Return to Transcripts main page

Legal View with Ashleigh Banfield

President Obama and Prime Minister Renzi of Italy Hold News Conference. Aired 12:30-1p ET

Aired April 17, 2015 - 12:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

MATTEO RENZI, ITALIAN PRIME MINISTER: But to achieve this goal, the local government, the national government must do reforms. This is important first of all for Italy. We are absolutely committed to realize the (inaudible) to our citizens, not European institution, to our citizens.

[12:00:02] And then we can finally open a discussion about the relation between austerity and growth in European economy. But now is the time to respect the new framework of agreement and we will work in this direction.

QUESTION (THROUGH TRANSLATOR): (inaudible)

Mr. President, some of your promises has all -- have already brought investors from the U.S. to Italy. Now these investors would like to know when all these reforms are going to take place. Could you give us a better idea?

You spoke about austerity and growth. The markets are very preoccupied. We have public finances that are in a difficult situation.

How can you reconciliate a -- this austerity when our public finances are in such bad shape?

And I would like to know what you think about the TTIP.

QUESTION: (OFF-MIKE) about Germany holding Europe hostage to its inflationary obsessions.

Now, you have just heard from Mr. Renzi that things are changing in Europe, that there are pro-growth policies, especially with the ECD taking action with Q.E. action.

Is that enough? Have Europe and Italy done enough? Is your complain (sic) over Germany over?

And (inaudible) did you agree, or did you discuss the sale of drones to Italy?

Thank you.

RENZI (THROUGH TRANSLATOR): Three questions in one, you just asked. Three questions in one. First of all, the timeline for reforms, I think that I can safely say that the American investors who wish to invest in Italy, but Italian investors as well, finally have a labor market which is more flexible. This has been achieved. Let's say that we have done with -- then they have an institutional system, the taxation system, public instruction. In the next six months, everything, all this reform will be done.

So what needs to be made absolutely clear is that, even if in Italy, everybody wants to start, or many people would like to start from scratch again, growth forms have begun. They're on their way, and there's no way anyone is going to block them.

People who wish to invest at this time find a labor market which is simplified. They also find the quality of the engineers, the people who work, people in Italy in general, very high quality of people.

But I think that what will be necessary in the next few months is -- is education, education, education, investment in this field, because in the global world, in order to be a leader in Italy isn't the number of inhabitants. We're not that many.

And perhaps it's not just simply the position, even though we are in a strategic position; what will really count is whether Italians can offer human capital, ideas, development and future.

Now, in terms of the austerity policies, I think that it's important to bear in mind something that's quite simple.

I mean, if -- I know that we have to be very clear in our accounts, but we have to bet on growth. The United States are our model.

RENZI (THROUGH TRANSLATOR): In the last meeting of the European Board of Directors, President Juncker and Draghi showed us some slides with results of the United States and in Europe in the -- in the last seven years. Obviously, this is -- this attests to the respect for the United States, but it also proves that just based on austerity in Europe, this is not going anywhere.

We spoke about this in Brisbane, and we have discussed this with President Obama. We cannot just look at our budget, as, of course, an important limit, Italy is fulfilling all its obligations, and it is the country in Europe that is fulfilling all its obligations and all the rules.

Now, in terms of TTIP, it's a very important objective. We believe that 2015 has to be the turning point, the year of the turning point.

[12:30:01] As the Italian government, we are pushing with great determination, because we know that with the TTIP, Italy has everything to gain from the trade and economic stance, but also because we believe that when the United States, and justly so, establish trade agreements with China, with Asia, with other areas of the world, I think that it would be fundamental as a key principle having the same relationship in the logic of our historic friendship between Europe and the United States.

Now, going back to our own party, we represent the party in Italy which I would like to call the democratic party one day at a European level. Our party is convinced, and it also maintains the position, even though there are many resistances from the German Social Democrats, I am fully determined to find (ph) the agreements, and will talk about this during our lunch hour as well.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: First of all, let me make sure that I correct the impression that I have consistently criticized Germany. Chancellor Merkel is a great friend and a great ally.

From the time I came into office, when we were in the midst of the Great Recession, there have been competing economic theories in terms of what's the best way to pull us out of a financially induced crisis of this scale. And it was our strong belief that it was important for us to make the investments to boost demand, to put money in the pockets of consumers, to strengthen and fortify the banking system so that we wouldn't see a repeat of the kinds of bail-out practices and irresponsible practices on Wall Street, and that the best way to bring down the deficit was not just to cut spending, but to grow the economy, as well as initiate the kinds of structural reforms around health care and education, research and development, that were gonna be important for long-term growth.

And I think we've largely succeeded in stabilizing the economy and then putting it on a growth trajectory. We've now seen five straight years of job growth. We've gone from a 10 percent unemployment rate down to 5.5 percent, and we've done this while reducing the deficit by two-thirds, primarily because the economy grew much faster.

And, you know, it's been my view with respect to Europe that it's not an either-or situation, but it's a both-and situation. Sometimes it gets framed as what's the right answer for Europe? Is it austerity or is it structural reform?

OBAMA: And my attitude has been, yes, you need structural reforms of the sort that Matteo is initiating. If the labor markets are too stuck, then it's very hard to hire, particularly for young people.

If there's too much bureaucracy to start a new business, then businesses will go elsewhere or talented entrepreneurs will start businesses someplace else.

So I think Prime Minister Renzi's government is on the right track in initiating the kinds of structural reforms that Angela Merkel and other economists have called on for a long time. But what I've also said is that at a time of such low demand, and hints of deflation that we were seeing in Europe over the course of the last several years, boosting demand is also important; having some flexibility in meeting fiscal targets is also important.

That the sustainability of structural reforms depends on people feeling some sense of hope and some sense of progress. And if all it is is just getting squeezed, but there's no growth, then over time the political consensus breaks down and not only do you not get structural reforms, but you also end up reverting to some of the old patterns that didn't work.

And so, I -- I think that the approach that Matteo is describing is the right one.

[12:40:03] Move forward on the structural reforms, but have flexibility and a strategy for increasing demand, increasing investments. If -- if -- and by the way, here in the United States we're not done. I'd like to see us rebuild our infrastructure across this country. That's a smart investment to make right now. It would put people back to work. It would boost additional demand. More workers would be employed. They would then spend money. You'd get a virtuous cycle, but it's also something that we need to do to stay competitive. So it's a smart combination.

So this is not just a criticism of Europe. I think globally, all of us have to recognize global aggregate demand is still very weak. And China is making some necessary transitions towards a more consumer-based rather than export-based economy, but that means that they're not going to be growing as fast. And that in turn has meant that suppliers of raw materials to China are seeing their economy soften.

And what -- what I've said to the Europeans is: Don't expect that the United States is simply going to be the engine for everybody. Don't want to -- don't expect that you can just keep on selling to the United States, but we can't sell anything to you because your economy is so weak. That won't benefit anybody. And those are concerns that I've expressed across the board.

And this, finally, the last point I would make, this applies to Greece as well. I think Matteo is right. Greece needs to initiate reforms. They have to collect taxes. They have to reduce their bureaucracy. They have to have more flexible labor practices. And when the new prime minister came in, I called him and I said, we recognize you need to show your people that there's hope and that you can grow, and we will be supportive of some flexibilities in how you move forward so that you can make investments, and it's not just squeezing blood from a stone.

OBAMA: But you have to show those who are extending credit, those who are supporting your financial system that you're trying to help yourself, and that requires making the kinds of tough decisions that I think Matteo's beginning to make.

We did not discuss drones. We did not.

Last question from this side Margaret (ph) (inaudible). QUESTION: Thank you, Mr. President, Prime Minister Renzi.

Mr. President, I would like to ask you about Iran, but before I forget, I'm hoping at the end of your answer, you might also bring us to speed a little bit on Loretta Lynch's prospects for confirmation as your A.G.

OBAMA: I won't forget.

QUESTION: Have you done enough? What do you make of Republicans' most recent moves? Where is this thing going?

On Iran, so much has happened, so this is going to be one of my...

OBAMA: Just a general...

QUESTION: ... three-part questions. No.

The Cardin-Corker compromise this week really was a pretty significant concession from you. And what I'm wondering is, do you believe that you have now weathered anymore congressional sort of bids to derail this, or are you concerned that because Israel and Iran have now become deeply polarized issues, there's going to be more to fend off?

And you have suggested but you have not said explicitly that there must be a phase-out rather than the immediate lifting of sanctions in order for you to agree to a final deal. Can you be definitive on that?

In exchange, might you be willing to release part or all of that $100 billion or so in frozen oil assets that Iran has in offshore accounts?

And you seem to be floating the idea that you might want to say something about Russia lifting its ban on selling missiles to Iran, so I will throw that your way.

Prime Minister Renzi, I'd wanted to ask you about drones, but since that shockingly didn't come up, there -- there -- there's been some deeply troubling news about some of the migrants trying to come from Libya, violence, reports of violence by Muslims and, you know, pushing the Christians off the boats.

And what I wanted to ask you is, how are you managing this? Are you confident that Italy is able to control the risk of extremists coming into Europe through Italy?

Thank you.

OBAMA: All right. I wrote them down.

(LAUGHTER)

On Iran, I thought Bob Corker and Ben Cardin came to a reasonable compromise.

I had two concerns from the start with respect to any steps taken by Congress.

[12:45:07] The first was to make sure that their actions did not derail or prevent us being able to get the best deal possible and John Kerry, when he is those negotiations, not being hobbled or his life being made more complicated by congressional actions until we actually have a deal done.

My basic argument was, let us show you if there's a deal or not. If there is, you'll have ample opportunity to review and opine on it. But right now, we're still negotiating, so have some patience.

And I think the final product that emerged out of the Corker- Cardin negotiations, we believe will not derail the negotiations. So that checked off one box.

OBAMA: The second concern I had was just an issue of presidential prerogatives. There were a number of people who were supporting Corker's legislation, suggesting that as a routine matter a president needs to get sign-off from Congress to negotiate political agreements. That is not the case. That has never been the case.

This is not a formal treaty that is being envisioned, and the president of the United States, whether Democrat or Republican, traditionally has been able to enter into political agreements that are binding with other countries without congressional approval.

And I still have some concerns about the suggestion that that tradition was in some ways changing. But there was language in the legislation that spoke to this being directly related to congressional sanctions. And that I think at least allows me to interpret the legislation in such a way that it is not sending a signal to future presidents that each and every time they're negotiating a political agreement, that they have to get a congressional authorization.

So, the final thing I'll say about the Corker legislation is that both Senator Corker and Senator Cardin, at least in my understanding, agreed that there's not gonna be a whole bunch of poison pills or additional provisions or amendments added to it and that they will be protective of this being a straightforward, fair process for Congress to be able to evaluate any deal that we may come up with, and then register its views, but that it's not gonna be tilted in the direction of trying to kill the deal.

I take them at their word on that. We'll continue to monitor that. But assuming that what lands on my desk is what Senators Corker and Cardin agreed to, I will sign it. And that will then give Congress an opportunity to see, do we have a deal that reflects the political agreement that I talked about earlier. I expect that it will.

With respect to the issue of sanctions coming down, I don't want to get out ahead of John Kerry and my negotiators in terms of how to craft this. I would just make a general observation, and that is that how sanctions are lessened, how we snap back sanctions if there's a violation, there are a lot of different mechanisms and ways to do that. Part of John's job and part of the Iranian negotiators' job and part of the P-5-plus-1's job is to sometimes find formulas that get to our main concerns while allowing the other side to make a presentation to their body politic that is more acceptable.

Our main concern here is making sure that if Iran doesn't abide by its agreement, that we don't have to jump through a whole bunch of hoops in order to reinstate sanctions.

[12:50:02] That's our main concern.

OBAMA: And I think that goal, of having in reserve the possibility of putting back and applying forceful sanctions in the event of a violation, that goal can be met. And it will require some creative negotiations by John Kerry and others. And I'm confident will be successful.

And I very much appreciate, by the way, the support that has been provided by Prime Minister Renzi, as well as his former foreign minister who now is the E.U. representative in many of these discussions.

And with respect to the Russian sales, I will tell you this is actually a sale that was slated to happen in 2009, when I first met with then-Prime Minister Putin. They actually stopped the sale, paused or suspended the sale at our request. And I'm frankly surprised that it held this long, given that they were not prohibited by sanctions from selling these defensive weapons.

When I say I'm not surprised, given some of the deterioration in the relationship between Russia and the United States, and the fact that their economy is under strain and this was a substantial sale. I do think that it sends a message about how important it is for us to look like we are credible in negotiations if in fact a deal fails, and we are needing to maintain sanctions.

Because I've heard some in Congress who are opposed to this deal say either let's just slap on even more sanctions, or we'll do sanctions unilaterally, regardless of what other countries are willing to do. The reason that the sanctions regime has worked is because painstakingly we built an international coalition that has held this long.

And if it is perceived that we walked away from a fair deal that gives us assurances Iran doesn't get a nuclear weapon, then those international sanctions will fray. And it won't just be Russia or China. It will be some of our close allies who will start questioning what -- our capacity or the wisdom of maintaining these.

We don't want to put ourselves in that position. We want to make sure that if there's no deal on the Iran nuclear program, it's because the Iranians were not willing to accept what the international community considered to be an appropriate and fair approach to this problem.

OK? Pshew (ph).

(LAUGHTER)

All right. Oh, see, I'm still not finished.

(CROSSTALK)

OBAMA: Let me just say this about Loretta Lynch. We've actually seen some outbreaks of bipartisanship and common sense in Congress over the last couple of weeks. Yesterday, I signed the SGR fix that initiates not only some real reforms around how our health care system works, but expands insurance for children.

OBAMA: We just talked about what I think was at least a constructive process to resolve the question of congressional involvement in Iran. And yet what we still have is this crazy situation where a woman who everybody agrees is qualified, who has gone after terrorists, who has worked with police officers to get gangs off the streets, who is trusted by the civil rights community and by police unions as being somebody who's fair and effective, and a good manager, nobody suggests otherwise, who's been confirmed twice before by the United States Senate for one of the biggest law enforcement jobs in the country, has been now sitting there longer than the previous seven attorney general nominees combined.

And there's no reason for it.

[12:55:02] Nobody can describe a reason for it beyond political gamesmanship in the Senate on an issue that's completely unrelated to her.

This is the top law enforcement job in the -- in the country. It's my attorney general who has to interact his Italian counterparts or her Italian counterparts in dealing with counterterrorism issues, in dealing with Interpol, in dealing with our national security, in coordinating with our FBI. What are we doing here?

And I have to say that there are times where the dysfunction in the Senate just goes too far. This is an example of it. It's gone too far. Enough. Enough. Call Loretta Lynch for a vote. Get her confirmed. Put her in place. Let her do her job.

This is embarrassing, a process like this.

Thank you.

(LAUGHTER)

RENZI: On the situation of migrants in the Mediterranean Sea, I think Mediterranean is a sea and not a cemetery. The problem at this moment is the situation on the ground in Libya we discuss about, Mr. President, or the president. If you think about 91 percent of the people who came from Africa to Italy come from Libya, so exactly as of three years ago, when the people come from Tunisia, because the problem was the lack of stability in Tunisia, today the only way is come back to the peace and stability there, Libyan institutions.

Obviously, it is not easy. We work every day to find a solution with the United Nations and then with the other partners and the friends and allies in the -- in the -- in the region. But I think the only way is come back to stability in Libya.

In this period, in this period of transition, Italy is ready to bring responsibility, to make the leadership in every diplomatic and counterterrorism efforts. But the key point is stop human trafficking in the Mediterranean Sea is a priority for everybody in Europe, and for me is absolutely crucial. The words (ph) of the President Obama is a priority also for the United States.

RENZI: Stopping human trafficking is the only way to give a perspective of justice and also security obviously of course for the risks of this area.

I think there are not problem of clash of religions in Italy. Maybe (inaudible) maybe there were one (inaudible) about (inaudible). But the problem is not a problem of clash of religions. It's a problem of human dignity. We are absolutely committed to solve this -- this problem and I am confident if this become a priority, we (inaudible) agree to resolve (inaudible).

QUESTION (THROUGH TRANSLATOR): You just said that Italy is ready to take on its responsibilities in terms of diplomacy and antiterrorist activities. I would like to ask you, who are the protagonists in this region, the people that should be the interlocutors in order to reach a stability in Libya? And what does antiterrorist activities mean? Are you ready to send the 5,000 men that you spoke about? How do you intend to do so?

And also, perhaps you -- will you have the support from President Obama maybe using drones?

QUESTION: Can we expect any time soon specific counterterrorism action with the United States in Libya?

And then concerning Russia.