5:20 P.M. (L)

Q Are we going somewhere?

MR. BERGER: The White House is pleased to announce that the President and Mrs. Clinton will visit Macedonia.

Q Nooo.

MR. BERGER: We always like you to be at the cutting edge of news. Some of you don't get the Czech wire service. (Laughter.) We'll also be going to the Aviano Air Base.

Q Is the First Lady going, too?

Q When are we going?

MR. BERGER: Yes. On June 22. The President will be meeting with leaders of both Macedonia and Albania. He will visit a refugee camp in Macedonia and he will talk to military personnel both in Macedonia, including some folks who have been in Kosovo and are back out, mostly those who have been working on refugee issues. Then we will go on to Aviano and we will receive a briefing on -- an overall briefing on the allied operation, air operation.

He will obviously have an opportunity to thank the NATO and American air crews who served in the Operation Allied Force. I believe Prime Minster D'Alema will be joining us at Aviano. And we're very much looking forward to that. I know the President is specifically looking forward to both being able to go to the refugee camp, which he wanted very much to do last time when we were in Germany -- it was not possible -- and to go to Aviano and thank our military people.

Q Any chance he could also visit Kosovo itself?

MR. BERGER: No. Not this trip. I don't think that it's logistically ready for the arrival of all of us -- although I do believe that Secretary Cohen is going there tomorrow.

Q -- qualify as refugees? (Laughter.)

MR. BERGER: That's true. Now, let me talk to you briefly about -- I believe Jim Steinberg has briefed you on the morning session and will brief you in a little while on the afternoon session. But let me give you a readout on the meeting the President had with Prime Minister Stepashin after the meeting broke.

It was a very good meeting, and I think I said to you last night, if my recollection is correct, the President had said how impressed he had been with Prime Minister Stepashin based on the first day, and he is, I think, a very impressive man. I think the main purpose of this meeting, in addition to the meetings they've had as a group, is simply to establish a personal relationship with the Prime Minister.

They talked about resumption of the Stepashin-Gore Commission. As you know, Vice President Gore has had a commission with several of his Russian prime ministerial counterparts, and Minister Stepashin was looking forward to resuming that channel, which has been, I must say, one of the most productive channels of our relationship over the past several years. More has gotten done in the Gore-whatever -- Gore-Primakov, Gore-Chernomyrdin channel than perhaps any other single avenue of communication. We've solved a lot of specific problems. And, therefore, I think it's very good news that Stepashin wants to continue this.

The President and the Prime Minister talked about arms control. The President said it would be -- he would very much like to move on to START III, hoped that the Duma could deal with START II. The Prime Minister did not make any commitments in that regard, but clearly in their mind they would like to get into a negotiation on START III because, as most of you know, the START II numbers right now don't work terribly well for the Russians in terms of -- it actually would cost them money to build -- to meet START II requirements. And that's not something that they could do too easily. So I think they would like to move into START III. Obviously, we have to have some disposition of START II as part of that.

They talked about -- I would say perhaps this is -- I should have made this item number one -- the importance of moving beyond Kosovo in our relationship. The Prime Minister said Kosovo obviously had put a strain on our relationship, it had been difficult for the Russians, and he now looked forward to getting back to the business that the two countries have between each other. And the President agreed with that very strongly.

We talked about the issue of space-launched vehicles and nonproliferation -- a quite important issue, although maybe not quite too familiar to all of you. But, essentially, we have tried very hard over the past few years to get the Russians to be more rigorous in restraining their export of missile technology to Iran. They have agreed now to a regime that came out of conversations between Bob Gallucci, who is our representative for these purposes, and Mr. Kopchev, who is the head of their space agency, for a much more elaborate export control program. And we're hopeful that they will begin to implement that, as it appears that they are, which would enable us to increase their quota of space launches, which is something very much desirable from the perspective of American industry.

Prime Minister Stepashin raised the issue of steel, saying that -- I believe that steel exports to the United States have decreased by -- steel imports to the United States -- have decreased by 97 percent since we entered into a quarterly marketing agreement with the Russians after the surge of steel exports to the United States from Japan and Russia. We've now rolled those back by virtue of this agreement with Russia, by virtue of some anti-dumping actions -- cases with the Japanese. The Russians would like to move now beyond this phase. The President said that he would continue to discuss this with him and look at it.

They raised -- he raised again an issue that is a tremendous irritant to the Russians, and that is the continued existence on the books of the Jackson-Vanik Amendment. It's something which now doesn't have really any economic impact because we waive it every year, but for the Russians it's a very strong symbol of us treating them like the old Soviet Union.

This is a vestige of an earlier time when it was enacted because the Soviet Union would not allow the free immigration of Jews. That is now no longer a problem. But there still continue to be some religious issues in Russia and it's been difficult for us to marshal all of the support we need in the Congress to get this done. But it's something that we would like to do so long as Russia does not enforce provisions against non-recognized religions that are discriminatory.

There was some discussion of the Russian economy. There has actually been some improvement in the Russian economy in recent weeks. There has been an increase in government revenue, an increase in domestic production, and the Duma has enacted some of the steps recently -- Mr. Stepashin has tried very hard and been quite successful in getting the Duma to do some of the things that the IMF are seeking to finalize an agreement.

The President was very encouraging of that and said that we would like to, obviously, get Russia back on a path where it could have an IMF program, but, obviously, that would require continued success of Stepashin with the Duma.

I think that pretty much covers it.

Q Sandy, are the Russians insisting on a reconstruction package for Serbia, and if so, what's our reaction to that?

MR. BERGER: Nothing that came up in this bilateral related to that. I don't know whether that might have come up in the larger meeting when they've talked about reconstruction. Our reaction is, as I have described it, as the President has described it -- that is that we do believe that there should be a reconstruction program for the Balkans, and we would very much like it to include Serbia, but not so long as Serbia is led by an indicted war criminal. And it's very difficult to imagine a major reconstruction program in which the countries, themselves, did not share the values of democracy and tolerance and human rights, which were inherent in the enterprise.

I know that is not the Russian view, because there's been some discussion of this issue in the context of the communique. I believe the communique probably, therefore, will not address the issue. But it is clearly our view; it is the British view; I think it is the French view.

Q -- was the bilateral with Mr. D'Alema? Was he more of the Russian position? What did he say to the President?

MR. BERGER: I wish I could tell you. The bilateral with Prime Minister D'Alema took place informally in the meeting room, and we had an interpreter. We were all waiting for them, but they did it without us.

Q Yeltsin's spokesman just said that Yugoslavia is the most important issue for Yeltsin when he gets here, and said "he is in a fighting mood." What do you make of that? Is that the attitude that you expect him to have when he comes here?

MR. BERGER: I don't know what to make of that. I can tell you that Stepashin -- clearly, Kosovo is a big issue, has been a very important issue between us and the Russians. As strongly as we felt about Kosovo, I think probably they felt as strongly that what NATO was doing was wrong, for a whole series of reasons. So I think that there needs to be probably a discussion of Kosovo.

But Stepashin was quite clear in saying that he thinks it's important to move beyond -- we've now cooperated in the Chernomyrdin-Ahtisaari agreement, which was quite instrumental in the end game of stopping the bombing and stopping getting the Serbs to withdraw. We've now reached an agreement in Helsinki on Russian participation. Russia will be a partner with us in KFOR and -- I don't know, there may be some desire to discuss -- to go back and discuss the events of the past 90 days. But I think the larger thrust here is to move forward.

Q Are you suggesting that the communique -- this group feels so strongly about helping Kosovo, spending billions of dollars, not a penny of it in Serbia, and the communique won't even mention that?

MR. BERGER: Oh, no. I think the communique will address reconstruction very significantly. I think the question of aiding Serbia -- these communiques are consensus documents, and I don't know whether the Russians would agree to a statement that no money would go to Serbia as long as Milosevic is there. That certainly is not going to influence our attitude towards it or the attitude of most of the European countries, or, I believe, the EU. It just means that in the G-8 document the Russians have to agree. I don't believe that they will agree to articulate that position.

Q You're confident that no money is going to go to Serbia so long as he's President?

MR. BERGER: I'm confident none of our money is going to go to Serbia. Let me draw a very important distinction because I don't want to -- I think there is a very important distinction to be drawn between humanitarian assistance and reconstruction. And where that line is, is not self-evident. Is getting electric lights back on for the winter humanitarian or is it reconstruction?

But putting aside the fact that there is a definitional line drawing here, I think that we probably ought to. And my own view is, and I think the President's view is, we ought to participate, we ought to -- if the need is great in Serbia, particularly as winter comes on and there is need for food and medicine and basic human needs, that we would participate in that probably through the Red Cross or the U.N. or other international agencies.

I just want to distinguish that from rebuilding and reconstruction and the kind of ambitious and forward-looking program that we're talking about for the Balkan states.

Q You're saying you wouldn't help rebuild electricity then? And on a related question, we're coming up on the deadline for the withdrawal of Serbs --

MR. BERGER: What I"m saying is -- let me be more precise. We will not participate in a reconstruction program for Serbia so long as Milosevic is the President of Yugoslavia. I think we probably, if need be, if there were needs for humanitarian assistance, that we probably ought to participate in that through the international community. We give humanitarian assistance to North Korea.

I was simply pointing out that there is -- where that line is, is obviously something that's going to have to be established. Food is clearly on one side of the line; rebuilding industry or rebuilding their basic infrastructure is on the other side of the line. The example I gave, actually, I think is the toughest example and I don't know what side of the line it's on.

Q On the question of withdrawal, we're coming up on the deadline. Will the Serbs make it? And also, have you heard about reports that the Serbs took Albanian prisoners out of Kosovo with them and back to Serbia?

MR. BERGER: Well, my information is that the withdrawal is still going smoothly and as of maybe 12 hours ago, which is sort of the last report I had, was slightly ahead of schedule. So I would expect that the Serbs would be able to meet the timetable. General Jackson has evidence of willingness to be flexible if there is a particular reason, as he did with one of the deadlines which he extended for a day.

But I think what has been extraordinary here is that the fact is we're on day 10, tomorrow's day 11, and most of the Serbs are out, and pretty much without incident. I cannot confirm the Albanian incident that you have talked about.

Q Sandy, I understand that there's no direct linkage between Helsinki and what the G-8 is now trying to do for Russia. But why is G-8 trying to do now so much for Russia, given the distrust and the concerns that you expressed yesterday about whether you had a full understanding of what they did and why in Kosovo?

MR. BERGER: Because the future of Russia is extraordinarily important to the future of the West. It makes a big difference whether Russia is able to strengthen its economy, maintain its democracy and continue to head in the basic direction of openness and reform, or whether it reverts back to some kind of nationalistic or inward-looking leadership.

And so, whether there had been a Kosovo or not, we have a strong interest in trying to help Russia stay on the path of recovery, reform and democracy. Russia has been through a very difficult period over the last several months, starting with the Asian financial crisis, the drop in oil prices, problems in its own economy, political instability inside Russia. And I think all of these leaders here feel that this has got nothing to do with Kosovo; this has to do with Russia and whether or not these countries can be of assistance to Russia in its evolution on a path that is compatible with the international community.

Q In connection with aid to Russia, Chirac said that there was a document ready to be released by the summit with regard to this topic, titled, "Partnership For Prosperity," and it apparently would go beyond efforts to help them reschedule their IMF debt or get their $4 billion-plus loan from the IMF. Is there a broader economic support package being prepared for Russia?

MR. BERGER: I don't think there's anything that's being prepared outside the context of the context of the IMF program. Obviously, if they are able to meet the IMF requirements there are a lot of things that can happen in terms of debt, rescheduling Soviet era debt, for example. But that all depends upon their being able to fulfill the requirements of the IMF.

There is one -- I know one program that will be -- has been I think, or will be discussed by the leaders tomorrow, and I think I've mentioned it to you before -- we call it "cooperative threat reduction program. You know it sort of as Nunn-Luger in the United States -- that is that was a very narrow program, Nunn-Luger. It was basically helping Russia destroy the weapons that were no longer needed by virtue of arms control. Literally chopping strategic aircraft in half and dismantling and destroying warheads.

That program has been expanded and we would like to expand it even further to include assisting Russia in handling nuclear materials, trying to engage Russian nuclear scientists in civilian work, using their skills and talents so that they are not simply floating on the open market and tempted to go work for whatever rogue state is going to offer them a good deal of money.

The President spoke about this in the State of the Union. We put $4.2 billion in our budget over five years for this and I know one of the President's priorities here is to get other countries to join in this program. But I'm not sure what Chirac is referring to.

Q Was the President saying that START III talks can start before the Duma passes START II, or was he saying that the Duma must pass START II and we can immediately go into START III talks?

MR. BERGER: Well, there have already been some discussions at the expert level on START III. If you go back to Helsinki -- not this Helsinki, but the Helsinki Summit in which President Yeltsin and President Clinton agreed to a number of arms control -- reached a number of arms control agreements, including a START II protocol which extended the period of START II compliance, and also a set of START III guidelines which provided sort of the parameters of what a START III agreement would look like. Since that time, there have been discussions on START III at the expert level, and presumably, those discussions could intensify and continue. We would obviously like to see START II ratified first; that would be preferable.

Q Preferable but not essential?

MR. BERGER: We're still hoping that the Russian Duma will ratify START II.

Q Sandy, in terms of debt restructuring, is there going to be any debt restructuring agreement with Russia this weekend? We're hearing something about $16 billion and the Germans being restructured for a year.

MR. BERGER: I'll tell you, I will let you ask that question to my trusty deputy, Mr. Steinberg, when he gets here, who is more current on the status of those.

Q Sandy, how worried are you that the KLA is now going to take revenge against Serbs inside Kosovo?

MR. BERGER: Well, I think it's a serious issue. There are, as we speak, there are negotiations that are going on between NATO and the KLA on an agreement by which the KLA would end all hostilities. They would agree not to attack or intimidate civilians. There would be restrictions on where they could carry small arms. There would be, essentially, cantonment of rifles and heavy weapons, turning those over, essentially, to NATO over a time schedule; and then the KLA ceasing to wear uniforms or the insignia of the military.

So this is the demilitarization program, sort of a military technical agreement, in a sense, on the KLA side. There are active negotiations going on today and we're very hopeful that the KLA will reach an agreement with NATO on this.

Q When did the U.S. government formally stop referring to the KLA as a terrorist organization?

MR. BERGER: Is this a trick question? (Laughter.)

Q No.

MR. BERGER: I honestly don't know the answer, Wolf.

Q The question, I guess -- is there a fear that the KLA will revert to terrorism as the U.S. government has accused it of doing in the past?

MR. BERGER: I think there is every incentive for the KLA here to transform itself and deal with the new reality. The fact is the Serb military has left Kosovo. And as of 24 hours from now it will be something that will be true which has never been true in Kosovo's history -- all Serb troops will be gone.

Let's remember what gave rise to the KLA. Before the October '98 assault by the Serbs we estimated there were about 500 KLA. After that, we estimated there were about 5,000 KLA. One can only imagine what there would have been had we not prevailed and the Serbs left, how many KLAs could have been recruited from those refugees camps.

However, we now have a new situation. The Serbs are out of Kosovo. The Kosovars are back, or will soon be back. NATO is there to protect them, maintain civil order. And the challenge here for organizations like the KLA will be to find ways of building civil institutions, including police, that can provide the kind of self-government that they have wanted. There is nobody there to fight for -- if there are some people who believe in independence, there is nobody there to fight; the Serbs have left. The Serb military has left. And they certainly should not be fighting the Serb people.

So it is the job of KFOR to protect -- it has much the job of KFOR to protect the Serb population against reprisals from the Kosovar Albanians as it is to do the reverse.

Q Sandy, you talk about how Kosovo has placed a strain on our relationship with Russia and the need to move beyond this issue and get back on track with that relationship. Can you quantify more precisely the damage that was done to U.S.-Russia relations and talk more specifically about what steps can be taken to repair our relationship with them?

MR. BERGER: Well, I think it's kind of frozen things, certainly, during this period. We've continued, obviously, to talk with the Russians, but there has been a kind of elephant in the room, which makes it difficult, which is hard to ignore. I think that with the elephant gone -- I'll stay with my terrible metaphor -- (laughter) --

Q You're going to see that one again.

MR. BERGER: Yes, probably. I think it's possible to now deal with a series of issues that are extraordinarily important. We have a huge agenda with the Russians, and it ranges from arms control -- not only strategic arms control, but conventional forces in Europe -- we need to see whether we can reach an agreement on that; non-proliferation; we're concerned about missile programs in Iran and otherwise; the Russian economy and helping them as we can to build the kind of institutional framework which would enable their economy to work and to connect to the global economy -- that Stepashin raised today, law enforcement cooperation.

I think he's a former justice minister, if I recall, and he raised the need to have a better relationship between our justice ministries on issues, on the one hand, such as extradition; on the other hand, such as the presence of American law enforcement agencies in Moscow.

So there is a huge agenda across the board, and I think that the challenge will be to deal with those issues at a time when Russian politics are fluid. Clearly, the positioning to replace President Yeltsin after the election next year has begun. And that affects, obviously, doing business with Russia. But I think we're going to try our best to get as much done as we can.

Q Can you answer a question about this non-proliferation issue? Have the Russians met some conditions that will allow the space launches to be not suspended or to go ahead? Can you explain?

MR. BERGER: Let me be a little more specific. Several months ago Ambassador Gallucci and Minister Kopchev reached an agreement -- this was during the Primakov government -- which would provide for a much more elaborate Russian export control regime. Part of the problem there is that there are thousands of Russian enterprises, and unlike the United States, there is not an export control -- centralized export control system that really works. And the Russians agreed, particularly with respect to certain enterprises that were engaged in sensitive trade, to implement programs of export controls -- specific programs.

Now, what has happened over the past -- when Stepashin came in, he reaffirmed the agreement with Vice President Gore, and then I've had some conversations with my colleague, Mr. Putkin, who has responsibilities here, and they seem to be moving in the direction of implementing this. And if we were comfortable or convinced that they really were implementing this agreement, we would be in the position to increase the quota. We would not increase the quota in the absence of that.

Q And are these the institutions that are under sanctions?

MR. BERGER: No. These are institutions --- these are a much larger universe of institutions that are involved in dual-use production that would come under this kind of export controls.

Q Back on the issue of reconstruction just a second, and the aid to Milosevic. You mentioned the position of France and Great Britain as being sort of -- are you still prepared to say that the allies are unified on that issue, and, ultimately, does it really matter? In other words, can you foresee a situation in which countries will eventually have a different attitude?

MR. BERGER: Well, obviously, any country can do with its bilateral assistance that which it desires. I mentioned France and Britain only because I personally have heard Chirac and Blair speak to this issue. Someone asked me about D'Alema before -- I just have not -- I don't know what their position is on this.

Q -- know if you're still unified?

MR. BERGER: I don't know that we're not unified. I think that when I have a chance to talk more fully to the President after these meetings I'll try to determine what was said about this subject at the meetings. I think it will be important whether a consensus, exclusive of Russia, came out of this meeting.

Q Is the elephant really out of the room? (Laughter.) What reason --

MR. BERGER: Never should have done it.

Q It was a large metaphor, it had to be exercised. What reason do you have to believe that NATO forces are not about to be at odds with 3,000 Russian troops as opposed to just 200 now?

MR. BERGER: That I think is -- I think that will work itself out. I actually believe -- if you ask the question in terms of the larger relationship, as you were doing, I think we'll have to see. But I think in terms of cooperation in Kosovo, we had the experience of Bosnia where the Russians were in our sector. It worked very well. There was good cooperation between our people and their people.

This is more complex, but Stepashin said today that -- or, yesterday, I guess, last night -- just what I said earlier, that they are very serious about their responsibility to protect both Serb and Albanian populations. Stepashin is a very serious man, and I think that was a very useful thing to hear him say. And there may be bumps along the road, but I think that there will be cooperation in KFOR.

Q Are indicted war criminals entitled to the principle of presumption of innocence?

MR. BERGER: Yes, but they're also -- I suppose, but there also is an obligation to see them brought to justice and let a court determine their innocence or guilt. And I would not want to prejudge Mr. Milosevic's guilt, but I would only suggest that you turn on your television and watch what we're seeing in Kosovo.

Q But isn't that what you're doing when you're saying no aid so long as you're in power? You're prejudging his guilt?

MR. BERGER: Let Serbia go, have them tried in The Hague, and if he's acquitted, then perhaps our position will change. If he's acquitted by the War Crimes Tribunal, he's not a war criminal, then I'll be 6'4" and our position will be changed.

THE PRESS: Thank you.

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