Background Briefing With Senior State Department Officials
Special Briefing
Senior Department Official
Official
Official
Athens, Greece
July 17, 2011
MODERATOR: This will be on background. [Senior State Department Official Two] is going to join us in the last couple minutes, if you wanted to go ahead and get started, since they’re going to have to leave.
SENIOR STATE DEPARTMENT OFFICIAL ONE: Yeah. We’ll be brief and just go to questions. I guess you want a bit of a readout from yesterday on Turkey, and then we can preview the Greece legs.
I’ll do – she saw President Gul, Prime Minister Erdogan, and Foreign Minister Davutoglu, so I’ll just sort of package it together as issues, which she just had something that’s similar ones with each of them. She also, I would note, went to see the Ecumenical Patriarch, which is somebody that she respects and has known for a long time, and they talked about issues of importance to the patriarch (inaudible), including the opening of the Halki Seminary there. We – the patriarch reminded the Secretary that we’re coming up to the 40th year of the closure of the Halki Seminary. It’s opening is something the United States has long supported. The Secretary personally supports that and agreed to raise it with her Turkish interlocutors, which she did.
We said when we talked about the Turkey agenda that it is – Turkey is one of those partners with which our relationship is so multifaceted, practically every issue under the sun, and I’ll just try to give you – and they discussed just about every issue under the sun, and I’ll just try to give you a sense of the main ones.
I’d start with the PKK issue and the terrorists threat, obviously, because just a couple of days ago there was the PKK attack on Turkish soldiers that killed 13 of them. It’s obviously a huge deal in Turkey. And the Secretary expressed, obviously, her condolences but also her strong support for continuing to work with Turkey on this terrorist threat. We see the PKK as a terrorist organization and work intensively with Turkey to deal with this common threat.
They talked a lot about Syria, another very big issue for Turkey. I think that the border is 850 kilometers long. Prime Minister Erdogon noted that there are some 8,000 displaced Syrians in Turkey, and Turkey is doing everything it can to support them. And they discussed the need to see genuine real reform in Syria and how to coordinate our approach to bringing about such change.
Libya, the Secretary congratulated Foreign Minister Davugtolu on a very successful Contact Group meeting. We think that the advances there, not least the co-chair statement underscoring a participants’ agreement to treat the TNC as the legitimate governing authority was a major step forward towards our common aim of looking beyond Qadhafi and towards a democratic future for Libya.
And they spent a lot of time on the Arab Spring more generally, obviously of great importance both to Turkey and to us, and I think for the common agenda on reform there.
They talked about NATO issues, including Afghanistan where Turkey has 1,800 troops, and discussed the President’s proposal for phased withdrawals; and including missile defense, on which they had good and constructive discussions, which they agreed to continue. It was clear that Turkey understands the importance of missile defense for NATO, and the Secretary appreciated that.
A lot of regional issues, including Armenia, where the Secretary expressed our desire to see normalization of relations between the two countries. We think that would be a historic project. She encouraged Turkey to support and move the protocols, which have been stuck in the Turkish parliament, but more generally to reach out to Armenia with confidence-building measures and do whatever possible to strengthen that relationship, leading ultimately to restored diplomatic ties.
Cyprus is another issue the Turks brought up and underscored their desire to see further progress in the talks. Obviously, it’s something we’re going to discuss here in Greece as well. Prime Minister Davutoglu pointed out that Cyprus takes over the rotating EU presidency next year, and it would be a wonderful thing to see that be the unified Cyprus taking over the EU presidency. The Secretary agreed with that and agreed to do everything we could to support the talks that are going on at present under EU auspices.
They discussed energy issues, and the Secretary expressed our support for moving forward on the Southern Corridor, which should do a lot to enhance European energy independence.
And they also talked about issues of strengthening democracy and the importance of a free press and free expression, some of the issues that the Secretary addressed in her coffee or tea earlier with the journalists.
I’m sure there are a number of issues I’m leaving out because, again, this agenda is so broad and diverse. But that, I think, covers the bulk of what she focused on in Turkey.
QUESTION: Did they – I’m sorry.
SENIOR STATE DEPARTMENT OFFICIAL ONE: No, I’ll – we can pause and do that, and then I can brief separately, if you like –
QUESTION: (Inaudible) questions on this first?
QUESTION: On the PKK, was there any kind of specific steps that Turkey wanted the United States to take? I mean, after that last kind of doubt a few years ago, you had kind of stepped up intelligence through a series of asks. I’m just wondering. And she kind of made some comments yesterday about Iraq and (inaudible), and I’m just wondering if there’s any there in terms of –
SENIOR STATE DEPARTMENT OFFICIAL ONE: No, there’s not a particular ask that we’re focused on. She did note – I mean, there’s a new context in that the United States either won’t have any or won’t have a similar number of troops in Iraq, where dealing with the PKK has been an issue. So the context is changing and our strategic presence is changing, and that raises the question for the two sides of how to continue to be successful in the fight against the PKK. But it was more, as I say, the fact that this just happened, it is – I mean, the Turks acknowledge that from their own point of view, as important as the Libya Contact Group was, Turkish public in the past few days has been focused on this because it’s such a big deal. And she just wanted to know that – she wanted them to know that we totally stand with them on this fight against the PKK.
QUESTION: Could I ask, on Syria, coming over, you sort of noted that the Turks hadn’t gone as far as the EU and the U.S. on the sanctions front. Is there – or was the Secretary sort of querying them on that or asking what Turkey plans to do next? And is there any discussion of specifics? Particularly, there’s been the suggestion that oil and gas sector sanctions, ICC referrals, and I mean, when you talk about next steps, were there any concrete steps discussed?
SENIOR STATE DEPARTMENT OFFICIAL ONE: They talked about efforts at the UN Security Council, and Turkey just wants to make sure that it has a voice. It understands where we are and where some other members of the Security Council are on further measures. It understands what the EU and we have done in terms of specific sanctions. And Prime Minister Erdogan underscored why this is so critical for Turkey – cultural links, ethnic links, obviously geographical links. We just want to make sure – he wants to make sure that, as we contemplate any of those specifics that Turkey was not necessarily contemplating, we do it together with Turkey, and we see Turkey and understand the impact on Turkey.
QUESTION: Where are they – where do they stand in terms of – obviously, you’ve made some pretty strong statements against Asad. Are they, without saying particular sanctions were said (inaudible) diplomacy (inaudible) –and the people around him like we are with Qadhafi (inaudible).
SENIOR STATE DEPARTMENT OFFICIAL ONE: You mean – I’ll let the Turks speak for themselves in this pursuit of strategy. I think they continue to be focused on the need for reform. That is by far their first preference, because any alternative to that (inaudible) Turkey that is not what they seek, so – but as to specific things, they should speak for themselves.
QUESTION: Greece.
SENIOR STATE DEPARTMENT OFFICIAL ONE: Want to do Greece? Everyone good?
QUESTION: Good morning.
SENIOR STATE DEPARTMENT OFFICIAL ONE: Just in terms of the schedule, she’s going to meet with Foreign Minister Lambrinidis, who, as you know, just took office in the reshuffle less than a month ago. She had lunch with Prime Minister Papandreou. She’ll see the president, Papoulias. She’ll see the new finance minister, Venizelos, who also just took office in this recent –
QUESTION: Bloodletting.
SENIOR STATE DEPARTMENT OFFICIAL ONE: -- reshuffle. (Laughter.) I don’t want to characterize it. Matt always has a word for it. She’ll sign a memo, UN cultural issues at the Acropolis this afternoon. Tomorrow morning, she’ll see opposition leader Samaras. Tonight, she will prepare to watch the women’s World Cup final, on which [Senior State Department Official Two] and I will brief her in great detail prior.
I mean, the issues that are the obvious ones, starting with the economy, obviously, on which she wants to show support for what Prime Minister Papandreou is doing. It’s obviously a very difficult challenge, but he is undertaking serious efforts to reduce the deficit. As you know, in late June, the Greek parliament passed the medium-term fiscal strategy designed to further reduce the budget deficit, consolidate finances, and leave Greece in a more financially sound position, underscore its competitiveness. That’s the strategy, which we strongly support. There is not a direct U.S. role in this. The lead we see as primarily European, which is to say the European Union, the European Central Bank, and the IMF. And it’s through the IMF that there’s only – that the U.S. has some particular role. But more broadly – and we certainly have a major stake in the outcome, both for our ally Greece and for Europe as a whole. But I think she will want to support – to express to the prime minister her support.
Greece has made some progress over the past couple of years. The budget deficit has come down from 15 percent a couple of years ago to 10 percent in 2010, and is projected to be 7.5 percent this year. So it is doing the difficult work of bringing the budget deficit down. And by the way, that’s in a context of not just slow growth but of a GDP that has shrunk over the past couple of years. So bringing the budget deficit down while you’re not having growth is a major challenge, and that’s no doubt why you’re seeing a debate about the way forward.
They’ll also talk extensively about regional international issues. Greece has been a partner in Libya and participate in the Contact Group, and we’re grateful for their support, and at not least logistically in terms of the use of Souda Bay and other facilities. Greece was helpful on the planned flotilla issues on the anniversary of the clash in the Mediterranean last year and prevented some ships from seeking to break the Israeli blockade, and we were grateful for that. They’ll talk about the Balkans, where Greece has long played a major important role. Cyprus, following up the discussions in Turkey and again seeking to make a success of these UN-led talks so that this (inaudible) federation can actually be the next EU presidency of a unified Cyprus. Greece-Turkey relations, Arab Spring – Greece also has a major interest. So I think, again, you’ll see a pretty broad regional and global agenda.
QUESTION: Well, can I just – with everything going on at home, how comfortable is she coming in here and talking to the Greeks about how bad deficits are and you need to get your struggling economy back on its feet? I mean, that would strike me, if I was Papandreou, being an American himself, as, like, what are you talking to me about this for?
SENIOR STATE DEPARTMENT OFFICIAL ONE: Well, but a prime minister will speak for himself, but I suspect he is very pleased to see the Secretary. She’s perfectly comfortable talking about that. I think the Greeks want to know that the international community supports them, the United States supports them. The Secretary makes plain that we’ve faced economic challenges, too. She knows what – how difficult it is to reduce deficits and cut spending. And so they can talk about the common challenges of dealing with economic difficulties, the political context, but I’m highly confident that the prime minister is delighted to see her and to talk about these issues and to hear –
QUESTION: Can I just do one other thing? What about (inaudible)? I mean, this is – Macedonia. This seems to be a perpetual, perennial, ridiculous issue of enormous consequence but really just seems to be like a schoolyard fight to most people looking it from the outside. And I realize that (inaudible) opinions on both sides, and they don’t see it like that. But to the rest of the world – to normal, non-Macedonians and non-Greeks, normal people – it seems ridiculous. How close are you?
SENIOR STATE DEPARTMENT OFFICIAL ONE: We agree that the dispute over the name has gone on for far too long, and very much want to see a resolution. I do think it’s important that when you say it’s sensitive to them, it really is, on both sides. And it’s easy for outsiders to say why don’t you just change the name, or why don’t you just agree to whatever name is on the table? But for them, it matters. And you can debate that, but it’s a reality that it matters to the two parties and that’s why, for nearly 20 years, they haven’t been able to agree on it. We think they would both benefit from a solution, obviously. NATO has said that Macedonia can join when the name dispute is resolved. It met the other criteria. We think that would be an important new element of stability in the region, and strongly support it. The talks are going on seriously under UN leadership. We support it. Obviously, the sides have to agree, but the Secretary will surely have conversations with the prime minister.
QUESTION: Are there any new proposals for – any new ideas? Or is it still this hyphenated whatever they call it?
SENIOR STATE DEPARTMENT OFFICIAL ONE: There are a number of ideas because there are a number of options, and the trick is to find one that’s mutually acceptable. And I think it’s accurate to say they are close. But in any negotiation over something sensitive, close isn’t enough. They have to go that final mile or however long it is and get it done. And that’s a realistic proposition and we’d very much like to see it. It would be good for both countries.
QUESTION: Do you see anything new, any new element in the Cyrpus dispute, say since the referendum in 2004, that would propel the parties to want a deal more than (inaudible) seven years ago?
SENIOR STATE DEPARTMENT OFFICIAL ONE: Well, again, that’s another dispute that we think has gone on for far too long and are absolutely convinced that both sides would benefit from (inaudible). This one is even more multifaceted, with issues of territory security, property, governance, the economy, EU membership, and so all of these pieces have to put together. But I think it’s fair to say that almost any of the deals that have been put on the table in those five or six categories would benefit both sides. Both sides would have something to gain. And that’s why it’s really unfortunate that there hasn’t been a deal.
New elements? I don’t want to suggest that somehow they’re on the verge of a deal. They have been engaged in serious talks. We appreciate the fact that they’re involved in direct talks. The parties need to talk to each other. It can’t be done or imposed on them. We saw in 2004 that there was an international plan. The United States supported it. There was a democratic referendum in Cyprus, and the Greek community didn’t support it and we’ve moved on from there and are talking about different approaches, again under the UN. So this present cycle of direct talks has gone on for about three years, and they have had – I don’t know the latest number, but more than 80 direct meetings of the leaders, so it’s serious and they’re very much into details. But again, close doesn’t cut it when you’re talking about a sensitive negotiation. The party – the leaderships met again last week, and a deal couldn’t come too soon. And as I said, we like this vision of seeing a united Cyprus be the president of the European Union next year.
QUESTION: [Senior Administration Official Two], I mean, I – obviously, this is being led by the UN, but how much is the Secretary willing to – on some of these things like a meeting or whatever, she’s tried to use her – I mean, not just raise it with the leaders but kind of use her good offices, if you will, to –
SENIOR STATE DEPARTMENT OFFICIAL TWO: Oh, she’ll certainly discuss it today. She discussed it yesterday with Davugtolu. But I think she sees the UN as being in the driver’s seat on it. I would just add to what [Senior State Department Official One] said, that Cyrpus is coming up into the EU presidency right here in a year’s time, so I think that’s going to shine a brighter spotlight on the whole issue.
QUESTION: (Inaudible.) It adds urgency (inaudible).
QUESTION: Yeah, but sometimes –
QUESTION: But is Cyprus joining the EU – someone said that joining the EU didn’t add anything –
QUESTION: I know.
QUESTION: Hell, I mean, just becoming the president of the EU –
QUESTION: Yeah. I think the talks have said that if the thing isn’t settled (inaudible) it could be worse for them (inaudible).
QUESTION: Why isn’t it an --
QUESTION: Can I go back –
QUESTION: (Inaudible.)
SENIOR STATE DEPARTMENT OFFICIAL TWO: She’s not appointing an envoy.
QUESTION: No, I don’t mean appointing an envoy, but there have been times like –
SENIOR STATE DEPARTMENT OFFICIAL TWO: I think what you heard from her yesterday is she does think – her sense of a lot of these frozen conflicts or whatever you want to call them is let’s fire up the parties to see it in their interest to resolve them, but she’s not trying to change the constellation of key members.
QUESTION: Can I come back on Greece for a second? Yeah. The (inaudible) today (inaudible) in the context of these (inaudible) meeting in Brussels next Thursday. So how much defense can she make? Who can she (inaudible) in the wake of this meeting?
SENIOR STATE DEPARTMENT OFFICIAL TWO: You mean in the run-up to it?
QUESTION: Yeah.
SENIOR STATE DEPARTMENT OFFICIAL ONE: No, I mean, on the – they are two separate things. As I said, we largely see this as an EU lead in terms of financial support for Greece, and that is what is in the EU’s hands as they meet in (inaudible). But again, I think the Greeks will appreciate a strong show of U.S. support.
QUESTION: Are you worried that the Europeans cannot get back together?
SENIOR STATE DEPARTMENT OFFICIAL ONE: We have said that we are confident that Europe has the means to deal with this challenge. I think the Greek economy is about 3 percent of the overall EU economy. So without diminishing the challenge, if you just take it in terms of proportions, there’s no reason that this massive European Union economy can’t deal with what is clearly a very challenging situation in Greece but not one of a magnitude that European countries are not in a position to deal with.
QUESTION: Is this just putting pressure on the rest of the nations, rather than – that’s not --
SENIOR STATE DEPARTMENT OFFICIAL ONE: On the what nations?
QUESTION: The U.S. putting pressure on – I don’t know if pressure is the word, but on the – it’s more – that’s how you support Greece is by encouraging other countries to support it?
SENIOR STATE DEPARTMENT OFFICIAL ONE: No, I think you support Greece by underscoring that we understand the difficult position that the prime minister is in and that he’s making hard choices as leaders have to do. And we see him as a leader in doing so, and that the Greek parliament did the right thing, as difficult as it was last week to pass a tough fiscal package, and to let everybody know that we think they’re on the right track. And again, it’s – we’ve been consistent on this view that – nobody is expecting, including the European leaders next week. It’s not as if they are asking the U.S. for some direct role (inaudible) financial stake. I think the international community’s approach with the European lead and the IMF role is agreed.
QUESTION: You’re not expecting the Greeks to ask for any kind of involvement, even diplomatically or a public statement of weigh-in?
SENIOR STATE DEPARTMENT OFFICIAL ONE: No, I think they will want us to understand their challenges and dilemmas but I don’t think they’d be asking for some diplomatic intervention.
QUESTION: Will she express concern that (inaudible) something (inaudible) in world markets and in the world community?
SENIOR STATE DEPARTMENT OFFICIAL ONE: I think everybody has acknowledged that success in Greece is not just important for Greece but as a factor of stability throughout the Euro-zone, and it just gives us an added reason to want to see Greece succeed. But again, we are confident that the European has the means to do that.
QUESTION: What exactly will she say to make news, meaning ID – move markets?
SENIOR STATE DEPARTMENT OFFICIAL TWO: You’ll just have to wait and see. That will be unplanned. (Laughter.)
SENIOR STATE DEPARTMENT OFFICIAL ONE: Yeah. We’ll be brief and just go to questions. I guess you want a bit of a readout from yesterday on Turkey, and then we can preview the Greece legs.
I’ll do – she saw President Gul, Prime Minister Erdogan, and Foreign Minister Davutoglu, so I’ll just sort of package it together as issues, which she just had something that’s similar ones with each of them. She also, I would note, went to see the Ecumenical Patriarch, which is somebody that she respects and has known for a long time, and they talked about issues of importance to the patriarch (inaudible), including the opening of the Halki Seminary there. We – the patriarch reminded the Secretary that we’re coming up to the 40th year of the closure of the Halki Seminary. It’s opening is something the United States has long supported. The Secretary personally supports that and agreed to raise it with her Turkish interlocutors, which she did.
We said when we talked about the Turkey agenda that it is – Turkey is one of those partners with which our relationship is so multifaceted, practically every issue under the sun, and I’ll just try to give you – and they discussed just about every issue under the sun, and I’ll just try to give you a sense of the main ones.
I’d start with the PKK issue and the terrorists threat, obviously, because just a couple of days ago there was the PKK attack on Turkish soldiers that killed 13 of them. It’s obviously a huge deal in Turkey. And the Secretary expressed, obviously, her condolences but also her strong support for continuing to work with Turkey on this terrorist threat. We see the PKK as a terrorist organization and work intensively with Turkey to deal with this common threat.
They talked a lot about Syria, another very big issue for Turkey. I think that the border is 850 kilometers long. Prime Minister Erdogon noted that there are some 8,000 displaced Syrians in Turkey, and Turkey is doing everything it can to support them. And they discussed the need to see genuine real reform in Syria and how to coordinate our approach to bringing about such change.
Libya, the Secretary congratulated Foreign Minister Davugtolu on a very successful Contact Group meeting. We think that the advances there, not least the co-chair statement underscoring a participants’ agreement to treat the TNC as the legitimate governing authority was a major step forward towards our common aim of looking beyond Qadhafi and towards a democratic future for Libya.
And they spent a lot of time on the Arab Spring more generally, obviously of great importance both to Turkey and to us, and I think for the common agenda on reform there.
They talked about NATO issues, including Afghanistan where Turkey has 1,800 troops, and discussed the President’s proposal for phased withdrawals; and including missile defense, on which they had good and constructive discussions, which they agreed to continue. It was clear that Turkey understands the importance of missile defense for NATO, and the Secretary appreciated that.
A lot of regional issues, including Armenia, where the Secretary expressed our desire to see normalization of relations between the two countries. We think that would be a historic project. She encouraged Turkey to support and move the protocols, which have been stuck in the Turkish parliament, but more generally to reach out to Armenia with confidence-building measures and do whatever possible to strengthen that relationship, leading ultimately to restored diplomatic ties.
Cyprus is another issue the Turks brought up and underscored their desire to see further progress in the talks. Obviously, it’s something we’re going to discuss here in Greece as well. Prime Minister Davutoglu pointed out that Cyprus takes over the rotating EU presidency next year, and it would be a wonderful thing to see that be the unified Cyprus taking over the EU presidency. The Secretary agreed with that and agreed to do everything we could to support the talks that are going on at present under EU auspices.
They discussed energy issues, and the Secretary expressed our support for moving forward on the Southern Corridor, which should do a lot to enhance European energy independence.
And they also talked about issues of strengthening democracy and the importance of a free press and free expression, some of the issues that the Secretary addressed in her coffee or tea earlier with the journalists.
I’m sure there are a number of issues I’m leaving out because, again, this agenda is so broad and diverse. But that, I think, covers the bulk of what she focused on in Turkey.
QUESTION: Did they – I’m sorry.
SENIOR STATE DEPARTMENT OFFICIAL ONE: No, I’ll – we can pause and do that, and then I can brief separately, if you like –
QUESTION: (Inaudible) questions on this first?
QUESTION: On the PKK, was there any kind of specific steps that Turkey wanted the United States to take? I mean, after that last kind of doubt a few years ago, you had kind of stepped up intelligence through a series of asks. I’m just wondering. And she kind of made some comments yesterday about Iraq and (inaudible), and I’m just wondering if there’s any there in terms of –
SENIOR STATE DEPARTMENT OFFICIAL ONE: No, there’s not a particular ask that we’re focused on. She did note – I mean, there’s a new context in that the United States either won’t have any or won’t have a similar number of troops in Iraq, where dealing with the PKK has been an issue. So the context is changing and our strategic presence is changing, and that raises the question for the two sides of how to continue to be successful in the fight against the PKK. But it was more, as I say, the fact that this just happened, it is – I mean, the Turks acknowledge that from their own point of view, as important as the Libya Contact Group was, Turkish public in the past few days has been focused on this because it’s such a big deal. And she just wanted to know that – she wanted them to know that we totally stand with them on this fight against the PKK.
QUESTION: Could I ask, on Syria, coming over, you sort of noted that the Turks hadn’t gone as far as the EU and the U.S. on the sanctions front. Is there – or was the Secretary sort of querying them on that or asking what Turkey plans to do next? And is there any discussion of specifics? Particularly, there’s been the suggestion that oil and gas sector sanctions, ICC referrals, and I mean, when you talk about next steps, were there any concrete steps discussed?
SENIOR STATE DEPARTMENT OFFICIAL ONE: They talked about efforts at the UN Security Council, and Turkey just wants to make sure that it has a voice. It understands where we are and where some other members of the Security Council are on further measures. It understands what the EU and we have done in terms of specific sanctions. And Prime Minister Erdogan underscored why this is so critical for Turkey – cultural links, ethnic links, obviously geographical links. We just want to make sure – he wants to make sure that, as we contemplate any of those specifics that Turkey was not necessarily contemplating, we do it together with Turkey, and we see Turkey and understand the impact on Turkey.
QUESTION: Where are they – where do they stand in terms of – obviously, you’ve made some pretty strong statements against Asad. Are they, without saying particular sanctions were said (inaudible) diplomacy (inaudible) –and the people around him like we are with Qadhafi (inaudible).
SENIOR STATE DEPARTMENT OFFICIAL ONE: You mean – I’ll let the Turks speak for themselves in this pursuit of strategy. I think they continue to be focused on the need for reform. That is by far their first preference, because any alternative to that (inaudible) Turkey that is not what they seek, so – but as to specific things, they should speak for themselves.
QUESTION: Greece.
SENIOR STATE DEPARTMENT OFFICIAL ONE: Want to do Greece? Everyone good?
QUESTION: Good morning.
SENIOR STATE DEPARTMENT OFFICIAL ONE: Just in terms of the schedule, she’s going to meet with Foreign Minister Lambrinidis, who, as you know, just took office in the reshuffle less than a month ago. She had lunch with Prime Minister Papandreou. She’ll see the president, Papoulias. She’ll see the new finance minister, Venizelos, who also just took office in this recent –
QUESTION: Bloodletting.
SENIOR STATE DEPARTMENT OFFICIAL ONE: -- reshuffle. (Laughter.) I don’t want to characterize it. Matt always has a word for it. She’ll sign a memo, UN cultural issues at the Acropolis this afternoon. Tomorrow morning, she’ll see opposition leader Samaras. Tonight, she will prepare to watch the women’s World Cup final, on which [Senior State Department Official Two] and I will brief her in great detail prior.
I mean, the issues that are the obvious ones, starting with the economy, obviously, on which she wants to show support for what Prime Minister Papandreou is doing. It’s obviously a very difficult challenge, but he is undertaking serious efforts to reduce the deficit. As you know, in late June, the Greek parliament passed the medium-term fiscal strategy designed to further reduce the budget deficit, consolidate finances, and leave Greece in a more financially sound position, underscore its competitiveness. That’s the strategy, which we strongly support. There is not a direct U.S. role in this. The lead we see as primarily European, which is to say the European Union, the European Central Bank, and the IMF. And it’s through the IMF that there’s only – that the U.S. has some particular role. But more broadly – and we certainly have a major stake in the outcome, both for our ally Greece and for Europe as a whole. But I think she will want to support – to express to the prime minister her support.
Greece has made some progress over the past couple of years. The budget deficit has come down from 15 percent a couple of years ago to 10 percent in 2010, and is projected to be 7.5 percent this year. So it is doing the difficult work of bringing the budget deficit down. And by the way, that’s in a context of not just slow growth but of a GDP that has shrunk over the past couple of years. So bringing the budget deficit down while you’re not having growth is a major challenge, and that’s no doubt why you’re seeing a debate about the way forward.
They’ll also talk extensively about regional international issues. Greece has been a partner in Libya and participate in the Contact Group, and we’re grateful for their support, and at not least logistically in terms of the use of Souda Bay and other facilities. Greece was helpful on the planned flotilla issues on the anniversary of the clash in the Mediterranean last year and prevented some ships from seeking to break the Israeli blockade, and we were grateful for that. They’ll talk about the Balkans, where Greece has long played a major important role. Cyprus, following up the discussions in Turkey and again seeking to make a success of these UN-led talks so that this (inaudible) federation can actually be the next EU presidency of a unified Cyprus. Greece-Turkey relations, Arab Spring – Greece also has a major interest. So I think, again, you’ll see a pretty broad regional and global agenda.
QUESTION: Well, can I just – with everything going on at home, how comfortable is she coming in here and talking to the Greeks about how bad deficits are and you need to get your struggling economy back on its feet? I mean, that would strike me, if I was Papandreou, being an American himself, as, like, what are you talking to me about this for?
SENIOR STATE DEPARTMENT OFFICIAL ONE: Well, but a prime minister will speak for himself, but I suspect he is very pleased to see the Secretary. She’s perfectly comfortable talking about that. I think the Greeks want to know that the international community supports them, the United States supports them. The Secretary makes plain that we’ve faced economic challenges, too. She knows what – how difficult it is to reduce deficits and cut spending. And so they can talk about the common challenges of dealing with economic difficulties, the political context, but I’m highly confident that the prime minister is delighted to see her and to talk about these issues and to hear –
QUESTION: Can I just do one other thing? What about (inaudible)? I mean, this is – Macedonia. This seems to be a perpetual, perennial, ridiculous issue of enormous consequence but really just seems to be like a schoolyard fight to most people looking it from the outside. And I realize that (inaudible) opinions on both sides, and they don’t see it like that. But to the rest of the world – to normal, non-Macedonians and non-Greeks, normal people – it seems ridiculous. How close are you?
SENIOR STATE DEPARTMENT OFFICIAL ONE: We agree that the dispute over the name has gone on for far too long, and very much want to see a resolution. I do think it’s important that when you say it’s sensitive to them, it really is, on both sides. And it’s easy for outsiders to say why don’t you just change the name, or why don’t you just agree to whatever name is on the table? But for them, it matters. And you can debate that, but it’s a reality that it matters to the two parties and that’s why, for nearly 20 years, they haven’t been able to agree on it. We think they would both benefit from a solution, obviously. NATO has said that Macedonia can join when the name dispute is resolved. It met the other criteria. We think that would be an important new element of stability in the region, and strongly support it. The talks are going on seriously under UN leadership. We support it. Obviously, the sides have to agree, but the Secretary will surely have conversations with the prime minister.
QUESTION: Are there any new proposals for – any new ideas? Or is it still this hyphenated whatever they call it?
SENIOR STATE DEPARTMENT OFFICIAL ONE: There are a number of ideas because there are a number of options, and the trick is to find one that’s mutually acceptable. And I think it’s accurate to say they are close. But in any negotiation over something sensitive, close isn’t enough. They have to go that final mile or however long it is and get it done. And that’s a realistic proposition and we’d very much like to see it. It would be good for both countries.
QUESTION: Do you see anything new, any new element in the Cyrpus dispute, say since the referendum in 2004, that would propel the parties to want a deal more than (inaudible) seven years ago?
SENIOR STATE DEPARTMENT OFFICIAL ONE: Well, again, that’s another dispute that we think has gone on for far too long and are absolutely convinced that both sides would benefit from (inaudible). This one is even more multifaceted, with issues of territory security, property, governance, the economy, EU membership, and so all of these pieces have to put together. But I think it’s fair to say that almost any of the deals that have been put on the table in those five or six categories would benefit both sides. Both sides would have something to gain. And that’s why it’s really unfortunate that there hasn’t been a deal.
New elements? I don’t want to suggest that somehow they’re on the verge of a deal. They have been engaged in serious talks. We appreciate the fact that they’re involved in direct talks. The parties need to talk to each other. It can’t be done or imposed on them. We saw in 2004 that there was an international plan. The United States supported it. There was a democratic referendum in Cyprus, and the Greek community didn’t support it and we’ve moved on from there and are talking about different approaches, again under the UN. So this present cycle of direct talks has gone on for about three years, and they have had – I don’t know the latest number, but more than 80 direct meetings of the leaders, so it’s serious and they’re very much into details. But again, close doesn’t cut it when you’re talking about a sensitive negotiation. The party – the leaderships met again last week, and a deal couldn’t come too soon. And as I said, we like this vision of seeing a united Cyprus be the president of the European Union next year.
QUESTION: [Senior Administration Official Two], I mean, I – obviously, this is being led by the UN, but how much is the Secretary willing to – on some of these things like a meeting or whatever, she’s tried to use her – I mean, not just raise it with the leaders but kind of use her good offices, if you will, to –
SENIOR STATE DEPARTMENT OFFICIAL TWO: Oh, she’ll certainly discuss it today. She discussed it yesterday with Davugtolu. But I think she sees the UN as being in the driver’s seat on it. I would just add to what [Senior State Department Official One] said, that Cyrpus is coming up into the EU presidency right here in a year’s time, so I think that’s going to shine a brighter spotlight on the whole issue.
QUESTION: (Inaudible.) It adds urgency (inaudible).
QUESTION: Yeah, but sometimes –
QUESTION: But is Cyprus joining the EU – someone said that joining the EU didn’t add anything –
QUESTION: I know.
QUESTION: Hell, I mean, just becoming the president of the EU –
QUESTION: Yeah. I think the talks have said that if the thing isn’t settled (inaudible) it could be worse for them (inaudible).
QUESTION: Why isn’t it an --
QUESTION: Can I go back –
QUESTION: (Inaudible.)
SENIOR STATE DEPARTMENT OFFICIAL TWO: She’s not appointing an envoy.
QUESTION: No, I don’t mean appointing an envoy, but there have been times like –
SENIOR STATE DEPARTMENT OFFICIAL TWO: I think what you heard from her yesterday is she does think – her sense of a lot of these frozen conflicts or whatever you want to call them is let’s fire up the parties to see it in their interest to resolve them, but she’s not trying to change the constellation of key members.
QUESTION: Can I come back on Greece for a second? Yeah. The (inaudible) today (inaudible) in the context of these (inaudible) meeting in Brussels next Thursday. So how much defense can she make? Who can she (inaudible) in the wake of this meeting?
SENIOR STATE DEPARTMENT OFFICIAL TWO: You mean in the run-up to it?
QUESTION: Yeah.
SENIOR STATE DEPARTMENT OFFICIAL ONE: No, I mean, on the – they are two separate things. As I said, we largely see this as an EU lead in terms of financial support for Greece, and that is what is in the EU’s hands as they meet in (inaudible). But again, I think the Greeks will appreciate a strong show of U.S. support.
QUESTION: Are you worried that the Europeans cannot get back together?
SENIOR STATE DEPARTMENT OFFICIAL ONE: We have said that we are confident that Europe has the means to deal with this challenge. I think the Greek economy is about 3 percent of the overall EU economy. So without diminishing the challenge, if you just take it in terms of proportions, there’s no reason that this massive European Union economy can’t deal with what is clearly a very challenging situation in Greece but not one of a magnitude that European countries are not in a position to deal with.
QUESTION: Is this just putting pressure on the rest of the nations, rather than – that’s not --
SENIOR STATE DEPARTMENT OFFICIAL ONE: On the what nations?
QUESTION: The U.S. putting pressure on – I don’t know if pressure is the word, but on the – it’s more – that’s how you support Greece is by encouraging other countries to support it?
SENIOR STATE DEPARTMENT OFFICIAL ONE: No, I think you support Greece by underscoring that we understand the difficult position that the prime minister is in and that he’s making hard choices as leaders have to do. And we see him as a leader in doing so, and that the Greek parliament did the right thing, as difficult as it was last week to pass a tough fiscal package, and to let everybody know that we think they’re on the right track. And again, it’s – we’ve been consistent on this view that – nobody is expecting, including the European leaders next week. It’s not as if they are asking the U.S. for some direct role (inaudible) financial stake. I think the international community’s approach with the European lead and the IMF role is agreed.
QUESTION: You’re not expecting the Greeks to ask for any kind of involvement, even diplomatically or a public statement of weigh-in?
SENIOR STATE DEPARTMENT OFFICIAL ONE: No, I think they will want us to understand their challenges and dilemmas but I don’t think they’d be asking for some diplomatic intervention.
QUESTION: Will she express concern that (inaudible) something (inaudible) in world markets and in the world community?
SENIOR STATE DEPARTMENT OFFICIAL ONE: I think everybody has acknowledged that success in Greece is not just important for Greece but as a factor of stability throughout the Euro-zone, and it just gives us an added reason to want to see Greece succeed. But again, we are confident that the European has the means to do that.
QUESTION: What exactly will she say to make news, meaning ID – move markets?
SENIOR STATE DEPARTMENT OFFICIAL TWO: You’ll just have to wait and see. That will be unplanned. (Laughter.)
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