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Zelenskyy Calls For Humanitarian No-Fly Zone Over Ukraine; JPMorgan Chase: Russia Could Default On Its Debt Any Day Now; NATO Defense Ministers Hold Talks Today On War In Ukraine. Aired 11:30a-12p ET
Aired March 16, 2022 - 11:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BIANNA GOLODRYGA, CNN ANCHOR: Close the sky over Ukraine. That is the message this morning from Ukrainian President Volodymyr Zelenskyy to Congress. Zelenskyy is saying that Russia has turned the Ukrainian sky into a source of death and that his country is fighting for Europe and the world in "the worst world war since World War Two."
Well, joining me now, Congresswoman Chrissy Houlahan of Pennsylvania. She sits on both the foreign affairs and Armed Services Committee. She has also served as a captain in the U.S. Air Force. Congresswoman, thank you for joining us this morning. First off, your reaction to President Zelenskyy's speech.
REP. CHRISSY HOULAHAN (D-PA): It was an incredibly compelling and powerful, and sobering conversation that President Zelenskyy had with Congress. He not surprisingly, is a very good communicator and he was very articulate in communicating what he asked -- was asking of us as a Congress and as the Americans, frankly.
GOLODRYGA: And of course, his number one ask continues to be a no-fly zone. That's something that you have not supported. Did his call today change your mind at all?
HOULAHAN: So, I still am firmly in the camp that a no-fly zone provided by NATO forces or Americans is not something that we should consider right now, but I have been in support of making sure that we're providing the president and his administration, President Zelenskyy all of the things that he has been asking for. Short of that and short of boots on the ground, inclusive of air airpower, inclusive of drones inclusive of S-3oos. I think that we should, as he asked, do more.
GOLODRYGA: Yes. And you're also calling on the U.S. Air Force to send a specific kind of plane to Ukraine, an A-10. Why that plane?
HOULAHAN: Sure. And it's a little bit broader than that. I think what we're seeing is that the -- you know, predictions that this would be a very short cut -- war of just 24 to 48 hours has certainly not come to fruition. We could possibly be in this for longer than any of us anticipated. And as a result, we need to be thinking about all of the creative solutions that we can provide to Zelenskyy into Ukraine.
HOULAHAN: One of those things is the A-10 which is a tank-killer, it's a War hog. One of the things that we're seeing is a big pile-up frankly of tanks in -- that are coming in from this -- the U.S., from Russia, and from a variety of other places. And we have an opportunity if there's time to train up Ukrainian pilots to make sure that they can use those kinds of aircraft.
GOLODRYGA: That is the big question, right? Where would you find the time to now training the Ukrainian military now while they're in the midst of a war? Like you, most members of Congress are not in favor of closing the skies above Ukraine.
But I want to play sound from you from Senator Manchin to Wolf Blitzer yesterday because he sort of drew the line at the use of chemical weapons and what the U.S. response should be if that does happen and Russia doesn't least -- unleash chemical weapons, take a listen.
(BEGIN VIDEO CLIP)
SEN. JOE MANCHIN, (D-WV): Think that's a whole another red line -- that's a whole another line in the sand or a red line to cross. You cross that, the genocide we see going on now, to inflict more punishment, more pain on innocent people is intolerable. And to use chemical weapons, and say we're going to stand by and watch this happen, I think that could be a red line and it should be a red line.
(END VIDEO CLIP)
GOLODRYGA: You know what happens in this country when people hear politicians say the word red line, and we've seen chemical weapons used in Syria in the past by the Russians, so what would your definition of a red line be, and would that be a chemical attack?
HOULAHAN: So, it's enormously complicated, right? You know, what's happening right now is unprecedented. It looks very much like 1939 all over again, but we've added into that the complexity of things like cyber warfare as well. So there's all kinds of permutations that I don't think we can at all predict in terms of what a red line would look like. Perhaps we will know it when we see it. Certainly, chemical weapons is beyond the pale but I don't know that I'm necessarily the person who determines what the red lines are.
GOLODRYGA: Should the president be laying out parameters as to what this administration will and won't do? It's something that we saw going into this conflict and it's something we continue to hear from the administration. At this point, would it be more powerful to leave open the window for other ventures for the President isn't broadcasting at this point?
HOULAHAN: So, that also is a complicated question. I think one of the things that the president and the administration, our administration has done very, very effectively is broadcast to the world what is going on from the perspective of intelligence coming out of Russia and I think that's been very effective in unifying the world.
I think you're not wrong to say that we need to be circumspect about what we share on our end about what you know, is possible and not possible as well. And I think the administration has been toeing that line as well too.
GOLODRYGA: Congresswoman, I just want to end on a personal note for you because I know your father was born in Lviv. How does that impact how you approach this as an elected official, and as someone whose family is so closely connected?
HOULAHAN: Sure. And what I would say is, obviously, this is personal to me because of that family heritage and connection, but it's also deeply personal to me and should be personal to everyone because we should all be students of history and we should all know what this looks like, and this definitely looks like 1939.
I'm also a military veteran, my father is as well. He called me today just after Zelensyy spoke and he was in tears again. And that from a Navy captain is something that is pretty devastating from a -- for a daughter to here. So it should be personal for all of us, all Americans, and all who value in the price of democracy and freedoms that we have.
GOLODRYGA: No doubt this must be PTSD for people like your father and others who have lived this already once in their lifetime. Congresswoman Chrissy Houlahan, thank you so much.
HOULAHAN: Thank you.
GOLODRYGA: Also this morning, President Zelenskyy is calling on the U.S. to increase the economic pressure on Russia.
(BEGIN VIDEO CLIP)
VOLODYMYR ZELENSKYY, PRESIDENT OF UKRAINE: Speaking a foreign language.
UNIDENTIFIED FEMALE: New packages of sanctions are needed constantly every week until the Russian military machine stops. Restrictions are needed for everyone on whom there's unjust regime is based. All American companies must leave Russia from their market. Leave their market immediately because it is flooded with our blood.
(END VIDEO CLIP)
GOLODRYGA: And we should note Russia's economy is already buckling under the weight of Western sanctions with President Putin acknowledging as much. In an address to the Russian people today, he said that the economy will face hardship but the "Western attempts to organize an economic blitzkrieg over Russia will not work." The country could also default on its debt as soon as today.
Joining me now is Sergei Guriev. He is an economist, currently teaching in France, and a longtime Putin critic. He also is now the co-founder of the True Russia Campaign, raising money for Ukrainian refugees and he is a longtime critic of President Putin.
GOLODRYGA: Thank you so much, Sergei, for joining us. How significant, first of all, what default actually be for Russia and its lenders? You know Russia didn't have much debt going into this war.
SERGEI GURIEV, FOUNDER, TRUE RUSSIA CAMPAIGN: Thank you very much, Bianna, for inviting me, and thank you very much for mentioning the True Russia initiative where we did fundraise among Russians to help Ukrainian refugees. Yes, default may happen today. This is not a real, really big problem, indeed.
As you rightly said, the Russian external that is not -- is not huge, and it's definitely not going to hit ordinary Russians the way it was in 1998. Many Russians bill -- remember that default is something which destroys the financial system, but Russian financial systems already been destroyed by the sanctions, which has happened in the last three weeks. They have been introduced in the last three weeks. So it says it is a problem for bondholders, but it's not going to be a Lehman moment for the global economy if you like.
GOLODRYGA: Yes. And the 98 default had ripple effects really around the world. You're saying that won't be the case this time. But what we know President Zelenskyy is asking that the West do more to hurt Russia economically, specifically, by cutting off oil and gas exports. Just yesterday, it was interesting, this caught my eye.
The head of Germany's biggest power supplier said that "an immediate stop to Russian energy imports would have unimaginable consequences." Now Economists like Paul Krugman point to research suggesting that, in fact, it could be manageable. Would be still painful, but it would be manageable. What is your view?
GURIEV: I think research does show that costs will be tangible, but completely acceptable. The paper that Paul Krugman refers to is a paper by several leading German economists, including my colleague here (INAUDIBLE), which shows that indeed, exiting Russian oil and gas is doable, and Germany can afford this. And you rightly mentioned that the largest energy company in Germany, E.ON, and that's a personal link for me, I was a board member of E.ON Russia business.
At some point, I think -- I think that that is going to show how it may actually work. And that will hurt Russia. Why? Because if Russia manages to restore its exports and gets paid for its oil and gas exports, it will be doing fine financially in the sense that it will restore its balance of payments, it will actually have a huge current account surplus and fiscal surplus because oil prices are so high.
And in that sense, oil embargo introduced by Europe, in addition to what the U.S. has already done, would actually close this light in the end of the tunnel for Mr. Putin, which he currently sees. He hopes that this current disruption due to the boycott by private companies in the West will stop and he will restore his influx of oil revenues and will be able to support his regime pain Petrodollars to his policemen who beat up protesters, to his soldiers in Ukraine, and actually two Middle Eastern mercenaries whom he's hiring right now to fight in Ukraine.
GOLODRYGA: Yes, we should know that the riot police there in Russia relative to other civilians get paid quite well. The U.S. and Europe have demonstrated though, you have to admit unprecedented unity and imposed sanctions that went far beyond what was expected by Russia and by the markets, their stock market remains close all these days in. What will be some of the effects likely in Russia? Will there be food shortages? Well, will the plane still be able to fly? I mean, what are some of the consequences we'll see?
GURIEV: Bianna, you're right on target. Right now, people are trying to stock up food because prices are rising. And whenever people expect inflation, they try to buy the staple goods before it's too expensive. Just to give you a number. According to official data, after the first week of the war, Russian prices went up by 2.2 percent, which means 10 percent in monthly terms.
And the forecast of the central bank that annual inflation will be 20 percent looks too optimistic to me. So I think in equilibrium, we will not see shortages but we'll see really expensive food and medicine, which will hit not just the middle class and not just the oligarchs, but ordinary Russians who need to spend their reasonably low incomes on communal utilities, food, and medicines and for them that will be a shock to living standards.
As for the planes, I think that's a great question. Boeing and Airbus will not service Russian planes. In apparently important planes, they account for about 90 percent of seat capacity in Russia. So either the Russian government will say we don't care if planes are safe, they can still fly or they will just ground those planes.
GURIEV: So this is one of the many disruptions probably most visible of those many disruptions that sanctions have brought to Russia.
GURIEV: And many of these sanctions are imposed by the governments but some are very private companies which by "Russian business."
GOLODRYGA: Yes. It was interesting to hear Vladimir Putin say and threatened to nationalize planes that are leased right now from Western companies, as well as those companies themselves that have suspended business in Russia currently due to the war.
Finally, I want to ask you, I know you were spending so much time focusing on the impact on Russia, I know you predict a recession, possibly a 10 percent decline in GDP growth in Russia, given what we're seeing now, but talk about the impact on Ukraine because their economy really not functioning now as the country is just surviving -- is fighting for its survival.
GURIEV: Well, the Ukrainian economy is in a very difficult situation. You're right. The economy is not functioning, and it will require after the war, whatever the outcome of the war is, it will require a new Marshall plan to rebuild Ukraine. We don't know what the new borders of Ukraine will be after this war, we don't know when the war will be over, but I call -- I call on the Western partners of Ukraine, Western allies of Ukraine to reinvest in rebuilding Ukraine.
I used to work in European Bank for Reconstruction development. I'm very proud that my colleagues put together a $2 billion package. But as for the money, it seems the Russian central bank's reserves have been frozen.
GOLODRYGA: Frozen, yes.
GURIEV: This is an infinite amount of money for rebuilding Ukraine. I'm sure there will be lawsuits against Russia, and maybe some of these assets will be actually confiscated to pay for the reconstruction of Ukraine as part of the preparations for the war, for this aggressive, brutal war that Mr. Putin started against Ukraine.
GOLODRYGA: Yes, perhaps just one idea there once this war ends, and obviously, we want to see that happen as soon as possible. Sergei Guriev, thank you so much, and thank you for all the work that you're doing with the Ukrainian refugees right now. We all appreciated this as human beings. Thank you.
GURIEV: Thank you -- thank you, Bianna. Thank you.
GOLODRYGA: And coming up, much more of our coverage of the war in Ukraine as we wait for President Biden to speak expected now at any moment. And later, oil prices are tumbling even as gas prices stay stubbornly high. How long before consumers see a price drop at the pump? That's next.
GOLODRYGA: And we are just moments away from hearing from President Biden. He is expected to formally announce that the U.S. is sending an additional $800 million in security assistance to Ukraine. We're also waiting to hear his response to President Zelenskyy's historic address to Congress in which Zelenskyy pleaded with Biden to be the world's "leader of peace." And this all comes as NATO Defence Ministers, including Defense Secretary Lloyd Austin, meet today in Brussels to discuss the atrocities happening right now in Ukraine.
Joining me now is NATO Secretary General Jens Stoltenberg. Thank you so much for joining us. We just heard, as we mentioned, another powerful speech from President Zelenskyy to the U.S. Congress. I'll get into his specific asks in just a moment but I do want to begin with that rather sharp rebuke that he directed at institutions meant to prevent war and, of course, that would include NATO. He said they don't work. And called for new ones that have the "strength to provide whatever is needed to stop conflicts immediately to save the world." How do you respond to that? JENS STOLTENBERG, NATO SECRETARY GENERAL: So I fully understand the desperation expressed by President Zelenskyy and that's also a reason why NATO Allies provide significant support to Ukraine, and ministers at the meeting in Brussels today agree that we need to provide also, of course, continue to provide military support as allies do, and the U.S. is leading those efforts.
When it comes to NATO's core responsibility -- main responsibility is to protect 1 billion people living in 30 NATO-allied countries and we have been able to do that for more than 70 years. And we have stepped up our efforts with an increased presence of NATO troops in the eastern part alliance to remove any room for miscalculation or misunderstanding in Moscow, about our readiness to prevent any attack on any NATO-allied country in addition to what is happening in Ukraine now.
GOLODRYGA: Yes, but with all due respect, President Zelenskyy is saying that's not enough. That you haven't been able to prevent and now stop a three-week war that has killed thousands of his citizens.
STOLTENBERG: Our core task is to prevent an attack on NATO-allied countries and we have done so for more than 70 years and we continue to do that. And that's the reason why we reinforce our collected events, especially in the eastern part of the Alliance.
STOLTENBERG: Ukraine is not a NATO member, but Ukraine is a highly valued partner, our NATO allies have trained tens of thousands of Ukrainian troops for many years. We have over many, many years provided essential equipment to Ukraine, and allies are now providing even more support, including with air defense systems and other advanced weapon systems to help them to fight the invading Russian forces.
GOLODRYGA: Yes, if there's one thing we've learned out of all of this is that Ukraine is definitely not a NATO member and it's something we've heard over the past few days with President Zelenskyy even acknowledging that it won't be one anytime soon. I'm just -- to put a button on this wanting to reiterate his point, that if NATO wasn't doing enough to prevent Russia's invasion into Ukraine that NATO countries could be next.
STOLTENBERG: But that's exactly why we have implemented the biggest reinforcements on collective defense since the end of the Cold War.
STOLTENBERG: We now have hundreds of thousands of NATO troops on heightened alert across the whole Alliance. We have 100,000 U.S. troops in Europe and it has increased several thousand just over the last few weeks. And we have more than 40,000 troops under direct NATO command, supported by significant air and naval capabilities. So this is what to do to make sure that there is no attack on any NATO-allied countries -- ally country. And, of course, NATO has a responsibility to support Ukraine as NATO
allies do but we also have a responsibility to prevent this conflict from escalating beyond Ukraine because the suffering, the death, the destruction we see now in Ukraine can become even worse if this conflict in Ukraine escalates to a full-fledged war between NATO and Russia, in Europe.
GOLODRYGA: Yes. And one way that NATO members, including President Biden, view a possible escalation of this war that could include possibly bringing the fight to NATO in its borders, and beyond that, is to instill now and impose a no-fly zone. That seems to be a non- starter, even though President Zelenskyy continues to ask for that. Other than that, there are other -- there's other aid that is headed now to Ukraine. The other ask that he's asking for in addition to defense systems, right is airplanes -- are airplanes. Will that be part of the package now?
STOLTENBERG: NATO allies are providing more and more military support equipment to Ukraine, including advanced systems also to protect them in the air. Air defense systems, drones, and other means to also deal with the threats they're faced with in the airspace or in air. So I think for operational reasons, we should be a bit careful going into every specific type of weapon system we are delivering -- NATO allies are delivering but the message from the ministers today is that we really need to step up to provide more support.
I welcome the announcement from the United States and other allies to provide more funding for military assistance. And, of course, it's first and foremost, the courage of the Ukrainian Armed Forces that has stopped and fought back the Russian invasion. But the training and the support that NATO allies have delivered over many years and continue to deliver military equipment has, of course, been essential in enabling them to fight back against the invading Russian forces.
GOLODRYGA: But you can't confirm now -- I understand the sensitivity here, but you can't confirm now that that planes, specifically the MiG-29 will be part of this package.
STOLTENBERG: I cannot go into this specific. The only thing -- the only thing I can say is that NATO allies are providing also systems that can help them to protect them against air attacks, missiles -- air and missile defense systems, including advanced systems, which actually help them to shoot down planes and missiles over these weeks. And that's the reason why we also see the value of this military support that provides -- the provision of advanced military equipment.
GOLODRYGA: Yes. U.S. administration officials have confirmed this morning that National Security Adviser Jake Sullivan spoke today with his Russian counterpart. That would be the first high-level contact since this invasion began. And it comes as new CNN reporting reveals that NATO has also tried to connect with Russia and has thus far been unsuccessful. Does that sound to you like Russia is trying to cut NATO out of any communication at this point?
STOLTENBERG: Well, our commanders, they have the lines for communications and it is extremely important that we do whatever possible to prevent any incidents or accidents. And if they happen to ensure they don't -- they don't spiral out of control because with heightened tensions, with more military presence close to our borders, we saw the attack on this International Training Center close to the Polish border a few days ago, of course, the risk for incidence or accidents has increased.
And therefore, it is important that our military commanders have the necessary lines of communications with Russia and, of course, we will use them if necessary.
GOLODRYGA: Yes. Though the lines are open but have the Russians responded?
STOLTENBERG: Well, we have commanders which can reach out to Russia if needed, and that's the most important thing for me.
GOLODRYGA: NATO Secretary Jens Stoltenberg, thank you so much for your time. We appreciate it.
STOLTENBERG: Thank you so much.
GOLODRYGA: And CNN's breaking news coverage of the war in Ukraine continues. INSIDE POLITICS with John King starts right now.
ANNOUNCER: This is CNN breaking news.