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Amanpour

Greek Defiance; Merkel's Peace Mission; Imagine a World

Aired February 09, 2015 - 14:00   ET

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

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CHRISTIANE AMANPOUR, CNN HOST (voice-over): Greek markets tumble on the continued standoff between Athens and its creditors. Tonight I speak live

to the Greek finance minister.

Plus a showdown between Russia and the West: the Iron Chancellor goes to Washington to promote one last push for peace in Ukraine.

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ANGELA MERKEL, CHANCELLOR OF GERMANY (through translator): ... this principle of territorial integrity of countries and we will not be able to

maintain the peaceful order of Europe that we've been able to achieve.

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AMANPOUR: Good evening, everyone, and welcome to the program. I'm Christiane Amanpour.

Greek stocks tumbled today as the stalemate over the country's debt intensifies. In his first major speech to Parliament on Sunday, the

country's new prime minister, Alexis Tsipras, defiantly declared that he is done with the European and IMF bailout program and its harsh austerity.

When the current deal run out in just over two weeks.

He promised to raise the minimum wage and hire back government employees that he says were illegally fired under austerity. But he didn't make

clear how he will replace the bailout's funds.

Arrayed against Greece are European heavyweights, led by Germany, which insists that Greece must push on with cost cutting and reform. Greece's

finance minister, Yanis Varoufakis, who was tireless and wearing a leather jacket, inspired quite a following as he took his agenda on a whirlwind

tour of Europe last week, but after two weeks in office, the gap between image and policy is still wide. And that much was clear when Varoufakis

met with his German counterpart.

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YANIS VAROUFAKIS, GREEK FINANCE MINISTER: We agree to disagree. As Dr. Schaeuble said, we didn't reach an agreement. It was never on the cards

that we would. We didn't even agree to disagree from where I'm standing.

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AMANPOUR: Now European finance ministers meet again this week and Yanis Varoufakis joins me live from Athens.

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AMANPOUR: Minister Varoufakis, welcome back to the program.

VAROUFAKIS: Thank you so much.

AMANPOUR: It's good to see you. Now you've heard that they are talking tough and you are equally determined to stand tough. The ECB says it'll no

longer recognize your bonds as collateral.

Doesn't that reduce a huge stream of revenue in addition to rejecting bailout funds, which is another huge stream of revenue?

VAROUFAKIS: Let's separate the two issues. The ECB has replaced one form of refinancing with another. It was a move that has happened before

without any major repercussions. Personally I think that it was too premature, that move, but nevertheless it's not that significant in the

scheme of things.

The second is the question of the bailouts. This government is, Christiane, elected in order to challenge the very logic of the bailouts,

which began in 2010. Christiane, what happened in 2010 was the Greek state became insolvent and the great of the good in Europe in their great wisdom

and infinite wisdom, I should say, decided to treat this insolvency problem as if it was a problem of liquidity. So they dumped the largest loan in

human history on the weakest of shoulders and condition that we reduce, squeeze our income by almost a quarter.

Now bankruptcy lawyer in New York, actually a 10-year-old child would tell you that that can't end well. So it's not that we're refusing anything.

We're not playing hardball, at least from our part. All we want to do is have a rational discussion, but this kind of combination of great loans to

the insolvent on condition that we should shrink our income further, this must end because it makes no sense for anyone.

AMANPOUR: Let me take your metaphor. You talked about a 10-year-old child with a vague knowledge of math. So I want to ask you about math because

we've just talked about huge revenue losses, given these two issues, plus the idea of raising the minimum wage plus the idea of hiring back all sorts

of government workers.

The math doesn't add up. I mean, you haven't said how you're going to bridge this gap.

How will you?

VAROUFAKIS: OK. Let's start from days missed, which I'm sure have come to you through a distorted lens. Take the question about the issue of

rehirings. What we have committed to do, Christiane, and let's be clear on this, is to rehire within the next year 1 percent -- just 1 tiny, little,

miserable percent -- of those who were -- who lost their jobs, the hundreds of thousands that lost their jobs during the last five years.

And who are these people that we're going to rehire? School guards and people who were dismissed by means -- by legal means that are highly

suspect.

This is not worthy of a discussion. Remember, 1 percent of the losses of jobs are going to be restituted in this way.

On the question of where do they -- we get the money from, look, Greece over the last five years, because of the unenforceability of this illogical

program that has been applied to Greece over the last five years has been in this situation, in -- let's say in limbo between different agreements

with our creditors for a number of times.

Let me give an example: the summer of 2012, before that it was 2011. There have been these standoffs between the Greek authorities and our

creditors. And always there was some formula for finding a few months during which to achieve some kind of agreement.

What this government is doing, something that it has never tried before, Christiane, and that is to say we were like drug addicts and we always

cared about the next dose. The next dose was the next loan tranche. We don't want the next dose. We don't care about the next loan tranche when

our debt is unsustainable.

We want to get rid of the addiction.

AMANPOUR: So let me ask you --

VAROUFAKIS: We just want to get rid of the addiction --

AMANPOUR: -- all right. You want to get rid of the addiction.

But how do you get better terms for your recovery, so to speak, to carry on your metaphor, and people say these are the most generous terms that Greece

has had for a long, long time.

And today in Washington, Angela Merkel basically said, "I think what counts is what Greece will put on the table. I've always said I'll wait for

Greece to come with a sustainable proposal and then we'll talk about it."

So what is your sustainable proposal?

VAROUFAKIS: I don't think we have time for me to go through the details of what we're going to table on Wednesday. But I'm very glad that Chancellor

Merkel has invited us to do that, because this is the only thing we care about. All we're asking for, Christiane, from our European partners is an

opportunity to table our proposals and to be given a short space of time -- a few weeks, no more -- during which we deliberate with them.

But you know, more precisely, let me say this: our government is all about reforming Greece deeply so that we never go back to where we were in 2009-

2010. But we can't do that when we are in a debt deflationary camp. Remember, Greece has 175 percent of debt as a proportion of GDP and at the

same time we have a broken banking system that doesn't work as a credit mechanism. We have negative investment and we have a commitment -- this is

a commitment undertaken by previous governments. This is part of our bailout program -- that we should produce almost 5 percent of primary

service every year.

If this is like trying to suck more milk from a sick cow by whipping it, you will kill it. You will not get more milk out of it. So in order for

us to repay our debts and to grow, we need more fiscal space. We need a primary surplus. We are committed to having balanced budgets and indeed

for having a primary surplus.

AMANPOUR: So obviously --

VAROUFAKIS: -- like 1.5 percent.

AMANPOUR: -- obviously many people want to know how you will become more competitive and you talk about raising -- I know it it's a small

percentage, but nonetheless, raising minimum wage.

But I just do want to ask you about leaving the Eurozone. You have said it will cause a disaster for the rest of the Eurozone. Other countries seem

to make contingencies.

My question to you is: do you not fear that there will be a panic in Greece that people will try to do a run on the banks?

Are you going to forbid them from taking their money out?

What are you going to do to prevent a panic and make your economic situation worse if you do in fact leave?

VAROUFAKIS: We're not going to leave. Grexit, Greece's exit from the Eurozone, is not anywhere near thinking process. We consider ourselves to

be part of the Eurozone, whatever criticisms one may have of the Eurozone, once you are in it, you should stick with it. Mario Draghi has thinking

November, put it succinctly and brilliantly when he said that for the euro to succeed anywhere, it must succeed everywhere. And those who are toying

with the idea of jettisoning or unprepaving (ph) Greece from the Eurozone are being extremely reckless because this is an experiment that has never

happened before. Those who believe that they can amputate Greece and keep the Eurozone intact, they have absolutely no evidence for that. It's never

been tried.

And we should not be playing around with people's lives, with a prospect of having a gradual fragmentation of the Eurozone because the awful

centrifugal forces that are going to be unleashed may very well tell the whole of Europe apart and the world economy, the American economy, the

Chinese economy, the last thing they need is this kind of turbulence coming from Europe at a time when everybody is struggling to recover from the 2008

debacle.

AMANPOUR: Minister Yanis Varoufakis, we look forward to the talks later this week and see that hand being played. Thank you very much indeed for

joining me tonight.

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AMANPOUR: Now of course tough talks clearly to come.

When it comes to fraught negotiations, this unusual bit of diplomatically on the other side of the world caught our eye. Colombia's Marxist Park

Rebels have invited this year's Miss Universe no less, a Colombian, to attend peace talks with the country's government.

The 22-year old hasn't yet responded. It would, of course, be an unusual addition to her duties as beauty queen, which many women think is an

antiquated institution anyway.

But could a dose of beauty help the bitter medicine of peace and compromise go down in Minsk? That is where a crucial, some say last chance effort to

hammer out a cease-fire between Russian and Ukraine gets underway later this week.

When we come back, arm or not to arm? That is the question.

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AMANPOUR: Welcome back to the program.

Fighting continues with renewed intensity in Eastern Ukraine. This apartment block next to a chemical plant in Donetsk is on fire after being

shelled earlier today.

Meanwhile the German Chancellor Angela Merkel has been meeting President Obama in Washington, selling a peace plan to try to end the war between

Russia and Ukraine.

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MERKEL (through translator): The French president and I have decided to make one further attempt to make progress through a diplomatic means. I

myself actually would not be able to live with not having made this attempt.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: As diplomatic efforts continue this week, we are in absolute agreement that the 21st century

cannot stand idle, have us stand idle and simply allow the borders of Europe to be redrawn at the barrel of a gun.

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AMANPOUR: So this attempt, a last-ditch attempt at another cease-fire all takes place against a fierce debate about whether the West should send arms

to help a massively outmatched Ukraine to defend itself.

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AMANPOUR: And joining me now with opposing views from Berlin is Wolfgang Ischinger, the chairman of the Munich Security Council and a former German

ambassador to both the United States and Britain.

And also joining me is Tony Brenton, who was British ambassador to Russia from 2004-2008.

Ambassadors both, welcome to the program.

Let me start with you, Ambassador Ischinger, because there you are in Berlin and Chancellor Merkel is in Washington and you were just hosting

probably very robust debates at the Munich Security Conference.

A last-ditch peace effort: can it happen with this current military status quo, with Ukraine totally outmatched and Russia sending its own forces and

materiel in to help the separatists?

WOLFGANG ISCHINGER, CHAIRMAN, MUNICH SECURITY COUNCIL: Well, Christiane, I think a bit of expectation management is important here. First of all, I

think we all agree, certainly here in Germany, the public and the political elite agrees with Chancellor Merkel that yet another effort ought to be

made.

But we should be clear about this. It would be a great victory already for diplomacy if a cease-fire could be achieved; ending the war as such,

creating peace is yet another matter. And I must say personally I am rather skeptical whether we will have peace in Ukraine because I think

there are some parties to this conflict that are not really interested in peace regardless of what we do and what others do.

AMANPOUR: You have come out for giving Ukraine defensive weapons, lethal defensive aid. What do you think that can do and how do you answer the

skeptics?

ISCHINGER: Well, actually, my position is a little different. My position is as I have written that I think it's important that when you have these

kinds of negotiations, that you do not take options off the table unless you have to.

And I think the option of introducing the idea of strengthening the Ukrainian army through arms deliveries from the West is not -- of course

not a desirable option. We all hope that that will never have to happen.

But I think that showing our stuff, so to speak, showing what we could do might enhance the willingness on the other side to strike a deal.

AMANPOUR: Well, let me ask you then, Mr. Tony Brenton, what is wrong with showing our stuff, showing what we could do? Because you obviously oppose

sending weapons but you probably agree that the sanctions haven't deterred President Putin militarily.

TONY BRENTON, FORMER U.K. AMBASSADOR TO RUSSIA: Yes. Let (INAUDIBLE). I expect the difference between me and Wolfgang is not as wide as you may

have anticipated. I am dead against harming the Ukrainian army and we may come onto that.

But having the option on the table as the peace negotiations go forward, as Wolfgang says, is obviously very useful because it encouraging Mr. Putin to

be more active in looking for solution.

Where I think I may disagree with Wolfgang is his suggestion that the Russians are not looking for a peaceful solution. I think that Mr. Putin

is very keen to end this crisis. He doesn't want to acquire Eastern Ukraine. He doesn't like the sanctions. He wants to restore his relations

with the West to the extent that he can. The difference between us is the terms on which he will settle.

AMANPOUR: Well, that's the great question because the terms are that every month he gets more territory in Eastern Ukraine and therefore could

presumably if the military status quo continues actually freeze the lines right there.

So when you say put weapons on the table in the negotiating process do you think that should be announced then before the Minsk talks?

BRENTON: What I'm saying -- and I think Wolfgang agrees with this -- is that having the possibility that the United States and other Western

countries will supply the Ukrainians with arms as part of the background to the discussions which resume in Minsk on Wednesday is quite a useful extra

source of pressure on Mr. Putin.

If those negotiations however fail, if we're then confronted with the situation where the war is continuing, the question then becomes do we

actually supply those arms?

And my reaction to that is no. Nobody is suggesting that supplying the arms will turn Mr. Putin back. Nobody's in fact suggesting that it will

make the war, resolving the war any easier. Mr. Putin has a huge military advance if he chooses to exploit it. He may be pushed into doing that if

he fears the arrival of Western arms. Any supply of those arms is going to make the situation worse, not better.

AMANPOUR: So Ambassador Ischinger, you were hosting, as I said, the protagonists in Munich. What do you think the terms are as expressed by

Minister Lavrov and others, maybe in public or off the record to you, that Mr. Putin will be willing to settle for?

ISCHINGER: Well, first of all, Christiane, I think that it was good, fortunate, really, that we had this Munich Security Conference weekend

exactly on the eve of Chancellor Merkel's visit to Washington and just a couple of days before this sort of last-ditch attempt at achieving a

diplomatic breakthrough in terms of achieving a lasting cease-fire.

All the relevant actors, the United States represented by Vice President Biden, Russia represented by Lavrov, et cetera, were in Munich and I think

the message was understood that this option of arms to help the Ukrainians defend themselves is actually a real option, that it is being discussed and

that Russia needs to understand that some might actually want to do that.

So I think it will -- the mere fact that we're having this debate, even if we are not totally united within the West, I think it raises the pressure a

little bit on Putin and hopefully we will not need to continue this debate about weapons deliveries after next Wednesday.

AMANPOUR: One last question for you, Ambassador Brenton, you know, you have looked into Putin's eyes as you've written and he won't back down, you

have also written.

What happens if after this peace conference if you like in Minsk nothing changes and we're already hearing from the separatists that we will not

take a single step back, how then do you maintain European integrity and reverse what has been the invasion of one country by another in Europe?

BRENTON: I think we have to make the negotiation process work. What Russia's ambitions have been have been very simple, that Ukraine should

stay neutral, that Russian should have continued economic access to the East and that the eastern provinces of Ukraine should have some sort of

autonomy. It seems to me that there is no real cost to the West in finding a solution along that basis.

And the real thing that we all want to see is a prosperous, successful, recovering Ukraine. That depends upon two things. First is massive

Western financial support, which we're looking at. But the second is that the war be brought to an end on whatever terms we can achieve so that

Ukraine can begin to recover and then actually can become an example for Russia itself on what good democratic market economies can produce.

AMANPOUR: And just one final word, Ambassador Ischinger, because the terms and the conditions that Ambassador Brenton said I thought had been agreed

by Poroshenko in the first Minsk, more autonomy, sort of more sort of -- more autonomy for the East.

ISCHINGER: Well, look, Christiane, and Tony, I'm sure Tony will not disagree with me.

In these types of negotiations, not losing face is key. And the question is is there -- is it possible to square the circle in a way that neither

Putin loses face vis-a-vis his own constituency and that at the same time President Poroshenko doesn't lose his credibility within his own camp.

He's already under a lot of stress because many Ukrainians believe he has already given up too much.

So let's not forget this is about Ukraine and about Ukrainians and about their future so we must also be sure that we know exactly how they feel

about this. It's not that we decide about them; it's they who have a right to decide about their own future.

AMANPOUR: And on that note, Ambassadors Ischinger and Brenton, thank you so much for joining me tonight.

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AMANPOUR: And we will be back with more on this, an unusual move from war to poetry, imagine that world when we come back from a break.

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AMANPOUR: And finally tonight, imagine a world where politics makes way for poetry. The Russian foreign minister, Sergey Lavrov, a man who of

course supported the war in Georgia, backs the Syrian regime and his own government's annexation of Crimea, has just released three previously

unseen poetic works.

He actually wrote these poems more than 20 years ago and his style is described as "beat poetry," which is distinctly American, but he uses it to

criticize, quote, "foreign land" and "loud and arrogant cities."

Is he talking about America?

But Lavrov saved his strongest pathos for his own country, Russia, where he mourns the loss of pride and talent as the nation's best and brightest

emigrate in a continuing brain drain.

Of course his boss, President Vladimir Putin, has also hearkened back to the golden days. A few years ago, he described the collapse of the Soviet

Union as, quote, "the greatest geopolitical catastrophe of the 20th century."

Now at home, Lavrov's getting high praise for his poetry. That must come as a welcome relief after a weekend where he found himself being booed and

laughed at during his speech defending Russia's Ukraine policy at the Munich Security Conference that we were just reporting on.

Perhaps this line of his poetry best describes his nation's policy, quote, "The road ahead, only the start of the road back."

Now for her part at the same Munich conference and just before jetting off to Washington, Angela Merkel had a somewhat different perspective as an

East German who reveled in the collapse of Soviet-led Communism, she promised that once again, quote, "our principles will triumph."

And that's it for our program tonight. Remember you can always watch see the whole show online at amanpour.com, and follow me on Facebook and

Twitter. Thank you for watching and goodbye from London.

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