Briefing by Sandy Berger, James Steinberg, Lawrence Summers, and Steve Stestanovich.

Office of the Press Secretary
(Martha's Vineyard, Massachusetts)

For Immediate Release August 28, 1998


The Briefing Room
The White House
Washington, D.C.

4:16 P.M. EDT

MR. BERGER: Let me begin quite briefly by answering what Iexpect might be the first question: Given the crisis in Russia, why shouldthe President still go? I think there are a number of reasons that it'simportant that he go on this trip despite the situation -- or perhaps evenbecause of the situation in Russia.

First of all, we have an enormous stake in Russia's future, inits continuation on a path of democracy and market reform. Although thekeypolitical and economic choices are up to the Russian people themselves, weneed to engage actively even, or especially in time of crisis, publicly andprivately the President intends to reinforce the fundamentalimportanceto Russia and to the world of holding fast to the basic objectives ofdemocracy and economic reform in the face of new challenges.

Second, the Russian people should know that, particularlyintimes of difficulty, the United States and the West will not turn away fromcooperation. As they do the things necessary to restore stability andprogress, we are prepared to support them. I believe that alone will havesome stabilizing effect for the Russian people.

Third, there are important foreign policy and securitychallenges which continue where Russia must play a keyrole. We hope we can agree to some concrete and specific stepsthat will reduce further the threats left by post-Cold Warmilitary arsenals. We have work to do on nonproliferation, onKosovo, on Iraq. These issues are simply too important to put onhold.

Fourth, this is an opportunity to talk withPresident Yeltsin, Acting Prime Minister Chernomyrdin, oppositionleaders, regional political leaders, as well as directly to theRussian people about their future.

I've been quite interested over the past few days tohear reports that Russian political leaders across a very broadspectrum very much want the President to come. I don't want tominimize the seriousness of the situation now facing Russia, butneither should we minimize the distance Russia has traveled, inthe past decade in particular. It has peacefully relinquishedits empire. It's withdrawn its troops from the Baltics. It'sdownsized its nuclear and military arsenals. It has generallyplayed a more positive and productive role on European securityissues. It has opened and privatized its economy and held freeand fair elections for parliament and the presidency.

The challenges it faces certainly are no lessdaunting. But the United States needs to do our best to behelpful. In the final analysis, the choices are theirs, but wemust be ready and prepared to be of help if they make the rightchoices. No one is nostalgic for the Cold War, with the worldperched on a nuclear precipice the USSR's neighbors enslaved,dangerous regional conflicts, spiraling defense budgets. And noone wants a weak Russia beset by crisis. America has a stronginterest in preventing Russia from backsliding and in promotingits stability and success.

At this point, we can best do that not by backingaway, but by trying to help Russians find Russian solutions totheir domestic problems that are compatible with the globaleconomy and consistent with their choice of democracy.

Let me ask Gene now to talk a bit about theeconomic.

MR. SPERLING: I'll be very brief. We spoke with --the security and economic team spoke with the President thismorning, and I think the President fully understands that he iscoming at a time of transition for the government and theireconomic team, and in that environment one does not have thecapacity to have a detailed review of a detailed plan, or thattype of engagement. But one does -- and this President does havethe ability in his conversations with Yeltsin and Chernomyrdinand Duma officials to make -- to speak clearly about the type ofeconomic measures that will signal the markets in a positive wayand provide reassurance that there is movement in the rightdirection on reforms and towards reestablishing marketconfidence.

Clearly, there are no shortcuts, no silver bullets,no quick fixes. This is a serious path toward restoring marketconfidence, but it's one that many countries have successfullygone through, and certainly, even this President, though, toobviously in a less severe situation in our country, we have hadto, with our debts, et cetera, have had to go through a processthat's taken time, but has successfully, over time, been able tocreate significant confidence.

Let me, so we have time for questions, let meintroduce the Deputy Secretary of Treasury, Larry Summers, to addsome and then we will all be available for questions.

DEPUTY SECRETARY SUMMERS: Sandy and Gene have saidit well. The President and our delegation will be going toRussia at a critical economic juncture, following recentdevelopments. The choices that Russia makes in the next fewweeks and the next several months will be crucial in determiningits economic future and as the President has said, the way inwhich the Russian people define their greatness.

Crucial aspects of those choices will include thechoices about their budget and the adequacy and sustainability ofthe way in which they finance their budget, will include thesteps they take with respect to their banking and financialsystem, will include their relations and the way they managethose relations with their foreign creditors, and mostimportantly will include their steps to establish a framework fora market system based, above all, on the rule of law, on secureproperty rights, and on the ability to carry out free exchange inan environment that is properly regulated.

It is their success in carrying out these steps thatwe believe will be crucial in determining their economicprospects in what is not an easy global economic environment, andit is these issues that the President looks forward to discussingwith President Yeltsin and that we expect to discuss with Russianauthorities during our time in Moscow.

AMBASSADOR SESTANOVICH: Even by Russian standards,this has been a week of swirling rumors and political uncertaintyin Moscow, which is one of the world's great rumor mills. Thesources of that uncertainty I think are pretty obvious. Theeconomic crisis, compounded by the need to form a new governmentunder a new Prime Minister.

The fact that a new government has to be put intoplace has spawned intense consultations, bargaining within theParliament, which has to vote Acting Prime Minister Chernomyrdininto office, and between the Parliament and the Executive aboutthe terms of his appointment. The Parliament, as you may know,has formed with the government a trilateral commission they'vecalled -- posed to the two houses of the Parliament and theExecutive Branch to reach an understanding on the direction ofthe new cabinet.

This commission's report is now being wrapped up anda vote, we understand, is scheduled for Monday so that if ithappens, a new government will be in place at the time thePresident arrives.

I referred to the swirl of rumors about the futureof Russian politics. I think at this point I should say onlythat I think those rumors have been substantially allayed byPresident Yeltsin's appearance on TV today, interview he gave onnational television. President Clinton is eager to learn fromPresident Yeltsin and the other Russian political leaders that hewill meet with from across the political spectrum about how thisprocess of making the choices on Russia's future, how thatprocess is proceeding. It's obviously a discussion with greatsignificance not only for Russia, but for our own nationalinterest.

Jim will talk about Ireland.

MR STEINBERG: Well, as I'm sure all of you know,after the two days in Moscow the President will be going toNorthern Ireland and the Irish Republic. And to paraphrase myboss, Sandy Berger, let me tell you why we're going to NorthernIreland and the Irish Republic.

I think there are three main purposes for the visit.First, to pay tribute to the courage and determination of boththe leaders and the people in Northern Ireland and in theRepublic for making the Good Friday peace agreement possible.Second, to provide support for rapid implementation of theagreement including the new political structures, especially theassembly which will be launched this September. And finally, andequally important, to demonstrate that the United States intendsto continue to be deeply involved in supporting the peaceprocess and economic development both in Northern and the IrishRepublic both through the International Fund for Ireland, throughhelping to attract investment and job opportunities, and alsopolitical support for the forces for peace.

Now, the President will spend a very full day inNorthern Ireland. A focus of his efforts will be meeting withthe new leadership and the members of the new assembly toindicate his support for their efforts. The United States ishelping in training and helping prepare the new assembly membersto take on this important bit of self-government in NorthernIreland. He will then give a major address to the people ofNorthern Ireland at Waterfront Hall in Belfast, to talk about ourview about the challenges ahead and the way forward.

He will also travel to Omagh, which is the site of aterrible tragedy just a few weeks ago, the worst bombing in thehistory of The Troubles, both to show his sympathy for the peoplethere, but also to really pay tribute to the remarkable effortthey've done about pulling together and showing that they're notgoing to be deterred by the enemies of peace. And he will alsogive an address in the City of Armagh, which is a famed city forreconciliation -- the two cathedrals symbolizing the twocommunities working together for peace.

He'll then spend a day and a half in the IrishRepublic meeting with the Taoiseach Birdie Ahern and his cabinet,with community leaders there, giving a speech at Gateway 2000 totalk about the remarkable economic miracle in the Irish Republic,and then traveling to the west to meet and talk to the people ofLimerick, which is another sign of the great economicregeneration of the Irish Republic, and then finally to make goodon an old bet and a raincheck for a golf match in Ballybunion.

Q Just yesterday you had a cautionary note sayingthat it would be disturbing or you would be concerned, the U.S.would be concerned, if Yeltsin veered off the course of marketreform and democracy. Today he booted his last two reformers,economic reformers. At least you and whoever followed you seemedto speak as if it was last week -- or is it still up in the air?Hasn't Yeltsin convinced you all yet that he doesn't think he canstick with at least radical reforms, that he's going in anotherdirection? Are you disturbed?

MR. BERGER: Let me take a quick cut at that and askeither Larry or Gene to follow up. First of all, some of thosedecisions today I think are non-encouraging. But I think what isimportant here is what policies are adopted by the newgovernment, and whether they are realistic in terms of thesituation that Russia faces, whether they are likely to stabilizethe situation, whether they are likely to bring investorconfidence back -- and I think the policies here are far moreimportant than who may be the individuals that are in thegovernment. There have been a number of different Russiangovernments. But, by and large, they have stayed on the road ofreform and we would hope they would continue to do so.

Q It sounds like you think it's a time to berealistic.

MR. BERGER: I think we always believe it's the timeto be realistic.

Q Well, you know, being realistic evidently meansnot moving too fast toward those principles that you all haveheld so high. He's got to save his skin. He's got to save hisskin by cutting a deal with the Duma and getting rid of thereformers. Do you disapprove of that?

MR. BERGER: As far as I know, there is yet to beformed a government. As far as I know, there is yet to be put inplace a set of policies of which you speak. We've been veryclear about what we think the path that we would encourage theRussians to follow in terms of market reform. And one of thereasons why the President believes it is important to go toMoscow, despite the situation there, is so that he can be withPresident Yeltsin and with others, speak candidly about what webelieve will be necessary to stabilize the situation economicallyand to continue on the path of political reform.

Q What can two politically weakened leadersexpect to achieve from this summit? What do you expect? Whatwill be assigned? And isn't the President really goingempty-handed? And how will this be viewed in the world, becausehe's

MR. BERGER: Any more questions? (Laughter.)

Q How can they deal?

MR. BERGER: Do I get to choose any one of thosequestions?

Q You can do them all.

MR. BERGER: Okay. Well, first of all, withoutaccepting the premise of your question --

Q Can you rebut it?

MR. BERGER: I believe that the relationship betweenthe United States and Russia is a critically importantrelationship. The direction that Russia takes as it continues,hopefully, on this historic path of transition andtransformation, is extraordinarily important to the UnitedStates. On the economic side, the President and his economicadvisors who will be with him, can speak to President Yeltsin andmembers of -- those who would be involved in the Russiangovernment about the policies that we believe are most likely tostabilize the economic situation and put Russia back on a tracktowards market confidence.

In terms of foreign policy and security policy,there are a range of issues that are enormously important. Ispoke earlier of, in the security field, I believe that -- I hopethat we can reach some agreements during this trip that will havean impact on lessening and reducing the risk of military arsenalsleft over from the Cold War.

I expect that the President will raise withPresident Yeltsin and others issues ranging from Bosnia to Kosovoto Iraq, to Iran and nonproliferation, terrorism. There are arange of issues where what Russia does is important to thecapacity of the international community to make progress. All ofthose things will be on the table.

Q Sandy, to follow on your comment about policy,the most important thing, yesterday the head of Mr.Chernomyrdin's parliamentary party, Aleksandr Shokhin, wastalkingabout a program of reimposing currency control, reimposing pricecontrol and renationalizing some industries. Today, tonight inRussia, the Russian news media are reporting that Mr.Chernomyrdin and the Parliament have reached a deal. What do weknow about the terms of that deal and is there any reason tobelieve that the program outlined by Mr. Shokhin is not part ofthat?

DEPUTY SECRETARY SUMMERS: We do not know of anydefinite set of policies to which the new Russian government hasbeen committed. It is our belief that a move back towardscentralized planning, based on price controls and administrativeallocation of goods and systematic controls would be a seriouspolicy error, and very unfortunate with respect to Russia'seconomic prospects going forward.

Q After all the money that's been lent by theInternational Monetary Fund and after all the help has givenRussia, is there anything left to give? Is there anything theinternational lending institutions can do or the U.S., Germanyand Japan? Is there anything left, or is it just all in thehands of whatever the Russians do?

DEPUTY SECRETARY SUMMERS: Russia's economic futurewill be shaped in Russia by Russian policy choices going forward.The international financial institutions, with our support, arecertainly prepared to provide support to Russia; as to othercountries, that is measured with the pace of reform on the basisof strong policy measures. That, from what I understand, was themessage that Managing Director Camdessus conveyed to PrimeMinister Chernomyrdin during their recent meeting. But the keyat this point going forward is the policy choices that Russiamakes.

Q Can you tell us anything Secretary Talbott toldyou about Mr. Yeltsin's state of health, his demeanor, his energylevel?

MR. BERGER: Secretary Talbott met -- I guess it'sstill today -- in Moscow with President Yeltsin. The meetinglasted I guess 15 to 20 minutes. He said President Yeltsin wasenergetic and animated and engaged.

Q And can you tell us to what degree you've hadto sort of throw out the planning you had done for thesummit and redo?

MR. BERGER: Well, I think that, obviously, oneneeds to make adjustments as the situation changes, but I thinkthe fundamental elements which are -- we have been concernedabout even two weeks ago or four weeks ago, which is the economicpolicy choices that Russia makes, as Mr. Sperling and SecretarySummers have indicated, and the range of arms control securityand foreign policy issues remain the same.

The President will also give a speech to the Russianpeople and also on September 1st, which is quite a celebratoryday in Russia as children go back to school and parents come tothe school with them, the President will also go to a school inMoscow on September 1st.

So the basic building blocks were there. Obviously,the nature of the dialogue shifts as circumstances shift.

Q This is a question for Larry Summers. Have youdiscussed the possibility of a currency board with the Russians,and is that an option or one of the things that the twoPresidents will be discussing?

DEPUTY SECRETARY SUMMERS: I don't expect that levelof detail and specificity to figure in the discussions betweenthe two Presidents. As you're very much aware, currency boardsare a monetary arrangement that have been put in place in someplaces, but that require a whole set of surrounding policycommitments with respect to the budget, with respect to thebanking system, with respect to the way in which economic policyis organized. And I think at this point it would be very muchpremature to look at those kinds of questions until we have asense of what the plans and intentions of the new Russiangovernment will be.

Q For either Sandy or Larry or both, you say thatyou're looking for policy, not personality. Can you point to onesignificant policy decision since Prime Minister Kiriyenko wassacked and replaced with Prime Minister-designate Chernomyrdinthat would lead you to believe, that gives you any encouragementthat the new government will continue on a path that you believegoes towards the reform necessary? Have they done any one thingencouraging, or has it all been discouraging?

DEPUTY SECRETARY SUMMERS: I don't think it's for usto handicap each statement or indication, or to try to judge whatis obviously an uncertain situation, where judgments are beingmade and measures are being selected. I think it certainly wouldbe fair to say that we view the economic situation in Russia withgreat concern and view, as I said earlier, the choices that willbe made as enormously consequential, with the right choices inour judgment offering the prospect of, over time, rebuildingconfidence and providing a foundation for tapping what isenormous underlying economic energy in Russia, with naturalresources, with a very educated population, substantial capacityof technology -- and with the wrong choices running the risk ofcreating very substantial instability and uncertainty, with verysubstantial costs for the Russian economy.

Q You've been pretty specific about some thingsyou think are the wrong choices, like currency and pricecontrols. What would be some specific right choices?

DEPUTY SECRETARY SUMMERS: I think I emphasizedearlier the importance of sound budget measures, of addressing ina strong way the problems in the banking system, of taking thelegal and administrative steps necessary to provide a frameworkin which a market can satisfactorily operate -- taxes based onlaw, not discretion, and so forth.

The underlying steps that are important to build asound economy have not changed, and in light of the setbacks thathave taken place, it becomes, in our judgment -- I think it's nota political judgment, it's a judgment I think of the vastmajority of economic people who look at this kind of situation --it becomes ever more important that a framework in which thereisn't pressure to create excessive currency and in which marketsand property rights and entrepreneurs can function be put inplace. Those continue to be critical steps.

MR. BERGER: I think what the internationalcommunity does and says about circumstances as they evolve inRussia are important. I think there are on any particular issueareas where we have common interests that we have to build upon.I talk now on the non-economic side.

For example, in the area of arms control. And wehave, for example, huge stockpiles of fissile material that comefrom nuclear warheads that can once again be used for nuclearweapons either in Russia or in some third country. We aretalking with the Russians about things that we could do to reducestockpiles of fissile material. We are talking with the Russiansabout things we can do with respect to sharing information onmissile launches.

I mean, there continue to be across a very broadrange of issues important areas where the United States andRussia, working bilaterally, can reduce tensions in the world.

Q Is economic the one area where you have noleverage?

MR. BERGER: Well, in the economic area -- and againI'll defer to Gene and Larry -- is an area where we have workedin concert with and through the international institutions --through the IMF and through other international institutions.

Q -- the administration feel that we're facing aglobal crisis here? I mean, at the same time that Russia hasdefaulted on its bonds and suspended currency trading, today theJapanese market hit a 12-year low. What's going on here? Is theadministration concerned that we're facing the possibility ofglobal recession?

DEPUTY SECRETARY SUMMERS: I think it's veryimportant that we distinguish between situations in differentcountries -- and distinguish clearly between them -- that we, inmaking policy, that investors in looking at what happens indifferent countries recognize that situations differ in veryimportant ways and not generalize inappropriately.

Clearly, there have been important economic problemsthat we have been discussing in Russia. More generally, therehas been a reduced appetite for risk-taking on the part ofinvestors in emerging markets globally. That situation has itsroots in the global economic environment, in events that tookplace last year in Asia, in altered investor psychology, inpolicy problems in some countries, in concerns about the economicsituation in Japan.

And we and Secretary Rubin, Chairman Greenspan, U.S.authorities continue to be in touch with our counterparts inother countries and in the international financial institutionsand are prepared to support strong measures, working through theinternational financial institutions where appropriate toencourage appropriate policy steps in particular countries. Butwhile these events certainly have had a consequence for theAmerican economy and have in particular had an important impacton some of our exporters, agricultural exporters, some of ourother exporters to emerging markets, I am convinced that if wecontinue to manage our economy prudently with sound budgetpolicies to which the President is committed, with appropriatemonetary policies, there is no reason why the difficulties ininternational markets, while significant, should interfere withor prevent the basic momentum of economic expansion in the UnitedStates.

I do think it is very important, in light of theuncertainties that the international situation creates, that theUnited States, as soon as possible, ratify its contributions tothe IMF, in order that it can be securely in a position to meetwhatever challenges may arise.

Q Would the U.S. be open to a renegotiation ofthe Russia loan package from the IMF?

MR. SPERLING: I just want to follow on for a secondbecause I think several of the questions have referred toleverage or whatever specifically you're bringing in, and I thinkyou need to come back to the kind of stage of engagement that onehas. First of all, it is absolutely the case for any country'seconomic policy the ball is first and ultimately in their courtand that country has to have an economic team and a plan thatmakes sense.

With the context where you have seen the UnitedStates being able to engage is a context where you're at thestage where there is a team, has a specific plan, that they'reengaged with the IMF. In that context, there's obviously a limitto what any one country can do, but in that context there is aserious role that the United States, this President, our TreasuryDepartment, plays in working with the G-7, with the internationalcommunity and the IFFYs as what to be done.

Here we just happen to be, because of the fortune oftiming, coming at a stage where the government is in a period oftransition, the economic team is in a period of transition, andso the question is in that situation what makes sense.Obviously, there isn't the kind of specific plan or engagement atthis point. That does mean, however, that this President, withhis experience and his knowledge that he's learned firsthand ofhow markets react, cannot speak candidly in private and in publicabout what are the type of things that encourage confidence.

Clearly, a measure, for example, is lowering your --having a path that gradually lowers your deficit as a percentageof GDP. That is something that is looked at -- and providingreassurance in a timely fashion, that they're on a path to gettheir fiscal house in order, and do those things will beimportant. But we have to just remember the stage that we're at.We're just not at a stage where answers to a lot of the questionsbeing asked are appropriate. It doesn't have anything to do withour particular role being different, but just the stage of ourvisit. And I think that's important as we're looking at thedifferent questions and issues being raised.

Q Who is the President meeting with on Wednesday?And specifically --

MR. BERGER: The meeting on Wednesday will consistof a fairly broad range of leaders from the Duma, regionalleaders and other political figures. I believe Mr. Zuganov hasbeen invited to that, but certainly a broad range of folks.

Q Are any of the agreements going to be signed?

Q Sandy, do you think you've contributed to thecrisis in Russia by over the years being too optimistic aboutevents in Russia and cutting Yeltsin too much slack --particularly, economically?

MR. BERGER: No, I don't think there's any basis forthat. We have supported policies that we thought made sense.President Yeltsin, after all, is the elected President of Russia,twice elected by the people of Russia; in democracy, they get tomake the decisions about the directions that they take. But Idon't think by any stretch of the imagination one can argue thatthe current financial situation in Russia is a result of U.S.actions.

Q Would the U.S. be open to a potentialrenegotiation of the terms of the rescue package from theInternational Monetary Fund? I mean, is that a possibility?Secretary Summers?

DEPUTY SECRETARY SUMMERS: Clearly, following thebreaking of the ruble peg and the restructuring of the GATT andthe very profound problems that have arisen in the banking systemin the last several -- or surfaced in the banking system in thelast several weeks, but that were a long time in coming, you'rein a very different economic situation than contemplated in theIMF Agreement that was reached.

So, clearly for Russia to go forward with the IMFwould require a new set of understandings appropriate to currentcircumstances about Russian policy actions. With such policyactions and commitments on the Russian part and an appropriateframework, as I said earlier, we would continue to be prepared tosupport IMF and other international financial institutionengagement in Russia. But at this point, the emphasis and thepriority has to be attached to the policy choices that Russiamakes.

Ultimately, what I think we've seen in each of themany situations that we have confronted is that countries'prospects depend upon their own policy choices. Financialsupport can make a difference in contributing to confidence, inreinforcing the momentum and the incentive for reform, but it isultimately a country's own policy choices that are of greatestimportance.

The question of leverage came up. Leverage isimportant when you want to push somebody or encourage somebody todo something that they don't think of as being in their interest.In this case, the primary beneficiaries of successful economicreform will be the Russian people and the Russian economy.

Q -- no longer believe that the Russians can meetthe requirements of the next tranche?

Q -- that there could be more IMF money, new IMFmoney? Or were you talking about the basic $23-billion packagethat was negotiated in July? Are you talking about arestructuring of that package? Do you envision more money ifRussia takes the reform steps that you are asking them to?

DEPUTY SECRETARY SUMMERS: I think at this point itis premature to talk about IMF support or to talk about theparameters of the IMF support in detail because that has to beput in the context of Russian economic policy which is what we'rewaiting to see. And at this point, we don't have a Russianeconomic team, we don't have a Russian economic plan. So I thinkall I would want to say is that the policy has been consistent,being prepared to support through the IMF strong policy fromRussia, but that has to be based on what the actions, theparticular actions, the framework that Russia establishes toensure that resources will be well used.

Q Do you believe it is no longer possible forRussia to meet the requirements of the next tranche of the IMFloan? Do you believe it's no longer possible for them to meetthe conditions that --

DEPUTY SECRETARY SUMMERS: I think that Russia, as Isaid, Russia is in a very different economic situation because ofthe devaluation, because of the restructuring, because of theproblems of the banking system that was contemplated in theprogram. And so I think that there would need to be a new set ofunderstandings between Russia and the IMF before the provision ofsupport could go forward. In a context of such a new set ofunderstandings, certainly it is possible that the support thathad been previously committed could again be committed to supportreform in Russia.

Q Mr. Berger, could you give us your assessmentof how firmly President Yeltsin controls the Russian militaryright now, and also tell us why it was that Ambassador Collinsmet with communist leaders today?

MR. BERGER: On the first question, absolutely noreason to believe that he is not in firm control of the militaryand other elements of government. I specifically don't know whyAmbassador Collins met with the communists today, although it'sthe job of an ambassador to meet not only with the government butwith a range of opposition figures. And since the communists arethe largest part in the Duma, that doesn't surprise me.

Q Mr. Berger, you mentioned in your openingstatement specific and concrete steps on the security agenda, andthen you later mentioned reduction in stockpiles of fissilematerials in the early warning agreement. Can you spell thoseout in a little more detail?

MR. BERGER: Well, they're still -- I don't want tobe too much more specific until we see whether we can reach finalagreement on these. But these would involve plutonium stocks onthe one hand and on the other hand, information sharing onmissile launches. Both countries have quite sophisticatednational systems for early detection since the most likelythreats in the future -- at least in the foreseeable future --come from third countries. To the extent to which we can makearrangements to share that data on a real-time basis wouldobviously be enormously stabilizing.

Q And in a plutonium proposal, are we offering toreduce our stockpiles of fissile material as well?

MR. BERGER: Let me just leave it at that at thispoint, and, hopefully, we'll have more to say or I'll just eat mywords.

Q In the prospect of a cutoff of assistance fromthe international financial institutions, are there potentiallyother avenues of support that the U.S. or its allies could offer,particularly regarding your concern over nuclear stockpiles? Wehave big arrears in the Russian military wages. Are there otherthings that the U.S. can do to stabilize the situation throughassistance?

MR. BERGER: Well, there certainly have been,through programs like Nunn-Lugar, assistance that has beenprovided to Russia that have aided it in the process ofdemilitarization, destruction of weapons. Those have all servedsecurity needs and have been perceived by the Congress andrespective administrations as serving security needs of both theUnited States and Russia. I think there continue to be areaswhere that can be of benefit, but I think it would have to bemeasured largely in security terms.

Q Is there an initiative planned to get a firstmeeting between David Trimble and Gerry Adams either before orduring the President's visit?

MR. STEINBERG: I think the President has said, andhe's certainly said to the parties, that he thinks it's veryimportant that all of the parties related to the process begin towork together effectively to get the assembly up and running.That means that all of the parties who are going to beparticipating in the assembly ought to work together. And wewould certainly hope that Mr. Trimble and Mr. Adams and all ofthe others do have a chance to meet. We would certainly welcomethat and if it happened in connection with the visit or at anyother time, it would be something we would welcome.

Let me just say while I'm up here on a completelyunrelated matter, the President today is announcing his intentionto nominate former Governor Michael Sullivan as Ambassador toIreland. As you know, the Governor has an enormously successfulrecord as governor and he is somebody who the President hasenormous respect for. He's very active in the community and willonce again reaffirm the very strong ties between the UnitedStates and the Irish Republic.

He will not go on the trip because we will waitobviously until -- this is just an intent to nominate him andhave a confirmation. But this is somebody who has the personalconfidence about the President and the Secretary of State andwill continue a long tradition of having somebody who can reallyexpress the personal as well as the political commitment betweenthe United States and the Irish Republic.

Q Do you have a list of congressional members whoare going on these trips? How big is the delegation?

MR. BERGER: There are, I believe, three members ofCongress going on the whole trip, and I believe 17 joining us inIreland. Don't hold me exactly to those numbers, because theychange from day to day.

Q Is that the smallest number you've ever hadwith the three members to Russia?

MR. BERGER: What we ordinarily do on presidentialtrips is ask each of the four leaders either to come with us orto designate. So the basic package is four. Since the Senate isin session next week, I think a number of senators were reluctantto be gone; so that's why we're short one senator.

COLONEL CROWLEY: We think there are four now.

MR. BERGER: But not any more. (Laughter.) BecauseMr. Crowley has just found another senator. So there will bethree or four people going to Russia. Do you have the list? Wewill release the list.

Q How much consideration did you give to delayingthis trip to Moscow?

MR. BERGER: I think over the past several dayswe've obviously all looked at the issue in view of the crisisthat is going on in Moscow, and I think we owed it to thePresident to not simply be on automatic pilot, but to askourselves whether under these circumstances the trip should goforward. And I think in the call this morning, which includedthe President, the Vice President and most of the President'sboth national security and national economic teams, there wasunanimous recommendation to the President, there was no dissent.

Each of the participants agreed that it wasextremely important for the President to go forward with the tripand that even in this and perhaps because of, to some degree, ofthe economic crisis, it is important both to be engaged, to beseen by the Russian people as being engaged, to try to influencethe choices that Larry and Gene have discussed to the extent thatthe President can, and to try to do as much business as we can onthe security and foreign policy areas.

Q Just a quick follow-up on the arms controlissue. Can you say whether, specifically, START II and themodifications that the administration would like to make to theABM Treaty will be addressed?

MR. BERGER: Well, I'm sure they will be addressed,but it is -- we originally had wanted to go to Russia after STARTII was ratified so that we could begin intense negotiations onSTART III. You will recall the Presidents at Helsinki reached akind of a framework for START III that would bring our nucleararsenals down to 80 percent of their Cold War levels.

It was clear as we headed into the spring and earlysummer that the Duma was not going to act quickly on START II andthat in fact, the fact the President's trip was in some waylinked to that had become counterproductive in terms of action onSTART II. And that is when, in June, the President decided weneeded to go forward and begin to plan the trip in any case.

So I would expect the two leaders to talk about it.I would not expect any progress on this area. The next step,obviously, is for the Duma to ratify START II, and I think whatwe will try to do, both with the members of the Duma and with thegovernment, is to make the case, which was quite overwhelming,that START II is not only in Russia's strategic interest, butSTART II and then START III ultimately is in Russia's economicinterest, as you look at the kinds of investments that they wouldotherwise need to make in strategic arms.

Q How about the ABM Treaty? Obviously, theRepublicans on the Hill want to scrap that completely and buildmissile defenses. You guys want to modify it.

MR. BERGER: Again, I would imagine this would bediscussed. I would not anticipate any new agreements in thatarea.

Q Is there any more progress on negotiationsabout Iran, over Iran?

MR. BERGER: Well, this is a very important subject.Let me take this last -- I'm glad you bring it up.

We have spent a great deal of time and effort inworking with the Russians to assist them in both articulating aclear policy opposing cooperation with Iran onmissile technology, number one -- which President Yeltsin did --number two, adopting the legal infrastructure that would enablethem to enforce that policy, which they have done throughregulations that they have adopted; and then, three, to enforcethose regulations against a vast network of Russian firms thatnow no longer have the same degree of control, obviously, that itdid under the Soviet Union.

The Russians have made progress in this area. Theyhave not only done the things I've mentioned, but they'veactually launched investigations against nine companies. But itis an area where I think more work is necessary and where we willemphasize with the Russians that this is an area that needsconstant attention. And even during a period when there are alot of diversions, this is something that they need to focus on.

Thank you.

COLONEL CROWLEY: Just one thing before we go. Iwish to thank our colleagues from the White House CommunicationsAgency both here and up in Martha's Vineyard for working the tincans and the strings right so we could put this interactivetogether. Thanks very much. We'll see you in Moscow.

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