SECRETARY KERRY'S REMARKS WITH TURKISH MINISTER OF FOREIGN AFFAIRS, MEVLUT CAVUSOGLU

FROM:  U.S. STATE DEPARTMENT
Remarks With Turkish Minister of Foreign Affairs Mevlut Cavusoglu
Remarks
John Kerry
Secretary of State
Treaty Room
Washington, DC
April 21, 2015

SECRETARY KERRY: Well, good afternoon, everybody. And I’m delighted to welcome this afternoon to Washington my friend and my colleague, Mevlut Cavusoglu. We run into each other in a lot of different places. Probably this is the longest gap we’ve had in the last few months. But I’m very, very delighted to welcome him here to Washington in the full bloom of springtime.

We are about to begin a meeting with a very typical U.S.-Turkey agenda which covers a vast range of security, political, and economic issues.

We’re going to talk, for example, about the Iran nuclear negotiation, including both the progress that was made at Lausanne and the urgency of working out the final details for a comprehensive plan and clarity about the road forward if we do that with respect to the security interests of the region, which everybody shares concerns about.

Neither the United States nor Turkey believe that it would be acceptable for Iran to have a nuclear weapon, just as we are also united in our concern about Tehran’s support for activities in the region which can be disruptive and destabilizing, and particularly any kind of support for terrorism or other kinds of destabilizing activities.

Counterterrorism in general will be high on our list of discussion today. Mevlut and I met just three months ago at the Counter-ISIL Ministerial in London. And since then, ISIL – or Daesh as many people know it – has suffered numerous setbacks. But much remains to be done, and we’re aware of that and we are committed to doing it. We’re committed to doing everything necessary to push Daesh out of Iraq and ultimately out of Syria or any other place where it seeks a foothold for terror.

Now, much will be done over the course of these next months, and we will be discussing that. But it is obvious that Daesh’s forces are under increasing strain, its leadership has been degraded, its finances have been squeezed, and its hateful ideology has been discredited. Now Turkey – Turkey has been – excuse me – has been and remains a very essential partner in all of these efforts and it is co-chair of the Coalition’s Working Group on Foreign Terrorist Fighters. And that convened just earlier this month in Ankara.

As Daesh has weakened, it has become more dependent on new recruits, which means that we have to redouble our efforts to persuade – and if necessary to prevent – young people from making the fatal mistake of signing up and then traveling to and trying to cross the border into Syria. Turkey is stepping up its efforts by improving screening procedures, expanding and implementing a “no entry list,” detaining suspected terrorists. In February, the Turkish Government also agreed to host a U.S.-led train and equip mission for the members of the vetted Syrian opposition.

On the humanitarian front, our ally is also hosting nearly two million refugees now, creating a huge economic burden and a social burden also on Turkey. The United States is grateful for Turkey’s generosity and is urging international donors to help address the refugee needs, including access to health care, education, and employment. In the past four years, the United States has contributed more than $3.7 billion in order to provide aid to the region, including more than a quarter of a billion to support relief efforts in Turkey specifically.

Now meanwhile, I am personally looking forward to my visit next month to Turkey for the NATO ministerial in Antalya, which is a city with a booming economy and a fascinating history, with mountains on one side, the Mediterranean on the other, and Turkish hospitality everywhere. It’s sure to provide a very inspiring setting for our review of NATO priorities. And one of those priorities is Russian aggression against Ukraine in the east, and the threat that is posed by violent extremists to NATO’s south, where Turkey’s contributions are especially important.

Now, I want to emphasize this afternoon the importance of the ties between the United States and Turkey, and particularly the security relationship at this particular moment. Turkey is playing a very important role in Afghanistan as part of Operation Resolute Support. It is protecting NATO’s southern flank with its patrols in the Black Sea, and it’s been making important contributions in Iraq.

I will resume my conversations this afternoon with the foreign minister on such issues as the failed leadership of Assad in Syria, the conflict in Yemen, and the ongoing problems in Libya, including the tragic death this week of hundreds of migrants at sea. The foreign minister and I will also be talking about energy security, which is critical to the geostrategic interests of the entire region.

Last month a consortium of partners broke ground on the Trans-Anatolian Pipeline, the longest segment of the planned southern corridor that would bring gas from the Caspian through Turkey and into Europe. My government thinks it is absolutely essential to complete the southern corridor and also the transatlantic pipeline – the Trans-Adriatic Pipeline, which will connect to Greece, Albania, and Italy, and strengthen energy diversity in Europe, including with possible lines up to a place like Bulgaria or elsewhere.

Cyprus is also on our agenda here today. The United States and Turkey both support the UN-led negotiations to reunify the island as a bi-zonal, bi-communal federation. Now, this is a problem that just has gone on for far too long, and it is begging for international efforts to try to help bring about a resolution, a lasting settlement. We hope together – and I talked with Mevlut’s predecessor, Ahmet Davutoglu, at great length about this, now the prime minister – we believe that the parties can make real and lasting progress in the year 2015. And that would be very positive for the region, and obviously a terrific boost in opportunity for a better life for all Cypriots.

As I’ve often said, foreign policy and economic policy are absolutely inseparable, and this is reflected in the U.S.-Turkey relationship. This coming November, leaders from around the world will assemble in Antalya for the annual summit of the G-20. And Turkey is currently serving as president of that meeting. In the past decade, the U.S.-Turkey trade has doubled, and I’m confident that we can and we will do a lot more in the future in order to strengthen our commercial ties.

Let me just say that the United States and Turkey are at our best when we are working to strengthen our democracies, including the fundamental rights and responsibilities that are enshrined in both of our nation’s constitutions, such as free speech and an independent press and judiciary. So as always, when representatives of the United States and Turkey get together, we are obviously going to have a very full plate of issues to discuss this afternoon.

And I’m pleased now to yield the floor to my friend and my colleague, the foreign minister of Turkey, Mevlut.

FOREIGN MINISTER CAVUSOGLU: Thank you so much, John. Ladies and gentlemen, I have the pleasure to be in Washington, D.C. and the State Department upon the kind invitation of Secretary and my dear friend John Kerry. And we are at a critical time for our region – our region in Middle East and also in Ukraine, and also around the Black Sea. And Turkish-American strategic relations are more indispensable today than ever.

As my dear friend John Kerry mentioned, during our bilateral meeting we will extensively discuss a number of important issues on our common agenda. Besides the bilateral issues – trade and economic cooperation and the political – to further deepening and strengthening our political affairs and cooperation, we will take up the situation in Yemen and Syria, Iraq, and the threat posed by (inaudible) terrorist organization Daesh. And we will focus on concrete steps for taking our operational cooperation on these issues even further. And the ongoing crisis in Ukraine and Crimea and Cyprus are also on our plates.

And we want to reach a last solution in Cyprus in this year. And as special advisor of United Nations, Secretary General Eide, mentioned the talks can restart or resume after the elections in Turkish Cyprus. And we are hoping to reach a solution within 2015, and we have the political will. Turkey and Turkish Cypriots have the political will for a solution, and they are – we are waiting at the negotiating table. Here, United States role – active role and involvement is very important. And we see this will in the United States and in the State Department and as well as in White House. And thanks to the efforts and the support of United States, we can finally reach a last and fair solution in Cyprus.

Of course, energy security and fight against terrorism is also on our agenda. And regarding the fight against terrorism, first we need to eradicate and we need to fight Daesh and other terrorist organizations on the ground, particularly in Syria and Iraq. And we need to also stop foreign terrorist fighters flow, and Turkey is one of the transit country for foreign fighters. We have been doing our best to stop them, and we have included more than 12,800 people into the no-entry list and we caught and deported 1,300 foreign fighters. But the source countries should also do their best to spot and to stop the foreign fighters before they leave those source countries.

And we need better cooperation. We need timely information sharing and also intelligence. And our cooperation regarding the foreign fighters with United States I can say excellent, and we can further improve, of course, this cooperation. And I appreciate the determination of the United States on our fight with foreign fighters and foreign fighter flows to Syria.

And Turkey and the United States are the two countries with important comparative advantages. This is what makes our partnership unique and valuable. In the past, we have proved that by working together on any common vision, our two countries can overcome any challenges. That is why I am confident that we can continue our significant contributions to the international peace and security by working together in close cooperation and coordination. Our meeting today will give us the opportunity to confirm our mutual determination and deepen our cooperation on all these issues through concrete steps.

Iran nuclear deal is also on the agenda, and first of all Turkey welcomes the tentative deal with Iran. And I appreciate Secretary Kerry for his tireless efforts and personal contribution to these achievements. And Turkey always for a political solution and we will be supporting the process. And we hope that by the end of June there will be a comprehensive deal, and I’m sure my dear friend Secretary Kerry will continue playing his important role to make that deal with Iran. We know that it is not easy, but we shouldn’t underestimate the achievements that are made, but we have to also be realistic that we have to do a lot more for the comprehensive settlement.

And I would like to also personally thank John Kerry for informing me. He kept me informed during all this process. He often called me and he updated me about the developments regarding this Iran nuclear deal. Turkey is against nuclear weapons. Turkey had never intention to have nuclear weapons, and Turkey is against that Iran might have – or Iran’s intention to have nuclear weapon, or Turkey is against nuclear weapons in our neighborhood. Therefore, we will continue giving our full support to this process.

Well, we have many issues to discuss in the room (inaudible), and once again, I would like to thank John Kerry for the kind invitation. I’m looking forward to hosting him in three weeks’ time in Antalya, my hometown. I brought some nice weather from Antalya today to Washington, D.C., but in three weeks’ time, we will have – we will also enjoy the beauty of Antalya as you described, John. Thank you very much once again. Thank you.

SECRETARY KERRY: Thank you all very much.

REMARKS BY SECRETARY KERRY, TURKISH FOREIGN MINISTER BEFORE THEIR MEETING

FROM:  U.S. STATE DEPARTMENT 

Remarks With Turkish Foreign Minister Davutoglu Before Their Meeting

Remarks

John Kerry

Secretary of State

Brussels, Belgium

June 25, 2014

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SECRETARY KERRY: Turkey is such a key partner in so many ways, but particularly given what is happening in Syria and now in Iraq with ISIL and the participation that we’ve had. We have obviously some major issues to confront. And also, we’ve been talking about Cyprus quietly and thoughtfully over a period of time. We’ll continue that discussion. I will be visiting there at some point in the next months; we’ve been talking about that. And so there’s a lot to discuss today, but we’re grateful for your friendship, Mr. Foreign Minister.

FOREIGN MINISTER DAVUTOGLU: Thank you very much, Mr. Secretary.

SECRETARY KERRY: (Inaudible.)

FOREIGN MINISTER DAVUTOGLU: Oh, it’s – no, no, it’s okay. (Laughter.) Of course, Turkey and the U.S. are two allies, and we are going through a very difficult process in neighboring regions of Turkey and the Mediterranean and the Middle East, and the Balkans and Black Sea. Now it is time to consult more frequently, act together as two strategic allies, and that cooperation will continue in all things and all challenges. Thank you.
SECRETARY KERRY: Thank you.

FOREIGN MINISTER DAVUTOGLU: Thank you.

SECRETARY KERRY: Thank you for talking.

SECRETARY KERRY, CYPRIOT FOREIGN MINISTER KASOULIDIS MAKE REMARKS BEFORE MEETING

FROM:  U.S. STATE DEPARTMENT 

Remarks With Cypriot Foreign Minister Ioannis Kasoulidis Before Their Meeting

Remarks

John Kerry

Secretary of State

Treaty Room

Washington, DC

May 13, 2014

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SECRETARY KERRY: Well, good morning, everybody. Delighted to welcome Foreign Minister Kasoulidis of Cyprus. And it’s a real pleasure. We saw each other last May. We had been talking and working on the issue of trying to find a peace for Cyprus, a reunification of the island on a bi-zonal, bi-communal federation policy. President Anastasiadis and the foreign minister have taken leadership in trying to bring a long sought-after resolution to this and we are privileged to work with them in that effort. We’re very supportive of this initiative.
It’s my hope to be in Nicosia and perhaps in Athens somewhere in the next weeks, if not early months. We’ve been talking about a visit for some time. We want to try to be helpful in this process. There are exciting things happening, and we respect and appreciate Cyprus’ efforts to work on a number of different fronts. Most importantly, Cyprus has been really helpful – a partner, a strategic partner, in a number of initiatives, and most importantly with respect to Syria and the removal of the chemical weapons. That leadership, that partnership is absolutely critical to all of us. There are new economic opportunities in the energy sector, looking at Cyprus.
So we have a lot to talk about today, and I want to impress on everybody our respect for and gratitude for the leadership that is currently being provided by the current administration, and we look forward to continuing to work with them. So welcome, Mr. Foreign Minister; we’re happy to have you here. Do you want to say something?

FOREIGN MINISTER KASOULIDIS: Thank you very much. I would like to thank Secretary Kerry for this meeting. It’s the second one within the last 12 months. A lot of things are happening in the world, particularly in Europe with Ukraine, but also in our region, the eastern Mediterranean. We are excited to have the (inaudible) region, and something that renders the resolution of the problem of Cyprus (inaudible) and we thank very much Secretary Kerry himself and the United States Administration for their assistance, for their interest. We need the assistance and interest of the international community because I think the circumstances are appropriate to push in order to find a settlement in this quorum, if I can call it this way. Thank you.

SECRETARY KERRY: And we agree with that, absolutely, and we will work at it. Thank you. Thank you very much, everybody. Ioannis, thank you.

4 HIZBALLAH LEADERS DESIGNATED BY U.S. TREASURY FOR TERRORISTS ROLES

FROM:  U.S. TREASURY DEPARTMENT 
Action Targets Hizballah’s Leadership Responsible for Operations Outside of Lebanon

WASHINGTON – The U.S. Department of the Treasury today designated four members of Hizballah’s leadership responsible for operations throughout the Middle East, further exposing Hizballah’s pernicious activities that reach beyond the borders of Lebanon.  These designations include senior members of Hizballah responsible for activities ranging from assisting fighters from Iraq to support the Assad regime in Syria, to making payments to various factions within Yemen, and to military leaders responsible for terrorist operations in Egypt, Jordan, Turkey, Cyprus, Israel, the Palestinian territories, and Iraq.

Belying Hizballah’s claim to be a domestic Lebanese “resistance” organization, its expansive global network seeks to extend its malign influence, and the influence of Hizballah’s patron Iran, throughout the Middle East and beyond.  The Treasury Department will continue to combat Hizballah’s terrorist activity inside and outside Lebanon with all available tools and will continue to work with partners around the world to make it clear that Hizballah’s militant and extremist activities should not be tolerated by any nation.

“Whether ferrying foreign fighters to the front lines of the Syrian civil war or inserting clandestine operatives in Europe, the Middle East, and elsewhere, Hizballah remains a significant global terrorist threat,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen.  “So long as Hizballah spreads instability, conducts terrorist attacks and engages in criminal and illicit activities around the world, we will continue to sanction Hizballah’s operatives, leaders and businesses, wherever they may be found.”

The individuals sanctioned today were designated pursuant to Executive Order 13224, which targets terrorists and their supporters for acting for, or on behalf of Hizballah.  U.S. persons are generally prohibited from engaging in any transactions with the individuals designated today, and any assets of those designees subject to U.S. jurisdiction are frozen.

Khalil Harb
In the years prior to Israel’s withdrawal from southern Lebanon in 2000, Khalil Harb served as the deputy commander for Hizballah’s central military unit’s southern Lebanon region from 1988 to 1992, and as the commander for this region from 1992 to 1994.  From 1994 to 1997, Harb served as the commander of Hizballah’s central military operations.  By 2000, Harb supervised Hizballah military operations inside Israel, Jordan, Cyprus, and Turkey.

In late November 2000, Harb was given responsibility for overseeing work of the Islamic Resistance, including assisting with the smuggling of Hamas and Palestinian Islamic Jihad operatives from Syria into the West Bank via Jordan.  By late 2003, Harb was head of the Syrian/Jordan/Israel/Egypt operations unit, which was subordinate to Hizballah’s Islamic Jihad council.

In March 2006, Harb served as Hizballah’s chief of military liaison with the Palestinian factions and Iran, dealing almost exclusively with Palestinians and Iranians inside and outside the territories.  Prior to this posting, Harb had served as Hizballah’s chief of military special operations.  During the summer of 2006, Harb was given command of a Hizballah special operations unit in southern Lebanon, which engaged the Israeli Defense Forces (IDF) in July 2006, at the Lebanese-Israeli border where IDF Special Forces entered Lebanon.  In early 2007, Khalil Harb was chief of Hizballah’s Unit 1800, also known as Hizballah’s Nun Unit, the Hizballah entity responsible for supporting Palestinian militants and conducting Hizballah operations in the countries surrounding Israel, and he travelled to Iran for meetings regarding coordination between Hizballah, Iran, and the Palestinians.

In February 2010, Harb, serving as the leader of the Palestinian activities for Hizballah, planned unspecified attacks against Israeli officials in Israel, in retaliation for the assassination of former Hizballah External Security Organization (ESO) chief Imad Mughniyah.  By mid-May 2010, Hizballah created a new position for Harb as “advisor to the Secretary General,” which provided Harb oversight of Hizballah Unit 1800, which he previously commanded.
As of 2012, Harb was responsible for Hizballah’s Yemen activities and was involved in the political side of Hizballah’s Yemen portfolio.  Harb also served as commander of a Lebanon-based Hizballah special unit that focused on Israel.  Since the summer of 2012, Harb has been involved in the movement of large amounts of currency to Yemen, through Saudi Arabia and the U.A.E., and in late 2012, Harb advised the leader of a Yemeni political party that the party’s monthly Hizballah funding of $50,000 was ready for pick up.

Muhammad Kawtharani
As the individual in charge of Hizballah's Iraq activities, Kawtharani has worked on behalf of Hizballah's leadership to promote the group's interests in Iraq, including Hizballah efforts to provide training, funding, political, and logistical support to Iraqi Shi'a insurgent groups.  A member of Hizballah's Political Council, Kawtharani also helped secure the release from Iraqi custody of Hizballah operative Ali Musa Daqduq, a senior Hizballah commander designated by the Treasury Department in November 2012 who was responsible for numerous attacks against Coalition Force in Iraq, including planning a January 20, 2007 attack on the Karbala Joint Provincial Coordination Center that resulted in the deaths of five U.S. soldiers.

Over the last year, Kawtharani has assisted in getting fighters to Syria to support the Assad regime.

Muhammad Yusuf Ahmad Mansur
Muhammad Yusuf Ahmad Mansur (Mansur), a member of Hizballah since at least 1986, once served in a Hizballah military unit operating in south Lebanon.  Around 2004, Mansur was transferred to Hizballah’s Unit 1800.  Mansur was subsequently dispatched to Egypt to work with Unit 1800 under Muhammad Qabalan, and in 2008, the cell escalated its operations to target tourist destinations in Egypt.  Mansur served as the Egypt-based cell leader.  By early 2009, Egyptian authorities had disrupted the Hizballah cell and arrested and detained Mansur and dozens of other individuals for planning to carry out terrorist operations against Israeli and other tourists in Egypt.  Hizballah Secretary-General Hassan Nasrallah in November 2009 publicly acknowledged that Mansur was a Hizballah member involved in transporting arms and equipment to Palestinian militants.  In April 2010, an Egyptian court sentenced Mansur to 15 years for his involvement in the cell, which was subordinate to Hizballah’s Unit 1800.  However, in late January 2011, the imprisoned members of the Hizballah cell escaped and Mansur returned to Lebanon.  In February 2011, Mansur appeared on Lebanese television with Hizballah officials at a Hizballah rally in Beirut.
Muhammad Qabalan

Hizballah terrorist cell leader Muhammad Qabalan (Qabalan) once served as the head of a Hizballah infantry platoon.  In 2008, Qabalan, as a leader in Hizballah’s Unit 1800, was serving as the Lebanon-based head of the Hizballah Egypt-based terrorist cell targeting tourist destinations in Egypt and was coordinating the cell’s activities from Lebanon.  In April 2010, an Egyptian court sentenced Qabalan in absentia to life imprisonment for his involvement in the cell, which was subordinate to Hizballah’s Unit 1800.  As of late 2011, Qabalan worked in a separate Hizballah covert unit operating in the Middle East.

HEZBOLLAH OPERATIVE CONVICTED IN CYPRUS

FROM: U.S. STATE DEPARTMENT
Cypriot Court Convicts Hezbollah Operative
Press Statement
Victoria Nuland
Department Spokesperson, Office of the Spokesperson
Washington, DC
March 21, 2013

The United States applauds the government of Cyprus for its professional investigation and successful conviction in court today of Hezbollah operative Hossam Taleb Yaacoub on a range of charges involving his surveillance activities of Israeli tourist targets. Over the past year, we have seen Hezbollah engage in increasingly aggressive terrorist activity around the world. In July 2012, just two weeks after Yaacoub’s arrest, we witnessed the deadly impact of Hezbollah’s commitment to terrorism in Burgas, Bulgaria. Today’s verdict underscores the need for our European allies – and other governments around the world – to crack down on this deadly group and to send a strong message that Hezbollah can no longer operate with impunity, at home or abroad.

PRESS ROUNDTABLE IN ATHENS, GREECE WITH PHILIP H. GORDEN

FROM: U.S. STATE DEPARTMENT
Press Roundtable in Athens, GreecePress Availability
Philip H. Gordon
Assistant Secretary, Bureau of European and Eurasian Affairs
Athens, Greece
July 27, 2012

ASSISTANT SECRETARY GORDON: Thank you. It’s very nice to be back in Athens. It’s nice to see some of you again. I think I’ve seen you on a number of occasions including in this very room.

I am here to express our support and solidarity of the Greek people, and the Greek government as it undertakes some very difficult but we think really important economic reforms. We’re following these developments very closely and have a great stake in the outcome, not just for the sake of our friends and partners in Greece, but for the sake of the entire European area and the U.S. economy and the world economy. So we have great interest and we admire what the government is doing in undertaking, again, what we consider to be essential reforms, not just to convince world markets and European lenders of the soundness of the Greek economy, but for the sake of the Greek economy itself. In other words, we think these reforms are worth undertaking because they will lead to a more prosperous and sound Greek economy, let alone stabilize the eurozone.

We also appreciate Greece’s continued partnership with the United States on a number of regional and global issues, notwithstanding the economic difficulties. I had a chance to meet with the Foreign Minister. I also met earlier today with some of the other party leaders in the coalition. The latter mostly to talk about the economic situation, but obviously with the Foreign Minister, not just the economic situation but regional and global affairs. And as we discussed, world events don’t -- you don’t get to hit the pause button while you deal with the economy. There are still a lot of issues between Greece and Turkey and the Balkans, Afghanistan, Iran, Syria, so we exchanged views on those and I expressed our appreciation for Greece’s partnership in dealing with those, even as it faces the economic difficulties.

So again, a big agenda. It’s very important to the United States, so I came here to try to get a better understanding of what’s going on in Greece and the region. I’ll be going on to Turkey from here. But as I began with, I also came to express support for what the government and the people of Greece are doing.

With that, I’ll be happy to take any questions.

QUESTION: One of the priorities of the new Greek government in foreign policy is to declare the exclusive economic zone. Do you believe it can go ahead with this or before that have an agreement or something like that with Turkey?

ASSISTANT SECRETARY GORDON: I think it’s important to avoid unilateral steps. The United States recognizes countries’ rights to declare exclusive economic zones but these things aren’t done in a vacuum and you’d have to understand the full context. We don’t think it would be in Greece’s interest to do it without full cooperation with neighbors including Turkey.

Fortunately you have mechanisms in place, and over the past number of years have developed bilateral channels in which these things can be discussed and I know that they have already contributed to progress and we would strongly encourage Greece to use those channels to have these conversations so that any steps in this area are done cooperatively in the interests of all parties.

They’re complicated issues and it’s not as simple as being able to declare an EEZ or not being able to declare an EEZ, and that’s precisely why it should be done cooperatively.

QUESTION: In order to get the economy started, which is the big issue for Greece, it is crucial to attract more and more investment. What do you believe should be the main reforms that Greece has to make in order to attract investment?

ASSISTANT SECRETARY GORDON: That’s a good question, because attracting investment is clearly a critical aspect to turning the Greek economy around. You need foreign investment. I think frankly over the years there has been a perception in Greece that it wasn’t friendly enough to foreign investment, that there were too many rules, too much bureaucracy, too slow approval rates, and investors need certainty and transparency. They want to be sure what the rules are, the regulations -- that they’re not going to be changing. So I think creating a more investor-friendly climate is critical.

There are other less direct measures, but are still important measures, and those are the ones that I think the government is already working on in strengthening the overall economy so that you get growth and buying power, purchasing power, so that it’s worth making the investments. But I would start with the question of bureaucracy, rules and regulations. I think you can look at, there are rankings of countries in terms of, for example, how quickly an investment can be approved and I think Greece needs to advance on that list.

QUESTION: I will stick to the economy because that’s what’s troubling us. I don’t know if you could say a few words about the meetings that you had with the other two governmental partners. And we had the Assistant Secretary of the Treasury a few days ago and I was wondering, the idea is, especially ahead of the American elections, there is this notion and I think it’s understandable that the United States is beginning to lose patience not with Greece, but the way the European leaders are handling the crisis since Greece and Ireland are not a problem right now. Nothing compares to what will happen if Spain or Italy fail or these growing costs continue.

So it would be great if you would give us your insight on this, and what is worrying the United States, and apart from declarations of support, which are good, or that you have to do something. If you have any other idea of how you could convince the European leaders to move on the next step and do something decisive.

ASSISTANT SECRETARY GORDON: Sure. As I said right from the start, we are following it extremely closely because we have such a great stake in the outcome. We have a great stake because we care about the hundreds of millions of people who live in Europe and their prosperity, but we also even have a more direct national interest at stake, our economy is so dependent on growth and stability and that of our largest trading and investment partner in the world by far. I think it’s accurate to say that some of the drag on the U.S. economy right now are questions about the eurozone, and so that’s why we’re so committed.

We acknowledge also that we don’t have a direct say in some of the key decisions to be made in Europe. The question of how big is the firewall or whether there are bailout funds or whether the ECB should be buying bonds at a certain level are not issues on which we get a vote. But because we are so engaged and so committed and so intertwined with Europe, we have views and we share those views and I can tell you at the highest levels, including our President there are regular conversations with European leaders about the way forward.

You mentioned American impatience. I wouldn’t describe it as impatience. I would acknowledge that --

QUESTION: Losing patience. I think it’s right.

ASSISTANT SECRETARY GORDON: That’s different. Yes. We would like a comprehensive solution tomorrow or yesterday, but we also understand these are complicated decisions. They’re not easy. The reforms will take time. I think Angela Merkel but other leaders across Europe keep trying to explain that as well, that there is no magic bullet and there is no quick solution to this problem and we understand that. At the same time, we are urging leaders and I think have been for some time to be as decisive as possible as quickly as possible because the stakes are so great.

In terms of what -- you asked about my meetings with the party leaders and what needs to be done -- I would say I was encouraged from what I heard in the sense that the coalition members seemed determined to implement the agreements that have been reached. They seemed to have an appreciation that markets and governments need to see results and real efforts and structural reforms before they will respond positively. It goes back to the question that I was asked about investments.

Of course they took the opportunity to explain to me how difficult it was on the Greek people and the Greek economy, which we know and appreciate, but they also demonstrated a real understanding that only by taking these difficult measures will eurozone governments, the European Central Bank, and private investors be convinced that they can really put their money in Greece.

That’s what I encourage them to do as well, as quickly as possible and as decisively as possible, demonstrate in deed as well as in word, that there really is a new Greece, that Greece gets it, that it’s doing the things that are necessary to make clear that this is a place that you can really do business, and in this highly competitive globalized world there are a lot of places where you can send your money, as investors and hedge funds and others demonstrate every single day. And if they have the slightest doubts about a country’s ability to pay its debts or about what would be the fate of their investment, they’ll just go elsewhere.

That’s why it’s really incumbent on the country in question to take decisive, necessary measures. But as I say, from my meetings here I was convinced, I think it was in the first place encouraging to see the Greek people vote for parties that understood that, because the alternative would, in our humble estimation, really not serve Greece’s interests well. And it was encouraging to hear from those party leaders that they understand that and they’re determined to finish the job.

QUESTION: I would like to insist on the European economy matters. Are you worried about the possibility of a eurozone breakup and how possible do you find it? Because you see there were, even from German official, statements the past days about Greece leaving the eurozone, so --

ASSISTANT SECRETARY GORDON: I would say a couple of things. First, we’re confident that the eurozone will stay together, that the governments have the commitment and the means to keep it together, and we believe that’s in our common interest. So we don’t want to see a breakup of the eurozone.

I would add that we’re not alone in thinking that. I think it’s worth pointing out that notwithstanding all of the questions about the viability of the eurozone, all of the costs involved to certain countries in keeping it going, all of the real pressures on certain members including Greece to do difficult things to stay in, notwithstanding all of that, every single member of the eurozone and governments across the European Union remain committed to it. If you want to simplify, both the lender countries and the debtor countries, they still remain committed. Even in Greece where we know you’ve borne great costs to do the necessary things to stay in, the Greek government is committed to it, and the Greek people voted consciously for parties who are also committed to it, notwithstanding the costs. I think that shows a real recognition of the values of preserving the eurozone.

You point to German leaders speculating about a breakup. If you listen carefully -- first of all the main German leader, the Chancellor, has been absolutely clear that she wants to preserve the eurozone and I think you see that in her actions when Germany puts up money to keep everybody in the eurozone -- and so what you’ve had is a couple of leaders most recently say they’re no longer appalled by the notion of one country leaving the eurozone. That’s still a very long way from saying we should abandon the eurozone, it’s not in our interest. On the contrary, I think all evidence points to a real recognition that it’s in everybody’s interests.

Then take I think even just yesterday Mario Draghi, head of the ECB, saying we’ll do -- you can check the quote exactly -- but something along the lines of whatever it takes. So I think there’s a recognition among all key actors that as painful and difficult as it is, it is really worth preserving. That will in itself I think help support the eurozone.

QUESTION: I would like to ask two questions. One is [inaudible] be positive on an extension of the Greek adjustment program from two years to four years so that it’s easier for the people to accept it. The second is the situation in Syria seems to get out of control. The Obama administration has shown that any action that could possibly be taken should be in a collective manner. But do you believe that the only way to do this is through the UN Security Council? Or possibly if the situation gets even worse we should explore other possibilities like a coalition of the willing?

ASSISTANT SECRETARY GORDON: Thanks. Two separate things. First, on the question of an extension of the timetable for Greece’s program, that’s really between Greece and the Troika, which is the source of the original deal. It’s not for us to say what schedule it should be on.

That said, I would share my sense that the first thing Greece needs to do is demonstrate that it’s committed to the program and it is undertaking real reforms. I think, being perfectly frank, it’s too soon to start asking for an extension. Your election was what, less than two months ago. The government has started to undertake a number of important steps, but I think that receptivity in Europe to any talk of extensions now is premature. On what basis would they do that? So I don’t think it’s something that should be ruled out, but I think in terms of sequencing it should be first things first. Demonstrate over a period of time that you are genuinely committed to these difficult steps in implementing the program, and then on the basis of that effort I think the prospects for discussing timetables or flexibility would be much better than doing it in the other order.

As for Syria, we’re obviously very concerned about the situation in Syria. It has become clear to us for some time that there needs to be a political transition in Syria, that Syria will never be stable and peaceful under Assad who has used violence against his own people. And yes, we have gone to great efforts to work with the international community. This is not just a U.S. view. The international community, including most importantly all of Syria’s neighbors practically and the Arab League, are focused on a political transition as well.

Yes, our strong preference has been to work on it through the UN Security Council, that’s why we’ve been back to it three times for proposing different resolutions focused, as we say, on political transition. Unfortunately, every single time it didn’t pass in the Security Council because there was a veto by Russia and China, including most recently just two weeks ago, and, I might add, by nobody else. There were two abstentions and two vetoes. In the previous one it was 13 to 2. We regret that Russia and China have stood in the way of what clearly the rest of the international community believes to be the need for a resolution supporting political transition.

So yes, in that sense the Security Council route is blocked. We will continue to act with our international partners. There have been a number of meetings of the Friends of the Syrian People with participation of 40, 60, 80 countries and international entities, and we’ll continue to work through that channel and others to increase the pressure on the regime, change the balance on the ground, and support and coordinate the opposition so that when Assad does go, and he will, there is a better prospect for a more stable, inclusive government in Syria than otherwise. And we’re going to continue to work it. On that, we appreciate Greece’s support in those efforts.

QUESTION: Mr. Gordon, do you believe that the Greek-Turkish relations could be deteriorated, could be affected in some way because of the Syrian crisis and the complicated issues that emerge in the region with say the efforts of the Israeli and the [inaudible] to be more close to [inaudible], for example?

ASSISTANT SECRETARY GORDON: I don’t see any reason why the developments in Syria should be harmful to Greek-Turkish relations. In fact I think Greek and Turkish interests in Syria, and even policy in Syria, is aligned, which is aligned with the United States as well, to increase pressure on Assad and foster a political transition and support the opposition. There’s no reason that Turkish policy in Syria should be a problem for Greece or vice versa.

I’m encouraged that even with other complicated things going on in the region and even with political change in Greece, the Greek-Turkish relationship seems to continue to improve. That’s an important factor of stability throughout this region, especially at a time when unfortunately the Turkey-Israel relationship is not improving, it remains frozen at best for the past couple of years. Obviously relations between Turkey and Cyprus are complicated and potential tensions over energy. So this is a region that needs more progress in bilateral and trilateral and quadrilateral relationships and it’s all the more important for Greece and Turkey to be preserving their relationship.

QUESTION: Are you now more optimistic about Greece’s future in the eurozone than you were before coming to Athens? And I’m wondering, if you had a vote, you said the U.S. is not a member of the eurozone. If you have a vote, what would you say to the Germans? We all see there is a strong conflict between the U.S. and Germany.

QUESTION: You have a vote in the IMF.

ASSISTANT SECRETARY GORDON: We do have a vote in the IMF, and that’s really the only sort of direct way that we have a role. But the IMF is only one-third of the troika and we’re only, I won’t say one vote because we are more than one vote in the IMF, but one voice within the IMF.

On the first part of your question about optimism, I would just repeat what I said. I was encouraged to hear from the party leaders I met with their commitment to the reforms that we think are necessary to stabilize the Greek economy and to persuade markets and governments to work with Greece moving forward. That’s most critical of all, because obviously the coalition was elected to do certain things and it needs to stick with its agreements, it needs to demonstrate that, and so to hear directly from those party leaders that they get it, that they’re committed to doing it, they know how difficult it is, but they are not wobbling under these pressures is critically important. In that sense I am optimistic.

I think it matters less what I think than what the markets think and I think markets are voting in favor as well. You’ve seen some money start to flow back to Greece, whereas there was great question, especially the run-up to the election, that you would see bank runs and see money start to flow out. I think since the election of the government some of the steps that they’ve taken, people are more confident that Greece really is on the right track. So that is reassuring.

As for the latter, I won’t speculate on -- you asked hypothetical membership in the European Union, but I think I’ve already said and the President and Secretary of Treasury and State have indicated the types of things that we think are necessary. We have urged more decisive action on the part of eurozone governments, I think we have stressed that while fiscal consolidation is critical, the entire weight of the reform effort can’t be borne by fiscal consolidation alone. You can’t just cut your way out of this crisis. I think that evidence over the past two years gives some credence to that notion, that there needs to be also an emphasis on growth, on liberalization and other structural reforms that will restore Europe to growth and competitiveness and jobs. I think that view is growing throughout the European Union, which we’re encouraged by.

We have urged that a substantial firewall be put in place not because we want it to be used, we don’t. The point of a firewall is precisely so that it will not have to be used and that you reassure markets that they can put their money somewhere and there’s less of a risk of default.

So I think in general while it’s not for us to give a precise prescription as to what Europeans should be doing, we’ve given general indications of what we think is the right direction. I think it’s fair to say that things have largely moved in that direction over time and they continue to do so, and if that balanced package continues to move forward, reforms and fiscal consolidation in the countries under pressure and solidarity and support from the countries in a position to do so, I think the future looks much more positive.

QUESTION: Are you worried about the moves of the Russian navy in the Eastern Mediterranean and the relation that [inaudible]has with Moscow ?

ASSISTANT SECRETARY GORDON: On the first point, we’ve been very clear about the question of Russians arms deliveries to Cyprus -- Sorry, let me be clear, to Syria. I’m not breaking any news here. [Laughter].

QUESTION: [Inaudible].

ASSISTANT SECRETARY GORDON: Exactly. Russian arms deliveries to Syria which we think are only fueling a government that is using violence against its own people. And you heard Secretary Clinton talk about the attack helicopters that the Russians were planning to deliver. The Russians say they’re not signing new arms deals with Syria, just fulfilling old ones. Obviously we welcome that they’re not signing new ones but we regret that they’re fulfilling old ones because we think the last thing anyone needs is more arms in the hands of the Syrian government. So on that we’re clear.

Russia says it’s not taking sides, it wants to be balanced. But it’s hard for us to interpret arms deliveries to the Assad regime as anything else than supportive and lending legitimacy to a government that we think has clearly lost its legitimacy.

On Cyprus, I’m not sure if what you’re getting at is the loan question. We’re aware that Cyprus is considering a loan from Russia. It’s obviously up to the government of Cyprus where it gets its loans if it needs loans. We know they’re also obviously talking to the European Union and others. We would just hope that, there’s always a concern that financial dependency can lead to political dependency and that’s clearly something we wouldn’t want to see, but it’s really in the end a decision for the government of Cyprus if it wants to pursue a loan from some other sources.

QUESTION: Russians are concerned about the so-called Islamic bowl that emerged after Arab Spring in relations. How do you comment this [inaudible]?

ASSISTANT SECRETARY GORDON: There are different aspects to it. You may be referring specifically to Egypt and the trend in Egypt, election of a Muslim Brotherhood government in the wake of the fall of the Mubarak regime.

I think the first thing to keep in mind on questions like this is a certain sense of humility about our own role in the future of this region. It’s not up to us. It wasn’t up to us whether Mubarak stayed in power or not. It wasn’t up to us who the Egyptians chose to represent them, and once Mubarak was gone we felt there should be free and fair elections and it’s up to the Egyptian people who to support and they supported a Muslim Brotherhood government, and we reached out to that government. Secretary Clinton was there within the past couple of weeks. And we’ll look forward to working with them.

So we stand by our principles in those terms. When it comes to what we want to see is rule of law, fair treatment of all citizens of the countries including women, minorities, transparent elections, peace with neighbors. And if a government is willing to abide by those principles, then it’s up to the people what government should be in place.

Russian concerns about extremism we share. That’s a difference that we have with them when it comes to Syria where they talk about the risks that if Assad goes you could have extremism and al-Qaeda. Obviously that’s something we’re concerned about as well, but in our view that’s all the more reason to accelerate the transition or put the opposition and strengthen those groups that support the principles that are dear to us, as opposed to either do nothing or support the Assad regime which we fear will just lead to ongoing violence, civil war, and precisely the extremism that they’re worried about.

Thanks everybody. It’s nice to talk to you.

QUESTION: You’re going to visit the Halki School?

ASSISTANT SECRETARY GORDON: I am.

QUESTION: It’s the first time American officers visit the Halki?

ASSISTANT SECRETARY GORDON: I think our current Ambassador was there during his current tenure. President Clinton went to the Halki Seminary. So it’s not the first and it’s just a continued --

QUESTION: You’re going to press [inaudible].

ASSISTANT SECRETARY GORDON: That’s my point about it being consistent with our longstanding policy. We’re encouraged by what we’ve heard out of Turkey in terms of hopes to open it. It’s been our longstanding position that it should be open, so it’s just an opportunity to express our support for that.

U.S. OFFICIAL SPEAKS AT THE ECONOMIST'S INVESTMENT ENERGY SUMMIT IN ATHENS

FROM U.S. STATE DEPARTMENT
Remarks at The Economist's Investment Energy Summit
Remarks Richard Morningstar
Special Envoy for Eurasian Energy The Economist Conference
Athens, Greece
March 28, 2012
Thank you for inviting me to speak at The Economist’s Investment Energy Summit in Athens. I will jump right into the details, as I know we all want to eat.
Let me just briefly outline our overall policy with respect to Eurasia, and then I'll get into some of the specifics, particularly relating to the Southern Corridor and the Eastern Mediterranean.

First, we encourage the development of new oil and gas resources while at the same time promoting efficiency and conservation in the use of all of our energy resources. Because there is a world market for oil, new production contributes to meeting growing demand anywhere in the world, including in the United States. When we're talking about natural gas in this neighborhood, whether it's the Caspian region, the Mediterranean, Iraq, Russia or Central Asia, it's unlikely that any of that gas is ever going to reach the United States. But it's still important, because it's going to add to the international gas supply. Additional supply in one place naturally frees up supply in another, and as the market for liquefied natural gas continues to grow, we can start to think about gas moving around markets in much the same way oil does. One item that may not be for debate today, but it's going to be interesting looking down the road several years, is whether fixed pipelines become somewhat archaic, given the ultimate development of liquefied natural gas and unconventional gas. I think there will always be fixed pipeline, but there is going to have to be more flexibility in take or pay contracts.

Second, we want to assist Europe in its quest for energy security. One might ask, why does the United States care about European energy security? You are 4,000 miles away. Europe is our partner in any number of different areas. The U.S. and Europe have the world’s largest trade and investment relationship. We have an interest in an economically strong Europe. Europe has a major interest in an economically strong United States. And energy security is a major factor in the economy of any country. And in spite of all the difficulties we're facing in the world today, we can't forget the relationship between energy security and a strong economy.

Of course, Europe is composed of many different states, and energy security is a more pressing issue to some than others. Some countries in Europe do not have a diverse energy mix and depend largely or, even in a few cases, entirely on a single supplier and transport group. So, our aim is to encourage the development of a balanced and diverse energy strategy with multiple energy sources, with multiple routes to market – a competitive, efficient market which offers the best prices for consumers. We say this for all countries. It's not just Europe. It's for the United States; it's for Russia. For example, if Europe wants to diversify its energy supply, Russia should be diversifying its consumers as well.

The third component of our policy is our desire to help Caspian, Central Asian and Middle Eastern - and Eastern Mediterranean - countries find new routes to market for their hydrocarbons. We want to help foster economic growth and prosperity in all of these countries. By expanding export routes, they can increase competition for their resources, demand a fair price and create strong links to the global economy. And most of all, I think maybe the most important part of this prong of our strategy is that we are not in a zero-sum game with Russia. We only care that these countries should be able to make their own choices as to how they deal with their energy resources.

While by no means our only interest, the Southern Corridor is a key component of our Eurasian Energy policy. The Obama administration strongly supports the establishment of the Southern Corridor to bring natural gas to Europe via Turkey from the Caspian and potentially other sources beyond Europe's southeastern frontiers. Gas from Azerbaijan's Shah Deniz (SD) field represents the first significant volumes available to supply the Southern Corridor. Development of the second phase of Shah Deniz is well under way. The Shah Deniz consortium recently narrowed the field to three potential pipelines a scalable Nabucco, SEEP, and TAP. Nabucco West is a modified version of the Nabucco project which would be built to accommodate the current gas production realities of SD II, while also having the capabilities to expand when more gas becomes available in the future. TAP would bring Caspian gas through Greece, Albania, and Italy via the Adriatic Sea. They're all vying for the right to ship Shah Deniz gas into the EU. I recognize that there are issues. BP has also suggested the SEEP pipeline, which stands for Southeastern Europe Pipeline. This possibility would provide for a capillary approach, combining existing pipelines and new construction, throughout the Balkans and Eastern Europe.

We support the Southern Corridor, which will consist of one or more pipeline projects that are commercially viable and strategically significant. A full Nabucco would be a highly desirable political and strategic option, but as with any pipeline it must be able to demonstrate commercial viability. There will ultimately be large amounts of gas to ship through Azerbaijan, Georgia, and Turkey to Europe. We support any pipeline through the Southern Corridor that provides gas to the most vulnerable countries in Europe and that includes concrete, written guarantees that the pipeline will be expanded as more gas becomes available. Additional gas will become available; it's just a question of when. If TAP is ultimately selected, it is generally accepted that it would have to be done in conjunction with an interconnector to SE Europe.

I would like to make one more point regarding Europe. The most important thing that Europe can do – more so than any pipeline or any single gas field - is what Europe does itself with respect to liberalizing its market, with respect to creating interconnectors between countries, by looking at alternative sources of energy, whether it be shale or renewables, by taking advantage of opportunities to improve energy efficiency, by increasing LNG facilities, by increasing storage facilities, doing all the things that are necessary for Europe to have its own balanced and diverse energy policy.

Moving beyond the Southern Corridor, recent, large finds in the Eastern Mediterranean are very important, new components for diversification and energy security for countries in the region and elsewhere in Europe. These developments are complementary to the Southern Corridor. With these valuable finds come some serious political considerations and risks, as well as a variety of legal issues. Yet, at the same time, there is much to gain for all stakeholders.

As to Cyprus, as we have repeatedly said, the United States recognizes Cyprus’ right to drill in its offshore zone. We also believe American companies bring unparalleled world-class experience in offshore exploration, and we support their bids to do work in this region, as we do in other regions. As we have also said, we believe that any potential revenue from future oil and gas resources in Cyprus should be equitably shared between both communities. Our key message to both the Republic of Cyprus and Turkey reflects our long-standing policy, which is to support the Cypriot-led efforts under UN auspices to reunify the island into a bizonal, bicommunal federation and encouraging the two sides to come to a peaceful settlement - this issue could help us get there. This would allow all of Cyprus and other countries to share in the benefits of the Eastern Mediterranean.

In addition, Israel’s significant offshore natural gas finds, including the Tamar Leviathan field – one of the largest offshore gas finds of the past decade – have put Israel on the hydrocarbon map and initiated significant changes in Israel’s energy economy and investment and energy policies. The gas will significantly enhance Israel’s energy security, and Israel is presently examining export potential, including LNG.

Greece also is working to identify potential hydrocarbons for exploitation. The Greek government has announced tenders for seismic studies and hydrocarbon exploration onshore, in the Ionian Sea, and south of the island of Crete.

Having said all of this – the issues in the Eastern Mediterranean go beyond Cyprus, go beyond Israel, and affect the whole region. There are a myriad of legal issues, including law of the sea questions, and political issues that will have to be resolved. At the risk of oversimplifying, I would make the following conclusions. Gas in the Eastern Mediterranean is a good thing. It helps to create diversification and helps Europe, but most of all it helps the region. All countries from Egypt and all the way around the Mediterranean to Turkey and Greece will benefit. There are multiple pots of gold in the Eastern Mediterranean. If equitable solutions are found, all will gain. If not, nobody will reap the full benefits. Voices should be kept low; the parties involved should look reasonably at their interests and talk to each other so that solution can be found and all can benefit.
Thank you.