What Russia Does is Bluff, Says Friedman

Our guest is Robert Hormats, the vice chairman of Kissinger Associates. Bob, it's great to have you with us, and I was just flicking through what is a fantastic career in public service. You helped manage the Nixon administration's opening of diplomatic relations with China's communist government. UM, as you know, typically these are much orchestrated events when two leaders meets each other with predetermined deliverables. Do we have any of that with

this Well, they're not predetermined at this point. But I think that Trump has made a number of statements which have been divisive in terms of US relations with Europe and US relations with our allies, in particular in NATO. But he also has an opportunity, as other heads of state have had in the past, other American presidents have had in the past, to really exercise leadership at the summit. I wish the President well. I hope he succeeds to succeed.

I think is very important and other presidents have understood this as well, to take a strong leadership role, particularly in standing up to Russia or the past Soviet leaders, and that is to really exercise leadership and say, we need you to stop imposing your will and your pressure and your disruptive measures on the Ukraine. We need you to work with us in Syria to stop the continued movement east in particular and southwest in particular of the

Syrian regime. We need you to work together to strengthen the ties that we could have between us. So he could make a leadership statement by making progress on cooperation, constructive cooperation on Syria, constructive cooperation on Ukraine and u and many other areas as well, and back off on his meddling in the US. If the President were to take a leadership role, he could really exercise a lot of influence in this summit, strengthen our alliances strengthen our

relations with the EU. So I wish him well. It's a great opportunity for him if he wishes to take that leadership role as Reagan and Nixon and other presidents have done before him. I would like to pick up on that. What success, Bob, How do you define six sense at a summit when there is no pre defined agenda. Well, that's of course one of the questions. There's no defined agenda, but doesn't mean you can't make progress on these issues.

One would be to have an agreement whereby the Russians would stop the Syrian regime from moving eastward to the eastern side of the Euphrates. America has troops there. We need to keep those troops there until their stability and not allow the Syrian regime to just go in. That

will simply strengthen the Russians and the Iranians. Also on the question of Ukraine, to get uh some arrangement to maintain the ceasefire that was once again reinforced or agreed in July, but has now begun to deteriorate a little bit. That would be a success and some degree of of progress, or at least pressure on Putin to stop interfering in American politics. We've already had these indictments. Those could be a point of strange for the president if he takes

them seriously and says we have the evidence. We probably have more evidence that we haven't released yet, and we're going to do that if it will release it if we have to. That's a big problem for you. Russia needs closer economic cooperation with the US because economy is not doing very well. So if you do these kinds of things putin we will do something to be helpful to you economical, but we need evidence that you're cooperating Syria,

Ukraine and backing off interference in the US. Tough order, but areas where presidential leadership could be a very positive thing. So I wish him well if he takes these kinds of positions. I hope he does Investador harmts Um, I think of the Imperial Hotel in Tokyo is a set

piece of Cold War architecture. I'm standing in one right now, the acclaimed Hotel Vacuna build in nineteen fifty two, and folks, if you ever want to see the ground zero of Swedish and Scandinavian design, Bob I I assume you stayed in this hotel various semi trips. Is well, this hotel where I'm standing and brings back the nostalgia that President Trump always seeks for. Are we wrong in our nostalgia for another time, in our fading memory of the Cold

War and the tensions between Russia and America. Well, I think we should bear in mind that during the Cold War we were able, in fact to work with UH then Soviet Union leaders to deal with some issues. And one issue that he can deal with, and you go back to the Cold War, the so called New Start Agreement, which is to continue to reduce nuclear capabilities on both sides. That's something that we we did to a degree during the Cold War with Start one. The other two starts

didn't work so well. But now we have a New Start we could reinforce that. So we shouldn't we we do. We should not yearn for another Cold War. We're fortunately out of that period which was very dangerous, but we don't want a new Cold War. And therefore, I think it is important to bear in mind the lessons of the past and figure out ways of working now with who if he's willing to do it. But the only way to do it is to be very strong and

resist his pressures in the areas that I mentioned. He understands strength, and if he sees openings for dividing the U S from its allies, the U S from the EU, fragmenting Europe, he will take advantage of. So the strength that President Trump demonstrates is going to determine whether we're able to work with the Russians successfully or not. And I hope he does show that strength because I wanted to succeed. I don't want us to go back to another Cold War. Well, let's pick up on that point.

You've just mate. Um. If President puts In sees an opening to divide the rest of Europe from the United States, it's that opening there at this summit. Well, if you look at what the President has said about going it alone and his criticism of the EU and some of his criticisms of NATO, Trump may be inadvertently perhaps signaling Putin that he can divide the West, that he can

divide the US from Europe. So, therefore, I think that it's important that Putin be disabused of the notion that whatever Trump has said in the past, that he can continue to pursue his divisive ways and divide the US from its friends and allies which are critical to our security and to theirs. Bubbalo mats, it's great, can't you have the really really appreciate your time here on the

bloom ducks of Islands. The vice chairman of Kissing To associates with Tom Kaine in House, Saint kim My Saft, Johnathan Pharaoh in New York City, John Farrell, and I are now advantaged to have with this Charlie Saloni's pastor Neck, who is well not a military brat, but he grew up traveling the world as a banker brat. His father was a leading banker, and he lived here, he lived there, and he ended up in Middletown, Connecticut at Wesleyan University.

For a guy from Finland, what was the first day on the perfect gorgeous liberal arts campus of Wesleyan University, one of the toughest ants in America. Well, I exactly. I wanted the liberal arts education because I wasn't sure what I was gonna want to be. Um, it's a little unusually in Finland, where you choose you're to be a doctor or a lawyer or whatever you're gonna do. Um,

I loved it. I mean, you know, you get to work every day with brilliant people, learn read and then it's your job to see what you get out of it. Right that The theme that you studied at Wesleyan at Helsinki and your work with the Finnish Institute of International Affairs is to pick up and look forward from the Westphalian system over to a clash of civilizations. Maybe we drag in for red Zakaria in a post American or a post Finland world, and we staggered or whatever, we're

staggering too brief, Mr Putin and Mr Trump? What are we staggering to right now in international relations that affects all of us? Well, well, this is just it if I if I'm looking looking at it from Helsinki right now, it is unique that the US and Russian leaders both seem hell bent, if I may use the expression to weaken and divide boding, can we say hell bent on radio? Is that? Okay? Yeah, okay, I got the big thumb up.

But but both so US and Russian leaders want to divide and break up Europe and within it, maybe even the EU. That is truly unique because if you're looking at it from from across the Atlantic in the US, US global power has been built on and is dependent on these global alliances and friendships. The distinction to me is, as you correctly stay from the Atlantic, it is a coalesced Europe wrapped around the symbols of Germany, France, maybe

the United Kingdom. Europe, which is a larger economy than the United States, is the Finland's the Lithuanias, et cetera of Europe. How much do we get wrong the parts in the sums of Europe. It's not just angela miracle and what she says next, well, it's it's correct, and it's a small ones that you can desperately needs something bigger to belong to, like the EU, because Finland by itself doesn't necessarily do well in the geopolitical game globally. Um I I guess if you say, is it's where

you can have innovation. You can you can have small business ideas, and then you go to bigger countries to get the capital. You go to uh California or somewhere else to get capital for for ideas on clean tech, environmental stuff, so on. Can Finland become a Helsinki become their version of California. Everyone tosses around the word innovation. I met with Tyler Monaco, who's called this the most livable city in the world. A huge buzzier finner had

a perfect flight up here from London. Can a California ethos come to Finland that informs Europe about entrepreneurship? I think it can. Um. There is a sense of wanting to make things better. Um it's one of my colleagues said, you know, Finns have this cross to bear, which is to improve things continuously. And that's maybe why Helsinki is such a livable city. Something may be good, but let's improve it a little bit. And that I think is

one kind of startup mentality. Someone's already doing this, but let's do it a little better. I'm thunderstruck coming here as the ugly American fifty four miles to Westonia, twot two miles to St. Petersburg. In my naivete of that statue by the Helsinki Cathie rulers are Alexander. Americans were clueless about this linkage of Finland to Russia. What is it? In two thousand and eighteen. Well, we're neighbors, and as as through history and and and through the world, neighbors

have to trade. You have to somehow communicate, understand what is the what are the other people thinking about? And that's not how I think most Finns view it. Trade sent as many Finnish hockey players, if they don't go to the NHL, go to the KHL, do all of this stuff, but then prepare if the day comes when when arms have to be picked up. So it's not necessarily an antagonistic one, but it is certainly a wary one. Within the trade is the issue clearly of the moment

across all of these populous debates, which is migration. How is migration touched Finland. Well, broadly speaking, as we'll see, not a great deal. But of course Finland and many of the historical innovations were brought by migrants here. They had something they wanted to do and they thought Finland is a good place to do that. Uh. Now, about three years ago we did have something very unhappy happened, which is Russia quite purposefully released a set of migrants

or forced them to cross the border here. Uh, kind of as a proof of concept. Saying, hey, we can release people across the border, and depending on what you do, we have millions more to go. Um. So that was a less pleasant surprise. Always say when President Trump not urgueser talks, but jaw bones if you will. About American manpower in Europe, that's troops that may be not stationed in Estonia, but they train in Estonia with British forces and and such. Explain why that presence is important in

this special relationship with Russia. Why do we need American troops training in eastern Europe? Well, again, because it almost doesn't matter if anyone Washington doesn't know about Estonia or tart or telling our health and it's the US global military and trade power is dependent on these alliance networks.

And if the US, let's go of one of them, shows he will not defend one ally, then across the world, Japan, China, everyone else is following from Finland's perspective, which is doing deep, deep cooperation with the US, deeper than I think most Finns even realize. It's also important because we don't belong to NATO, so you want to have potential partners everywhere in the U. S S is an obvious one. You mentioned hockey before. I've got one final question that Patrick

Lane is wonderful the Finnish conversation. Contribution to the National Hockey League, to North American hockey is extraordinary. But there's a gentleman that played for the Anaheim Button but Ducks. I don't know why he had to retire. Tiamo Solani was at the peak of his game. It seemed when he retired, Boy did he go out with grace? He he did go out well and and great to see him. In fact, years ago, the first in of you ever did was with Tim Moise Helen after it was season.

Uh so, yeah, great to see him and what a what a great career. The best part of this is our discussion of international relations. But frankly, the best part of this is not talking the World Cup, as I've been doing for six weeks. Charlie, thank you so much, Charlie Solanes, pastor and achis with the Finnish International Affairs John Farrell. That was one of those hockey talk How did you squeeze in ice hockey? I got ice hockey like eighty five degrees here and I got ice hockey

into it. I honestly don't know what you're up to say this morning, without question, within the tensions of the Soviet Union of the past the Russian Federation of the present in the United States of America, this is the interview of the day. George Friedman, you know from Stratford and of course his work with geo political futures. But maybe there's not the George Friedman who at age seven wandered out of Hungary. Mr Friedman joins us in Austin,

Texas this morning. George, what was it like when your family fled Hungry? Do you remember that as a child? I remember very little of it. The Soviets had taken over in the country. The borders are closed, mine fields everywhere, and my father was on a list to be arrested. So does either get out or get out? And we went across the Danube in a rubber boat with machine guns looking at us. Interesting time, Those are interesting times,

and that it's a reality from the past. Do we need to be informed about machine guns on the Danube now? And particularly does the president need to have an understanding about about machine guns on the Danube now? Or is that a distant past. Well, the machiners aren't on Danube during the Carpathian Mountains. Potentially they're in the Polish border. But the Russia and not anywhere as strong as the Soviet Union was, and a great deal of what they

do is bluff. Their economy is pretty close to shambles. The military is nothing compared to the American Uh. There is of course a feeling of this super intelligence service that hacked our elections when they stole some emails and they send some twitters and some Facebook stuff. But we need to keep this in perspective. The Russians have played their hands beautifully, making them here at a global basis

that they're a major power, but they're struggling. Should we put weight to the twelve officers that have been indicted? Do you agree with Mr Mueller this is an important item or does Mr point Mr Trump have points that maybe it's overdone. Well, certainly, you know the idea of indicting foreign intelligence officers now open his door for American to tell officers to be indicted in foreign countries, which

you know it'll be tips for tat. But more important, I'm really interested in wine Miller, knowing that a summit meeting was coming, chose that time to issue the indictments. He probably had a reason. He probably had a good reason why. It's part of his investigation that had to be done now. But it really reshaped the meeting between the American and Russian presidents and seems to have pushed

Putin a little bit off the wall. He made a tweet this morning it was extraordinary where he said the declining relations with in the United States and Russia was due to the stupidity of American foreign policy in the past. That is a stunning statement for the President to ake on walking into Putin. That certainly puts them in a bad position to negotiate Georgia's right where I wanted to go And folks, this is why this conversation when Mr Freeman is so important. And we'll have this out on

our podcast I hope later. Uh at Apple and Spotify and George Freeman. The bottom line is is Mr Pompeio asked to pick up the pieces. Now. There was a feature article full disclosure, folks, I can't remember right now the New York Times or the Washington Post today about General Maddis running essentially a separate Pentagon European policy. Can our State Department run a separate policy from the president's rhetoric, or is Mr Pompeo tied at the hip linked at

the hip with the President. I would put it this way. General Madis can run a fire a separate policy because US military forces are overwhelmingly powerful, and he can do that. Uh, the United States economically is overwhelmingly props. And these are the fundamental realities. Now, how the administration organizes itself is an interesting question and an important question. But the most important thing to bear in mind is the relative power

of the two countries. But it would seem very likely that the General Maddie, who has really had control over old military political dimensions of foreign policy up to this point, is it kind of running the shop of Southsian delegates if you're just joining us with us, George Freeman, Geopolitical futures, George, I want to go granular now, and I want you to inform our global audience and particularly American audience, about this area of Syria that is a focal point of

tension between UH Russia between their support of Syria, between Mr Yaho and Israel, between Iran and I guess with America as well. And this is the distance of Syria from the Israeli border, and what each of these parties wants. What should America want about this most sensitive part of the Middle East. Well, put it into broader context, the Iranians have managed to take a great deal of control

in Iraq. They are the dominant force in Lebanon, they have become a significant force in Yemen, and they're very powerful force in Syria. What we've been seeing is uh Iran kind of extending its power. Now it's thin on the ground, it's not really powerful if it was challenged, but it's there, and the Israelis are looking at them very close to their border, knowing that they can fire missiles, knowing that they could carry out covert operations, knowing that

they can do all sorts of things. The Israelis want them back from the border. The Russians have agreed sort of that they would force them to go back from the border. But the question is how far Ten miles

doesn't make any difference to a missile. The real question is here the Iranians are now threatening Israeli national security Metanya, who said yesterday that he and the president had to talk and they're very close together, and this is likely to be the major issue, there are any substantial issues at this kind of kind of disc ser I did a TV special George last week at broadcast. Folks look

for it out. I'm Bloomberg Digital with Ian Bremer and Robert Kaplan, and of course we talked about Marco Polo's World and Kaplan's Duke Book and the Eurasia, which I'm going to take from the Straits of Malacca all the way around the Persian Gulf. Is there going to be a band of geography from Tehran to burn Root? I mean, is is that a new geography Americans have to get used to? Not really, we don't have to get used to it. We don't really have to decide to handle it.

Ran is well, it Ran is domestically unstable. Uh. There was an uprising over the weekend Shiites throughout Iraq against the pro Iranian government. So we have to understand one. They have their footprint down. So did the Russians. To underneath it all that, I'm very strong. So what has happened is as do Wes has created, a vacuum has been filled by second grade powers. We look at all of this, watch China's response to the American trade initiative,

and it's kind of weak and very nervous. The United States has to recognize the most important thing, which I think Trump sometimes it doesn't really deal with really very strong as a nation, and the one we're facing, like Russia, what's the third world power? It lives off of export oil and it can't control its price. Iran can spread if there's no one resisting it, but it can easily be rolled back. And the Chinese have their own powers. So I regard this Eurasian thing as a coalition of

the week. They could get together. They can do these things. But uh, in the end, once the United States becomes coherent in its policy, there's no question that the guys in the back is well. This sounds like a conversation to continue. George Freeman just brilliant on this Elsinki and the submit. I want to bring in Chris Granville. He is a managing director for EMA and global political research for TS Lombardimi of course Europe, Middle Eastern Africa. He

joins US from London. Chris Granville, thanks very much for being with us. UM you've you've said that you believe that the chances of Britain crashing out of the European Union without a deal are negligible. Why do you say that? Hi? There what It's a simple observation about the parliamentary arithmetic. The there is no majority in the House of Commons, the UK Parliament, that is, that would ever support a disorderly,

crash out style of UK Brexit. On the contrary, there's a guaranteed majority that if the worst came to the worst, would stop that happening. So whatever whatever else could happen, there will be lots of political noise. There could be changes of leadership, changes the Prime minister, even changes of government,

but that will not happen. So in our view, the volatility of in the FX markets, so the pounds sterling perhaps in why the UK assets is on the one hand inevitable because there will be even higher levels of political noise on the domestic UK scene than we've already been seeing in the coming months until March next year, which is the deadline for the Brexit process. But that noise will not lead to a true economic and financial shock,

so there will be buying opportunities along the way. That's that's how we look at it, Okay, But but you make it sound as if Britain has complete control over the process, where by the European Union surely has a voice in how this works out. Good question, and I

should have added that important detail. If the UK Parliament refuses to ratify whatever version of the Withdrawal Agreement, that is the treaty instrument by which the UK would leave the European Union, then um the same UK Parliament that refused to ratify that agreement would then instruct with governments to to avoid a crash out in March, and the obvious way to avoid it would be for the UK government to request an extension of the two year deadline

under the famous Article fifty of the European Union treaty. So that is, a departing member state and member states who wishes to depart notify as the European Union of its wish gets two years to prepare. And now as you, as your question implies, any such requests from the UK would need to be accepted by the other side, which is the other seven remaining member states of the European Union.

So an important part of our argument is that in those extreme circumstances, we're talking about remote scenarios here, and the mainstream is just a smooth brexit in name only going into a stand still transition lasting a couple of years.

But in this remote scenario, then the other Member states would certainly agree to an extension because a crash out of the UK and disorderly circumstances would be for the EU to allow that to happen despite the UK request that it should not happen, would be an actors self harm and they won't do that. A theme that I'll be honest, folks, I didn't have until I got to Finland is that we have a very three nations centric

view of Europe Germany, France, United Kingdom. And you come to Finland and you really have in your face, folks, the periphery in the many other nations of Europe. Do they have a big voice in the Brexit EU debate? I mean in Brussels, is it about waiting to see what chance or miracle wants or Mr McCraw or does

Finland actually have power within the Brexit debate? Well in the in when it comes down to dramatic and extreme scenarios like the one I just mentioned Tom, then yes, because the unanimous assent of all Member states would be necessary.

So even smaller countries like Finland, and Finland, by the way, is by no means the smallest member states, and the think of Cyprus or even Marta, but they would all have a voice and they would all have to be taken seriously in their concerns, if they had any concerns

they wished, would need to be listened to. But in the day to day negotiations and in the Brexit process, it's also the case that smaller, smaller countries have an important weight, and in particularly the Republic of Ireland by any standards, a small member state of the European Union, but one who's vital interests are involved in the Brexit process, and the interests of the Republic of Ireland are being firmly defended by the central EU negotiatives in Brussels, because

the EU will always want to show that it will stand up for its numbers, and this is certainly doing. The Netherlands is a slightly less extreme example, but the Netherlands, again a smaller state which would be at risk of severe We've got Chris Grantville, We've got to leave it there. Emia, Global political research director for t S. Lombard, speaking from London,

HMM Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keene before the podcast. You can always catch us worldwide. I'm Bloomberg Radio