. so certainly, more eager than anyone else to conclude them. however, the operative words here, a successful conclusion. not yet another version of expanding and pretending. for five years now has been turning a drama into a crisis of global significance. of the extending and pretending that gives greece's debt deflationary spiral yet another. now, let me share a thought with you.

nothing would be easier for me personally, nothing would be easier for my prime minister. nothing would be easier for our government than to sign on the dotted line of the existing memorandum of understanding of the existing program. nothing would be -- pledging to do as it says. like previous governments who did, always pledged everything that was asked of them. and in that way to collect $7 billion very quickly, and immediately answer the questions that the good people of the financial press are posing for banks, for us regarding our liquidity situation. except that it would be the wrong thing to do. it would be the wrong thing to

do by our creditors, wrong by our partners, wrong by our people. when i say our people, i mean not just the people of greece, but equally every citizen of every member state of the eurozone. we are one people. why would it have been wrong to add our signature to the logic, to the philosophy of the existing, pre-existing program? because, ladies and gentlemen, this program constitutes a recipe, a treatment that no reasonable person can consider to have been successful. the insistence that we should continue with its logic, philosophy and policies is bound in the medium term to reinforce an image that we need to expand. the image of greece as a bottomless pit.

an image that causes much frustration on my fellow global partners while it engulfs our nation in unbearable hopelessness. now, track records matter. and the track record of this program that we inherited from the previous government is a sorry one. to better phrase, economic consequences of the peace, we're not going to sign up to targets we know our economy cannot meet by means or policies that our partners should not wish to impose upon us. not just for our sake, but for the common european and global interest. ladies and gentlemen, in 2010 the greek state was able to service its debt, while nominal gdp was falling. europe's banking system had become more or less insolvent. the growth prospects of our trading partners were abysmal. the global credit crunch ensured the interest rates would be going up. and how did we deal with this problem as europeans?

by means of the largest loan ever of condition. and a program that was bound to shrink violently incomes to which the old debts would have to be repaid. now, those loans were naturally extended to the greek government in the context of an ability analysis. i don't have a diagram to show to you. i had one, but in the end it turned out that we don't have the facility to project it. but if you look at projections of nominal gdp in 2010 made by the imf, again in 2011, again in 2012, and the reality, you realize that we're talking about a passive political failure. in any sense, and these are heavy words that i'm going to use, greece went from a period

before 2008 of abundant growth, of growth fueled by unsustainable borrowing, to a period of austerity which is what i call serious austerity funded by unsustainable borrowing. i'm asked also these days, why did other countries on which the same policy was tried not experience a catastrophic collapse like greece's? the reason ladies and gentlemen, is very simple. they suffered significantly less. we had -- we are the champions of fiscal consolidation. we had more than 11% of a reduction in the debt. this is unprecedented in peacetime. and if you blocked a diagram with fiscal consolidarity and what happened to nominal gdp on the other, you'll find that greece is following a pattern,

but a negative pattern. ourself was so much more than anybody else's. the collapse of national income and all the repercussions that come with that was much greater. in this sense, greece is a classic outlier, having been the first to be bailed out in the eurozone in which, let me remind you in 2010, bailouts were banned. our country ended up an experimental lab in which much improvization occurred. greece took a hit. our own economic failures, i'm insistent on that, we took a hit on europe's behalf because of our economic and social failures that made sure we were the first domino to fall, and, of course, due to the eurozone's design faults. our particular failures were exacerbated by the hit we took for the team.

history will tell the story of how insolvencies in the greek private and public sectors were pushed under the carpet. portrayed as cases of illiquidity. history will register this was an abuse of the notion of solidarity. greece was never really bailed out. only 9% of the bailouts, loans that we took over the last few years went to the greek state. the rest went to the banking sector. finally, the historical record will show that the reform program that accompanies the loans was precisely wrong. if one is to rank all the cases of malignancy in greece, from the worst case to the least offensive one, you'll find that the reform program over the last five years started from the

bottom, not from the top. and the rest of interest that lurks at the top where they once backing, the government that was pointing moralizing fingers at majority of greeks who may have been. could not be easily persuaded to reform themselves when being told to do so by the greatest rent seekers who thought that reforms were never for them. unsurprisingly, as a result of this practice, debts, both private and public, skyrocketed. banks seized to function as credit providing institutions. investment dried up. and all we have had over the last few years was a slowing down of the rate of our economy as all the fat went, then the muscle, then we were proceeding to the bones of our economy.

it's often said that 2014 marked a recovery of short. very mild, very fragile recovery, but a recovery. i beg to differ on this. what happened in 2014 was nominal gdp, gdp in market prices continued to fall. but as market prices on average were falling even faster. that's not my definition or anybody's definition of recovery. it's the definition of what happens when you go through recession to depression. but that's all past history. we're now negotiating a very simple principle. on the one hand, we have an

existing program that the greek state is committed to, legally. legally bound. and surely, states have a continuity, and therefore, there's no doubt, even though we were elected to challenge the philosophy, logic, the essence of those policies, we're bound to them. this is a principle of democratic states. but there's another principle, too. that democracy should matter for something. in some degree. the fact that we have a mandate to challenge the philosophy of the problem that we inherited should also make a difference. so what happens when you have two different principles that are clashing with one another? that's what democracies are for. in democracies, you have various things that clash with one another. liquidity. against interest of the

collective. this is what we do with democracies. we blend together contradictory principles. this is precisely what we tried to do upon our election. we tried to convince our partners in the euro group, in the european union, at the imf, that what we need to establish the common ground on which to build a new set of conditionalties, a set of conditionalties that we would all, i'm sure, have agreed upon had we started afresh. so that we over come the inertia, the institutional inertia of the program, which i'm not sure -- actually, i am quite sure that almost everyone had they had the chance to start afresh, to start, would have considered to be a failure and would not want to continue along those lines. but you know how bureaucracies

are, how very complex organizations are and there's nothing more complex than the eurozone system or lack thereof managing our collective economic prospects. they tend to develop a life of their own and they tend to be subject to inertia. and it's very difficult to shift once you have embarked upon a certain path. we would not be putting ourselves in a situation, in this very harsh negotiation, if we didn't think that the path we have embarked upon for greece is a path that could get us to a good place.

we are convinced that it can't. the greek people did not vote for us because they believed the greek success story of last year. they voted for us because they knew that it was smoke and mirrors. in this negotiation, we're not trying to impose our will upon our 18 partners in the euro group. we have a mandate. so do they. i accept this fully. what we are asking for is for the opportunity to do two things. firstly, to be heard. to have our proposals for the way in which the greek social economy must be reformed, discussed in good faith. and the second thing we're asking for is for the time and the space in which to allow this conversation to take place so that we can do the one thing that needs to be done. and what is that one thing? we need to convince our partners, especially in northern europe, that this government is not about going back to yesteryear, and they need to convince us that they're serious about rebooting a series of measures, programs, fiscal

consolidation plan, that has failed. this negotiation must succeed, and the reason why it must succeed is because as mario draghi said months ago for the euro project to succeed anywhere, it must succeed everywhere. greece insists on being part of it everywhere. greece believes that the new government that the greek people have elected is offering our partners, despite our significant political differences, a chance for pluralism and democracy, to prevail within a monetary union that knows how to acknowledge errors and do what the united states has done with such great success in the 19th and 20th centuries. and what is that? create consolidation out of the crisis. in europe, we like to say that we have achieved that, that we've learned the lesson, that we consolidated, that we created new institutions which are

allowing our monetary union to evolve and to develop the mechanisms that lacked, by which to counter a major earthquake shock like that of 2008. i cannot believe we have done that. i believe that the many ways we have proclaimed in name that which we have denied in practice. for instance, a proper banking union. this government, with our quirky left wing background, i admit, is keen to come to an arrangement with our global and european partners that will sit with europe consolidates in a manner that creates greater efficiency, genuine growth, overcomes the major productivity failures and investment failures

of the last few years, not just for greece, but for everyone, in a way that allows all europeans, especially those who are critical of institutions of europe, to remain within the europeanist camp which is where our government firmly locates itself. thank you very much. >> i just want to thank, again, minister varoufakis very much for his really excellent speech i will say. i just want to say two things. one is i want to introduce david, my partner and friend here today on the panel who's the director of the center on

fiscal and monetary policy. he joined brookings about a year and a half ago. he was at "the wall street journal" most recently as economics editor. he's the author of two "new york times" bestsellers in 2009 and 2012. "in fed we trust: ben bernanke's war on the great panic" published in 2009. and "red ink: inside the high stakes politics of the federal

budget," 2012. he shared two pulitzer prizes in '84 and 2003. one for the "boston globe" series on the persistence of racism in boston. that was 1984. in 2003, for stories on corporate scandals. i'm happy david is here. it makes much after all this possible. thanks for being here, glen. now we're going to have a discussion, and we all look forward to it. i'll let david ask the first question. >> thank you. minister, thank you for very your clear remarks. to an outsider, it seems as if there's very little overlap between the policies that fall within your mandate, and the ones on which the imf and your european partners are insisting. so, it's hard for us to see how this comes to a happy conclusion, and there's been speculation that one option here is to have some kind of referendum on staying in the eurozone, or perhaps a snap election in there for the different coalition. is that part of your game plan now? >> this is an easy question to answer. absolutely not. let me be precise. >> that was pretty precise. >> precise. >> in terms of the first part of the question. now, you mentioned -- or you alluded to a great gap between

the policies that have been pursued by our government and the policies that would be acceptable to our partners. i don't think it's so great. remember what -- the "p" word that i used, pluralism. we used live in societies where we tolerated difference of opinion and different mixes of public and private virtues. so you recall in the '70s and even in the early '80s we used to take great pride of the fact that we lived in a mixed economy where we had the public sector playing an important role, where we had conventions and norms of collective bargaining that created a safety net in the workplace, where we had the social welfare net that also played the same role regarding humanitarian issues. we had public enterprise with private enterprise. remember that one of the great arguments in favor of capitalism in the old cold war days is precisely. now, what we are bringing to the table here is the notion that this culture where everything

public must, by definition, be problematic, and everything private, everything must necessarily be on the road to virtue. that has not worked very well. it hasn't worked very well here in the united states. it hasn't worked very well anywhere. now, what precise mix we use, and we hope for, is another matter. let me be a bit more precise regarding some of the policies. this is where i'm going to be specific. privatization pensions, labor markets. just the big three out of the

hat. take privatizations. let me tell you what our policies are on this. firstly, we look at the privatizations that took place in the last few years. they were disasters. firstly, they were a disaster from the point of view of legal public rights. so -- a number of significant ones collapsed when they were taken to the high court. high court. to the european competition commission. so you have private investors that go through the arduous process of securing a bid and winning a bid, an auction. they get the property rights, they make an investment, then the holding goes belly-up. so there's this aspect, this is not neither left nor right. it's a question of efficiency and the security of property rights. we want to change that. i can give you many examples. secondly, we are in the middle of a great depression. now, how clever is it to try to sell public assets when asset prices are through the floor?

at such a time without strength, and take these few pennies that you get and put them into the bottomless pit of an unsustainable debt. i don't think this is an apt use of public assets. so what we're saying -- we're not against privatization. we're against this kind of fire sale that doesn't even dent even a little bit our debt situation. so our policies, just to wrap this up, is simple. we want to impose minimum investment levels on the winning bid so as to give a developmental dimension to the nationalization, privatization. secondly, we want to have a deal with the winning bidder regarding minimum labor standards. minimum environmental standards. we also want to ensure that the local economies are cut into the deal so that there is both

national and local developmental effect. is this something we cannot discuss sensibly with the imf and european partners? i think it is. i don't think that mrs. thatcher would do it the way the previous government did. there's no doubt that our pension system is in trouble, but how could it be otherwise? we have a collapsed labor market. we have a massive reduction in numbers of people who work and who are capable of making pension fund contributions. we have more than 30% of paid labor being undeclared labor. so when we look at the problem of the pension system and the labor market, they're intertwined, and our government is saying that cutting and

pasting from the imf rule book, the ideas about labor market, completely useless in greece. we have the most regulated market in the world. we are, as i keep saying. 90% of unemployed people receive unemployment benefits. nobody else. nine. okay? let me put it differently. 91% of the unemployed have never received one euro of unemployment benefit. how much more can you this labor market? half a million workers working for more than five months and haven't been paid a cent. why? because of a recession. and they keep reporting to work in order not to lose their dignity, in order not to lose their claim to the company, to help the company survive so that they don't lose everything. now, what we're saying is in that environment, smart

collective bargaining agreements similar to the ones they have in germany, that we want to hammer out in unison together in cooperation with the ilo, will help re-regulate markets now in an efficient way but in a way that brings the part of the labor market into the labor market, the formal part. the sail time, dealing with a pension problem. now, one of the things that is impeding a conclusion for this negotiation is quite well known, i'm not preaching anything by saying this. is the demand that we don't stop an automatic clause that was voted in by the previous government that would have secretary pensions cut by almost 90%. secretary -- that can mean that somebody on a 600 euro a month pension will have to lose 180 euros. in the middle of this humanitarian crisis, in the middle of this recession, we want to put a freeze on this. we are accused of rolling back reform. now, why reform to reduce low, low, low pensions? it's a cutback, but i don't see any serious reform. we want to reform the pension

system. now, of course, when they ask us, so, how do you envision the pension system to function in the next 20 years? i have to admit to you, i don't have an answer that goes beyond a general description of principle, but when france, germany, and the united states answer that question, we will answer that question, too. it may take a little bit more than a few weeks. to be serious now. what we're asking is for the absolutely sensible principle that we're a new government, we need to come to terms with our partners on four, five large reforms that need to be instituted tomorrow which we can do because we have common ground on this on a number of them. maybe there's a disagreement.

we will compromise. we are perfectly prepared to compromise. introduce these reforms, come up with a rational fiscal plan for the next five, eight years. not the one we have now. 4.5% primary surpluses for the foreseeable future. best economy without a banking system that functions properly as a credit system is absurd. and once we get this agreement going, then we can keep negotiating until -- and our intention is in good faith to reach a new contract with our partners by the end of june that will create a sustainable greek economy so we can cease having these conversations. >> so let me make two points and ask a question. two points, part you already covered, but i want to emphasize them, that balance sheets are more important than flaws. i mean, we had the same discussion with minister. if you focus just on the flaws of one year, you miss a lot of the story. if a country like germany can

invest negative interest rates and create positive assets, expenditure may go up, but, in fact, the balance sheet of the public sector improves and that's the point, for example, larry summers makes all the time. one of the issues between the fund program and, you know, discussion not just on greece but on other countries is this importance of taking, or having truly a medium-term framework rather than an annual expenditure limit. and i think you alluded to that. the second point, and i can't help wanting to support it, is privatization. i had the same experience when i was in kind of your job in turkey. yeah. i was in your job. you know, one demand was privatize everything.

immediately. at whatever price you can fetch. well, that is not good for public finance. i'm sorry. and i refuse. we were asked to privatize turkish airlines and allow for a strategic investor to buy it. we refused. and today, turkish airlines is the airline that flies to the greatest number of countries in the world and it's quite profitable and it's still a state enterprise but open to small private investors. so, you know, when we talk macroeconomic policy, we always discuss primary surplus. when we say structural reform, somehow there's something under there which i think we have to get into the details of to see whether they're good or bad. replacing the public monopoly by a private monopoly, even if one is a perfect liberal economist is not a good idea. two things i had to get off my chest. but i think if there's one thing

that could have -- i wonder -- i mean, you made a very strong point. very, very strong. by saying, you know, the people of greece are the same as the other people in the eurozone. i mean, we, we are the people of the eurozone. don't you think that at the beginning it would have been better to somehow give the message or maybe the press distorted the message. i don't know. the press was quite careful at times. that there are two sides to being part of the eurozone. that they have to respect -- they, meaning your creditors, have to respect greek democracy and the will of the greek people and realize the suffering that the greek people have gone through. but at the same time that the greek government, if it was to be in the eurozone, in the european union, cannot just do whatever it wants. and the message came out, we've been elected. we've got the support of the people. we'll do whatever we want. and that -- you can do it outside europe, you know, but

inside europe, you do have to kind of stress that the european agreement is needed. >> let me start with your last point then go back to the earlier ones only because i'm very interested in them. you're quite correct. i did mention it before that having won a mandate in the election of the 25th of january. i mentioned, remember, there are another 18 mandates. but the point i made was that it gave us that mandate that i say we'd like to be heard about the social economy. when we're in a great depression, we have a humanitarian crisis. we want -- and my request of the first euro group i attended was when we are in a great depression, we have a humane

tear crisis. first euro group i attended was i asked for four weeks during which in peace and quiet without the threat of liquidity and liquidation, without the reports, that gave rise to background, a sit-down to be allowed a month during which once we have control of our own ministries to come up with a plan and to present it to our partners. then i asked for another month during which to come to an agreement, we call it. this was our strategy. we never said that we are going to, you know -- we're not irresponsible citizens that think we have the right to do anything we want. that was never the point. but that we have the right to be heard and we have the right to challenge the logic of the program that has clearly failed. i believe that that was -- on

the other two points that you mentioned, first regarding privatizations we don't have an answer to the question are you in favor or against it. the answer to this question is, which privatization? if you ask me about the railways, about the ports, about electricity generation and distribution, if you ask me about the horse racing outfit or electronic gambling, i'll give you different answers depending on the particular case. and lastly, and that is something very important you mentioned the distinction between balance sheets versus stocks flows and regular economy. we are a very particular economic union. we have governments without

central banks backing them. and we have a central bank without a federal government backing it. this is a unique state of affairs. ideally, completely speculating a federal government and a fed. but, of course, and this is a sad realization that i am sharing with you. this crisis that began in 2008, 2009, 2010, instead of helping us come closer together, it's creating forces that's making the political process of unifying even harder. and that is something that we should lose sleep over. as germans, as greeks, as portuguese, as fins, as slovaks, as french. i mean i left out the irish and some others. please forgive me. once you are caught up in this

monetary union that has very peculiar forms of governance as well as constraints to labor under, you end up with a end up with a complete lack of coordination when it comes to investment so the argument that you mentioned earlier that you discussed i wasn't here and didn't listen to it, about germany's capacity to invest to borrow at negative yields, negative interest rates, that is very different -- i understand your argument. but i understand fear of the government but does not want to have a debt at 6%. in the case of our government there's absolutely no fiscal room for a standard deficit spending investment. however, and this is a big

however, europe as a whole, eurozone as a whole is not only by a mountain of great private and public debts, which we do have, but there is another mountain hiding hide it a huge mountain, savings with nowhere to go. it should be a joint project to energize moderate those savings to help them overcome the great fear that keeps them idle and channel them into productive investments, not vexts into assets but real capacity. now, how do we do this? we have a european investment bank that could do this. and we have a european central bank which is backing upon quantityive easing. why can't they fund a major new deal for europe? that channels investment to the private sectors of the countries and regions within countries that have a major gap, great

deflation and forces running through them with ecb standing by ready to jump into the secondary markets to purpose these bonds if the yields stop going up. have you noticed there's no mention of the government here. there's no need for government to be involved. this is not deficit spending by germany or greece or portugal by anyone. it is all money borrowed by the taxpayer. it is money that is borrowed by the ab on banking principles as it has been doing for decades. but you have the acb playing the role that simulates the federal government and in the context of smart easing. i'm only mentioning this we need to have an answer to the question, okay, you don't have federation you don't have the political dynamic that can lead you to one how can you respond differently from self-defeating austerity? i wanted to give just one small

example of the kind of out of the box thinking that can get us there. we need to begin -- we have to earn. we greeks have to earn the trust of our partners. but they must also acknowledge the fact that for five years now the particular program has been imposed upon our nation that has been making the things worse. >> let's say i buy you're analysis but there's a certain reality, you owe some money, yet you can't afford to pay unless they open the spigots, says to us, it's up to them, they meet my conditions or i'm not going let them have money. not quite how we put it. he says look, what's going on greek yields are rising and no con tagio noxt to spain he said it won't be smooth sailing if you have to leave the euro it

could probably be done though. aren't you walking to a point at which you have very little leverage left and you basically have to default? then what happens after that? >> i would willingly eagerly and enthusiastically accept any terms offered to us if they made sense. i would have no problem with the understanding if it was founded upon an informed program that attacked the worst case in greeks and made reforms necessary in order to enhance sufficiency and social justice. if it came from planet mars or berlin or portugal, i don't care where it comes from, i would embrace it. the problem we have with these

conditions here is not so much -- it's the fact that we've tried it and it hasn't worked. >> what happens if you can't come to a resolution? >> i'll come to that, the second question. these days i'm told that liquidity is drying up in greece and it is. you know what, there's a reason why it's dried up. the previous government in its infinite wisdom decided to try to retain power by starting a background, by saying in no uncertain terms, if we win, it will be shut next day. how irresponsible is that for a sitting government when the opinion polls are clearly showing we're going to win, to start and not survive? at the same time, you have voices from within the system

the euro system the system of european central banks warning that there would be liquidity restrictions and then the moment we won the liquidity restrictions started happening. on the 4th of february after visiting london and inspired enthusiasm in investor's mind 11% the next day, the ecb removed the waiver and started imposing stricter and stricter restrictions on the commercial bank's capacity to participate and build. the liquidity is being squeezed at the same time the demand to fear was being prop pull gated with the system increased. it's like imagine i take a band and tied it around your arm and said you have a liquidity

problem with your blood vessels going to become gangrenous, what are you going to do about it? ? i don't think this is the way our monetary union was mention to function. our answer to the situation, we will compromise and we will compromise and we will compromise in order to come to a speedy agreement but we're not going to end up being compromised. this is not what we were elected for. we were elected to put an end, draw a line at the debt deflation and to the fact that the reform program that was perpetuated in greece, imposed in greece was badly designed and administered by those who had to be reformed but who were refusing to be reformed. if this means that europe is going to stand idly by while our

young government is snuffed out then i have to say that our only rational pro-european response is to spend every waking hour moment, second trying to reach an honorable agreement with our partners. we shall endeavor to come to reforms along the lines that i mentioned on privatization and pensions and at the same time make a commitment that these cast in stone even penned in our own blood to increase its credibility, that we should never slip again into a primary deficit. this is what we're committing to. we're inviting our global partners and european partners to meet us, not halfway, one fifth of the way. and we expect them to do this why? because toying with -- which is something we don't do we are

refusing to discuss it, as i said before even worrying about it is like worrying about being hit by a comet in a universe in which comets are attracted to you if you're worried about it. toying with ideas of amputating greece is profoundly un-european. anybody who claims they know what the effect is are deluded. >> let me come in because i must say that when the minister was here an hour ago, he also ruled out drex et and expressed his confidence that a solution will be found. i was quite kind of happy to hear that. he said it quite strongly. so i think -- i mean i think everybody -- i think everybody is trying to find a solution. let me ask you, in the experience of the imf and of the world bank and the debt issues

there is the precedent of saying to the country and group of countries, bring up your reform program. we will suspend your debt payments but the final debt agreement will come two or three years later provided that your reform program -- there can be changes during the two or three years but provided that your program has been carried out. in other words greece would suspend payments with the agreement of the creditors, including by the way, imf payments. in exchange of an agreement of reforms but would also commit -- this is not restructuring done up front.

the real legal restructuring or reprofiling if you like or change of interest rate or whatever you call it would come after let's say two or three years of a period during which the program is carried out. so to me -- there is this experience that has been actually successful for a group of low income countries. it has never been used for a middle income country. but i kind of wonder whether this seemingly unreachable gap because without -- when you make the debt payment, you run out of money and don't have the time right now to build the whole program so that way you can have the time to build up a program in the meantime your debt burden will be relieved and primary surplus could go down, at the same time the international institutions will not write off any part of your debt in a complete way or agree to any change in interest rates

in a final way. >> this is such a radical proposal i didn't think of it myself. our proposals are extremely moderate by comparison. if this is good to me, i can sure you i'm going to alook at it with this belief and few minutes later with glee and satisfaction. we don't need that generosity. if we get it, we'll be very happy. what we need is to stay faithful to the spirit of the agreement of the euro group level which allowed greece to be the author co-author of its reform agenda, we would ideally like to get down to work of discussing bills that would go through parliament to affect these reforms and we've been pushing for this. instead however, we keep hearing

there has to be a comprehensive review the kind that never happened in the last two years has to happen within a few weeks of our governments but nevertheless, we go along with that. and what would be i think very -- would be to separate the conditionalities for closing the final review of this kind of problem on the basis of four or five major reforms that need to be done and can be done in the space of the next few weeks. this is the time frame we're facing. and do what you're suggesting by the end of june, which is again very soon we're prepared to do this by the end of june come to an agreement about the long term. now, that is what we're proposing and right from the beginning to effect. the separation therefore of the current review from the medium

and long term is i think essential for avoiding the accident and creating circumstances for greece's recovery which by the way, let's say a few things on an optimistic note. if we make this and i believe we will, i'm greatly encouraged by what the doctor said in this whole -- an hour or so ago if there is a declaration similar to that of dragi's that the you're yoen zone will do whatever it take to remain individual and at the same time there is an announcement of an agreement between greece and international european partners on another -- fiscal matters, let's agree on fiscal services that are not exorbitant and

packages through the paext bank, way of writing out the loans from the banking sector to unclog. and aimed to development and other than five states. it doesn't have hair cuts and in the ends up giving more value back to creditors through the response, and at the same time we attack the -- what i call the trilology of sin, which is procurement, bureaucracy, the political system the way that has such a cozy relationship with -- and the media that play a toxic role in greek society and always have done. at the same time we have reforms that perk late down to the level of product markets supermarkets, then we can go down to pharmacists if we need

to but this -- before we attack the major sources of -- in greece would be quaint if it were not so tragic. these are things that i believe we can agree upon in one afternoon. the announcement of such an agreement will unleash such a wave of optimism about greece. remember, prices are on the floor and suddenly greece will be a great field for bargain hunting. there's going to be such a relief more than greek investors and foreign investors and excellent human capital and potentially growth industries that we can do the one thing we have not managed to do create an expert led developmental model that will be -- by the initial enthusiasm and will be fueled immediately after that by

a never ending sequence of great reforms. this is what we're striving for. it will be such a great shame if this agreement is not concluded in the first few days or weeks. thank you. >> we'll go -- we have to leave the room at 4:00. what i'll do if it's okay take a few together the lady up front. please identify yourself. >> thank you very much i'm greek citizen and i would like to thank you for the analysis but i would like to ask a question and address this question to the voice maker because you are a member of the government who started in january. as we know of a populist right

party and we know also from our family and friends in greece that day after day greeks are waiting an action from this government related to development. so i would like to ask you, do you have any proposal -- any development or measure that these government took since january 15th? >> we'll go for the gentleman there in the middle. >> thanks very much, assistant professor, johns hopkins next door. i have a question for you as a politician. i think many of us actually agree with your economic analysis and i think d.c. is probably your most favorable audience you're going to get. but as a politician, are you worried that being right is not going to be enough? because the political economy is that the reality is you're one

against 18 for the you'reeurozone. how are the 18 other eurozone countries going to sell the concessions they are going to make to your government if they are going to meet you one fifth of the way? thank you. >> the third -- the gentleman all the way to the back there yes, you're right there. >> i've been an observer over last 30 years i wanted to make a suggestion regarding ones that you might find sensible dealing with the state owned enterprises and the suggestion is before you sell off the family jewels that you consider making them more productive by eliminating jobs which have gone on for 30 years or later own secondly that you fire nonperforming employees who have very high salaries compared to the private sector in greece

and contrast to many other countries they are on top of this, toe the youth of greece which has 60% unemployment? to attract foreign investment you consider eliminating the restrictions on mass dismissals. >> i think we take three and then you answered this and a few more? okay, then you'll have the -- the lady with her hand up. trying to keep gender balance. >> thank you very much. we know that a lot of economists are betting on the fact that greece is going to leave the eurozone. what are we going to do to ensure greece doesn't leave the euro zone. it is said this morning you cannot have a delay in payments and also heard from the german

finance minister earlier that would give you advice to be sure you stick to reforms. how to you plan to ensure you're not going to be compromised but ensure you're going to be compromised as much as you can without putting the greek economy in danger? thank you. >> subject to my -- there have been cases of arrangements conditional on future performance. so it is not an undone thing that some payments are either refinanced. >> thank you very much. sgs, my question is a follow-up to what all of the colleagues said before and, it goes to the essence of negotiations that are taking place. it seems to me and reading the papers and trying to talk to some of the actors involved,

that the piece that is missing is not so much the flexibility and trying to find a slightly different compromise on how to achieve the goals that you want to achieve but the lack of specificity, basically how i understand it the eurozone partners and the institutions involved, are showing some kind of flexibility, but since there has been a breakdown in trust what they would like to see is not so much generic goals form lated but more specific actions are taken to at least the beginning of actions taken that can sort of help to restore the trust that has been broken probably over the past few years, not due to your actions necessarily, but due to all of the things that have happened since 2010. how do you respond to that criticism?

thank you. >> i think -- >> right, your question? policies. what are we suggesting? actions. well i did allude to some before but i didn't get a chance to each one much these topics would take the whole lecture. but the example i gave our policy of developing public assets in conjunction of private years, where we have minimum investment standards when it comes to railways that is a very clear policy of saying we are going to get partnership with the private sector. we will allow them to manage it and even give them a majority

share holding but they will have to ensure minimum investment -- minimum labor standards and environmental standards, that's a policy. i could -- i don't have the time but could give you a lot of different examples of this. talk to you about our ideas regarding the tax systems. for instance in greece we have the peculiar privilege of being a country with extremely high tax rates and extremely low tax stakes. how do we then tackle this problem. there are ways of doing it but, again, you have to realize that our sovereignty severely sir couple described by the situation. almost everything we're introducing as ideas we're being told that it has to go through the filter of the negotiating process. that is slowing us down. we are much keener than it seems to legs leg s dislate and put

these in practice. on the question of -- i've come to your question because it's related on the question of lack of specificity. let me answer it just directly. our original suggestions to our partner was that we sit down and we specify three or four or five bills that need to be introduced particularly reforms and indeed we settle them. build trust. this is the only way we know how to do it. let's agree on three measures that need to be taken and you watch us take them and watch the limitations and pass judgment on us depending on -- we didn't get anywhere because we were told that if you -- everything has to be discussed. my fear is when you discuss everything you're not discussing about much.

let me share another source of frustration with you. we enter these negotiations and constantly asking for nar rowing down the focus, the specificity that you're referring to and we present proposals 10 page, 20 pages, 100 pages, particular proposals which are not discussed. instead we have the comprehensive review which is effectively an avalanche of questions and questionnaires about this and that and the other and that's nopt the same thing as talking about specific policies. and then the international press becomes full of reports that we have no proposals. in the situation where if we would reveal proposeals this is considered unilateral action which is breaching faith. please consider that. on the question that you asked me, the standard question, when is it better to be right or

actually succeed? i don't know of any way in which i can argue in something i believe to be wrong. in that case, i'm very happy for you to say i'm not a good politician but i'd rather tell you what i think should be done instead of using sub tre fuj. they sign on the dotted lines and made commitments they never intended to uphold. didn't work out well. maybe the truth would work. not that i have the monoply of truth, i'll tell you what i believe, this is not a game for me personally speaking. let me also -- how will you convince the 18 standing in front of you?

i don't believe it's as simple as that. appearances are deceptive, there's a great deal of common ground between us. there's something else happening here. there is a kind of equilibrium of consensus which doesn't -- is not founded on genuine unity of conviction that everybody is doing is on the right track and our suggestions are wrong. but as adam smith once said, when you address the baker and brewer and butcher, do not speak to them of your means, you address them on the basis of their interest. we will always try to couch our arguments in terms of what's in the common interest of europe. we genuinely believe, we're in this for maximizing the benefit. it's the only strategy i'm willing to pursue.

>> sorry. >> no go ahead. one more question? >> there was a question about state enterprises and jobs that are secure highly paid and effectively reproduce right? >> this is obviously a fine ambition and one that i share. firstly, before i get to it let me say that with many fewer state enterprises than we did some years ago since you've been an observer. okay, so privatization is not a process taking place now, it's already happened to a very large extent. very few state enterprises exist. right? telecommunications for instance, gone. port authority partly gone, we're in the process of

considering happening for the remaining, we would be very happy to see the development of the railway system in conjunction with private partners and private -- and management teams that come from outside. but you're quite right, not so much for state enterprise but the greek public sector. now, it is quite clear that what we need in order to do the same, we need to effect the system of proper evaluation. one of the previous governments was a travesty, i know it firsthand in some of these occasions, the ones fire wered most productive and the ones they kept were the better connected ones. we know this from universities, don't we? system evaluation can be double edged sword. they create not only a system of valuation but a system of power.

sometimes when their wrong people use it the result is precisely the opposite of that which we intend. this is what we need to do and need to do it very carefully. we're working on it. >> finally what would i do for the eurozone? we are going to compromise compromise compromise without being compromised. that is what we're going to do. >> you choose the last two questions. the very quick questions. >> the one over there and then the gentleman here, over here. stand up. you. >> i work in local government and we're looking at models that u collective impact it's compromise but it's also using collective impact so it's cost after collaboration after non-profit and public sector and private sector. we're having good success with that here in fairfax county virginia just outside washington, d.c.

there's interesting progress that's been made in looking at social impact funds. >> over here. >> how confident are you that there will be an agreement with institutions, can hope the agreement would be approved? parliament? >> if we reach an agreement it will be approved by parliament. >> okay. >> regarding your question, i'm familiar with social impact bonds and they are a very good idea. first we need to conclude this negotiation so it can get down to work. >> we do have to close and i'm very, very grateful -- please stay so he can be escorted outside first. that's the rule. many thanks to all of us and i want to predict there will be an agreement. [ applause ]

today the senate and house budget meets to consider the 2016 budget bills passed by both bodies, you can see it live begin being at 3:00 p.m. eastern on c-span. she was considered modern for her time, called mrs. president by her detractors and was outspoken about her views on slavery and women's rights as one of the most pro i havic writers of any first lady, she provides a unique window into colonial america and personal life. abigail adams, sunday night at 8:00 p.m. eastern on c-span's original series, first ladies, influence and image.

examining the public and private lives of the women who filled the position of first lady and influence on the presidency, from martha washington to michelle obama, sundays at 8:00 p.m. eastern on american history tv on c-span3. as a xplimt to the series, c-span's new book is available, first latddyes presidential historians on the lives of 45 iconic women providing lively stories of these fascinating women, decree aing an illuminating and inspiring read. it's available as a hard cover or an e book through your favorite bookstore or online book seller. >> the investor of saudi arabia to the united states says they had no choice but to take military action against the houthi rebels. his comments came as he talked about the saudi led coalition strike s

strikes. >> ladies and gentlemen, let's come to order today. >> thank you, dave good morning, everyone and thank you for coming. this shows that the topic itself is timely and it's relevant and some of the participants it's indeed urgent. we're talking about a region that is hardly marginal and behind the back of the beyond. we're speaking of a region that has two kinds of oil, turmoil and that other kind with implications to no end of people's interest the involvement and concerns and their key foreign policy objectives and all of these relate to issues of security and stability and without security and stability you have no orderly peaceful development. without security you have no stability. without the two you have no

foreign direct investment. without foreign direct investment in a country as poor as massively poor and pervasively poor as yemen, the future looks more than bleak. and indeed if it only looked bleak, that perhaps would be an improvement. now we have a number of resource special iflts some of them have devoted their lifetime to yemen and it's implications regional and globally and nationally and locally, these two on my right and three americans on -- two on my left, including myself and we will do our best to confine ourselves to ten minutes each. we'll have a discussion question where you have cards on your chair, please write a question as opposed to a comment or speech, valedictorian address so we can have a cerebral massage

here. in regards to yemen, i'll let you know about the context and how complicated and complex this country is. but before doing so, we thank the media for being here. if you look around, you'll have a little whiplash there on the neck side. we have ten of the global interest r international and national and regional media filming this filming it live we appreciate especially c-span cnn and all of the others that are here to capture this on record for posterity. now if the gentleman with the camera there on my left will step aside for a minute and i hope my voice carries. we're talking about eight yemens just to underscore the complexity. think of yemen as louisiana in the shape of an american state,

in terms of a short boot, this being the ankle this being the heel and ball of the foot and toes. you have at least two factors and forces in northern yemen that are at odds with one another and two a degree that's an analogy of interest. you have in the northernmost part of yemen the base of the houthis not a household name ten years ago. people didn't know they were as therm animal or vegetable or mineral. they are a forceful force now. south of that area, sanaa, the capital, has been led by a yazidi president since the end of the yemen civil war and revolution from september 22nd 1962 through march 14th 1970, where saudi arabia backed the

northern monarchists and southern sunni tribes. these divisions of shia/sunni are not as pronounced as they are in other places. there's intermarriage between the two. there's a softness commonalty between the two. it's not the issue that the western outside media makes it to be. these are two in the north and one area of the north just to the east of the capital where the countries -- part of the country's mineral wealth is. coming down to the south, what used to be the border between the north and south, the second largest city in the north and furthest one to the south but south towards aden is another world. this used to be known as a western protector and into this area that the houthis have advanced in the last two weeks. and posing a challenge and threat to aden. there's aden itself, a crown

colony great britain had only five during the reign of queen victoria. these were the diamonds and tiara of queen victoria's necklace. the end of the 1950s, believe it or not was the world's fifth largest port in terms of tonnage handled, you could have more ships in aden's harbor at the same time than you had in jaluti combined twice over into the 1960s. so to has modern aden been the gift of the suez canal when the suez canal was shut in june of '67, it remained close until 1975 and it was in this

atmospheric when that month that aden lurched to the left to become a marxist government. but there's been no other marxist governments in the islamic world like there was in aden based on the power and privilege and prominence of aden in terms of full international trade. then to the east of aden, this area here and all these states, these are small villages there with the typical scott tape yemeni architect tour. they are different what drives them than those i mentioned. and immediately to the east, through the winds and tires and currents has produced around 10

million yemenis in indonesia and the foreign minister minister of education and minister of interior, all from yemen. this is the roots of the osama bin laden, quite a large number of yemeni merchants who live in these areas of region. just east is marha, did not have a single paved road until the last 15 years and quite different. it's from this state here that we're talking about the island, which the soviet had its eyes on at one time and gave some concern to the united states. this is a reason why until now not in the coalition against the houthis because we're talking about a neighbor state here and their policy will be driven by its neighborliness. the last factor of the yemenis,

the numbers fluctuate up and down and saudi arabias as many as a million, you can say they are a million if you include kuwait and qatar and united arab emirates and yemenis all over the world and probably on the moon as some say, they were the first arabs to work in response to henry ford's five hours a day for an honest day's work. then to the united automobile workers unit in deer born, the president and vice president and treasury is yemeni in that particular union, the largest of the uaw. this is just a painted brush stroke of the context here, we're going to jeremy sharp with the congressional research service, he is the person who does the research writing analytical written work for members of the united states

congress. the bios on the materials you picked up coming in on your seat. i ask you write a question on the 3 x 5 cards and pass them to national council staff who will bring them forward and i'll use them in the q and a. ambassador is due here around 11:00. he called yesterday to say i'll be there. and so we're looking for an operational logistical fete because he's been in the kingdom in the last 72 hours and now he's coming back and this particular event is highest on his agenda. jeremy sharp. >> thank you john. [ applause ] >> i wish i could do that, give a country's history in a broad brush stroke. thank you to the national council and u.s. arab relations for hosting this event today and welcome not just to the media

and our outside guests but a special thanks to our congressional clients for coming here today and like a good crs analyst, i'm legally obliged to note that the remarks here this morning are my own and do not represent those of the congressional research service. i like to thank john for moderating this morning. i can tell you firsthand that john can hike the yemeni high lands better than most men half his age, i know that because i panted from behind. don't be fooled john is quite nim bl. thank you for moderating today. this is a particularly unpleasant time for most yemeni yemenis. i'm always humbled by the fact that i cover yemen from a seat here on capitol hill and perhaps our panelists and you in the

audience have friends or extended family members enduring quite an ordeal of suffering right now. suffering that might endure the longest this conflict persists. so i'm constantly mindful of that fact. now because i am situated here in washington, i wanted to gear my remarks toward u.s. policy and what are the implications for operation decisive storm on u.s. policy towards yemen and the region. so i'm going to make a few policy remarks and analyze where this is going in the weeks and months ahead. number one the obvious point to start with there is a serious political imperative in washington to demonstrate support for saudi arabia at this time, both in the administration and congress. whatever you may think of saudi arabia's historic involvement in yemen for better or worse, the reality is that u.s. policy in yemen, which is foremost designed to counterterrorism is

highly dependent on saudi arabia. not just for counterterrorism, but for politically and financially supporting a yemen i central government. this is especially true since the transition that began in late 2011 culminating in early 2012. because of houthi alliance extended so far into yemeni territory, far beyond what we in and out a few weeks and months ago. there has been -- by the administration that we understand that a red line has been crossed and saudi arabia's mind and we support their action. this is particularly pertinent amidst the wider regional environment of a international environment of iran nuclear negotiation and the sensitivity to sunni arab perceptions of a regional emboldened iran. now, just a few remarks on iraqn for a second. for iran who's definitely

supporting the houthis rkz materially and financially, what a great investment yemen is for iran. iran is certainly supporting them and level of support doesn't mirror what's being done in syria and mirror what's being done in iraq or historically in lebanon. in the media every time it mentions iran and yemen, it's doing iran's work for them, inflating this prospect. it's a concern and support could increase in the years ahead but we have to keep that in mind we have to measure what is exactly going on there. one named u.s. official said we've shown when it comes to the security of the persian gulf countries we have their back, providing unique indispensable capabilities to facilitate their actions. u.s. support for saudi arabia is not just political.

there's certainly material element to it. and the back of my room is my colleague chris blancheard and his report on saudi arabia has cataloged and documented pentagon and defense department notifications to congress since 2010, there has been a planned armed sales to saudi arabia, something like over $90 billion. when you think about that number for a second and saudi arabia goes to warn yemen, there's a definite u.s. element that's working behind the scenes. if you sell an f-15 to saudi arabia, there's a saudi arabia pilot and saudi owned plane but there's u.s. work being done on the maintenance and u.s. refueling and rearment. training on the pilot. when saudi pilots went down a few days ago there was u.s. search and rescue operation to assist. there's a lot that we're doing behind the scenes. and the administration is not hiding this fact. the white house issued a statement on the day that

operation decisive storm began, blaming the houthis for causing the crisis in yemen, recognizing president as the legitimate leader of yemen and authorized the logistical support to gcc led military operations the administration claimed while u.s. forces are not direct -- not taking direct military action in yemen we're establishing a joint planning cell with saudi arabia to coordinate intelligence support. that's one aspect of the policy and one being played out in public. now, privately we can speculate that we're definitely in support of what's going on but there's a lot of concern perhaps that the longer that this persists, the greater the chance for terrorists on the ground to become i am powered. i'm really glad i woke up at 5:00 a.m. to prepare for this

today because had i not, i wouldn't have checked the news cycle and seen there was a major operation last night where aqap terrorists in what seems like a major operation attacked certain facilities and while one group was attacking facilities another group attacked a jail and broke it open and several hundred militants escaped including a high level regional senior commander. we know from history yemen's history, when the central security forces dissipate take sides and abandon their post, that that leaves a vacuum for aqap islamic state whomever to take route. it may happen continually if the conflict drags on.

there's the immediate concern how do they conduct counterterrorism operations in yemen as this conflict persists. the administration released several statements trying to reassure the american public we will take action if there's an immediate risk to u.s. homeland security. that we have assets in the region offshore assets, assets that we'll employ if there's a terrorist threat at the same time, logic would dictate if our embassy operations are suspended and we pulled out a certain level of military personnel that that's going to certainly impact our on the ground knowledge of what's going on. now, that's an obvious point but there's also something else that's out there and that is since 2006 as part of our ct strategy in yemen we've had a train and equip program. one concern that hasn't been

expressed in the various pieces on yemen yet is if this conflict persists we've made a lot of investments in the yemenny military. if there's dan do those investments both material and human, that's going to be a lot harder to reconstitute our program in the years ahead. there's concern that doesn't take place either. the fourth part about u.s. policy in the conflict, the u.s. has really tried to get its own personnel out of harm's way we moved diplomats and some of our of our special personnel out of an air base near a nearby town attacked by aqap militants just a day before we evacuated other

personnel. where is this all going? we talk about some aspect of the policy but it's going to be a lot is going to be dictated where this conflict goes in the days and weeks and months ahead. an oversimplified way of looking at things is to take two tracks. one is that this is a military conflict that the saudi led coalition either by ground, air, there was a bbc report a few hours ago there there had been land forces i have no idea, some may know better than others if you're on your phone tweeting or whatever, where the coalition pushes everyone back from aden the houthis back from taz, perhaps the capital perhaps beyond. i also think force is being ugsed in another way in state craft. i think that's something we need to look at and that is perhaps force is being used to break

apart the houthi marriage of convenience. if you look at what's been put out in the pan arab meetdia lately, there have been reports of leaks from the former president saleh wants to preserve his immunity in yemen and lift u.n. sanctions against him in exchange for turning on the houthis. there's a quote shall -- i don't know if it was him directly let's go to dialogue and elections and i promise you neither i nor my relatives will run for the presidency. a houthi spokesman retorted, only doing this to keep his relationship friendly because he wants above anything else to protect his personal interests. no i don't know exactly what the play here is. trying to break up this marriage seems like a pretty rational

strategy, whether it's by forsz or psychological operations whatever, using the media. because look he's a rational actor concerned with his own preservation and preservation of his family. his son, his place in yemen, he's the con sum mat negotiator. but the u.n. sanctions committee put out a report estimating something unbelievable, that saleh provered 30 to $60 billion from yemen over the time in power. that's like forbes list, puts him toward the top if he hasn't spent it all supporting patronage in yemen. that's something to look at and carefully analyze. what is the deal if there is any? and what does it mean for president hadi as we've said

he's legitimate ruler of yemen and saudis are doing this on his behalf. if there is one day of negotiation, what is it going to look like in terms of his status? i'll leave it to the rest of you. thank you very much and good luck. [ applause ] >> thank you jeremy. david deroesh. >> thank you, it's an honor to be on a panel with such distinguished members. i feel like a forgotten of the super group cosby stills nash and lebowitz -- >> thank you very much. >> okay. >> thank you, sir. >> my remarks also do not reflect the view of the national defense university department of defense or united states government. jeremy has taken a lot of my thunder. it's always awkward when you're in violent agreement with members of the podium but i'd like to address a few elements

of the crisis focusing on security implications on yemen and its neighbors. i won't get too wonky but you can ask me questions if you want to know about precision guided munitions or t-55 tanks. first background, it's clear to us now and clearer to the saudis that it was a mistake to leave saleh at yemen. it would prevent conflict and bloodshed, a move that hindsight shows, i admit this considerable hindsight it was misguided. he retained or purchased loyalty of significant parts of the yemeni armed forces. the extent to which the forces are loyal to al hadi was brought into question with the rapid houthi advance into the capital. there was an intense period of confrontation with ended with house arrest and yemeni political system. the lack of yemeni arm forces

southward towards aden can only partly be explained by inefficiency and there was some treasury involved as well and turning units. the houthis are misunderstood as well. it is not well known here that in some parts of the country houthis are seen as the vanguards of the general opposition of the established political order in yemen. they are not a unified fighting force and their support may be transactional and shallow in parts of the country that we and the saudis consider as conquered. at the end of the day all politics in yemen are tribal and armies generally do not do well in areas occupied by hostile tribes. let me talk about the air campaign. my bias and career has been spent in the ground forces but you know it's important to look at this since that's what we're doing here. saudis for their part seem to have concluded that both yemeni air force and surface to surface

missile brigade are under defacto control and made a point of targeting those capabilities early in the bombing campaign. they hit the surface to missiles twice. it is interesting to note with the mig-21s, they chose to crater the runways and hangars but not the aircraft itself. it seems to be an idea that eventually the yemeni state will reconstitute itself. so long as the runway is cratered they can't fly. the spectacular series of explosions on tuesday night were proof of the determination of the coalition to prevent retaliation retaliation. there have been reports that the saudis also moved patriot batteries and they've upgraded to pack 3 to the southern border to prevent an attack and a few saudis have stated the fear of yemeni skuds drove the action. the air campaign is impressive. saudi arabia which provides the

overwhelming bumming of the air power, has shown it learned from and improved on its generally unimpressive conduct of the border war in 2009. if 2009 a general criticism, you will hear it from everybody, was the saudi air force relied too heavily on newly acquired precision munitions. the result was a poorly coordinated bombing campaign which did little damage to serious military targets but stirred up considerable international condemnation for hitting civilians. reportedly, there were as many as 1,000 saudi casualties and moroccan and jordani forces had to deploy to bolster the saudi forces on the ground. the contrast with now is extremely impressive. the saudis skillfully lay the political groundwork for building an international coalition which sends a message to the mouthies and the iranians. most importantly as jeremy mentioned perhaps as a quid proquick for acquiesce sense on an eventual iran deal, they secured the active cooperation of the united states.

the u.s. agreed to provide intelligence and logistic sporp presume lbl athis meanings at the least help in identifying and picking targets and then assessing of the target after each strike which is exactly what was lacking in 2009. this could also mean rapid resupply of f-15 parts as well as precision guided munitions. these scarce assets will not only be used more effectively because of enhanced targeting but they willreplaced more rapidly and the cooperation extended to the rescue of two saudi pilots downed at sea and that is extremely important. as the air campaign grinds on however, its effectiveness will decrease not air rit met icically but exponentially. targets will be disbursed among civilians or in areas like mountain valleys where they can be defended by anti-aircraft artillery traps. as we saw with korea or vietnam

or world war ii in europe, if you try to achieve a military victory just from the air you eventually redefine not only your target set but also redefine victory. air forces cannot seize and hold terrain. let me say that again. air forces cannot seize and hold terrain. in kosovo the targets that expanded as coalition air planners grew frustrated with the lack of political success. the same will happen to this coalition if the military effort is not accompanied by an effective political initiative that offers the houthis something other than surrender. it's important to discuss what victory means here. the houthis may not be who we think they are. they have always been among a broad group of yemenis unhappy with political development in the post-saleh era. as air strikes harden opinion in yemen, this opposition will become more of a prodly based group. if the air strikes continue outside the context of an overall police settlement yemeni opposition to the

coalition will harden not just among the houthis but among average yemenis. saudi arabia may find it will turn into an actual war with yemen. a word by ground operations. ground operations by nonyemeni fortions other than perhaps a limited covering operation aimed at defending the approaches to aden, if the houthi forces can be ejected -- i think the houthi forces are a saudi armored brigade that just switched sides, they're ill advised. the egyptian armiy lost 25,000 soldiers in north yemen. the terrain is mountainous and the infrastructure is rudimentary. an assault would involve forcing a potential end it's series of thermopylaes. the army should if it wants to be capable of ousting the houthi on their own. the question is who does the army answer to? it appears at the moment to be more saleh and less hadi. but loyalties transient things.

hopefully saudi influence and money could force a shift back to the yemeni government. if the bombing campaign continues and the casualties mount, this happy outcome becomes more expensive and less likely. now, a word on aqap as jeremy foreshadowed. aqap remains an important security concern for america. only aqap has shown the intent and capability to mount attacks on the american homeland and on the saudi deputy crown prince. aqap is a shared concern. yemen has been a vital but vacillating power in the campaign against aqap and we saw that in this morning's jail break. saleh was a smart fellow. he is a smart fellow. he realized if aqap were defeated decisively instead of being treated as an american partner, he would be put in the same box as burma and other information pariahs. it appears there were selected local truces witha qap.

the challenge for policymakers in the united states and in the west and in the gulf has always been to discern where the line is between treachery, tribal politics and local government, and the central government lack of capacity. the houthis and aqap have fought. there have been bombings and attacks carried out, but it would be foolhardy to suppose those two forces will cancel each other out. the fighting with the houthis, who are of regional concern, has detracted from the fight against aqap who is of global concern. finally, a word on iran, iran did not give birth to the houthis. but -- and the support of the houthis is not vital to their success. they have survived on their own. they have exploited the opportunity to stick their thumb in the eye of the saudis, and it is possible that the saudis may like their distaste for iran to cloud their better judgments. i have skimmed over a number of things. i'd be happy to take your question but let me close by saying there is no military solution to the current political problems of yemen, and i welcome your questions. thank you.

wildcats wildcats [ applause ] we now have mr. abbas almosawa. a yemeni journalist who has served in diplomatic situations in abu dhabi and beirut and he's an editor of a well received, respected journal. mr. almosawa and translating simultaneously for him will be dr. ahmad. >> good morning, everyone. i will speak arabic. [ speaking foreign language ]

[ speaking foreign language ] >> good morning, everybody. greetings to everyone. i will be translating and he cited a verse from a yemeni poet. basically the idea is there is a real tragedy going on in yemen

since the arab spring and many many factors coalesce basically a weak state al qaeda in yemen and now al qaeda seems to be getting stronger. [ speaking foreign language ] [ speaking foreign language ]

[ speaking foreign language ] >> translator: there are many groups in yemen and now apparently there is the remnants of whatever is left of the yemeni state that are being destroyed by coalition of arab, american, and european forces. i am not a houthi lover. actually have attacked my family, my people, and they have basically carried arms against the central state. [ speaking foreign language ]