Return to Transcripts main page

Quest Means Business

Scholz Meets Biden At White House, Macron Meets Putin In Moscow; Low-Fare Carriers Frontier And Spirit Plan $6.6 Billion Merger; Ottawa Declares State Of Emergency As Protests Enter 11th Day; Wall Street Scaling Back To Return To Work; Chinese Tennis Star Peng Shuai Speaks Out; Biden Holds Joint News Conference With German Chancellor. 3-4p ET

Aired February 07, 2022 - 15:00   ET



RICHARD QUEST, CNN BUSINESS ANCHOR: Start of a new week, an hour left to trade. The Dow already now breaking into positive, going above the line,

bouncing around all day, and not only over the line, but putting on some serious weight, half a percentage point. Let's see how much of that holds

between now and the closing bell in an hour.

The markets are looking like that, and the main events that we're talking about.

Meetings galore taking place on Ukraine. Here is the President and the German Chancellor in Washington. Thousands of miles away, the French and

Russian Presidents meeting across a very large table, I suspect COVID restrictions that is in Moscow, both sides having press conferences. We

will have them. We'll take them when those press conferences happen.

America's leading low-cost airlines want to join forces, it is Spirit and Frontier, $6.6 billion. All in all, we are live from New York, starting a

new week together, Monday, February the 7th. I'm Richard Quest, I mean business.

Good evening. Now tonight, we are watching twin Summits taking place in Washington and Moscow. Four of the world's most powerful leaders are trying

to find common ground and thus maintain peace in Europe.

The French President, Emmanuel Macron is in Moscow speaking to President Vladimir Putin. You see the pictures from earlier in the day. President

Macron told Putin he was there to build a constructive arrangement that is mutually acceptable to Russia and the rest of Europe.

Now, in a moment, we're going to take you inside the White House where the German Chancellor, Olaf Scholz is to take questions after his first one-on-

one Summit with President Biden. We will certainly take that as well.

A short time ago, President Biden affirmed that U.S. and Germany are working in lockstep despite recent suggestions to the contrary.


JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Germany is one of America's closest allies, working in lockstep to further deter Russian aggression in

Europe, and address the challenges posed by China and promote stability in the Western Balkans.

We then -- we have to take on the pandemic, climate change, and among many others issue, so we have a lot to talk about, Mr. Chancellor and Olaf, I'm

looking forward to us working closely together.


QUEST: Now, the German Chancellor Scholz's predecessor, Angela Merkel, was Europe's most influential leader for more than a decade you will be well

aware of that. Her retirement left a diplomatic vacuum. Germany has remained largely on the sidelines on the Ukraine issue, as tensions between

Russia and Ukraine have threatened to bring open war to Europe.

Germany's outside reliance on Russian gas, which could be delivered by a new controversial pipeline is an Achilles heel here. President Biden will

no doubt push for Chancellor Scholz to be more forceful in confronting Moscow. The West's response so far has been fractured, and uneven.

Also, U.S. officials say Vladimir Putin has now assembled 70 percent of the military force it has believed is needed for a full scale invasion all the

way to Kyiv.

Nic Robertson is CNN's international diplomatic editor. He is in Moscow. Nic, let's start with the events in Moscow of the day. We have Macron and

Putin, do you know -- I mean, apparently I'm hearing reports, even though it's very late at night, the meetings continue.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: This is what we understand, perhaps longer than anticipated, and they started later than

anticipated. President Putin does tend to start later in the day or have his big meetings later in the day, but the fact that they're still talking,

I think, will widely be seen as a positive. Certainly, until we get a readout. It'll be taken that way.

But, you know, just to lay out a couple other things here, what they're trying to do, what Macron is trying to do and President Putin are trying to

do and of course, they are different things that they're trying to achieve and there is some crossover, there are very, very many different things



You know, President Putin still doesn't have the guarantees that he wants from NATO on security, and President Macron has not got those guarantees to

give him, but he has got language around it like, you know, a security in Europe that is good for all sides and transparent.

He is also under pressure, Macron is under pressure from President Putin to bring diplomatic efforts and pressure on the Ukrainian leadership to talk

to the separatists, the Russian backed separatists in Ukraine. So there are many layers to this.

And, of course, as you say, Macron is entering a field here that he has wanted to play a bigger role on. And that is, you know, generate a, a more

European-centered security for Europe, i.e. have the European Union have a bigger voice on foreign policy and defense.

So not just leaving it all up to NATO, not letting the United States be the big player in NATO, but Europe take a bigger handle on it. So, there is a

lot on the table, but that that big issue of Russia not having its demands met and also Putin not saying precisely his response to NATO and the United

States yet, there's a multitude of things that they can discuss, and it's really not going to be clear until they come out of the meeting, what areas

they have gone into, and what progress or stalling may have happened -- Richard.

QUEST: Nic, okay, but is it likely that President Macron will find a key that will unlock this further on? Bearing in mind that the Russian demands

for new treaties and the like, are simply unacceptable. And related to that, doesn't Macron risk being suddenly undermined if Biden decides to go

a different direction?

ROBERTSON: And there have been very close coordination between President Biden and President Macron, two phone calls over the past about 72 hours

and Macron has, of course, been talking with other leaders in Europe.

You know, I think a lot of people look at what is happening here that President Putin has essentially dug his heels in and made a big stand over

what he perceives as a threat to Russia, and he is not de-escalating his forces around Ukraine. He says, they are not going to invade Ukraine, but

is not de-escalating them.

So this is a lot of heft, a lot of potential muscle going into his negotiating position, and I think the expectation would be for Putin to

double down and keep pushing and keep saying what concessions he can shake loose and keep saying what Macron can deliver, and if that creates rifts in

NATO, that's a benefit. I think that's probably a reasonably accurate read of what's going on behind closed doors.

QUEST: Thank you. Nic Robertson is in Moscow. We'll come back to you in a moment as the press conference does take place.

Ambassador Philippe Etienne is the French Ambassador to the United States. He joins me from Washington.

Ambassador, it is good to see you, sir. So your President is in Moscow? What -- I mean, we know the differences, and I've read all about the

understanding what President Macron says about the importance of understanding Russia's legitimate security concerns.

But how do -- how is he going to try to defuse this with 110,000 troops on the border of Ukraine?

PHILIPPE ETIENNE, FRENCH AMBASSADOR TO THE UNITED STATES: Well, thanks for -- I would like first to report, we will also be in Kyiv tomorrow, not only

in Moscow. Number two, France holds the Council of the European Union, and together is (AUDIO ISSUES) the crisis of Ukraine, which means that --

QUEST: All right, Ambassador, I'm going to interrupt you. Forgive me, I wouldn't do this normally. I'm going to interrupt you. But we're hearing

only one word in for which might make for great sort of quiz games, but is not suitable for listening to an important discussion on geopolitics at the


We're going to try and reestablish the connection with you to see if we get a better connection.

Back to Nic Robertson, who hopefully is still in Moscow to talk me through this.

Nic Robertson, look, I see the significance of this -- very important and President Macron trying -- not trying, moving forward to build this role.

But Olaf Scholz in Washington. Man missing?


ROBERTSON: You know, I think there is such an effort by the United States to align all these European partners. And, you know, when we look at the

conversations that are going on and the conversations tomorrow, we know him the Ambassador there was saying Emmanuel Macron will be in Kyiv tomorrow,

and one of the things President Putin hopes it will do, which as I was saying was, put pressure on the Ukrainian leadership to talk to the

separatists and they will pick up the Minsk Agreement.

And we know the U.S. Secretary of State's view of how the Minsk Agreement has been implemented so far, which is that the Ukrainian leadership is

doing pretty much all the things they're supposed to be doing and Russia is not, so that tells you the lay of the land there.

But there are a lot of voices coming together. Another meeting that President Macron will be having tomorrow will be with Olaf Scholz in

Berlin, and the Polish President Duda will meet the three together.

Now Poland has just received 1,700 U.S. troops. The British have just said they'll send another 350. Poland is one of those nations that finds itself

caught by its history, by geography, and feels very threatened by Russia that takes this sort of bellicose position that it has taken by beefing up

forces, and essentially threatening Ukraine and the Europeans into a conversation.

So you know, Olaf Scholz is hearing from others who, you know, not just the U.S., but others in Europe to stand together. Unity is the word.

QUEST: Nic Robertson in Moscow. Stay with us again. Back to the ambassador. Sorry, Nic Robertson in Moscow, back to the Ambassador in


So look, I mean, skeptics and cynics say this is President Macron making his move, becoming the elder statesman of Europe to some extent in a vacuum

that has been left by Angela Merkel. Am I too cynical?

ETIENNE: It is not there yet. We have France and Germany and France is also at the presidency of the Council of the European Union, but there is

also a strong coordination as your colleague has said, President Macron and President Biden has opened twice in the previous days. This question is a

question for the security of Europe, and it shows unity in (AUDIO ISSUES) as American allies.

QUEST: Ambassador, I'm going to have to say that we still can't hear you clearly. It's either connection on our end or your side. So, I do apologize

to you, Ambassador.

We're basically hearing one word in three, but thank you for joining us, and what I propose is in the spirit of mutual cooperation that we talk

after, and we can then maybe talk tomorrow after the events, and we could ask you, we can go through what we talked about afterwards.

The ambassador in Washington joining me Thank you, sir.


Chancellor Olaf Scholz is to be Jake Tapper's guest in "The Lead." He will be straight from his meeting with President Biden assuming the meeting

finishes on time. It's about an hour from now. We'll have that interview.

And of course, again, let me reiterate when that meeting takes place between -- sorry, when the press conference takes place, either the Putin-

Macron or the Biden-Scholz, we will bring either of them to you.

There you are, you see, they are assembled in Washington. I don't think they're even assembled in Moscow at the moment for that news conference and

its hours. It is 11 o'clock at night, they've been talking for hours.

As we continue, it is merger Monday. Spirit and Frontier announced a $6.6 billion deal and it will create the fifth largest U.S. airline.

And talk about possible Peloton acquisition has picked up steam. It is all sorts in the running -- Amazon, Nike, Apple all in the conversation -- in a




QUEST: Two of America's leading ultra-low cost carriers are planning a merger. It is Frontier Airlines and Spirit. It's a $6.6 billion deal. The

combined company will become the fifth largest airline in the U.S. behind American, Delta, United and Southwest, but this merger is not only about

size, rather geographic reach.

Look at this map. You can see on this chart, you can see Frontier versus Spirit, and you get an idea of the geographical significance. Obviously,

they both have presence in the northeast, but one is much greater than the other.

The analytics firm, Cirium says around 18 percent of their routes currently overlap. The new airline would offer flights to more than 145 destinations.

Three new low-fare airlines have launched last year in the United States -- aha! Air Hotel, Avelo Airlines, but the best known and the one that's doing

the best so far Breeze Airways from David Neeleman.

Two more are hoping to launch this year as the pandemic creates opportunities to purchase planes or lease them cheaply, and many highly

trained staff are on the market having been laid off.

Mary Schiavo joins us now. I can see the geographic importance here, but we thought that perhaps consolidation could not happen because of regulatory

issues. We know that the Department of Justice and Congress are against this. Will this fall foul of regulatory issues, do you think?

MARY SCHIAVO, CNN AVIATION ANALYST: Probably not, and remember, when an airline is concerned, there are two different regulatory bodies. Not only

does the Department of Justice weigh in looking at anti-competitive effects, market concentration, and the Justice Department does look at the

city pairs. So you are exactly right to highlight where the two airlines serve the same city pairs.

But then you also have to look at the Department of Transportation and the Department of Transportation over the last two decades has watched the

number of airlines fall from about 96 to 61. So, not surprising, the DoT actually has regulations in place as to how you do a merger, and you have

to have a transition plan and they're going to look like safety and security and training and manuals and even how you handle your hazmat.

So this airline -- these airlines will have to go through two different government departments, but I think they'll make it through.

QUEST: What about the competitive issue here. The two involved are ultra- low cost, so their costs are low and their fares are very low, and whilst one might raise eyebrows at questions of standards of service and things

like that. I mean is this going to reduce competition?


SCHIAVO: Yes. And now that is the job of the Department of Justice. That's what they're going to be looking at. And you know, so many merged in the

past, a lot of people thought they would never go through because of the effect on competition and that the two airlines that were merging basically

would control many city pair markets, and the Justice Department did let them go through.

In fact, they more often than not let the mergers go through than don't. And remember, the F.A.A. is going to weigh in and say: Now wait a minute,

we have to oversee two airlines and two certificates. And we can, and you know -- and low-cost carriers often get a lot of special emphasis or a lot

more close scrutiny since the value debt tragedy. So the F.A.A. may be weighing in that it will allow these low-cost carriers to actually be more

competitive and might bring more competition.

But time will tell and I think the Justice Department can be persuaded that the overlap on city pairs is not anything unlike other mergers they've


QUEST: And certainly, it can be remedied with loss of slots or gates or whatever.

Finally, we have now a situation where there are the legacies, full service, there's the true sort of low costs, if you will, Southwest,

JetBlue, and you've now got the ultra-low costs. And, and yet, at the same time, they're all fighting for the same passenger. Who wins?

SCHIAVO: Well, who wins are probably those with the new idea. Now, I've actually been able to be in cities where Breeze is serving them and people

are very entranced with the point to point service of Breeze and the new aircraft.

So you know, it's going to be who has got a better idea, and remember, with the Justice Department looking at it, the F.A.A. always says: Well, you

have a low-fare carrier, but a lot of times the cost is the same. So you know, they might actually say, there is no such thing as a low cost, but

perhaps a low-fare carrier and that's really going to be where this all comes down and shakes out, I think.

QUEST: You're right. When the low fares aren't matched by the airline's low costs, then it tends to go badly wrong. Thank you, Mary Schiavo.


QUEST: In cycling, the main group of races is known as the Peloton, and other races on to inquire the exercise company of the same name. Amazon,

Apple, and even Nike could all be in the chase. Amazon and Nike are reportedly exploring bids. Tech analysts like Dan Ives says he would be

shocked if Apple wasn't in his words, aggressively involved.

Peloton's stocks have been about 20 percent, give or take zero, let's see how we are doing at the moment. There you are, 22 percent, it is getting

better, still down nearly 70 percent since November and that's what's made it an attractive acquisition target.

The company is reporting its quarterly results tomorrow. Paul La Monica joins us.

Is this a case, Paul, of at the right price someone will buy?

PAUL LA MONICA, CNN BUSINESS REPORTER: I think at the right price you will have interest obviously on the part of Amazon, Apple, and Nike. What I'm

not so certain, Richard, is whether or not Peloton really wants to sell. It seems like this is a company that likes its independence. Of course, there

is probably a price that management and the board would accept and Peloton has obviously had a lot of struggles in the past few months, so it is

understandable that there would be pressure on this company to sell out.

But I think also, if you're an Amazon or an Apple or Nike you have to wonder there is baggage there. There's a lot of competition in this

business now. Just buying Peloton really makes sense.

QUEST: Okay, my executive editor absolutely adores Peloton and the mere mention of it. Pamela always will say: Oh yes, they are very important.

However, when we look at the problems they faced, and yet at the same time, Amazon, we see there, $80 billion in cash, Apple could buy Peloton many

times over and still take every Peloton subscriber out for an ice cream.

LA MONICA: Hopefully, the Peloton subscribers would turn down that ice cream. That's probably why they are staying a bit on the Peloton is in the

first place, but Richard, here is the thing that always strikes me about the Peloton and dare I say, I'll call it cult, like your executive

producer. Peloton is a company that is not nearly as big as I think its fans think it is.

It has about six million subscribers, which is relatively tiny compared to the user base of things like Apple and all of its subscription services,

Amazon and Prime and obviously, the number of people who own Nike sneakers.


Yes, Peloton has its fanatics and there are probably many people on the coasts, so there is that heightened sense of self-importance because if

it's big in New York and LA, it must be big everywhere, so I'm not so sure that Peloton is the company that is as important in the food chain of the

exercise business as people think it is, and because there's so much competition out there and people are starting to go back to the gym, I just

don't know if there's really a value proposition to buy Peloton when you could buy a cheaper exercise equipment company if you are Apple and want to

get into buying you know, actual, you know, selling cycling and treadmills, which I'm not sure Apple wants to do.

QUEST: Paul La Monica, thank you. @RichardQuest is where you can just tweet me a thought if you're a Peloton user, and would you want it to be

bought by Apple or Amazon or anybody? @RichardQuest. It would be nice to hear your thoughts.

Day 11 of the protests against Canada's COVID-19 restrictions in Ottawa and the city has entered a state of emergency. Truckers are continuing to run

the streets. Police have issued more than 450 tickets since Saturday morning and the city's mayor has called the demonstrations a serious danger

and a threat to safety and the security of residents.

Paula Newton is in Ottawa, joins me now.

Paula, what's driving this -- pardon the pun -- but what's driving this? The last thing one thinks of when one thinks of Canada is this sort of


PAULA NEWTON, CNN CORRESPONDENT: It is true. And for the majority of this pandemic, really most Canadians have been compliant, right, Richard? We

have one of the highest vaccination rates in the world and people have been wearing masks.

These truckers reacted to a vaccine mandate, and here is the thing, Richard, it started with the Freedom Convoy out west. They always plan to

stop in Ottawa and stay in Ottawa until that vaccine mandate was lifted. But what's happened now is they want it all gone now, Richard.

They want the vaccine mandate gone, mask mandates gone -- any kind of COVID-19 restrictions lifted. And that issue here is the fact that while it

is a minority of Canadians, some Canadians have joined them. They're just fed up, Richard, and they have really hit a nerve with some.

I will say this has sparked so much controversy not just here in Ottawa, but really throughout the country. And the reason is the fact that the

Ottawa Police now say that, look, this is unlawful that it is taken their city. It has sieged -- it is a siege mentality right here.

And in fact, the hostages, the residents say they feel like hostages, like their city has been hijacked. Most of the businesses in the downtown core

are completely shut down and more than that, Richard, there are questions about the funding to this.

GoFundMe has now suspended, likely canceled a very lucrative fundraising page. And there is of course that element to that even people like Senator

Ted Cruz, the former President of the United States are encouraging the truckers to keep it up.

QUEST: Okay, so how does it resolve itself? Unless they go voluntarily, you can't use horses, teargas, and hoses to get rid of those trucks.

NEWTON: Yes, and the here is the issue, logistically it's a problem, but obviously it is a problem if you really want to avoid a confrontation and

violence. The Police Chief gave us an update a few hours. Again, he says they will continue with enforcement, right, Richard?

When we think about these businesses, these trucks are a major investment for these people. If they start to get a raft of tickets, if they get their

insurance pulled, if they get their licenses pulled perhaps through the days, things will change.

If you listen to them, they say, they are hunkered down. They've got supplies. They're ready to stay here until these mandates are lifted.

But you can sense that while the city here, police are getting tougher perhaps with enforcement, they still need reinforcements. They're now

asking for the Federal and provincial governments to triple the amount of officers on the ground.

This is going to be a while, Richard.

QUEST: And in a sentence, if you were to take a straw poll across Canada, what would it be?

NEWTON: Listen, the vast majority of Canadians in the polls show it, Richard, do not agree with this. They agree that people should be able to

voice their opinions, but not for this long. I'll leave you with a word, this is called the Freedom convoy. Well, Canadians realize, this is taking

away the freedom of the people in the center of Ottawa

QUEST: Paula Newton who is in Ottawa first tonight. Thank you, Paula.

A return to the workplace is taking longer than expected. Few offices in Manhattan have reached even 50 percent capacity.


Mark Dixon will be with me, the founder of the workplace provider, IWG, in a moment.



QUEST: Amid the Omicron wave, New York City offices are nowhere near close to back to full capacity. Roughly 16 percent of employers said in January

that Manhattan offices had daily attendance higher than 50 percent. That's according to the Partnership for New York City. The local business lobby

group does expect that number will more than double by the end of Q1 as the city enters springtime.

The FT is reporting the firm Jefferies hit the 50 percent mark last week after starting to bring back stuff in October. The paper says Citibank is

requiring just two days a week in the office for most employees. BNY Mellon, Bank New York Mellon is reportedly going to let staffers work

remotely from anywhere they want for -- up to two weeks a year. Mark Dixon is the global CEO and founder of IWG, He joins me now.

Mark, it is fascinating because there is a revolution underway. Let's just fill it for the moment. Put aside, you know, I mean, we all accept that the

health issues and safety will dictate it but put that aside to one moment. Once this is over, do you believe a revolution will have taken place?

MARK DIXON, FOUNDER AND CEO, IWG: Yes, but look, absolutely, Richard. It's -- a revolution is the way to describe it. Because it's a fundamental

change to the way people want to work. And companies want to support their workers. And it's a permanent change. And it will be one of the lasting

legacies of the pandemic.

QUEST: So how do you capitalize on that? Let's take a company like mine. I have no idea what our plans are. But Warner Media, we've got maybe 10, 15,

20 floors in this building. If we move to a hybrid version of some sort or another. Do we need that number? Smaller firms may sort of give up offices

completely and move to people like yourself. How do you capitalize?


DIXON: Well, look, for us, you know, we're seeing that move happening. So, you know, this year, we'll see the most rapid level of growth that we've

seen, in the last 20 years of the company's history, as more and more people seek to work more remotely. So people are going to offices, they

just don't want to all be forced to come into downtown Manhattan or downtown in any city in the United States.

And this is pretty much a worldwide phenomenon. So this is all about providing places for people to work, and work with other people. But all of

those people may not be for the same company, but just about anywhere.


DIXON: And it's that flexibility of the workplace. That's what -- that's what companies and people are looking for.

QUEST: Right. That flexibility, but there's a glut of office space. I mean, there is a huge amount of office space available. There are loads of former

shops, real estate shops, banks, that are now doing a sort of a temporary office, we work type environment. So that's putting a downward pressure, if

you like, on your ability to charge for the assets.

DIXON: Well, yes, I mean, look, if you own real estate in many downtown locations, it's going to be a difficult transition in the years to come.

There will be undoubtedly less people looking for space to bring everyone together. What we're seeing these companies do and want to be in downtown

areas, but they want smaller amounts of space, better designed, where people actually want to come in, it's much more for collaboration rather

than everyday work.

So there will be fundamental changes to the cities around the world. And we're seeing that happen in real time.

QUEST: I'm feeling there's a tension at the moment in the workplace. And it's this. Management say, we want you back in the office. But we promised

and we'd sort of believe but not in a messianic way, in hybrid working. Employees say you promised us hybrid working, you're now reneging on that

promise, how far do you think this will go?

DIXON: Well, it -- look, it will just become the norm. It's going to be difficult to hire the right people, unless you as a company provide some

level of hybrid working. And this is not for all companies. But for quite a large proportion of companies it's seen as being a fundamental part of the

workplace offer, part of the job offer. So if you want the right people, you're going to have to do it

And for companies as well with also the, you know, the elephant in the room, which is the climate and so on. It, you know, basically you can

reduce your carbon footprint by about 70 percent by moving to hybrid. So if it's what people want, you can take the carbon footprint box and its lower

cost, why wouldn't you make that move?

QUEST: And so, let's just turn to your own company and your competitors. For you what will distinguish the ability for, you know, why come to you

rather than your competitors. Bearing in mind, as I say, we all agree there's a glut of office space, there's a glut available, and your

competitors have as much as you. So what will be the fighting ground for you against your competitor?

DIXON: The fighting grounds are simple one. It's just being everywhere. It's about platform. It's about being anywhere where people live. You need

to have a place for people to work, and it's combining all of that onto a platform. That is what we're doing. We are -- today in 1100 cities. ur

objective by the end of 22 is to increase the number of cities by about 50 percent. That's what's happening in our company.

QUEST: Mark, we'll talk more about it. I'm grateful that you've joined us this late where you are. Thank you for joining us out. I appreciate it.

DIXON: Thank you very much.

QUEST: It's QUEST MEANS BUSINESS for you at the start of a new week. The tennis star Peng Shuai is speaking out. This has been a huge

misunderstanding. But of course, it's not as it seems. I'll tell you about it after the break.



QUEST: (INAUDIBLE) to the White House and President Biden and the German Chancellor Olaf Scholz.

JOE BIDEN, PRESIDENT OF THE UNITED STATES: I'd like to start by thanking Chancellor Scholz for making this visit to Washington. We had an

opportunity to have a very productive meeting. I think our staffs wondered whether we were going to let them in at all. We spent the first half hour

or more talking together and it's been a very, very useful meeting.

One of the things that struck me was the shared values, and -- that shape how each of us approaches leadership, among them the foundational

commitment to the dignity of workers and the need to treat all people with respect.

So, I enjoyed speaking with you, Olaf. And I know, working together, we'll continue to strengthen and deepen our alliance and the extensive

partnership between Germany and the United States.

Of course, at the top of our agenda today was our united approach to deterring Russia's threats against Ukraine and the longstanding principles

of rule-based international order. That's what we spent most of our time talking about.

Germany and the United States, together with our allies and partners, are working closely together to pursue diplomatic resolutions of this

situation. And diplomacy is the very best way forward for all sides, we both agree, including best for Russia, in our view. And we have made it

very clear we're ready to continue talks in good faith with Russia.

Germany has also been a leader in pushing de-escalation of tensions and encouraging dialogue through the Normandy Format. But if Russia makes the

choice to further invade Ukraine, we are jointly ready and all of NATO is ready.

Today, the Chancellor and I discussed our close cooperation and developed a strong package of sanctions that are going to clearly demonstrate

international resolve and impose swift and severe consequences if Russia violates Ukraine's sovereignty and its territorial integrity.

And I want to thank Germany and our -- and all of our other partners in Eastern Europe -- in the European Union for their work in this united

effort. We are in agreement that it cannot be business as usual if Russia further invades.

We also discussed our shared commitment to NATO's Article 5 responsibilities and reassurance of our eastern flank allies. We're united

in that as well.

Already, the United States is sending troops to reinforce the Alliance, and I want to thank the Chancellor of Germany for hosting additional U.S.

forces and for the longstanding hospitality to our women and men in uniform.

We also discussed the challenges we're facing to the international order from China, along with Russia and other competitors that are pursuing more

illiberal futures.

We've agreed that Germany and the United States will continue to work together to ensure that the rules and principles governing emerging

technologies are geared to advance freedom of opportunity, not repression or authoritarianism.

We also reaffirmed our commitment to completing the work of integrating the Western Balkans into the European institutions and to finally realize a

Europe that is whole, free, and at peace.

With Germany holding the presidency of the G7, we also talked about how that form can harness the world's leading democracies to advance a robust

agenda of global -- on global challenges, from ending the pandemic to addressing climate change.

So, the bottom line is this. Whether as Allies in NATO, partners through the European Union, as leaders of the G7 and G20, or through our strong

bilateral relationship, Germany and the United States are close friends and reliable partners, and we can count on one another.


There is no issue of global importance where Germany and the United States are not working together strength-to-strength and applying and amplifying

our efforts together.

So, I want to thank you, Olaf, for making the journey today. And I look forward to being the first of many opportunities we can spend together,

beginning this meeting and throughout the rest of the year and the rest of our terms.

So, thank you and welcome. The floor is yours, sir.

OLAF SCHOLZ, CHANCELLOR OF GERMANY (through translator): Thank you very much. Good afternoon from my side as well. I'm very grateful that we had

the opportunity to talk in much detail today, and that I was able to make my first official visit here and that we also could talk about the

important questions that we're dealing with today.

We are in a very difficult situation, and it is a good thing that Joe and I were able to discuss what we need to do in this difficult context.

Of course, there is a military threat in Ukraine -- against Ukraine, and we cannot remain silent on that. We see the number of Russian troops along the

Ukrainian border, and that is a serious threat to European security. And this is why it is important that we act together, that we stand together,

and that we do what is necessary together.

It is important that all allies -- the U.S. and Germany, the transatlantic partnership between the U.S. and Europe, NATO -- say the same thing, speak

with one voice, and do things together. And we made it very clear. If there was a military aggression against Ukraine, this will entail severe

consequences that we agreed upon together, severe sanctions that we have worked on together.

So, there will be a high price for Russia. This is a very clear message. Everybody has understood it. And I think this message has been made clear

again and again so that even Russia has understood the message now.

What is important is that we also intensively worked on preparing possible sanctions together. We don't want to start once there is a military

aggression against Ukraine. We have prepared a reaction that will help us to react swiftly if needed, and we will do that.

At the same time, it is important to use all diplomatic means we have. And I'm very glad about your great willingness to move forward together,

especially the bilateral talks between the U.S. and Russia, and, of course, the talks that we have agreed upon within the NATO-Russia format.

This is also important, also because Russia needs to understand that NATO stands together and that NATO is prepared. After so many years, there have

not been any talks in this format. So, it is a good sign that they are happening now. Of course, we have controversial debates there, but it is

important that we talk.

And the same is true for the OSCE where we need to discuss about security in Europe. This is also a progress, as tiresome as it may be. And we have

not yet reached any very substantial conclusions yet, but it is good to see that this format plays a role now.

And the same is true for the talks between Ukraine, Russia, France, and Germany -- the Normandy Format. We have this format, but we haven't been

able to really use it in a productive way over the last few years, so now we have come back to that format. We're having tough discussions in that

format, and that shows that there are ways that will lead us out of this difficult situation.

And this dual-track approach of clear announcements with regard to sanctions that will be taken if there is a military aggression and, at the

same time, keeping all dialogue formats open -- I think this is the most promising strategy one can have. And that is what we're doing together, and

we stand side by side in this approach.

We also talked about many other topics that are important for us today, especially when it comes to the G7 presidency of the Federal Republic of

Germany. We will work closely as strong economies, strong democracies. And we also therefore have a special mandate to contribute to cohesion


And part of this is that we continue to do everything we can to make sure that the citizens of the world can be vaccinated not only in our rich

countries, but also in countries where people would love to have the vaccine but don't have access yet.

And these are initiatives that we have carried out together and that are of utmost importance worldwide.


The same is true for fighting manmade climate change -- a big topic that keeps us all busy. Even though it is obvious that only a global solution

can be successful, because climate is a global thing. It doesn't stop at national borders.

As an industrialized nation, we have an important contribution to make. We have technological opportunities, economic opportunities, and have to use

them in order to prepare a situation where we and others can enjoy prosperity without harming the climate.

This is the big challenge that we see and that is of great importance to us. So, this is why we want to work together on this strategy and use a

climate club of likeminded people and partners.

These are some of the topics we discussed. And once again, the personal discussion we had illustrates the excellent cooperation between our

countries, the strong bond we have within our transatlantic partnership, and the fact that both countries can rely on each other.

BIDEN: Thank you very much. We'll now take a couple questions to each -- Reuters. Andrea, you've got the first question.

UNIDENTIFIED FEMALE: Thank you, Mr. President. And thank you, Chancellor Scholz. Mr. President, I have wanted to ask you about this Nord Stream

project that you've long opposed. You didn't mention it just now by name, nor did Chancellor Scholz. Did you receive assurances from Chancellor

Scholz today that Germany will, in fact, pull the plug on this project if Russia invades Ukraine? And did you discuss what the definition of invasion

could be?

And then, Chancellor Scholz.

(through translator): If I may ask you, Chancellor Scholz, you said there was some strategic ambiguity that was needed in terms of sanctions. I just

wanted to know whether the sanctions you are envisaging and the E.U. is working on and the U.S. as well, are already finished, finalized, or is

there still work ongoing?

And you're not really saying what the details are. Is that just an excuse for Germany, maybe, to not support the SWIFT measures?

BIDEN: Let me answer the first question first. If Germany -- if Russia invades that means tanks or troops crossing the border of Ukraine again

then there will be -- we -- there will be no longer a Nord Stream 2. We will bring an end to it.

UNIDENTIFIED FEMALE: But how will you -- how will you do that exactly since the project and control of the project is within Germany's control?

BIDEN: We will -- I promise you, we'll be able to do it.

SCHOLZ: Thank you very much for your question. I want to be absolutely clear. We have intensively prepared everything to be ready with the

necessary sanctions if there is a military aggression against Ukraine.

And this is necessary. It is necessary that we do this in advance so that Russia can clearly understand that these are far-reaching, severe measures.

It is part of this process that we do not spell out everything in public because Russia could understand that there might be even more to come. And,

at the same time, it is very clear we are well prepared with far-reaching measures. We will take these measures together with our Allies, with our

partners, with the U.S., and we will take all necessary steps. You can be sure that there won't be any measures in which we have a differing

approach. We will act together jointly.

And possibly this is a good idea to say to our American friends. We will be united, we will act together, and we will take all the necessary steps. And

all the necessary steps will be done by all of us together.

UNIDENTIFIED FEMALE: And will you commit today -- will you commit today to turning off and pulling the plug on Nord Stream 2? You didn't mention it,

and you haven't mentioned it.

SCHOLZ: As I've already said, we are acting together, we are absolutely united, and we will not be taking different steps. We will do the same

steps, and they will be very, very hard to Russia, and they should understand.

BIDEN: You can recognize someone now, Chancellor.

SCHOLZ: Herr Fischer.


MICHAEL FISCHER, DEUTSCHE PRESSE-AGENTUR FEDERAL POLITICAL CORRESPONDENT (through translator) Michael Fischer, DPA. Mr. President, one question to

you. The U.S., over the last few years have exported heavy weapons to Ukraine and Germany excludes that -- has only delivered 5,000 helmets to

Ukraine. Don't you think that NATO should act unanimously in this respect and Germany, as the strongest European NATO partner, should also deliver

heavy weapons to Ukraine? And Ukraine has asked Germany to do so.

And on Nord Stream 2, I would also like to ask. Don't you think, with regards to the threat posed by Russia, Germany should already rethink its

position on Nord Stream 2?

And the third question, if I may. Over the last few days and weeks, there has been severe criticism from the U.S. media and from Congress as well

vis-a-vis Germany about the reliability of Germany as an ally. This has been called into question. Do you understand this criticism? Is Germany a

reliable partner, from your point of view?

And, Mr. Chancellor, also a question to you. Nord Stream 2, you said all options around the table. You're not mentioning Nord Stream 2 by name.

Don't you think if you were to spell this out, you could win back trust as a strong ally here for the U.S.?

BIDEN: There's no need to win back trust. He has the complete trust of the United States. Germany is our -- one of our most important allies in the

world. There is no doubt about Germany's partnership with the United States. None.

With regard to helping Ukraine, one of the largest contributors financially to Ukraine has been Germany. Germany has been in the forefront of making

sure -- providing economic assistance.

You also asked the question -- you asked so many I can't remember them all. But in terms of the U.S. media saying Germany is not reliable, Germany is

completely reliable -- completely, totally, thoroughly reliable. I have no doubt about Germany at all.

SCHOLZ: We are united. And the transatlantic partnership between Germany and the U.S. is one of the permanent pillars of German policy, and it will

be relevant in the future as well -- just as relevant. And this will be one of our top priorities always.

On behalf of NATO, we are the country in continental Europe that is doing - - making the largest contribution: financial means and also military power.

And we are the country that contributes a great share -- we're not fully -- we don't fully agree with you as who pays the biggest part of financial

support to Ukraine. So, since 2014, about $2 billion U.S. direct bilateral support and, within the E.U., an additional 3.8 billion that is made

available. So a substantial financial means to stabilize the Ukraine economy, and we are willing to continue with that sort of contribution.

So, this is the very strong and unbreakable friendship between our two countries. Part of this is that with regard to the difficult situation at

the Ukrainian border due to the Russian troops, we have made it very clear we will unanimously act in terms of sanctions.

UNIDENTIFIED MALE (through translator):) Mr. President, once again, a question with regard to arms exports. Do you think it is okay that NATO

partners have different approaches here?

And on Nord Stream 2, once again, do you think the current positioning of Germany with regard to the Russian threat is OK?

BIDEN: Look, there is no doubt in America's mind that Germany is an incredibly reliable Ally and one of the leading physical powers in NATO,

number one.

Number two, the notion that Nord Stream would go -- Nord Stream 2 would go forward with an invasion by the Russians -- it's just not going to happen.

Now, Wall Street Journal, Sabrina.

UNIDENTIFIED FEMALE: Thank you, Mr. President. Based on everything you know now, do you think that President Putin will authorize an invasion of

Ukraine before the end of the winter?

And what is your message to the roughly 30,000 Americans who are currently in Ukraine? Do you think that they should leave the country?