Philip H. Gordon
Assistant Secretary, Bureau of European and Eurasian Affairs
Budapest, Hungary
January 13, 2011

QUESTION: About this meeting, participating the European Directors meeting, what was your perception? What are the most important issues in the next six months which are in the interest of the United States?

ASSISTANT SECRETARY GORDON: The agenda for the next six months is enormous and the agenda together with the European Union is enormous.

I was in Budapest to do some consultations with European colleagues, EU colleagues, the 27, which we do every six months in the capital of the rotating presidency. This time our agenda included how we work together on Asia. It included counter-terrorism issues, it included Belarus and the [inaudible] Eastern Partnership, it included the Balkans, it included Russia, it included Sudan and Cuba. So I think you can see that together with the EU we really deal with a global agenda. Our partnership is increasing, and this was part of that conversation.

QUESTION: You touched upon the question in your presentation, the question of Belarus. What do you think? Are there possible sanctions or stricter measures against Belarus in cooperation with the European Union?

ASSISTANT SECRETARY GORDON: I think we and the European Union are both together and separately reviewing all of our options vis-à-vis Belarus. I think you’ve seen the strong statements done together by Secretary of State Clinton and High Representative Catherine Ashton reflecting our strong condemnation of the way the election was handled and the crackdown afterwards and the ongoing detention of the presidential candidates and others.

We have made clear that Belarus should immediately release all of the detainees and we’re reviewing our sanctions and our engagement with the people of Belarus in this context. The United States already has significant sanctions on Belarus, asset freezes and visa waivers. We suspended some of those sanctions two years ago in the context of the release of political prisoners. If the current detainees are not allowed to go free, they will be considered political prisoners and we will be looking at reimposing those sanctions. I think the European Union is undergoing the same process. We’ll also review our support for democracy and civil society in Belarus, making clear that we stand by the Belarusian people and want to see a free and democratic future for Belarus.

QUESTION: Maybe you could give possible cooperation or new field of cooperation with Russia because in the measures taken against Belarus, Russia has also some conflicts of course in economic fields with Belarus. Is it a possible field of cooperation?

ASSISTANT SECRETARY GORDON: We would like to see Russia join us in making clear that we don’t accept the conduct of the election, the detainees. But you’ll have to ask the Russians whether they’re prepared to join us in measures against the authorities in Minsk.

QUESTION: But no discussions about this question yet?

ASSISTANT SECRETARY GORDON: No. Our cooperation has been primarily with the European Union on this question.

QUESTION: In your opinion is it considerable that there are the traditional fields of U.S./EU cooperation? I mean traditional, counterterrorism, Afghanistan, Iran, energy security? But there are now tough questions about the European economic problems and European economy. Do you think this could shed these other parts of, other fields of cooperation? Because a deepening European Euro crisis could affect the trade cooperation, the trade relations between the EU and the U.S.?

ASSISTANT SECRETARY GORDON: First let me just note what you called traditional areas of cooperation are not actually that traditional. Indeed, we should pause to note how both new and important they are.

The idea ten years ago that we’d be not only closely cooperating on Afghanistan but jointly fighting a war there with 40,000 European troops is actually remarkable. A number of years ago we had strong differences on whether and how to engage or contain Iran, and now we have literally the same policy.

QUESTION: I meant traditionally compared with the urgent questions.

ASSISTANT SECRETARY GORDON: Fair enough. They have been marked by cooperation over several years where as you’re referring to a new crisis, the financial crisis.

We take it very seriously. For all of us the most urgent priority is getting our economies back on track. We think we’ve worked pretty well in that regard together, and together helped avoid an even worse recession or depression. President Obama has invested significantly in the G20 process to make sure the global economy is not only relaunched but more balanced. We can ensure balanced growth. We have ongoing engagement with Europe over every aspect of international economics.

The particular debt issues that we’ve seen in Greece and Ireland and Portugal are primarily European-led, but obviously they’re of great importance to the United States. We can’t succeed unless the European economy succeeds as well.

QUESTION: The weakening euro and the strong dollar affects the U.S. export badly - to the European Union.

ASSISTANT SECRETARY GORDON: There are always different pros and cons of a currency that’s rising or falling. Our basic view is that exchange rates are and should be determined by the market. The reality is the dollar and the euro haven’t fluctuated that much in recent weeks and months.

QUESTION: Now not big concerns about this?

ASSISTANT SECRETARY GORDON: We have lots of concerns about the state of the economy, but managing exchange rates is not something that we are doing.

QUESTION: So-called traditional issue, what I meant, traditional issue, Afghanistan. In this year I think there should be the preparations for the reduction of troops. What are the cooperations, what are the main points, the main tasks between U.S. and EU?

ASSISTANT SECRETARY GORDON: We have agreed on a common strategy. First let me say we are grateful for all of the support we get from our European NATO allies and that includes Hungary which like others is making significant sacrifices in order to contribute to the common effort in Afghanistan.

At the Lisbon summit we agreed to a common strategy on transition. None of us want to stay in Afghanistan forever. We all have a critical interest in succeeding in Afghanistan and we need to continue to do it together. That common strategy we agreed is not only to increase our efforts in the short term in terms of troops and trainers, but to use those troops and trainers as a pathway to transition to an Afghan lead on security. We have said that that process will begin this summer, but it will be a deliberate, conditions-based process that should lead us towards our goal which is the transition to Afghan lead authority by 2014.

So in the mean time we need to keep doing what we’re doing and intensify our efforts so that the Afghans themselves by then are capable of playing the lead role in their security. It doesn’t mean we disappear, but it means that we can withdraw many of our troops from the theater.

QUESTION: Is there harmonizing the troops reducement between the nations in Afghanistan? To which rate the U.S., Britain, France withdraw troops? The schedule?

ASSISTANT SECRETARY GORDON: There needs to be. It needs to be coordinated. The commander on the ground will be best placed to know which sectors can transition first, but the guiding principle as the commander makes those decisions is mutual solidarity. So that we don’t have different countries rushing out and say we want to be the first to leave.

We’re all committed to this. We’re committed to the 2014 goal. And need to pursue that transition process in the way that’s best for Afghanistan and not best for those who want to leave most quickly.

QUESTION: For the Hungarian EU presidency, what do you think the main challenges are?

ASSISTANT SECRETARY GORDON: That’s for the government of Hungary to articulate. From what we’ve heard from them, among their major tasks, things they’re most interested in focusing on, are the Eastern Partnership which is appropriate given the geography, and that’s something that we in the United States strongly support, and join the EU in supporting. The Balkans, again, Western Balkans and its path to European Union membership is important. The enlargement process, keeping that on the agenda and obviously and inevitably, the economy.

QUESTION: Energy security is a priority for the Hungarian presidency.

Are there some other plans, or are there initiatives that the U.S. would participate in those investments directly? The southern corridor which is to --

ASSISTANT SECRETARY GORDON: You’re absolutely right, that energy security will be a priority for the Hungarian presidency as it is for us. And we are very much involved in the discussion of fostering energy security. The southern corridor specifically is something that we support. We’re not in the business of making decisions about different routes or pipeline routes. Companies involved in those projects which have to be financially viable will make those decisions. But as for the concept of a southern corridor and energy diversity, it is something that the United States very strongly supports.

We think energy diversity and energy security is not only in the interest of the countries of Eastern and Central and Southeastern Europe, but in our own. When you have more energy diversity you have more economic security, you have more security of supply, and you have more political independence because countries are less dependent on single sources. That’s why we’ve invested so heavily. We have a Special Ambassador, a Special Envoy for Europe and Eurasian Energy Security. We have the U.S.-EU Energy Council. And the President and Secretary are very much interested in that.

QUESTION: Are there special expectations for 2011, for this year? Decisions on the pipelines? We have seen that many decisions are possible in the last period.

ASSISTANT SECRETARY GORDON: I don’t want to put any deadlines on anything. The answer should be as soon as possible, as soon as viable. Obviously economic difficulties don’t make it easier to pursue large scale investments, but we’re committed to going as quickly as possible.

QUESTION: In the recent weeks Hungary got some of her critics because of some regulations. Do you think this could shed the Hungarian EU presidency? Because some reactions from Hungary was for the critics that these are not based on thorough information. Could this shed the Hungarian presidency or the overall picture on Hungary?

ASSISTANT SECRETARY GORDON: I think the debate about the media law has been a distraction to the start of the Hungarian EU presidency. And it’s not for me or for the United States to dictate to Hungary what its media laws or any other laws should be, and it’s not for the European Union to dictate to Hungary. It’s a democracy and it’s up to Hungarians.

That said, when I say it’s been a distraction, clearly there are widespread international concerns and criticisms of what’s in the law. And to the extent those aren’t accurate, Hungarians need to explain to their friends why they may be misled, but I think Hungarians should also listen when there is such international concern about freedom of expression which is so critical to democracy. You mentioned Hungary’s reputation. Hungary has a reputation for being a democratic country based on rule of law and freedom, and that’s precious. And we believe that a free media, free expression is central to democracy and so hope that Hungarians will take the concerns that have been expressed seriously.

QUESTION: It was one interesting remark from the Hungarian President. I would like to ask you about this. This is about the values of democracy. He said last week on an international press conference that in the media law there are questions of the values. He said that in this regulation the protection of children, the next generations, are more important than the freedom of speech. Could he be right? The freedom of speech is for the United States Constitution, is a core point.

ASSISTANT SECRETARY GORDON: Freedom of speech is absolutely a core point for the United States. I don’t think you can put in opposition broad categories like this -- protection of children, freedom of speech. These are the concepts that democratic societies need to discuss. I think one of the things people are concerned about in the media law is who gets to be the watchdog and who gets to decide when these categories are met. And certainly in the American system what’s important is a sense of checks and balances. That even winners of democratic majorities don’t get to decide on behalf of the society as a whole what the definition of unbalanced is or what the definition of family values is. And that’s why even when one obviously supports broad concepts like protection of children and balanced media, it is important to make sure that there is comfort throughout society with who gets to make that decision. I know that there’s been a lot of debate in the Hungarian media law whether Hungary has got that just right.

QUESTION: One more thing about the perspectives of investment in Hungary from the United States. Positive and negative measures that would affect the investments. I mean Hungary the corporate tax has been reduced last year. On the other hand there are some so-called crisis taxes. So what could boost the investments in Hungary? Or these two are in balance?

ASSISTANT SECRETARY GORDON: First of all, Americans in general and people around the world, see Hungary as a positive place to invest. A well educated population, member of the European Union, advantageous geographical site. Hungary is an attractive place for investment, low corporate taxes, and that’s why it attracts significant investment.

On the other side of the ledger, there are questions about the crisis taxes. Investors crave stability and they want to know not just what the tax rate is but what it’s likely to be and whether it’s likely to change, and in particular when it comes to the crisis taxes, there would be the concern, could they be renewed, how long will they go on for? I think it’s important to clarify and provide stability for investors.

I also think, going back to debate about the media law and other discussions of democracy in Hungary, that the overall perception of Hungary as a stable democracy, member of the European Union, helps shape the climate. Even if there’s not a direct link between media regulations and investment, it’s all part of an overall picture and Hungary and all countries do well for themselves when they are seen as stable democracies in the European mainstream.

QUESTION: The very last question, can we hope or can we welcome in May, in Budapest, or is it a question of consideration, Secretary of State Hillary Clinton?

ASSISTANT SECRETARY GORDON: I don’t have any announcements to make about the Secretary’s travel. The Secretary would love to come to Hungary and I’m sure will do so at the right opportunity.

QUESTION: Thank you very much.