Russia, Its Neighbors, and the Future of Post-Cold War Europe

IAN A. BREMMER: Welcome and good evening, everyone, to this New York Council meeting of "Russia, It's Neighbors, and the Future of Post-Cold War Europe." I'm delighted that this topic -- we all are, has this much interest here in New York and on our teleconference today.

I would like to -- first, a couple housekeeping rules: Completely turn off -- not just put on vibrate, your cell phones, BlackBerrys, all wireless devices to avoid interference with the sound system. I would also like to remind all members that this meeting is on the record. Council members around the nation and the world are participating in this meeting via a password-protected teleconference. We'll be taking questions from the floor and from the teleconference after our session.

But first of all, a little introduction. You know, I love talking about Russia and its neighbors -- something I don't do enough nowadays, you know, particularly as I think about where we've seen some geopolitical tensions that I think 10 years ago we might not have expected. The notion that Russia has, in some ways, embraced itself as a revisionist power -- insecure in its geopolitical situation, willing to provoke conflict on its borders, across its borders, to improve said geopolitical environment; and also potentially benefitting at times, domestically, from doing so.

I want to raise that as a question, and talk with two panelists that are eminently positioned to discuss precisely that, Ron Asmus and Adian Katatitsky (sic).

First -- at the end, Adrian is an old friend. He is senior fellow at the Atlantic Council of the United States; a frequent contributor to "Foreign Affairs." Ron Asmus just came up from Washington. He's executive director of the Brussels-based Transatlantic Center. He's also just published a book that will be available after the speech -- "A Splendid Little War," I'm making that up -- it's actually "A Little War That Shook the World: Georgia, Russia and the Future of the West." (A) great day to discuss this. Just earlier, a few hours ago, we see that President Medvedev came out and announced that the Russians were going to put a military base in Abkhazia. I don't know -- the timing's sort of fortuitous here.

I want to open it up to both of you to ask about where we think Russia is today. Specifically, that the U.S.-Russia interaction in the so-called "near abroad" is the single greatest irritant, I would say, in the relationship, from Moscow's perspective, and many Moscow elites view Washington through the prism of America's allegedly nefarious intentions in Russia's backyard.

So I guess I'd like to say, first of all, to what extent you think this is a zero-sum conundrum? Where is Russia in the near abroad today? I'd like both of you to start off with addressing that.

I'll turn first to Adrian.

ADRIAN KARATNYCKY: Well, we've just gone through a election process in Ukraine, and Ukraine I think is sort of the pivotal country in the near abroad, and I would say that the edge was taken out of that zero-sum game.

The Russians and the Russian government intervened, to the extent that it did, very lightly. It did not see the hand of the United States in this -- in a "mock geopolitical struggle." It was very different from the atmospherics around -- the exaggerated atmospherics of a struggle for power and influence around the Orange Revolution.

So I think, five years later, what we have is a more moderate -- moderated Ukrainian elite, and the judgments of the main political players in Ukraine -- about how to relate to Russia and how to relate to the West, reduced the temperature. And I think we see also, in Russia's relationship to other countries, where there have been "semi-color" revolutions -- like Moldova, which had a regime change, with the communist leadership being replaced by a coalition of nationalist, moderate and liberal groupings. Again, a certain kind of a effort by Russia not to see this as some kind of a threat, but to try to -- in a more constructive way, in a kinder, gentler way to engage Moldova.

This is not to say that Russia is not playing, you know, with tough politics -- using its energy card, using its geopolitical advantages, but it is to say that there is always a pendulum, I think, in how Russia addresses the near abroad and the world. And I would argue that, you know, we were at a very low point in this, sort of, oscillation back and forth around the war that Ron describes. And Russia may have taken, learned some lessons, and may have felt a bit of the bite of the global economic crisis -- the collapse of commodities, the collapse of -- you know, not the collapse, but the decline in Russian GDP. All those things are having a kind of a sobering effect. And I see some changes in how Russia is addressing this part of the world, Georgia excepted.

BREMMER: Just today, not Putin, but President Medvedev came out and said Saakashvili -- persona non grata from a Russian perspective, do you see Russia going through a more benign cycle right now with its near abroad, or do you have a different view?

RONALD D. ASMUS: I hope Adrian's right. I'm a bit more pessimistic. I think, Ian, you're right. Even though in the papers we talk about Iran and Afghanistan as the big issues in U.S.-Russian relations, the issue where we have the biggest gap is this one: The future of those countries between the Eastern borders of NATO and the European Union and Russia.

And I think -- I mean, the argument of my book, in a nutshell, is that this war was fundamentally about Georgia trying to "go West" and Russia determined to stop it, in which the conflicts were instrumentalized.

But, you know, it's 2010. And 20 years ago we signed something called the Charter of Paris. There are several people in the room that were probably active at that time. And people like me have spent the last 20 years trying to build this new post-Cold War piece based on these principles. And those principles included: no spheres of influence, the right of countries to choose their own path -- their own alliances, equal security for all countries big and small.

And I would say that that document, which we sort of see as the "Bill of Rights" of a new Europe, is a dead letter as far as Moscow is concerned. There is no agreement today between Moscow and the United States, or Moscow and Europe, on what the rules of the game are for European security. And that's not a good thing. In essence, Medvedev's European security proposal is a proposal to rewrite those rules of the game, which we have now, kind of, said no to.

So even though -- I mean, the conflict may be muted in Ukraine because of a certain outcome, and because the Russians, I think, got smarter -- having been heavy-handed in the last election, spent whatever it was, $600 million, and then have the whole thing backfire -- "gentler when it works, tougher when it's necessary" is sort of the strategy.

But we have this basic, huge gap conceptually between how we see these issues. And I still think these are conflicts that potentially are waiting to happen. I mean, the reality in the Georgian war is that all the ingredients are there for another conflict. Russia's war aim, as Foreign Minister Lavrov said to Condi Rice in a famous phone conversation, was that Saakashvili had to go; no more pro-Western government in Georgia.

And, you know, you think of Medvedev's letter, you know, he declared the Ukrainian and Georgian presidents persona non grata -- 'We will not deal with them; we will try to undercut them.' And the goal is -- you know, it's interesting this word -- I happen to be a big fan and friend of Finland, so I don't like the word "Finlandization," but the word Finlandization is back. And Finlandization is not what we were talking about building 20 years ago with Russia in Europe. And I think we ignore this gap at our own peril, because until we figure out what we want, and how to talk to the Russians about it, you run the risk that these things can escalate.

BREMMER: So, I mean, Adrian, is there something different here, or have the Russians just won because the U.S. has sort of ceded Georgia from the map?

KARATNYCKY: No, I think there is something different. I agree with Ron fundamentally that since Russian policy moves and oscillates, you know, within a framework that includes these more dangerous and potentially risky and aggressive steps, that there -- that much more care and attention needs to be given to the security architecture of this "gray zone."

But I was commenting on the trends of the last year, and I think that, you know -- and so my disagreement is not about the potential threats that exist; it is a -- it's sort of more of an attempt to -- (inaudible) --

BREMMER: But, Adrian, here's --

KARATNYCKY: -- the moment -- (inaudible.)

BREMMER: -- here's a question, because I'll be curious what your answer is: If Ukraine was successfully democratizing itself, and moving in a pro-Western direction -- and let's not even say NATO membership, let's say it's successfully aligning itself with the West in the way most people in this room would define success, would the Russians remain benign and relaxed?

(Cross talk.)

BREMMER: Or as benign and relaxed --

(Cross talk.)

BREMMER: -- as benign and relaxed?

ASMUS: Or would they become less benign and relaxed?

KARATNYCKY: Yes, clearly, if this breached the security relationship. That is to say, if NATO began to appear again on the horizon as a serious option, from both sides -- meaning, from the Western side and from the Ukrainian side, I think Russia would ratchet-up the rhetoric. And Russia does have one area of particular danger where it can exert influence, and malign influence, and that is in the Crimea -- both ethnically, as the only predominantly Russian, ethnically Russian part of Ukraine, and in Sevastopol where the Black Sea Fleet is substantially --

BREMMER: Let me push you on this Ukraine point of it, because, of course, we are in the middle of the elections period. We thought it was going to be over but it's not quite over yet. You were just there are before the votes were counted.

And you know, we have Mr. Yanukovich, who clearly, historically, has been much more aligned with Moscow, with the Russia-speaking area. The Ukrainians are under massive economic strain. They're probably not going to get an IMF deal done. The Russians will be in a position where they'll have them over a proverbial barrel.

Given what they've done with them on the energy on the downstream, what might we see from this Russia-Ukrainian relationship, going forward? What's it look like?

KARATNYCKY: Well, first of all, I think it's wrong to view Mr. Yanukovich and his team as what they were a decade ago or what they were five years ago. Their period in political exile, when they were regarded by the Kremlin as political failures -- and Mr. Yanukovich left Ukraine fearing prosecution in the months immediately after the Orange Revolution; relocated himself in Russia where some of his associates, intimates have told me that he was treated very rudely and very severely as a failure. And this has created a certain kind of a distance between him -- a personal distance between him and that political elite.

Secondly, the Donetsk economic elite has acquired great wealth. They have started investing more so in countries like Italy and Poland, and moved -- Switzerland, and moved Westward, in terms of their economic -- in search of economic opportunities. They are determined to bring Ukraine into the European Union.

So I think that the political balance in the Party of Regions has shifted. And actually, if you look at some of the more rabble-rousing Russians who were involved in the Orange Revolution, like Sergei Markov -- kind of a hawk of the Kremlin on, you know, on the near abroad, he spoke very calmly and quietly and said, 'We're going to have a difficult relationship with Ukraine,' you know, meaning a difficult negotiating relationship with Ukraine. He adopted a more pragmatic set of expectations.

So I think Russia is happy to be past the Yushchenko period, because they regarded that as a sort of a personal battle between Putin and, I guess, the Bush administration over influence, and Putin didn't take failure very well. But now (that) Mr. Yushchenko has receded from the scene, and most of the leaders of Ukraine -- even those who collect their votes in Central and Western Ukraine, in the ethnically Ukrainian areas, have a much more moderated view, partly because the West has not stepped up, so to speak; partly because they need to find resources, and not to have Russia creating and stimulating additional economic crises.

But the end result is that it seems that both the Russian side and the Ukrainian side, across the political spectrum, are moving towards a more pragmatic approach to resolving their economic predicament.

BREMMER: So let as both of you a question that kind of gets around the topics that we've been, we've been nibbling on, which is that this is kind of over-determined, right. I mean, we see Russian behavior in the near abroad becoming, in a sense, easier for the West to tolerate.

And there are several things that you've all intimated are going on: First, some outcomes that have been better, from their perspectives, in a bunch of countries; second, the United States playing less of a role -- distracted, incapable, whatever; third, oil prices and Russian economy clearly not where they were before the crisis.

If you had to rank order, which of these is sort of determinative or most important, to the extent that you could -- and make a quick comment on that, where would you go?

Ron?

ASMUS: Well, look, I mean, Adrian knows more about Ukraine than I do, and I defer to him.

And, frankly, Ukraine, for the Russian elite, is much more important than Georgia. But when I look at Georgia, the Southern and the Northern Caucasus, I see the Northern Caucasus being destabilized by Russia's own policies. I asked myself, in five years, if the Northern Caucasus continue to go the way they're going, will that lead to a more aggressive or passive Russia?

And I fear the answer could be a more assertive Russia, but I'm not sure. And I see the ingredients, and I see that Russia didn't achieve its war aims in toppling this Georgian government, and it hasn't given up even though it doesn't have the opportunities or isn't pursuing them perhaps as aggressively. And I see us with no strategy, with not much of an international presence on the ground. And part of my book is a plea for us to learn from our own mistakes, and get smarter the next time to prevent another conflict from happening.

So about the Caucasus, I'm not sanguine at all. In terms of the overall -- I mean, it was interesting, after the Russo-Georgian war it was common to run to a Russian who said, 'This war was not only directed against Georgia, it was directed against us,' sort of, one interesting empiric example. All the graffiti left behind by Russian troops in Georgia was it's not about Georgia, it was about Bush, McCain, the EU, NATO. And when you talk -- when you talked to the Russian generals, they kept on talking about how they defeated "a NATO country."

Well, Georgia wasn't a NATO country, and we kept on saying we had nothing to do with it. But that's not the way they saw it. But they thought they had stopped us dead in the tracks. And there were numerous articles published in the Russian press: 'It's over;' 'The West will never enlarge again;' 'We've stopped it.'

Well, two weeks ago Senator (sic) Clinton gave a speech -- the Obama administration, in the first year, didn't say much about this issue, and two weeks ago she gave the first speech in which she unequivocally affirmed that NATO enlargement was a good thing, that it created stability for the West and for Russia, that the door remains open, that Medvedev's security proposal is bad, and et cetera, et cetera, et cetera.

And I remember it showing up on my BlackBerry, and I looked at that and I said, I could have written that, you know, sort of -- but this is the first time they, sort of, took a stand. And the next day the Russian commentary was not that favorable, as you might expect. So it's not over.

And the irony here is, if these countries -- and the irony here is, if these countries fail -- if they succeed, we recreate the -- it exacerbates the tension and the conflict. As long as they're fumbling about, and they can't get their act together, and they're not moving West, the Russians aren't worried. But I think the trajectory of Ukraine and the trajectory of Georgia, if nature is allowed to take its course, these countries are moving Western in a very helter-skelter, chaotic way, and they are never going back to Russia's sphere of influence voluntarily.

So if the Russians see what I see, I see the long-term trends not necessarily culminating in full NATO, EU membership. But this younger generation of Ukrainians -- Adrian, you know this much better than I do, they're much more European or Western then their counterparts in Russia. This younger generation of Georgians is never going back.

So I think we're deluding ourselves if we think this problem is going away. It ain't going away.

BREMMER: Let's go "big picture."

Adrian, let me ask you, then, this question. I mean, Russians, they're viewing this strategically: Putin's in power for a long time, and probably will be; Russian demographics are horrifying; the geopolitics, long-term, probably not moving in their favor; we haven't even mentioned China.

Knowing all of that, how do we continue to have -- how do we hold the sanguine view about what they're likely to be doing in this stage, in this sphere of the world?

KARATNYCKY: Well, I mean, I do think there are a number of items to worry about. But on the other hand, I think we should also be open to the current trend lines. That is to say, 1) broadly speaking, the pitch -- high pitch, anti-U.S., anti-Western rhetoric has been diminished substantially on Russian television, and in the Russian media, and in articulations by the Russian leadership. Foreign policy issues related to the Russian near abroad are virtually invisible in the speeches -- the last two speeches of Medvedev's "the state of the nation" addresses, and certainly compared to Putin.

But that can change very rapidly. And if you have a conflict -- we also see another trend, which is that Olga Kryshtanovskaya, this excellent Russian sociologist who tracks the Russian political elite, and has a long-term model, and tracks their biographies, saw a huge influx of the security and the military portions of that elite occupying civilian positions. She said that reached a peak at about 2007.

They still had a substantial influence, but it has been on the decline, and a substantial decline since Medvedev took over. This is not to say that Medvedev and Putin are in opposition to one another, but there is more nuance in this. And there is, I think, a certain kind of a discontent that the security role in governing such a complicated country, particularly in an economic crisis, may require some adjustments, and those adjustments appear to be made.

So all that said, you know, I'm not in disagreement with Ron about the potential for trouble, and for reasons to be worried, and for important reasons for the United States to be engaged. On the other hand, we should view this as an opportunity. The rhetoric is lower. Somehow the U.S. and Western interest in the Ukrainian elections and the Russian interest did not become an object of conflict.

There may be a way of modulating the relationship to -- but it requires, I think, the presence of Europe, the presence of the United States, but more so, I would say, the presence of Europe in the efforts to bring Ukraine more fulsomely (sic) into the integration processes of the EU. That includes a, you know, a free-trade zone that they're talking about, which is a high priority for the Yanukovich administration and for the entire Ukrainian elite.

BREMMER: I mean, it's part your expertise, but it's part the legitimate situation on the ground that I think you're both more concerned about the Georgia situation than you are on Ukraine. And I guess --

KARATNYCKY: In the short term.

BREMMER: In the short term. And I guess -- well, and Ron seems to be saying the longer term as well.

And the question here is, you know, if your plea in your book, and tonight, is that the Americans need to be much more engaged so that we avert a potential real crisis in the South Caucasus, how does one do that? Assuming you can get any involvement at all, how does one do that and not create the kind of insecurity, backlash, and the rest that Adrian clearly seems to think was behind some what caused the Russian machinations to begin with?

ASMUS: There's one thing we need to at, sort of, the macro level, and there's something we need to do at the micro level.

At the macro level, you know, we made this huge investment in building this post-Cold War piece on the assumption that we would lock in peace in Europe, then we could shift and deal with all these other problems in the world. And after September 11th, the combination of the, sort of, "big-bang theory" of enlargement, Prague 2004 -- (inaudible) -- coming in -- September 11th, we thought 'Europe was done, now we can focus on these other issues.'

And now we see Europe's -- you know, fissures appearing in the foundation of Europe. But we've got Afghanistan, Pakistan, Iran, you go right down the list, and you can see how the United States is torn. If you live in Europe, like I do, you can feel the demand, 'America, come back just a little bit, and reinvest, and help us restabilize a situation that could get worse.' And you can see the inattention of an America that's pulled into these bigger problems. We have to somehow find it, I believe -- a modest reinvestment to restabilize Europe and prevent it from becoming more unstable.

On the ground, what we're talking about for the next five years is not enlargement. We're talking about more presence. You know, looking back, and with the benefit of hindsight, you know, the EU could put 200 monitors on the ground in Georgia within six weeks of the war. When the Georgians asked for 200 monitors three months before the war, neither we nor the EU could put a single person on the ground. Had we done that then, had we made a fraction of the commitment there that we -- with the attention we spend on the Balkans, I believe this war could have been averted or stopped.

So now, you know, we need to put "presence." We need to have people; we need to -- let's avoid the big conflict over membership, which triggers all sorts of stuff. Let's think more about partnership, and investing, and helping these countries get stronger, and helping them do reforms. In Georgia, we should actually have many more monitors on the ground; and yes, there should be Americans in with the Europeans; and yes, there can be other countries too.

But there's a number of relatively low-cost, modest steps we could take that would stabilize Ukraine, which I would -- would stabilize Georgia and the Southern Caucasus, stabilize Ukraine. But above all, you know, we need a new narrative about why it matters. You know, in a sense, we took the Central European experience -- and I often say, had you asked me in 1998, when I was in the State Department in charge of NATO enlargement, all these other things, had I ever thought about Ukraine and Georgia joining NATO, the honest answer was "not really." It wasn't on my radar screen.

So I thought it was a miracle we got Poland into the Baltic states, and everyone else, and I remember when the first Georgians came to me and said, 'Will you come visit us?' And I was saying, oh my god, you know, this is a bridge too far; and I ended up going there. But we sort of stretched the paradigm and it snapped. And the reality is, Georgia isn't Slovenia and Ukraine isn't Poland. And we need a new consensus in the United States and in the West on what our goals, what our strategy is. And until we have that debate, we're not going to have a coherent strategy.

And that's why we couldn't come up with 50 or 100 monitors. That's why we couldn't spend $50 million, and instead we ended up spending a billion dollars to help Georgia after the war. You know, we couldn't do crisis prevention effectively because we were too divided. And that's one of the -- (inaudible) --

You don't have to -- the president of the United States doesn't have to get up every morning and think about Abkhazia. That's not what people like me are calling for. We're calling for a modest reinvestment of American political and economic leverage and muscle to stabilize the situation on the ground; help rebuild these countries; wait and see how the debate in Russia goes.

Maybe in five or seven years we'll have a more interesting Russian partner than we have today, and we can try to chip away at some of those bigger disagreements. But we should be investing more on -- and we should be more present and active on the ground in Ukraine, in Georgia, and all these places.

BREMMER: So before I open up --

ASMUS: Without triggering the Russian hyper-, you know, reaction.

BREMMER: Before I open up to questions -- I mean, we are the Council on Foreign Relations here, and we're looking at this and discussing this, thus far, mostly from the Western perspective. I guess I want to, before I open it up, I want to ask from the Russian perspective for a second. Which is, don't the Russians, at the end of the day, have a point? Can Europe really be safe and secure in the absence of Russian buy-in, and voice, and vote in European security? And what does that mean for us?

ASMUS: Look, I always say, the project is not complete -- the project I've spent my life working on is not complete until we have a Russia that is part of the European security system. Now, the question is, on whose terms does this Russia integrate? And the reality is, is this is not the kind of Russia we wanted as a partner, and it's not the kind of Russia that wants to integrate into this community.

I mean, I was struck, I was recently having dinner with a very well-known Russian political strategist -- and, you know, I always end up defending myself as not being anti-Russian, because they all think I'm anti-Russian because of everything I've done -- and I laid out to him, you know, my view, which I've held for 15 years, from the beginning of all these debates, that at the end of the day, Russia comes into this process as it becomes a more democratic country -- (inaudible) -- He said, "No, you're the worst of them all. You're the most aggressive, because your goal is to change Russia."

BREMMER: You're only "anti" a certain kind of Russia; it just happens to be the Russia we have right now. (Laughter.)

ASMUS: Exactly, you know. (Laughs.) (Laughter.)

BREMMER: Well, you're on record here. So I mean this is -- you're in trouble, sir.

ASMUS: No, no. But see, our strategy was premised on the fact that we could keep -- we could anchor these countries to the West and leave the door open to Russia, and a more democratic, pro-Western Russia would emerge that would want to join our community. And our answer was always, when that happens we will change our structures to accommodate Russia. But the Russia we have today doesn't want to do that.

BREMMER: Adrian, (come now.?)

ASMUS: It wants its sphere of influence that is directly in contradiction to everything we've been talking about. And that's the issue we face.

KARATNYCKY: Precisely. I mean, the real trouble is the nature of the Russian discourse. I mean, the Russian discourse oscillates between some potential interest in the security -- the European security architecture, and some deeper economic relationship with the European community. And at the same time, it also has these Eurasianist trends of Russia as a completely different civilization, a Russia with a completely different identity.

But, pivotal to this, I think, is the direction of Ukraine. And the Ukrainian decision to be a European state and to buy into the European identity is one of the consensual positions of Ukrainian public opinion and of the Ukrainian elite.

BREMMER: And you think that's happening?

ASMUS: The one difference is --

BREMMER: You think that's happening?

ASMUS: Yes. Half of Ukraine doesn't understand that Russia doesn't have that view. So it believes that you can comfortably have a close, fraternal relationship with "our fraternal Slavic Russian brethren," and at the same time integrate smoothly into at least the economic and political structures of Europe. Russia is not quite there, as we know, and that is the latent source of future tension.

BREMMER: I think this is the crux of the debate, and it is a good time to open it up to questions. So please, I'm going to ask everyone -- I have rules around this, to wait for the microphone; speak directly into it; please stand, state your name and affiliation; one question only.

I'm going to start in the back, right there.

QUESTIONER: Jamie Rubin, Columbia University.

Ron, nice to see you.

You said that Georgia is not Slovenia and Ukraine is not Poland, but some very prominent American said that "we are all Georgians." (Laughter.) So where do you -- you know, in trying to create a consensus to achieve all these objectives, how do you deal with the fact that many people are already way out there? And how do you talk about Georgia with a -- if it's not a Slovenia, and Ukraine, if it's not a Poland?

ASMUS: I think what I meant by that, Jamie -- and, of course, Jamie was a central part of the team in the '90s when we were doing this -- we spoke about a return to Europe. And when we said a return to Europe, Europeans thought 'Poland, Czechoslovakia, Hungary coming back.'

When we now say 'a return to Europe,' they weren't thinking about Georgia and Ukraine. And, frankly, we need a new and a somewhat different strategic, and, I would say, moral narrative about why these countries and these regions matter, because there is no consensus in the West today.

And I think, as you know, we worked very hard in the '90s to make sure that the United States and Germany were fully in sync. And when the Russians backed down and acquiesced to NATO enlargement, it was because we were completely together. We worked together on Ukraine and Georgia.

The Russians ran circles around Western disunity in the run up to this war, because people aren't even always sure whether Georgia's part -- it starts with, 'Is Georgia part Europe?' Now, I think the answer to that is clear, but not everyone thinks the answer to that is clear. So we have -- and we've sort of lumped Ukraine and Georgia together, and in reality they're very different. In reality, this trajectory of Ukraine today, and trajectory of Georgia are different.

So we have to go back -- you know, and the good news here is a lot of this lies in our own hands. We have to come up with the next phase of the vision and the strategy, and it has to be -- it has to make sense. You have to convince people. And I believe that it would be a fundamental mistake to give up those values we embraced 20 years ago just for the short-term interest of accommodating Russia to get cooperation on Iran or Afghanistan. I think you play it long. You wait for a different Russia to emerge. You defend those principles.

But the short-term necessity is actually to preserve the Ukrainian and Georgian independence, and see -- let those countries make up their own mind. But we need a different -- we need to, sort of, fight the battles, or have that debate all over again. Because I think that if we're honest, the consensus on enlargement collapsed. It's broken today and needs to be -- if it's going to be continued, it has to be put back together, in a convincing way, to build the majorities we had, bipartisan, across the aisle, across the Atlantic. It's not there today.

BREMMER: How much harder is it for America to do this, given that Saakashvili is there?

ASMUS: You know, look, I think Saakashvili is a extraordinarily gifted, somewhat mercurial tough guy. But, you know, he's -- let's not turn the victim into the problem here.

This is a guy who turned his country from nearly a failed state into a political and economic success story; was and still is the best hope for a democratic breakthrough in the region. Is not perfect -- obviously, had made mistakes. I think almost everyone here probably thinks what he did on August 7th was a mistake. But, you know, read the first chapter of my book -- it wasn't that easy. He was convinced he was being invaded. His intelligence told him he was being invaded. Twenty-five thousand Georgian lives were at stake.

And, you know, they had the names of the Russian colonels in the regiments coming through the Roki Tunnel, and he thought they were coming after him. Now, we still told him, 'don't do it.' But had you asked me -- having spent all that time in Georgia, if, put in that situation, would this guy fight or back down, I would have told you he's going to fight, even if we think it was the wrong decision.

Now, the question for President Saakashvili is -- now, again he's back up to almost 60 percent in the polls. The Russians never believed he would survive. And Ambassador Lomaia is here, and there's a story in my book which comes from him, he was in Gori negotiating with Borisov and the generals during the occupation, and he asked the Russian generals, "Actually, what was your mission?" (Laughs.) "What was your mission? Why are you here?" And without any fuss, they said, "Our mission was to cut the country in half, and invade here, invade there, cut off the ports, and wait for your government to fall."

Well, that's a pretty clear mission. That wasn't defending peacekeepers in South Ossetia and Abkhazia; it was regime change. And I bet that they never thought Misha would last six months. And now he's 18 months; he's going to serve out his term.

But can he reinvent himself, regain the moral high ground, reform Georgia, and sort of gain some of what Georgia obviously lost? That is the big question that, you know, is there. And I don't know if he can do it. We urge him to do it -- a lot of us urge him to do it.

BREMMER: But do you think Russia has abandoned the regime change --

ASMUS: No, I don't think Russia has abandoned the regime change at all. I think they were surprised he survived. I think they're still trying to -- they're trying to delegitimate and isolate him.

And, look, you know, let's be honest here, President Obama hasn't called him yet. He put 1,000 troops in Afghanistan. If any other European leader would put a thousand troops in Afghanistan, they would have had multiple phone calls from the White House by now. Joe Biden is the guy who sort of deals with him.

But what we -- I mean, Europe is never going to have -- galvanize itself to come up with a strategy in wider Europe, in the neighborhood, if the Americans aren't there with them. I mean, that is my firm belief. And until we start leading more on this, we're going to be all over the map.

And I think the best way to have influence over Saakashvili and the Georgians is to be present on the ground, and hug them close. And, you know, it's tough love. But to do tough love, you have to do both the tough part and the love part.

BREMMER: I knew I shouldn't victimize Saakashvili -- (inaudible) --

Right back there.

QUESTIONER: Herbert Levin (sp).

This is not why I raised my flag. I just would remark that I have no hope for the EU, since they turned down Turkey -- which doesn't mean they won't be a very successful, selfish, inward-looking customs union.

But my question is on Russian nuclear policy. During the worst times of the Cold War we had considerable cooperation with them against proliferation. They seem to be turning us down, in terms of anything reasonable on Iran. Could you talk about Russian nuclear policy now?

BREMMER: Adrian, do you want to address?

Do you want to address?

ASMUS: Well, I think, I very much hope -- I mean, I think we all hope that -- and let me be clear, I support the reset policy. I think, in order to have -- you need this -- in order to have leverage with the Russians you need to be doing business, and be talking in areas where they have equities and we have equities.

But it's interesting how, what people thought would be a relatively quick, you know, START agreement, has become very hard, and much more difficult than we expected. If we can't get that done, and let's see, then, how easily we can ratify it or not ratify it. It just shows you how complicated and difficult this relationship remains.

But, you know, of course, the hope was you could -- that would sort of change the tone -- to some degree that's happened already, then you could tackle Iran and Afghanistan; and then, at the end of the day, you would deal with the "tough nut" of wider Europe. Well, I don't know, history usually doesn't segment things, and make them that nice and neat for policymakers that deal with them in sequence. They usually come at you, unfortunately, all at the same time.

But I'll just leave it (there. ?)

KARATNYCKY: Well, I mean, but is a little bit of progress. I mean, three years ago there were some Russian officials that were trotting out the idea of letting Iran accede to the Collective Security Treaty Organization. So we've moved a little bit further --

ASMUS: Oh yeah. No, no, I mean, we've come a long --

KARATNYCKY: -- in perceptions -- (inaudible) --

BREMMER: And today we did see some movement, in terms of sales of weaponry to Iran, following Bibi Netanyahu's trip up to Moscow. So maybe they'll be on board for the sanctions regime.

ASMUS: No, but I mean I think it was, Foreign Minister Lavrov was over here in New York, or in Washington -- I read these transcripts in Brussels, I can't remember where it was, but, you know, he was asked what Russia has to do for the reset. And he had a hard time answering that question, because for many Russians the reset is about us correcting our flawed policies.

And flaw number one is NATO enlargement. And I always say I have a no-guilt attitude toward NATO enlargement, because this is -- the greatest irony of them all, is if -- you try to imagine you were Russian, and you look at your borders in Europe, Asia and the South, which border is the most stable? Your European, Western borders are the most stable.

Has the West made it more or less stable in the last 20 years? Well, I think we've made it more stable. We have created the only stable border that Russia has. But yet, in the latest version of their military doctrine, is the threat from the East? No. Is the threat from the South? No. The threat from the West? Yes.

How do you move beyond that? How do you convince the Russians that they can have influence in the Caucasus through partnership and cooperation, and not through invasion, manipulation and everything else? The person who comes up with a strategy that can gradually move Russia in that direction deserves the Nobel Peace Prize. But that ultimately has to be our goal -- that they deal with their neighbors differently --

KARATNYCKY: I do want to make one --

ASMUS: For their own self --

(Cross talk.)

ASMUS: -- out of their own self-interest.

KARATNYCKY: One point on the NATO question, as it relates to Ukraine. I think that the consensus of the Ukrainian elite, and of this new group that will occupy the presidency, and will be in a coalition government, the Party of Regions, is that they do not want the door to NATO closed. They are convinced that they don't want to push towards NATO. But they would regard it as a terrible signal for them -- a terrible signal of potential isolation, a terrible signal to Russia if that option were to be taken off (the table. ?)

BREMMER: So we have -- (inaudible) -- EU analogy: perpetual candidate sometime in the (futuredom. ?)

KARATNYCKY: They're willing to -- they need that to find the kind of political space, or geopolitical space in their relationship with (Russia. ?)

(Cross talk.)

BREMMER: So maybe this is the new model.

ASMUS: The weak EU has done visa facilitation and free trade agreements over the last -- or were moving that. At the moment, what we actually want the EU to do -- visa facilitation, free trade agreements, they are plodding along in their own typical EU way, but actually moving. They have 200 people on the ground in Georgia. We don't have a person on the ground.

You know, before we always describe them as utterly incompetent, they're taking more risks than we are at the moment.

BREMMER: We have one in the back here.

Yes, sir.

QUESTIONER: Peter Green, from Bloomberg News.

I wanted to ask you, Ron, you have a rather, as you said, optimistic view of the U.S. role in all this, and how it will all play out. But given all the challenges the U.S. is facing now, which you named -- wars in Afghanistan and Iraq, economic depression in the U.S., a recession, big problems with our China relationship, North Korea, et cetera, what hope is there? What signs are there?

And, realistically, what could happen in the next four or five, eight years that would show that the U.S. is committed to Europe in the way it used to be, and that could help reassure Russia, and maybe even bring some of these former Soviet states back into their own free orbit?

ASMUS: I think the goal of building Europe whole and free, it would be a fundamental mistake -- we were premature in declaring victory. The job wasn't -- and I was one of those, you know, to be self critical, who thought, sort of, it was done. And now we realize it wasn't quite done. And I think it would be -- it doesn't require that much. We can walk and chew gum at the same time.

You know, I remember once, in a meeting with President Clinton in the late '90s, when Senator Stevens came in -- who was one of the biggest opponents of all this, and he sort of lit into the president and said, 'Stupidest policy I've ever heard of, NATO enlargement; we should be pulling out of Europe, not making more commitments in Europe; what the hell are you doing?'

This is when I realized Clinton was smarter than all of us, because he didn't use any of his talking points, he simply said, "Well, Ted, you know, you may be right that, down the road, China is the biggest problem. And that's why NATO enlargement is so important, because what I'm trying to do here is lock in peace in Europe once and for all, so we never ever again have to fight a war there. And this Europe, then, will start to raise its geopolitical horizon and become our partner. And, if and when, we have to face these new challenges, we won't be all alone, and maybe we'll have a few Europeans at our side."

And I still think that's fundamentally true, that we will never get Europe to become a more global partner as long as it has instability at its doorstep. You know, this is a crisis prevention strategy I'm calling for that will save us money, and blood and treasure in the long-run if we do it right. If we had put 200 people on the ground in Georgia, and spent $150 million, and paid a little bit more attention, we wouldn't have had to spend a billion dollars after the war trying to save Georgia from collapsing, et cetera, et cetera.

So I am an American. I am optimist. You know, I think you can -- you know, people like me are going to make the case, and we'll see if we prevail or not prevail in this debate, but that's what it's -- you know, that's why I wrote, I wrote my book because everyone jumped over this war, and swept it under the rug, and wanted to forget it without debating what really happened and what it meant.

BREMMER: Of course, instability in Europe nowadays includes places like Greece and Spain.

But, Adrian --

KARATNYCKY: Well, I do want to say that you laid out a kind of a strategic and altruistic vision of a Europe, whole and free. But there is also the element of electoral politics, meaning American electoral politics. From my interactions with Polish diplomats and with Ukrainian diplomats, there is this palpable sense of the retreat of the United States from an active and engaged effort to resolve -- and try to resolve constructively this gray security area.

Now the Poles have a greater comfort that they're in the NATO Alliance, but -- and the Balts are a little bit, there's an anxiety there. So it just seems, if you keep -- look at the electoral map of the United States, and assume that we're going to have tightly-contested elections. If I were arguing for Republican candidates, I would argue, look at the East- and Central-European ethnic populations that are in Michigan, Pennsylvania, Illinois --

BREMMER: Illinois, Wisconsin, Minnesota.

KARATNYCKY: -- in votes where -- Ohio, 5,000, 10,000, 20,000 may determine the Electoral College vote, specific appeal to the insecurity that their brethren feel, and that they, observing the countries of their origins, or the origins of their ancestors, may have some kind of a resonance.

The Clinton embrace of NATO expansion was -- in the campaign, was not linked to a fully-formed geostrategic approach to the world. It was partly linked to an attempt to mobilize that portion of the electorate in those battleground states. I know because I had my finger in (it. ?) (Laughter.)

BREMMER: Right here. Yes, please. Right in front.

QUESTIONER: (Inaudible.) I'm working Energy Intelligence.

How energy, and Europe's energy dependence towards Russia, plays in your stability picture?

BREMMER: That's Adrian. You can start with that. Especially given the Ukraine issue, we haven't really addressed the number of times that these guys have been shut down by the Russians.

KARATNYCKY: Yes, well, Ukraine, as you know, is a transit nation. But I'll start with the announcement last week, or the reports last week that ENI was renegotiating downward the long-term gas relationship with Russia.

There is a sense that people are shifting to other sources of energy. There is a sense that with the, sort of, the shale oil and LNG, and other displacements of those markets, that the Russian vision of a completely dependent Europe may be something very different; that Russia will need to secure those markets.

Russia is now spending a lot more on, you know, building pipelines to circumvent Ukraine, particularly South Stream, than it is in exploration and capital investments, and ensuring stable energy supplies. Russia has politicized its approach to energy to such a degree that it itself is going to -- at least in the view of some experts, to suffer economically.

The new Ukrainian government will make a bargain and will try to resolve this issue. They want to solve, comprehensively, by creating a multinational European-Ukrainian-Russian consortium to ensure the reliable transiting of natural gas to Europe. They want Russia to abandon the South Stream project, which they regard as really competitive with their role as a transit country.

It's a hugely expensive project which, in their view, could be diverted to both modernizing the Ukrainian pipeline system. They have no -- they've shown no anxiety about North Stream, which is related to supplying, you know, from sources -- from new sources, along new pathways, and for new demand.

So I think there are, there is a possibility -- with this less-politicized approach by the Ukrainian leadership, and with the sort of the bracing, sort of, slap given by the severe, the severity of the Ukrainian economic crisis -- to construct some new stabilizing relationship, which, I think, you know, Europe would be pleased with, and potentially could help divert needless expenditures by Russia and by its European neighbors in bypassing the Ukrainian --

BREMMER: Now, I want to turn this to the bigger energy picture, for Ron.

Ron, you are not an apologist for NATO enlargement. Are you an apologist for U.S. energy policy in the region, in the sense that that, of course, for the near abroad, is something else that the Russians will historically give a lot of stick about -- that the Americans are interested in multiple pipelines as long as they move away from Russia, and they take Caspian energy that belongs to them someplace else.

To what extent do you think that there are legitimate insecurities on Russia's part there?

ASMUS: I don't feel too much guilt about TBC (sp) or anything like that either, I have to admit. But you know, this is -- if you want to do what I'm -- I mean, if I was king for a day and had three wishes, wish number one would be a -- why is Europe so divided in how to deal with Russia? A big chunk of that answer is energy.

And until they have -- they will never have a -- you know, living in Brussels, and when I have to explain the -- or try to explain the EU to people who don't live in Brussels, there are some issues where the EU has consensus and the machinery can act, and they act with reasonable effectiveness, depending on the toughness of the issue.

And there are other issues where they're so divided, and they can't act, and they just get up there and mumble because they're too -- the differences across the union are so big. Russia is one of those, and a big chunk of that is energy. So until they have an energy policy, there will not be a Russia policy.

So if you want to have a common Russia policy, a balance of engagement and toughness, you have to help Europe get to that energy policy. And I'm glad that we now have Dick Morningstar as our envoy, who knows the EU, who knows Russia, who knows energy. And, you know, just like TBC (sp) would not have happened without us, you can judge Nobuko's chances in light of unconventional gas and everything differently.

But none of this is going to happen without us playing a helping, facilitating role. That's just the reality.

QUESTIONER: Hi. Todd Johnson (sp), from -- (inaudible) -- Consultancy.

I'm wondering if you can comment on, I think, most post-conflict appraisals were fairly uniform in the fact that the Russian military's performance was fairly substandard in Georgia. And does that performance send, sort of -- particularly, combined air-ground operations, and such, is that going to restrain Russian militarism, sort of, opening up, as it did the major deficiencies? Or will it push forward major reform efforts, so five, seven, 10 years from now we see a Russian military that's much more modernized than we would have seen had the war in 2008 not have occurred?

ASMUS: Well, I think now almost the entire chain of command in the Russian operation against Georgia has been replaced or fired, even though initially it was this huge success. Now they're all gone. I think every one of them has been replaced or fired -- so hardly a vote of confidence. But whether -- but it's one of the big debates in Russian military reform.

But, look, the reality is if you're Georgia -- and I, you know, I sat at the table, and (Kai ?), who was there many times, with leading Georgian officials debating: Do we do a peace proposal? Do we buy Stingers on the black market? What do we do? And I was -- I always have been of the view, even if we had sold them Stingers, even if the Georgian army was better, they would have fought for 10 days as opposed to five days, or 12 days as opposed to five days. They would have killed more Russians, more Georgians would have been killed, but the result would have been the same.

Georgia -- all this talk about the "Israel model," or the -- it's all, in my view, baloney. Georgia's only chance -- and my advice to the Georgians is very clear, it's: Set aside the conflicts for the time being, with -- (inaudible) -- reform your country as fast as you can; and try to somehow get under our security umbrella in one form or another to get deterrence, because deterrence works.

And that's the way you ensure Georgia's safety. It's not by spending 6, and 8, or 10 percent of GDP on defense -- although, you know, if they could have closed the Roki tunnel maybe this -- the whole history of this war would have been different. But I actually don't want them to think that way. I want them to think -- I mean, if you ask me, I think it's in our interest to get them to think differently, because the Russian army is always -- even an incompetent Russian army is strong enough to beat a little Georgian army, you know, even if it was better trained and better organized than it was in August, 2008.

But I think, look, I mean, we have to change -- we have to think long -- I mean, the great tragedy is -- let's imagine that you could stabilize the Caucasus and open them up, and you could solve Turkey-Armenia, Abkhazia-South Ossetia, and Nogorno-Karabakh. There's so much potential in this region. You can imagine standard of living doubling within 10 years, and trade routes, north, south, east, west -- who would be the greatest benefactry (sic) of that kind of opening up and stabilization? Russia. If it would think differently.

If it would think differently, and realize it can have influence by being a major economic player, that stability can actually bring it influence. And that is still the $64,000 question: Can we nudge, push, cajole the Russians? And will a new generalization of Russians emerge that realize that these policies are sowing the seeds of greater problems for them and not creating more influence, really, down the road?

BREMMER: Let me close up with one -- with a big-picture question, which is that, I mean, if you're sitting in Moscow right now, it seems to me two big-picture things are happening globally that are affecting you as a Eurasian power, right:

The first is, the United States is becoming sort of less involved, less engaged in this part of the world, showing less capacity and willingness to do so. And that's probably structural -- at least you can make a guess or a bet that it is. And secondly, China is becoming much more so, from an investment perspective, from a geopolitical, a geostrategic perspective, spending a lot more money, a lot more involved in things like water, on demographics, all the rest.

Over the long term, how do those two things affect the way the Russians are likely to think about their role in the region? Does it make them turn more toward Europe and the West, because China is more of a threat? Does it make them try to engage the Chinese more? How does it make them think about the near abroad and their role as a Eurasian power? Kind of nice, big open-ended question that we can end with.

And let me -- I'll start with you, Adrian.

KARATNYCKY: Well, I think that the great obstacle for Russia, to address these two geopolitical realities, is that the ambivalence of Russia about what it can still accomplish in its former Soviet space. I think that Russia is now turning a kinder face to Ukraine, and to Moldova, and so on, but the end-game is still the same: It wants to restore either hegemony, or potentially a sphere of influence, or potentially reintegrate these countries into some larger entity that will give the, you know, Russia more resilience in the face of these long-term trends: to become a kind of an equal partner, a substantial player, balancing Europe, for example, as a long -- and being able to stand up to the challenge of China.

I believe, given what I know of the trends in the largest country that is pivotal to Russia's ambitions of in-gathering, that this will be another folly. This will fail again. They've had that dream when Mr. Kuchma was elected president in 1994. He came from the East. They thought the East would in-gather and bring them closer. It didn't happen. The same trend is going to occur.

And I believe that that development, if it is, frankly, encouraged and nurtured, your Ukraine's European option can help avert Russia's gaze from this hopelessly impossible ambition, to the more pragmatic one of integrating in a concert of, you know, prosperous states, and working with them in a closer way, in the way that Ron had articulated -- in integrating Russia into the European sphere and, therefore, giving it greater resilience in its relationship with China.

BREMMER: Ron, end big-picture with this.

ASMUS: Well, you know, the original strategy after the end of the Cold War was to sort of create a new set of structures on the ground in Europe, recognizing that Russia didn't like some of it, in the hope that Russia would move on and we'd build this broader partnership which would be focused on doing things together in the Middle East, outside the (Europe- ?) Atlantic area.

It didn't quite work. But I think, fundamentally, our long-term strategic goal -- you know, if historians look back 50 years from now and say that South Ossetia and Abkhazia led to a major estrangement between Russia and the West that lasted 20 or 30 years, that is not a success story. Let's be honest, that is failure of strategic imagination. So our goal still has to be to convince the Russians that we're not their biggest problem; we are their potential partner.

But they have to -- there have been to be certain preconditions and rules for this partnership, which is why we have to keep these doors open, even if we have to be tough with them on certain issues where we think they have done things that are wrong, and which violate the (rules. ?) But, over time, you have to bank on some Russian leaders figuring out that their problems in the East and the South are far bigger than their problems in the West, and that we are their natural partners that they will ultimately turn to, and we will ultimately find a way to work together.

And that has to be the long-term goal. But I think you have to just -- I believe in, you know, staying tough on the principles, because I think the day -- I mean, I'm afraid that Russia is on -- and, you know, Ukraine's success is one of the greatest potential avenues of influence, if you can put it that way, as you know, for encouraging Russia. Because if Ukraine goes European, it will have a huge impact on Russia, in a positive sense, from our perspective, and it will help, ultimately, pull Russia in the right direction.

So that has got to be the long-term direction, but it's clear it's going to be harder and take longer than we thought.

BREMMER: Well, thank you very much, Ron.

We aren't all Georgians, but we can all buy Ron's book. (Laughter.) It's available outside.

Please all join me in giving these men a -- (applause).

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THIS IS A RUSH TRANSCRIPT.

-------------------------

IAN A. BREMMER: Welcome and good evening, everyone, to this New York Council meeting of "Russia, It's Neighbors, and the Future of Post-Cold War Europe." I'm delighted that this topic -- we all are, has this much interest here in New York and on our teleconference today.

I would like to -- first, a couple housekeeping rules: Completely turn off -- not just put on vibrate, your cell phones, BlackBerrys, all wireless devices to avoid interference with the sound system. I would also like to remind all members that this meeting is on the record. Council members around the nation and the world are participating in this meeting via a password-protected teleconference. We'll be taking questions from the floor and from the teleconference after our session.

But first of all, a little introduction. You know, I love talking about Russia and its neighbors -- something I don't do enough nowadays, you know, particularly as I think about where we've seen some geopolitical tensions that I think 10 years ago we might not have expected. The notion that Russia has, in some ways, embraced itself as a revisionist power -- insecure in its geopolitical situation, willing to provoke conflict on its borders, across its borders, to improve said geopolitical environment; and also potentially benefitting at times, domestically, from doing so.

I want to raise that as a question, and talk with two panelists that are eminently positioned to discuss precisely that, Ron Asmus and Adian Katatitsky (sic).

First -- at the end, Adrian is an old friend. He is senior fellow at the Atlantic Council of the United States; a frequent contributor to "Foreign Affairs." Ron Asmus just came up from Washington. He's executive director of the Brussels-based Transatlantic Center. He's also just published a book that will be available after the speech -- "A Splendid Little War," I'm making that up -- it's actually "A Little War That Shook the World: Georgia, Russia and the Future of the West." (A) great day to discuss this. Just earlier, a few hours ago, we see that President Medvedev came out and announced that the Russians were going to put a military base in Abkhazia. I don't know -- the timing's sort of fortuitous here.

I want to open it up to both of you to ask about where we think Russia is today. Specifically, that the U.S.-Russia interaction in the so-called "near abroad" is the single greatest irritant, I would say, in the relationship, from Moscow's perspective, and many Moscow elites view Washington through the prism of America's allegedly nefarious intentions in Russia's backyard.

So I guess I'd like to say, first of all, to what extent you think this is a zero-sum conundrum? Where is Russia in the near abroad today? I'd like both of you to start off with addressing that.

I'll turn first to Adrian.

ADRIAN KARATNYCKY: Well, we've just gone through a election process in Ukraine, and Ukraine I think is sort of the pivotal country in the near abroad, and I would say that the edge was taken out of that zero-sum game.

The Russians and the Russian government intervened, to the extent that it did, very lightly. It did not see the hand of the United States in this -- in a "mock geopolitical struggle." It was very different from the atmospherics around -- the exaggerated atmospherics of a struggle for power and influence around the Orange Revolution.

So I think, five years later, what we have is a more moderate -- moderated Ukrainian elite, and the judgments of the main political players in Ukraine -- about how to relate to Russia and how to relate to the West, reduced the temperature. And I think we see also, in Russia's relationship to other countries, where there have been "semi-color" revolutions -- like Moldova, which had a regime change, with the communist leadership being replaced by a coalition of nationalist, moderate and liberal groupings. Again, a certain kind of a effort by Russia not to see this as some kind of a threat, but to try to -- in a more constructive way, in a kinder, gentler way to engage Moldova.

This is not to say that Russia is not playing, you know, with tough politics -- using its energy card, using its geopolitical advantages, but it is to say that there is always a pendulum, I think, in how Russia addresses the near abroad and the world. And I would argue that, you know, we were at a very low point in this, sort of, oscillation back and forth around the war that Ron describes. And Russia may have taken, learned some lessons, and may have felt a bit of the bite of the global economic crisis -- the collapse of commodities, the collapse of -- you know, not the collapse, but the decline in Russian GDP. All those things are having a kind of a sobering effect. And I see some changes in how Russia is addressing this part of the world, Georgia excepted.

BREMMER: Just today, not Putin, but President Medvedev came out and said Saakashvili -- persona non grata from a Russian perspective, do you see Russia going through a more benign cycle right now with its near abroad, or do you have a different view?

RONALD D. ASMUS: I hope Adrian's right. I'm a bit more pessimistic. I think, Ian, you're right. Even though in the papers we talk about Iran and Afghanistan as the big issues in U.S.-Russian relations, the issue where we have the biggest gap is this one: The future of those countries between the Eastern borders of NATO and the European Union and Russia.

And I think -- I mean, the argument of my book, in a nutshell, is that this war was fundamentally about Georgia trying to "go West" and Russia determined to stop it, in which the conflicts were instrumentalized.

But, you know, it's 2010. And 20 years ago we signed something called the Charter of Paris. There are several people in the room that were probably active at that time. And people like me have spent the last 20 years trying to build this new post-Cold War piece based on these principles. And those principles included: no spheres of influence, the right of countries to choose their own path -- their own alliances, equal security for all countries big and small.

And I would say that that document, which we sort of see as the "Bill of Rights" of a new Europe, is a dead letter as far as Moscow is concerned. There is no agreement today between Moscow and the United States, or Moscow and Europe, on what the rules of the game are for European security. And that's not a good thing. In essence, Medvedev's European security proposal is a proposal to rewrite those rules of the game, which we have now, kind of, said no to.

So even though -- I mean, the conflict may be muted in Ukraine because of a certain outcome, and because the Russians, I think, got smarter -- having been heavy-handed in the last election, spent whatever it was, $600 million, and then have the whole thing backfire -- "gentler when it works, tougher when it's necessary" is sort of the strategy.

But we have this basic, huge gap conceptually between how we see these issues. And I still think these are conflicts that potentially are waiting to happen. I mean, the reality in the Georgian war is that all the ingredients are there for another conflict. Russia's war aim, as Foreign Minister Lavrov said to Condi Rice in a famous phone conversation, was that Saakashvili had to go; no more pro-Western government in Georgia.

And, you know, you think of Medvedev's letter, you know, he declared the Ukrainian and Georgian presidents persona non grata -- 'We will not deal with them; we will try to undercut them.' And the goal is -- you know, it's interesting this word -- I happen to be a big fan and friend of Finland, so I don't like the word "Finlandization," but the word Finlandization is back. And Finlandization is not what we were talking about building 20 years ago with Russia in Europe. And I think we ignore this gap at our own peril, because until we figure out what we want, and how to talk to the Russians about it, you run the risk that these things can escalate.

BREMMER: So, I mean, Adrian, is there something different here, or have the Russians just won because the U.S. has sort of ceded Georgia from the map?

KARATNYCKY: No, I think there is something different. I agree with Ron fundamentally that since Russian policy moves and oscillates, you know, within a framework that includes these more dangerous and potentially risky and aggressive steps, that there -- that much more care and attention needs to be given to the security architecture of this "gray zone."

But I was commenting on the trends of the last year, and I think that, you know -- and so my disagreement is not about the potential threats that exist; it is a -- it's sort of more of an attempt to -- (inaudible) --

BREMMER: But, Adrian, here's --

KARATNYCKY: -- the moment -- (inaudible.)

BREMMER: -- here's a question, because I'll be curious what your answer is: If Ukraine was successfully democratizing itself, and moving in a pro-Western direction -- and let's not even say NATO membership, let's say it's successfully aligning itself with the West in the way most people in this room would define success, would the Russians remain benign and relaxed?

(Cross talk.)

BREMMER: Or as benign and relaxed --

(Cross talk.)

BREMMER: -- as benign and relaxed?

ASMUS: Or would they become less benign and relaxed?

KARATNYCKY: Yes, clearly, if this breached the security relationship. That is to say, if NATO began to appear again on the horizon as a serious option, from both sides -- meaning, from the Western side and from the Ukrainian side, I think Russia would ratchet-up the rhetoric. And Russia does have one area of particular danger where it can exert influence, and malign influence, and that is in the Crimea -- both ethnically, as the only predominantly Russian, ethnically Russian part of Ukraine, and in Sevastopol where the Black Sea Fleet is substantially --

BREMMER: Let me push you on this Ukraine point of it, because, of course, we are in the middle of the elections period. We thought it was going to be over but it's not quite over yet. You were just there are before the votes were counted.

And you know, we have Mr. Yanukovich, who clearly, historically, has been much more aligned with Moscow, with the Russia-speaking area. The Ukrainians are under massive economic strain. They're probably not going to get an IMF deal done. The Russians will be in a position where they'll have them over a proverbial barrel.

Given what they've done with them on the energy on the downstream, what might we see from this Russia-Ukrainian relationship, going forward? What's it look like?

KARATNYCKY: Well, first of all, I think it's wrong to view Mr. Yanukovich and his team as what they were a decade ago or what they were five years ago. Their period in political exile, when they were regarded by the Kremlin as political failures -- and Mr. Yanukovich left Ukraine fearing prosecution in the months immediately after the Orange Revolution; relocated himself in Russia where some of his associates, intimates have told me that he was treated very rudely and very severely as a failure. And this has created a certain kind of a distance between him -- a personal distance between him and that political elite.

Secondly, the Donetsk economic elite has acquired great wealth. They have started investing more so in countries like Italy and Poland, and moved -- Switzerland, and moved Westward, in terms of their economic -- in search of economic opportunities. They are determined to bring Ukraine into the European Union.

So I think that the political balance in the Party of Regions has shifted. And actually, if you look at some of the more rabble-rousing Russians who were involved in the Orange Revolution, like Sergei Markov -- kind of a hawk of the Kremlin on, you know, on the near abroad, he spoke very calmly and quietly and said, 'We're going to have a difficult relationship with Ukraine,' you know, meaning a difficult negotiating relationship with Ukraine. He adopted a more pragmatic set of expectations.

So I think Russia is happy to be past the Yushchenko period, because they regarded that as a sort of a personal battle between Putin and, I guess, the Bush administration over influence, and Putin didn't take failure very well. But now (that) Mr. Yushchenko has receded from the scene, and most of the leaders of Ukraine -- even those who collect their votes in Central and Western Ukraine, in the ethnically Ukrainian areas, have a much more moderated view, partly because the West has not stepped up, so to speak; partly because they need to find resources, and not to have Russia creating and stimulating additional economic crises.

But the end result is that it seems that both the Russian side and the Ukrainian side, across the political spectrum, are moving towards a more pragmatic approach to resolving their economic predicament.

BREMMER: So let as both of you a question that kind of gets around the topics that we've been, we've been nibbling on, which is that this is kind of over-determined, right. I mean, we see Russian behavior in the near abroad becoming, in a sense, easier for the West to tolerate.

And there are several things that you've all intimated are going on: First, some outcomes that have been better, from their perspectives, in a bunch of countries; second, the United States playing less of a role -- distracted, incapable, whatever; third, oil prices and Russian economy clearly not where they were before the crisis.

If you had to rank order, which of these is sort of determinative or most important, to the extent that you could -- and make a quick comment on that, where would you go?

Ron?

ASMUS: Well, look, I mean, Adrian knows more about Ukraine than I do, and I defer to him.

And, frankly, Ukraine, for the Russian elite, is much more important than Georgia. But when I look at Georgia, the Southern and the Northern Caucasus, I see the Northern Caucasus being destabilized by Russia's own policies. I asked myself, in five years, if the Northern Caucasus continue to go the way they're going, will that lead to a more aggressive or passive Russia?

And I fear the answer could be a more assertive Russia, but I'm not sure. And I see the ingredients, and I see that Russia didn't achieve its war aims in toppling this Georgian government, and it hasn't given up even though it doesn't have the opportunities or isn't pursuing them perhaps as aggressively. And I see us with no strategy, with not much of an international presence on the ground. And part of my book is a plea for us to learn from our own mistakes, and get smarter the next time to prevent another conflict from happening.

So about the Caucasus, I'm not sanguine at all. In terms of the overall -- I mean, it was interesting, after the Russo-Georgian war it was common to run to a Russian who said, 'This war was not only directed against Georgia, it was directed against us,' sort of, one interesting empiric example. All the graffiti left behind by Russian troops in Georgia was it's not about Georgia, it was about Bush, McCain, the EU, NATO. And when you talk -- when you talked to the Russian generals, they kept on talking about how they defeated "a NATO country."

Well, Georgia wasn't a NATO country, and we kept on saying we had nothing to do with it. But that's not the way they saw it. But they thought they had stopped us dead in the tracks. And there were numerous articles published in the Russian press: 'It's over;' 'The West will never enlarge again;' 'We've stopped it.'

Well, two weeks ago Senator (sic) Clinton gave a speech -- the Obama administration, in the first year, didn't say much about this issue, and two weeks ago she gave the first speech in which she unequivocally affirmed that NATO enlargement was a good thing, that it created stability for the West and for Russia, that the door remains open, that Medvedev's security proposal is bad, and et cetera, et cetera, et cetera.

And I remember it showing up on my BlackBerry, and I looked at that and I said, I could have written that, you know, sort of -- but this is the first time they, sort of, took a stand. And the next day the Russian commentary was not that favorable, as you might expect. So it's not over.

And the irony here is, if these countries -- and the irony here is, if these countries fail -- if they succeed, we recreate the -- it exacerbates the tension and the conflict. As long as they're fumbling about, and they can't get their act together, and they're not moving West, the Russians aren't worried. But I think the trajectory of Ukraine and the trajectory of Georgia, if nature is allowed to take its course, these countries are moving Western in a very helter-skelter, chaotic way, and they are never going back to Russia's sphere of influence voluntarily.

So if the Russians see what I see, I see the long-term trends not necessarily culminating in full NATO, EU membership. But this younger generation of Ukrainians -- Adrian, you know this much better than I do, they're much more European or Western then their counterparts in Russia. This younger generation of Georgians is never going back.

So I think we're deluding ourselves if we think this problem is going away. It ain't going away.

BREMMER: Let's go "big picture."

Adrian, let me ask you, then, this question. I mean, Russians, they're viewing this strategically: Putin's in power for a long time, and probably will be; Russian demographics are horrifying; the geopolitics, long-term, probably not moving in their favor; we haven't even mentioned China.

Knowing all of that, how do we continue to have -- how do we hold the sanguine view about what they're likely to be doing in this stage, in this sphere of the world?

KARATNYCKY: Well, I mean, I do think there are a number of items to worry about. But on the other hand, I think we should also be open to the current trend lines. That is to say, 1) broadly speaking, the pitch -- high pitch, anti-U.S., anti-Western rhetoric has been diminished substantially on Russian television, and in the Russian media, and in articulations by the Russian leadership. Foreign policy issues related to the Russian near abroad are virtually invisible in the speeches -- the last two speeches of Medvedev's "the state of the nation" addresses, and certainly compared to Putin.

But that can change very rapidly. And if you have a conflict -- we also see another trend, which is that Olga Kryshtanovskaya, this excellent Russian sociologist who tracks the Russian political elite, and has a long-term model, and tracks their biographies, saw a huge influx of the security and the military portions of that elite occupying civilian positions. She said that reached a peak at about 2007.

They still had a substantial influence, but it has been on the decline, and a substantial decline since Medvedev took over. This is not to say that Medvedev and Putin are in opposition to one another, but there is more nuance in this. And there is, I think, a certain kind of a discontent that the security role in governing such a complicated country, particularly in an economic crisis, may require some adjustments, and those adjustments appear to be made.

So all that said, you know, I'm not in disagreement with Ron about the potential for trouble, and for reasons to be worried, and for important reasons for the United States to be engaged. On the other hand, we should view this as an opportunity. The rhetoric is lower. Somehow the U.S. and Western interest in the Ukrainian elections and the Russian interest did not become an object of conflict.

There may be a way of modulating the relationship to -- but it requires, I think, the presence of Europe, the presence of the United States, but more so, I would say, the presence of Europe in the efforts to bring Ukraine more fulsomely (sic) into the integration processes of the EU. That includes a, you know, a free-trade zone that they're talking about, which is a high priority for the Yanukovich administration and for the entire Ukrainian elite.

BREMMER: I mean, it's part your expertise, but it's part the legitimate situation on the ground that I think you're both more concerned about the Georgia situation than you are on Ukraine. And I guess --

KARATNYCKY: In the short term.

BREMMER: In the short term. And I guess -- well, and Ron seems to be saying the longer term as well.

And the question here is, you know, if your plea in your book, and tonight, is that the Americans need to be much more engaged so that we avert a potential real crisis in the South Caucasus, how does one do that? Assuming you can get any involvement at all, how does one do that and not create the kind of insecurity, backlash, and the rest that Adrian clearly seems to think was behind some what caused the Russian machinations to begin with?

ASMUS: There's one thing we need to at, sort of, the macro level, and there's something we need to do at the micro level.

At the macro level, you know, we made this huge investment in building this post-Cold War piece on the assumption that we would lock in peace in Europe, then we could shift and deal with all these other problems in the world. And after September 11th, the combination of the, sort of, "big-bang theory" of enlargement, Prague 2004 -- (inaudible) -- coming in -- September 11th, we thought 'Europe was done, now we can focus on these other issues.'

And now we see Europe's -- you know, fissures appearing in the foundation of Europe. But we've got Afghanistan, Pakistan, Iran, you go right down the list, and you can see how the United States is torn. If you live in Europe, like I do, you can feel the demand, 'America, come back just a little bit, and reinvest, and help us restabilize a situation that could get worse.' And you can see the inattention of an America that's pulled into these bigger problems. We have to somehow find it, I believe -- a modest reinvestment to restabilize Europe and prevent it from becoming more unstable.

On the ground, what we're talking about for the next five years is not enlargement. We're talking about more presence. You know, looking back, and with the benefit of hindsight, you know, the EU could put 200 monitors on the ground in Georgia within six weeks of the war. When the Georgians asked for 200 monitors three months before the war, neither we nor the EU could put a single person on the ground. Had we done that then, had we made a fraction of the commitment there that we -- with the attention we spend on the Balkans, I believe this war could have been averted or stopped.

So now, you know, we need to put "presence." We need to have people; we need to -- let's avoid the big conflict over membership, which triggers all sorts of stuff. Let's think more about partnership, and investing, and helping these countries get stronger, and helping them do reforms. In Georgia, we should actually have many more monitors on the ground; and yes, there should be Americans in with the Europeans; and yes, there can be other countries too.

But there's a number of relatively low-cost, modest steps we could take that would stabilize Ukraine, which I would -- would stabilize Georgia and the Southern Caucasus, stabilize Ukraine. But above all, you know, we need a new narrative about why it matters. You know, in a sense, we took the Central European experience -- and I often say, had you asked me in 1998, when I was in the State Department in charge of NATO enlargement, all these other things, had I ever thought about Ukraine and Georgia joining NATO, the honest answer was "not really." It wasn't on my radar screen.

So I thought it was a miracle we got Poland into the Baltic states, and everyone else, and I remember when the first Georgians came to me and said, 'Will you come visit us?' And I was saying, oh my god, you know, this is a bridge too far; and I ended up going there. But we sort of stretched the paradigm and it snapped. And the reality is, Georgia isn't Slovenia and Ukraine isn't Poland. And we need a new consensus in the United States and in the West on what our goals, what our strategy is. And until we have that debate, we're not going to have a coherent strategy.

And that's why we couldn't come up with 50 or 100 monitors. That's why we couldn't spend $50 million, and instead we ended up spending a billion dollars to help Georgia after the war. You know, we couldn't do crisis prevention effectively because we were too divided. And that's one of the -- (inaudible) --

You don't have to -- the president of the United States doesn't have to get up every morning and think about Abkhazia. That's not what people like me are calling for. We're calling for a modest reinvestment of American political and economic leverage and muscle to stabilize the situation on the ground; help rebuild these countries; wait and see how the debate in Russia goes.

Maybe in five or seven years we'll have a more interesting Russian partner than we have today, and we can try to chip away at some of those bigger disagreements. But we should be investing more on -- and we should be more present and active on the ground in Ukraine, in Georgia, and all these places.

BREMMER: So before I open up --

ASMUS: Without triggering the Russian hyper-, you know, reaction.

BREMMER: Before I open up to questions -- I mean, we are the Council on Foreign Relations here, and we're looking at this and discussing this, thus far, mostly from the Western perspective. I guess I want to, before I open it up, I want to ask from the Russian perspective for a second. Which is, don't the Russians, at the end of the day, have a point? Can Europe really be safe and secure in the absence of Russian buy-in, and voice, and vote in European security? And what does that mean for us?

ASMUS: Look, I always say, the project is not complete -- the project I've spent my life working on is not complete until we have a Russia that is part of the European security system. Now, the question is, on whose terms does this Russia integrate? And the reality is, is this is not the kind of Russia we wanted as a partner, and it's not the kind of Russia that wants to integrate into this community.

I mean, I was struck, I was recently having dinner with a very well-known Russian political strategist -- and, you know, I always end up defending myself as not being anti-Russian, because they all think I'm anti-Russian because of everything I've done -- and I laid out to him, you know, my view, which I've held for 15 years, from the beginning of all these debates, that at the end of the day, Russia comes into this process as it becomes a more democratic country -- (inaudible) -- He said, "No, you're the worst of them all. You're the most aggressive, because your goal is to change Russia."

BREMMER: You're only "anti" a certain kind of Russia; it just happens to be the Russia we have right now. (Laughter.)

ASMUS: Exactly, you know. (Laughs.) (Laughter.)

BREMMER: Well, you're on record here. So I mean this is -- you're in trouble, sir.

ASMUS: No, no. But see, our strategy was premised on the fact that we could keep -- we could anchor these countries to the West and leave the door open to Russia, and a more democratic, pro-Western Russia would emerge that would want to join our community. And our answer was always, when that happens we will change our structures to accommodate Russia. But the Russia we have today doesn't want to do that.

BREMMER: Adrian, (come now.?)

ASMUS: It wants its sphere of influence that is directly in contradiction to everything we've been talking about. And that's the issue we face.

KARATNYCKY: Precisely. I mean, the real trouble is the nature of the Russian discourse. I mean, the Russian discourse oscillates between some potential interest in the security -- the European security architecture, and some deeper economic relationship with the European community. And at the same time, it also has these Eurasianist trends of Russia as a completely different civilization, a Russia with a completely different identity.

But, pivotal to this, I think, is the direction of Ukraine. And the Ukrainian decision to be a European state and to buy into the European identity is one of the consensual positions of Ukrainian public opinion and of the Ukrainian elite.

BREMMER: And you think that's happening?

ASMUS: The one difference is --

BREMMER: You think that's happening?

ASMUS: Yes. Half of Ukraine doesn't understand that Russia doesn't have that view. So it believes that you can comfortably have a close, fraternal relationship with "our fraternal Slavic Russian brethren," and at the same time integrate smoothly into at least the economic and political structures of Europe. Russia is not quite there, as we know, and that is the latent source of future tension.

BREMMER: I think this is the crux of the debate, and it is a good time to open it up to questions. So please, I'm going to ask everyone -- I have rules around this, to wait for the microphone; speak directly into it; please stand, state your name and affiliation; one question only.

I'm going to start in the back, right there.

QUESTIONER: Jamie Rubin, Columbia University.

Ron, nice to see you.

You said that Georgia is not Slovenia and Ukraine is not Poland, but some very prominent American said that "we are all Georgians." (Laughter.) So where do you -- you know, in trying to create a consensus to achieve all these objectives, how do you deal with the fact that many people are already way out there? And how do you talk about Georgia with a -- if it's not a Slovenia, and Ukraine, if it's not a Poland?

ASMUS: I think what I meant by that, Jamie -- and, of course, Jamie was a central part of the team in the '90s when we were doing this -- we spoke about a return to Europe. And when we said a return to Europe, Europeans thought 'Poland, Czechoslovakia, Hungary coming back.'

When we now say 'a return to Europe,' they weren't thinking about Georgia and Ukraine. And, frankly, we need a new and a somewhat different strategic, and, I would say, moral narrative about why these countries and these regions matter, because there is no consensus in the West today.

And I think, as you know, we worked very hard in the '90s to make sure that the United States and Germany were fully in sync. And when the Russians backed down and acquiesced to NATO enlargement, it was because we were completely together. We worked together on Ukraine and Georgia.

The Russians ran circles around Western disunity in the run up to this war, because people aren't even always sure whether Georgia's part -- it starts with, 'Is Georgia part Europe?' Now, I think the answer to that is clear, but not everyone thinks the answer to that is clear. So we have -- and we've sort of lumped Ukraine and Georgia together, and in reality they're very different. In reality, this trajectory of Ukraine today, and trajectory of Georgia are different.

So we have to go back -- you know, and the good news here is a lot of this lies in our own hands. We have to come up with the next phase of the vision and the strategy, and it has to be -- it has to make sense. You have to convince people. And I believe that it would be a fundamental mistake to give up those values we embraced 20 years ago just for the short-term interest of accommodating Russia to get cooperation on Iran or Afghanistan. I think you play it long. You wait for a different Russia to emerge. You defend those principles.

But the short-term necessity is actually to preserve the Ukrainian and Georgian independence, and see -- let those countries make up their own mind. But we need a different -- we need to, sort of, fight the battles, or have that debate all over again. Because I think that if we're honest, the consensus on enlargement collapsed. It's broken today and needs to be -- if it's going to be continued, it has to be put back together, in a convincing way, to build the majorities we had, bipartisan, across the aisle, across the Atlantic. It's not there today.

BREMMER: How much harder is it for America to do this, given that Saakashvili is there?

ASMUS: You know, look, I think Saakashvili is a extraordinarily gifted, somewhat mercurial tough guy. But, you know, he's -- let's not turn the victim into the problem here.

This is a guy who turned his country from nearly a failed state into a political and economic success story; was and still is the best hope for a democratic breakthrough in the region. Is not perfect -- obviously, had made mistakes. I think almost everyone here probably thinks what he did on August 7th was a mistake. But, you know, read the first chapter of my book -- it wasn't that easy. He was convinced he was being invaded. His intelligence told him he was being invaded. Twenty-five thousand Georgian lives were at stake.

And, you know, they had the names of the Russian colonels in the regiments coming through the Roki Tunnel, and he thought they were coming after him. Now, we still told him, 'don't do it.' But had you asked me -- having spent all that time in Georgia, if, put in that situation, would this guy fight or back down, I would have told you he's going to fight, even if we think it was the wrong decision.

Now, the question for President Saakashvili is -- now, again he's back up to almost 60 percent in the polls. The Russians never believed he would survive. And Ambassador Lomaia is here, and there's a story in my book which comes from him, he was in Gori negotiating with Borisov and the generals during the occupation, and he asked the Russian generals, "Actually, what was your mission?" (Laughs.) "What was your mission? Why are you here?" And without any fuss, they said, "Our mission was to cut the country in half, and invade here, invade there, cut off the ports, and wait for your government to fall."

Well, that's a pretty clear mission. That wasn't defending peacekeepers in South Ossetia and Abkhazia; it was regime change. And I bet that they never thought Misha would last six months. And now he's 18 months; he's going to serve out his term.

But can he reinvent himself, regain the moral high ground, reform Georgia, and sort of gain some of what Georgia obviously lost? That is the big question that, you know, is there. And I don't know if he can do it. We urge him to do it -- a lot of us urge him to do it.

BREMMER: But do you think Russia has abandoned the regime change --

ASMUS: No, I don't think Russia has abandoned the regime change at all. I think they were surprised he survived. I think they're still trying to -- they're trying to delegitimate and isolate him.

And, look, you know, let's be honest here, President Obama hasn't called him yet. He put 1,000 troops in Afghanistan. If any other European leader would put a thousand troops in Afghanistan, they would have had multiple phone calls from the White House by now. Joe Biden is the guy who sort of deals with him.

But what we -- I mean, Europe is never going to have -- galvanize itself to come up with a strategy in wider Europe, in the neighborhood, if the Americans aren't there with them. I mean, that is my firm belief. And until we start leading more on this, we're going to be all over the map.

And I think the best way to have influence over Saakashvili and the Georgians is to be present on the ground, and hug them close. And, you know, it's tough love. But to do tough love, you have to do both the tough part and the love part.

BREMMER: I knew I shouldn't victimize Saakashvili -- (inaudible) --

Right back there.

QUESTIONER: Herbert Levin (sp).

This is not why I raised my flag. I just would remark that I have no hope for the EU, since they turned down Turkey -- which doesn't mean they won't be a very successful, selfish, inward-looking customs union.

But my question is on Russian nuclear policy. During the worst times of the Cold War we had considerable cooperation with them against proliferation. They seem to be turning us down, in terms of anything reasonable on Iran. Could you talk about Russian nuclear policy now?

BREMMER: Adrian, do you want to address?

Do you want to address?

ASMUS: Well, I think, I very much hope -- I mean, I think we all hope that -- and let me be clear, I support the reset policy. I think, in order to have -- you need this -- in order to have leverage with the Russians you need to be doing business, and be talking in areas where they have equities and we have equities.

But it's interesting how, what people thought would be a relatively quick, you know, START agreement, has become very hard, and much more difficult than we expected. If we can't get that done, and let's see, then, how easily we can ratify it or not ratify it. It just shows you how complicated and difficult this relationship remains.

But, you know, of course, the hope was you could -- that would sort of change the tone -- to some degree that's happened already, then you could tackle Iran and Afghanistan; and then, at the end of the day, you would deal with the "tough nut" of wider Europe. Well, I don't know, history usually doesn't segment things, and make them that nice and neat for policymakers that deal with them in sequence. They usually come at you, unfortunately, all at the same time.

But I'll just leave it (there. ?)

KARATNYCKY: Well, I mean, but is a little bit of progress. I mean, three years ago there were some Russian officials that were trotting out the idea of letting Iran accede to the Collective Security Treaty Organization. So we've moved a little bit further --

ASMUS: Oh yeah. No, no, I mean, we've come a long --

KARATNYCKY: -- in perceptions -- (inaudible) --

BREMMER: And today we did see some movement, in terms of sales of weaponry to Iran, following Bibi Netanyahu's trip up to Moscow. So maybe they'll be on board for the sanctions regime.

ASMUS: No, but I mean I think it was, Foreign Minister Lavrov was over here in New York, or in Washington -- I read these transcripts in Brussels, I can't remember where it was, but, you know, he was asked what Russia has to do for the reset. And he had a hard time answering that question, because for many Russians the reset is about us correcting our flawed policies.

And flaw number one is NATO enlargement. And I always say I have a no-guilt attitude toward NATO enlargement, because this is -- the greatest irony of them all, is if -- you try to imagine you were Russian, and you look at your borders in Europe, Asia and the South, which border is the most stable? Your European, Western borders are the most stable.

Has the West made it more or less stable in the last 20 years? Well, I think we've made it more stable. We have created the only stable border that Russia has. But yet, in the latest version of their military doctrine, is the threat from the East? No. Is the threat from the South? No. The threat from the West? Yes.

How do you move beyond that? How do you convince the Russians that they can have influence in the Caucasus through partnership and cooperation, and not through invasion, manipulation and everything else? The person who comes up with a strategy that can gradually move Russia in that direction deserves the Nobel Peace Prize. But that ultimately has to be our goal -- that they deal with their neighbors differently --

KARATNYCKY: I do want to make one --

ASMUS: For their own self --

(Cross talk.)

ASMUS: -- out of their own self-interest.

KARATNYCKY: One point on the NATO question, as it relates to Ukraine. I think that the consensus of the Ukrainian elite, and of this new group that will occupy the presidency, and will be in a coalition government, the Party of Regions, is that they do not want the door to NATO closed. They are convinced that they don't want to push towards NATO. But they would regard it as a terrible signal for them -- a terrible signal of potential isolation, a terrible signal to Russia if that option were to be taken off (the table. ?)

BREMMER: So we have -- (inaudible) -- EU analogy: perpetual candidate sometime in the (futuredom. ?)

KARATNYCKY: They're willing to -- they need that to find the kind of political space, or geopolitical space in their relationship with (Russia. ?)

(Cross talk.)

BREMMER: So maybe this is the new model.

ASMUS: The weak EU has done visa facilitation and free trade agreements over the last -- or were moving that. At the moment, what we actually want the EU to do -- visa facilitation, free trade agreements, they are plodding along in their own typical EU way, but actually moving. They have 200 people on the ground in Georgia. We don't have a person on the ground.

You know, before we always describe them as utterly incompetent, they're taking more risks than we are at the moment.

BREMMER: We have one in the back here.

Yes, sir.

QUESTIONER: Peter Green, from Bloomberg News.

I wanted to ask you, Ron, you have a rather, as you said, optimistic view of the U.S. role in all this, and how it will all play out. But given all the challenges the U.S. is facing now, which you named -- wars in Afghanistan and Iraq, economic depression in the U.S., a recession, big problems with our China relationship, North Korea, et cetera, what hope is there? What signs are there?

And, realistically, what could happen in the next four or five, eight years that would show that the U.S. is committed to Europe in the way it used to be, and that could help reassure Russia, and maybe even bring some of these former Soviet states back into their own free orbit?

ASMUS: I think the goal of building Europe whole and free, it would be a fundamental mistake -- we were premature in declaring victory. The job wasn't -- and I was one of those, you know, to be self critical, who thought, sort of, it was done. And now we realize it wasn't quite done. And I think it would be -- it doesn't require that much. We can walk and chew gum at the same time.

You know, I remember once, in a meeting with President Clinton in the late '90s, when Senator Stevens came in -- who was one of the biggest opponents of all this, and he sort of lit into the president and said, 'Stupidest policy I've ever heard of, NATO enlargement; we should be pulling out of Europe, not making more commitments in Europe; what the hell are you doing?'

This is when I realized Clinton was smarter than all of us, because he didn't use any of his talking points, he simply said, "Well, Ted, you know, you may be right that, down the road, China is the biggest problem. And that's why NATO enlargement is so important, because what I'm trying to do here is lock in peace in Europe once and for all, so we never ever again have to fight a war there. And this Europe, then, will start to raise its geopolitical horizon and become our partner. And, if and when, we have to face these new challenges, we won't be all alone, and maybe we'll have a few Europeans at our side."

And I still think that's fundamentally true, that we will never get Europe to become a more global partner as long as it has instability at its doorstep. You know, this is a crisis prevention strategy I'm calling for that will save us money, and blood and treasure in the long-run if we do it right. If we had put 200 people on the ground in Georgia, and spent $150 million, and paid a little bit more attention, we wouldn't have had to spend a billion dollars after the war trying to save Georgia from collapsing, et cetera, et cetera.

So I am an American. I am optimist. You know, I think you can -- you know, people like me are going to make the case, and we'll see if we prevail or not prevail in this debate, but that's what it's -- you know, that's why I wrote, I wrote my book because everyone jumped over this war, and swept it under the rug, and wanted to forget it without debating what really happened and what it meant.

BREMMER: Of course, instability in Europe nowadays includes places like Greece and Spain.

But, Adrian --

KARATNYCKY: Well, I do want to say that you laid out a kind of a strategic and altruistic vision of a Europe, whole and free. But there is also the element of electoral politics, meaning American electoral politics. From my interactions with Polish diplomats and with Ukrainian diplomats, there is this palpable sense of the retreat of the United States from an active and engaged effort to resolve -- and try to resolve constructively this gray security area.

Now the Poles have a greater comfort that they're in the NATO Alliance, but -- and the Balts are a little bit, there's an anxiety there. So it just seems, if you keep -- look at the electoral map of the United States, and assume that we're going to have tightly-contested elections. If I were arguing for Republican candidates, I would argue, look at the East- and Central-European ethnic populations that are in Michigan, Pennsylvania, Illinois --

BREMMER: Illinois, Wisconsin, Minnesota.

KARATNYCKY: -- in votes where -- Ohio, 5,000, 10,000, 20,000 may determine the Electoral College vote, specific appeal to the insecurity that their brethren feel, and that they, observing the countries of their origins, or the origins of their ancestors, may have some kind of a resonance.

The Clinton embrace of NATO expansion was -- in the campaign, was not linked to a fully-formed geostrategic approach to the world. It was partly linked to an attempt to mobilize that portion of the electorate in those battleground states. I know because I had my finger in (it. ?) (Laughter.)

BREMMER: Right here. Yes, please. Right in front.

QUESTIONER: (Inaudible.) I'm working Energy Intelligence.

How energy, and Europe's energy dependence towards Russia, plays in your stability picture?

BREMMER: That's Adrian. You can start with that. Especially given the Ukraine issue, we haven't really addressed the number of times that these guys have been shut down by the Russians.

KARATNYCKY: Yes, well, Ukraine, as you know, is a transit nation. But I'll start with the announcement last week, or the reports last week that ENI was renegotiating downward the long-term gas relationship with Russia.

There is a sense that people are shifting to other sources of energy. There is a sense that with the, sort of, the shale oil and LNG, and other displacements of those markets, that the Russian vision of a completely dependent Europe may be something very different; that Russia will need to secure those markets.

Russia is now spending a lot more on, you know, building pipelines to circumvent Ukraine, particularly South Stream, than it is in exploration and capital investments, and ensuring stable energy supplies. Russia has politicized its approach to energy to such a degree that it itself is going to -- at least in the view of some experts, to suffer economically.

The new Ukrainian government will make a bargain and will try to resolve this issue. They want to solve, comprehensively, by creating a multinational European-Ukrainian-Russian consortium to ensure the reliable transiting of natural gas to Europe. They want Russia to abandon the South Stream project, which they regard as really competitive with their role as a transit country.

It's a hugely expensive project which, in their view, could be diverted to both modernizing the Ukrainian pipeline system. They have no -- they've shown no anxiety about North Stream, which is related to supplying, you know, from sources -- from new sources, along new pathways, and for new demand.

So I think there are, there is a possibility -- with this less-politicized approach by the Ukrainian leadership, and with the sort of the bracing, sort of, slap given by the severe, the severity of the Ukrainian economic crisis -- to construct some new stabilizing relationship, which, I think, you know, Europe would be pleased with, and potentially could help divert needless expenditures by Russia and by its European neighbors in bypassing the Ukrainian --

BREMMER: Now, I want to turn this to the bigger energy picture, for Ron.

Ron, you are not an apologist for NATO enlargement. Are you an apologist for U.S. energy policy in the region, in the sense that that, of course, for the near abroad, is something else that the Russians will historically give a lot of stick about -- that the Americans are interested in multiple pipelines as long as they move away from Russia, and they take Caspian energy that belongs to them someplace else.

To what extent do you think that there are legitimate insecurities on Russia's part there?

ASMUS: I don't feel too much guilt about TBC (sp) or anything like that either, I have to admit. But you know, this is -- if you want to do what I'm -- I mean, if I was king for a day and had three wishes, wish number one would be a -- why is Europe so divided in how to deal with Russia? A big chunk of that answer is energy.

And until they have -- they will never have a -- you know, living in Brussels, and when I have to explain the -- or try to explain the EU to people who don't live in Brussels, there are some issues where the EU has consensus and the machinery can act, and they act with reasonable effectiveness, depending on the toughness of the issue.

And there are other issues where they're so divided, and they can't act, and they just get up there and mumble because they're too -- the differences across the union are so big. Russia is one of those, and a big chunk of that is energy. So until they have an energy policy, there will not be a Russia policy.

So if you want to have a common Russia policy, a balance of engagement and toughness, you have to help Europe get to that energy policy. And I'm glad that we now have Dick Morningstar as our envoy, who knows the EU, who knows Russia, who knows energy. And, you know, just like TBC (sp) would not have happened without us, you can judge Nobuko's chances in light of unconventional gas and everything differently.

But none of this is going to happen without us playing a helping, facilitating role. That's just the reality.

QUESTIONER: Hi. Todd Johnson (sp), from -- (inaudible) -- Consultancy.

I'm wondering if you can comment on, I think, most post-conflict appraisals were fairly uniform in the fact that the Russian military's performance was fairly substandard in Georgia. And does that performance send, sort of -- particularly, combined air-ground operations, and such, is that going to restrain Russian militarism, sort of, opening up, as it did the major deficiencies? Or will it push forward major reform efforts, so five, seven, 10 years from now we see a Russian military that's much more modernized than we would have seen had the war in 2008 not have occurred?

ASMUS: Well, I think now almost the entire chain of command in the Russian operation against Georgia has been replaced or fired, even though initially it was this huge success. Now they're all gone. I think every one of them has been replaced or fired -- so hardly a vote of confidence. But whether -- but it's one of the big debates in Russian military reform.

But, look, the reality is if you're Georgia -- and I, you know, I sat at the table, and (Kai ?), who was there many times, with leading Georgian officials debating: Do we do a peace proposal? Do we buy Stingers on the black market? What do we do? And I was -- I always have been of the view, even if we had sold them Stingers, even if the Georgian army was better, they would have fought for 10 days as opposed to five days, or 12 days as opposed to five days. They would have killed more Russians, more Georgians would have been killed, but the result would have been the same.

Georgia -- all this talk about the "Israel model," or the -- it's all, in my view, baloney. Georgia's only chance -- and my advice to the Georgians is very clear, it's: Set aside the conflicts for the time being, with -- (inaudible) -- reform your country as fast as you can; and try to somehow get under our security umbrella in one form or another to get deterrence, because deterrence works.

And that's the way you ensure Georgia's safety. It's not by spending 6, and 8, or 10 percent of GDP on defense -- although, you know, if they could have closed the Roki tunnel maybe this -- the whole history of this war would have been different. But I actually don't want them to think that way. I want them to think -- I mean, if you ask me, I think it's in our interest to get them to think differently, because the Russian army is always -- even an incompetent Russian army is strong enough to beat a little Georgian army, you know, even if it was better trained and better organized than it was in August, 2008.

But I think, look, I mean, we have to change -- we have to think long -- I mean, the great tragedy is -- let's imagine that you could stabilize the Caucasus and open them up, and you could solve Turkey-Armenia, Abkhazia-South Ossetia, and Nogorno-Karabakh. There's so much potential in this region. You can imagine standard of living doubling within 10 years, and trade routes, north, south, east, west -- who would be the greatest benefactry (sic) of that kind of opening up and stabilization? Russia. If it would think differently.

If it would think differently, and realize it can have influence by being a major economic player, that stability can actually bring it influence. And that is still the $64,000 question: Can we nudge, push, cajole the Russians? And will a new generalization of Russians emerge that realize that these policies are sowing the seeds of greater problems for them and not creating more influence, really, down the road?

BREMMER: Let me close up with one -- with a big-picture question, which is that, I mean, if you're sitting in Moscow right now, it seems to me two big-picture things are happening globally that are affecting you as a Eurasian power, right:

The first is, the United States is becoming sort of less involved, less engaged in this part of the world, showing less capacity and willingness to do so. And that's probably structural -- at least you can make a guess or a bet that it is. And secondly, China is becoming much more so, from an investment perspective, from a geopolitical, a geostrategic perspective, spending a lot more money, a lot more involved in things like water, on demographics, all the rest.

Over the long term, how do those two things affect the way the Russians are likely to think about their role in the region? Does it make them turn more toward Europe and the West, because China is more of a threat? Does it make them try to engage the Chinese more? How does it make them think about the near abroad and their role as a Eurasian power? Kind of nice, big open-ended question that we can end with.

And let me -- I'll start with you, Adrian.

KARATNYCKY: Well, I think that the great obstacle for Russia, to address these two geopolitical realities, is that the ambivalence of Russia about what it can still accomplish in its former Soviet space. I think that Russia is now turning a kinder face to Ukraine, and to Moldova, and so on, but the end-game is still the same: It wants to restore either hegemony, or potentially a sphere of influence, or potentially reintegrate these countries into some larger entity that will give the, you know, Russia more resilience in the face of these long-term trends: to become a kind of an equal partner, a substantial player, balancing Europe, for example, as a long -- and being able to stand up to the challenge of China.

I believe, given what I know of the trends in the largest country that is pivotal to Russia's ambitions of in-gathering, that this will be another folly. This will fail again. They've had that dream when Mr. Kuchma was elected president in 1994. He came from the East. They thought the East would in-gather and bring them closer. It didn't happen. The same trend is going to occur.

And I believe that that development, if it is, frankly, encouraged and nurtured, your Ukraine's European option can help avert Russia's gaze from this hopelessly impossible ambition, to the more pragmatic one of integrating in a concert of, you know, prosperous states, and working with them in a closer way, in the way that Ron had articulated -- in integrating Russia into the European sphere and, therefore, giving it greater resilience in its relationship with China.

BREMMER: Ron, end big-picture with this.

ASMUS: Well, you know, the original strategy after the end of the Cold War was to sort of create a new set of structures on the ground in Europe, recognizing that Russia didn't like some of it, in the hope that Russia would move on and we'd build this broader partnership which would be focused on doing things together in the Middle East, outside the (Europe- ?) Atlantic area.

It didn't quite work. But I think, fundamentally, our long-term strategic goal -- you know, if historians look back 50 years from now and say that South Ossetia and Abkhazia led to a major estrangement between Russia and the West that lasted 20 or 30 years, that is not a success story. Let's be honest, that is failure of strategic imagination. So our goal still has to be to convince the Russians that we're not their biggest problem; we are their potential partner.

But they have to -- there have been to be certain preconditions and rules for this partnership, which is why we have to keep these doors open, even if we have to be tough with them on certain issues where we think they have done things that are wrong, and which violate the (rules. ?) But, over time, you have to bank on some Russian leaders figuring out that their problems in the East and the South are far bigger than their problems in the West, and that we are their natural partners that they will ultimately turn to, and we will ultimately find a way to work together.

And that has to be the long-term goal. But I think you have to just -- I believe in, you know, staying tough on the principles, because I think the day -- I mean, I'm afraid that Russia is on -- and, you know, Ukraine's success is one of the greatest potential avenues of influence, if you can put it that way, as you know, for encouraging Russia. Because if Ukraine goes European, it will have a huge impact on Russia, in a positive sense, from our perspective, and it will help, ultimately, pull Russia in the right direction.

So that has got to be the long-term direction, but it's clear it's going to be harder and take longer than we thought.

BREMMER: Well, thank you very much, Ron.

We aren't all Georgians, but we can all buy Ron's book. (Laughter.) It's available outside.

Please all join me in giving these men a -- (applause).

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