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It's your Bloomberg Brief, Danny Berger here in New York.
The Bank of America Investor Summit is underway in Dubai, with European defense mending in sharp focus.
Bloomberg's Guy Johnson.
Has a timely conversation and a special guest to bring us. Good morning, Guy, Good morning, Danny, Thank you very much. Indeed, Yeah, I'm joined by Kay Bailey Hutchinson, former United States Permanence Representative to NATA, A perfect person to talk to as we see such turbulence, particularly around bad Alliance, but particularly around the Transatlantic relationship. More broadly, Europe feels like it's on its own at the moment. Is that your view as well?
No, not at all. I do think that the President has been very direct about Europeans doing more, especially in defense, but also in the regular Victoria Breena, I know he's talking about that, but uh, the NATO UH bond is very strong, and I think it's strong because all of us are in it. The thirty two allies have made a commitment and I think we will not walk away
from that. So I don't think Europe has on its own although I do understand the hard feelings about some of the harshness of the comments.
The the the incoming Givin Chancellor said yesterday that he feels that Europe needs to be independent of the United States. Does Europe need to be independent of the United States? Does it need to be a relationship more of equals because it has felt like an unequal relationship Europe has existed under the US security un bretherins. Does that ultimately needs a change?
Now?
Well, I do think that I and really every president with whom I've served has said the same thing. Europe needs to do more for its own defense, and I think that is being said in a different way.
But again, we do.
Know that we'd like to have an equal partner UH with Europe in defense because our security depends on our being together. M Really, the G twenty nations in general should be together, UH if we're going to face foes like Russia, like North Korea, like Iran, and then UH
potentially an adversary in China. I think UH, economic unity is going to be our whole card, and we need to do that with Europe and with the other strong nations with economies that can make a difference with China or with any of our other uh potential adversary.
Y You, I'm sure talks to a lot of people that you work with over the years about what Europe needs to do. What do you think Europe does need to do? Is it three percent? Is it four percent? Does Europe have the capability if it wants it to even spend that money to use that money effectively? What is your assessments of what is required and what Europe should do right now?
Well, I think Europe needs to do more in its own defense building its military for one thing, and the German military in particular has not been able to do offense. They have a military of defense, but we need offense for deterrence. So I think we do need for Europe to spend more on capabilities. And now I think a lot of the capabilities are going to be technology, and technology is the new thing for all of us, and we are going to be investing as we always do.
We have always made security a priority, but Europe is not. They have had other priorities economic uh, trade, UH, social spending. And now if they make it a priority, they can do it, and I think it will be important for them to build up so that it is a strength for our alliance.
I if if European spending goes up, can US spending go down?
Is it a zero? Some games? That the way the right way of thinking about it. Now.
No, the US will not lower our level of spending. I mean we're talking now about cutting the budget only in places where it's.
There's sch waste.
I mean, yes, we'll do that, but no, we're not gonna go down in our efforts to make sure that America is secure. And I don't think anyone uh in the administration, certainly not in Congress UH believes that we should lessen our defenses in some way?
Dy dy, do you understand the Trump p Moscow pivot, the the Washington Moscow pivot that seems to don away at the moment.
I don't understand it. I do know that sometimes, uh, the administration will do something for effect or for some purpose that we don't see yet. Uh W We'll have to be somewhat patiently.
So you're willing to give them the benefits of the doubt right now?
Well not, I'm not a I don't give them the benefit of the doubt. About Russia. I think Russia, it's very clear. Uh. Russia invaded a sovereign nation and Ukraine has fought valiantly. I think our interest is that we not let Putin have a free hand to do something like this, which would embolden him to do more. He did this with Georgia, he did it on Crimea. Now he's doing it with the donbos Uh part of Ukraine.
And if he gets by we're doing something like this, he will go into the next country that he can come ever and take over. So I don't think that we will have a lasting piece if Russia gets its way and there is no price to pay.
If there are peacekeeping troops put into Ukraine post some sort of a peace settlements that the talking europe and certainly kissed Armer and Emmanuel Macaron be talking about this in their trips to Washington. The idea is that you basically put European peace on the ground with European added with the US air defense maybe as as cover. Is that a reasonable plan, Is that something you could think might be actually viable.
I think that it's certainly a point to negotiate Yuh, that it would be with an American support system. We did this in Afghanistan for instance, the Europeans were there, they were active, they were very important at Framework nations.
UH.
But we were doing the air cover, we were doing uh much that was needed that couldn't be done uh by the Europeans. I think certainly there is a negotiation there. I don't know where yuh uh that ends, but I think ah a peacekeeping uh place in the dawn boss or Carimea uh is certainly a part of a negotiation. And I think there may be some purpose in the way this has started. I don't see it myself, but it it could end up being uh A a good end. I think a good end would be a lasting piece.
A lasting piece would mean that, of course Ukraine is rebuilt, hopefully by Russia, by the Russian assets that were held in Europe and the United States, but also uh that there be a the capability to show putin that he cannot do this in the next country and then the next country.
Do you think the Ukraine should pay for some of that's a city with its mineral rights.
Do you think that is a reasonable trade?
I think uh. I I don't know what is being asked. I really don't. I mean, that's being sort of close help so I don't know what is a reasonable UH. I w I wanna make sure that Ukraine gets the benefit UH of their resources, and I think it is important that there be uh a development of that. But how that's worked out, I think is to be determined.
Tiber hutch Kate Bailey Hutcheson, Thank you very much, indeed, very nice to see you. Thanks for stopping by to see us. We greatly appreciate it.
Thank you,