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FAREED ZAKARIA GPS

Interview With Turkish Prime Minister Erdogan; Interview With Sergey Lavrov; Interview With Jose Manuel Barroso

Aired September 25, 2011 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


FAREED ZAKARIA, HOST: This is "GPS," the "Global Public Square." Welcome to our viewers in the United States and around the world, I'm Fareed Zakaria.

It was U.N. week in New York, and we bumped into all sorts of world leaders. We have three on the show today. Must-see conversations.

We'll begin with Turkey's prime minister. In making a break with Israel, he's altering crucial alliances in the Middle East and all over the world. He will explain his reasoning.

Then, is the new Russia a friend or a foe? Sergey Lavrov served the Kremlin back when the USSR was our sworn enemy. He is now Russia's foreign minister.

And later, the man who might save the euro. Jose Manuel Barroso is the president of the European Commission. He is faced with a tough task as the euro zone crisis worsens.

All that, plus we'll tell you about political pirates and why they scored a surprising victory.

But first, here's my take. This was U.N. week, and there was some drama over the issue of the Palestinian bid for statehood. But the real action is taking place now as the world's finance ministers and leaders meet to talk about money.

I think it's fair to say that we are confronting the worst economic moment since the days after the collapse of Lehman Brothers in 2008. Growth has slowed in Europe and the United States, and it is slower even in the bubbling, emerging markets.

Some European countries now have deep problems with their debt burdens that appear unmanageable, and that problem is spreading to major European countries like Italy. Europe's banks have too little capital and too much bad debt on their books. They are posed for a Lehman-like event.

And here's the worst part -- in light of these problems, key governments are doing almost nothing. The real culprits are the leaders of Europe. They have been kicking the can down the road for two years. They now have to face the fact that the euro was badly created. Mixing together economies of very different characters, and they have to fix it.

That could mean a smaller, stronger euro zone, which is to say letting countries like Greece exit or it could be figuring out a way to let Greece default and shore up Italy and Spain. I've argued that the best solution would be to get the IMF money from countries like china and use it to restructure, create a long-term reform program for Italy and Spain.

There are other ideas like Eurobonds which would allow countries like Greece to borrow at German-subsidized rates. But Europe's leaders need to do something to deal with these urgent problems. In the United States, we talk a great deal about the jobs issue, but who is actually doing much about it?

President Obama's jobs plan, which is pretty good is going nowhere in Congress. And he hasn't helped matters by presenting a gimmicky and totally inadequate plan to fund that program and cut the budget deficit. The market keeps telling us by the ever-falling interest rate that what it fears is another recession, not inflation.

Everywhere leaders all seem to assume that if they just keep things steady, something will miraculously happen to solve the problems and jumpstart growth. It won't. The problems are actually getting worse, and by sticking their heads in the sand, leaders are making the inevitable crises only worse. Let's get started.

My first guest was arguably the man of the week at the United Nations. The man everyone wanted to meet, everyone wanted to talk to the powerbroker. Recep Tayyip Erdogan, the prime minister of Turkey and that country's most powerful leader since Kamal Ataturk.

This year alone, President Obama has spoken to Erdogan nine times. No other head of state can claim to have gotten more attention. Turkey has historically straddled the east and west, Islam and Christianity. Now Erdogan is looking toward a new set of alliances.

Joining the EU is no longer a big priority. Israel is no longer a close friend and the long time alliance with America no longer dominates his thinking. Erdogan is all too aware that these policies are boosting his standing as a populist hero in the Middle East.

You may not like everything he has to say, you may not agree with it, but listen because his voice may be the voice of the new Middle East economically dynamic, politically confident, geopolitically savvy.

(BEGIN VIDEOTAPE)

ZAKARIA: Mr. Prime Minister, thank you for joining us.

REYEP TAYYIP ERDOGAN, PRIME MINISTER OF TURKEY (through translator): I would like to thank you for preparing such an opportunity for me.

ZAKARIA: Let me ask you about one of your neighbors with whom you have had some trouble, Israel. Do you think relations between Turkey and Israel are broken? Can they ever get back to what they were?

ERDOGAN (through translator): For the time being, I can clearly and frankly state that the relations between Israel and Turkey have been broken on the basis of an issue that is being raised by Israel, which began when the flotilla bearing humanitarian aid was trying to get to Gaza.

It had passengers from 33 different countries and was attacked both from the sea and the air. At the end of these attacks, nine Turkish citizens died. One of them is an American citizen of Turkish descent and the American citizen's rights have not been defended by the United States.

Still, to this day, no serious attitude has been adopted against Israel for the life lost there. Is it because he was of Turkish descent? We're very upset about this. In this situation, no matter who we are speaking about, democracy, rights, and freedom should be defended.

Whoever, whoever is in question if rights, if liberty is in question, it should be defended. We gave our warnings to Israel. This is the reason for war. This is something you cannot do in international waters, but as a great state, we have been very forgiving. That's why we have been very patient.

We've demanded they apologize, pay compensation, and eliminate the embargo on Gaza once and for all. If these demands are not met, relations between Turkey and Israel will never become normal again. We have nothing against the people of Israel, but against the attitude adopted by the administration of Israel.

And if you're insistent on creating a source of unrest, you are bound to become lonelier and lonelier. They used to be good friends of ours, and this solitude is Israel's fate under these circumstances. Israel is going to be alone in the region.

ZAKARIA: Do you believe that there will be Turkish escorts for the next flotillas that go into Gaza, that go and try to break the embargo?

ERDOGAN (through translator): It might be Gaza. It might be Egypt for which there are humanitarian missions. But after such an incident took place, there is a lack of confidence in security. So these flotillas might be dispatched to wherever they're going with the escort of the navy because Israel cannot be trusted.

ZAKARAI: Were you very close to a deal that the Obama administration was trying to arrive at between the Turkish government and the Israeli government, and did the Israeli government at the last minute back out?

ERDOGAN (through translator): We have conveyed our impressions to Mr. Obama along with many different related institutions. Turkey is very frank in its delivery, and we stand behind our remarks. Here's what's being said, and this is upsetting to hear. They say that Palestine is bombing and disturbing the people of Israel, and many Israelis have been killed.

I'm very clear in my remarks. I would like to see accurate statistics of how many Israelis have been killed by the bombs thrown by Palestinians or with the rockets that were launched by them, 10, 20, 100, 200, how many? Please document it. Let us know.

But on the other hand, we know that hundreds of thousands of Palestinians were killed. Only as a result of the Gaza attack, thousands of people were killed. These are very clear remarks. The Israeli people are only resorting back to the issue of genocide in history.

And using that genocide, they're always acting as if they are the victims all the time. We said for that, go ask Germany to pay its dues, and they have. So Germany has paid and is still paying its dues to Israel. But neither turkey nor the Muslims in the region have such a problem.

They have never exerted such cruelty on Israel, but Israel is very cruel in that regard. It shows no mercy. I can never forget the screams of the children that were killed on that beach while trying to hide behind the legs of their fathers or while their fathers were trying to protect them in their arms.

I can never forget those scenes because I am a father, too. At home with my wife, my children, we watched those scenes together. I saw seven people getting killed as a result of one attack. These are the Israeli acts that are inexplicable.

If you want normalization, you have to take certain steps to restore peace and stop causing unrest. Israel possesses nuclear bombs. Israel possesses heavy weaponry. Israel possesses phosphorous bombs and weapons of mass destruction. What is it they don't have?

They have it all, but I might ask you the same question -- what does Palestine possess? How do you think Palestine is capable of killing as many Israeli people as claimed? Let's stop deceiving each other because the human race will no longer be deceived. Everybody knows what Israel is about.

ZAKARIA: Syria, it seems to me that the way Turkey's diplomacy moved on the Syrian issue, that you were deceived by the Syrian government and were given assurances that they would cease their violence and that those assurances were then not followed through.

Many people would say that this was obvious, that Assad was a brutal dictator. But yet, you trusted him. You vacationed with him. Do you think you misjudged him? Do you think you made a mistake?

ERDOGAN (through translator): Let me say we never had a vacation together. He has only been my invitee. I had always invited him to come to our region, which is known to be a holiday region for the Turkish people. He was our guest, but we never vacationed together. But every time he would come to Turkey, of course, we would get together and talk about the relations between Syria and Turkey in the same way I went to Syria several times, and then there were meetings with our president, as well.

Let me say something very frankly and currently. We act on principles. Principles, these principles are the determining factors for me. You and I, we can be friends, brothers today.

But if one day you clash with the determining principles of democracy and if you are going to act against the fundamental rights, liberties, and the law, you will lose your position in my heart as my brother and my friend.

This is exactly what happened. I was very patient. Patience, patience, patience and then I cracked.

ZAKARIA: Do you believe, Prime Minister, that the current government of Syria can last? Do you think one year from now Bashar Assad will still be president of Syria?

ERDOGAN (through translator): There is something I always say -- you can never be happy through tyranny or cruelty. You can never remain in power through cruelty. You can never stand before the will of the people.

This process might be extended a little bit more, but sooner or later in Syria, if people take a different decision, that decision is going to be catered to such as in Egypt, such as in Tunisia, such as in Libya.

People want to be free, and they are struggling to earn that freedom. One by one, dictatorial systems are burning down to the ground. Autocratic systems are getting eliminated once and for all to move toward democratic systems.

(END VIDEOTAPE)

ZAKARIA: Much more with Turkey's prime minister coming up in just a moment. Is he leading his nation down an Islamist path, and what about his relationship with the west, and what does he think of President Obama? We'll be right back.

(COMMERCIAL BREAK)

ZAKARIA: And we are back with Turkey's Prime Minister, Tayyip Erdogan, the power broker of the Middle East, to talk about Islam and democracy and the west.

(BEGIN VIDEOTAPE)

ZAKARIA: A lot of people will listen to you and will see your actions particularly in the United States, and they say that this is part of a new Islamic foreign policy that Turkey has, that you are embracing a kind of foreign policy that is very different from what Turkey has pursued since the time of Ataturk. And it is an effort to bring a kind of Islamic ideology to turkey's foreign policy. How would you respond?

ERDOGAN (through translator): Mr. Zakaria, this is how I perceive the situation. We are a team focused on common intellect. We don't want to see the clash of civilizations in this world. We want to see the alliance of civilizations.

The world is so fed up with wars. Trillions and trillions of dollars are being allocated to weaponry to the armament industry. That's not the kind of world that people want to live in anymore.

ZAKARIA: The question, though, that many people have is, are you taking Turkey down a different path since the time of Ataturk? Are you taking it on a foreign policy that will be not pro-western anymore, that is not -- does not see its historical destiny with the west that is more Islamic, that is more populist?

When you go to Cairo now, you have become a rock star. There are big photographs and posters of you because of your embrace of the Palestinian position. Is this a new populist, Islamic, Turkish foreign policy?

ERDOGAN (translator): Mr. Zakaria, I'm not a rock star, I'm a politician. But I can say very clearly that, look, everything that the western world does is not necessarily right. We work on adopting the science of the west. We work on adopting whatever has been developed and whatever is beautiful in the west.

But let's not forget there are really beautiful things in the east, as well. Do not leave the eastern parts of the world aside. We're always running after science, after intellect, we seek out knowledge from whichever part of the world that is most of that, then we extract and adopt it.

ZAKARIA: You've tried to maintain good relations with Iran. But you have recently agreed to site an American radar on Turkish territory, and it has drawn severe criticism from the Iranian government.

Do you believe that Iran right now is a country with which we could -- the international community can have a constructive dialogue to monitor its nuclear program, or is Iran in your view a country that has to be watched and contained carefully?

ERDOGAN (through translator): There are two things that should not be confused here. First, the plans to install the missile defense base. The radar base in Turkey is a NATO concept. No specific country has ever been referred to.

We don't think Iran should get offended when there is no reason. We don't want to see Israel coming up with different interpretations from what is actually the reality. If Iran is interpreting it in a different way, it is their decision.

I am speaking very frankly. Unless Turkey is attacked, we will never allow Iran to be attacked from the Turkish territory. But why is it that the country's banning Iran from having the nuclear weapons don't also ban Israel from having nuclear weapons?

Israel possesses atomic and nuclear weaponry. What is the excuse? That Israel is under siege? But Israel is the only country in the region possessing nuclear weapons. In the north, only Russia has nuclear weapons.

And Iran says that its only purpose is to generate affordable energy through nuclear power. We don't want to act on presumptions. And no sanctions based on presumptions are acceptable by Turkey.

ZAKARIA: Let me ask you a final question, Mr. Prime minister. You've had a lot of dealings with President Obama. How does he strike you as a leader on the world stage?

ERDOGAN (through translator): Personally, unlike Hussein, Obama is someone I really like and vis-a-vis his policies and his implementations, I want him to be much more successful. When he assumed the office, there was a huge economic difficulty on his shoulders.

Had he surmounted those economic difficulties, he would have been much more relieved today. And at that point, in the general elections that are going to be held in about 400 days, I wish him the best of luck because I've had the chance to get to know him better one way or the other.

Whether it be our mutual or bilateral talks, whether it be our talk on the phone. Many times, they were very frequent actually, even more frequent than they've ever been before. From a strategic partnership to a modeled partnership, Turkey and the United States have taken relations to a much higher level.

I don't know who the Republican candidates will be, but of course we shall always respect the choices of the American people because the relations between America and Turkey, whether the Democrats or the Republicans have been in office, have always been very positive. I hope and pray that they will be just as good in the days to follow.

And I wish that these elections will bring the most useful results for world peace for the people of America and for the American political life.

ZAKARIA: Mr. Prime minister, thank you very much.

ERDOGAN: (through translator): Thank you. I would like to convey the best of regards to the entire American nation who have been watching us on behalf of myself and on behalf of my people, thank you.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ZAKARIA: This past week, New York might have seemed to be the center of the world. But the political story that struck me came not from the corridors of the United Nations but thousands of miles away in the city state of Berlin, Germany. You might have heard about the group called "The Pirate Party" that has burst on to Germany's political scene.

The "Economist" magazine jokingly writes that it sounds like a party whose name was dreamed up at Octoberfest, Germany's annual beer festival. Actually, its ideology centers around internet freedom.

Its members are tech-savvy youngsters who wear hooded sweatshirts, throw cool parties, and play up their group's name with pirate boats like this one.

But don't let the cool facade fool you. They won 9 percent of the vote in Berlin's parliamentary elections. That puts them well ahead of the (inaudible) Free Democratic Party, a long-established party and part of Angela Merkel's established coalition. So what is going on?

Well, it turns out their movement was founded in Sweden five years ago with a focus on copyright and patent law. It has since spread to a number of European countries and even the United States. But the German offshoot is broadening its focus and says it is about bringing politics back to the people.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We use democracy to use liquid feedback --

(END VIDEO CLIP)

ZAKARIA: Liquid feedback is a phrase that struck a chord. It's designed to empower citizens to use quick polls on the internet to shape how their representatives vote on a given issue.

You might think the last thing we need is more political pandering, but the pirate party is one more manifestation of the despair of the average citizen with government and large institutions more generally.

A new world economic foreign poll of experts from a range of fields finds that less than 10 percent have confidence in the state of global cough governance. If you put the same question to the unemployed youth, you'd probably get an even more depressing response.

We've all heard so much about the Arab spring this year, but there is a malaise that's affecting the already democratized world, as well. People feel disillusioned, disconnected, disenfranchised. From the anti-corruption movement in India to similar protests that are now brewing in Brazil, from an outbreak of anger and rioting in London to demonstrations over a lack of housing in Jerusalem.

These protests are all local, but they are all about a similar set of frustrations. Governments around the world need to take notice and respond. India's prime minister, for example, has posted the tax returns of his entire cabinet on the internet.

Although many commentators look at the documents of some famously corrupt ministers as evidence of how cleverly they have hidden their wealth. Brazil's president has fired five ministers this year on charges of theft.

The United Kingdom has announced it will make government openness criteria when choosing, which nations to give aid. And the Obama administration has an open initiative to increase transparency.

But these are small steps and they're unlikely to address a basic mismatch. On one hand, you have the aspirations of the young and new technologies that are empowering them, the world of the internet and Google and Facebook. These people are used to a world of transparency, individual empowerment, and immediacy. On the other hand, you have government, big, bureaucratic, hierarchical, and secretive.

This tension will persist, and the split between the world of open and closed will probably keep showing up in various ways, in various countries around the globe. We'll be right back.

(BEGIN VIDEO CLIP)

ZAKARIA: So two years in, has Obama transformed U.S.-Russian relations?

UNIDENTIFIED MALE: We have seen considerable change in attitudes.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

CANDY CROWLEY, CNN ANCHOR: Time for a check of today's top stories. Nineteen people were killed today including two Americans when a small plane crashed in Nepal. It was returning from a sightseeing tour when it hit a mountain and broke into pieces trying to land.

At least 10 people were killed and 70 wounded in four consecutive explosions in Iraq. All four blasts occurred about 60 miles southwest of Baghdad. Police said the explosions targeted civilians who were on their way to an office that issues passports and travel documents.

In Yemen, clashes between protesters and government troops this weekend have left dozens dead. Demonstrators are calling for the President's Saleh to be tried for crimes against Yemenis.

Two American hikers released from an Iranian prison last week are headed back to the U.S. Josh Fattal and Shane Bauer were freed after being held by Iran for more than two years on spy charges. The men are expected to arrive at New York's JFK airport later this morning. CNN will have coverage of their arrival.

Eighty people were arrested on Wall Street yesterday in the biggest crackdown since protests began in New York's financial district eight days ago. The demonstrations are aimed at drawing attention to the role powerful financial interests played in the country's economic slump.

Those are your top stories. Now back to "FAREED ZAKARIA GPS."

ZAKARIA: President Obama came to office wanting to reset relations with Russia, which he believed had veered off track. So are we now in better shape with this country still the world's other nuclear superpower with a United Nations veto and with interests ranging from Europe to Iran to Asia?

My next guest has been part of this crucial relationship for nearly four decades. Sergey Lavrov represented the then-Soviet Union at the United Nations in the 1980s. He is back now as Russia's foreign minister.

(BEGIN VIDEOTAPE)

ZAKARIA: Thank you for joining me, Mr. Lavrov.

SERGEY LAVROV, FOREIGN MINISTER, RUSSIA: Thank you for the invitation.

ZAKARIA: In May, 2010, there was a leak of a 70-page document to the Russian edition of "Newsweek" in which you are supposed to have written that Barack Obama had the potential to be a transformational president who would change the character of U.S.-Russian relations.

And he was battling an intelligence military foreign policy establishment that wanted a more confrontational relationship. So two years in, has Obama transformed U.S.-Russian relations?

LAVROV: Well, I don't think we wrote exactly what you quoted. But we certainly believe that the slogan of change under which president Obama came to office was a comprehensive one and embraced not only domestic politics.

But international relations and we certainly have seen a change in attitudes. The atmosphere is very different from the last years of the Bush administration. And I think from the first meeting with President Medvedev.

I believe it was in London. They understood each other and agreed that they would not ignore the differences. But first they would concentrate on making sure that whatever could be done to remove those differences would be done.

So I think -- I think we have seen considerable change in attitudes from Washington to the Russian-American relations, and this has been reciprocated.

ZAKARIA: Let me ask about the Arab spring in general. The Russian position on election has been unwilling to support any intervention that would help oust Gadhafi. You were opposed to the no-fly zones, eventually sustained. You have been opposed to any outside intervention in Syria.

Is it possible that you are behind the curve here, that events are moving in a way that there is going to be regime change in all these countries, and Russia will be seen as having supported the regime, the old order?

LAVROV: You know, when Colonel Gadhafi started using his air force against civilians on the ground, we did not hesitate. Then we supported the resolution of the Security Council, which introduced arms embargo for Libya. No supplies of any arms to anyone on the Libyan territory because this was the means to prevent further violence and bloodshed.

And we supported the imperative that said that there would be no- fly zone and that there would be no airplane, and no aircraft without the permission of the Security Council Committee should be in Libyan airspace.

What caused us to abstain was the next paragraph, which said that to do so, anyone can do anything because it would be legitimate. And as it turned out, it's exactly this paragraph, which was used to abuse the authority issued by the Security Council.

ZAKARIA: You believe NATO is now abusing its authority?

LAVROV: Grossly, grossly and we have discussed this with NATO.

ZAKARIA: You have supported sanctions on Iran. Do you believe that it is working, that Iran is rethinking its -- its nuclear path because of these sanctions?

LAVROV: We are convinced that the only way to resolve the Iranian nuclear issue is through negotiations. And we reminding our partners in this three-plus-three group that resolved this Arab spring, Arab summer, and now Arab fall, we should not forget the need to engage more actively.

And the logic was that -- I mean, the logic which we want to use with Iran is the same one, which we agreed in North Korea, and it means that Iran should make a first step, say freezing the production of centrifuges. Then we freeze the new -- we don't adopt new sanctions, neither in the Security Council nor unilaterally.

ZAKARIA: But do you see any willingness in Iran to engage in some kind of cooperative --

LAVROV: I believe if Iran, if Iran gets very clear message that all this exercise is not about the regime change but about non- proliferation issues, I believe we have a chance to start this serious discussions.

ZAKARIA: Let me ask one final point. You said that the United States and Russia have good relations. And yet, last month, Prime Minister Putin calls the United States a parasite and accuses us of being an economy -- a parasite, an economy that lives off others.

The exact quote is he said, "a parasite, the country is living in debt. It's not living within its means. It's shifting the weight of responsibility on other countries and in a way acting like a parasite." This doesn't sound like strengthening U.S.-Russian cooperation --

LAVROV: That's his assessment and I can tell you that he discusses this with the leaders when he meets with them. He raised the issue of the world economy when President Obama was in Moscow and met with Prime Minister Putin. That's the assessment of the prime minister.

I hope that the United States would cooperate with the partners to reduce its debt. The debt is a problem. The debt is with you, but unfortunately, the debt is not only with you but with us and with the rest of the world because we all one way or another are dependent on the dollar.

We do believe that there must be more reserve currencies. We are very concerned with what is going on with Europe. We keep our reserves both in dollars and in Euros mostly. So we are not just an observer in this game. It's directly affecting our economy, our finances. That's how I would describe the situation.

ZAKARIA: Sergey Lavrov, thank you very much for joining us.

LAVROV: Thank you, Mr. Zakaria.

(END VIDEOTAPE)

ZAKARIA: We will be back.

(COMMERCIAL BREAK)

ZAKARIA: Europe's debt crisis has the potential to bring down the entire global economy. And my next guest is one of the people tasked with staving off the collapse.

Jose Manuel Barroso is the former prime minister of Portugal and currently the president of the European Commission. He is the most powerful officeholder in the European Union and joins me now. Thank you very much for doing this.

JOSE MANUEL BARROSO, PRESIDENT OF THE EUROPEAN COMMISSION: Thank you.

ZAKARIA: So how are you going to solve the Greek crisis? Clearly, Greece needs more money. In order to get the money it has to commit to a much more extensive commitment to reforms than has been done. What's the solution?

BARROSO: There's a team made by the European Commission, the European Central Bank and the IMF working with the Greek authorities to define exactly the conditions necessary for further support to the Greek economy.

I think the latest announcements made by the government of Greece are very encouraging. And in fact, there is no other way than Greece making reforms and also serious fiscal efforts. If this is the case, we are going to provide the support because it's important for Greece but also important for all the euro area. ZAKARIA: When you look at Italy and Spain, Greece is a much smaller problem in the sense that it's 2 percent of Europe's GDP. When you look at Italy, Spain, they have to roll over 600 billion euros of debt in the next two years. Does Europe have that money? Shouldn't you go to the Chinese to get it?

BARROSO: Look, Europe is full of resources including those countries you mentioned, Italy and Spain. What happens is that we are in a very peculiar situation now where the markets are overreacting to a situation that is a complete new situation.

If you look at the euro area, the overall debt compared to the GDP is lower than the United States. It's much lower than in Japan. So we have a monetary union in the European Union, 17 of the 27 countries have such a monetary unit.

But we have not yet all the instruments for this kind of integration. And we have no building it. I think it's amazing what has been achieved. And the importance of the decisions and probably not well le let's say taken into consideration by commentators in the market.

We have just now decided to create a stability of 40 billion Euros. So if you look in perspective, European area has been achieving a higher degree of integration and it will remain in debt, of course. Nobody in Europe now is discussing do I back -- backwards. We are discussing the way forward.

ZAKARIA: Let's talk about that because a lot of people say, you look at this -- this monetary union, and you have a monetary union without a fiscal union. And the reality is as a result you have a weak euro which cannot survive and, therefore, what you need is a smaller but stronger euro.

BARROSO: The euro, I'm sorry, is very strong. The euro is second currency in the world, remains stable. We have a credible central bank, because there is a low inflation. The problem is not so much the euro as a currency.

The problems, let's face it, and we are not complacent about this is different fiscal positions and competitive not against some of the members of the monetary union.

ZAKARIA: But you're saying there are no circumstances -- you saying the answer has to be greater coordination of fiscal policy, there's no possibility of anybody exiting the Europe?

BARROSO: Yes, exactly. We are going forward in terms of integration. This is the debate in Europe -- in Europe no one is discussing the way forward, but how fast and how far is going further integration. We've already taken important steps in this direction.

ZAKARIA: Ten years from now, Europe will be more integrated --

BARROSO: Much stronger, I can tell you. If there is a real emerging power globally. It's Europe before it was European countries. We were not united. Only after the fall of the Berlin wall, you have this continental dimension.

In fact, Europe is stronger today than it was five years or ten years ago, as bloc. So Europe, five, ten years from now will be stronger because already now globalization is I believe the most powerful driver for integration.

Because our member state including the most important economies with great diplomacies, they understand that if they want to count in the world, if they want to discuss quality conversation with our American friends or with Russia or with China or with other, we count much more if we act together.

ZAKARIA: As long as you can get through this crisis.

BARROSO: Exactly. And that is the most immediate concern.

ZAKARIA: President Barroso, thank you very much.

BARROSO: Thank you very much. It was a pleasure.

ZAKARIA: We'll be right back.

(COMMERCIALB BREAK)

ZAKARIA: Our question this week from the "GPS" challenge is, where was the first United Nations general assembly? Was it, A, San Francisco, B, New York, C, London, or D, Geneva? Stay tuned, we'll tell you the correct answer. Make sure you go to cnn.com/gm for ten more questions.

While you're there check our web site, theglobalpublicsquare. You'll find smart interviews and takes by some of our favorite experts. Don't forget, you can follow us on Twitter and Facebook.

I've just finished reading a great book. It's Jack Weatherford's "Genghis Khan and The Making of the Modern World." It's my book of the week. Weatherford really makes you understand that Genghis Khan's territory was the roman empire of Asia.

He conquered the lands that make up China, Russia, India, and much more. We now think of Genghis Khan as a barbarian, but he was a great modernizer, fascinating read. Now for the last look.

We all like our comforts of home, even world leaders. Colonel Gadhafi always traveled with his tents. Queen Victoria reportedly traveled with her own bed. President Bush had his own pillow. But such needs almost caused a diplomatic incident this week. Australia's foreign minister, Kevin Rudd, wanted to bring his beloved breakfastry to New York with him this week.

But according to Mr. Rudd's Twitter feed, the airport authorities in New York tried to confiscate it. The culprit -- vegemite, yes the spread that most Aussies love and the world hates. Mr. Rudd, you should know where to find vegemite for sale in New York, just a few miles from the Australian mission. So maybe next time, save yourself the hassle, and buy it here. Though why would you want to? The correct answer to our "GPS" challenge question was, C, the first U.N. general assembly was held at Central Hall in London in 1946.

There were 51 nations represented back then and 193 nations are represented today. Go to our web site for more. Thanks to all of you for being part of my program this week. I will see you next week. Stay tuned for "RELIABLE SOURCES."