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Office of the Press Secretary

                         BACKGROUND BRIEFING

January 5, 1994

The Briefing Room

3:26 P.M. EST

MS. MYERS: In a moment we're going to begin a BACKGROUND BRIEFING by two senior White House officials. The purpose of this briefing is to provide somewhat of an overview of the trip. I just want to emphasize, before we get going here, that the President and the foreign policy team has spent a great deal of time over the past several months preparing for this trip. It is something that we have been in consultation with the allies on, something that we've discussed at great length both internally and with the allies working out the details of both the policies and the specific sites along the way.

The President, as you know, has spent a good deal of time both prior to this week and certainly this week -- on Monday he had several meetings with his foreign policy team to discuss both the overview of the trip and the NATO and EU portions. Last night be met with some outside experts on both Europe and Russia. Today he had --

Q Who was that --

MS. MYERS: We'll get back to that. Today he had a lengthy meeting on Russia, as well as a lunch with columnists from various newspapers and magazines.

Q Make any news?

MS. MYERS: Pardon me? Make any news? You'll have to wait until tomorrow to find out -- actually, one of the wires was represented, so I'm sure there will be something on that shortly.

Q That's not fair. (Laughter.)

MS. MYERS: Tomorrow the President will go to Milwaukee, where he will address the broader themes of the trip in the first of three speeches that will look at the overall sort of goals and objectives of the trip. Overall, the President's going to focus on the challenges and opportunities in Europe on this trip -- specifically, to reestablish our ties to Europe through NATO and the EU; to reach out to Eastern and Central Europe through the Partnership For Peace; to continue to work on denuclearization issues in both Russia and the Ukraine; to reaffirm our support for the continued democratic and market economic reforms in Russia during our stops there; and finally, to continue to develop an overall policy towards Europe that integrates strategic economic and security concerns.

Finally, there will be one more round of briefings on Friday. At 10:30 a.m. on Friday morning, the President will meet with a bipartisan group of congressional leaders to discuss the upcoming trip. Following that meeting, Secretaries Christopher, Aspin and Bentsen will be in the Briefing Room here for sound and camera to talk about the overall trip. And I think probably on Friday afternoon, we'll do one final briefing on Russia.

So, without further adieu, I give you the senior administration officials.

Q What time do you think the briefing will be at?

MS. MYERS: Probably 11:45 a.m., something like that.

SENIOR ADMINISTRATION OFFICIAL: Some of you have heard this before and at the risk of boring you by agreeing with other senior administration officials, let me first talk about how the President sees the context of the trip and what's at stake here.

Over the next months and years, several very important decisions are being made in Europe and in the western world -- Russia's fate; that of the other NIS states; whether the really extraordinary progress toward democracy and free markets that we've seen in Central and Eastern Europe will continue and those countries will feel they can look West with hope rather than East with fear; whether NATO will be as central to post-Cold War European security concerns as it was during the Cold War, and a big question for those of us in the West, in the established Western democracies; whether our governments and societies will have the courage to risk change, especially at a time of serious domestic economic and social stress --- more in Europe than here, but here, too; whether we will have the courage risk change domestically in creating jobs, labor flexibility, but also internationally, and the two obviously are part of the same problem in continuing to lower barriers to trade, to open markets. And in the European context, in particular, to integrate the new and aspiring democracies of Europe's East rather than to throw up new barriers -- not just military barriers, but protectionist barriers. Not an easy thing to do when everybody has troubles at home -- to be open to the world. And all of these choices play into each other, and they set the framework for the trip.

Now, one eight-day Presidential trip to Europe is not going to determine the outcome. And the outcome lies primarily with the citizens of the societies affected. But the President believes that in the course of this trip, he can articulate his concept of what the new post-Cold War security challenges are and a strategy for dealing with them in broad terms, but also in some quite specific proposals. All of them could come under the word of "integrating." During the Cold War, the security problem, to be crass about it, was to keep the bad guys out of Western Europe. Now it is to expand the circle of democracies and market economies to embrace the former communist states; integrating in the largest sense of the word, the question of NATO's openness, but the openness of Western markets, the openness of Western political systems and vice-versa, of course.

So let me say, just very briefly, how each of the stops, before we get to the former Soviet Union, plays into this broad agenda. First, the President will begin in Brussels next Sunday with his first speech about Europe. He's spoken very courageously, I think, about Russia at the very beginning of the administration. But this will be the first speech he has addressed to the subject of U.S.-European relations aside from the very critical relationship with Russia which, in my opinion, is the single most important aspect of European security, including the security of Western Europe and Central Europe.

So we think this is an important occasion for him to lay out the overall framework for his concept of U.S.-European relations after the Cold War, the new security challenges and the American role in them.

The NATO summit will probably get the most attention, at least before he gets to Moscow, and it's the occasion for the trip, as you know. The challenge for the NATO Summit is to open NATO to new democracies in Europe's east in ways that delivers quite concrete security benefits, but also important political benefits, not least demonstrating to the electorates that reform pays in terms of acceptance by the West, and can address the security vacuum they perceive, that they're not being left in a no-man's land, nobody much cares about them, between the West and Russia without fueling antiWestern fires in Russia that could make the Central Europeans and all the rest of us less secure in the long run.

That's not an easy balancing act, but we think we've found the right formula, the best available formula for addressing it, which is the creation of a Partnership For Peace, which as you know, will get NATO's relations with the militaries of the former communist states out seminar rooms, onto the field actually doing things together.

I won't go into all the details of -- a subject close to my heart, all the mechanics, but that's not what you're interested in here. The important thing is the political, the various political spinoffs of this -- what it can do to promote democracy, to promote the kind of networking among militaries of East and West, but also to provide a framework in which the militaries of some of the former communist states would feel comfortable cooperating with each other, not just with those of the West.

We're not going to change their attitudes overnight, but we think this can be part of a process that will affect how militaries in these countries think about their role in a democratic society, and also come to think of each other, as well as the militaries of the West as partners rather than potential adversaries, much as NATO did for France, Germany, et cetera, et cetera. We're going to do this without drawing any formal new dividing lines in Europe. And as some of you have heard other administration officials say, what we want to do now is ensure security and stability for all of Europe. And if you just move the Iron Curtain a few hundred kilometers each, you're not likely to do that.

And our concern is not just with the Russian reaction, which has received most press attention, but the tensions and apprehensions that would be aroused in all the countries that didn't think they were on a fast track to membership if we either identified now who we expect to be NATO members, or by some kind of wink and nod implied who we expect to be NATO members in the first tranche.

But I do want to make very, very clear that excited as we are about the partnership for its own sake, we don't see it as the end of the road. We want it to go like gangbusters and to evolve and be an active, serious cooperative venture. But we are not saying to the Central and East European states, including those in the former Soviet Union, this is it for you -- we're going to make the most we can of the partnership, but this is it. It's the beginning of a dynamic and evolutionary process that we hope will lead to full NATO membership for some people. We don't know exactly when or who, and if we did think we could guess, it would be unwise to say so now. But we really mean this as part of a dynamic process.

Now, after the NATO Summit, the President will go to a summit with the European Union. He does that every six months, as the European Union changes its presidency every six months. But this will be the first one since the Uruguay round was completed and since the Maastricht Treaty was ratified and the European Community started calling itself a union. It's a wonderful opportunity to set the post-Uruguay Round trade agenda, including market access for Eastern and Central Europe -- when I say Eastern Europe, I mean Russia as well, so including Eastern and Central Europe market access, which is all part of the integrating process. But also it's a time to address the desire of the European Union members for a stronger foreign policy role, which is something we're very open to and we have specific ideas how we can make clear that we are open to this.

After he leaves Brussels, he will go to Prague for a meeting -- it's not a bilateral meeting with the Czech government, it's a meeting with the leaders of the Visegard states: Poland, Hungary, the Czech Republic and Slovakia -- something that's never happened before and that we are really very excited about. He will obviously talk to them about the opportunities the Partnership offers to them, and how they can take it and make it something really very interesting to them and interesting to their electorates, which is not unimportant to politicians. But also talk about the American role in their political and economic transition. These are the countries that have probably come farthest of the -- certainly come farthest of the former communist states. None of them feel that their democratic and market evolution is secure. All of them want -- there are specific things they want, but even more than the specifics, they want certainty of a sustained Western, including American, engagement, which they frankly had doubts about since the heady days after the Berlin Wall first came down. And we have some very specific ideas -- none of which is going to be a headline grabber -- but we think altogether will demonstrate that we mean to be engaged in a more imaginative way, not only by bringing them closer to NATO in an evolutionary process that can lead to membership, but in their political and economic transformations.

And after that, we go on to Moscow and Minsk.

SENIOR ADMINISTRATION OFFICIAL: Good afternoon, pleased to be with you. Let me just make a few comments about the President's trip to Moscow and then about his trip to Minsk, which follows. And I would open by saying, which you already know, this is the third meeting that the President is going to be having with President Yeltsin, will have had since April of last year. You remember in Vancouver they met for two-and-a-half days and, I think fair to say, established a new relationship between the United States and Russia -- a broad relationship based on economic cooperation, a security partnership in foreign policy cooperation. They then met briefly in Tokyo during the summit when President Yeltsin came for the G-7 plus one. There was a separate bilateral where they continued those discussions.

This meeting is in many ways an outgrowth of those two meetings, because we certainly want -- the President wants to reaffirm the partnership he is developing with President Yeltsin. But it also takes place after a very turbulent and historic four or five last months in Russia where we saw the constitutional challenge in September, the siege of the parliament in October, and the elections in December which, in effect, closed the door on the Soviet Union. So, the constitution in the Soviet parliament passed into history.

We are at a very interesting juncture now in Russian history. If you look at the events of the past few years in a longer term perspective from December 25, 1991, the day the Soviet Union dissolved, until December 12 of '93, there was, in essence, a twoyear power struggle between reformers and those who were not interested in reform. And to be very simplistic about it, the reformers won that power struggle. But the reformers who did so now face a considerable number of challenges as they look towards the future. And that is the setting in Moscow that the President will experience when he gets there next week.

And a key question for us, of course, is how will the United States -- how should the United States respond in this relationship, in this partnership to the challenges facing the Russian government? And let me just cite for you a couple of major themes as I see them for the President's trip. I will then -- I would then like to review some of the major issues that he'll be dealing with, and then I'll run over the schedule very briefly.

I think it's for us very clear that the first objective that the President has is to clearly, publicly articulate the continuity in U.S. policy towards Russia. And that policy is unequivocal support for Russian reform in all of its dimensions for Russia reformers, including the leading personification of reform, Boris Yeltsin. We are not in the position of sitting on a fence waiting for events to unfold. We are clearly taking the position that history is with those in Russia who want to create a democratic society and some form of a market economy. That is very much in the American interest that that happen. It has all sorts of implications for security in Europe, as my colleague has mentioned, and also for our own situation here at home in terms of our defense spending and the security of the American people as we look towards the future. So the President since he came into office has taken a very clear view of events in Russia and of our relationship to them and he continues to do that. And I'm sure that in his opportunities in his press conference, but more importantly in his speech to the Russian people, that will take place on the second day of the visit he will make that point very strongly.

I think the President will also want to reaffirm the foundations or the new pillars of the U.S.-Russian relationship --and I'll get into that in a minute -- in all of its dimensions. And third, he will want to reach out to a broad cross-section of the Russian public. This will be his first visit to Russia as President. He has an opportunity to meet people he has not met before, obviously, and he will take advantage of that opportunity.

The goal here is to build very strong lines of support, certainly to the Russian government but also to reformers outside of Moscow. And we're hoping that there will be a number of people in from the provinces -- governors, members of the new duma and the new Federation Council, which will, in fact, be meeting the week that the President arrives.

Let me cite for you four principal issues that I think will dominate the substantive discussions between the United States and Russia at this summit. First is, of course, the whole set of economic issues that since Vancouver have been at the very heart of this relationship. The President feels very strongly that the lessons of this election are -- the Russian election -- are that Russian economic reform must continue. It must continue firmly and it must be very aggressively pursued.

Along with that, however, the President I think since the day after the election has been articulating a complementary view, and that is along with the continuation of reform the Russian government should seek to develop a comprehensive cushion, if you will, to protect the Russian people through this very, very difficult transition period. I think the President made those comments when he was on the road the first two days after election. It's very clearly what Boris Yeltsin wants to do, and he has said so in public and he's said so privately to us. And the President will want to listen to President Yeltsin and hear his view of how Russian economic reform will proceed. He will certainly want to discuss with President Yeltsin how the United States and the G-7 and the west in general can respond to that vision. And here I'm talking about a continuation of the programs that have been put in place, most notably in Tokyo last July, the $28 billion support program for macroeconomic stabilization, but also to discuss how the United States and other countries and the international financial institutions can play a greater role in trying to help the Russian government provide for the basic social protection of the population as they undergo this historic transformation process.

Two other economic issues will be very important in Moscow. The first of them is, of course, the bilateral programs of support that the President put in place in Vancouver. And here the President will, in effect, be reporting to President Yeltsin on the progress that the United States has made in support of Russian reform. You remember in Vancouver the President announced a $1.6 billion program of support. He will report to President Yeltsin on how that has been implemented, how much of the money has been obligated, where it has gone, and in a fairly detailed fashion. And I think we'll be glad to share with all of you next week in Moscow the details of that program as well.

In addition, as you know, the Congress passed a $2.5 billion program of support for Russia and other NIS reform in September. And the President will want to give President Yeltsin a view as to how that money will be spent in 1994.

The third economic issue is perhaps the most important for the long term. And my colleague touched on it in remarks about East and Central Europe, and that is how can we in the West find a way to support reform long-term. The answer, we think very clearly, is through private trade and investment; is through an economic engagement between our two countries, because ultimately what American and Japanese and European corporations are able to do in the way of investing and trading in Russia is far more important than what the IMF and World Bank can do or what the United States or any other number of western governments can do. That is a long-term process. There are a number of barriers in place to trade on both sides. And the President will want to emphasize that issue with President Yeltsin.

The second major issue that will come up is, of course, Partnership For Peace. This is a proposal that unifies the President's trip to Europe, as my colleague mentioned. We look forward to Russian participation in the Partnership For Peace, and we fully expect that that will happen.

The third major issue will be a discussion of foreign policy issues. And here, I think the United States again has been able to make considerable progress in our dialogue with the Russians on how we cooperate on foreign policy issues. We are cosponsoring the Middle East peace process. We have been a very close partner of Russia in discussing the events in Bosnia and how the world should confront the problems in Bosnia.

We have had, as well, a close dialogue on the issues in Russia's so-called "near abroad." And here, I think the President and President Yeltsin will discuss a number of specific issues of concern to the United States. I would just mention one, for illustrative purposes. The United States believes very strongly that Russian troops should be withdrawn from Estonia and from Latvia. We believe this is the intention of the Russian government. We are not an intermediary in the negotiations among these countries, but we are trying to help behind the scenes as a friendly partner to all of the countries concerned, and I think we'll want to have a very indepth discussion of that issue in Moscow.

The fourth issue, of course, is denuclearization. This, in many respects, along with economic assistance reform is the number one foreign policy priority of the administration in the former Soviet Union. We have made considerable progress.

The Belarussians have acceded to the Nonproliferation Treaty. They will become a nonnuclear state. President Nazarbayev of Kazakhstan in late December when Vice President Gore was visiting announced his intention to accede to the NPT. We are now engaged in very complex and very important negotiations with the Russians and Ukrainians to see if we can make similar progress with Ukraine. That will obviously be an issue of great importance at the Moscow summit.

Having laid out those general themes and general issues, let me just take you briefly through the schedule. The President arrives, I think as you know, from Prague on the evening of the 12th of January. There are no events scheduled that evening. He's got two days of meetings and four substantive encounters with President Yeltsin.

On the first day, they will begin with a one-on-one in the Kremlin. That's Thursday morning, January 13th. I think that will be on broad themes of our relationship and particularly sensitive issues in the relationship. That is followed by a larger meeting on economic issues. They'll cover the issues that I just listed for you.

That evening, President Yeltsin will be hosting a small dinner for the President and a number of his advisors. And I suspect they'll have important discussions on foreign policy and other issues at that meeting.

And the following day, Friday the 14th, there will be an expanded meeting on security issues and military-to-military issues. The President will, of course, be doing more than just having his official meetings in Moscow. He intends to have a meeting with the Patriarch of the Russian Orthodox Church, Aleksiy II. They have not met before. We had hoped that they could meet earlier this year, but the Patriarch had to leave the United States early on one of his prior trips. The President is looking forward to that. The President will also visit the Tomb of the Unknown Soldier -- I think most of you know that -- just outside the Kremlin gates.

These two events, I think -- we hope will show the deep respect that we as a country have for Russia and for the Russian people. The church is a very important institution in Russian life. And, as you know, the great patriotic war -- the Second World War -- is also a defining event in recent history in Russia. And so the President very much wanted to do those two events.

In addition, the President is hosting a reception late Thursday afternoon, early Thursday evening, for between 100 and 150 leading Russians from politics, from the arts and from other fields. This is an attempt on our part to reach out to people that maybe we normally do not encounter in our government work, people who are influential in Russia and who are distinguished in Russian society, and people from beyond Moscow. As I mentioned, the duma and Federation Council will be meeting. There will be people from the Far East, from Southern Russia, from the Urals, from Siberia in Moscow, and it's a good opportunity for the President to meet them. So he intends to do that.

I would say one of the most important events of the trip, finally, will be the speech that the President intends to give to the Russian people. That's scheduled for late Friday afternoon.

Let me just say a word about Minsk very briefly. The President will travel to Belarus, to its capital, Minsk, on Saturday the 15th. He'll be spending most of the day there. And the President is going to Minsk for two reasons. First, obviously, we are very pleased that Belarus has decided to denuclearize, to become a nonnuclear state. And we think that it is important to continue to support the Belarussians in that process. It is a long-term process. It's costly for them to dismantle and destroy the nuclear missiles, weapons and to remove them, transport them to Russia. And we are assisting in that process through Nunn-Lugar legislation.

Second, there is a real battle underway in Belarus for the future. And the battle, in essence, is similar to the battle that we've seen in Russia over the last two years. And, very generally, it's between those in the parliament and in the government and society who want a democratic, economic, reform future for the country, and those who do not. Chairman Stanislav Shushkevich, who is the Chairman of the Belarussian Supreme Soviet, is the leading reformer. The President knows him. They met here at the White House in July. The President has enormous respect for him. And I think that in his visit to Minsk, the President will want to speak about the importance of democratization and the importance of people in Belarus deciding that their future lies -- as it does we think with Russia and Ukraine and the other states -- with democracy. So that's a very important theme of that trip.

Those are general comments. I think my colleague and I would be very glad to take your questions.

Q I understand that Russia has finally paid up on their agricultural credit arrearages for '93 and that now USDA Secretary Espy sees them as creditworthy. But with Russia and certain people in the administration not wanting to have a commodities link to this summit, do you anticipate any discussion of new credit that would be available in early -- in a year for Russia, or would you expect Russia to make a symbolic payment of their Russia GSM 102 credit payments that's due in January during this summit?

SENIOR ADMINISTRATION OFFICIAL: Just a brief response, then a brief footnote. The issue is whether or not the United States will want to get into the business of commodity credit extension towards Russia for their purchase of our agricultural commodities. I believe that the United States put forward roughly $5 billion worth of such credits in a two-year period between '90 and '92. Over the last year Russia had been in default, and so the program, by law, had to stop. It is true that Russia has now made up those payments and is fully in compliance with the law, so it is theoretically possible for us to think about the extension for credits for commodity exports -- commodity sales.

At this time, the Russians have not asked us for any such commodity credit extensions. And so I don't believe it will be an issue in Moscow.

Q Is there any danger that the President going there, that it might make Yeltsin look too beholden to the West, with the rise of nationalism that Zhirinovsky might play on this and make this an issue?

SENIOR ADMINISTRATION OFFICIAL: President Clinton was invited by President Yeltsin to visit Russia, so I don't believe that's a problem at all. And I would just say that I think certainly the United States feels -- and I think the Russian government does, too -- that this process of integration, of integrating Russia into the West economically and politically and, indeed, in a security sense -- the Partnership for Peace -- is the most critical element in building a peaceful relationship for the Russians over the future. So we feel very good about this relationship. We think it's in the interest of our country. I think President Yeltsin feels the same.

Q How does the President finesse the Zhirinovsky problem? Isn't there going to be a great deal of tension to his not meeting with Mr. Zhirinovsky during his visit to Moscow?

SENIOR ADMINISTRATION OFFICIAL: Well, as I said, the President's going to meet with a broad cross-section of leaders. There are no plans to meet with Mr. Zhirinovsky.

Q How do you -- what kind of things do you have in mind in helping the Russians with the social protections aspect that you talked about? And can you square the circle between yourself and Strobe Talbott? There seems to be some question about whether the administration is still as gung-ho on economic reform or whether there's going to be more emphasis on --

SENIOR ADMINISTRATION OFFICIAL: Well, let me take the second part first. The administration is unified and has been unified in this issue, and there's no disagreement in the administration. The President has set the tone on this issue, and everyone in the administration agrees with the position -- at least those at the senior levels. We believe that the lesson of the election is two-fold.

First, it's very important that Russian reform continue -- Russian reform in the person of privatization of state industries, price liberalization, macroeconomic stabilization. Without that, we're very much afraid that the situation -- the economic situation -- will deteriorate. And so that is a strongly felt view within the administration. But secondly, we would like to try as best as we can to work inside the G-7 and with the international financial institutions to see if all of us can expand our efforts, or enhance the effectiveness of our efforts, to help the Russians build a cushion to protect their population.

Now, I would say first that's a Russian job. The Russians have to define what it is they want to do. They've got to decide how they're going to do it. And at that point, I think the West, led by the United States, will be very eager to talk to them about what it is that we can do to respond to those developments. But it really wouldn't be appropriate for us, I think, to go out and design a social safety net for Russia.

That's why the President's major focus on this issue in Moscow is going to be to listen -- to listen to what President Yeltsin intends to do. I think what the President will be willing to say is that we will commit ourselves to help this process work, because we understand how important it is for the future of reform.

Q Can I follow up on that, please? But does the administration want the IMF and the World Bank to ease the conditions under which it will provide loans to Russia, because the Vice President, in his trip, seemed to be complaining that the IMF and the World Bank were being too tough.

SENIOR ADMINISTRATION OFFICIAL: What we went is -- let me just take you through very briefly so as not to bore everybody again, the two pillars of our economic policy. We want the IMF and the World Bank, the G-7 to continue their programs of macroeconomic support for the Russian government. That is terribly important -- I would say even critical -- for any possibility that reform is going to succeed. And that is what we have told the IMF and the World Bank.

In addition to that, we think there are ways that the IMF and the World Bank and the United States can be more effective in conveying assistance to Russia, perhaps in some fields be more energetic -- all of us. And certainly, I think the President and Vice President have both spoken to the need to be creative. I think both of them have used the word to be sensitive to what the message of the elections was -- and that is that people are hurting during the transition. So, what we have done over the last couple of weeks is sit down privately within the administration and try to think of ways to do that.

Let me give you an illustrative example. We have not gone to the Russians with ideas in having gone to the G-7. But we have already instituted a privatization fund at the Tokyo summit last year. It's a G-7 fund. The United States is contributing $125 million to set up a large enterprise fund that will lend money to the large state enterprises that want to privatize that will help them through the perils of the transition process, and importantly, that will help the cities and the regions in which these enterprises are located to also adjust to privatization; because, as you know, the way Soviet economics worked, health care, education were all tied to the enterprise. That is going to be a process of devolution of powers and of responsibilities in the Russian economic system because of these great changes.

Perhaps the World Bank can contribute more to this effort. Perhaps the United States and its Western partners can contribute more. We do not yet have any firm view as to what might happen. The first thing that has to happen is we have to listen to the Russians, see what the Russian government wants to do. The second thing is to build an effective program of Western support, and the President is determined to do that.

Q What is there on this trip to reward, if you would, the Visegrad states for the relatively greater progress they have made toward democracy and market economies with the understanding that the Partnership For Peace is not what they were looking for, not completely --

SENIOR ADMINISTRATION OFFICIAL: Well, it's not all they were looking for, certainly. You're quite right about that. Some specific things, but as I said at the outset, none of the individual things we have there is a headline-grabber. I think a sense that the West is open to them and is opening in a continuing and evolutionary process to them can be portrayed by them quite legitimately as a success and a reward, to put it crassly, for reform. That means closer cooperation, practical cooperation with NATO. That means continuing improved access to Western markets. That means a sense of sustained American, as well as West European engagement in their economic and political transformation.

I see the perplexity in your face and I understand it, because it all sounds sort of nebulous and fuzzy. Their situation is very different from that of Russia, simply because they are so much farther along. In some things, though they are similar. What my colleague was saying about the lesson of the Russian election, in a less dramatic way it's dangerous to make comparisons, because the situations are so different. But there is a similar lesson from the Polish election. The Polish economy is a major success story. They applied shock therapy early, it worked. It's the fastest-growing economy in Europe, in the world, possibly; certainly in Europe. And the people don't feel -- "Joe Sixpack" doesn't feel he's necessarily benefiting from it, as the results of the election showed.

Our suggestion in Poland is exactly as in Russia, that the answer is not to slow down shock therapy, but that we need to be more creative in helping them devise means of helping communities and the society in general adjust.

Probably what we can do most for them is helping them attract American investment as well as market access, simply because their economic situation is different. They would be the first to tell you that the West doesn't have the solution to their problems, that it lies with them -- and they're proud of the fact that it does lie with them. They don't want lectures about how to become a democracy, they are democracies. They know there are threats to that. So what we can offer is a sense of sustained engagement and on an evolutionary basis, opening to the West in ways that will not prematurely draw new lines in Europe.

One thing I --

Q Let me rephrase it. What do you have to convince them that they're not once again playing second, third or fourth fiddle -- they're just not as important as Russia, because that's who this trip appears to be focused on, to the exclusion, almost, of the Visegrad states?

SENIOR ADMINISTRATION OFFICIAL: Well, that's an extraordinary impression, since the Visegrad meeting is the first time any American president has done anything of the sort. Now, the press can decide if the NATO meeting is the most important event on the trip, or Russia is the most important event on the trip, but that's honestly not the way we see it. In some ways, we see the -- it's silly to compare -- but there are ways in which the Visegrad meeting is the most exciting aspect of those of us planning these meetings simply because it is something different and innovative and they recognize it as such. It's also a mark of our support for cooperation among them and we have some specific ideas for how we can facilitate cooperation among them.

One thing we have to make clear is that this isn't an effort to sort of re-ghettoize them, to push them into free trade and security arrangements with each other, but it's a way to facilitate their integration with the West; the more they demonstrate, they can cooperate with each other, the more welcome they will be in the West.

But let me make one more remark about how this trip ties together. My colleague and I have both been focusing on what the West can and should be doing to contribute to and help the democratic and economic reform process in Central and Eastern Europe all the way through Russia and beyond. That is not instead of a revitalization of the traditional transatlantic partnership; it is the way to revitalize the traditional partnership, which has always been based on a partnership to ensure security in Europe. We have an opportunity here to move beyond the Cold War demands on our economy, on our society, and ensure a Europe in which those kinds of lines don't need to be drawn.

But we can demonstrate to the Central Europeans that we are there with them for the long haul of their political and economic transformation and that in the process of doing what outsiders can do to help, which is not everything but is more than I think many have realized, we can through the Partnership For Peace -- and I want to be careful of how I say this, because we do not think Russia is going to turn out badly -- but to put ourselves in a position where if it should through these active programs of military cooperation, we would be more in a position to draw new dividing lines should that become necessary, which we do not expect to happen. But we don't want to do anything that would make it more likely that that should happen.

Q are finding out -- at least some of the NIS have different priorities. For example, they want to talk about new threats -- the kind of work being done right now at the Pentagon. You didn't talk at all about that one.

SENIOR ADMINISTRATION OFFICIAL: No, I didn't. But I think -- I'm glad you raised that, because that's something that I think is very interesting. This NATO summit is going to launch a NATO project on proliferation, not to try to duplicate what's being done elsewhere but to look in in a very serious way to what NATO's unique or special contribution can be, not only to preventing proliferation but also to counter proliferation. And that's not throwing in the towel on nonproliferation; it could contribute to nonproliferation by demonstrating that proliferation doesn't pay. The game's not worth a candle.

Now, the reason I didn't mention it is that all this NATO summit is going to do is launch a NATO program, which tends to make people's eyes cross, rather than have a decision to announce. But in fact, it gets NATO into a very important new area, which could be relevant to the security of its own territory. And I think that nicely balances what we're doing to make NATO more relevant to security in the East. It's all part of updating NATO to the postCold War world.

Q Could I ask about Russia for a second? You remember in Vancouver Yeltsin made a big point of asking for permanent MFN status and for promises that the U.S. won't use its nuclear submarines to snoop around the coasts of Russia. What progress have you made on those two issues? What will you be able to tell him when you get there?

SENIOR ADMINISTRATION OFFICIAL: There are a number of issues that came up in Vancouver of that type. Let me just try to deliver a report card on how we've done. President Yeltsin asked, or stated his opinion, that COCOM was discriminatory against Russia. And as you know, the United States is leading the way with its western partners to do away with COCOM, to create a new institution in which Russia would be a member, an institution not directed against Russia, but in which Russia would help involve itself with the West in fighting the problem of proliferation.

Second, President Yeltsin asked that the United States take away from its books, from our laws, 60 to 70 statutes, regulations and laws from the Cold War period that discriminated against Russia as a "communist country." The President wrote a bill. He lobbied for the bill in the Congress. He had the support of both parties in the Congress for that effort, and that bill passed in November.

President Yeltsin was also interested, as you said, in Jackson-Vanik. Right now Russia has received, at least for the last couple of years, annual waivers from the Clinton administration and the Bush administration before it to provide MFN. This is an issue, frankly, that we are still studying. There are a number of options before the President. He has not made a decision.

President Yeltsin also asked for a quick disbursement of U.S. aid -- I mentioned that before we did it -- 100 percent obligated, a vast majority of the funds actually expended on the ground in Russia. So, I think that our --

Q are, in fact, projects that are being built out of that $1.6 billion or are being done?

SENIOR ADMINISTRATION OFFICIAL: Absolutely. Yes, $1.6 billion. One hundred percent of the money is obligated. You understand that term of art.

Q Yes, it means you've agreed to do something. It doesn't mean anything is done --

SENIOR ADMINISTRATION OFFICIAL: And as I said, we'll tell you next week that the vast majority of the funds have been expended in Russia -- money spent on projects in Russia. And we'll give you -- in fact, what we'll do next week if you'd like is run through each of the projects, if you have that kind of patience or interest and go through them. It's a good record.

Q Are any of those projects viable enough for the President to see them? Did you find anything that he's going to --

SENIOR ADMINISTRATION OFFICIAL: Interestingly enough, most of the projects are outside of Moscow and by design -- by design because that's where the Russian people are. That's reform is occurring, not just in the capital city. He is -- we are hoping that he'll be able to visit a project that has received U.S. aid. We're still working that out. But let me just continue the list.

Q What will that be?

SENIOR ADMINISTRATION OFFICIAL: We don't know yet. We're still working that out. But let me just continue the list -- President Yeltsin also asked for an enterprise fund. He wanted a mechanism from the United States to help create small businesses. The enterprise fund has been created. It has started. It is physically opening its doors in Moscow a week after next. They discussed at Vancouver the opening of a G-7 office in Moscow to help make more rational G-7 assistance to Russia and to organize it and to make it more aggressive. That office is opening again next week. The President will announce the name of the American who will head it and of a German deputy director.

We also at Vancouver talked about this large enterprise fund. That is also underway. And so I think as you look back at Vancouver, it really was a case of the President making a number of commitments, and I believe he's fulfilled almost all of them.

Q Submarines?

SENIOR ADMINISTRATION OFFICIAL: Yes, I believe as a result of the instance that took place just before Vancouver, I believe that our military has been in touch with the Russian military, and we're quite confident that kind of incident will not recur.

Q On foreign policy, can you please explain whether the U.S. is at all concerned by a rising nationalist trend in Russia's foreign policy? And whether this is at all worrisome, specifically remarks by Kozyrev, both before and after the election, that seem reminiscent of what he said in Stockholm in December of '92 -- moves to put Russian peacekeepers in the "near abroad"; certainly a sense that if the United States isn't going to pay to provide for what is perceived as Russia's own security, that Russia will have to do it themselves? I mean, is the President bringing any message of concern or will he be asking President Yeltsin for any assurances in this regard?

SENIOR ADMINISTRATION OFFICIAL: Well, as I mentioned before, the United States is very interested in having the best possible cooperation and the best possible ongoing dialogue with the Russians on foreign policy issues. Terribly important for Russia's neighbors, and terribly important for our ability in the United Nations and the Middle East, to name two areas, in order for us to achieve our own objectives. I think I would say that the record of Russian foreign policy since December 25, 1991, has been in marked contrast to the foreign policy of the Soviet Union, its predecessor.

For the most part we have cooperated very well with the Russians. We have had our disagreements, which are to be expected, but we have, including recently in the last four or five months. What we will emphasize in our discussions with the Russian government is that Russia, obviously, like all countries, must be a good neighbor; that Russia must respect the borders of its neighbors, the territorial integrity, the sovereignty of its neighbors. Russia has indicated its interest in withdrawing its troops from the Baltics. We think that's very important. We hope very much it happens. It will be a very good demonstration of Russia's commitment of the principles that I just listed. And we think it will happen, but it will -- it will be a subject of discussion in Moscow.

You mentioned peacekeeping. A very complicated issue. And it's easy to confuse, say, the Baltics, where the troops are not wanted, where the Estonia and Latvian governments want them out --and we have a lot of sympathy with that -- with, for instance, Tajikistan, a member of the Commonwealth of Independent States, that has invited the Russian government, the Kazakh government, the Kyrgyz government and the Uzbek government to station troops on the TajikAfghan border. That was done via international consent, through the consent, sovereign consent, of the government of Tajikistan -- a very different situation than the situation in the Baltic states, one in which we are not inclined to protest, obviously. In fact, we would even say that the multinational force on the Tajik-Afghan border, has been a stabilizing force on that border. So I think we all have to be careful about generalizations about Russian foreign policy.

There are conflicts in between Georgia and NagornoKarabakh, to name two, that are very difficult conflicts. They will also come up in the discussions in Moscow.

Q One more question about the aid programs. The President has spoken about the need to have things that will show the Russian people that there are actually tangible benefits of reform. This is the first we've heard about these projects on the ground that are actually up and running. Is that they're just so small and their effects are so marginal that it's not worth --

SENIOR ADMINISTRATION OFFICIAL: It's the biggest country in the world. It's 11 time zones across. We are going to be spending, what, from '93 to '94 a couple of billion dollars in a country of 175 million people. We are not doing -- we are not committing some of the mistakes that were made maybe in the '50s and '60s by a lot of countries who were not building visible dams, for instance, were not building airports. We're investing in people. What we're doing with our money is we're putting $225 million into privatizing firms over three years. We're putting $300 million into the creation of small business through the enterprise fund; another $125 million into the large enterprise fund. We're going to be putting a substantial amount of money, $160 million, to construct 5,000 housing units for Russian military officers as an incentive for the withdrawal from the Baltic states. We'll be spending roughly $200 million over a number of years on democratization programs. We're going to bring 25,000 Russians and Ukrainians and Armenians to this country for college, university and post-grad studies.

So a lot of the money goes for this type of thing. A lot of it is not in bricks and mortars -- some of it is -- but a lot of it is not. A lot of it's in people; it's in the transition process. And if you will, it's somewhat invisible. You're not going to see the money that goes to pay for somebody from Smolensk to study at Indiana University for four years. You're not going to see the money -- at least it's not going to be on the street -- that privatized a firm in Vladivostok. But that is going to produce the kind of change that we think will lead to a reformed future. And we think investing in people is the most important thing. But we can try to make the money visible. We'll try to do it with you next week when we unveil some of these numbers.

Q Where do you say that they have cooperated on Bosnia? And when do you think Russia will join the Partnership For Peace?

SENIOR ADMINISTRATION OFFICIAL: I expect that Russia will join the Partnership for Peace very soon. But I think first --

Q Will they discuss it --

SENIOR ADMINISTRATION OFFICIAL: Well, I think first there needs to the NATO summit and then President Clinton and President Yeltsin need to discuss the concept, and then I would expect that Russia would follow very shortly thereafter.

Q he's indicated that?

SENIOR ADMINISTRATION OFFICIAL: We've had -- obviously we've had discussions with the Russian government. We've received very good indications that they want to join, they want to participate, and they favor the concept. As to Bosnia, my colleague's the expert on Bosnia, not me. I would just say we haven't always seen eye to eye with the Russians, but we've had a good dialogue, which is in marked contrast to the U.S.-Soviet period in foreign policy.

Q Haven't they really been supporters of the Serbs alone --

SENIOR ADMINISTRATION OFFICIAL: No, that's an oversimplification. They have historic ties, obviously, with the Serbs. There's a great deal of sympathy in this country historically for the Serbs, who are an admirable people, which is not the same thing as support for the present government of Serbia.

If you notice, every time there has been a western proposal for a Security Council resolution, the Russian government has supported it. These are very, very hard issues in which the right is almost never entirely one side. On almost all the issues once I make up my mind I'm certain I'm right, but I could give you a good case on both sides of the issues. They're extraordinarily hard issues. We talk about them; we agonize about them internally, each of us. We talk about them within this government. We talk about them with our allies, and we talk about them with the Russians. And at the end of the day, we have worked out an agreement among all the permanent members of the Security Council -- the West Europeans, the Russians and the Chinese acquiescence -- but with active Russian participation.

We have, as you know, a special envoy in the talks as do the Russians -- Deputy Foreign Minister Churkin. The relationship has been constructive, which does not mean we've agreed on every detail, but that these are hard issues on which honorable men can disagree. But the relationship has been very constructive.

Q When he finishes at NATO and goes on to Prague and the Partnership For Peace looks a little more definite, will President Clinton ask those countries, which have been very vocal saying they want NATO membership, to withdrawal their formal applications? Does he think that they have to take a step back now from that?

SENIOR ADMINISTRATION OFFICIAL: I don't think so. I'm not sure there's a way of applying for NATO membership. They've announced that they would like NATO membership. What they want to say about their desire for NATO membership is absolutely up to them. I'm not going to pretend that they're going to stop wanting -- in fact, none of them is asking for NATO membership now, what they want is to be identified as in the fast lane, as the favored candidates, with some assurance that if they do the right things, they will get in regardless of what is happening elsewhere in Europe. I don't think they're going to change that view. What I do think is that as they come to understand what the partnership can do for them, they will be more enthusiastic about that, which does not mean they will stop wanting full membership.

And we haven't been able to do the kind of sales job that I think is easy to do, because NATO is still working out the details. The partnership is not an American creature. And that's one reason Madeleine Albright and General Shalikashvili are going off to Central Europe at the end of this week, because now we're finally in a position to talk about some of the details. And, as I've had conversations with senior officials -- including some very senior officials from some of those countries -- when you can sit down with them one on one and talk about what's in it for them, they don't say, "Okay, you've convinced me. This is better than NATO membership." They say, "Yeah, I didn't realize there was so much in it here. We can make something of this."

Q When they ask to be part of the partnership, there's this list of things that they have to certify that they will work towards, is that right?

SENIOR ADMINISTRATION OFFICIAL: Yeah, it's a little bit more complicated than that. NATO does not pass judgment on anybody who wants to join the partnership. People would have to sign what's called a framework document which will have some political as well as military commitments. The political commitments -- some of them are reaffirming U.N. and CSCE commitments. Others are to work toward civilian control of the military and transparency in military budgets.

Q Do they have to pledge to a timetable on those things?


Q All they have to do is to they believe that those are good things to have.

SENIOR ADMINISTRATION OFFICIAL: But then they would file -- if you want to get into the mechanics -- something we call a commitment document which would be two-part. The first part is what resources they can make available -- military units, medical units, bases, infrastructure, et cetera. The second part is what steps they plan to take over a time -- not overnight -- but progressively to increase civilian control of the military. And they're not starting from ground zero, but to increase civilian control of the military and to increase transparency of military budgets. NATO does not pass judgment on those.

Q Will NATO monitor as time passes whether they are meeting this --

SENIOR ADMINISTRATION OFFICIAL: We'll discuss it as time passes, and they can discuss what they think, frankly, about our -- NATO members now go through something a defense review process, where we all critique each other's defense planning. The partnership will itself be an evolutionary thing, but there will be an opportunity in NATO committees at NATO headquarters that are there and at the planning cell at Mons to review partners' programs and for them to say what they think about what we're contributing to the partnership.

Q But could NATO ever vote to kick someone out of the partnership because they haven't made sufficient progress?

SENIOR ADMINISTRATION OFFICIAL: That is not provided for, no. That is not provided for. We want the partnership to be a means of influence, but there are no prior criteria for joining the partnership except --

Q criteria for kicking someone out who had failed to meet the timetables --

SENIOR ADMINISTRATION OFFICIAL: No. Nor is there a criterion for kicking anybody out of NATO.

Q But the invitation comes from NATO, doesn't it?

SENIOR ADMINISTRATION OFFICIAL: The invitation comes from NATO to all states that participate in the North Atlantic Cooperation Council, which means all former Warsaw Pact states, including all former Soviet republics, and for instance, to the European neutrals who now participate in the NACC ad hoc working group peacekeeping and countries like Sweden, Finland, Austria, Switzerland -- know a lot about peacekeeping. They have a lot to teach the rest of us. And they are -- I don't know that any of them have made a firm decision to join, but there's a lot of interest among the neutral countries. And they like the idea of being able to say how they ensure civilian control to the military. They think this can be a two-way dialogue, and so do we.

Q made public those commitment documents? In other words, is this a way to get the new democracies to commit in public to a series of steps to enhance their democracy?

SENIOR ADMINISTRATION OFFICIAL: I don't know if they'll officially be made public any more than NATO documents are officially being made public. But they'll be available to all other participants in the partnership. So there will be very wide distribution. When we talk about, for instance, transparency of military budgets, it's not just so a country's electorate will know how its tax money is being spent on the military, but so a country's neighbors will know and will have an opportunity to critique that just as they can critique our military budgets and planning.

Q In your discussions, have the results of the Russian election made those Eastern Europeans either more enthusiastic about the Partnership For Peace or more anxious to get clear assurances of their pass to full membership?

SENIOR ADMINISTRATION OFFICIAL: Both. And it varies, of course, with individuals. Some Central Europeans -- and some of them have been quite vocal about it -- say this proves that the Russians are going to be a threat again. This is a window of opportunity. Seize it now when you can. Take us into full membership. Other very senior Central European leaders have said to us in private, yes, we very much want a security link with NATO. We want NATO membership in the not too-far-distant future. But we see, and the Russian elections have made us see even more vividly, our own stake in not doing it in a way that would destabilize Russia. And so maybe the partnership is the best thing to do for now. But there are different opinions within these societies, just as there are in this one.

Q (inaudible) -- it seems that the French are finding out step by step that a somewhat more decisive position would make sense. Is the President arriving in Brussels with some kind of new Bosnia initiative taking advantage of that moving situation as far as -- (inaudible) -- are concerned, because there had been -- (inaudible) --

SENIOR ADMINISTRATION OFFICIAL: Actually, I would quarrel with the second half of that. I have never seen the French as a stumbling block in Bosnia. They have been the largest single contributor to UMPROFOR and the country most -- one of the country's most willing to consider being more assertive in using UMPROFOR's full mandate. No, we are not planning, so far as I know, and I think I would know, any new initiative on Bosnia. That's not what this summit is about.

Q -- (inaudible) --

SENIOR ADMINISTRATION OFFICIAL: Very much so. Absolutely. Yes.

Q Sounded like you are perhaps anticipating in Russia next week quite possibly signing or announce some kind of intent to join the Partnership For Peace.

SENIOR ADMINISTRATION OFFICIAL: That's up to the Russians to decide. I meant to indicate that it's our very strong feeling that they are positive about it, and they will elect to participate very shortly.

Q Are you hoping the would do this next week while the President --

SENIOR ADMINISTRATION OFFICIAL: It's up to the Russians to decide that question, not us. But we think it will happen.

Q What's the latest on a possible Kravchuk visit to Moscow to meet with the President?

SENIOR ADMINISTRATION OFFICIAL: I've got nothing for you on it. What

Q Is it under consideration?

SENIOR ADMINISTRATION OFFICIAL: I can say is that we are involved in very important and complex negotiations. You all know where we want to end up -- that is, we want a decision by Ukraine and Russia to complete the process of denuclearization. But I really can't comment on anything beyond that.

Q You said in the last couple of weeks the U.S. had been talking about ways to create this cushion for Russian society. Can you share with us what thinking, specific thinking there is for socially-targeted programs for pensioners, for example, and government workers?

SENIOR ADMINISTRATION OFFICIAL: Well, I gave you an illustrative example of an existing program that could be expanded -- the G-7's privatization fund. We do have a number of ideas under consideration. But it wouldn't be really fair to share with you since we haven't adequately shared it with all of my superiors, and we haven't shared it with our allies or the Russians. Once we complete that process, we'll come back to you guys.

THE PRESS: Thank you.

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