Transcript of a joint press conference with Gordon Brown and Barack Obama in Washington on 3 March 2009.
Read the transcript
President Obama:
You know, I think that the report that was in the New York Times didn’t accurately characterize the letter. What we had was a very lengthy letter talking about a whole range of issues, from nuclear proliferation to how are we going to deal with a set of common security concerns along the Afghan border and — and terrorism.
And what I said in the letter is the same thing that I’ve said publicly, which is that the missile defense that we have talked about deploying is directed towards not Russia, but Iran. That has always been the concern, that you had potentially a missile from Iran that threatened either the United States or Europe.
And what I said in the letter was that, obviously, to the extent that we are lessening Iran’s commitment to nuclear weapons, then that reduces the pressure for, or the need for a missile defence system. In no way does that diminish my commitment to making sure that Poland, the Czech Republic and other NATO members are fully enjoying the partnership of the Alliance and US support with respect to their security. So the way it got characterised I think was as some sort of quid pro quo - it was simply a statement of fact that I have made previously which is that the missile defence programme to the extent that it is deployed is designed to deal with not a Russian threat but an Iranian threat.
Question:
[Inaudible]
President Obama:
Well we have had a good exchange between ourselves and the Russians. I have said that we need to reset or reboot the relationship there. Russia needs to understand our unflagging commitment to the independence and security of countries like Poland or the Czech Republic. On the other hand we have areas of common concern and I have cited two examples: the issue of nuclear non-proliferation and the issue of terrorism. And at this point I think we probably have some potential common concerns on the world economic front as well. So my hope is that we can have a constructive relationship where based on common respect and mutual interest we can move forward.
Question:
Mr President it has often been said that you, unlike many of your predecessors, have not looked towards Europe, let alone Britain. Can you just respond to that comment? And also the Prime Minister is talking to you about a global new deal today, will that actually help hard-pressed American consumers? And if I may briefly put a question to the Prime Minister [Indistinct]
President Obama:
Well first of all the special relationship between the United States and Great Britain is one that is not just important to me, it is important to the American people and it is sustained by a common language, a common culture. Our legal system is directly inherited from the English system, our system of government reflects many of these same values, and by the way that is also where my mother’s side of the family came from. So I think this notion that there is somehow any lessening of that special relationship is misguided. Great Britain is one of our closest strongest allies and there is a link, a bond there that will not break. And I think that is true not only on the economic front but also on issues of common security. And you know in our conversations here we talked not only about the need to coordinate around economic policy, but also I expressed to the Prime Minister, America’s extraordinary gratitude for their support in our efforts in Afghanistan and the young men and women of Great Britain who have made enormous sacrifices there. There was a debate obviously around the issue of Iraq, nevertheless whether you were for or against the war here in the United States the recognition of Great Britain’s friendship and standing tall with us during that period is something that will never be forgotten. And so rest assured that the relationship is not only special and strong but will only get stronger as it goes on.
Prime Minister:
Let me just thank President Obama for his welcome, for his hospitality, for his leadership of his country and the inspiration he is giving the world at this very difficult time. And I have come here to renew our special relationship for new times. It is a partnership of purpose, it is a partnership of purpose that is borne out of shared values, it is a partnership of purpose that is founded on a determination to rise to every challenge and I think it is a partnership of purpose that is driven forward now by the need for us all to work together in unity to deal with the world economic problems. And I am grateful for the conversations that I am having with President Obama about this and other things, and grateful too that Michelle and Sarah will be meeting later this afternoon and I know they will have an enjoyable time as well.
Question:
Prime Minister your Chancellor has said overnight that it is our collective responsibility [Indistinct] Is that a form of apology from the government, are you apologising for the problems that there have been over the past 10 years? [Indistinct]
Prime Minister:
Well there has got to be big regulatory change. We have just been talking, Barack and I, about the need for proper supervision of shadow banking systems, of areas where there were bank practices that were unacceptable, where remuneration policies got out of hand and weren’t based on long term success but on short term deals, and these are the changes that we have already announced that we are going to make. So we have learned from what has happened over these last ten years. Things have happened in every part of the world that we are learning about as well. We have now got to show how the international financial system can be brought to work in the public interest. So every country is learning and every country is taking action. And what we are talking about today is how by us taking action - Britain and America - we can help other countries join us in making for a more stable and effective financial system.
Question:
Thank you, Mr. President. The stock market has fallen to lows not seen since 1997 [Indistinct]
President Obama:
Well let me say this. I am absolutely confident that they will work and I am absolutely confident that credit is going to be flowing again, that businesses are going to start seeing opportunities for investment, they are going to start hiring again, people are going to be put back to work. What I am looking at is not the day to day gyrations of the stock market but the long term ability for the United States and the entire world economy to regain its footing. And you know the stock market is sort of like a tracking poll in politics, you know it bobs up and down day to day and if you spend all your time worrying about that then you are probably going to get the long term strategy wrong. Now having said that, the banking system has been dealt a heavy blow, it has to do with many of the things that Prime Minister Brown alluded to - lax regulation, massive over-leverage, huge systemic risks taken by unregulated institutions as well as regulated institutions. And so there are a lot of losses that are working their way through the system and it is not surprising that the market is learning as a consequence. In fact you know I think what we are seeing is that as people absorb the depths of the problem that existed in the banking system, as well as the international ramifications of it, that you know there is going to be a natural reaction. On the other hand, what you are now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you have got a long term perspective on it, I think that consumer confidence as they see the American recovery and reinvestment act taking root, businesses are starting to see opportunities for investment and potential hiring, we are going to start creating jobs again.
One of the things that Prime Minister Brown and I talked about was how can we coordinate so that all the G20 countries, all the major countries around the world in a coordinated fashion are stimulating their economies, how can we make sure that there are a common set of principles in terms of how we are approaching banking so that problems that exist in emerging markets, like Hungary or the Ukraine, don’t have these enormous ripple effects that wash back on to our shores and we are providing them with some help in a coordinated and international fashion as well.
All those steps I think are going to slowly build confidence but it is not going to happen overnight and my main message to the American people is to just recognise that we dug a very deep hole for ourselves, there were a lot of bad decisions that were made, we are cleaning up that mess, it is going to be sort of full of fits and starts in terms of getting the mess cleaned up, but it is going to get cleaned up and we are going to recover and we are going to emerge more prosperous, more unified and I think more protected from systemic risk having learned these lessons than we were before.
Prime Minister:
I think President Obama is absolutely right and I think the history books will record that what he has done in his first, what, nearly 50 days of office has been momentous in setting the means by which we can see the economic recovery happening. We have had a global banking failure and it has happened in every part of the world. It is almost like a power cut that went right across the financial system and we have got to rebuild that financial system, we have got to isolate the bad assets, we have got to underwrite the financial system so that loans can start again to businesses and families, and we have got to get enough lending into the economy so that people are able to go about their normal business again. And that is why we are looking ahead to the G20 in London in April because a bad bank anywhere can affect good banks everywhere. So we have got to root out the problems that exist in other parts of the world as well, set principles for the banking system for the future and make sure that the banks subscribe to lending agreements where they actually increase the lending that is available to citizens in every country.
Question:
Prime Minister, Mr President, should all governments at this point acknowledge the mistakes of [indistinct] would that be helpful or unhelpful in general? And could I just ask you, an awful lot of interviews describing the individual relationships between Prime Ministers and Presidents [indistinct] how you find working with each other?
President Obama:
Well I will say that this is my third meeting with Prime Minister Brown and I would like to think that our relationship is terrific, and I am sure he won’t dispute me. Look, I think that the Prime Minister has taken the helm of the British economy at a very difficult time. As he noted, I have just come in recently, but I think there are a set of shared values and shared assumptions between us that we believe in the free market, we believe in a government that is not overbearing and allows entrepreneurs and businesses to thrive, but we also share a common belief that there have to be sufficient regulatory structures in place so that the market doesn’t spin out of control. I think on the international front we have a shared world view; that it is important for us to be true to our values and ideals, of the rule of law, of a belief in human rights, a belief in our democratic practices, but that we also have to be respectful around the world and to listen and not simply dictate that in this new world that we live in, that the way to get things done is to build partnerships and alliances as opposed to acting unilaterally. So I think both on the economy and on foreign policy we have got a shared worldview that allows us to work together very effectively.
With respect to the first part of your question, look I think there is no doubt that setting aside who is to blame, that in the past there have been some mistakes and lessons learned in terms of how we deal with the financial sector. Globalisation can be an enormous force for good and one of the things that we have talked about repeatedly is that countries in this crisis cannot start turning inward and try to erect protectionist barriers, we should encourage trade, the fact that we have a global capital system allows money to flow to areas that previously couldn’t get capital, that allows them to develop and to grow, that can grow the economy worldwide, increase trade and that potentially benefits everybody. But what is also true is that when you have got trillions of dollars that can now move at the speed of light, when you have got a whole series of unregulated pools of dollars outside of the banking system, but we still have a 1930s regulatory system in place in most countries designed from the last great crisis, that we have got to update our institutions, our regulatory frameworks so that the power of globalisation is channelled for the benefit of ordinary men and women so that they have jobs, they can purchase a home, they can send their children to college and prosper and thrive and that the benefits of globalisation aren’t just for a small handful of people who are not accountable. And that is the kind of transformation that we are obviously trying to bring about here in the United States and I suspect that that is a view that Gordon shares.
Prime Minister:
As far as the common interests that we are pursuing, look there is the possibility in the next few months of a global new deal that will involve all the countries of the world in sorting out and cleaning up the banking system and there is the possibility of all the different countries of the world coming together to agree the expansion in the economy that is necessary to both restore confidence and to give people jobs and growth and prosperity for the future. And there is the possibility of the international institutions for the first time being reformed in such a way that they can do the job that people want them to do and deal with some of the problems that exist in the poorest countries of the world. And there is a chance also that the recovery that we are talking about can be a green recovery, a low carbon recovery where each country in different parts of the world can work on this together.
So the opportunities are there. I have said to the President that almost every leader I meet wants the best possible relationship and the highest degree of cooperation for the future. And so the challenges are momentous and global, the response of leaders around the world is to want to work together and I believe that we can make a contribution, not just to each of our own economies, but make a contribution to the world economy, helping each economy if we actually work together. And that is why our talk about the G20 is very important; we hope to make progress on April 2nd.
I want the regulatory system to be reformed to meet the needs of our times. When we made changes in 1997 we made changes for the times of 1997. The financial markets have moved globally since then and we need a global means of bringing people together so there is proper supervision of the system. You don’t want shadow banking systems, you don’t want regulatory and tax havens, so we have got to act as a world together to deal with that and that is one of the things that we will be talking about in April in London.
Question:
Can I just ask about the Pakistan terror attack today on the cricket team [indistinct] Afghanistan and Pakistan together, how do you think that the world community can support Pakistan?
President Obama:
Well the details are still coming in and so I don’t want to be too specific. Well obviously we are deeply concerned, but let me just make a general statement. Both Great Britain and the United States share a deep interest in ensuring that neither Afghanistan nor Pakistan are safe havens for terrorist activity and we have coordinated effectively in the past. But the truth is that the situation in Afghanistan has deteriorated, the safe havens for al Queda remain in the frontier regions of Pakistan and we are conducting currently a comprehensive review of our policies with respect to Afghanistan, with respect to Pakistan, our coordination with our NATO allies and other members of the international security forces that are there. I will be making a series of announcements prior to the NATO Summit that immediately follows the G20 Summit in terms of the direction that the United States would like to go. What I am confident in is that our strongest partner in that effort once again will be the United Kingdom and the Prime Minister sitting next to me.
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