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President Obama Statement on Egypt; Global Stock Market Sell- Off

Aired August 15, 2013 - 10:30   ET

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

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We know that many Egyptians, millions of Egyptians, perhaps even a majority of Egyptians, were calling for a change in course.

And while we do not believe that force is the way to resolve political differences, after the military's intervention several weeks ago, there remained a chance for reconciliation and an opportunity to pursue a Democratic path.

Instead, we've seen a more dangerous path taken through arbitrary arrests, a broad crackdown on Mr. Morsy's associations and supporters and now tragically, the violence has taken the lives of hundreds of people and wounded thousands more.

The United States strongly condemns the steps that have been taken by Egypt's interim government and security forces. We deplore violence against civilians. We support universal rights essential to human dignity, including the right to peaceful protest. We oppose the pursuit of martial law which denies those rights to citizens under the principle that security trumps individual freedom or that might makes right.

And today the United States extends its condolences to the families of those who were killed and those who were wounded. Given the depths of our partnership with Egypt, our national security interests in this pivotal part of the world and our belief that engagement can support a transition back to a democratically-elected civilian government, we've sustained our commitment to Egypt and its people.

But while we want to sustain our relationship with Egypt, our traditional cooperation cannot continue as usual when civilians are being killed in the streets and rights are being rolled back. As a result, this morning we notified the Egyptian government that we are canceling our biannual joint military exercise which was scheduled for next month. Going forward, I've asked my national security team to assess the implications of the actions taken by the interim government. And further steps that we may take as necessary with respect to the U.S./Egyptian relationship.

Let me say that the Egyptian people deserve better than what we've seen over the last several days. And to the Egyptian people, let me say the cycle of violence and escalation needs to stop. We call on the Egyptian authorities to respect the universal rights of the people. We call on those who are protesting to do so peacefully and condemn the attacks that we've seen by protesters, including on churches.

We believe that the state of emergency should be lifted that the process of national reconciliation should begin, that all parties need to have a voice in Egypt's future. That the rights of women and religious minorities should be respected and the commitments must be kept to pursue transparent reforms to the constitution and democratic elections of a parliament and a president.

And pursuing that path will help Egypt meet the democratic aspirations of its people while attracting the investment, tourism and international support. They can help it deliver opportunities to its citizens.

Violence on the other hand will only feed the cycle of polarization that isolates Egyptians from one another and from the world and that continues to hamper the opportunity for Egypt to get back on the path of economic growth.

Now let me make one final point. America cannot determine the future of Egypt. That's a task for the Egyptian people. We don't take sides with any particular party or political figure.

I know it's tempting inside of Egypt to blame the United States or the West or some other outside actor for what's gone wrong. We've been blamed by supporters of Morsy. We've been blamed by the other side as if we are supporters of Morsy. That kind of approach will do nothing to help Egyptians achieve the future that they deserve. We want Egypt to succeed. We want a peaceful, democratic, prosperous Egypt. That's our interest.

But to achieve that, the Egyptians are going to have to do the work. We recognize that change takes time and that a process like this is never guaranteed. There are examples in recent history of countries that are transitioned out of a military government towards a democratic government and it did not always go in a straight line and the process was not always smooth.

There are going to be false starts. There will be difficult days. America's democratic journey took us through some mighty struggles to perfect our union. From Asia to the Americas, we know that democratic transitions are measured not in months or even years, but sometimes in generations.

So in the spirit of mutual interests and mutual respect, I want to be clear that America wants to be a partner in the Egyptian people's pursuit of a better future and we are guided by our national interests in this long standing relationship.

But our partnership must also advance the principles that we believe in. And so many Egyptians have sacrificed for these last several years no matter what party or faction they belong to. So America will work with all those in Egypt and around the world to support a future of stability that rests on a foundation of justice and peace and dignity.

Thank you very much. (END LIVE FEED)

WOLF BLITZER, CNN HOST, "SITUATION ROOM": So there he is the President of the United States taking a strong stance, opposing the violence that's been going on, the crackdown by the Egyptian military, the security forces on the demonstrators supporting the former President Mohamed Morsy, announcing that the United States is now, in his words, canceling operation Bright Star, this biannual military exercise hundreds of hundreds of U.S. and Egyptian troops had been poised to meet next month in Sinai, spend several weeks on the ground, in the air and on the sea exercising. They have been doing this going back many, many years. The President saying this is not the time to do so.

Also saying further steps, in his words, further steps could be taken if -- if there is no immediate cessation of the violence and if there is no move towards a democratic process.

Jake Tapper has been watching what's going on; our reporters here in Washington, indeed in Cairo. But Jake, some perspective first to you, there was no word from the President about suspending $1.3 billion a year in military aid to Egypt, although that is implied as part of the further steps if this crisis escalates.

JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT: That's exactly right Wolf. And before President Obama started speaking, we were talking about the efforts of the Obama administration to thread the needle to urge the Egyptian military to show restraints and to install a civilian government as much as possible.

Initially after Morsy was deposed from power, whether you want to call it a coup or you choose not to, there were statements from the White House, from the administration, suggesting what the Egyptian military needed to do and holding out the threat of other possibilities, of repercussions, of suspending joint military exercises, of withdrawing the $1.3 billion to $1.5 billion in aid that Egypt receives more than any other country in the world except for Israel.

Now we see the first one of these steps taken after the bloodshed yesterday withdrawing, suspending that joint military operation, but not yet taking the step of withdrawing aid. We should point out of course that the United States gives a lot of money to Egypt, but it is nowhere near as much money as other Muslim countries give to Egypt. So that $1.3 billion, $1.5 billion does not have the sway it once had -- Wolf.

BLITZER: Yes certainly doesn't especially when you think about the United Arab Emirates, Kuwait, Saudi Arabia -- in the last few weeks since the removal of Morsy they have announced more than $10 billion or maybe even $15 billion in aid. They're ready to provide Egypt. And they're certainly going to be frustrated, they're certainly are going to be deeply disappointed in the President's statement today suspending, canceling I should say, cancelling this joint exercise. They'll be fearful this will send exactly the wrong message to the Muslim Brotherhood and other supporters of Mohamed Morsy that if they continue to remain on the streets of Cairo and elsewhere, maybe they eventually will regain power.

Dan Lothian, our White House correspondent is with the President at Martha's Vineyard. Dan we suspected he would take this and make this announcement about Bright Star, this joint U.S./Egyptian military exercise now being canceled. It will send a message to the Egyptian military leadership most of whom Jake pointed it this out earlier, it's true, most of whom did extensive training right here in the United States.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right Wolf. And you know I think it's interesting. Look at how the President began his remarks this morning. It was something that you and Jake have been talking about earlier, talking about the deep and the long relationship that the U.S. has had with Egypt, not only with the country itself, but also with the Egyptian military. And so that's why it's been very difficult for the Obama administration to sit back and watch the violence on the ground, watch the situation escalating there because the long ties and important ties with Egypt and the role that Egypt plays on behalf of the United States in the region.

The second point that I thought was important is how the President wrapped up when he talked about how this is a situation that the Egyptian people have to fix on their own. And while a lot of people in Egypt may be blaming the United States, pointing fingers at the President, condemning the President that this is something while the U.S. certainly has leverage with the $1.3 billion in aid that it supplies each year to Egypt, it really is up to the Egyptian people to fix this problem Wolf and come up with the right solution.

BLITZER: And certainly as I -- Dan stand by for a moment. We're going to go to Cairo. We'll take a quick break. And much more analysis of what we just heard from the President announcing cancellation of the joint U.S./Egyptian military exercise scheduled for Sinai next month promising further steps in his words -- further steps by the U.S. could be taken if this situation is not stabilized -- stabilized quickly.

We'll take a quick break much more right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

We're continuing to assess what's going on in the U.S./Egyptian relationship? What's going on in Egypt right now? Ian Lee is standing by, he's in Cairo. He's been watching the violence up fold. Jill Dougherty is watching what's going on as well, our foreign affairs correspondent.

Ian, what's the likely reaction that we're going to get from both sides, the pro-Morsy side, the military side, the interim government in Egypt from what we just heard from the President?

IAN LEE, CNN CORRESPONDENT: And there's a couple of things that really stood out to me in his speech, Wolf. And the first was that he did not reference the -- what the ousting of former President Mohamed Morsy as a coup. I think now we've gone past the point whether that's even a question for the United States government for President Obama. I think that is now a thing in the past and they have moved forward.

He said they did not support either group, that the United States doesn't support either group, that they want an inclusive government. And that's the other thing that really stood out to me, too. He urged both sides to come together, he criticized the Brotherhood for not being inclusive enough, but that's going to be a problem now for this interim government is to bring the Muslim Brotherhood to the negotiating table.

After yesterday's event, we saw the bloody crackdown on those protests, on those camps. It's going to be difficult to bring them now together to form an inclusive government or try to form some sort of dialogue to move towards elections that are seen as legitimate to the Egyptian people.

The interim government can not alienate the Muslim Brotherhood. The Muslim Brotherhood is still a powerful organization here in Egypt and for Egypt to move forward as a stable democracy, they're going to need to be inclusive and that is something President Obama urged but that is going to be something very difficult to do here -- Wolf.

BLITZER: Ian, we know the Egyptian military, the security forces, the police -- they are well-armed. They have a lot of weapons. But what about the other side, the pro-Morsy forces.

We were told yesterday 43 Egyptian police officers were killed in the violence yesterday so that means some of pro-Morsy forces -- they must have weapons of their own.

LEE: That's exactly right. And now the pro-Morsy side said they didn't have any weapon, but we have seen in videos in the past as well as yesterday, you did have over 40 police officers killed in those clashes. Now when you have the leaders of the Muslim Brotherhood say these are peaceful demonstrators, they can't be accountable -- they can't account rather, for every person who's in those protests. And some of those people do come ready to fight, ready to bring weapons. We see a lot of homemade weapons at some of these protests. So while they do say these are peaceful protests, you do sometimes have those individuals who do bring weapons -- Wolf.

BLITZER: Ian, stand by.

Jill Dougherty, you're monitoring what's going on. The president made a dramatic announcement canceling the joint exercise scheduled next month for the U.S. and Egyptian military -- Bright Star as it's called -- in Sinai. At the same time, he did not suspend any U.S. military or economic assistance to Egypt, although he did say further steps could be in place down the road depending on what happens in the coming days.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Right Wolf. Well, you know, it's an important step and in a way it's a no-brainer. Because imagine as we say the optics, imagine what it would look like if U.S. troops were holding joint military not exercises, but training exercises with the Egyptian military who are on the streets firing on civilians. It would look really bad. So it was one thing the President could do. Serious step -- but in a sense it was unavoidable.

Going the further step to cutting aid is a very serious step. And it has repercussions for the United States because don't forget that some of that money goes to the Egyptian military to buy U.S. arms. So it affects the United States, as well.

And just one other quick point -- Wolf -- having the people who are from the Muslim Brotherhood in the political process is crucial. It can get much more radicalized if they're cut out.

BLITZER: All right, Jill Dougherty, with that we're going to obviously stay on top of the breaking news out of Cairo, what's happening in Egypt, the U.S. reaction. What we just heard from the president. We're going to have extensive coverage here on CNN throughout the day; much more of course in "THE SITUATION ROOM" later today 5:00 p.m. Eastern.

But there is a lot of other news happening right now. Carol Costello is monitoring that. Carol, there is also I assume some reaction on Wall Street to what's going on.

COSTELLO: I don't know if it's a reaction to Egypt, but it's in reaction to something because Wall Street is tanking right now. We're going to take you to the New York Stock Exchange right after this.

(COMMERCIAL BREAK)

COSTELLO: Have you checked your 401(k) around this time? You better change your plans. On Wall Street, we're just about an hour into the trading day and already we're seeing a sell-off. The question is why. The woman who knows is Alison Kosik -- good morning.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning.

So this is a bird's eye view into how these earnings reports from some big companies of names that you may recognize -- Wal-Mart and Cisco. How these earnings reports really reflect how the economy is affecting them.

So what I'm talking about first of all is Cisco systems, its CEO John Chambers coming out today in an earnings report saying that the economy is in tough shape and you're seeing investors take notice. As we see Cisco shares sell off 7 percent lower; the broader market -- the Dow down 216 points.

Investors notice this Carol, because how Cisco does usually mirrors how these global economic trends. The company also announced that it's laying off 4,000 people because of this economic uncertainty.

Also spooking the market, a company you may recognize -- Wal-Mart. Wal-Mart saying it's cutting its earnings. It's also cutting its sales outlook for the rest of the year because of the same familiar story, a challenging economy. So, you roll all this together, it just doesn't paint a good picture and you see investors running for the exits today -- Carol.

COSTELLO: Ok. So here is hoping for a better day tomorrow. Alison Kosik at the New York Stock Exchange.

More top stories for you after a break. We'll be back.

(COMMERCIAL BREAK)

COSTELLO: Checking our top stories at 56 minutes past the hour.

We're keeping a close eye on Birmingham, Alabama. Investigators there are using hand tools, picks and shovels to dig out the flight data recorders from the wreckage of that UPS plane. The smoldering fires in the tail section had prevented them from searching until now. NTSB says neither the pilot or co-pilot issued a distress call before the plane went down; both died at the crash.

Gripping new details emerging about Hannah Anderson's kidnapping. We now know more about the teenager's mother and brother and how they were killed. Unsealed search warrants say James DiMaggio tortured and killed his long-time friend Christina and her son. A crowbar was found near Christina's body.

The warrants also disclosed that there were 13 calls between Hannah Anderson and DiMaggio on the day Hannah was abducted. A preliminary autopsy report says DiMaggio was shot at least five times by the FBI when he and Hannah were found in the Idaho wilderness area.

On a social media site, Hannah was asked if she was glad DiMaggio was dead. Her one word answer: "absolutely".

A raging wildfire in Utah has destroyed at least 14 homes and is threatening hundreds more. The area's home to several famous ski resorts including Breckenridge in Arapajo Basin. Hundreds of people have been evacuated. At least 4,000 acres have burned. At times the fire has moved at the rate of 80 feet per minute.

Thank you so much for joining me today. I'm Carol Costello.

"LEGAL VIEW" with Ashleigh Banfield after a break.

(COMMERCIAL BREAK)

ASHLEIGH BANFIELD, CNN HOST: Hello, everyone. I'm Ashleigh Banfield. It's Thursday, August 15, and welcome to the "LEGAL VIEW" where we dig in to the day's top legal stories.

But we are going to begin today's program with the major breaking news of the day and that takes you right into Egypt. Our President, President Obama, interrupting his vacation this morning to address this nation on the widespread deadly violence in Egypt.

Speaking from Martha's Vineyard, he condemned the violence that has so far killed more than 500 and wounded over 3,000. Have a listen.

(BEGIN VIDEO CLIP) OBAMA: To the Egyptian people let me say the cycle of violence and escalation needs to stop. We call on the Egyptian authorities to respect the universal rights of the people. We call on those who are protesting to do so peacefully and condemn the attacks that we've seen by protesters, including on churches.