U.S. - European Union Relations

1:15 P.M. EDT

MS. PAPAZIAN: Okay. Well, maybe if I could just start us off. I'm Elaine Papazian from the Washington Foreign Press Center, and we're very happy to welcome you all here today. And we're very happy to have the Ambassador here.

Ambassador Schnabel is our representative at the European Union. And he is here to brief on the occasion of the enlargement of the European Union. He's here to brief on U.S.-EU relations. And the way we would like to do it is, I know you've all introduced yourself, but I think for the record, I'm going to ask to go around the table and have each of the journalists introduce themselves; and just say your organization so that we have it on the record. And then the Ambassador would like to make brief, introductory remarks, and then we'll just throw it open and you can all have a nice conversation. And this is an on-the-record briefing.

AMBASSADOR SCHNABEL: Great.

MS. PAPAZIAN: So Margery, could you start with the introductions?

QUESTION: Yes. I'm Margery Friesner, and I'm with ANSA, the Italian News Agency.

AMBASSADOR SCHNABEL: All right. Thank you.

QUESTION: Well, my name is Laszlo Toth. I'm from the Hungarian News Agency.

QUESTION: I am Pal Reti -- Pal Reti from the leading Hungarian news magazine. That's it.

MS. PAPAZIAN: Very good.

QUESTION: My name is Grzegorz Jasinski from Polish Radio RMF, FM -- biggest Polish radio station.

QUESTION: And I am his colleague from the Czech Republic, Miroslav Konvalina, Czech Public Radio.

MS. PAPAZIAN: Great. Okay. So then I suppose we'll just ask you if you would make your opening remarks.

AMBASSADOR SCHNABEL: Okay. Great. Thank you very much.
Obviously, the United States has been, since the very beginning, a very big proponent of the European Union and of the expansion, of the ten new countries coming in. I had the good fortune of visiting most.

I have missed Poland so far, but I am going to be going to Poland soon. And we have always felt that to have a united Europe would be very good for Europe, but would also be very good for the United States and for the world at large.

If you look at -- Europe and the United States, together, today have something close to 60 percent of the world's economic activity. And when you're thinking about the issue of global poverty, which, of course, is the single most important issue that we're all concerned about; but tied to that is the issue of terrorism today, it is imperative on the United States and Europe to work together because we are the ones that can address those issues best -- or certainly along with other countries, naturally. But it’s because of the size of the United States and Europe that we can do things together that are very important.

So it is the partnership between the two that we have always been in favor of. And even though we have gone through a difficult time in the last couple of years, particularly leading up to the Iraqi war because there were substantial differences in approach, we continue to believe that the relationship, as does this Administration and everybody in it, it's the single most important relationship we have. And now that the ten new countries have joined, that, of course, applies to all 25 countries.

We've had very good relations with the two -- the ten accession countries, in the past, individually. We hope to continue those relations, of course, on an individual basis, but now we will be dealing with your countries at the same time through the EU.

So I think, personally, when you talk about what is going to happen in the EU, I think that the ten new countries coming in will bring a new spirit, a new blood, a new kind of thinking into the EU. And I like to think of it as not "the new countries," but of a total of a new, new Europe, because it will be different. It will change.

We are very cognizant of the fact that Europe, today, has 450 million people versus the United States, with something substantially below that. And of course, our economies are roughly the same size.

So again, 60 percent of the world's GDP -- very important that the relationship that has been building for many, many, many years continue even though we've had a difficult time of it lately.

What is true, of course, is that Europe and the United States have very similar basic values. We've talked about, clearly, democracy. We've talked about open markets. We've talked about the rule of law. And yet, we have an approach that is different. Our cultures are different in that people look at things differently so where we are basically coming from the basic values being the same, we are approaching our problems differently. And it is in that that we, from time to time run into disagreements. And when you have, like any other partnership, there are disagreements that you have to work your way through, and that is what we've done and what we continue to do.

So I am very optimistic about the future of the EU. I'm optimistic about the ten new countries that are joining. And basically, over time, I think it will be very good for the citizens of Europe, which, again, will be good for the United States and for the world at large.

So that's what I'd like to -- that's what my comment is, and maybe you would like to open it up?

MS. PAPAZIAN: Yes. And also, let me just introduce our other journalists: Matthias Reub from Frankfurter Allgemeine Zeitung.

QUESTION: All parkings are full today.

MS. PAPAZIAN: Oh, gosh. (Laughter.)

AMBASSADOR SCHNABEL: Oh, are they? You have to walk, you know. Forget about all these -- (laughter.)

MS. PAPAZIAN: Okay.

QUESTION: This is what we usually do in Europe, but in America, distances are just much longer.

AMBASSADOR SCHNABEL: Yeah, it's true. It's true.

MS. PAPAZIAN: Okay, sir, if we could. Please introduce yourself and --

QUESTION: Yes. My name is Laszlo Toth, Hungarian News Agency.

I would like to cite from The New York Times, Guenter Burghardt, who is the Union's Ambassador to Washington, and he said that "We need to know that America is open to a confident relationship, not just with certain member-states, but with the EU, as such." And this was in The New York Times, and the -- Roger Cohen, who wrote this states that the expansion presents America with a choice. Should it embrace this new union that stretches to the Russian border, or try to foster Europe's many fissures in order to divide and rule? What is your comment on that?

AMBASSADOR SCHNABEL: Well, I think that the gentleman that asked the question probably knows the answer, because we are not into the business of dividing and ruling. We are dealing with the EU, an enlarged EU, while at the same time maintaining, of course, the relationship that we have established over many years.

For instance, with your country, we've had very good relations and have done business of all sorts, so we don't intend to change that, but at the same time, we recognize that by you joining this exclusive club called the EU, we have to deal with you through the EU, and that's what we have been doing for 50 years, and continue to do so. So I think it's very clear that the answer to that question in that article is that we intend and want to, and have always said so, want to deal with Europe and the EU at large.

And, by the way, in that article, too, it is stated that relations are not very good, and probably, that very same sentence that you quoted starts with another sentence that --

QUESTION: Situation has never been so bad in 50 years.

AMBASSADOR SCHNABEL: Yeah. Yeah. And I totally disagree with that. But I know the sentence, of course. We do get -- we stay informed, you know? We read the press. We read the press.

QUESTION: Miroslav Konvalina from Czech Radio.

I don't know if you are familiar with the particular problems between Czech Republic and United States when we joined the European Union, but are there some open question what has to be solved or especially in economic spheres because we had very rich ties with United States during these years and now you have to sacrifice something for Europe?

AMBASSADOR SCHNABEL: Yeah, I know what you're talking about, but not in detail. And we had similar things like that with Hungary as a matter of fact. And those are issues that needed to be worked out, of course. And there is such a thing as a grandfather clause for some of these companies that are established in your country and in Hungary that they had certain tax benefits coming in. And frankly, I do not know where that stands today, but the intent is to get it -- to get it resolved because these companies established themselves there based on certain promises, of course, and you can't just easily change that.

But I don't know what, at the moment, that the status of that is. But I am familiar with the issue.

QUESTION: There is a follow-up question to that, that -- and what, what is your impression that -- would it affect the American investment in these parts of the new union? I mean that they don't get anymore those kind of tax benefits?

AMBASSADOR SCHNABEL: Like they did in the past? Yeah. I don't believe so. The investment, as you know, has been very substantial over the last five + years, maybe five to ten years, in most of the new accession states.

Now that they are full members of the European Union, there are other benefits, of course. The benefits in part of -- in some of the countries, in most of the countries, is that first of all, the standard of living, the cost of living is dramatically lower than the EU. The tax rates, corporate tax rates, are dramatically lower than the average in the EU.

The people are -- you know, your economies are growing vis-à-vis the European Union. Of course, it's been very, very slow growth, so the interest of the part of American companies in the ten accession countries continues to be very serious. And there is obviously a benefit from being in your countries and exporting into Europe, as well as the rest of the world. But you get -- in addition to that, of course, you get the benefit of the lower tariffs.

So if you base yourselves there -- now, in Hungary, GE was one of the original investors there, a major investor, and I think that may be as much as 10 years ago. I don't know.

QUESTION: Yeah, in '89, but not before the changes, yeah.

AMBASSADOR SCHNABEL: Yeah, well, so they came in early on. But what we hear and what we see, we see a greater number of American companies coming to Brussels because they're interested in the EU and the enlarged EU. So I think that you, if anything, you're going to see a greater flow of investment into the EU now that it is enlarged. Because I believe, I believe that the ten accession countries will, in effect, spur the rest of the European economies on to greater growth, even though, of course, your economies are relatively small compared to the overall numbers; and the number of people, for that matter, are, but you bring competition into Europe. As a for instance, Slovakia, Bratislava, which is an hour from Vienna, they have a 19 percent flat rate.

The average corporate taxes in Europe, of the 15, is something in the 30's, so you have a dramatic difference, a big advantage, and here, you're an hour away, you know. And that is true with a lot of the different countries that have those advantages.

So I do not see where the investment, to answer your question, I don't see that it will slow. I think it's the opposite. It will actually gain momentum now that your whole marketplace has opened up to include all of your Europe, which is the largest single market in the world, you know, bigger than the United States.

QUESTION: Can I have follow-up? I'd like to ask if the campaign some American media are running for almost a year about outsourcing will have some negative impact for investment in Europe?

AMBASSADOR SCHNABEL: Well, I don't know what it is in Czechoslovakia, but I do know, for instance, that there are specific outsourcing companies that are located in Hungary, particularly, a company, Flextronics --

QUESTION: Flextronics.

AMBASSADOR SCHNABEL: -- that is there.

In effect, some of these American companies have gone to the ten accession countries to, in effect, put some of their manufacturing facilities there because it is cheaper to manufacture there.

Now where the future will be on that, because obviously, there are other places in the world as well, but the outsourcing issue is an issue that is being talked about a great deal, but you cannot, in an open marketplace, you can't control where jobs go. They go to the best place with the best-educated people at the best price because it is the consumer, ultimately, that gets the benefit of that.

You can't stop outsourcing. And, in effect, it doesn't have the impact that people are talking about. It is true also that there are plenty of European companies that, in effect, have come to the United States and are, in effect, insourcing jobs in the United States because they have invested here, or bought here or expanded businesses here. So, you know, you have jobs going out, but you also have jobs coming in, in other words.

MS. PAPAZIAN: Please.

QUESTION: Grzegorz Jasinski from Polish Radio RMF-FM.

We know, we all know that United States have better relations with some of the European Union countries, a little bit worse with some of them.

Can we expect some kind of a new impulse in the relations between United States and whole European Union, just to prevent some kind of impression that -- you've thought about not dividing Europe? But there is some kind of impression that the United States now wants to talk with particular countries about some particular issues, and because the discussion with the whole European Union and the whole NATO is a little bit more difficult, it may go this way.

So can we expect some kind of an impulse into just trying to make these relations with the whole European Union better?

AMBASSADOR SCHNABEL: Yeah. It's a very good -- it's a very good question. And the intent, if you talk to the individual people in Washington and the Administration, the intent is to do -- to do exactly that. We did run into some difficulties with particular countries leading up to Iraq. So there was a lot of difference of opinion there.

And now -- pardon me -- now we are working with Europe on the reconstruction, for instance, and once the Iraqi people have taken over, it'll be less of an issue in our bilateral relationship, if you will, with the EU.

We recognize that it is that we need to deal with the EU, and continue to do so. We have more and more visitors, high level visitors coming from the United States, cabinet level visitors coming from the United States to Europe constantly in the financial area, in the trade area, in the law enforcement area, in the sciences, in the energy area.

We have people coming to the EU, in other words, to Brussels. Now they may, on a trip like that, they may also visit one or two of the other countries, including your own, of course, but because there are -- again, there are bilateral relations that continue, you know, and there are business, business relationships between countries, of course. But it is very clear that we recognize that we have to deal with a united -- with an EU, and that is what the intention is and we want to do that.

And that's -- by the way, that that is my job. You know, the whole unit that we have, which is constantly growing in Brussels, they are all people that have to do with policy issues. Everybody there is a policy -- policy wonk, if you will, and we have no -- we don't do anything with visas or any of that sort of thing like, like you'd do in a normal embassy.

So we deal with the issues. And in the United States, we recognize the importance of a united Europe, and we deal, as such, with a united Europe. If you talk about the business community, I had a meeting yesterday with the Secretary of Commerce, and there were representatives from the business community in Europe and the United States at this meeting.

It's called the Transatlantic Business Dialogue, TABD. And that is an effort by the United States and European governments, the EU and the United States, and the private sector to talk issues, to talk about all sorts of issues: trade issues, security issues, terrorism issues, for that matter. But it is the business community.

If you look at the overall relationship between Europe and the United States, it is the business community and the economic relationship that has -- that has been the stabilizer, even when we went through very difficult times. People are buying companies. Europeans are buying here, vice versa. They are employing a total of roughly 13 million people on both sides of the Atlantic. So the business community keeps talking and doing business regardless of what the politicians do, and those relationships are enormous.

If you look at the $5 trillion investment of the United States -- the foreign investment of the United States is $5 trillion, roughly; 60 percent of that is in Europe. So the enormity of it, you know, Europe is much more important investment-wise than the majority of other countries -- than Mexico, we invest more in the Netherlands than we do in Mexico, for instance.

I mean, it's -- you have to look at the numbers and see how incredibly integrated the economic relationship is, and that, of course, is what a lot of these -- the other things are based on. As long as that works, it's very important to you. Our markets are very important to you, and vice versa.

So the answer to your question is, we will deal with the EU while, while, at the same time, maintaining our bilateral relationships. You know, but over time, I have been told by some of the European leadership that over time, you will see fewer of the European embassies, for instance, in Washington; and ultimately, that you will have an EU Embassy in Washington.

I don't say that. I don't know that. But that's been told to me by some of the European leadership, which is interesting, so that they are dealing more as an EU, in effect. So that's why I said in the statement in the New York Times, we don't buy that. We are positive on what is going on between the United States and Europe and, we are working that recognizing, recognizing that there are always issues.

And, you know, it's like a marriage. You know, there are issues, but it doesn't mean you have to get a divorce. You know, we're going to work the issues, as we have done for 50 years, and they continue.

QUESTION: So let me --

MS. PAPAZIAN: Maybe I'll let Matthias -- could you speak into the microphone -- and please?

QUESTION: My name is Matthias Reub. I'm with the German newspaper Frankfurter Allgemeine Zeitung, so I'm from "old Europe," so to speak.

And as you mentioned that you're handling the issues, that might be a bit tricky question, but how confident is the United States that, you know, this new European Union will really remain stable, politically stable? Because, well, I have my experience: I lived in -- "new Europe," in Hungary, for a couple of years and I realized that the closer those nations get to the European Union, to the EU, the less enthusiastic they have been. They are still most enthusiastic in Albania and Romania in joining the EU, and they are less enthusiastic in Hungary or in the Czech Republic or even in Slovakia.

So there is a lot of frustration going on, what this EU is all about, on both sides of the former Iron Curtain. And, you know, if you take into account all those economic problems that Europe is facing with the less than favorable demographics and high unemployment and fear of immigration, and there was recently -- I think it was today -- an article, again, in the New York Times about, you know, people in Eastern Germany, in the Eastern part of Germany fearing that gypsies are coming over --

AMBASSADOR SCHNABEL: Yep.

QUESTION: -- into the thousands. So there's a lot of potential for conflicts. And how -- you know, how confident is the United States that those tensions will not, so to speak, boil over? So is this a stable political unity or what is it?

AMBASSADOR SCHNABEL: Well, you know, obviously, there is -- somebody made the statement one time, "It's very difficult to make predictions, especially about the future." Who was that again? (Laughter.) So we don't --

QUESTION: Winston Churchill, probably.

AMBASSADOR SCHNABEL: Somebody -- nobody famous. But the fact is, sir, you never know. It is true, however, that it is interesting why the EU was put together after the Second World War was, essentially, to form a group of countries that had been fighting each other in the past, and that would no longer be fighting.

The fact of the matter is that they are no longer fighting each other, and that, in effect, their interests lie in being connected economically. So people are working -- I mean, like in -- here in the United States, Chrysler Corporation is owned by a Germany company, as you know.

It's incredible to think of that, that overnight that company was bought -- a huge company -- and this is happening all the time. So the -- it is the economic integration that is driving things. The more things are happening economically in -- of course, Germany, it's been happening all along, so Germany is very, very much integrated already economically with the United States, but when you're talking about your countries: Hungary, Poland, Czechoslovakia, and so on, more and more of that will happen -- that there will be cross-border investments going back and forth. And that, in and of itself, becomes a basis for stability. And then you have people that join organizations such as the WTO. So isn't it true that ultimately, the average person is looking in life for some sort of, you know, a way to improve their lot in life economically; to improve the lot in life of their children; to get their children educated, and all of those good things? And isn't that a basis for stability? Does it mean it always works? I mean, you know, you have ups and downs in the economy, of course, too. But --

QUESTION: Do we have ups?

(Laughter.)

AMBASSADOR SCHNABEL: I'm sorry?

QUESTION: Do we have ups in the economy?

AMBASSADOR SCHNABEL: Well, yeah. As a matter of fact, you know, as I said earlier, I was at the Commerce Department -- no, the Treasury Department this morning and --

MS. PAPAZIAN: In the German economy.

AMBASSADOR SCHNABEL: I'm sorry?

MR. PAPAZAN: In the German economy, he was saying.

QUESTION: In the German economy, I was saying.

AMBASSADOR SCHNABEL: Oh, your economy. Oh, I'm sorry. I'm sorry.

(Laughter.)

Well, we were talking -- we were talking this morning, which I hadn't heard before, but the world economies, the economies of the world, combined, this year will grow in excess of 4 percent. That includes Europe, which is very interesting, because it includes, of course, China, India, and Latin America, America, the United States itself. But, you know, I -- and maybe, maybe you may think that that is naive, but I actually believe that we're going to see growth in Europe.

Now, maybe not the numbers that we all want, but even in Germany, where you have to go through massive, massive changes, which, in the new countries, of course, some of those things have already happened, but strategic -- I mean, changes within a country like Germany, of course, are very, very difficult to make happen, but there is a crisis.

If people -- if you have no growth in Europe, and everybody is getting older, and in so many years you have -- you're getting a lot of people that are on pensions, who is earning the pensions? Who's going to be paying the pensions? So either the younger people are going to have to pay an enormous amount of taxes to take care of the older people's pensions --

QUESTION: Or you do have to have immigration, which nobody wants.

AMBASSADOR SCHNABEL: Or you do -- or you have immigration, like we do, or you cut the pensions. But you've got a crisis, so you've got to do something. And it is based on that that Mr. Schroëder, of course, has attempted to, to make some changes in Germany. And it's going to have to be done. In Holland, they did; Holland, which was very, very socialistic country, they went through enormous changes in the welfare system some time ago.

And so there are lots of different ways to look at it. I think that definitely, at the moment, the growth in Europe is not there, and our economies are based on growth. You have to get growth in order to create jobs and in order to take care of people's pensions and the welfare state and so on.

At the same time, you may find that the welfare state, as it exists today, you can't afford. And that is why, for instance, the United States, some time ago -- we had welfare changes that were very dramatic, were very difficult to put through, but were very dramatic because we basically couldn't afford it anymore.

MS. PAPAZIAN: Margery.

AMBASSADOR SCHNABEL: So -- I'm sorry.

QUESTION: Margery Friesner, ANSA.

I would like to do a follow-up on the question from the Polish, my Polish colleague that some of the countries -- on foreign policies, some of the countries, like, for instance, in Iraq, Italy was one of the countries that supported it.

There are different relationships with each capital on many foreign policy issues, but there are -- it seems to me there are a lot of foreign policy issues that there's a difference -- between Europe and the United States, like the Middle East relationship with Iran, Cuba.

I wanted to ask you how -- are you dealing with this on a country-to-country basis, or from -- on a Brussels-Washington basis?

AMBASSADOR SCHNABEL: We are dealing on affairs of the Middle East, which, of course, is the big thing at the moment, and it has been -- we are dealing through the Quartet -- we had a meeting, we had a meeting yesterday, I believe, in New York -- was it yesterday or Monday?

QUESTION: Yes. Yesterday.

AMBASSADOR SCHNABEL: -- of the Quartet. Which, of course, includes the United Nations. It includes Europe, Russia and ourselves; and we talked there about the Israeli-Palestinian issue, but we're talking about the Greater Middle East Initiative as well. We are working that together. The Europeans have had an initiative, the Barcelona Process, for ten years almost, 1995, of dealing with the Middle Eastern countries on the issues of economic issues, free market issues, democracy issues and we have an initiative working in that same area that we are working on together. We are working together on things such as counterterrorism. We are working together in Afghanistan.

QUESTION: But I wanted to ask about the things that you don't agree on, like Arafat, you know, dealings with Arafat --

AMBASSADOR SCHNABEL: Where we don't agree, what we do is, we continue to talk. And there are absolutely differences. And over time -- if I tell you that Colin Powell talks to Javier Solana probably two or three or four times a week on those very issues, and there is a dialogue and the Europeans -- we take account of the European interest, and we try to meld together and come up with a way to do it jointly, recognizing we have to deal -- we don't just walk away from the issue.

You know, we have a disagreement in Israel vis-à-vis Mr. Arafat, absolutely. We had one in Iran. The Europeans have just gotten Iran to, in effect, give up on some things, where the Europeans were dealing with Iran on a special trading relationship, and they said, "We're not going to sign a deal with you unless you do something about proliferation and human rights." The Europeans stood by what they believed in and we were approaching Iran on a similar type of an issue, and the Europeans and ourselves worked that together.

So you -- again, there are issues. Of course there are. And you know, the Europeans have a different way. They use their strength as a trading unit, as an EU with an enormous marketplace, they used that in the case of Iran to simply say, "We're not going to open up our markets to you unless you do some things."

We have, in the past, vis-à-vis Iraq, for instance, we have taken a more of a military approach because we found that in Iraq you couldn't deal with the people, because they made promises and made agreements with the UN, for instance, and nothing happened.

So we -- at the same time, the Europeans are putting together a military capability of their own. They have, already, in Europe a major military capability, you know, which is -- they spend maybe half of the amount of money we do, but it's an enormous amount of money anyway. But the EU, as such, is currently -- has a unit -- a military unit -- that is, for instance, in Macedonia and is going to be in Serbia before the -- I mean Bosnia before the end of the year. As the EU, they're taking over Bosnia, as we -- as you know.

So it is true that there are differences. But it is also true that we have a dialogue that is constant. And the Quartet dialogue is a very good example of that. You know, you sit around the table and you talk about the very issue, which is foremost in everybody's mind at the moment, the Middle East.

QUESTION: Thank you. I have to ask you to excuse me.

AMBASSADOR SCHNABEL: Okay. Did you get what you wanted to get?

QUESTION: Yes, thank you.

AMBASSADOR SCHNABEL: Okay.

QUESTION: Thank you very much.

AMBASSADOR SCHNABEL: Okay, nice to see you.

QUESTION: We are talking mainly about business at the moment, and of course, business is the most important between European Union and the United States and -- but there are -- there is an important part of the relations between nations and there are some even hostilities between Americans and some Europeans. It's not very pleasant to be American in Europe at the moment, I heard about it.

Do you think that Washington will try to arrange some kind of PR campaign about understanding each other better? Because the ways, in the public view, the ways of America and Europe, some kind of went different ways, and we probably do not understand each other so well as we should be, being from the same root of the culture and, what do you think?

AMBASSADOR SCHNABEL: Are we doing anything about -- well, yeah. We are -- we have something called Public Affairs Departments in all of our embassies, and they talk to the press, of course, constantly, about issues. So we are explaining our issues all the time, as we are trying to do right here today, for instance.

Whether you are talking about a campaign as such, I'm not aware of that, you know, whether there's a special campaign to -- I don't know that. But in the meantime, the issue of public affairs is constant. We have large departments all over Europe, with people that, in effect, deal with the press on all fronts.

In my position, for instance, I'm around to talking to -- we talk to groups, we talk to the press. When we go to visit your countries, for instance, we talk to the leadership, we talk to the business leadership as well, to the political leadership, but we also talk to the students and to the press and so on.

So you're right. I think that at the moment, there is a feeling -- there is some of that, what you just -- which you just described. And I think we're going and have gone through a particularly difficult time, and it's related to the Iraq thing. But it's my belief that once you get past Iraq that things will settle down to getting back to where they were, that this drift if -- that you see some of, that that is not a permanent thing.

And we need, by the way, we need -- and your point is well taken -- we need to do more to get our story told in Europe and vice versa. Because there are a lot of people in this country that don't really fully understand what the EU is all about. They know and recognize the individual countries, of course, but the EU is an enigma to a lot of people. A lot of people just simply do not understand exactly --

QUESTION: We're all from Europe. (Laughter.)

AMBASSADOR SCHNABEL: Well, that's true, too.

QUESTION: Even to me.

AMBASSADOR SCHNABEL: You know, who is the leadership and who's doing what and how does it all work and so on. It is. There's no question about it. But that is true in the United States.

If you -- I was asked this morning -- well, no, just a minute ago, by a German television here in the building, they asked the question, "Why do you think that the ten accession countries on May 1, why didn't that -- why wasn't that a bigger issue in the United States?"

Well, the bulk of the people have no idea what it is. You know, I mean, they did interviews and a lot of people said, I don't know what you're talking about. They don't really, they don't really know. People are -- they're -- people are occupied. When you're living in the middle of the country here somewhere, you know, you're not worried about what's going on there. What you're worried about is, get your paycheck, pay for your kids and pay for your house mortgage or something, and you're not necessarily on top of the issues that we all are on top of because it's our business, of course, you know.

QUESTION: You know, at 6:00 p.m. on Friday, when the main part of these ten countries are just becoming the part of European Union and the fireworks were all over the Europe, in the main cable news stations, you could hear only about Michael Jackson. And, you know, only BBC America made some kind of transmission from Poland, from Czech Republic, Slovakia, Estonia. And here, nobody's talking about it. So you even cannot blame people. Even the media just doesn't care. So --

AMBASSADOR SCHNABEL: No, but of course, the media doesn't care because they think the people don't care. That's why they don't carry it. You know, you guys are in the media, so you know better than I do, but --

QUESTION: But the White House made a statement on Monday, not on Friday. So even if the White House is not telling people, you know, the White House is the best place to make news. If the White House is not making news on Friday but on Monday, it's for us Europeans, it's a kind of a statement that -- you know.

QUESTION: And in Congress yesterday there was a huge reception organized by these new countries and you can count on one hand the number of the Congressmen who show up, you know, for this. And you are saying that we are the most important relationship between Europe and the United States.

AMBASSADOR SCHNABEL: Yep.

QUESTION: Can I just --

AMBASSADOR SCHNABEL: You -- you should have invited the business community. But your -- by the way, your point is well taken. I will say this -- that our statements out of Brussels rolled on the press on Friday. But your point is well taken. And your point is well taken, too.

And I do not have the answers to that, by the way. I don't have the answers to it. All, you know, somebody needs to -- well, I was in California the other day with the head of the European Parliament as my guest, my personal guest -- I'm from Los Angeles. The newspapers were not interested.

I called the Governor, who's a European -- we are outsourcing the management of our state to a European, you know, so we are doing the same thing you know -- and he's doing a great job by the way.

But I called his office because I know him and he lives very close to where I live actually, in Los Angeles. And I said, "Well, you've got to come to reception. You have to meet, you should meet" -- to his people -- I said, "You should meet this man. He's a very key player in Europe, Pat Cox." And they didn't really, they said, "Well, you know, Europe, Europe, well, I don't know."

But then I'd said, there are one million people in the state of California, whose jobs are directly related to the activity between the United States and Europe, i.e., selling to Europe or European companies that own them. Then, all of a sudden, somebody said, "Hey, wait a minute, I didn't realize that." One million jobs, if you can imagine that.

But in California what they said to me, another press man, when I raised that point, he said, "You know something, Mr. Ambassador, you can talk about it all day long, but the fact of the matter is, we are looking west and not east." When you sit in California, you know, the great relationship is with the -- West of there, you know, yet -- I mean, a million people are employed. That's an incredible amount of people, you know?

So how you can get a greater amount of interest in it, I do not know. All I know it this: that General Electric, when they were thrown out of Europe when they couldn't make that acquisition under the previous leadership, when the new man came back -- came in, Jeff Immelt, who is the new CEO, 50 years old or so, I think he is -- and he came in, the first thing he did is he came to Brussels, he came to my office. They moved their main office from London to Brussels. They have made two major acquisitions. And again, those people know because they're doing a tremendous amount of business in Europe.

So the business community does know, the leadership of the business community. But how -- why people don't make a bigger deal of the -- I can't tell you. I cannot tell you. It's frustrating to me, too, by the way, because I'd rather read about the ten accession countries than about Michael Jackson, let me just assure you, but, you know.

MS. PAPAZIAN: Rik, did you have something?

QUESTION: Yes, Rik Winkel, at Financieele Dagblad, from Amsterdam.

AMBASSADOR SCHNABEL: (In Dutch.)

QUESTION: (In Dutch.) I keep hearing you saying that things will improve -- if things improve in Iraq, things between Europe and America will improve as well. That's a function of that. But isn't there something more fundamental wrong in the relationship in the sense that Europe and America do not -- do not any longer seem to share the same analysis of what's wrong in the world, what's dangerous in the world, and --

QUESTION: Can I just have a follow-up? I think it has nothing to do -- a lot to do with just a war on terror. I think the majority of people in Europe think that those Americans, they're just paranoids. And it's -- and you know, there was recently, there was an editorial in the Stuttgarter Zeitung saying they are just exaggerating. Usama bin Laden is far from being as dangerous as Hitler and Stalin was, but, you know, how -- and I think in the United States many people would argue, how can you know? This war has just begun.

So this is -- I think this is a completely different mindset at work --

AMBASSADOR SCHNABEL: Yeah. No, I think --

QUESTION: -- and that this will -- far from being over, maybe this is only the beginning of the end of the beginning of this problem.

AMBASSADOR SCHNABEL: No, I think you're right. I think you have two things basically, and I think your point is a good point. You have the terrorism thing and the whole Iraq that came from that, flowed from that is taken in a greatly different way in the United States. And if you look at the President's "popularity", you know, his numbers, basically the man on the street recognizes that we have been attacked and that we are at war. The Europeans don't say this. It is the United States that says that. Even after Madrid. You know, that was an incident and 200 people got killed and it was a major incident, but people still don't call this a war.

In the United States, there is a conviction among most that there is an attempt to end up with an Islamic universe, and that we are involved and we have been attacked and that we -- it appears to the Europeans to be paranoid, but we are reacting to something that we think is very serious. And of course, the information that we have leads us to believe that these people are all over the country and all over Europe and intending to do more damage.

But you know, it's not just here, it's -- what was it recently? Was it in Turkey that they rolled up a big group?

MS. PAPAZIAN: Yes.

AMBASSADOR SCHNABEL: So -- but okay. But I mean, so you have that one thing. So we do have -- now some people call that paranoia, other people call that -- this is the first time that somebody, in effect, flew into the United States with an airplane and did enormous damage to the number of people, but at the heart of our country, really, but not only at the number of people, of course, that died, but also the enormous economic effects of that.

Now, I think it is true that if you look at the cultural differences between Europe and the United States, they're very vast. I think that the European -- I was born and raised in Europe, and so I have some of that understanding, but that's been a while back, but -- unfortunately. But it is true that there is a very basic difference between the approach in the United States.

We have a faith-based society here, for instance, which is dramatically different in Europe. You have a very, sort of an optimistic society of people that are very entrepreneurial and very individual, which is very different than Europe, even with the younger generation today.

You look at, you know, the word "ambitious." Americans are ambitious people. It's not a word that's terribly popular in Europe. I think the entrepreneur is looked up at in the United States, but even today -- and I get around Europe all over the place all the time, that the person that is a standout in its field is somewhat suspect, you know. If you really become successful, there is a -- people question that. They wonder about that. And that's highly respected here, of course.

So you have a -- you have sort of a "can-do" attitude here, you know. Anything is possible and that is just not the way. Somebody -- there's a word in French for it, and I should have it but I don't know what it is, but it's sort of malaise, but it's a different word.

QUESTION: Usé.

AMBASSADOR SCHNABEL: What?

QUESTION: It's usé, kind of fatigue or tired?

AMBASSADOR SCHNABEL: What is that? Usé?

QUESTION: Usé, I think.

AMBASSADOR SCHNABEL: Okay.

AMBASSADOR SCHNABEL: Usé -- well, in any event, somebody came up with that, some European came up with that. But yes, it connotes a tiredness.

But what I find in going around Europe, that it is the younger generation that believes in Europe and that are much more aggressive, including in countries like your own, by the way.

I was in Denmark the other day and I met with the Minister of Justice who is 35 years old and brought her baby into the office, and she said to me, "Mr. Ambassador, the future of Europe is with this generation, not with your generation," i.e., mine. It's the -- pardon?

QUESTION: Go ahead.

AMBASSADOR SCHNABEL: Yeah, I mean, I don't know whether that is so, but that is somebody expressing an opinion and in going to the schools or to the universities, and so on, you get more of it, but there is a -- you look at the numbers of hours worked in the United States, vis-à-vis, the average. Holland is particularly low.

But on the average in Europe, we work here something like 20 percent, 15 to 20 percent more hours. In many cases, people's jobs are based on their jobs frequently. Now, that is, I think that that's changing a little bit with the younger generation in America, too, by the way. But it is true that people look at our approaches very differently in Europe, and therefore, you get a -- a lot of people disagree with that. And that's why I believe that there is this sense of not being as positive about the United States as they used to be.

MS. PAPAZIAN: We have just a few minutes left, so think of your last questions, okay?

QUESTION: I would like to ask you about illegal immigration, not to United States, but to Europe. Now, there are some news that there are tens of thousands Americans living illegally, it means on tourist visa, working in the Czech Republic. Is it the broader European program or it's just that American who loves Bohemian style and just escape from here?

AMBASSADOR SCHNABEL: Now there -- that I have no answer to. I can imagine a lot of people would like the Bohemian style and live in Prague. Absolutely. I could see that.

QUESTION: (Inaudible.)

AMBASSADOR SCHNABEL: Pardon?

QUESTION: (Inaudible) on top of that.

AMBASSADOR SCHNABEL: Yeah, I know, probably. But I don't know that.

QUESTION: No? Okay.

AMBASSADOR SCHNABEL: No, I do not know that. I have not seen anything on people living in Europe illegally, but.

QUESTION: Okay.

AMBASSADOR SCHNABEL: But I can imagine a lot of people are attracted to your country, by the way. But did my answer touch your question at all?

QUESTION: Not entirely, no, I'm afraid.

AMBASSADOR SCHNABEL: Okay. Well --

QUESTION: But let me put it another way. Could you try to -- because it seems also to be, on the European side, a kind of loss felt about the Americans, because if you could try to define in what way America has a special relationship with Europe, and how it have different shades from relationships you might have with the Japanese or with allies in the Middle East or --

AMBASSADOR SCHNABEL: I think that the special relationship, of course, comes from the fact that a lot of Americans -- originally, you know, America was, to a large extent it was settled by Europeans.

I'm reading a book at the moment, by the way, that it makes a whole case that the Dutch influence in America was tremendous when they moved into Manhattan, and even though the English ended up taking it over, of course, the Dutch influence still, was still very much a part of the American lifestyle and attitude.

The Dutch were then free traders, of course, in the 17th century, which is interesting. But I think that that's where it started. You have a lot of people, you have huge communities in the United States that are basically European background and they like that and they enjoy it.

I think that -- I think that you have a basic -- in attempting to answer the question to you, it is a different way of life. We approach life differently than the Europeans do. And the -- the sort of, the European approach to the cradle to grave, taking care of people is very different.

Americans are very individualistic, and as a matter of fact, in many cases would like to stay as far away from their governments as possible. A lot of people are -- they like to be individuals, whereas, Europe is much more of a consensus place, not only the individual countries, but at the way the EU is run. It's totally consensus based.

So you have a different approach to day-to-day life, which can well cause people to feel alienated from the other people because they don’t agree with their thinking. Where it used to be there were a lot of people were very envious of the United States and a lot of people, and, as a matter of fact, by the way, they are standing in line to get into this country by the droves, as you know, from all over the world, so that's not changed.

It may have changed somewhat from Europe, by the way, because I don't know the numbers from Europe. But it could -- I think that you, if you want to dig deeper into the basis for their being a disagreement between Europeans and the United States -- and it deserves more than just a casual discussion, of course, but I think it has a lot to do with a different approach to basic values, yes, but different approaches to issues dramatically, the Europeans would have never gone into Iraq.

We felt it was necessary to go into Iraq. And out of that flows a lot of disagreement. But even apart from that, even apart from that, it was building up to that in the last two or three or four years. So it may be, it may be that that is one of the reasons.

MS. PAPAZIAN: One last question?

QUESTION: Yes.

MS. PAPAZIAN: Okay, please.

QUESTION: Let me ask you the question which you most definitely will be asked when you will come to Poland, is the question about visas and about the policy of visas in the case of European Union. Of course, we know that some countries like Greece, even being the European Union member, the citizens have to have visa.

Is there any chance and any kind of climate in Washington, which may suggest that the Visa Waiver Program may be extended to another countries, all European Union countries?

AMBASSADOR SCHNABEL: It's not an area that I'm involved in, but I would suggest to you that that's not going to be the case.

QUESTION: Well, in Poland you will have to repeat this answer many, many times.

AMBASSADOR SCHNABEL: Maybe I shouldn't go, huh? They don't like the answer.

MS. PAPAZIAN: Or get another answer.

QUESTION: You have to be prepared. It's probably not so practical, but some kind of public opinion problem, and it is really big.

AMBASSADOR SCHNABEL: The feeling that there are a lot of individual countries that we are dealing with in that area, rather than dealing with the -- all of Europe in that area. But I must say that that's something that is a question that the State Department and the people that are responsible for that, they -- you could get much more detail about. I just happen to know that that is what the thinking is at the moment.

MS. PAPAZIAN: Okay. I guess we'll wrap this up then, and say, thank you very much. And thank you, everybody.

QUESTION: Thank you.

AMBASSADOR SCHNABEL: Thank you.