America’s Collision Course With The Debt Ceiling
As the nation counts down to default, Diane talks to longtime Congress watcher Norm Ornstein about the debt limit negotiations, what's at stake and whether he sees a way forward.
ECB President Mario Draghi unveiled details of a new bond-buying plan aimed at easing the eurozone’s debt crisis. The new U.N. and Arab League envoy for Syria, Lakhdar Brahimi, said searching for a solution in the country was like “standing in front of a brick wall.” And Secretary Hillary Clinton continued a six-nation trip through the Asia-Pacific region where she faced harsh criticism from China’s state media. James Kitfield of National Journal, Elise Labott of CNN and Tom Gjelten of NPR join Diane for analysis of the week’s top international news stories.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Europe Central Bank approved a large government bond purchase to prop up the euro zone. The new special envoy to Syria called the death toll there staggering and urged international unity to end the conflict and Afghanistan removed hundreds of troops in response to insider attacks against U.S. and NATO forces.
MS. DIANE REHMJoining me for the week's top international stories on the Friday News Roundup, James Kitfield of National Journal magazine, Elise Labott of CNN and Tom Gjelten of NPR. Do join our conversation, call us on 800-433-8850, send us your email to email@example.com. Follow us on Facebook or Twitter. Good morning to all of you.
MS. ELISE LABOTTGood morning, Diane.
MR. JAMES KITFIELDGood morning, Diane.
REHMJames Kitfield, the European Central Bank finally moved yesterday to try to ease that Eurozone crisis. It is going to be a big deal in the long run?
KITFIELDWell, I think it is a big deal. I don't know if it's going to solve the issue totally, but the, you know, it is the most decisive step we've seen so far from any European institution and as we've seen as in the past, Germany was once again a dissenting vote, but apparently was overruled in this. ECB has said, the European Central Bank has said it will buy short-term government bonds from these troubled countries like Spain and Italy whose borrowing costs and interest rates are rising to unsustainable levels.
KITFIELDThat is the most immediate scary issue that was facing sort of the euro zone. So we've, you know, once again avoided another catastrophe. This one actually feels like something a little bit different because there's -- the problem with Europe has always been you've got all these 17 different governments.
KITFIELDNo really central organized institution, but the one that really is a central institution that, not like our own Fed, could actually have some dramatic impact, was the European Central Bank, but it was being held back by this disagreement between the Germans and Draghi, who is the head of the Central Bank. He seems to have won that argument and that's probably a very good thing. And if you look at the markets and they've responded, they certainly think it's a good thing.
REHMThey responded yesterday, I'm not sure about today, but is it going to address the deep structural problems that the zone has?
MR. TOM GJELTENNo, the short answer is no, Diane. And the reason is because the southern European economies are far less productive than the northern European economies but they can borrow money at the same rate. And the fear is that this will just encourage them to continue borrowing money and will not force them to address those structural issues, the lack of competitiveness, the rigidity in the labor market, the, I won't say overspending anymore because they're all subject to austerity.
MR. TOM GJELTENBut they haven't had the discipline that the northern European countries have had and until they deal with those issues, now theoretically these countries, in order to take advantage of this bond buying program, will have to meet certain criteria. But the head of the European Central Bank as I already said, he'll do whatever it takes to save the euro so it's not clear where the leverage will be to force these countries to sort of get their economic policy in shape.
LABOTTWell, Tom is right, that basically these countries have to agree to a program of reforms and they have to agree to some oversight, possibly by the International Monetary Fund. So there is very strict criteria for these countries, but the question is if they don't meet criteria and they stop those bonds, then their rates increase and the whole cycle starts all over again.
LABOTTSo when Mario Draghi, the president of the European Central Bank, says, I'm going to do whatever it takes, it basically, as Tom says, is an incentive for these countries to see if it works. If it's not, I know Mario Draghi is going to bail me out anyway so -- and the question is, is whatever the European Central Bank doing whatever it takes, do they have what it takes?
REHMAnd the other question is to what extent what they do is going to in the long run affect what we do with our own fed, Tom Gjelten?
GJELTENWell, you know the interesting thing, Diane, is that even though the whole world got in this economic mess together, the United States pulled through and came out of it much more quickly and effectively than Europe did. We just got the news, kind of the background to this news this week that the entire euro zone is slipping back into recession. Even Germany, which has been the powerhouse of that region and it is not good news for the U.S. economy if Europe slips back into recession.
KITFIELDCan I just reiterate that, I mean, this was very conditional and I think that, you know, Mr. Draghi has said very clearly that only if you are under EC approved austerity program can you tap into this borrowing. And secondly, you know, there is fundamental disparities between southern Europe and northern Europe that will never be solved. You're never going to have the productivity out of Greece or Portugal that you have out of Germany and France. It's just not going to happen.
GJELTENI think that a certain amount of difference there is built in because Germany like the fact that Greeks and these others who can borrow money, buy German products. Most of their, you know, exports are to other fellow euro zone members. So I think some of that's built in there, but Tom is exactly right, it has to be within the debt ceilings that they have said, you cannot borrow over three percent of GDP. So I don't think it spells necessarily disaster for the Eurozone and its breakup, but it's a step towards actually having more centralization, which has been the problem all along.
REHMJames Kitfield, he is senior correspondent for National Journal. Let's move onto Syria where we have a new special UN envoy. He's taking up the post after Kofi Annan, who was on this program yesterday, resigned last month. Tell us about Lakhdar Brahimi.
LABOTTLakhdar Brahimi is a veteran Algerian diplomat at the United Nations. He's basically been in every hot spot in the world. He helped negotiate an end to the Lebanon civil war when he was in Lebanon many years ago. He has been in Sudan, he's been in Uganda, he's been in Afghanistan as an envoy to the UN and basically known as a very patient diplomat who is doesn't necessarily take sides, tries to see all sides. Didn't come in with a very optimistic prognosis.
REHMHe said the death toll is staggering.
LABOTTHe said the death toll is staggering and he said, look, I know that my mission is nearly impossible. He said it's a little bit of vanity, it's a little bit of his need to continue public service that he wants to try at this job, but nobody necessarily thinks that he'll be able to make much progress. One thing I think he has in his corner that Kofi Annan, as envoy, did not -- the Annan plan called for a transition in Syria which ultimately, if you go back to some of things that the Arab League was saying, would call for President Assad to step down, for somebody, a transitional government, to take his place.
LABOTTLakhdar Brahimi is coming in and saying, listen, I'm going to deal with all sides. He didn't come in immediately and say, President Assad should step down. He said, I'm going to speak with all sides and try and get them to talk to one another. Because he knows that even as beleaguered as President Assad is, he's still a force to be reckoned with.
REHMTom, what can he do that Kofi Annan couldn't do?
GJELTENNothing, Diane, nothing. I don't see any way that this is a relevant development at all. I mean, the UN monitors have largely pulled out of Syria, but that's not to say that there is not a diplomatic way forward. I think that the all attention now is not on Brahimi and the UN, but on the Arab League and we've had some very strong statements. I think in the past week you already talked about the importance of what Mohammed Morsi, the new president of Egypt said when he was in Iran.
GJELTENReally, publicly chastising Iran for siding with the Assad regime and Morsi of Egypt followed that up at a meeting of the Arab League in Lebanon this week, again putting very strong pressure on Assad, calling on him again to step down. I think that's where the ball is right now is with the Arab League, the Arab countries that are finally putting some concerted pressure on the Syrian regime.
REHMAnd what is his plan? He's saying the Arab League has to work together to do this, but if Bashar al-Assad is not listening, what happens?
KITFIELDWell, the template is Libya. I mean, we didn't get involved in Libya until the Arab League basically got together and for the first time in its really checkered history, you know, united behind a move that something had to be done and basically invited the international community to form an intervention for us, which NATO took that and, you know, got a UN Security Council resolution.
KITFIELDThat is not going to be forthcoming this time because China and Russia have absolutely, going to veto this. So the question is if the Arab League acts, which is what Morsi with (word?) in Turkey wants and you have regional leaders like Turkey willing to step and maybe this lead this effort. You know, NATO's going to be eyeing this because France and Britain have said very clearly this, nothing's off the table. They took the lead in Libya.
KITFIELDYou know, we've said all along this civil war left to burn unattended is going to cause that whole region to destabilize. We saw it this week with Iraq, actually allowing Iran to ship, you know, over its own air space, arms into Syria. Now, Iraq is lead by a Shia or is basically siding with the Shia in Iran and the Alawites who are an off suit of Shia and Syria against all the Sunnis in the region including Morsi in Egypt and the Saudi Arabians. So we're seeing the Sunni - Shia divide get worse and start to be irritant in an entire region and that is why I think NATO and a lot of people will eyeing this and saying something has to be done.
REHMAnd now the AP is reporting that Canada is shutting its embassy in Tehran and severing diplomatic relations with Iran because it is providing military assistance to Syria and that the Canadian embassy in Tehran is going to close immediately. Iranian diplomats in Canada have been given five days to leave, Tom.
GJELTENWell, that's really interesting, Diane. You know, there was this meeting of the Non-aligned movement in Tehran a couple of weeks ago and the outcome of that was a unanimous declaration by those countries that Iran had the right to develop a nuclear program. That was a very depressing development for the United States because it appeared that the isolation of Iran was not going anywhere. But now, with Syria you're getting exactly that isolation.
REHMTom Gjelten of NPR, Elise Labott of CNN, James Kitfield of National Journal. Short break here, we'll be back to talk more about Canada and other subjects. Stay with us.
REHMAnd just before the break, we were talking about the fact that Canada has just severed ties with Iran because of the assistance that Canada says Iran is providing to Syria in the way of military assistance. Turning now to Canada's own internal difficulties, the Quebec separatism is now back in the news. Explain, Tom.
GJELTENWell, there were provincial elections in Quebec this week to elect a new provincial government. And the Parti Quebecois has been voted back into power and the position of the Parti Quebecois is that -- did I say that right?
REHMYeah, you did. You did.
GJELTEN...it's that Quebec should be a sovereign country. It should separate from Canada and become a country all by itself. Now it's not going to happen because it's going to be a minority government. They only got a minority of the seats in the provincial parliament. So they're not going to be able to carry through on that.
GJELTENBut still it's -- you know, it's an indication of this kind of centrifugal force that is happening in many parts of the world, you know, the rise of separatist movements. We're also seeing it in Spain right now, a function of the economic crisis in Spain, separatists gaining power in Spain as well. So it's a development that I think that we were not expecting in Canada.
REHMBut, I mean, it went so far as to create violence that ended in the death of one individual, James.
KITFIELDYeah, while the head of the separatist party was given her acceptance speech, someone came in and shot two people, one of which was killed and one of which is in serious condition and shouted something to the effect of, the Anglos have awakened. Which, you know, it's disheartening to see this. And I would add Brussels and -- to that list of countries that, you know, you constantly see this tension between the French speaking and the Dutch speaking part of Brussels.
KITFIELDAnd it really leads -- this balkanization really leads to dysfunction. The only actually peaceful separatists I think we've seen in recent history was Czechoslovakia when it split into the Czech Republic and Slovakia. But neither one of those are as powerful or as influential as the country was together. It's just a really disheartening thing to see our good cousins to the north really constantly go back over this.
KITFIELDBut like Tom said, it's not going to happen. There have been referendums. It constantly loses. It polls at well below majority status even in Quebec. But there is this tension that now it's going to be all about small moves like saying you have to speak French. It has to be the first language, etcetera. And...
GJELTENI just wanna say, the guy that yelled the English are awakening, yelled it in French.
LABOTTWell, this is the whole thing. I mean, some of these rules that she's -- that Pauline Marois is promoting, toughening up, small businesses need to speak French. And people that are taking college courses have to speak in French. And then there's legislation to prevent non-French speakers from running for office. So, I mean, basically she also is going after religious minorities saying that anybody with religious garb is not allowed to wear it, such as hijabs for the Muslims or Jews can't wear yamakas.
LABOTTAnd any time that you have different categories of people based on language, based on religion you're going to have tension in a country. And even though there isn't much support for Quebec becoming a separate country or a separate state, there is a lot of support for making it a Francophile state where French is the national language.
REHMI don't think we should forget our own English first movement or English only movement. That got a lot of attention a while back. I think that has now pretty much faded. So you don't think anything's going to happen with Quebec. It's going to stay exactly the same way it is. But, you know, God help them all when violence becomes the way that people turn to, Tom.
GJELTENYeah, we have seen that over and over again happen.
REHMOver and over.
GJELTENYou know, and even in a country like Canada where, you know, gun control laws are much more strict than they are in this country, you know, when you've got these political tensions, they boil over.
LABOTTAnd we're seeing -- Diane, we're seeing a lot of it in our own country now. Anybody with a political grievance is going into a theater or a -- or to -- we saw Gabby Giffords last night at the convention. Look what happened to her. I mean, when you see it going on around the world you kind of think, oh that's terrible. But the more I've been seeing it in this country I'm saying that this is the way of the world right now.
REHMLet's talk about Secretary Clinton's trip to China. She got kind of a, shall I say cool reception, Elise.
LABOTTI would say so. This was supposed to be a very short and sweet visit by Secretary Clinton, possibly her last visit to Beijing. But as she was approaching the trip to Beijing she started talking about the South China Sea, which is a very important issue.
REHMI may just correct you. Her last visit as Secretary of State. Thank you.
LABOTTAs Secretary of State, excuse me, absolutely. But then she started talking about China and its meddling in the South China Sea. The U.S. wants China to work with other southeast Asian nations to have some kind of treaty and China's saying, no we're going to negotiate this with individual countries, China trying to extend its influence in the region. And this has been one of the major sore spots between China and the U.S.
LABOTTSo when Secretary Clinton got there she got an earful, not just in private, but in public from Chinese leaders who said, listen we cooperate on many issues but we're very concerned about the way you're talking to us. You're meddling in our sovereignty. There are clear differences between the United States and China talking about Syria, that we've talked about on this show.
KITFIELDThere are two issues that are enflaming U.S. Chinese relations right now, one of which both our countries are going through leadership transitions. And whenever that happens anti-Americanism plays very well in China domestically in their politics, just as anti-China rhetoric plays very well in our own domestic politics. That's one irritant in the relationship.
KITFIELDAnd the other one is that China really does hate the strategic pivot to Asia that the Obama Administration announced last year and is backing up with some moves of establishing, you know, temporary military bases in Australia and the Philippines and Singapore. And it really is over the alarm of how China is acting as it gets stronger and military more powerful. It is starting to bully its neighbors claiming all the South China Sea islands as its own, when they are open for much dispute between the Philippines and Viet Nam and even Japan.
KITFIELDSo we have pivoted to Asia. China knows what it is. It's a hedging strategy in case they continue to be belligerent and they don't like it. And this is -- Clinton did say one thing I thought was -- got right to the nub of the matter. You know, these are two countries who are trying to write a new answer to an age old question of how -- what happens when an emerging power and an established power meet. And those usually end in wars in different epochs in history. They're trying very hard for this one not to but to do that there has to be this kind of balance. And China's bristling at that balance.
REHMWhat about Syria, Tom?
GJELTENWell, that's -- you know, that's a third issue in addition to the two that James mentioned. The United States would very much like to get more cooperation from Syria and from China and from Russia in dealing with the Syrian issue. And, there again, Secretary Clinton got a complete brush-off from the Chinese. It made -- they made it very clear they were not willing to put more pressure on the Assad regime, which is what the Obama Administration was hoping.
REHMWe talked earlier about the fact that Canada has now cut ties with Tehran. Russia is sending a clear warning to Israel and the U.S. against attacking Iran. What was said, Tom?
GJELTENWell, they made it clear that if Israel is to attack -- and really in the short term it's much more directed at Israel then it is at the United States because I think the prospect of action against Iran is much more likely in Israel right now than it is from this country. But the Russians just made it clear that if this happens it will have -- in fact, the warnings that Russia made are not that different from what some of our own senior military leaders have said, which is that if Israel is to attack Iran there will be devastating consequences destabilizing the entire Middle East enflaming tensions all over the region.
GJELTENThat's not so different from what General Dempsey and others in the U.S. military establishment have said.
REHMNow are these comments from Russia any different from what they've said in the past, Elise?
LABOTTIt's not so much different from what they're saying in the past but they're saying it in a context that really flies in the face of the reality of what's going on with Iran. The IAEA just issued a new report that said Iran has kind of doubled its centrifuges at its underground facility in Fordo over the last few months warning about a possible military dimension to the program.
LABOTTAnd Russia's saying, listen we have no proof that there's a military dimension, still sticking by its ally Iran saying, hey this is really being blown out of proportion. You know that privately they are very concerned about a nuclear Iran or they wouldn't be working with the P5 plus 1. They've supported sanctions in the past. But for them to say this about no military dimension really --when you look at the situation they know that that's not true.
REHMWe are having two Israelis with very different perspectives on this issue of whether to go after Iran on the program on Monday. And that should be a most interesting debate.
KITFIELDCan I just mention something?
KITFIELDIt might be a point of questions for your guests next week. We are on a collision course with Iran. There's going to be war unless something changes. I mean, Elise mentioned this IAEA report. It was terrible. And Israel is -- and Russia's, you know rhetoric is heating up because they realize that the trains are closer to colliding right now. Something's going to have to change in the next year or so or there will be conflict over Iran. I'm almost certain of it.
REHMWell, some people are saying it's going to happen immediately after the U.S. election.
KITFIELDOr even before even because Israel's calculation in this is very complicated. But they don't want to -- if Mitt Romney is elected, don't want to particularly wait five or six months while his administration gets up to steam to face a situation like that. So there's all kinds of calculations that are very dangerous in this. And I commend you for having that program tomorrow (sic) 'cause it is heating up and, you know, something has to change or there will be conflict.
LABOTTI was just in Israel for most of the summer, Diane, and the mood is not good because they see that these sanctions while they're -- you know, Iran is feeling the pinch of them, it's not stopping their calculus. They're moving ahead with a nuclear program. And I know that there are considerations of the U.S. election but in the minds of Israeli officials the question is, is this program going to reach what they all keep saying is this zone of immunity. Will we be able to take care of it ourselves?
LABOTTAnd they want to take care of it before they're left beholden to the United States to take care of it for them. Because they can't trust President Obama, Mitt Romney who says, we have your back. They want to make sure they can do it themselves. And right now they -- there's a really sense of foreshadowing in Israel that they're -- and they are preparing the Israeli public that they might have to take some kind of action.
REHMTom Gjelten, this could just be disastrous.
GJELTENIt certainly is not difficult to envision a scenario in which it is disastrous, you know. From the Israeli point of view the prospect of Iran having a nuclear weapon is disastrous. You know, there was an interesting analysis I read the other day about how we are doing two things with respect to Iran. On the one hand we're pressuring them to get rid of nuclear weapons. On the other hand we're basically destabilizing their government through this incredible economic pressure that we are forcing them under.
GJELTENAnd the worst scenario in terms of Iran developing a nuclear weapon would be if the Iranian government collapses and there is internal instability. This is exactly the thing that we have worried about in Pakistan, we've worried about it in North Korea. If there is a nuclear weapon there and the government collapses you don't know who's going to gain control of that nuclear weapon.
REHMTom Gjelten of NPR and you're listening to "The Diane Rehm Show." Secretary of State Hillary Clinton says the U.S. is going to press on with military and diplomatic pressure against the Haqqani Network now that it has declared the Pakistan based insurgents as terrorists. Secretary Clinton said in a statement, she notified congress today, Friday, of her intent to designate the Haqqani's foreign terrorist organization. Congress had set Sunday for the deadline for her decision. Elise, tell us about the Haqqani Network and why it is now going to be designated.
LABOTTWell, the Haqqani Network is a Pakistani based militant group that if any terrorist organization should be labeled as such by the United States it's the Haqqani Network which has been responsible for some of the deadliest attacks against the U.S. troops in Afghanistan. And when you think about what's the criteria for designating a group it's killing Americans. And so this group has been in Pakistan. This has been a debate for two years in the Obama Administration about whether they should designate this group.
LABOTTBecause it is based in Pakistan. The U.S. has accused Pakistan of having ties to this group. And so what does this say about the relationship with Pakistan? Is Pakistan a state sponsor of terrorism? And the U.S. relationship with Pakistan has been so fragile lately, there's been a question about how this would affect the relationship. There's been a question about the peace talks with the Taliban and the Afghan government, how this could affect.
LABOTTAnd so I don't think there's ever been any doubt that this group deserves to be a terrorist organization. And U.S. officials, the question is what would we get out of it.
GJELTENWell, Elise mentioned that they have -- the Haqqani Network has attacked U.S. forces. They've also attached the Indian Embassy in Kabul. And this is important because they don't only see the United States as their enemy, they see India as their enemy. And in this respect they are in lockstep with the Pakistani government which has historically been very nervous about India. And now with the war in Afghanistan they have worried that India is going to gain leverage in that region through a new government in Kabul.
GJELTENAnd therefore when the Haqqanis attack Indian interests they are acting at the behest and in coordination with the Pakistan government. So by going after the Haqqani Network -- as Elise just said, by going after the Haqqani Network right now we are going after an organization with very close ties to the Pakistani government. And that is something -- that is, I think, the reason that people were very nervous about doing this. Do we really want to take on Pakistan in this way?
KITFIELDMy colleagues are right on both accounts. I was in Coast Province last time I was in Afghanistan, which is right across the border from where the Haqqani Network is based. And they are responsible -- I mean, that's very close to the infiltration route from Pakistan into Kabul -- they're responsible for most all the spectacular attacks in Kabul, including on our own embassy.
KITFIELDSo whether they're a terrorist organization or not -- and they are -- they are a sworn enemy to the United States and they kill Americans. And so this just sort of admits reality. But it is a very contentious issue because if you are -- you know, it rules out talking to the Haqqani Network in these negotiations with the Taliban. They are under the Taliban umbrella. We can, because they are a terrorist organization, not talk to them now. So it complicates the diplomacy of us trying to get out of there in 2014. It complicates our relationship with Pakistan, which quite honestly is unfathomably complicated as it is.
LABOTTAnd when you're talking about these drone strikes, which has been the main issue of contention between the U.S. and Pakistan, a lot of these drone strikes are going after members of the Haqqani Network. And last week the U.S. just confirmed that it killed a senior member of the Haqqani Network in a drone strike. So this really goes to the heart of the relationship with U.S. and Pakistan.
REHMAnd what about the Afghan authorities removing and detaining hundreds of their own soldiers to try to stop all of these killings of American troops? What a complicated world we live in. Elise Labott of CNN, Tom Gjelten of NPR, James Kitfield of National Journal. They're here to answer your questions after a short break.
REHMAnd welcome back, time to open the phones. Let's go to Wichita, Kan., good morning, Sherry.
SHERRYGood morning, Diane, thanks for taking my call.
SHERRYListen, I was wondering, Diane, I guess I don't really understand why we would be so upset about Iraq possibly having a nuclear weapon.
REHMYou don't mean Iraq. I think you mean Iran.
SHERRYI'm sorry, Iran, about Iran having a nuclear weapon because if they were to use it, there wouldn't be an Iran next week.
KITFIELDAh, that's absolutely correct so there is, you know, there's a strong argument that many people have made that even if Iran were to get a nuclear weapon, it could be contained. They're not a suicidal or irrational actor, but Iran has, because of its theology, theocratic leadership, they have some pretty messianic ideas about Israel being wiped off the face of the earth and they express these on a regular basis.
KITFIELDSo if you're Israel, you're probably not willing to take the risk that that's just rhetoric so for Israel, it's an existential issue and for the United States, I think it is a very troubling one because they are the chief state sponsor of terrorism in the world. And you know, we talked about the Haqqani network, but Hezbollah is probably on the A list of terrorist groups and they are in the pocket of Iran. They have killed many Americans in the past and the idea that they would be tied to a state sponsor of nuclear weapons is pretty frightening.
REHMAll right, to St. Petersburg, Fla., good morning, Brian.
BRIANHi, good morning Diane.
BRIANBefore I get started, I just wanted to applaud you real quick for always managing to find such relevant and poignant topics and as well, finding such qualified and civil guests to discuss those topics.
REHMThank you. I'm so glad you feel that way.
BRIANBut I guess I have two quick questions.
BRIANThe first one, I was just curious about, if you live in Spain and you're trying to get like a home loan or a car loan, do you pay rates based on basically their tenure, 30-year Treasury which, you know, they're now down below 6 percent for the first time in a while?
BRIANAnd my second question, all these countries of course, are democracies so who is to say what's going to happen two years, four years, six years from now? We're getting Berlusconi probably running again in Italy just next year. Like, what happens if all these anti-bailout parties start actually gaining some ground even in Germany?
REHMAnti-bailout parties. What do you think, James?
KITFIELDI'm not exactly sure what their interest rates on home mortgages are, but I know that you can get a lot of great deals because they had a huge housing bubble just like we did and that has been the fundamental thing which distinguishes Spain is that they've got this amazing amount of bad loans on bank ledgers that they have to work out.
KITFIELDI don't think, you know, this is one of the tensions of these austerity plans. We saw it in Greece, you know, at some point the democracies will revolt against austerity plans that they think are basically causing them to be mired in recession for the indefinite future.
KITFIELDAnd you know, if you get a government put in there that says that I'm not going to, you know, abide by the austerity plan, there's every chance the Eurozone starts to break up because, you know, that's the rules under which Germany has agreed to basically front all this money. And if they're not going to agree to these rules, Germany is not going to live up to its side of the bargain.
LABOTTJames put his finger on it. This goes to the very heart of the debate that's been taking place for Europe for the last several years. The debate, growth versus austerity and these countries, Europe has stagnated for so many years.
LABOTTEuropeans live a good life. They have a great quality of life, but the jobs are lacking. The economic opportunities are lacking and the economic growth is lacking. So while these countries are in huge debt crises because of the way that they've held their economies and also because some of the programs in the workforce and things like that, that we've seen discussions about in France and other countries. They also need to move forward.
GJELTENBrian mentioned, what's the outlook for the long term? And an important thing here to keep in mind is that the European Central Bank cannot save the Spanish economy, cannot save the Italian economy. All it can do is buy time.
GJELTENUltimately, what is important is for private investors to regain confidence in these countries and start buying their bonds again and what Mario Draghi has done here has said, we're going to buy these debts if we need to.
GJELTENWhat the governments of Spain and Italy are hoping is that that promise is itself enough, that they won't actually have to go to the ECB, but private investors will now come back into the market and buy the bonds, buy the assets of these countries. That's what will be needed to turn this around, so it's psychological.
REHMAnd how likely is that?
GJELTENYou know, we have seen that already. We've seen the interest rates have come down and the interest rates have come down in these countries not because the ECB is already buying those bonds, because they're not. The interest rates have come down because investors have been reassured that the ECB is now there, so investors are, at least for now, they are coming back into the market.
KITFIELDAnd just one quick point on that...
KITFIELDPart of that announcement yesterday was that if there is a default that the ECB is not, does not take preference over private bond buyers in terms of that default. And so that was a very important signal to bond buyers that you will not be, you know, left hanging high and dry as all the money goes to the ECB if there's a default.
REHMTo Virginia, in Chapel Hill, N.C., good morning.
VIRGINIAGood morning, Diane, yes, I do have a question.
VIRGINIAI'd like to know why it's never written or even mentioned on news programs, on television or radio that Israel has 150, at least according to President Carter, 150 nuclear weapons.
REHMI think we've mentioned it many times on this program. Go ahead, Elise.
LABOTTWell, this is the unspoken thing that when we talk about a nuclear-free Middle East, that's why the United States is not really pushing a nuclear-free Middle East because it has this constructive ambiguity that Israel has a nuclear arsenal and Iran knows that.
LABOTTSo when your caller earlier said, well, we know that Iran would cease to exist because Israel would then launch an attack against them, I don't think there's any question that Israel, if they were to attack, they would respond. The question is what Iran could initially do to Israel and that's why they don't want Iran to have a nuclear weapon.
LABOTTBut yes, Israel is believed to have a sizable nuclear arsenal that contributes to this whole idea of a nuclear arms race in the Middle East. It's not just about Iran. It's about Saudi Arabia, Egypt and other countries that say, well, if Israel is not going to halt its nuclear arsenal and Iran is going to have a nuclear weapon, then we need to have one, too.
KITFIELDThere have been writings recently from people who think that, you know, if Iran gets a bomb, it will create this sort of balance of nuclear terror that we had with the Soviet Union in the Cold War and that that would be not necessarily a terrible thing. Israel does have a nuclear arsenal. It also has a second-strike capability with a nuclear-armed submarine.
KITFIELDSo it's a reality. I've certainly reported it many times. Others have, too. But you don't see the U.S. government admitting it because it's more or less calling out a friend on a well-known secret that they don't like really to address probably.
REHMTo Cleveland, Ohio. Rashad, good morning.
RASHADGood morning, Diane, great show as always.
RASHADI have two comments. One is about the relationship with Iraq, the United States and Iraq and the strategic relationship. If they can't put any pressure on the Iraqi government to cooperate on Syria, what does that say about the future of the strategic relationship with Iraq?
RASHADAnd the other point I would like to make, I think that if Israel could effectively have a strike on Iran's nuclear facilities, they would have done it a long time ago like they did in Iraq and Syria. And I'll take my comments off the air, thank you.
REHMThank you. Tom.
GJELTENBoy, Rashad hit the nail on the head with that question. I mean, you look at what we have invested in blood and treasure in Iraq and we can't even get the cooperation of the Iraqi government to stop Iran from sending weapons to Syria. That is a pretty sad testament to what our investment in Iraq did not pay off.
LABOTTAnd you have three senators that just visited Iraq, Senator Lieberman, Senator Graham and Senator McCain, all of whom have been very supportive of Iraq, saying, listen, you really need to think about how important the relationship with the United States is.
LABOTTAnd Senator Graham hit the nail on the head. He said it shows that we're not engaged, the U.S. is losing its influence in Iraq. President Obama said he'd get us out of Iraq, but also that means that the U.S. is losing its influence there because the troops aren't there. There's a lot of, you know, lack of interest now, Iraq fatigue.
LABOTTAnd so if you're Prime Minister al-Maliki, you have to think, who has my back? Do the Iranians have my back or does the United States?
REHMAnd on the second part of his point, if Israel could have struck, it would have struck by now, James?
KITFIELDI think that Israel understands that a strike on Iran is far more complicated than a strike on that isolated base in, reactor under construction in Syria and certainly far more complex than hitting Iraq's reactor in the early 80s.
KITFIELDThey've buried a lot of these centrifuges inside of mountains and they're increasing the number of centrifuges inside mountains. They've dispersed it. Iran's gone to school on what Israel's done to militarily strike other people's nuclear programs and they've taken steps to make it much more difficult.
KITFIELDThere are over-flight issues. Iran is a lot farther away from Israel than Syria and Iraq were. So for a host of reasons it's a much more complicated problem. It doesn't mean Israel won't attempt it.
LABOTTAnd Diane, I also don't think that Israel is trigger-happy. I don't think they want to bomb Iran. They know what the consequences would be, not only for their own country, but for the United States so it's a very deliberate calculation that they're going to make. I don't think they're going to make it until they feel that they absolutely have to.
REHMAnd here's an email from a listener who says he or she lives in Quebec City, believes listeners should know there is already only one official language in the province and that is French. Any services given by the federal government must be available in English as well, but otherwise there is no requirement.
REHMThe man charged with shooting at the Pauline Marois Party, is that it?
LABOTTPauline Marois is the head of the party and would be the new prime minister, as Tom so eloquently called it, the Parti Quebecois, very correctly.
REHMOkay, is a hunting and fishing outfitter and therefore equipped with many guns. He's believed to be mentally unstable and was not known to be politically involved.
LABOTTI was reading up about this for the show and there was a very interesting op-ed in one of the Canadian papers that said, it's very easy to say, oh, this guy was a whack-job, he wasn't political and to try and say this is an isolated incident.
LABOTTBut what this does, as we were talking about, is it just highlights the fact that there are a lot of divisions in Quebec about what Quebec wants itself to be and when you start to single out people that don't speak English, that don't speak French, that speak English and that are religious that's just going to heighten already existing tensions.
REHMTo Charlottesville, Va., good morning, Bruce. Bruce, are you there?
REHMYes, go right ahead.
BRUCEI'm sorry, thank you for the time.
BRUCEAs something that has stymied me for a substantial period of time now is how Russia and China posture themselves with this arrogant, self-centered attitude of human rights violations in the interest of monetary gain and I know that they consider themselves advanced nations. How do they justify this status-quo? I'd appreciate if your guests could help me garner some insight into their culture on this and I'll take my answer off the air.
REHMAll right, sir, thanks for calling. James.
KITFIELDWithout putting too fine of a line on it Russia and China are both authoritarian regimes and they are very, very nervous about, in the cases of Syria and Libya, of this idea that the international community has a right to protect or to intercede in countries because they are mistreating their own people because China and Russia routinely mistreat their own people.
KITFIELDSo they don't like the principle behind these interventions and they will never sign on to again, I don't think, the idea that the international community has the right to militarily intervene in a country because that government is not treating its people well.
GJELTENYeah, I think that we have to be very careful about stereotypes here, but the truth is that Russia for example has never known the kind of democracy that we have had, never known the guarantees of civil liberties, the enlightenment ideals that have been so important in the United States. Culturally it's just a very different place.
REHMTom Gjelten of NPR and you're listening to ''The Diane Rehm Show''. And to Siad in Houston, Tx., good morning.
SIADHi, how are you?
REHMFine thanks, go right ahead sir.
SIADJust two or three points, number one Iran has been a signatory to the NPT. It has the most intrusive IAE inspections as well as the most intrusive sanctions that any country has got. And talking about theocracy in front of a hundred countries representatives the Ayatollah Khomeini has said that it is an (word?) for an Islamic nation to have a nuclear weapon.
SIADAnd last, the previous caller has already pointed out about the disparity between Israel's nuclear capability versus the potential capabilities of Iran so why can't we have a nuclear-free zone?
LABOTTWell, on the first part of the question, it's true that they do have intrusive inspections and they are subject to sanctions, but as the IAEA, the International Atomic Energy Agency which oversees those inspections says it's not stopping them from continuing to develop and that's why the IAEA wants even more intrusive inspections.
LABOTTAnd so the sanctions, they are under very tough sanctions. They don't seem to be stopping Iran from continuing to develop its weapons and that's what the IAEA found in its recent report.
KITFIELDI mean, the reason they are under sanctions and they're international sanctions and even the Russians and the Chinese have agreed to these is because they have broken their requirements under the agreement, the NPT.
KITFIELDThey have had secret sites where they have developed programs. They had a weapons program as recently as 2004 to test, you know, various factors of weapons, weaponizing. The IAEA wants to go on to the site and inspect that. Iran is, even as we speak, is raising that site.
KITFIELDSo time and again they have hidden their program. They have refused the inspectors right to actually do the inspections that they think necessary to convince the international community that this is not a nuclear weapons program. So it's misleading to say that Iran has sort of lived up to its responsibilities on the NPT. It has not.
GJELTENAnd the other thing is that if, in fact, Iran just wanted its nuclear program for civilian purposes, the way is open for them to do that. The international community has made it very easy for Iran to go down this path of a purely civilian program, as long as there are guarantees and checks and so forth to make sure it stays that way. Iran has not been willing to do that.
REHMYou know, it does seem to me while all of these various conflicts are going on in the world and here in the United States we're trying to have a national presidential election. There is no way that we can do this without all these other issues in mind.
LABOTTWell, that's the thing Diane. We've heard very little in the campaign up till now. We heard a little bit about it last night by President Obama, by Senator John Kerry and by Joe Biden about foreign policy, but it's the economy that's the driving issue. But if there's a world crisis right before the election, certainly voters have to take that into account when they go to the polls.
REHMElise Labott of CNN, Tom Gjelten of NPR, James Kitfield of National Journal, have a peaceful weekend everybody.
REHMThanks for listening, I'm Diane Rehm.
UNIDENTIFIED MAN 1"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Denise Couture, Susan Nabors, Megan Merritt, Lisa Dunn and Rebecca Kaufman. The engineer is Tobey Schreiner. Natalie Yuravlivker answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information.
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