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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: It's your Bloomberg Brief, Danny Berger here in New York.

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Speaker 1: The Bank of America Investor Summit is underway in Dubai,

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Speaker 1: with European defense mending in sharp focus.

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Speaker 2: Bloomberg's Guy Johnson.

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Speaker 1: Has a timely conversation and a special guest to bring us.

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Speaker 1: Good morning, Guy, Good morning, Danny, Thank you very much. Indeed, Yeah,

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Speaker 1: I'm joined by Kay Bailey Hutchinson, former United States Permanence

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Speaker 1: Representative to NATA, A perfect person to talk to as

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Speaker 1: we see such turbulence, particularly around bad Alliance, but particularly

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Speaker 1: around the Transatlantic relationship. More broadly, Europe feels like it's

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Speaker 1: on its own at the moment. Is that your view

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Speaker 1: as well?

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Speaker 3: No, not at all. I do think that the President

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Speaker 3: has been very direct about Europeans doing more, especially in defense,

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Speaker 3: but also in the regular Victoria Breena, I know he's

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Speaker 3: talking about that, but uh, the NATO UH bond is

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Speaker 3: very strong, and I think it's strong because all of

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Speaker 3: us are in it. The thirty two allies have made

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Speaker 3: a commitment and I think we will not walk away

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Speaker 3: from that. So I don't think Europe has on its

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Speaker 3: own although I do understand the hard feelings about some

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Speaker 3: of the harshness of the comments.

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Speaker 1: The the the incoming Givin Chancellor said yesterday that he

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Speaker 1: feels that Europe needs to be independent of the United States.

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Speaker 1: Does Europe need to be independent of the United States?

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Speaker 1: Does it need to be a relationship more of equals

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Speaker 1: because it has felt like an unequal relationship Europe has

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Speaker 1: existed under the US security un bretherins. Does that ultimately

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Speaker 1: needs a change?

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Speaker 2: Now?

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Speaker 3: Well, I do think that I and really every president

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Speaker 3: with whom I've served has said the same thing. Europe

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Speaker 3: needs to do more for its own defense, and I

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Speaker 3: think that is being said in a different way.

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Speaker 2: But again, we do.

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Speaker 3: Know that we'd like to have an equal partner UH

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Speaker 3: with Europe in defense because our security depends on our

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Speaker 3: being together. M Really, the G twenty nations in general

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Speaker 3: should be together, UH if we're going to face foes

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Speaker 3: like Russia, like North Korea, like Iran, and then UH

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Speaker 3: potentially an adversary in China. I think UH, economic unity

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Speaker 3: is going to be our whole card, and we need

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Speaker 3: to do that with Europe and with the other strong

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Speaker 3: nations with economies that can make a difference with China

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Speaker 3: or with any of our other uh potential adversary.

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Speaker 1: Y You, I'm sure talks to a lot of people

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Speaker 1: that you work with over the years about what Europe

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Speaker 1: needs to do. What do you think Europe does need

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Speaker 1: to do? Is it three percent? Is it four percent?

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Speaker 1: Does Europe have the capability if it wants it to

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Speaker 1: even spend that money to use that money effectively? What

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Speaker 1: is your assessments of what is required and what Europe

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Speaker 1: should do right now?

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Speaker 3: Well, I think Europe needs to do more in its

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Speaker 3: own defense building its military for one thing, and the

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Speaker 3: German military in particular has not been able to do offense.

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Speaker 3: They have a military of defense, but we need offense

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Speaker 3: for deterrence. So I think we do need for Europe

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Speaker 3: to spend more on capabilities. And now I think a

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Speaker 3: lot of the capabilities are going to be technology, and

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Speaker 3: technology is the new thing for all of us, and

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Speaker 3: we are going to be investing as we always do.

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Speaker 3: We have always made security a priority, but Europe is not.

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Speaker 3: They have had other priorities economic uh, trade, UH, social spending.

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Speaker 3: And now if they make it a priority, they can

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Speaker 3: do it, and I think it will be important for

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Speaker 3: them to build up so that it is a strength

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Speaker 3: for our alliance.

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Speaker 1: I if if European spending goes up, can US spending

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Speaker 1: go down?

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Speaker 2: Is it a zero? Some games? That the way the

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Speaker 2: right way of thinking about it. Now.

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Speaker 3: No, the US will not lower our level of spending.

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Speaker 3: I mean we're talking now about cutting the budget only

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Speaker 3: in places where it's.

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Speaker 2: There's sch waste.

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Speaker 3: I mean, yes, we'll do that, but no, we're not

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Speaker 3: gonna go down in our efforts to make sure that

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Speaker 3: America is secure. And I don't think anyone uh in

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Speaker 3: the administration, certainly not in Congress UH believes that we

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Speaker 3: should lessen our defenses in some way?

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Speaker 1: Dy dy, do you understand the Trump p Moscow pivot,

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Speaker 1: the the Washington Moscow pivot that seems to don away

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Speaker 1: at the moment.

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Speaker 3: I don't understand it. I do know that sometimes, uh,

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Speaker 3: the administration will do something for effect or for some

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Speaker 3: purpose that we don't see yet. Uh W We'll have

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Speaker 3: to be somewhat patiently.

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Speaker 2: So you're willing to give them the benefits of the

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Speaker 2: doubt right now?

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Speaker 3: Well not, I'm not a I don't give them the

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Speaker 3: benefit of the doubt. About Russia. I think Russia, it's

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Speaker 3: very clear. Uh. Russia invaded a sovereign nation and Ukraine

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Speaker 3: has fought valiantly. I think our interest is that we

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Speaker 3: not let Putin have a free hand to do something

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Speaker 3: like this, which would embolden him to do more. He

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Speaker 3: did this with Georgia, he did it on Crimea. Now

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Speaker 3: he's doing it with the donbos Uh part of Ukraine.

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Speaker 3: And if he gets by we're doing something like this,

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Speaker 3: he will go into the next country that he can

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Speaker 3: come ever and take over. So I don't think that

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Speaker 3: we will have a lasting piece if Russia gets its

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Speaker 3: way and there is no price to pay.

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Speaker 1: If there are peacekeeping troops put into Ukraine post some

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Speaker 1: sort of a peace settlements that the talking europe and

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Speaker 1: certainly kissed Armer and Emmanuel Macaron be talking about this

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Speaker 1: in their trips to Washington. The idea is that you

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Speaker 1: basically put European peace on the ground with European added

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Speaker 1: with the US air defense maybe as as cover. Is

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Speaker 1: that a reasonable plan, Is that something you could think

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Speaker 1: might be actually viable.

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Speaker 3: I think that it's certainly a point to negotiate Yuh,

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Speaker 3: that it would be with an American support system. We

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Speaker 3: did this in Afghanistan for instance, the Europeans were there,

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Speaker 3: they were active, they were very important at Framework nations.

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Speaker 1: UH.

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Speaker 3: But we were doing the air cover, we were doing

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Speaker 3: uh much that was needed that couldn't be done uh

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Speaker 3: by the Europeans. I think certainly there is a negotiation there.

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Speaker 3: I don't know where yuh uh that ends, but I

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Speaker 3: think ah a peacekeeping uh place in the dawn boss

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Speaker 3: or Carimea uh is certainly a part of a negotiation.

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Speaker 3: And I think there may be some purpose in the

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Speaker 3: way this has started. I don't see it myself, but

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Speaker 3: it it could end up being uh A a good end.

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Speaker 3: I think a good end would be a lasting piece.

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Speaker 3: A lasting piece would mean that, of course Ukraine is rebuilt,

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Speaker 3: hopefully by Russia, by the Russian assets that were held

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Speaker 3: in Europe and the United States, but also uh that

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Speaker 3: there be a the capability to show putin that he

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Speaker 3: cannot do this in the next country and then the

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Speaker 3: next country.

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Speaker 1: Do you think the Ukraine should pay for some of

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Speaker 1: that's a city with its mineral rights.

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Speaker 2: Do you think that is a reasonable trade?

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Speaker 3: I think uh. I I don't know what is being asked.

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Speaker 3: I really don't. I mean, that's being sort of close

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Speaker 3: help so I don't know what is a reasonable UH.

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Speaker 3: I w I wanna make sure that Ukraine gets the

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Speaker 3: benefit UH of their resources, and I think it is

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Speaker 3: important that there be uh a development of that. But

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Speaker 3: how that's worked out, I think is to be determined.

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Speaker 1: Tiber hutch Kate Bailey Hutcheson, Thank you very much, indeed,

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Speaker 1: very nice to see you. Thanks for stopping by to

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Speaker 1: see us. We greatly appreciate it.

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Speaker 3: Thank you,