IMF's Lagarde Says Protectionism Is a Global Threat

of course, on the Bloomberg. A little earlier today, our colleague Francine Locke sat down with the Managing Director of the International Monetary Fund at Christine Legarde in Brussels. She had given a speech there on some of the risks that the I m F is focusing on, among them protect is M and political uncertainty. Let's take a listen

to what she had to say. Protection is M is clearly a threat and one that if it was to be realized, would would really be a break on growth, would be a break on productivity, would be a break on investment, because we are seeing that both innovation and trade are conducive to productivity. Productivity is the engine for growth and better allocation of resources. So, you know, as part of the risks that we see clearly protectionism is one.

The political uncertainty that we see around the world, particularly in the European region is also high on our agenda of risks. And you know, the potential for capital flows moving from emerging market economies to advanced economies as a result of the reinforcement of a dollar and a rise of interest rates is a third one. Those are the sort of three rieks risks um that apply to a situation which you know is quite positive at the moment.

Do you believe that the Trump administration, though, could be less protection is that we feared just at the early in the beginning of January. You know, as as always, I don't think that any economy would actually um prescribe limited growth, limited productivity, limited investment, limited innovation. So if if policymakers, including the US policymakers, want better growth, more investment,

more innovation and productivity, trade is part of the solution. Now, then you go into the question of what kind of trade. Is it trade with restriction, is it trade with distort if measures, and I think everybody, I hope I would agree that we do not want distortions. We do not want restrictions. We want a trade that is open, that is fair and inclusive in order to facilitate opportunities. Great to have with us. Mark Chandler had of f X at Brown Brothers hereman here in our Bloomberg eleven three

oh studios. Since I was doing that day to check Mark, I was remiss and not mentioning euro yen right now one you've been paying particularly close attention to that pair. Why, yeah, sure. I think that that euro yen parents captures the axis and which you can capture a lot of the driving forces right now between the geopolitical concerns in Syria and

in Korea peninsula as well as the French elections. And so that euro yen cross has been moving against the Euro for eleven days in a row through yesterday, and that's the longest losing streak the euro has had against the Japanese yen since the advent of the euro back in the late nineties. Does it does it reflect entirely geopolitics or is there something else to play when you look at the Japanese economy sign well, the Japanese economy

and the euros on economy is growing. It looks like above trend here in Q one as the as both economies seem to be catching a good uh sort of good traction here. But I think that the you're the dollar yen itself. I think it's a relationship that's really driven right now by the ten year US yield. And so even though a lot of people talked about the yen strength yesterday at safe Haven, I don't only see that so much. I see short covering of the end, but I think it's really being driven by the drop

in US yields. You know, we were trading roughly to thirty two sixty on the tenure UH for several months, and we broke through the downside of that and find it difficult to get back into that old range, you know, Mark chand Are. One of the things I was looking at is I was comparing equity markets and going back about thirty days, I was checking on the Japanese equity market, taking a look also at the SMP five. It looks like we've done a round turn. That's so we've just

come and sort of lapped ourselves almost. Is there any context that you can help us understand why this is happening. Why we seem to have this uh sort of On the one hand, you know, people get bullish, they wait for earnings to come out, then everybody sells. Is it just really you know, by the news, sell the room the otherwise, sell the news by the room or sell the news. Yeah, I think that, you know, Brown Brothers, we really help our clients through value investing in the problem.

Right now, there's not a lot of value with stock markets. The US stock marketing record highs, many other stock markets that had big rallies. Emerging markets have been a real surprise in the first quarter up I want to say about eight percent or so. The Japanese stock market is really making new loads for the year I think yesterday or today, and this I think is really reflection of the value that we have before, but also the young strength.

You know, foreigners have been big sellers of Japanese stocks most of this year. Very end of March they turned buyers. And I suspect that the new fiscal year begins, we'll see Japanese capital outflows resume and we'll see foreigners again looking at Japanese stocks. As far as the political situation goes in in Asia and North Korea. I'm sure that's something that you didn't go to school to learn how to write about or even think about a factor into

your analysis. But how do you do that? Yeah? So how do people like me look at a couple of things. One is we try to understand what's happening, and we

try to make scenarios about what's going to happen. And I think that, you know, the Korean Peninsula is one of the left the last of the Cold War sort of challenges, and I think that there's you know, it's what's really challenging about it is when East when West Germany had that leveraged biout of East Germany after the Berlin Wall fell, Germany decided to do it on zone finance the takeover. But South Korea is not rich enough it will do that for North Korea. So it's much

more of an internationally. And East Germany did not have nuclear weapons. East Joreman did have nuclear weapons. But the idea is that how can how could the create to be united? Is that anybody's interest to really put this conflict to rest? And I don't think China would like the Korean Peninsula dominated by South Korea US interest. I don't think Japan would like a United Korean peninsula where it would be a real rival to the Japanese economic

UH power in in East Asia as well. So I'm not sure that anybody has It's sort of like the Middle East. Everybody complains about it, and I see that. Of course, people try to do things about it, but at the end of the day, it might not be in the collective interest to really resolve these conflicts, which is why they're not resolved. Help us understand how you weigh the political risk versus the fundamentals. UH is political risk taking precedence at this point, and that's a good question.

I think that, you know, I start of think of it like this, that's it's like a radio actually the markets, and I think that sometimes there's noise and sometimes there's a signal. And I think that people like myself, our job is trying to help investors distinguish between the noise and the signal. And I think that the underlying macroeconomic fundamentals are the ultimate signal, and the geopolitics is noise, though important noise around that signal. And so I think

it's sort of a bit of a disruption. But I think that the geopolitical situation is not something that can be sustained. A high level of tension like this cannot be sustained. Something has to give, and I think that we go back into a more stable situation as we get past this this coming weekend. How cognizant is this administration?

Do you think about what the markets are thinking? We can ask about this in the context of the FED as well, and you certainly heard from some FED speakers that they are aware of or interested in what the markets are are doing. But for a guy like you trying to find out what administration's policies are, uh, you know, do you think there's some sympathy for people the markets, for people that's just generally here trying to figure out what the heck is going on? I think that's really

the challenge. I just come back from a long business trip in Asia, and I think this is the key question everybody has, is the Trump administration unknown quantity. I know that there's some experienced people there in the in the cabinet, but there's a lot of people with little

political experience, with little knowledge experience in foreign policy. And I think that the communication style all this adds to uncertainties signals that are being sent inadvertedly, and so I think this is what makes the investment climate all the more difficult, uncertainty of policy, untested quantities out there. So

I think there's a real challenge. But what we try to do is still focus on the underlying signal, and that's going to be reversion back to macroeconomics, and they're the key issue is FED policy, tightening of FED policy, balance sheet and what other central banks will do. Bank of Japan is still easing policy, e c B is still expanding its balance sheet. So I think that the divergence still underpins a large, a long dollar position in the long run, but we got this noise in the

short run. Tell us about China and the Chinese you want, and I know that Stephen Schwarzman, the head of Black black Stone, yesterday was speaking on Bloomberg Television with the David Weston in which he spoke about China as a currency manipulator, and the point that he made, I believe was that he doesn't think that that's going to be a label that will get put on the Chinese. Yeah, that's my view as well. I think that oftentimes in campaigns I think Bush, Obama, Romney all talked about China

manipulating the currency. It may have in the past, but the Treasury Department has come up with a criteria and China just doesn't make the criteria. For example, one of the criteria is that that a country has a large by that they mean more than three percent current account surplus. China is close to half of that. I think last year is about one point eight percent. Another criteria is a country that has increasing currency reserves as they intervene

in the foreign exchange market. And as we know, over the last eighteen months or so, China's reserves have fallen by a trillion dollars. A trillion dollars there's more reserves in the US Canada have combined. And so again China dosn't meet this criteria. And I think this is we have to make a distinction between operational policy and declaratory policy.

How how is that shown up in the market. In other words, if if some one didn't tell you that the Chinese uh this trillion dollars hadn't flooded out, where would you go to see it and understand where it ended up going? Yeah, well, this gets a little bit tricky. I don't think you can really just look at the foreign exchange market because the currency, the R and B, is very steady against the dollar. I don't think you can look at the Chinese stock market. It's being driven

by other things. What I would be looking at is really is the Chinese companies that borrowed dollars that are paying them back, and that the i i f TO Institute for the National Finance said that about two thirds or those capital outflows from China are really Chinese companies who borrowed dollars paying them back. So I'd be looking at those kind of below the surface things that are

a bit bit more difficult, too difficult to find. But are there, nonetheless those Chinese companies that are in debt and they're paying back in US dollars they borrow the dollars and when the dollars and index for that or something I mean is there. You just gotta go company by company by company and you have to look at really what's behind the capital flows. I think a lot of us look at the trade flows, but I really think that behind the trade flows that was a sort

of our parents generation. But I think now it's the capital market that drives the trade flows, not the other way around. David Grew with Pim Fox today, Tom keene Off this week, Mark Chandler with us from Brown Brothers. Hariman and Mark and I were listening to the interview that Francine Lockwood did with Christine Lagard just a few minutes ago. She was enumerating risks Mark. She said, it's protectionism, political uncertainty. We've talked about both those in some detail.

That she said, potential for capital flows moving, How does that play out in an economy that she says is quote quite positive at the moment. Yeah. I think when she was getting at David was that typically you'd want to see the developed world lend money and invest in emerging markets. But really characterized really the pre crisis era, pre crisis phase at least was capital flows going from

emerging markets back to the developed world. And I think that the stabilized and the other issue I think that the capital flow issue raises is what Pim and I had talked about before, and that is that many countries and companies borrowed dollars when U S interrust rates were low and the dollar was cheap. And now that that that cycle is reversing. It looks like there's some dollar imbalances out there still, and that becomes also a destabilizing element.

Francy asked her about China being labeled the currency manipulator, the prospect for that happening, and she demurred. Talking about the report the I m F is going to release here in a couple of months. I noticed the same thing happening now within the Trump administration, Stephen Nutan saying we're gonna get this forex report, this twice a year FX report soon and uh, you know, not not having

the hot rhetoric that we saw on the campaign trail. Certainly, are you ruling that out at this point in light of what we're hearing from from the US the U S. Government, Do you think it's unlikely that we'll see that that labeling happen? In some ways, I think it's unlikely. But on the other hand, look at what happened when Japanese Prime Minister Abbe visited the US. UH the U S and Japan agreed to a high level between the Vice President and the Japanese Finance minister to having to have

trade talks. And now after President she visited the United States, the US and China are going to be a hundred day crash negotiations on a cabinet level. And it turns out that if a country is found guilty of manipulation by the U S Tradure Department, the first thing that has to happen bilateral trade talks. So I think that for me, it's the reason that China doesn't get sady. The currency manipulated is one that doesn't meet the criteria.

And secondly, because there's already these trade talks in place. And I think this is really partly the Trump negotiating type strategy. Make these outlandish claims and then get the other side to uh, to compromise, to make some concessions, and then you can pull back, that is, the US can pull back from some extreme operation excuse me, some extreme declaratory policy, Mark Chandler, Can I just ask you?

And I know I'm putting in a tough position because talking about other people's credibility is always a fool's errand but um, you know, we are how many years into the Greek crisis eight years? Uh, you have um a situation now where a fifth of the Greek population is currently unemployed, and that's being generous with the statistics. Uh, you're talking about a hundred and eighty percent debt to GDP plus about two and a half billion euros has just gone out of Greek banks in January and February

of this year. If you can't solve a problem like Greece, which I understand is about the economy, the size of Philadelphia, what credibility do you have to talk about all the other efforts that are going on around the world. And I think that you know, I think that him. This is I think a issue that people haven't focused on yet. It's coming up. It's gonna coming to a head in the next couple of months. And here's what the issue is.

The German parliament and the Dutch parliaments say the only way that they'll give more money to for the grease bailout, so called bailout, is if the I m F contributes money. The US is not sure that it wants to okay the I m F to contribute even more money to Greece. Isn't this a problem? I think you the point that I hear you raising. Isn't this a problem that europe can solve themselves? Do they need you? If Tillerson says,

what do US taxpayers have an interest in Ukraine? Surely U S taxpayers don't have an interest in bailing out griefs. And so I could conceive of a situation where the I m F board rejects that is, with the US veto tells the I m F it cannot lend more money to degrees, and there causes a bit of a crisis in Europe, because then what can the Germans do a few months ahead of their national elections? Couldn't you foresee a similar conversation where somebody off handedly says, why

do US taxpayers care about the IMV? Yeah? I think you know. This is an important point I think is that that is that the the American first rhetoric of Trump's is not hearkened back to World War Two, but World War One. And remember what happens after Woodrow Wilson proposes the League of Nations. The Senate says, no, you don't. And what the US was launching then, even though a lot of people call it an isolationist phase, it was really unilateralist. And I think this is the issue the

under the Trump administration. I think the idea is that these multi lateral institutions may prevent the US from articulating or expressing its national interest, but I think that at the end of the day, uh, the US will be hesitant to break from these, even though it might perhaps, as they've hinted, not necessarily listen to the all the w t O declarations UH where they where they try to exert their influence stronger within these multi lavel institutions

and enforced more vigorously some of the trade agreements. So I think that this is a risk that the protectionist, nationalist, scorched earth wing of the Trump administration wins out. But right now I'd say it looks like, uh, maybe a tilt the other way with that Kushner Bannon reproache mais that seemed to be in place as of last weekend. Our Mark Channel with Brown Brothers Harriman, thanks for being with us. Appreciated. Brought you by Bank of America, Mary Lynch.

Dedicated to bringing our clients insights and solutions to meet the challenges of a transforming world. That's the power of global connections. Mary Lynch, Pierce Federin Smith Incorporated, Member s I p C. Turning out a foreign policy he had a four year tour of duty in Brussels is the Supreme Allied Commander, Admiral James Debritus is now doing the

flex A School the Toughts University. He's anost is great to talk with you, is always, especially on this day when the NATO Secretary General is in Washington, d c. For a series of meetings at the White House. Will he'll hear from him later this afternoon when he and the President have a press conference at the White House. How confident are you that we're going to move beyond

the conversation about funding with these two leaders today. It's something that the President is very keen to talk about. He has been keen to talk about. Has he has he made his voice heard on that issue enough? Do you think we can move past it? I think he has. And you know, there's a business show. If a NATO or a stock I would say now is a pretty

good time to buy some more of it. Um. It is going to be a good conversation about the challenges that Russia poses to the Alliance, about the possibility for additional NATO resources devoted to the fight against Syria, and hopefully a little bit about cybersecurity and how we can work together on that. So yes, I think message received at NATO on the funding and we are going to

be able to move beyond it. Uh, it's gonna be an awkward conversation to have about the one sentence offhand remarks seemingly the Secretary of State Rex Tillerson made yesterday about about the Ukraine. He said, well, why should US taxpayers care about Ukraine? If you, if you had a few minutes with the Secretary, what would you say in

response to that? I would say that any time we allow a big nation like Russia to invade a relatively small nation like Ukraine and carve off a significant chunk of its territory, in this case the CRIMEA, if we, as an international community, and as the United States as a leading nation, allow that to happen, we are all

at risk. And therefore I would say to the American taxpayers that we don't have to send a couple of hundred thousand troops to Ukraine, but we ought to be in the game helping arm their military and pushing back against this kind of Russian aggression. It's in our global interest to do so. Admiralstravitas, I wonder if you could share just a bit of your personal history to demonstrate

how tractable some of these conflicts can be. And I'm thinking of your grandfather and Turkey and then your return to Turkey. I can. In nine two my grandparents became refugees. They were of Greek descent, but they were citizens of the Ottoman Empire, living in western Turkey in a town then called Smyrna today it's known as Zazmir. The Turks Uh, to put it politely, invited them to leave. They became refugees. The city was burned, they were rescued by Greek fishermen

and therefore came to Ellis Island. So my family story is born out of these kind of refugee challenges. Now the question would be for someone like me who has a shall we say, complicated family history with Turkey, can I rise above that? And the answer is yes. And when I was NATO Commander, the first city I visited

as the Supreme Alley Commander was Anca, Turkey. And after four years as the commander, when I left, the Turkish Foreign Minister h later the Prime Minister, Ahmed Davitt, who presented me with a book of vintage postcards made of the Greek community in Smyrna in the nineteen twenties, and he said, Admiral, you have helped us see that we need to know the past, but not be imprisoned by it. And I think that was a pretty good lesson for me.

So what what packet of postcards would you like to send our show to both the Vladimir Putin UH and perhaps even the leadership of Iran. Yeah, in a nice way. With Russia, the packet of postcards I think we want to show is that of US Russian cooperation in the Second World War. We do have history together that can be positive. I think we can also talk about our cooperation and things as diverse as counter terrorism, counter piracy in Afghanistan. But the cautionary message needs to be that

was then and is not now. In terms of Iran, I think it's even more difficult. We we don't have any shared history of cooperation with Iran. In fact, we we live today as part of the fruit of a poison tree from the hostage crisis. And so I think with Iran it's really tabula rasa clean slate. We need to find UH kind of track two diplomatic ways to

approach them. Both of those are going to be very hard, and we have to start by confronting both Russia and Iran when they line up behind a brutal war criminal like Lasa. How should Secretary State Rex Tillers don't approach these meetings today with Sergey Lava, the Foreign Minister, and perhaps with the President Vladimir Putin. The White House has

been keen to talk about fake news. We see this four page document which they lay out the case for Russia covering up or or excusing or trying to obfuscate when it comes to the gas attack we saw northern Syria last week. How hard is it to engage with a party that is not acknowledging the facts. Well, first of all, I gotta say I've been very encouraged over the last several weeks by, if you will, the emergence

of Secretary of State Rex Tillerson. He's he's now doing media, he's engaging in the public debate, he's attending the important meetings alongside the president. He's going to Moscow. So I think he is stepping up and doing so very well. Secondly, I think he needs to bring that kind of laconic Texan approach he has comment about Assad yesterday really struck a chord with me simply flatly saying SIDS regime is

not going to survive with someone like Tillerson. I'm always reminded of that story of the Texas Rangers when the governor of Texas was asked to send Texas Rangers to quell a riot and the mayor of the town said, how many can you send? And the governor send one riot, one ranger. And I think Rex Tillerson is that kind of Texan. So I think a tough talking, here are

the facts, laying it out. That's why the memo is a good thing, is going to be the best way to deal with Russia because Russia responds to strength, and I think that's what Secretary Tillerson needs to project well as someone that's so familiar with that. With that particular area. Is there this idea that now only bilateral agreements will work, or this idea that there is a regional or comprehensive kind of conflict resolution that can take place that would

satisfy Syria and Iran, Iraq and that whole area. The latter, We're not going to solve this in a unilateral way. As as much as I support the Tomahawks strikes, they are certainly not the answer. They're merely the beginning of a more serious conversation. Uh. The strategic message of the strikes was quite simple, that the United States A is willing to use force and be intends to be involved

in the resolution. But I think the way to think about how to resolve it is to go back to the Balkans in the n nineties, and it took a coalition that included not only NATO in the United States, but did ultimately include Russia to solve those wars in the which looked a lot like Syria does today. So I'm much more a believer in the multilateral regional solution than us doing anything unilaterally. Had a conversation with Sandy Winnifeld a couple of days ago, right on the heels

of those strikes. We were talking about the difficulty of enforcing a red line like that and then thinking that you're not going to change policy, that there isn't going to be cause for another set of strikes like the one that we had last week. Do you agree that it's it's becomes more complicated now? It does? And um,

that's kind of good. News bad news. The good news is that we've enforced a long stated US position against the use of chemical weapons, and I think the strikes were legal under international law for a variety of reasons. But the bad news is you've put chips on the table now and it's it would be a thousand times words to have launched those strikes, and then the next time it happens, do nothing. That's simply unthinkable. So we're

back in the game. The question is can we modulate our approach so that we don't end up with a hundred and fifty thousand troops like we did in Iraq and Afghanistan. We don't want to do that. We want to be smarter about how we do it. Back to the previous question, regional multilateral is really the way to go an most let me ask you to reflect on what we saw at mar Lago last week. Yes, of course events interceded. We saw the strikes on Syria, but let's focus on China here, focused on East Asia for

for a little bit. What were you watching, what what queues were you looking at? What were you hoping to see as an outcome from that summit in Florida last week? I thought It was a good summit, and the President must have been very happy with the fact that those strikes unfolded. Literally they're having dinner down there, pretty remarkable, in a very good way to signal to the Chinese that we're willing to use for us, we're in the game as it applies not only in Syria, but the

implied message of similarly in North Korea. What I was looking for was a shared statement out of the two of them that they would work the North Korea problem together, because I think at the end all roads to Punyang lead through Beijing, so that transpired. And then on trade, I think they had a pretty calm talk which made me feel as though we're not going to see any precipitous action out of this administration in terms of tariffs or barriers to Chinese goods, at least immediately. So I

think that's all good. And the the uber message I would say is, um, it's going to be more about China than it is about Russia. And if you looked at the rhetoric during the campaign, it was a lot of g We're going to conduct a grand bargain with Russia. I wouldn't go so far as to say this is a pivot to China, but it's certainly underlines the fact that the administration gets it correctly that it's really about the Pacific and about China over the long haul for US.

We're speaking with Admiral James has To Ritas used, the dean of the Fletcher School at Toughs University, a former Supreme Allied commander at NATO, is also the author of the Accidental Admiral. Let's talk about solutions. Admirals tots in terms of hard and soft power. As a former commander of a destroyer squadron and a carrier strike group, which would you rather have a television and media network or a carrier? You got to have both. And uh and as I always say, hard power, there are times when

you absolutely need it. We're not going to negotiate a solution with the Islamic State. We're going to find him and kill them. But um, the lawn game so often is about the soft power side. It's about strategic communications, creating better global opportunities, expanding economic solutions. So you need both. You need hard and soft power. And the mistake is when you think about it as an on and off switch, that that it's a binary choice. Um, it's actually a

real stat you've got to dial it in. So at the moment, we needed hard power to respond to the chemical strikes. Over time in the Middle East, we're gonna need soft power if we're gonna really solve the problems there. You need both. How cohesive is this foreign policy team? I imagine that you know Secretary Defense James Mattis, well, you probably know hr McMaster, Lieutenant General char McMaster as well. Perhaps you know litt less of a known quantit would

be Nikki Haley, the U N Ambassador. But are they Are they becoming a unified voice here? And how do they complement one another? I would say over the last two weeks we've seen a grammatic improvement in synchronicity amongst them. There's still a little bit of a disconnect with ambastaor Haley up at the United Nations and what Secretary Tillerson saying. But broadly speaking, you're seeing this team come together, and I think I would attribute it frankly to hr McMaster.

The job of the National Security Advisor is to be that coalescing feature, not to create policy, but to give all those cabinet officials room and space to work together and come up with coherent policy. Lieutenant General Master, I've known for twenty years. He's brilliant. In fact, in my latest book, The Leader's Bookshelf, one of the books I

talked about is hr McMaster's book, Dereliction of Duty. He could not be better in this role and is off to a terrific start, and I think you're seeing that reflected in the cabinet performances. What did you learn from his book? I learned that you have to speak truth to power unafraid. And the book, of course, is about the Joint chiefs of Staff during the Vietnam era who are not challenging President Johnson, and that contributed to us UH falling deeper into the spiral of Vietnam and UH.

The unvarnished truth is what a senior military officer owes his or her leadership. And I think that's loud and clear. In today's world, President Trump needs voices that are unafraid to come to him and point out where we're failing and what we need to do. Earlier, we were talking with Mark Chandler. He's in the in the foreign exchange space,

and we're talking about time horizons. This is an administration that maintains that it has plans but doesn't want to share them, and certainly that's something the present has said over and over again. His his reasoning for that is he doesn't want to give away the secrets or giveaway

the the strategy. Help us understand the degree to which we should trust a leader who says that, do we need to know more about, say, what happens next in in Syria after the strikes that we saw last week, do we do we need to know more of the contours, more of the plan going forward. I think there's a distinction to be made here between strategic plans and tactical execution. I think strategic plans need to be discussed, they need to be shared. You need to build support both in

Congress and more importantly, with the American people. You can't do that without laying out what your plan is, ends ways, and means in Syria, in dealing with North Korea and so forth. On the other hand, it is foolish to transmit your tactical plans. Okay, I'm gonna launch Tomahawk strikes. Then I'm going to bring in special forces, Then I'm going to bring in long range bombers laying out that kind of campaign plan obviously as a mistake. You need

to understand the difference between those two. What's desperately needed, in my view from the United States on Syria is a strategic vision, and we have not heard that as yet. What do you make of what Senator Lindsey Graham and others have said that there need to be more troops on the ground in the region focused on Syria. Yeah, I agree with that up to a point. So let's put it in perspective. At that peak, we had pushing

two hundred thousand troops in Iraq. When I was the NATO commander and I had responsibility for the mission in Afghanistan, I had one hundred and sixty thousand troops there. Um, we don't need that level of troops, but I would argue we probably need around ten thousand troops in Iraq and Syria to support the local forces as they accomplished the military missions. That's kind of the model we've moved to in Afghanistan, where we only have eight thousand US

troops and the Europeans have about six thousand. We used to have a hundred fifty thousand. We can use local troops that ought to be the model. We do need somewhat of an increase, but certainly not what we did in Afghanistan and Iraq. Admiral Stavita's what kind of public relations effort would be needed to convince the American public? Do you believe that ten thousand US troops ought to

be in Syria. I think that there is an enormous amount of what I'll call Middle East fatigue in the country, and people kind of conflate everything as Iraq and Afghanistan and Syria and Libya and Palestinians, and it's just a huge mess. What we need to do is disaggregate these things and UH queue up for the American public UH Syria and bash R El asads particular form of brutality. I think the US public would get it that people that are using chemical weapons like that have absolutely got

to be stopped. And I think um I would lead with that and then build the strategy out beyond it. So, in other words, use that use the images in the public in the public venue in order to help formulate that kind of policy exactly. I think the American public as a general proposition, will go along with the use of American force as long as they understand why it

matters to them. And I think the case, just as we were talking in the earlier segment about why Ukraine UH, the case to be made is you don't want to let big nations gobble up chunks of little nations. And here in Syria you want to make the case that war criminals need to be stopped. And boy, we we should have learned that lesson across the course of history, going back certainly to the last century and fascism as

it wrote up in Europe. What do you think reporter should be asking the Secretary General today at that press conference? Was that was the number one question you think they need to ask? Well, I am going to be pragmatic here and say the first question out of the box ought to be funding. It ought to be, uh, Secretary General, how soon will the NATO nations hit the two percent gross domestic product goal that they've set for themselves. I think the second question ought to be will NATO participate

in operations against the Islamic State as an alliance? And I think the third question a little bit off the beaten track, but would be an important one is what is NATO doing to protect itself from cyber attacks. When you look at Russia's growing capability demonstrated in our own election, I think that's an alliance problem as well. So there's three questions and old James tebrids. Thanks very much. Thanks

for listening to the Bloomberg Surveillance Podcast. Subscribe and listen to interviews on iTunes, SoundCloud, or whichever podcast platform you prefer. I'm out on Twitter at Tom Keene. David Gura is at David Gura. Before the podcast, you can always catch us worldwide. I'm Bloomberg Radio, brought you by Bank of America Mary Lynch, dedicated to bringing our clients insights and solutions to meet the challenges of a transforming world. That's

the power of global connections. Mary Lynch, Pierce, Fenner and Smith Incorporated Member s I p C.