lagarde explaining the change in the u.s. economic outlook. and then corruption and fraud at the united nations. lagarde tonight at 9:30. here is a look at her remarks. director, in the downward revision for growth in 2014, it looks like the weather played a big role. what does that tell us about the resilience of the u.s. economy given that impact? soothing. it is q1 is we believe that this results was a temporary occurrence, with temporary outcomes that will be negated by

stronger growth going forward in q3, and hopefully ongoing. however, you will have noted the have revised down our forecast for growth trends in the united states to 2%. we are facing this aging population issue. we are facing this relatively low collectivity issues, which is why we are recommending various long-term policy reforms to address aging and productivity. but it tells us another thing, weather that extreme occurrences have a serious effect on the economy, and extreme weather occurrences have frequently inmore the last 20 years than they had

in the previous century. i think that is a valid reason to wonder about climate change and how to deal with it. incidentally, one of the recommendations that we put in this report deals with -- tax. >> thank you very much, madam labagarde. >> you can see offer comments tonight at 9:30 on c-span. the russian energy company gas prom stopped furnishing gas to ukraine today. a spokesman for the company said are only forkraine the amount that has been paid for, and the amount paid for is zero. held ason center

discussion today with former u.s. ambassador to ukraine steve pifer and zbigniew brzezinski. it is an hour and a half. >> good morning. good morning. i am a recovering politician. i'm happy and fortunate to be in this role. i want to recognize the u.s. egypt ambassador who was here. welcome, sir. and to underscore the title of to date's event, which is mutual security on hold? russia, the

west, and european security architecture. conversation could not come at a more important time, with events in ukraine looming large on the global agenda. i was thinking about it earlier, and i suppose one piece of good news about the assault of the isif's extremist organization in iraq is that russia is distracted. what is russia distracted by? ukraine. and the disintegrating relations it's disintegrating relations with europe and the u.s. transport plane in ukraine on saturday as created outrage in kiev. the russian embassy there was damaged by an angry mob. fortunately, the event was defused by the foreign minister of ukraine, although a comment he made there has obviously on

viral. no one really believes that russia is not meddling and fomenting instability in eastern ukraine, and that makes it much harder for petro poroshenko to stand up an effect a transparent and corruption-free government for the first time in ukraine's history. i observed the is not meddling d fomenting instability in eastern ukraine, and that makes it much harder for petro election on the national democratic institute delegation led by madeleine albright. we had a chance right before it to meet with the leading candidates, and poroshenko said the right things about the leadership he hopes to provide for ukraine, and it is my personal wish that he is able to be successful. really,event is although ukraine will be a focus, to celebrate the role of the security conference and

other organizations like the osce and the wilson center who pay careful attention to russia and other ager security challenges. the wilson center has invested in these issues for 40 years. the investor and others founded the institute in 1974. ar global your program led by person on today's panel is the home of our newest distinguished scholar, who was the co-moderator of the national hinger.e, wolfgang isc from thelumni institute, and 100 of them are on the ground in ukraine. three of them worked in a small office we still have ntf. who better to keynote our program and someone who knows a lot about this region, ambassador zbigniew brzezinski? he wasi worked together,

the big shot, i was the small shots, and the carter white house in another century, when somehow the problems seemed easier other than hostages in iran. continued to think carefully about the strategic and hases in the world in my view written some of the most important books that give the rest of us. think about. during his tenure in the carter white house, he managed a normalization of relations with , the brokering of the camp david accords, and the fallout of the 1979 iranian resolution.

i think he is the second most important member of his family, after mika. ifer will make some comments. steve and i testified together a few weeks ago before the senate foreign relations committee, which is focused intently on what strategies could he successful in ukraine. for any of that happens, that's me introduce wilson scholar ger.ssador wolfgang ishin he has chaired the munich security conference since 2008. he was ambassador to the u.s. turning the 9/11 period and then ambassador to the u.k.

the book that he produced which was released includes chapters written by several folks. i was honored to write the chapter on -- and to be involved celebration of senator sam nunn for his contributions in the area of nuclear security. the conference each february is thus security event in the world. our congress and saying major delegation there. wolfgang.hing about among his other extraordinary was,iments, -- a compost he is the grandfather, but also a father of a 9 --year-old, as i have been waiting to wish you happy father's day. please welcome ambassador wolfgang ishinger. >> thank you. thank you so much, jane, and steve, forzbig, and

allowing us to have this session here this morning. both jane harman and zbigniew brzezinski were participating once again after many previous sessions at the munich security conference earlier this year, and i remember that you, zbig, participated in a session on ukraine at a moment when many of us were still considering .kraine a problem of ukrainians of course, now it has become a problem of not only european, but global dimensions, and he will talk or about that. so thank you for allowing me just to make a few brief remarks. i want to sort of present to you this book.

hall, a outside in the few copies of it, and there is also a sheet where, if you want a copy, you can order a copy from a u.s. distribution company. if i may say,, very modestly, a really good book. i know a very few -- of very few other collections of essays that offer such a comprehensive overview of foreign policy and global affairs. bookve in this contributions from -- and i will just give you a few names -- npov, chuckva hagel, john kerry, helmut schmidt, senator mccain, sam hoagland,nye, jim

nato secretary-general rasmussen, but also bildt,ricans like karl and most importantly jane harman. the book. it is worth reading it. there are really some real gems in the book. worked onroud that we it for almost a year, to come up with something on the anniversary of munich. for those of you who have not had a chance to be in munich, about make one comment the munich security conference. it is at its core a transatlantic event. there are not many events around the world annually where you will find up to 10 active u.s.

senators and a number of members of the house in one place for together.all that is a rare thing to see. i have checked with many of my american diplomatic colleague's, and it is something that does not happen very often. so there is strong participation, not only by all u.s. administrations since the 1960's, by the congress, by those in the congress who lead on foreign policy, is a huge asset for the conference. the conference was founded by a person who was until he passed away last year the last surviving member of the group of people who tried to assassinate hitler in 1944, and he had

quite a story to tell about how he escaped death and how inortunately the attempt 1944 failed. one or two words about our topic before i hand over to our dr. brzezinski. i had a few weeks to spend in the month of may leading up to the residential elections in ukraine. i have to tell you i did not meet many separatist's, and i tried very hard. i went over the country and i found that there was huge the toisfaction, enormous satisfaction, by many citizens with the conduct of their own government over the last decayed or so, because of corruption, because of lack of unity. was somebody

from the east or somebody from the west, running the country from a western point of view, etc. but i did not encounter a great deal of support for the idea that ukraine should the carved up. neither, by the way, did i find a lot of fascism or anti-semitism, which is something that russian pop again that has dented to suggest over the last period. so we have to be careful that we do not let ourselves be driven in the wrong. second point, my view, and i andct that dr. brzezinski ambassador pifer will hopefully correct me if i am wrong, my view is that russian action on an actions not been motivated i strength -- by sense,h and a strategic

but more out of weakness and anyway almost out of a sense of panic that certain things were sort of drifting apart that russia thought was important for them. whoussian friend, represents the carnegie endowment in moscow, has recently said russia has three options now. unfortunately, the only good option is the least likely one. he said the first option the russians have is self-improvement, self-reliance, more democracy. that is not likely. the second option is russia will tend to rely more and more on military options. certainly not a big war, but fomenting unrest, continued fomenting unrest in ukraine and other crisis spots in europe and beyond. and the third option for russia, as dmitri put it, is for russia

to leave the west and to go more to china, which they have already tried in a certain way. but that would be tantamount to russia surrendered hearing -- surrendering to china and would not be such a good option. so i tend to agree with dmitri. problem, and has created a problem by the very behavior that we have seen. finally, let me say that transatlantic coordination on how to deal with ukraine on the sanctions issue and beyond has actually been relatively good. together.ayed on the day i left tf, i asked the prime minister of ukraine what if he had one wish, what would it the from the west? and he said to me, and i think i am authorized to quote him, he

said, ambassador, there's one thing you need to do -- they sure everybody understands that what we need is western cohesion. do not allow yourselves to be within apart once again, europe and between europe and the united states. goodve actually been quite at it, but it has not been easy, and one of the reasons why it is not easy, if you look at certain elements of the german and european republic is the loss of trust created by the "snowden-nsa affair." that is a handicap, apparently. and i keep saying it, while i'm in this country, you should not take it into news to blow over. it continues to be a serious and capping factor for european government trying to work with united states in handling these

types of emergencies. you might think looking at ukraine that this ambitious title toward mutual security was maybe an illusion. i believe, and i am interested in hearing what our speakers will have to say, i believe that even if this is now a vision that is more remote than we thought two or three years ago it would be, it would be an appropriate vision for a future where europe is not going to be as divided as it is currently between the west and russia, but where we will have a europe with and free, including security architecture that works and with that kind of relationship of mutual trust that would help us to renew in thens with russia months and years to come,

hopefully. with this, i stop, and hand over to our keynote speaker, dr. brzezinski. [applause] thatsident harmon -- sounds pretty good, doesn't it? distinguished panelists, it is a pleasure to be here. discuss theo implications for the european security architecture of what er justg isching addressed, namely, the problem of the relationship of russia to the west and ukraine. what we are seeing in ukraine in eak, but at is not a p symptom of a more basic problem, namely, the gradual but steady

emergence in russia over the last six or seven years of a quasi-mystical chauvinism. this has taken the lead in , and it has a great deal of content of significance for the totality of russia's relations with the world, and the west in particular. the russian international affairs council, an institution in moscow composed of very reputable and significant scholars, not dissidents, independent thinkers, and these do exist these days in moscow, has come up with a report on russia's national identity transformation and a new foreign policy doctrine. and it reports in some detail on the process of creating a wholly

new conceptual framework for defining russia's relationship with the world, a relationship that the russians feel is needed because of the collapse of the soviet union and the partial disintegration of the long-established russian empire. report, but it is worth reading for those who are interested in international affairs. it deals particularly with that thisy concepts, new view of the world contains, a view of the world created by the need the russians around putin have felt around a comprehensive interpretation of what is the nature of russia's position of the world and its relationship with the world and the west in particular, and it is in this context that that ukraine is an issue becomes

significant. and the key concepts of it, this report, written by people of prominence in moscow, involves four basic concepts. that of a divided people, secondly, this theme of protecting comparing two hits -- compatriots abroad, and then world,oadly, the russian and the importance of technology and of sustaining, embracing, and promoting the great russian civilization. i mention this because i think it would be an error to think that crimea and ukraine are just the products of a sudden outrage. they are to some extent in terms of timing. it would've been much smarter for russia to have what has been

happening happen about 10 years from now, when russia would be stronger economically, more solid, but it happened to and these concepts are important. a divided people is the point of departure for the chauvinistic claim that russia's sovereignty embraces all russians, wherever has for, and that anyone familiar with european history some ominously familiar ii.ds, prior to world war it leads, of course, to the concept of protecting compatriots abroad, and that has special meaning for those countries which do have russian ethnic nationals living in their society and who border on russia. people in the protecting of compatriots abroad

then raises the question of the russian world, and the notion integralf an organic unity between all russians, irrespective of their and thatal location, their territorial location can be altered favorably in reuniting the russian people. think of the baltic states. last, the conviction that russia is not part of the western civilization, is also not a part of china. it is not part of the muslim world. russia itself is a great civilization, a world civilization, which fantasizes a which principles, some of are not unfamiliar to our own society, such as, for example, strong commitment to a but muchr religion, stronger than in the west, where

religion is part of a more thelex social arrangement, notion that the great russian civilization stands for certain basic values, not only religious, but it terms of interpersonal relationships, to some extent, for example, condemning some of the changes in the relationship between the sexes and within the sexes that are not taking place in the world. protects thessia integrity of certain basic the leafs -- beliefs that have characterized christianity, but now in the russian view christianity is permitting to slip away. this is a comprehensive and ambitious outlook and an outlook that justifies the conclusion that russia is a world power. and nothing has hurt putin lately than some of the international dialogue with the west than the words of president obama, which credited russia

with being a significant regional power. he did not have to say more in order to score a point that hurt. therefore, an important point of departure for dealing with the ukraine issue. ukraine issue is not a sudden symptom, as i have said, of a basic problem, the emergence of the policies, packaged within the larger, for example, framework, which i have described. what can we therefore expect? if ukraine in fact is its manifestation of that problem will be difficult to resolve, and i think it will take time to resolve. but of course, resolution of it need not be a unilateral solution if the west has a stake in it, and the state has to be then crystallized into policy.

will fade if it is contained, and especially if the russian increasingly cosmopolitan middle class, which is servicing, but not dominating currently, becomes politically more important, perhaps repelled by its sense of vulnerability and his appointment in putin and at some point and assumes a more significant political role when putin has passed from the stage. that is when there is no way of predicting it. it could be soon, it could be a long time, but also a great deal will depend on whether what ukraine has become as a symptom becomes a success or a failure from putin's point of view. so in brief, the stakes are significant. in the most immediate sense, the state involves of course the issue that the use of force in crimea and the ongoing and

sustained effort to destabilize parts of ukraine pose as a threat to the post-world war ii notions of international arrangements and particularly the exclusion of the use of force in resolving territorial issues. that has been a cardinal assumption of the european order after world war ii. and russia has been part of it. including the treaties they have signed. but it now is challenging that. that is a significant threat in a broad sense, and an immediate threat, psychologically at least, but potentially in view of crimea militarily to the baltic states, to georgia, to moldova, and more vaguely, indirectly, but perhaps potentially more successful than the others, belarus, because

belarus does not have any external protection. there are others that i have mentioned do in varying degrees. it follows from what i am saying that the ukrainian problem is a challenge that the west, by which i mean the united states and europe and the nato, particularly, must address on three levels. . .

>> event tankses affected aircraft weaponry. all that is something that even disagreeable, disaffected citizens of a country for which they feel they do not belong will be storing somewhere in their basement. these are weapons providing in effect for the purpose of shaping formations capable of sustaining serious military engagements. it is a form of interstate aggression. you can call it anything else. how would we feel if all of a sudden, they're saying the drug oriented gangs in the united

states were on from abroad from neighbors by equipment which would permit violence on that scale on a continuum basis. this is a serious challenge. so that is the second objective. and the third objective is to promote and then discuss a formula for a compromise assuming that in the first instance the use of force openly on a large scale is deterred and the effort to destabilize is abandoned. that means in turn the following. i will be quite blunt regarding my own views on the subject. ukraine has to be supported. if ukraine doesn't resist, if internal order persists in

capacity to organize effective national defense, doesn't transpire, then the ukraine problem will result unilaterally. probably with concentrate believe effects that will destabilize the states and the totality of the relationships. the forces of a world definition would become more striden. they do represent the most negative aspects of a russian society. a kind of thirst for nationalism for self-fulfill. gratification of the exercise of power. something which is not pervasive in the class which is a long range alternative. if ukraine does have to be

supported so it does exist, the ukraine has to help to exist. there's no secret. it is much better to be open about it. to say to the ukrainians and those who threaten ukraine, that you exist, you will have weapons. we'll provide some of those weapons in advance of the very act of invasion. in the absence of that, the temptation to invade may become overwhelming. what kind of weapon is important. in my view, these should be weapons designed particularly to permit the ukrainians to engage in effective urban warfare resistance. there's no point arm the ukrainians to take on the

russian army in open fields. there is a history to be learned from urban resistance in world war ii and most recently in chechnya which resisted for three months. the point is, is the effort to invade was to be successful politically, it would have to incorporate taking the major cities. if the major cities were to resist and street fighting begin a necessity, it would be prolonged and costly. the fact of the matter is, this is where the timing of this whole crisis is important, russia is not ready to undertake that kind of effort. it will be too costly in blood, paralyzingly costly in finances.

it will take a long time and create more and more international pressure. so, i feel we should make it clear to the ukrainians, that if you are determined to resist, seemly they're trying to do so, we'll provide them with anti-tank weapons, hand held weapons, hand held rockets. weapons capable of use in short range fighting. this is not arming of ukraine for some invasion of russia. you don't invade countries as large as russia with defense weaponry. you're more than likely to resist. that can permit them effective operations to terminate some of the violence that is being sponsored on the borders between ukraine and russia. i think would help in any case

to contain the risk and the temptation to resolve this issue by force of arms. on the russian side, in the context with a move of great ecstasy of a crimean which is quick. it can be quite strong and appealing to a political leader with desperate needs and measures of success. but at the same time, we have to engage in some exploration of possible arrangements for compromise. especially if it becomes clear to the russians and mr. putin that either destabilizing ukraine or taking it by force poses great risks and may not be attainable. that has to be effort in engaging in a dialogue.

what should be a compromise, i think it's simple. ukraine can proceed with its process publicly endorsed by a majority of ukrainian people becoming part of europe. but it's a long process. they have been engaging in the process. already for 60 years. in other words, it's not been very quickly. therefore the danger to russia is not imminent. but at the same time, clarity that ukraine will not be a member of nato. i think that is important for a variety of geo political reasons. you look at the map, it's important from a psychological strategic point of view. ukraine will not be a member in nato. by the same token, russia has to understand that ukraine will not be remember of some mythical

union that president putin is trying to promote on the basis of this new doctrine of a special position for russia in the world and special claims outside of russia vis-a-vis some of its fellow natives. ukraine will not be a member of the russian union. ukraine can have a separate trade agreement with russia, particularly taken into account the mutual benefits of certain forms of exchange and trade are mutually beneficial. agricultural products for example from ukraine to russia, industrial products. not many people realize that some russia test rockets, most of the engines for russia civilization and some the rockets used by the united states are produced in ukraine. it's a profitable and successful industrial enterprise. that, therefore, should be

continued . i think something like this might become appealing. it should be surfaced. it should be surfaced in the context of an open, not convert, but action designed to convince russians that any use of force, will have negative but enduring consequences for russia itself. not involving a threat to russia's security by involving raising cost of the assertion of russia's power. in my view in that context, nato should also act somewhat more assertively in reducing the insecurity of those nato countries that border russia and happen to have on the average about 25% of the population. i speak specifically of estonia.

i would think it would be very productive in addition to america with european states, france, germany and great britain, deploy some symbolic forces. so they're there too and not just americans on a regular basis. so that that would reaffirm the fact that nato stands in the context of this problem together. in international politics, symbolism is as important as the decisiveness. and symbolism can avert the necessity for extreme measures. given the current consequences of the very massive expansion of nato in the last several decades, to 28 members, it must be also appropriate in the late

of the ongoing experience that we're in the process of assimilating to take another look at the structure of nato itself. i have in mind particularly a review of the historical paradox involved. it's not much mentioned but potentially very important article five. article five is the article that provides for the procedure, the alliance follows and undertaking military response to an aggression directed at its general or at one or two or more of its member. article five has a provision that decisions do engage in hostility has to be unanimous. it means a single country has a veto. it was the united states that insisted on this provision when nato was first formed.

it insisted on it in order to obtain popular support from it in the american congress from the isolationist portion of the american pollty tick. it would violate american tradition of no foreign entanglements. the argument was this gives america what it needs to avoid a foreign entanglement. unfortunately today with 28 members of varying degree of capacity to participant in military action, the situation has become reversed. it is some of the new lies that

maybe attempted to invoke article five. not entirely preventing nato from responding. if that would happen after the long debate, much resentment and threats, the country trying to prevent nato from acting will join. i think it would be wiser to review this provision in a more patient atmosphere in spite of the circumstances that prevail. one possible solution might be adoption of the provision that there will be no veto right in the alliance for sustained enduring, underperformers of agreed commitments. some members of nato don't meet their commitments even by some

remote approximation. hence their membership in nato free ride all together. why should a member that doesn't meet nato commitments -- then have the right to veto the other member's right to engage in self-defense. it's an anomaly. as this crisis is gradually results, i hope nato will take another look at it and will also look at the issue of additional new members in nato more critically. it doesn't follow the country who security nato has an interest has to be in nato. nato can have an interest in security but without having it in nato and have a variety of understanding how it might respond. there is some talk of new members in the e.u. some of these will seek nato

membership. some countries have obtained nato membership by being territorially remote from the possible conflicts on the east-west dividing line. i think more discretion here might be beneficial. some pressure on those member who wish to be active members in nato to do more to meet the commitments they have formally undertaken. finally, looking much further ahead, i think that one way or another, with or without the compromise solution, crimea is going to become a serious economic burden for russia. there's no way that kind of economic activity, made major source of tourism and visits on a large scale coming into ports

and foreign tourist engaging in trade, collection of souvenirs and so forth can be sustained. as long as international community doesn't formally recognize the corporation of crimea into russia, it means that the exploration of underwater resources within crimea's territory of the sea. in brief, russia faces the prospect of the necessity of subsidizing on the significant scale. economic activity in crimea to the benefit of its citizens. prices and consumer prices have already risen. this situation creates a potentially serious liability for russia which already is in a

relative weak economic position. beyond that, there is the potential reality, which i think will become a fact as ukraines succeeds, that russia in the process has created the enduring reality of hostility towards russia on the basis of 40 million people. ukraine have not become under russia historically. certainly there's no comparison between its tradition to russia. the pols have fought for their inspection against the -- inspection against russia. it's becoming very intense. the inspire new generation of ukrainian born and freedom and national sovereignty reflected

the strongest. ukraine, therefore, will evolve not on enduring problem for russia in that respect, but the permanent loss of the huge s.w. -- swath of territory suffered by russia. this may in turn eventually begin to work against this new mythology regarding russia's place and role in the world with which i started my presentation. it maybe refuted by reality. this is why i'm increasingly hopeful that the new emerging russia middle class, realizing that the kind of mythology that putin has adopted and a significant portion of the less educated and more -- they'll be

reminded of that imperative every time they look to the east and ask themselves what does that mean for the future of russia. thank you. [applause] >> thank you so much dr. brzezinski for the brilliant remarks. very clearly lays out your views on russia motivations and western actions. we now have the privilege to have comments by alabama steven -- ambassador steven pifer. served for 25 years in the state department including ambassador to ukraine from 1998 to 2000. >> thank you very much. it's awfully hard to follow dr. brzezinski when he covers

such a broad bit of history or current history. he does it in such a comprehensive and terrific terms. i would agree completely that the thing that the west needs to do is support ukraine. it seems to me that the best review to the crimean policy would be three to four years from now, ukraine is looking each day more and more like poland. a normal democratic rule of law european country. i think the west can do things to help make that happen including terms of economic support and buy things like energy diversification. i would second his point about provision of military assistance to ukraine. light anti-armor weapon and

defenses makes sense in turns making sure the russian military is not eager to go into eastern ukraine. we ought to be providing weapons to the ukrainian military to affect that calculation. particularly in the case of defense systems, there's almost sort of an obligation for nato which over the last ten years has been running programs to destroy stocks of ukrainians. second direction is the point of assuring nato countries. particularly those in central europe who today are in much more nervous about russia, russian companies, russian actions. the u.s. military to deploy four companies to poland. having ground forces like that

which do not have heavy equipment and have capability. i would agree it would be useful to have them joined by european forces. a dutch company paired with the american pane in estonia. a make clear to russia that the commitment is a nato commitment. its not just an american commitment. it can be done in a way that is not provocative. i still managed to keep west berlin free by their presence. the third i think the west needs to work is the question of sanctions on russia. the goal of sanctions should be to change russian policies. there's evidence that comes in

now that suggest that those sanctions which today are modest, have had an economic impact on russia. for example, russian companies in 2013 were able to sell foreign currency bonds about $43 billion. in january and february they sold those bonds about $6 billion. since march they sold zero. i think the sanctions are effective. i worry that the west has not handled the sanction process well. the last day in which the united states and the european unixed sanctions together at the end of april, the russian stock market gained 1.5%. on may 2nd, chanceller merkel said if russian interfered with

the election, there will be sanctions. a substantial portion of the ukrainian electorate could not participate in that election because of activities by arms supported by moscow. in the -- again, we've seen continued problems including the introduction of heavy weapons on the part of tanks. i think fairly sophisticated air defenses as evidenced by the shoot down of the ukrainian 76 on friday evening. i think the west needs to be imposing costs if we're going to try to encourage the russians to shift their policy. the last point, it does seem to be that if the russians are prepared to be a part of the solution, you can see the elements of a compromise.

the government in kiev talked about decentralization of power. which makes sense. governors should be elected and not appointed by the president. they talked about some status for russian language which are some of the concerns expressed in the east. there's talk of early parliamentary elections which will be a good step. it would revalidate the democratic legitimacy in the parliament. as dr. brzezinski suggested, you can see the elements in terms of ukraine orient itself in terms of foreign policy. drawing close to the european union. you can certainly finesse this issue and make it clear to the russians that nato is not on the agenda for the foreseeable

future. president -- those the elements i would agree on the case of crimea. perhaps way to handle crimea is to set that aside. it's not going to be addressed early on. my own analytical adjustment, it's very hard to see a scenario in which ukraine is able to gain sovereignty over crimea. that does not means the west should accept it. until such time. that can be an issue you put down the road. the other piece this year might put together a basis for a compromise that would help mend the divisions within ukraine and i think could be an acceptable way forward. i think the big question here at the end of the day, is that still acceptable to russia. i'm not sure that the russians

are happy just with ukraine saying no nato. i think the russians still are unhappy with the idea that the ukraine wants to draw. this is not just the president but it's also the parliament and majority of the ukrainian people. when you look at the association agreement and what agreement does, it's a big if, if the ukrainians implement it. it is out of moscow's geopolitical orbit. that remains a sticking point for the russians. >> thank you very much ambassador pifer. i think we want to quickly to get to your questions and comments. before we do that, i like to give ambassador ischinger an opportunity to respond to dr. brzezinski's remarks. >> very little to add.

first, i mean this only half cynical, we can say thank you vladimer putin for reminding us that there is a good reason for having nato. nato was in a process of getting off the radar screen a little bit of the major european and transatlantic debate. now it's back on the radar screen. that's good. second, president putin has also by doing what he did reminded europeans that there is an overwhelmingly good reason for trying to get our act together in terms of speaking with one voice for the e.u. to be a political actor that can exercise a significant role as

it should, representing 500 million people. third, i think these events are in the process, are already reenergizing the debate about how best european countries, including my own, can unburden itself from too great dependency of energy support from russia. that's all very good. second point, when you discuss delivery of support including weaponry to ukrainians, the one problem i believe we would run into is that the ukrainian military is in terrible shape. ....

harman. >> i remember you talking in the president meetings of the carter whoufments i think it was your warm-up act. this was just magnificent. thank you very much for coming here. my question is about an organization that got little mention but wolfgang spent a lot of time connected to it and umz.is the

it was round tables in ukraine that wolfgang chaired that are credited to some extent with encouraging ukraine yons to take part in the election. the turnout was substantial. about 60%, better than our elections. so my question is could the osce, which is a security organization, which includes russia, but which operates by consensus, play a bigger role negotiating a -- an outcome here that would be satisfactory both to the west and to russia and benefit ukraine? >> thank you. >> i suppose it could but robably at this stage, iscussions were informal and

basically not open to the press and conducted in private. because right now we're not at a stage at which it is likely they could lead too something very positive but certainly doors should be open to that so i think it's desirable. should -- could i make two meant on what i said earlier? briefly on the arms. the arms are for defense. they're for urban warfare. they cannot be used defensively against russia. it doesn't require a lot of litary sophistication to use them. if the military is as disorganized as you say they are, civilians could take part in this. which really works. i could tell you stories on -- on how the russians were surprised and examples of russian warfare. it's a simple way of saying to the russians, don't expect an

easy walkin because it's going to be painful, costly, prolonged. aspect and e more this pertains a little bit to what you asked, jane. right now, the russians are in a phase in which they are trying to mobilize global support of western reactionaries, and that's what you referred to. the interesting thing about the western reactionaries is that they like the content of what the russians describe as the russian global civilization. that is to say, anti-modernistic, socially, sexually reactionary. kind of drawn inward but very self-rye thoust courthouse and this is what makes the -- righteous and this is what makes them the equivalent of the old western right wingers.

but my guess is the changing character of the russian system,over time, particularly because of the underclass and big cities is going to spell the doom of that. two things. pulet season not successful in militarily inserting himself and two, russia is no longer a political player. > it remains to be seen will o.s.c. could be in the settlement. if you did have a settlement it seems that o.s.c. mechanisms could be hugely important in gaining confidence on the part of the ukrainian population. >> if i may, one brief world on that. we had on the 17th of april a meeting in geneva etween john kerry, sergey, the european union and the ukrainian government. that was so far, unfortunately,

only a one-time event and in my view, it is highly desirable that a second geneva, geneva two as we've continued to call it, should take place and .c.e. i think is a good oh, to -- organization to support and help imp police department the kinds of decisions that -- implement the kinds of decisions that were taken already in geneva. one that still is not implemented, unfortunately. i-do agree that o.c.e. has a continuing and important role to play in supporting on a different level needs to be hammered out between the u.s., european union, the ukrainians and, of course, the russian government. >> yes. please state your name and affiliation. yep. right there.

>> steve laramie. ran corporation. a quick comment to wolfgang and then a question for dr. brzezinski. wolfgang, that statement that you mentioned in the -- regarding troops and so forth, that was pred sized -- the beginning of that sentence is very important because it said, as long as the current security situation does not change -- well, it certainly changed when one country invades another and then annexes it. tries to annex it. i think the situation most people would say has radically changed and therefore western policy is no longer obligated by that statement. i wanted to get your reaction to china. how do you think china looks at this?

they certainly were not very happy with the annexation of crimia. what implications to you -- do you think this might have for .s. relation with china? >> i have to say that, regrettably, in my view, neither china nor america has -- have handled their relationship all that well in the last couple of years. i'm not thinking just of the american press. i'm thinking of some american official pronounce y789s and then actions such as the pivot speech, which unfortunately, i think was not well-worded because its intent was not to give the impression that the united states is committed to the physical military

containment of china but the emphasis on the pivot, on the reallocation of troops, of the deployment of troops in australia, which, as far as i know is not under the threat of an imminent attack from papua, be new begina so it had to be china and gave the chinese the impression we are siding with whatever neighbor with china has a territorial conflict with china. that's an exaggeration but that's the way they've interpreted it. on the chinese side, there has been a dramatic increase in public pronouncements in the officially controlled and crensoirpped press but also in the statements of particular officials from different parts of the government. extremely itary is

hostile to the united states. so i think this relationship needs some careful tending and correction. however, on the russian-american "conflict," the chinese have been scrupulously neutral with their fact, of course, not backing e russians, who would have wished for some backing the --. in the u.n., the chinese abstained. they did not vote against it as the russians did. it was a reflection of their own national interests more than anything else and incidentally, not much noticed in the american press, israel. the official beneficiary of our military assistance and they took this neutral position for their own reasons and interests. one shouldn't be too surprised

by that the russians did it too. in the russian-chinese relationship, what we're seeing russian depence on china. -- depends on china. the fact remains that that the major financial investments are going to be made by the russians in communications, in facilities, pipelines and so forth. and the chinese are going to ave alternatives in terms of rice as soon as iran opens up, as soon as they reach out to deal with saudi arabia and so forth and therefore at some point the chinese will be able to go to the rush and say we value this treaty but you have to lower the price because the world price is going down and

we have these options and the russians will have no choice. they'll have to accommodate. which means the benefit of the treaty will be increasing the benefit both to the chinese. >> thank you. yes, center? >> thank you. office for corporation trailed investment. i have two questions. one pertaining to trust. i think one of the common elements they picked up on is there's a definite lack of trust of the russians and my question is what makes you think that we can build trust with the russians because it's on the basis of our actions over the previous years in terms of invading countries, in terms of spying on our own citizens, in terms of illegal intentions, in terms of our own disregard of international law. which which -- what makes you think that we can somehow

convince the russians to sit at a table and trust us if we don't trust them, with good reason given what you've all described. how do we get back to building trust? and the second question pertains to the coast of -- cost of doing what you've said. what's the cost in supporting ukraine for the europe and for the u.s.? how much is that going to cost and can that be borne, the burden, by the recovering economies of europe in particular? >> thank you. >> i can tans second question. ukraine has struck a deal with the international monetary fund and the i.m.f. has agreed to provide ukraine $17 billion over two years, provided that ukraine does the necessary reform steps that are required in the program. so the way the i.n.f. doles out the money, every several months

there's a review if ukraine has met the condition in terms of reform stems, then they get the next -- all the money. there have been a lot of i.n.f. mission to ukraine over the last 20 years and usually the mission would go and sit down and say here's the problem and the i.n.f. official would say here's what you need to do. in march when they met with the new acting government for the first time in dealing with independent ukraine, the acting government said here's our to-do scomplist it was the right to-do lust. i think people like the acting prime minister and the president understand the economic reform steps that ukraine has to take. there's been discussions with you cranian governments about these for 20 years. the real question will be can they sustain the political support for these steps? for example, to get access to the -- they started the program

on may 1. ukraine raised the price of heating to every household. that's a great time to raise the price of heating because nobody needs it but in november and december when the temperature is down in the 20's and teens, people are going to notice that their heating bills are way, way up. at that point is the government going to say to the public with we need to do this over the next couple of years? there are other fund available for the european bank for reconstruction and development and the european union. ukraine has access to billions over the next couple of years, primarily in the form of low-interest loans and that should help ukraine get through this period if they do the right things. >> would you like to take on the trust question, the first part of the question? >> i'll be very brief. mean, i don't think it is

fair to compare russia's behavior on ukraine and ith western imea w behavior going that's a very popular thing for russians to claim, that we are at fault, because, as russians say, we, the west, we aggressed the former yugoslavia. we did what we did in libya and, of course, in iraq, etc. i believe that it is important to note that, for example, in he case of kibba, where we, the west, certainly the united states, went to the security council of the united nations and obtained, actually with russia abstention at the time and endorsed activities directed at libya. the same is true in a number of

other activities. council o the security i don't know how many times trying to find a way forward on syria, trying to find a way forward ons so vo and on bosnia, etc. i am not aware that the russian federation even tried not even once to seize the security council to authorize russian action on crimea. so i think the comparison is not fair. i would grant you one point. the european security architecture as it exists with institutions like nato, the nato russia council, osce, etc. is not working the way it should. we do not have a sufficiently functioning body of institutions and rules. that's my take from what we are

witnessing. so that needs to be improved and repaired but in order to do it you need to have a minimum of trust that all actors are singing from the same page and that's very hard now that we have had such a terrible loss of trust in the predictability of russian policy as it happened over the last few months. >> thank you. david, what will finally be our final question. >> thank you. i want to ask ambassador ischinger on his assessment of whether germany is prepared to support the policies of deterring the chevy analyst russia that dr. brzezinski described. even though germany will pay significant costs in doing so.

>> i think yes, but the question is how? how exactly? f you take the majority view among the german public, you find a lot of skepticism regarding our jointly adopted decision on sanctions. you will find a lot of skepticism regarding the questions of reps -- weapons delivery. -- deliveryy, a lot of skepticism involving deployment of military force to eastern nato countries. in other words, there are obstacles to overcome in terms of public opinion and, kuwait frankly, as much as i personally agree with the point hat our eastern nato members

need to be reassured -- should be reassured by certain types symbolic y, including or not so some bollig military deployments, i think that our priority number one needs to be to stabilize ukraine and, quite frankly, by sending a few or anes to westonia poland, we are not directly doing anything to help these poor you cranians to handle their problems. the first objective, priority needs to be things that will help ukraine directly. i know, having been involved in these discussions how to deal with the ukrainian crisis over the last month or so. i know of no leader, certainly

no leader in europe, ho -- who has spent more time trying to explain to president put than he's making a mistake, a big one. and i think chancellor merkel has also been quite successful -- surprisingly successful -- in convincing the german business community, which has a much larger stake in the russian business than the u.s. business community, that the german business community should not oppose sanctions against russia. in fact, just over this past weekend, the leadership of the german business community, the b.d.i., issued a statement supporting with pain, as they said. for us this is painful but we ccept this has to be the prerogative of political -- ision making among trans

transatlantic parties and if they believe that sanctions are needed and maybe more sanctions are be it then so be it. that's a painful thing for someone to say who represents many hundreds, if not thousands of large and small business who have been doing a lot of business with russia and with their sub sidries in russia. so it's not a small thing. >> i very much agree with what wolfgang just said about the problems, especially the problems of the europeans when it comes to subsidies -- not subsidies, sanctions. i just wanted to add a little bit to it. namely, it's true that their difficulties in that regard are greater than our difficulties, but we also have expenses. for example, the president has just committed -- 1 billion for the reinforcement of central european security. that will come out of the projects -- pockets of the voters but it's a step in the

same direction so that we assume certain obligations and difficulties, costs as well. and i also think that, in any case, solidarity is what is essential and solidarity need not be only tangible. it can be symbolic and anything that our european allies can do to show that the issue of european security is of common concern and a common responsibility is good. it's not only anti-russian. it is a stabilizing step. in the last self-years, the russians have he'd -- held several military exercises on western soil. in fact, belarusa. large army formations, repelling an alleged attack and

then moving forward and the last one ended with a simulated nuclear attack on the central european capital. nuclear attack. no one has used nuclear weapons since 1945. these are things that we haven't paid much attention to but they're part of the sequetion and building material has to be considered in the face of solidarity in the face of challenge. >> thank you so much. this was a terrific round table. t me congratulate ambassador ischinger. the book highly recommended to all of you. thank you, ambassador rzezinski for our keynote. we're adjourned. thank you so much. [captions copyright national cable satellite corp. 2014] [captioning performed by the national captioning institute]

> coming up on c-span, christine lagarde explains the downgrade of the u.s. economy. then a look at allegations of corruption and fraud at the united nations and later, former national security advisor, brzezinski on russia and ukraine and the impact on european security. coming up on the next washington journal, we'll hear from john negroponte, former u.s. ambassador to iraq on the situation in iraq. ornstein on eric cantor's primary loss. wendy young.

>> tomorrow, housing and urban evelopment secretary nominee julian castro appears before the senate banking committee. live coverage at 10:00 a.m. eastern on c-span 3. >> religion is a powerful identity-forming mechanism. it's part of -- part of human society is figuring out who's us and who's them, right? religion answers that question pretty easily. if you pray like me, if you eat like me, if you go to the same church as i do then you're us and if you don't then you're them and you can see very easily how that kind of us-them, ingroup-out group

mindset could very easily lead o extremism to marginalization. after all, religion may be the most powerful form of identity formation but just as powerful is violence. how do you know who's us and who's them? if you're fighting alongside me, you're us. if you're fighting against me, you're them. far from religion and violence been -- being two things at odds, they have, as everyone knows, throughout history, been much more aligned that anyone would like them to bfment >> reza as lan will take your calls and comments for three hours. in august 3, former texas congressman and republican candidate ron paul. and mary francis berry. and this month on our online

book club we're discussing "the forgotten man," a new history of the great depression. join us in our chat room at book tv.org. television for serious readers. >> christine lagarde announced outgrowth for economic -- for the economy will be downgraded to 2%. she explains at a news conference in washington. this is a half-hour. >> thank you, jerry, and good morning to all of you. welcome to this press conference on the concluding statement on the article iv of the u.s. i'm assuming that you have received a copy beforehand and i will try to focus on the key messages that we have. just for the -- as -- by way of

background, it's been a while since we have not done a concluding statement when there is no domestic crisis, when there is no recession, and that has given us a chance to actually focus on long-term growth trends as well as the structural reforms that we see as ways to support both growth and jobs. turning to growth and numbers, you will have noted that we have readvised downwards our growth forecast for 2014 down to 2% and that is largely attributable to the poor result largely, not re entirely, but largely weather related. it's not the main message that we want to give on growth. we believe that this slowdown is temporary and better prospects lie ahead and we're aying that on the basis of

employment numbers, indices of production that much shown gaining economic momentum. there are, of course, risks to the outlook and we've seen weakness in housing and business investment that could continue to be a drag in the few. nonetheless, we believe that there will be growth in the coming quarters at about 3% or possibly higher than that. in 2015, we expect growth to hit its highest annual rate since 2005. now, we've also looked at the end for growth going forward and essentially based on the aging of population and productivity trinled, which have not kept up with earlier expectations, we have readvised downwards our projection for the long-term growth rates of

the united states to around 2% and that is clearly significantly lower than the 3% average that we have seen between 1948 and 2007. now, let's look now at the -- what we call the scars of recession, which are still visible. the first one is the long-term unemployment, which is too high, with 3.4 million unemployed people and those who have been unemployed for over 27 weeks. labor force participation is also low, too low, as too many productive workers have simply stopped looking for work. 50 d number -- almost million americans live believe powerly -- poverty line. what are our policy recommends -- recommendations in the face

of that? three key areas. one focus on jobs, growth, and poverty reduction, in the face of those numbers that i have just mentioned. second area for policy recommendations is the macroeconomy policies and third one deals with the financial stability. so let's star -- start with the key objectives, how to create more jobs, how to achieve stronger growth, how to alleviate poverty. you know there, is no single murtha is going to deal with all those issues and is going to be really an issue of putting all hands -- and it's going to be really an issue of putting all hands on deck in order to address all of them. we believe that for one, the u.s. should invest in its future and as we emphasize in our statement, the priority is to invest in people and to invest in infrastructure, to encourage innovation and stimulate productivity and try

to get people back in the labor force. but growth in and of itself will not be enough and we also believe that additional measures should be taken to mitigate enqualities. you've heard me say that on a global basis, because it's a factor that applies pretty much across the world and i'm going to now mention some of the measures that we believe will be helpful in the context of the u.s. market. we recommend targeted policy that is help pull -- poor families make ends meet. first of all, we recommend an expansion of the earned income tax credit, the eitc. it's a program that worked. that has been around for the last 40 years that is currently restricted to families with children and we certainly recommend that it be expanded beyond the family circle.

to complement the expansion to have eitc, we also argue for an increase in the minimum wage, which, in the u.s., relative to median wages is among the lowest in evolved economies. 38% so two key measures -- expansion of the eitc coupled with an increase in the minimum wage. second set of recommendations that relates to fiscal and monetary policies and clearly they are there to lay the groundwork for jobs and growth that i have just mentioned. starting with fiscal policy. as we have seen before, it remains critically important to dopt and implement a credible, median term fiscal plan to bring down debt and secure sustainability. now, we said that.

we have said that we will probably continue saying that because we recognize that it's quite difficult to achieve from a political point of view. however, we also acknowledge that there has been progress, clearly common -- demonstrated by last year's passing of the budget act. we also see room, provided there is this fiscal plan -- we see room for some fiscal support today to help lay the foundation for fiscal growth tomorrow. that includes education, job-training programs and childcare subsidies. yet making room for these important policies requires also getting to grips with long-term drivers of rising debt. and this will need to involve controlling health care costs, reforming social security, as well as improving the tax

system, which is to come plegs, has too many write-offs and loopholes and generates too little revenue. finally, i would highlight our recommendations on changes to the fiscal institutional framework, the goal of which is to try to avoid debt ceiling drinkmanship and government shutdowns. that's for the fiscal policies. turning to monetary policy, we believe that a gradual interest rate normalization is the right approach. our forecast suggests that the economy will only hit full employment by the end of 2017 and inflationary pressures will stay muted and here there is a bit of -- policy caveat and it's also a bit of inconsistency between the uncertainty around the outlook, which require that is the fed

be nimble, and it certainly is, while at the same time, though, there seems to be a large amount of certainty in markets on the way policy rates are going to go. so in the face of that, we certainly believe that the feds hould continue to deploy clear communication, which will be more important than ever. we've made some recommendations in the field of communication and we believe, notably, that possibly more frequent press conferences by the president of the fed -- sorry, by the chair of the fed -- might prove efficient in order to dispel this risk they just alluded to between the uncertainty on one hand and the certainty displayed by markets. and that brings me to my third and final area of policy recommendations, which touches on the financial stability. the crisis might be fading but

financial stability risks certainly have not gone away. and indeed, it seems pretty clear that they have gradually built up during the protraited -- protracted period of exceptionally low interest rates. the current market creates also the potential for an abrupt shift in financial markets. now, don't get me wrong. monetary accommodation has been the right thing to do in the wake of the crisis. the challenge now is to minimize the potential side effects and here we believe that the u.s. needs to continue to pay close attention to what is happening outside the banking system in the so-called shadow banks and in other non-bank activities. these activities often fall outside the standard nets of regulation and supervision and

yet can still be the magnets for excessive risk taking. what do we sflemmed contentious oversight and proactive approach. some specific oks including supervisorsry scrutiny, higher risk rates and tighter limbs -- to limits on large exposure certain assets. we also see scope for a larger federal role in insurance supervision and regulation, and while there has been progress in those areas, there needs to continue to be such progress. let me also point out that we're now working with the u.s. authorities on our next financial stability assessment program. it's work that will require a bit of time and our team will

work for the next 12 months so that when we see each other next year, same time, you will have not only the concluding statement of the article iv but you will also have the report of the financial stability assessment program. o in con -- conclusion, we see prospects looking up for the u.s. but we also believe that attention must now turn to the kinds of policies needed to lay the foundation for growth that would be sustainable, that will create jobs, and that will require investing in the long term and not being short siggeted as to what is -- short-sighted as to what is needed from a structural point of view both in terms of investment but also in terms of fiscal approach. thank you very much and i will take a few of your questions, which i see already. >> thank you very much, madam la gamplt may we focus the questions on the u.s. today,

and let's keep them short. start with the lady right in the middle. that's you will. >> thank you. my question is on the communication system of the federal reserve, you said that the chairwoman of the fed should have more press conches. now we have about four times press conferences. what do you think is appropriate? and also, how would you evaluate the communication system, not only inside the united states -- you -- i know you want to focus on the united states, but how to -- do you view the communication of the federal reserve with others? >> your question is twofold. on the first part of your question, you're saying essentially the fed today communicates four times a year and has those heavy-duty press

conferences. what is our refplgs? first of all -- recommendation? first of all, we would observe that the communication by the fed is pretty efficient and needs to continue to be first quarter. given what i described as the uncertainty versus certainty. in other words, uncertainty about the outlook, question about the texture of the labor market. questions about the participation rate. questions about the longer term unemployment. on the one hand, and the certainty that seems to be displayed by markets. we think that it's really important that the fed continue to do that. now, how can it do better as the economy evolves? and that is -- and as the crisis, you know, goes away and

as monetary policy clearly will evolve? we make two recommendationles. one is that there be more frequent press conferences and hat from four it could move to grafflely, maybe picks and that -- gradually, maybe six and hat it be as often as required given the descrip si between the certainty and uncertainty and as the certainty becomes more explainable that the fed takes the opportunity to explain. the second thing we recommend is a monetary policy report. now, that is often used by monitor institution that is adopt an inflation target monitor policy in various places. some countries such as the u.k., australia, new zealand and it could be considered -- i'm not suggesting that it be implemented right away because

the fed has has clearly long-standing institutions with his peculiarities and that has to be respected as well. but those are the two areas. the more freekt frequent press conference being privileged over the other. u asked me about the intercentral banks' communications. whether it's on the occasion of some of the g-20 meetings and so on, so forth, central bankers actually meet on a regular basis. they don't necessarily comment for you the cope scope and free agency of their meetings but they do -- frequency of their meetings but they do moment. having talked to many of the bankers that communication is increasing and improving because there is a wilder recognition of the potential spill ducts to the places where

monitor policies are decided. >> gentleman to the right here. >> robin harding from the financial times. the bank of england governor ecently warned that the u.k. interest rates may need to rise earlier than the markets currently expand. do you see a difference in the u.s.? -- similarity in the u.s. and if so why not? >> our market assessment is that generally once tapering will have been completed so the point where there will no longer be purchase, then tightening might, in short order, take place. we're not that certain about the shorled order -- short rder and our numbers on un employment and employment numbers and the uncertainty

around those numbers, coupled with the fact that we believe inflation will remain under target for a period of time, we don't see that short order to be march 2015, let's put it that way. and i'll also observe probably that the pickup in the u.s. economy is not as strong as it seems to be in the u.k. economy. so that's an additional factor. >> yes, lady right here. just to follow up on this question, so can you give us any more indication of when the i.m.f. thinks until when the rates could be appropriately at zero and what do you think the markets are not understanding on the fed communication or is it the fed that's not communicating it right? >> no, i want to dispel the idea that we would be arguing that the fed is not communicating right.

we believe that the fed is communicating rightly and what we're saying is that it could consider to communicate more frequently as the economy picks up. as the markets move in the direction they seem to be moving, in order to really clarify the uncertainty surrounding unemployment numbers, inflation numbers. core inflation numbers and its forecast for growth. so it's not -- we're not saying it's not communicating right. we're saying it is communicating right. but what we're saying is as uncertainty fades away, hopefully, it will be even more important for the fed to continue to communicate rightly and maybe a little bit more frequently in order to explain very clearly its monitor policy

going forward. as far as figuring out the tea leaves of the market reactions, i don't think that i could actually do that competently. >> my third question was -- >> we don't have a sixth -- fixed daytime. we don't think it would necessarily be in short order after the end of the tapering programs. that's what we assessed. do you want to add to that nigel? >> we make an assumption in our forecast pretty much along the lines of the market that the fed would lift off around mid 15 and move off after that. we also have inflation well below target through 2017 and also relatively high levels of unemployment. there's a lot of slack left in the labor mark. >> yes, sir? >> ian, "wall street journal." first of all, the most important question, the u.s. is

facing off against ghana today. who are you supporting in the world cup for that game and broader favoring in the world tournament? secondly, what are the consequences to the u.s. and global economy if the fed moves in line with market expectations instead of your prognosis or recommendation for a slower exit? especially in light of the financial risks you outline. guard against ly any prognostic concerning soccer. or what i call football. i was delighted to see that the french team did as it did yesterday and good luck to all teams. now, it's really difficult to speculate about what is likely to happen that we don't think

will happen. but clearly, you know, earlier than timely tightening could possibly have consequences on the u.s. economy in the first place. and could possibly, you know, con strain, -- constrain, restrict, the recovery momentum that we have observed and would not be positive from an employment point of view and second, could also have more severe consequences in terms of global economy -- economic outlook, where the spillover to emerging markets would leave a mark on their respective growth. so it's from that sort of twofold perspective that we would be looking at it. >> thank you. >> lady right here. yeah. > thank you.

in a rourlt -- report the u.s. growth prokts prospects have been lower. potentially from 2.8 to 2%. to what extent the lower mark will affect the rest of the world, especially emerging markets like china? thank you? >> as i said, we have readvised downwards, probably conservative live but essentially on -- conservatively but essentially on the very low and unexpectly low q-1. we haven't seen the final number, by the way, of q-1 and given the growth in the annual growth rate of any first quarter but i think our key message is that this we see as temporary and we see numbers going forward in quarter two,

three, hopefully four, as being a lot stronger and trending around 3%. yes, there will be spillover to other markets to the extent they're all strong into connections -- but i wouldn't overemphasize them given the temporary nature of this bad number in q-1. >> hello. i have a question on the minimum wage. where do you see the level of minimum wage and don't you think this increases our ridlock in washington? thank you. >> we believe that the increase in the minimum wage would be helpful, particularly if coupled with an increase in the eidc. so it's the two together that we believe would be very

helpful. when we look at the number of where it is today, it's clearly within the three lowest relative to minimum wage in all f the o.d.c. countries, adds 38% of the median wage and given the other numbers they mentioned, the 50 million americans living below poverty levels and the number of unemployed people, we believe that an increase of that minimum wage would be helpful from a microeconomic point of view. we're talking about significant numbers. when you have 50 million people living below poverty level, many of whom are working people, not people who are just not doing anything. that's why we are recommending it. now, as to give you a number. is it 10.10?

this is something that needs to be decided by -- clearly, but i would emphasize that there were sates in which minimum levels have been raised to try to reduce those poverty levels. >> thank you. gentleman in the front? >> good morning. the statement doesn't mention the ongoing unwillingness of the u.s. authorities to support and implement the i.m.f. reforms. have you given up hope on this? >> no way. no way. i would never give up. never give up. and i was a player in this organization except on the other side when the u.s. authorities campaigned actively for the reform and i want to see it through so i would certainly hope that the authorities both at the administration as well as at

the legislative levels appreciate how help and feel necessary it is to actually implement the reform so that the i.m.f. can play its role as prescribed by the articles. >> ok, looking for other questions. >> good morning. >> good morning. according to e, the national times, the i.m.f. discussed a way over bailouts. the i.m. sfmplet discussing changes to its rules that will on their struggling debt as a condition. can you comment on this? effort it's an ongoing but we -- that we have

undertaken and will continue to undertake in order to improve and fine-tune the sovereign debt restructuring range of issues. it's not just about extending aturity, having this intermediate tool in the tool box but looking at the whole range of issues and we will continue to do that. nor g is neither final approved nor ready yet for resolutions to be put to the board and it's certainly an area when we need to reach out and talk to all the stakeholders and it's a dialogue that has been ongoing anyway where we need to participate and we need to provide the expertise that we have accumulated over the last 70 years given changing circumstances.

it's hard work. it's highly technical and it needs to be well-articulated d also based on informed views around the community from all -- from the entire spectrum. >> the last two questions and i see the two gentlemen here.