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Jobs Report Indicates Growth; President Obama and Angela Merkel Press Conference

Aired May 2, 2014 - 12:00   ET


WOLF BLITZER, CNN ANCHOR: Clearly, their meetings are continuing a bit longer than had earlier been scheduled. They were scheduled to end -- to have that news conference about 20 minutes or so ago. But they're continuing their talks. We'll continue our coverage. We'll stand by here in Washington. We'll have live coverage of this, statements, the news conference, the Q and A with these two world leaders. That's coming up.

But in the meantime, let's go to Ashleigh Banfield in New York. She's watching other stories of importance.


ASHLEIGH BANFIELD, CNN ANCHOR: Hello, everyone, I'm Ashleigh Banfield. It is Friday, May 2nd. And welcome to LEGAL VIEW. Got a job? Need a job? Want a job? Because guess what? The U.S. economy just added nearly 300,000 jobs last month, and that is real good news to say the very least.

But there are some other things to consider before everyone can start cheerleading the end of the recession. Our chief business correspondent Christine Romans, who crunches the numbers on a regular basis, is doing a lot of crunching this morning.

I keep saying whenever you have these jobs reports that come out, good or bad, the cheerleaders and the naysayers can both chime in.

CHRISTINE ROMANS, CHIEF BUSINESS CORRESPONDENT: Oh yeah, there's good, bad, and ugly in this. But what we really want to focus on is this headline, the headline of 288,000 jobs created. February and March were better than expected.

We had that freeze. It was frozen at the beginning of the year, and then it started to thaw. And what I love about these numbers is the fact it was broad based. It wasn't cocktail waitresses and stock boys only. It wasn't people working in restaurants and people working in retail.

It was that, plus lawyers, accountants, I.T. professionals, people starting businesses, people working in mines, people working in factories, people working construction. Broad-based job gains. We want to see that continue. That's important.

BANFIELD: Apart from that being lovely for those people, why is that lovely for the greater economy?

ROMANS: Because when you have people making money and getting a paycheck or you see people around you making money and getting a paycheck, that's money that goes into the real economy, and that helps growth. That's really incredibly important.

BANFEILD: But is it also something like if you have a lawyer or a doctor who's getting a job and being paying -- you know, being paid six figures, they're also going to be paying higher taxes?

ROMANS: Absolutely.

BANFRIEDL: It's a greater trickle-down, et cetera.

ROMANS: Absolutely. The important thing here is so much of the job creation since the recession has been in low-wage jobs. It's why it's made it so important, the debate about raising the minimum wage. Why it's made it so important, the debate about extending unemployment insurance. Because there weren't a lot of good jobs that were being created. You want to see a lot of different kinds of jobs because we're a country with a lot of different kinds of people with a lot of skills.

BANFIELD: One of the big things that you -- the conservatives will oftentimes say, OK, great, yes, wonderful to see that the unemployment rate has dropped to, what is it, 6.3?


BANFIELD: That's not necessarily a real number. And a lot critics will say that's because people who have been out of a job for so darn long have had it. They don't want to look anymore. And they don't factor in anymore. Does that factor into this story today?

ROMANS: We've been watching that as the unemployment has been declining, the people who have been sidelined by the labor market and have just gotten out, quite frankly. These are households that used to have two incomes. Now they have one income. Some households are because childcare is so expensive.

Then you look at a low-wage job and you think, well, I'm not going back into the labor market. I'm gonna -- it doesn't even make sense to pay for my childcare.


ROMANS: There's a record number of baby boomers every day who are turning 65 or reaching retirement age. Some of them may be want to be working. Maybe they decided they're going to back off now or they can't find a job, so they're dropping out of the labor market.

BANFEILD: One other quick issue is a race breakdown. They do it all the time, but it doesn't off be make a big headline. And today, the racial breakdown of those people who all of a sudden are now back to work, 9:00 a.m., makes a difference. ROMANS: So I like to look at different sub groups, right? Because the American labor market is so dynamic. It's very different, depends on -- you know, your education level, where you live, regionally, and how much -- and all kinds of things.

When you look at the African-American unemployment rate, 11.6 percent, still too high and still double digits, a real problem. A look at black male unemployment rate. That dropped -- that dropped, and it's the lowest since I think August 2008. You want to see those numbers going in the right direction. Because sometimes you see overall improvements to the unemployment rate, and then you see group that don't get to follow along. Now you're seeing a little more broad- based together lowering that rate.

BANFIELD: Can you call me when the recession ends?

ROMANS: The recession is over. That's the thing. The recession's been over. But for a lot people, they feel like it's still there because they're not confident in their jobs.

You know, I just talked to a Mohamed El-Erian, and he's, you know, a famous economist. And he says this is the turning point in the labor market. This, right now, is the turning point in the jobs market.

BANFIELD: All right, Christine Romans, watching that breaking story for us, thank you for that.

ROMANS: You're welcome.

BANFIELD: And continue to bring the numbers as they break every month as well. Thank you for that.

Also, another big breaking story. Malaysia, the government says that it now may send a ship to the Bay of Bengal to search for Flight 370, even though the Malaysian officials say there's really almost zero chance that they're going to find any remnants of a plane there, thousands of miles away from the primary search area in the Indian Ocean. Three Bangladeshi navel ships sent to the area haven't found anything there at all themselves.

All of this after an Australian company not affiliated with the search claims that its technology detected evidence of an airliner off the coast of Bangladesh. It says it had a moral responsibility to release its findings to the rest of the world.

All of this as a preliminary report on mh-370 from Malaysia's transportation ministry is raising even more questions today. Why did it take almost 20 minutes for air traffic controllers to notice that the plane was even off the radar? Why did it take four hours to start the search for the jet?

And you can imagine, not just the media asking these questions. Those families who are devastated are demanding answers to those questions. Our Will Ripley's in Kuala Lumpur with the very latest on the search for that missing plane.


HISHAMMUDDIN HUSSEIN, MALAYSIAN ACTING TRANSPORT MINISTER: Particularly stressed since the beginning, we really have nothing to hide.

WILL RIPLEY, CNN CORRESPONDENT (voice-over): New this morning, Malaysian officials are dismissing claims by a private company of possible wreckage in the Bay of Bengal, several thousand miles from the search zone.

HUSSEIN: Many leads in the past have proven to be negative. And this is similar to what we've done before.

RIPLEY: Breaking overnight, news of a trilateral meeting on Monday between Australia, China and Malaysia.

ANGUS HOUSTON, AIR CHIEF MARSHAL: We're totally committed, as three nations, to find mh-370.

RIPLEY: The next step, a daunting deep sea search off western Australia, 8 to 12 months, an estimated $60 million, and more assets joining the Bluefin-21, which, so far, has found no sign of the missing plane.

Air traffic control audio of those haunting final words from the cockpit, just seconds before the plane's tracking devices were switched off. This new report detailing the hours of confusion that followed: 17 minutes before anyone noticed the plane disappeared from radar. Another four hours of inaction in the control towers before search and rescue was activated.

UNIDENTIFIED MALE: Why 17 minutes? This is what I told in (inaudible) also --


BANFEILD: I want to break into that package. The president of the United States with the German chancellor Angela Merkel is walking out. I want to toss things over to my colleague Wolf Blitzer. Wolf?

ANNOUNCER: This is CNN breaking news.

BLITZER: These two world leaders, and let's listen to the president.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: -- great pleasure to welcome my friend, Chancellor Merkel, to the White House. Germany is one of our strongest allies. And Angela's one of my closest partners.

And with her indulgence, I want to start by making two brief comments. First, as president, my top priority's doing everything that we can to create more jobs and opportunity for hard-working families, for our economic strength as a source of strength in the world.

And this morning, we learned that our businesses created 273,000 new jobs last month. All told, our businesses have now created 9.2 million new jobs over 50 consecutive months of job growth. The grit and determination of the American people are moving us forward. But we have to keep a relentless focus on job creation and creating more opportunities for working families. There's plenty more that Congress should be doing, from raising the minimum wage, to creating good construction jobs, rebuilding America. And I want to work with them wherever I can, but I keep acting on my own wherever I must to make sure every American who works hard has the chance to get ahead.

Second point, I also want to say on behalf of the American people that our thoughts are with the people of Afghanistan who have experienced an awful tragedy. We are seeing reports of a devastating landslide on top of recent floods. Many people are reported missing. Rescue efforts are under way. Just as the United States has stood with the people of Afghanistan through a difficult decade, we stand ready to help our Afghan partners as they respond to this disaster, for even as our war there comes to an end this year, our commitment to Afghanistan and its people will endure.

Now, Angela, I'm still grateful for the hospitality that you and the German people extended to me, Michelle and our daughters last year in Berlin. It was an honor to speak at the Brandenburg Gate. You promised me a warm welcome and delivered an unbelievable 90-degree day in Berlin.

This morning, our work touched on a range of issues where the United States and Germany are vital partners. We agreed to continue the close security cooperation, including law enforcement, cyber and intelligence that keeps our citizens safe.

We reaffirmed our strong commitment to completing the Transatlantic Trade Investment Partnership, TTIP, which is critical to supporting jobs and boosting exports in both the United States and in Europe.

We discussed energy security, including the importance of Europe diversifying its energy sources. The United States has already approved licenses for natural gas exports, which will increase global supply and benefit partners like Europe. And TTIP would make it even easier to get licenses to export like gas to Europe.

At our working lunch, we'll review our negotiations with Iran and our shared determination to prevent Iran from acquiring a nuclear weapon.

We'll discuss Syria, where we continue to support the moderate opposition and provide humanitarian relief to the Syrian people. I look forward to briefing Angela on my trip to Asia, a region where both our nations can help ensure that all countries in the Asia-Pacific adhere to international law and international norms.

Of course, most of our time was spent on the situation in Ukraine.

Angela, I want to thank you for being such a strong partner on this issue. You've spoken out forcefully against Russia's illegal actions in Ukraine and you've been a leader in the European Union, as well as an indispensable partner in the G-7. And your presence here today is a reminder that our nations stand united.

We are united in our determination to impose costs on Russia for its actions, including through coordinated sanctions. We're united on our unwavering article five commitment to the security of our NATO allies, including German aircraft joining NATO patrols over the Baltics. We're united in our support for Ukraine, including the very important IMF program approved this week to help Ukraine stabilize and reform its economy.

And as Ukrainian forces move to restore order in eastern Ukraine, it is obvious to the world that these Russian-backed groups are not peaceful protesters. They are heavily armed militants who are receiving significant support from Russia. The Ukrainian government has the right and responsibility to uphold law and order within its territory, and Russia needs to use its influence over these paramilitary groups so they disarm and stop provoking violence.

Let me say that we're also united in our outrage over the appalling treatment of the OSCE observers who've been detained in eastern Ukraine. Pro-Russian militants are still holding seven observers, including four Germans, as well as their Ukrainian escorts. They've been paraded in front of the media and forced to make statements at the barrel of a gun. It is disgraceful and it's inexcusable.

Russia needs to work to secure their immediate release, and the international community is not going to be satisfied until Colonel Schneider and his fellow captives come home.

Finally, as both Angela and I have repeatedly said, we want to see a diplomatic resolution to the situation in Ukraine. But we've also been clear that if the Russian leadership does not change course, it will face increasing costs as well as growing isolation diplomatic and economic.

Already, the ruble has fallen to near all-time lows. Russian stocks this year have dropped sharply and Russia has slipped into recession. Investors are fleeing and it's estimated that $100 billion in investment will exit Russia this year. Russian companies are finding it hard to access the capital they need and Russia's credit rating has been downgraded to just above junk status. In short, Russia's actions in Ukraine are making an already weak Russian economy even weaker.

Moreover, if Russia continues on its current course, we have a range of tools at our disposal, including sanctions that would target certain sectors of the Russian economy. And we've been consulting closely with our European and G-7 partners and we're stepping up our planning. Angela and I continue these consultations today.

The Russian leadership must know that if it continues to destabilize eastern Ukraine and disrupt this month's presidential election, we will move quickly on additional steps, including further sanctions that will impose greater costs. But that is a choice facing the Russian leadership.

Our preference is a diplomatic resolution to this issue and the Ukrainian government has already shown itself more than willing to work through some of the issues that would ensure that the rights of all Ukrainians are respected; that you have a representative government. They've shown themselves willing to discuss amendments to their constitution that devolve power to a local level. They have gone through with their commitment to potentially provide amnesty for those who lay down arms, and who are willing to abandon the buildings that they've occupied.

The Ukrainian government in Kiev has followed through on the commitments that it made in Geneva. We need Russians to do the same. So, Angela, I want to thank you again for being here, and as always, for your friendship and partnership. These are challenging times. Russia's actions in Ukraine pose a direct challenge to the goal that brought Europe and the United States together for decades, and that is a Europe that is whole, free, and at peace.

Just as our predecessors stood united in pursuit of that vision, so will we.

Chancellor Merkel.

ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): Well, thank you very much, Barack, for this gracious hospitality and this very warm welcome that you accorded to me, and I'm very glad to be able to be back in Washington, to have an opportunity to address all of these different issues with you.

I think priority really is on the current issue of Ukraine and that loomed very large on our agenda. It showed how important the trans-Atlantic partnership is also in today's times, and I think it's a very good thing that all of the steps that we've taken so far, we've taken together, and today, in our talk, we yet again underline that we fully intend to go ahead, as we did in the past.

What happened on Ukraine, what happened on the Crimean peninsula, well, the post-war border has been put into question. That rests on the acceptance of territorial integrity by all. And this is why it was so important for us to react in concord. And what is at stake here is that people in Ukraine can act on the basis of self- determination, and can determine themselves which road they wish to embark on into the future.

The 25th of May is a very crucial date. (inaudible) to ensure that, and we will see to it that elections can take place. The OSCE will play a central role in all of this. We talked about this. And together, with the OSCE, we shall do everything we can in order to bring Russia, that is after all, a member of the OSCE, to do the necessary steps so as the 25th of May, bringing about some progress in stabilizing Ukraine.

The 25th of May is not all that far away. Should that not be possible to stabilize the situation further, further sanctions will be unavoidable. This is something that we don't want. We have made a diplomatic offer, an offer for a diplomatic solution, so it's very much up to the Russians which road we will embark on, but we are firmly resolved to continue to travel down that road.

Now, secondly, we addressed issues that have a bearing on the work of the intelligence services here. Let me underline yet again for the German side, we have always enjoyed a very close cooperation with our American partner on this front, and anyone in political responsibility is more than aware, looking at the challenges of the modern world today, that obviously in fighting terrorism, the work of the intelligence services is not only important, it is indeed indispensable.

I am firmly convinced that our corporation in this area is a very helpful one, yet there are differences of opinion on what sort of balance to strike between the intensity of surveillance for trying to protect the citizens against threats, and on the other hand, protecting individual privacy and individual freedom and right to personality, and that will require further discussion between our two countries in order to overcome these differences of opinion.

We have these discussions, incidentally, also on the European front. We are talking about safe harbor agreements, for example, about a privacy protection agreement. And I take back the message home about the U.S. is ready to do that, is ready to discuss those, although we may have differences of opinion on certain issues.

Partly, TTIP, I think particularly in the overall context of further intensifying our trade relations, of global growth, but also in the context of diversification of our energy supply, this is a very important issue. It will be very important for us to bring the negotiations very quickly to a close on TTIP. We are firmly convinced that for the European Union, for Germany, and for the United States, this offers a lot of opportunities for the future. And it's so important for us to bring this agreement to a successful conclusion.

There are a number of discussions, I know, a number of skeptical remarks. People have doubts. But these doubts, this skepticism, can be overcome, and it needs to be overcome. Just look at the many partners all over the world that have bilateral trade agreements. I mean, it's -- it's simply necessary, looking at the intensity of the trans-Atlantic partnership and the closeness of our partnership for us to have this agreement, this trans-Atlantic trade agreement, and we are fully at one on this one.

So we had very intensive talks, and we were going to build on this over lunch.

Thank you very much, Barack, for giving me this opportunity. And also thank you for your gracious hospitality.

OBAMA: I think we're gonna take two questions from the U.S. press and two questions from the German press.

We'll start with Leslie Clark (ph).

QUESTION: Thank you, Mr. President. With violence today in Ukraine, you've said today that Germany and the United States are united in efforts to de-escalate, but have you been able to reach any common ground with the chancellor on sectoral sanctions, particularly the energy, the Russian energy section -- sector?

What's next if we are unable to?

And, to Chancellor Merkel, reports in the U.S. press have suggested that you've said that you believed President Putin may not be in touch with reality. Is that what you've said? Is that what you believe?

And could you give us -- you talked to him earlier this week. Could you give us a little more insight into what he might be thinking?

And do you believe that he's a threat to Europe?

OBAMA: Leslie (ph), obviously every day we're watching the events in eastern Ukraine and southern Ukraine with deep concern. And I think that what you've seen over the course of the last several months in the midst of this crisis is remarkable unity between the United States and the European Union in the response.

We have, at the same time, offered a diplomatic approach that could resolve this issue. We have been unified in supporting the Ukrainian government in Kiev, both economically, diplomatically and politically, and we have said that we would apply costs and consequences to the Russians if they continued with their actions. And that's exactly what we've done.

And you saw just over the course of the last week additional sanctions applied both by the Europeans and the U.S.

The next step is going to be a broader based sectoral sanctions regime. And what we have said is that we want to continue to keep open the possibility of resolving the issue diplomatically, but, as Angela Merkel said, if, in fact, we see the disruptions and the destabilization continuing so severely that it impedes elections on May 25th, we will not have a choice but to move forward with additional, more severe sanctions.

And the consultations have been taking place over the course of the last several weeks about what exactly those would look like and would apply to a range of sectors.

The goal is not to punish Russia. The goal is to give them an incentive to choose the better course and that is to resolve these issues diplomatically, and I think we are united on that front.

Within Europe, within the E.U., I'm sure there has to be extensive consultations. You have got 28 countries and some are more vulnerable than others to potential Russian retaliation, and we have to take those into account. Not every country is going to be in exactly the same place, but what has been remarkable is the degree to which all countries agreed that Russia has violated international law, violated territorial integrity and sovereignty of a country in Europe, and I think there is unanimity that there has to be consequences for that.

How we structure these sectoral sanctions, the experts have been working on and we anticipate that if we have to use them, we can. Our preference would be not to have to use them.

And I thank Chancellor Merkel's leadership on this front. She has been extraordinarily helpful not only in facilitating European unity, but she has also been very important in helping to shape a possible diplomatic resolution and reaching out to the Russians to encourage them to take that door while it is still open.


OBAMA: (INAUDIBLE) that when it comes to sectoral sanctions, we are looking at a whole range of issues. Energy flows from Russia to Europe -- and those continued even in the midst of the Cold War, at the height of the Cold War.

So the idea that you're going to turn off the tap on all Russian oil or natural gas exports, I think, is unrealistic. But there are a range of, you know, approaches that can be taken not only in the energy sector but in the arms sector, the finance sector, in terms of lines of credit for trade, all that have a significant impact on Russia.

I don't think it is appropriate for us to delve into the details at this stage because our hope is that we do not have to deploy them, but what I can say is that our experts at the highest level, and not just bilaterally but multilaterally through the European Commission and our diplomatic teams have been working through all the possibilities.

And we are confident that we will have a package that will further impact Russia's growth and economy.

But again our hope is that we shouldn't have to use them. We are not interested in punishing the Russian people. We do think that Mr. Putin and his leadership circle are taking bad decisions and unnecessary decisions and he needs to be dissuaded from his current course.

MERKEL (through translator): It is, I think, obvious to tall that there are very different assessments on what happens in Ukraine. On the other hand, that you have the United States and Europe. We've always taken our decisions together. And on the other hand, the Russian appreciation and appraisal of the situation, I hope that Russia will live up better in the future to its responsibilities. But we need to see deeds matched -- matching their words. We don't have any release of the hostages of the OSCE, among them also four German hostages. This is a very crucial step that needs to happen for us.

We don't -- we have not yet seen any implementation of the Geneva agreement by the Russian side. The Ukrainian side has taken some steps in the right direction. And the OSCE, too, is an organization to which we wish to accord a greater role so that they can prepare and pave the way for elections.

And one word on sanctions. I agree with the American president that they are not an end in itself, but combined with the offer that we want diplomatic solutions, it is a very necessary second component to show that we're serious -- we're serious about our principles. And there is a broad base -- a broad range of possibilities that are being prepared for in the European Union. In Europe, we have taken a decision that further destabilization happen, we will move to a third stage of sanctions. I would like to underline this is not necessarily what we want, but we are ready and prepared to go to such a step.

My main aim would be, first and foremost, to improve stabilization and to see to it that the elections can happen there. We will work on this in the next few days, but we're also prepared to take further steps.

What we're talking about here will be sectoral measures in the context of certain branches of industry. The American president and I can only agree to this, and said what is necessary as regards the dependency on gas, which is very strong in Europe. But we can also look ahead in the medium term what we can do in order to promote an energy union in the European Union, which we're doing, looking at dependencies in the next 10 to 15 years on Russian gas supplies.

There are six countries that right now in the E.U. that depend 100 percent on gas supplies. We need to improve the reverse flow, as we call it. We need to improve our grade of pipelines. All of the countries need to share supplies. And those are measures that we're currently discussing in Europe. We're talking about short-term, but also medium-term and long-term measures. And then (inaudible) free trade agreement (inaudible) is also gaining more prominence in this respect.

QUESTION (THROUGH TRANSLATOR): Sorry. Madam Chancellor, you said that time is of the essence and that it's getting shorter leading up to the 25th. When would be the time when you would say a third phase, moving to a third phase of sanctions is what you would promote? And is a more energy-intensive initiative by the E.U. necessary, for example, on heads of state and government level and (inaudible). Can you understand the fact that also Mr. Putin needs to play a role in the solution, which is the position of the European Union? That also his arguments have to be weighed.

And after the chancellor having made those several phone calls with Mr. Putin, do you think that the chancellor also stands a chance to sort of (inaudible) on this?

MERKEL (THROUGH TRANSLATOR): Well, as to the question what about the next few days to come, I think the meeting of foreign ministers of the E.U. on the 12th of May is going to play a very important role in this respect. One can sound out what possibilities there are in various directions. We from the German side, as we have agreed with our American friends, will do everything we can in order to bring the OECD (ph) into a situation, supported politically that is, to do what is necessary in order to bring matters forward in Ukraine.