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Is Britain Safer In Or Out Of The European Union?; Interview With U.S. Treasury Secretary Jack Lew On The Global Economy. Aired 2-2:30p ET

Aired June 3, 2016 - 14:00:00   ET



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That is CNN News Now. Up next, "Amanpour". You're watching CNN.

CLARISSA WARD, CNN HOST: Tonight, the island nation is Britain safer in or out of the European Union. The director of Europol and a former U.K. home

secretary tell me why they disagree.

Plus, Trump trade and America's troubling inequality gap. The U.S. Treasury Secretary Jack Lew on the global economy.


JACK LEW, U.S. TREASURY SECRETARY: If we cut ourselves off from the global economy, it will hurt growth, it will hurt jobs. If we engage, we will

grow jobs and grow the economy.


WARD: Good evening, everyone, and welcome to the program. Looking back at some of the week highlights. I'm Clarissa Ward, in for Christiane.

It's the biggest decision facing the United Kingdom and at least a generation in or out of the European Union, and with the vote just weeks

away the battle is intensifying.

This week, Prime Minister David Cameron reiterated his rallying cry to remain in.


DAVID CAMERON, BRITISH PRIME MINISTER: Let us not roll a dice on the future. Britain doesn't succeed when we quit. We succeed when we get

stuck in. We work to improve these organizations and we save other prosperity and the security of our great country.


WARD: But opinion polls are pretty much neck and neck. And this week the pro Brexit camp retching up their call for an overhaul of U.K. immigration,

saying Britain would bring in an Australia's style point-based system should the U.K. vote to leave.

Another key issue in security would the Brexit maybe U.K. more or less safe. This week, I spoke to two opposing voices. Europol Director Rob

Wainwright and former U.K. home security Michael Howard.


WARD: Let me start with you, Rob Wainwright. You have said this would be a real error to leave the E.U. Explain that to us, why?

ROB WAINWRIGHT, EUROPOL: Well, as your introduction shows, I think the threat that we face from terrorism and, indeed, many forms of international

crime at the moment, are much more threatening and complex than we've seen at any point in the past.

It requires Britain and, indeed, its European partners to enjoy the maximum possible cooperation, making use of course of their unique relationship

with the Americans and in the intelligence community.

But what I see in my job in the seven years I've been director of Europol is the great strides forward that E.U. cooperation measures have taken to

provide now, I think, one indispensable part of the way in which Britain can protect its people and protect its borders.

WARD: And can I just ask -- I'm coming to you in one second, Michael Howard. But I just wanted to ask, why is it that you feel leaving the E.U.

would preclude and end those agreements? Could those agreements not continue if Britain was not in the E.U.?

WAINWRIGHT: Well, it wouldn't preclude access to them in absolute terms. It would change the nature of that access. And, in some areas, such as

access to the Schengen Information System, which is the largest security database in Europe and something which British border officials use every

day to identify suspected offenders coming over, I think it would be very unlikely that the U.K. would continue to have access, because there would

be no precedent for a country, the U.K. within find yourself being in having -- being granted access to that system.

Other arrangements like Europol would mean that it would have a rather indirect relationship with us, still useful, but not, overall the point is

Britain's relationship with the European Union just wouldn't be quite as effective in securing itself from these threats.

[14:05:11] WARD: OK, I'm sure Michael Howard has something to say about that. You've said the E.U. might as well be hanging a welcome sign to


MICHAEL HOWARD, FORMER BRITISH HOME SECRETARY: Well, it wasn't me who said that. It was --


WARD: It was actually the former head of Interpol.

HOWARD: . head of Interpol who said that. And of course we can continue with the arrangements that Rob has described. In fact, if I'm not

mistaken, Norway, which isn't a member of the E.U., has access to the Schengen intelligence information.

We actually contribute much, much more to those arrangements than we get from them. So the European countries have every reason to continue to make

these arrangements with us and to continue with them. There are some specific, undeniable ways in which we're less safe because we're members of

the European Union.

WARD: What are those ways?

HOWARD: I'll tell you what -- they all have to do with the European Court of Justice, which is supreme. I don't know what Americans would think of

that, making your Supreme Court subordinate to a North American court of justice sitting in Mexico City. That's the position we're in.

The European Court of Justice has said we can't stop European citizens who are involved in terrorism from coming into our country. It said we can't

have systematic checks of E.U. citizens' passports.

Today, scores of people have been arrested in Greece for forging passports. We know a lot of the passports are forged. European Court of Justice said

we can't have systematic checks. And it's even going to decide, in a few weeks' time, whether the surveillance regime, passed by our Parliament, is

consistent with the European Charter of Fundamental Rights. And it may well overrule an Act of Parliament that's been established in the United

Kingdom. So the European Court of Justice, which has the last say on the arrangements we can make, as long as we remain members of the European

Union, is indisputably making our country less safe than it would otherwise be.

WARD: And we're hearing this a lot from people, that the lack of Britain's ability to have autonomous control over its borders, what's your say to


WAINWRIGHT: Well, I think the important point here is that Britain needs to have access to the information intelligence system that allow them to

identify the serious offender at the point at which they cross the border. And notwithstanding the point about the European Court of Justice, Britain

has made use of what is a clear security exemption in the free movement directive. It's been 6,000 cases in the last few years. So the system is


The point is that if we leave the European Union, we must be very careful about what we wish for, because at that point we still have the task of

managing our borders and identifying the serious offenders. We would then have less access to the information that we currently rely on to keep our

borders safe in the first place.

HOWARD: That's not the case. Look, Rob admitted earlier the closest intelligence relationship we have is not with the European Union at all.

It's with the United States, Canada, Australia, New Zealand.

WARD: Right.

HOWARD: And so we can continue to have a close intelligence relationship with countries without a formal arrangement .


WARD: But the European Union does offer some areas of expertise, for example, North Africa.

HOWARD: We would continue to benefit from that because they benefit much, much more from what we contribute. We have the best intelligence services

in Europe and they benefit from that.

Look, there's something called the European arrest warrant.

WARD: Right.

HOWARD: I'm in favor of it and there's a discussion about whether it will continue if we leave the European Union.

The number of applications for arrests from other European countries in the U.K. is 10 times the number that we ask for from them. So they're going to

benefit hugely by continuing with those arrangements.

And I'm sure that's what they'll do. They're not so stupid as to cut off their nose to spite their face, just because we decide to leave the formal

arrangements of the European Union.

WARD: Well, Rob Wainwright, you are speaking to -- these are your colleagues across the continent every day. What are they saying? What is

their impression? Would this have a major impact?

WAINWRIGHT: To be honest, I've met no serving police chief either in the United Kingdom or across Europe who thinks that it's a good idea in

security terms if Britain leaves the E.U. because we've grown up in the last five to 10 years with a practical use of these systems on an everyday


The Schengen Information System, which, by the way, Norway only has access to it because they're part of the Schengen free movement area.


HOWARD: Earlier said no one outside the European Union could have access.


WAINWRIGHT: . precedent in which the U.K. would find itself, which is being the European Union and not being a member of the free .

HOWARD: But you can't deny the specific examples that I've cited, of ways in which the European Court of Justice's rulings makes our country less

safe than it would otherwise be. We're less safe if we can't keep out people who we know are involved in terrorism. We're less safe if we can't

systematically check passports. We're less safe if we can't have the surveillance regime which Parliament has passed.

WARD: But .

[14:10:01] WAINWRIGHT: Terrorist stopped at British border every time that they need to.

WARD: Yeah.

HOWARD: That's not true.

WAINWRIGHT: And there's nothing that the European Court of Justice stops us from doing .

HOWARD: Come on, Rob. You must know the case of Zed Zed, where someone, a European citizen, who we knew was involved in terrorism, the home secretary

wanted to keep him out because it was a Labour home secretary, who said his presence wasn't conducive to the public good and the European Court of

Justice said, you've got to let him in. That makes us less safe.

WARD: Let's talk about very specific cases that we all know -- Paris, Brussels. There were obvious failings, Rob Wainwright. Tell us, what was

learned from them? Has enough been learned from them?

WAINWRIGHT: Well, the biggest learning lesson was, first of all, how complex and dynamic the threat was. And going back to your point about the

U.S. travel warning, we are concerned about what that means for the Euro Football Championships, for example. It shows that the threat from the so-

called Islamic State is very viable. It targets the United Kingdom like it does France.

The big learning lesson from those two investigations was that intelligence cooperation was not good enough and that we needed to reach out and find

better ways to connect our information systems, of course with the Americans, of course with the intelligence community.

But my biggest lesson from that was that the majority of the terrorists that were responsible for those awful attacks have criminal backgrounds.

That means we need to reach into police databases that my organization, Europol, has. Many of the E.U. instruments to have in a more systematic

way than we've ever done before. Now is not the time to disengage.

HOWARD: But we can do all that. We can do all that and it's in the Europeans' interest to allow those arrangements to continue. And they will


WARD: Well, let me ask you that.

HOWARD: But what we -- what I don't want to do is for us to continue to be unable to keep out of our country people who we know are involved in


WARD: Right. You have a lot of good points about the system and the problems with the system. What do you intend to replace it with, though?

And this is the question that many people have. There's so much ambiguity about what comes next, what damage will be done. How will that void be


HOWARD: Oh, I don't think it will be a difficulty at all. I think we'll be able to continue to trade freely with the European Union because they have

a huge surplus on their trade with us. We won't be members of the .

WARD: But I'm talking specifically about security.

HOWARD: I would be willing to continue with the European arrest warrant, to continue to share intelligence through the network that Rob is

suggesting. We don't share intelligence with all members of the European Union equally now. So we could continue to have those arrangements. And

it would be very much in their interest to continue with those arrangements, because they benefit from them much, much more than we do.

WARD: Do you agree?


WAINWRIGHT: I agree, actually, with Michael that the U.K. would continue to have the relationship, that they would negotiate a pretty good deal; it

just wouldn't be as good as it is now. And it's fraught with difficulty, frankly, and uncertainty. How long will that take? And what will be the

final result?

The minimum we can say it will not be as effective as it is now.

HOWARD: You can't say that. You can't say that. That's conjecture. But I can point to specific facts as a result of the decisions of the European

Court of Justice, undeniable, irrefutable facts .

WARD: But if you look at the .

HOWARD: . that make us less safe.

WARD: Let's look at some of the former intelligence, you know, the heads of MI-5, heads of MI-6 .

HOWARD: Well, they're on both .

WARD: .. they're on both sides.

HOWARD: . on both sides.

WARD: It's down the middle. I mean, there isn't really a clear .

WAINWRIGHT: It's not cut in the down the middle, we have one former head of MI-6, who left his job 12 years ago and hasn't had the experience .


HOWARD: . of Interpol, who said the .

WAINWRIGHT: Well, and it's in the United Kingdom, you know, that the -- much more recent heads of both MI-5, MI-6 and GCHQ, backing what I'm

hearing privately from all current serving chiefs.

HOWARD: You can have as many opinions as the cows come home.

WAINWRIGHT: But these are professionals, Michael. They have an objective view of what's .

HOWARD: I've put forward a specific series of facts.


HOWARD: You haven't been able to deny those facts. Those facts make the United Kingdom less safe than it would be if we left.

WARD: Let me ask you one final question, I have to ask you, Michael Howard, if Britain votes to leave the E.U., does David Cameron, Prime

Minister David Cameron, have to resign, in your opinion?

HOWARD: No, not at all. I -- he said he would stay. I hope and believe he will stay. We wouldn't want to be distracted at that time by a Tory

Party leadership contest. I hope, believe David Cameron will stay.

WARD: Thank you, gentlemen, both, for an enlightening debate.


WARD: And coming up, what would a Brexit means for trade with the United States. The U.S. Treasury Secretary Jack Lew speaks exclusively to

Christiane a global economy health check is next.


[14:16:39] WARD: Welcome back to the program. In the U.S., Donald Trump and Hillary Clinton traded more blows this week.


HILLARY CLINTON, (D), PRESIDENTIAL CANDIDATE: And I got to tell you, I think that Donald Trump has disqualified himself completely.

He has a attacked our closest allies. He has said let's pull out of NATO. He has praised the dictator of North Korea.

DONALD TRUMP, (R), PRESUMPTIVE REPUBLICAN NOMINEE: Hillary is not a talented person. In fact, she's a person with absolutely no natural

talent. She's one of the worst secretary of state in the history of our country.


WARD: Many Trump voters believe his business background will fix the economy for them. But will it? Independent economic experts his promise

could instead tip America back into recession. The U.S. Treasury Secretary, Jack Lew spoke exclusively to Christiane to assess the U.S.

economy in the face of heated political headwinds.


CHRISTIANE AMANPOUR, CNN HOST: Secretary Lew, welcome to our program.

SEC. JACK LEW, U.S. TREASURY: Good to be with you, Christiane.

AMANPOUR: I want to start with the general state of the economy. In the United States, unemployment -- good news -- back down to about 5 percent.

But the economy grew at apparently its slowest pace in two years during the first two months, three months of this -- of this year.

There's a lot of turbulence; there's a lot of anxiety in the U.S., in E.U., about the economy. What is your assessment about the state of the U.S.

economy and the global economy right now?

LEW: You know, I think the U.S. economy is continuing to move forward in a pretty stable way. We are seeing economic statistics supporting that,

ranging from consumer durables to housing, to the jobs numbers, 14.5 million new jobs since the recovery.

There are a lot of international headwinds. Globally, the economy is soft; we believe that demand is something that needs to be the focus of attention

as we have these international discussions. We have been very clear with our counterparts that you need to use all policy tools to try to get demand

going. That means using fiscal policy as well as monetary policy and structural reforms.

I think we're seeing signs of that becoming not just a set of commitments but actions. But I really think that the question of anxiety that's

beneath what you ask is a significant one.

Part of it is we've come out of a great recession that was very deep and it left scars and there's a nervousness about the future because of that. And

part of it is because there are a lot of tail risks in the global economy now. I think we as policymakers have to really try to be clear that we're

using the policy tools that we have to move things in the right direction.

I believe the U.S. is looked at as one of the real bright spots in the global economy right now.

AMANPOUR: Well, let me ask you about the national anxiety and the international anxiety. But it's clearly playing a huge role in the U.S.

presidential election, whether it's amongst Trump voters or Bernie Sanders voters, this sense that, you know, the system is rigged against people and,

as we know, of course, the middle class is no longer the majority in the United States.

In fact, you know, nearly half of U.S. income went to the top or the lower tier in 2014. And that's up from 29 percent in 1970, all to say that there

is this feeling obviously of inequality and that the system doesn't work for us.

[14:20:08] How difficult is it to correct that or even to operate as a Treasury Secretary in a populist environment?

LEW: You know, I actually think that this is not just a phenomenon of this year; it's been building up over decades because the trend in income

inequality has been growing. And I think the great recession deepened the sense of anxiety both because it accelerated some of the income disparity

and because it showed what fragility there is when a crisis hits.

I think that when I look at the responsibilities that I have, I have tools that I can use because of the position, the authorities we have, and can

take action on things like stopping inversions, to some extent. We put guidance out there that's made it more difficult for companies to move

offshore to avoid taxes. I think that's an important tax policy; it's an important signal that everybody has to be part of the same system and the

rules shouldn't be loaded in a way that allows some to avoid taxation.

AMANPOUR: Donald Trump on trade says we are like as third-world country. He describes your country, the United States, is being the third-world

country on trade, saying that America makes the worst trade deals ever. How do you, as Secretary of the Treasury, respond to that?

LEW: I'm not going to comment on any specific comments being made in the political season. But I would say that, if you look at the details of

what's in TPP, for example, the Trans-Pacific Partnership, it has high standards in labor practices, high standards on environmental practices,

health standards.

What we would do when we approve TPP, it'll bring the rest of the world up to a higher standard, which we already meet. That means that we'll be more


Now if the rest of the world has lower standards, that's bad for all kinds of reasons because it actually matters if, in a global environment, others

are polluting more than they should. But it also means that their products are cheaper than ours because they're not putting the same controls in.

AMANPOUR: Let me switch to the E.U. referendum that the British nation is involved in. You mentioned TPP. Well, what about TTIP, which is the

Trans-Atlantic Trade and Investment Partnership? The negotiations between the U.S. and Europe, what impact would a Brexit, in other words if the U.K.

were to leave Europe, what impact would that have on that set of trade negotiations?

LEW: Well, we have been negotiating with Europe for quite a number of years. I think that the progress there, we would like to see more progress

there, even in the remaining eight months of this administration.

The U.K. is an important part of Europe. I think Europe is stronger economically and in terms of its geopolitical stability with the U.K. in.

We will continue having the special relationship between the U.S. and the U.K., whatever decision the voters of the U.K. make.

But we think it's clearly a strong economic and national security interest to keep U.K. in Europe.

Now we will continue working on trade negotiations with Europe either way. As the president said when he was in the United Kingdom a few weeks ago,

any separate conversation with the U.K. would have to come behind that.

So I think it would be a better thing if we could have an agreement with all of Europe. A lot of issues to work through but we continue to be

committed to making progress.

AMANPOUR: Secretary of the Treasury, Jacob Lew, thank you very much indeed for joining me today.

LEW: Good to be with you, Christiane.


WARD: Coming up next, a different look at the refugee crisis. A powerful video experiment breaks down barriers and discovers what happens when

strangers look at each other in the eye. Next.


[14:25:51] WARD: And finally, tonight, we imagine a world away from political headlines, peeling back the rhetoric to find the humanity at the

heart of today's refugee crisis.

This video from Amnesty International is offering a look beyond borders. The organization asked Europeans and refugees to look into each other's

eyes for four minutes, an opportunity to see each other as human beings. So did it work? See for yourself.



UNIDENTIFIED FEMALE: I'm keeping my eyes on you.


WARD: Well, that's it for our program tonight. Remember, you can listen to our podcast, see us online at and follow me on Twitter

@ClarissaWard. Thank you for watching and goodbye from London.