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CNN'S AMANPOUR

Could Syrian Conflict Expand? Can the Eurozone Work with Germany as the Lead Country?

Aired June 26, 2012 - 15:00:00   ET

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


ALI VELSHI, CNN HOST: Good evening and welcome to the program. I'm Ali Velshi, sitting in for Christiane Amanpour. Since the Syrian conflict began, there has always been the danger that it could spill over into a broader regional conflict.

And given the particulars of the region, Iran and Iraq on one side, Israel on the other, that is not a pretty picture. Enter Turkey. On Friday, Syria shot down a Turkish Air Force RF-4 Phantom jet off its Mediterranean coast.

My brief tonight: could the Syrian crisis explode into a larger war? The facts of the shootdown are disputed. Turkey says the plane drifted into Syrian airspace just briefly but was shot down in international waters.

Syria says the plane was well within its airspace. What is not disputed is that Turkey, once a close ally of Syria, is a friend no longer.

Today Turkey's prime minister threatened Syria, calling the shootdown an act of hostility and saying his country would take, quote, "the necessary steps against this injustice."

NATO ministers held an emergency meeting at Turkey's behest afterward. NATO's allies expressed support for Turkey's outrage. For now, no one wants to escalate the situation further, but sparks from the Syrian conflict have already spread, not just to turkey, but also to Lebanon. And as each day passes, the potential that the crisis could explode beyond Syria grows.

In a moment, my exclusive interview with Namik Tan, Turkey's ambassador to the United States. But first a look at what's coming up later in the program.

(BEGIN VIDEO CLIP)

VELSHI (voice-over): Germany's Angela Merkel --

ANGELA MERKEL, CHANCELLOR OF GERMANY: (Speaking German.)

VELSHI (voice-over): -- Europe's fate is in her hands. And some in Europe hate her for it.

Then Berlin surrounded, no, not by the critics in the Eurozone but by Soviet tanks. Remembering when candy fell from the sky.

(END VIDEO CLIP)

VELSHI: We'll get to that in a bit. But first to the rising tensions between turkey and Syria. With me now is Namik Tan, Turkey's ambassador to the United States.

Ambassador, thank you for joining us. We understand the meeting, the NATO meeting has ended in Brussels. We have -- there's been an expression of support as one would expect for turkey by its NATO allies. What do you know about what happened in that meeting?

NAMIK TAN, TURKEY'S AMBASSADOR TO THE U.S.: Well, I wouldn't go into the details of that meeting, as you could imagine, but what I could say at this stage that we have so very clear-cut support from our -- and solidarity from our allies. And we have gotten it.

VELSHI: Well, you know, prime minister -- the prime minister addressed parliament today, and he said things like, "Don't test turkey. Turkey cannot be challenged and threats will not be left unresponded."

So now that you know that you've got the support of your NATO allies, what do you do with that support? What is going to be happen next?

TAN: Well, there is no quick solutions and no magical formulas. Of course, we will continue to work and cooperate (ph) with our allies and partners. And you know we have gotten into a very -- a different state of affairs with the Syrian regime.

And this is not a thing that's -- two countries -- only relates to two countries' relations. It is a matter between international community and Syrian regime. And I think Syrian regime should step down. And Assad should stop his atrocities against its own people. And it should pave the way for a democratic transition.

VELSHI: Ambassador, your prime minister had had that conversation with Bashar al-Assad. In fact, it was the precipitating event that broke up a good relationship between them. Obviously, Assad told your prime minister I'm not interested in your advice. Now you're in a stalemate.

Then given the tensions in that area, let's talk about what that plane was doing there. The Syrians say it was in Syrian airspace. You -- the Turks say that it briefly made its way into Syrian airspace. Why was it even in Syrian airspace at all?

TAN: Well, the point is not that our airport is in the Syrian airspace. The fact is that they have downed our airplane in an illegitimate way --

VELSHI: Right; I understand that. But if your airplane was in their airspace in a high, in a tense environment, what do you say to that?

TAN: This was a routine testing and monitoring mission, which was a training mission. And all identification systems were open. We have got no warning, no interception, no nothing, and therefore I think all the blame should go on the part of Syria. This is an unacceptable, illegitimate response. And that is actually acknowledged and endorsed by all our NATO allies.

VELSHI: All right. The issue that I -- I'll move off of this in a second, but I just want to be clear on it.

The issue is you say it was about 13 miles off of Syria; 12 miles is the limit. Syria said it was about two miles. It says it was shot down by machine guns.

In any case, this is a jet that goes at 500 miles per hour. Do your jets routinely go into Syrian airspace?

TAN: Well, as I said earlier, this is not about the specifics of the incident. It is a grave violation of international norms (ph) and Syria now entered into a different -- Syrian regime entered into a different state of affairs with the international community.

And I think there is ramifications of this act of aggression for Syrian regime and entire region. And I think for keeping up the stability and peace in our region, our allies and our partners and all our international community members should stand behind our position. And I think they did that.

VELSHI: So they will -- they clearly have indicated -- NATO secretary-general has indicated that they do stand behind turkey. The question is what turkey does next. The prime minister has said that there are new rules of engagement.

Now you have said that there have been several times when Syria aircraft -- Syrian aircraft has crossed into Turkish airspace five times this year. There are a number of skirmishes across the long shared border.

What do these new rules of engagement mean? Do you feel emboldened by NATO support? Is something different going to happen when Syrians come into Turkish airspace or approach the Turkish border?

TAN: I think it was stated by our prime minister, Prime Minister Ertegun (ph), very clearly. This type of action in the future will not go unanswered. That is our message. And it's very clear. And of course, I wouldn't go into details what sort of a reaction that we will show. However, as you know, we will choose the location, the timing and also the methods of our reaction. That is -- should be known.

VELSHI: Obviously you're being very measured, because you don't wish to start an international incident on CNN. But what is the message to Syria? You're -- it's highly nonspecific. They did shoot your jet down. Why should they believe you? It sounds like it could just be tough talk from your prime minister.

TAN: Well, I think we have made it clear to our NATO allies. This is very important. And international community, I think, Syria should -- Syrian regime should understand that this cannot go on like this. They cannot just continue their atrocities, their killings, their -- all this dictatorship in the future. And they should step down as early as possible to, as I said, pave the way for a genuine type of transition.

VELSHI: What's your --

(CROSSTALK)

TAN: That's the (inaudible) message that we have. And otherwise, if they continue such hostile acts, I think this could not just remain unanswered.

VELSHI: All right. But in the case that they're not shooting down NATO jets or the jets of NATO allies, they continue to do what they are doing and are not all that interested in what the rest of the world has to say about it, if they're not Syrian allies, what now, what action, if any, should NATO be taking? Should the United States be taking firmer action, in your opinion, in Syria?

TAN: Well, we will all take action. The international community, we will work to, I think, increase the pressure on Syrian regime. We will just step up the sanctions. We will do everything possible to isolate them and to just lead (ph) the part. That's what we are going to do. And we are trying to mobilize all our efforts together with our allies and partners to do that.

VELSHI: Although, in many cases where this kind of effort takes place, it doesn't have the same effect as it would have if the United States were explicitly behind that act. So do you think there's something that the United States need to explicitly do or say in order to strengthen these sentiments against Syria?

TAN: Well, I think, today you have heard the State Department spokesperson, Victoria Nuland, they are very clear in their messages, not to us, to the allies, but to all in the international community, that they are together with us, behind us. And I think there is, as I said, there is no quick formulas. And we will continue to collaborate (ph). This is what we can do at this stage.

And in that frame, I should say, once again, in a very clear fashion and very strongly that Syria should not make any mistake. We have to mobilize all our efforts. We have to work together in order to get on board other members of responsible members of the international community on board. And --

VELSHI: Let me just clarify -- let me clarify, Mr. Ambassador. You're saying if Syria does this again, if you have a jet or something like that that gets shot down by Syria, there will be a military response?

TAN: As I said, you know, it is not possible and I'm not in a position to just elaborate on our response. I mean, you shouldn't expect that answer from me.

VELSHI: It would be very clear if you gave it to me, though. You are -- you are saying a lot of things about what Syria shouldn't do, and I think Syria has shown that they are prepared to push back on people, telling them what not to do.

And you're in a position where you're flying airplanes; you've got a shared border. You have been arming people who are going into Syria with those arms. So this feels a lot like a war.

TAN: This is -- I think -- I think that I should challenge this -- (inaudible) --

(CROSSTALK)

VELSHI: Let me make myself clear. Let me make myself clear. People are being armed who are going into Syria and engaging in battle and turkey has shown their support for those people who are getting supplies or doing things in Syria, in turkey going into Syria.

TAN: We have never and we will not just send military weapons or any such kind of support to any of our neighboring countries, let alone Syria. This is our principal position, and we will never do that. And I think you should understand that we shall -- we will continue to support the opposition to democratic ways and means.

And this is our legitimate right. This is our -- not only our legitimate right, but this is the legitimate right of the international community. That is, I think, at the end, will stop the atrocities and will force the Syrian regime to step down.

VELSHI: Ambassador Namik Tan, thank you for taking the time to be with us.

TAN: I thank you.

VELSHI: Ambassador Namik Tan is the Turkish ambassador to the United States, and while Turkey and Syria rattle their sabers, the bitter memories of World War II have resurfaced in the Eurozone, where German Chancellor Angela Merkel has become the face of the enemy. Fair game or stereotype? When we come back.

But first we hear about the destruction in Syria. What is it really like? Take a look at this amateur video, a glimpse of hell, shot from a motorbike on the shattered streets of Homs.

(BEGIN VIDEO CLIP)

(COMMERCIAL BREAK)

VELSHI: Welcome back to the program. I'm Ali Velshi, sitting in for Christiane Amanpour. European authorities unveil their vision for the future of the Eurozone today. The proposal includes steps to turn the Eurozone into a closer fiscal union.

This week's summit of the E.U. leaders is seen as a critical moment and as Europe stares down the barrel of financial disintegration, the future of the euro rests squarely on the shoulders of German Chancellor Angela Merkel.

Now, Angela Merkel didn't sign up for this, but it's becoming increasingly clear that if Europe does pull together as a single union, the prescription favored by most financial experts -- well, Germany will call the shots. Many disagree with Merkel's policies. Investor George Soros said this week that Merkel has been, quote, "leading Europe in the wrong direction."

But the pushback is not just from financial leaders. Merkel has increasingly become the focal point of resentment from all over Europe. The German chancellor has been depicted as a Nazi on the front page of Greek newspapers. And a recent poll shows that more than 70 percent of Greeks now believe that Germany wants to bring in a fourth Reich, alluding to a new German empire reminiscent of the Nazi era.

Tensions were high even in the stands of this weekend's Euro 2012 football match between Germany and Greece. You've probably seen the pictures. Greek fans chanted, "We'll never pay you back," and "Screw your loan." Germany won the game, by the way, much to Merkel's delight. But when the final score is tallied for the European financial crisis, will Angela Merkel be seen as the hero or the villain?

Chrystia Freeland is editor at Thomson Reuters Digital.

Andrew Moravcsik is director of the European Union program at Princeton University.

Thank you to both of you.

Chrystia, is the -- is the anger, the derision directed at Angela Merkel, is it fair?

CHRYSTIA FREELAND, EDITOR, THOMSON REUTERS DIGITAL: Yes, I think it is fair. I mean, it's fair in part. What is happening right now to southern Europe is they are being asked to pay the bill for a structure that was incomplete. And they are quite right that the austerity programs right now that are being imposed are biting very, very hard. And they don't have a final solution.

You know, absent this sort of fiscal union, absent the E.U., the Eurozone countries collectively assuming responsibility for the debt, there is no positive ending for the southern European countries. And so I think the people there, quite right to say, wait a minute, this isn't working for us.

VELSHI: This is interesting stuff, Andrew, these pictures of Angela Merkel as a Nazi and the discussion of the fourth Reich. But it's actually very real in the minds of some southern Europeans and Greeks. We don't -- we don't want a world where Germany's calling the shots again. Could this sentiment actually stand in the way of getting a fix to the European problem?

ANDREW MORAVCSIK, DIRECTOR E.U. PROGRAM, PRINCETON UNIVERSITY: Well, I think it can, and I think a lot of people are opposed to some of the steps that need to be taken. But the key country is Germany, not just because Germany's powerful, but because Germany benefits from this system and has a real incentive to do something to keep it -- keep it going.

VELSHI: Let's talk about the system, what they're talking about. I find it interesting they're going to discuss this on Thursday and Friday in Brussels. We are talking about a finance -- a treasury for all of Europe, a finance minister, perhaps, for all of Europe. We're talking about national budgets falling under the purview of the E.U., where they can say, no, no; you're going into too much debt. A -- policy decisions being made by the -- by the centralized Europe as opposed to national governments. Any chance that could fly?

FREELAND: Yes, I think there is a chance, largely because the alternative is really pretty grim. I mean, I think that had you asked Europeans at the moment the euro was created to vote on not just do you want the common currency, but do you want effectively a political union, they would have said no. And that's why they weren't given that choice.

But the options today are quite different. The options are do you want this, you know, surrender of some national power to a common entity? Or do you want potentially really a very disastrous economic scenario with the collapse of the euro?

And it's because, you know, it's the lesser of two evils. And faced with that choice -- and we saw it in Greece, right? The Greeks are very unhappy. They're the ones who are suffering the most right now. And yet at the end of the day, for all the fiery rhetoric, they chose Europe.

VELSHI: Andrew, talk to us about this. I think Chrystia's right, that 10 years ago, maybe this is what they should have been talking about. But they weren't really going to talk about this. They weren't -- this was going to be a real convenient trade union, as it were.

They were going to come together and have no barriers to trade and be able to move around. But they weren't really going to give up their national interests. Now it looks like they've got to give up some of their cultural norms and their national norms in order to make this work. Should they? And will they?

MORAVCSIK: Well, Chrystia's right, that the Germans benefit from it a lot; everybody wants to avoid disaster. But think about what would be necessary to make this work, because people are asking the Germans to pony up a lot of cash.

VELSHI: Right.

MORAVCSIK: A lot of cash to bail out banks, a lot of cash to bail out countries, a lot of cash to keep the system going. And what's the quid pro quo for that? The quid pro quo for that, to protect the German taxpayer, to protect the system as a whole, has to be discipline on the countries in the south. It has to be reform in the countries of the south --

(CROSSTALK)

VELSHI: And that translates right now into control over what you do, and that's the part that's ringing hollow or difficult for a lot of southern Europeans.

MORAVCSIK: That's correct.

VELSHI: Because Germany is saying we, collectively, need to look at everybody's books. We, collectively, need to make decisions and put stops on people's spending.

MORAVCSIK: Well, not just --

FREELAND: (Inaudible) --

(CROSSTALK)

MORAVCSIK: Go --

FREELAND: No, I was going to say, Andy, I spoke earlier today with Raghu Rajan, who is now at the University of Chicago, former chief economist at the IMF. And he suggested to me what I thought was a really smart idea on resolving this political issue, which is the southern Europeans really don't want the Germans to come in and tell them how to run their country.

And Raghu said, you know what, this is a classic case where the IMF could play an important role, because they're a third outside party. He said, look, countries like India, like Brazil -- you can look more recently at the Baltic countries -- had the IMF give them a program, impose this external discipline, which clearly they need. And maybe that's going to be -- that would be a little more appealing than having the Germans --

VELSHI: Do you think it makes a difference?

MORAVCSIK: I think that gives the Europeans more of what they already have. The Europeans have done a great job actually in the last three years of dealing with short-term and medium-term crisis management.

What they need now is credible long-term structural reform. Actually, the IMF is not in the business of credible long-term structural reform. And it's not clear that the European Union can be, either. What's needed is commitment on the part of domestic governments, in Italy, in Spain and elsewhere, to converge to standards that are much more like the standards of German domestic policy.

VELSHI: How is that going to happen? How does that happen -- I mean, I think I've got a better chance of growing hair than they have of --

(CROSSTALK)

FREELAND: No, see, Ali, there I would disagree with you. And maybe with Andy.

VELSHI: (Inaudible) part about them getting stuff done?

FREELAND: I won't comment on the hair part. I think your head is very attractive.

VELSHI: Thank you.

FREELAND: But no. I mean, if you look, for example, at the Spanish labor market reforms, those are pretty significant. So to sort of talk about these countries as if they've done nothing, it's just wrong.

VELSHI: Right. We were probably really talking about Greece, because you're right. Spain has instituted some reforms; Italy has tried to do so. But, ultimately, we still come back to the fact that someone's going to be charge. Who's that going to be? Who's the grownup in the room?

MORAVCSIK: But I think what we're talking -- remember what's necessary is that the macro accounts of these countries be sufficiently similar that you don't build up 20, 30 percent differentials over 5-10 years.

That's a very stringent standard. And those differentials can come from anywhere, from public budgets, from labor markets, from business practices. And they build up quite easily. And I think it's rather unlikely that you're going to get credible reform in all these countries --

VELSHI: So do you think --

MORAVCSIK: -- somewhat pessimistic.

VELSHI: You think there's any chance of even a deal or something emerging by this weekend?

MORAVCSIK: As I said, I think the Europeans have done a very good job of short- and medium-term management. I think they will continue to do so. I think depreciation of the euro and other things will give them something of a cushion to deal with this for one or two more years. But whether or not they can manage it over a longer term, I think that's an open question.

VELSHI: Chrystia, the distinction is whether it's the IMF or it's the various bodies, European bodies who are trying to deal with the crisis in Europe, all of them exist at sort of a super not-elected level. As soon as you get the governments that exist on an elected level, they are now responding to national sentiments and concerns.

And that just seems to be where everything grinds to an absolute halt, because nobody wants to vote for somebody who's going to impose the tough decisions on them, at least in southern Europe.

FREELAND: Well, yes, and absolutely it's hard. But I do think the people of Europe are aware of how devastating it would be, given that they have the euro now for it to all unravel. And that's the only reason -- I agree with the difficulties; I agree that the -- this is a very complex structure. But you have to look at the alternative.

The other thing that we haven't been talking about is when you talk about the burden of adjustment in Europe, it's not just southern Europe. Germany has to adjust a lot, too. And what you're going to have to see -- I mean, Europe, in some ways, the European economy has imbalances similar to those of the world.

Americans are familiar with China having export-led growth that causes problems for the United States. In Europe, southern Europe is in the position of the United States and Germany is in the position of China.

VELSHI: That's right. That's a good discussion we should have another time.

Chrystia, thanks very much for that.

Chrystia Freeland, editor at Thomson Reuters Digital.

Andrew Moravcsik is the director of the European Union program at Princeton University.

Thanks to both of you. We'll be right back.

(COMMERCIAL BREAK)

VELSHI: This just in: earlier in the program, we heard the threats being issued from Turkey over that shootdown of one of its fighter jets over Syria. Now we hear from Syrian leader Bashar al-Assad just a short time ago. He made the strongest statement we've heard from him since the Syrian conflict began 16 months ago.

Now this is not necessarily a declaration of war against turkey, but it's clearly one against his own people. Listen.

(BEGIN VIDEO CLIP)

BASHAR AL-ASSAD, SYRIAN PRESIDENT (through translator): We are in a state of real war in every aspect of the word. When we're in a state of war, all our politics has to be concentrated on winning this war.

(END VIDEO CLIP)

VELSHI: We'll be keeping a close eye on the situation.

That's it for the program tonight. Remember, amanpour@cnn.com, the email box is always open. I'll see you again.

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