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May 11, 2016
Atlantic Council

Former National Security Advisors on the Geopolitical Stakes of Bremain Vs. Brexit

Introduction:
Frederick Kempe,
President and CEO,
Atlantic Council

Speakers:
Thomas Donilon,
Vice Chair, O’Melveny & Myers;
Former National Security Advisor (2010-2013)

Stephen Hadley,
Principal, RiceHadleyGates LLC;
Former National Security Advisor (2005-2009)

Moderator:
Katherine “Katty” Kay,
Lead Anchor,
BBC World News America

Location: Atlantic Council, Washington, D.C.

Date: Wednesday, May 11, 2016

Transcript By
Superior Transcriptions LLC
www.superiortranscriptions.com

FREDERICK KEMPE: Good morning, everybody. I’m Fred Kempe, president and CEO of the Atlantic Council. This event is an important one for us. It’s embedded in our Future Europe Initiative. The Atlantic Council has some growing concerns about the future of Europe, due to threats from the east, threats from the south, and centrifugal forces.

It is my pleasure to welcome you to today’s discussion of the geopolitical implications of the upcoming British vote on the United Kingdom’s relationship with the European Union. And we do see this in this larger context. We realize that this is an issue ultimately for British voters. We don’t wish to intervene in the internal affairs of the United Kingdom. Yet, on the other hand, at a moment of such great uncertainty both in Europe and globally, we find that the risks inherent in the possibility of Brexit are a geopolitical matter and also a U.S. national security matter.

In that spirit, a special welcome to our speakers, former national security advisors Mr. Thomas Donilon and Mr. Stephen Hadley, and our moderator, lead anchor at the BBC, Ms. Katty Kay. I’d also like to welcome distinguished guests I see here and our audience watching online, especially those in the U.K. who have tuned into our live webcast.

Today’s discussion comes at a critical moment in the run-up to the June 23rd referendum, when U.K. citizens will cast their votes to determine the future of their relationship with the European Union and the world. On Monday, Prime Minister David Cameron underscored the advantage of maintaining Britain’s leadership role within the European community saying, quote, “The truth is, what happens in our neighborhood matters to Britain. That was true in 1914, in 1940, and in 1989, and just as true in 2016. Either we influence Europe or it influences us.”

Responding to these and other concerns, the Atlantic Council yesterday released an open letter signed by 13 former secretaries of defense, state, and national security advisors, making the strong geopolitical case for the United Kingdom to remain in the European Union. The signatories include former Secretaries of State Madeleine Albright and George Shultz; former Secretaries of Defense William Cohen, Robert Gates, Leon Panetta, Frank Carlucci, and William Perry; and former National Security Advisors Richard Allen, Zbigniew Brzezinski, Jim Jones, Brent Scowcroft, Tom Donilon, and Steve Hadley.

These top U.S. leaders wrote, quote, “We are concerned that should the U.K. choose to leave the European Union, the U.K.’s place and influence in the world would be diminished, and Europe would be dangerously weakened.” The British government and people are America’s closest friends and allies. Shared history and culture as well as economic, political, intelligence, and military interests form the basis of this special relationship. As such, it was the view of these U.S. foreign policy leaders that the U.K. needs to remain globally engaged and effective, and that membership in the EU is an important part of that. So the outcome of the June 23rd referendum is, in the most fundamental sense, also a U.S. national security interest.

Here to elaborate on the points of the letter, and the national security implications of the upcoming vote, are Tom Donilon, Steve Hadley, former national security advisors under Presidents Barack Obama and George W. Bush, respectively. One a Democrat, one a Republican, just as the 13 who have signed this are a relatively even mix of Democrats and Republicans, with some having served in both administrations, Democrat and Republican. The wealth of experience these two gentlemen have had, serving several U.S. presidential administrations, and throughout that having dozens – one could say perhaps hundreds of interactions with the U.K. on crucial issues, is very important to this discussion.

Mr. Donilon is current partner and vice chair of O’Melveny and Myers LLP, having served as national security advisor from 2011 to 2013. He chaired the Obama-Biden transition at the U.S. Department of State, and has advised U.S. presidents since his first position at the White House in 1977, working with President Carter. He was also assistant secretary of state and chief of staff at the State Department during the Clinton administration.

Steve Hadley is a partner of RiceHadleyGates LLC, an international consulting firm that he founded with Condoleezza Rice, Bob Gates, and Anja Manuel. He served as national security advisor from 2005 to 2009. He has also served as assistant secretary of defense for international security policy, and was first on the NSC staff under President Ford from 1974 and ’77. So two men with an incredible experience of leadership, and a perspective on historic moments, such as the one we face now. Here at the Council, Steve also serves as an executive vice chair of our board of directors, and we’re grateful for his significant contributions to many of our initiatives.

Tasked with moderating the discussion is Katty Kay of the BBC. She has traveled the world reporting for the BBC, and offers an enormous depth of experience covering Washington. And we could think of no one better to moderate our conversation today.

Today, and in the weeks ahead, we’ll be using the hashtag #BremainVsBrexit – so hashtag #BremainVsBrexit. This doesn’t roll immediately right off the tongue. And if you don’t like that and you’re still in favor of Bremain, you can also use hashtag #StrongerIn, which is what our British friends have been using, if you want to follow this conversation across the Atlantic.

Without further ado, let me invite up the panelists and the moderator.

KATHERINE “KATTY” KAY: (Off mic) – this is an important issue. And there’s no better place to be doing this than the Atlantic Council. So, Fred, thank you for – (inaudible) – facilitating this conversation here.

Britain’s relationship with Europe, in a way, reflects right where we are today, because some Europeans feel torn between – Brits feel torn between the continent, looking across the channel to the continent of Europe. Some feel we should be looking across the Atlantic more thoroughly to the United States. And somehow, those two feelings seem to be mutually exclusive for some of my fellow countrymen. Britain’s relationship with Europe, of course, is complicated. A lot of it is about heart and not head. Some would say it dates back to the Middle Ages when we lost the Hundred Years War, that was perhaps the high part of our relationship with Europe because it pulled England out of France. And today we’re having the same debate.

And the polls are remarkably close. This morning I checked on the FT’s tracker of polls. It’s 46-43, 46 to remain, 43 to leave. If you’d asked me a year ago, I would never have thought that the polls would be that close. And they have been close, and steadily close, all the way through this campaign. So we will see on June the 23rd which way Britain chooses to go. I like to say, at the end of this year we could have three remarkable things – Angela Merkel kicked out of Germany, Britain out of Europe, and Donald Trump elected president in the United States. I would not have predicted any of those.

Tom Donilon, Stephen Hadley, you have signed this open letter which was published on the front page of the London Times yesterday. One of the – and Fred referred to some of it – one of the sentences is in our globalized environment it is critical to have size and weight in order to be heard. Stephen, let me start with you. What do you mean by that?

STEPHEN HADLEY: I think the problem for a U.K. withdrawal from the EU is that it will weaken the U.K., it will weaken the EU, and may actually precipitate an unraveling of the EU. And that, I think, is bad for the United States, bad for Europe. With all the problems we have internationally, the only way we’re going to solve them is if we can bring together our diplomatic, economic, and military weight in a focused way. And it’s going to be much magnified if the Unites States and a unified Europe are working together to solve those problems. So if the U.K. leaves, the concern is it weakens the U.K., it weakens Europe, weakens the United States because we lose our traditional partner at a time when the number of global challenges we face could not be greater.

MS. KAY: Tom, the leave campaign has called this kind of comment project fear, in the U.K. So spell it out for us: Why this apocalyptic view of what would happen to Europe if Britain were to exit.

THOMAS DONILON: You know, I think it’s grounded in history and in facts and in analysis. And Steve and I here obviously are not voting on this, in the United Kingdom. We’re here to talk about what the U.S. interests are. And I think in this case, the U.S. interests and the U.K. interests coincide quite strongly. Steve said, you know, we have – again, facts and analysis, right? We have a strong interest in a strong U.K., right? And by every analysis I’ve seen, I think the U.K. would be weaker, having pulled out of the European Union, weaker economically. I’ve read the Treasury report, I’ve seen Mark Carney’s comments, looked at the analysis of most of the financial advisory firms in the world. They all point to a poorer U.K.

MS. KAY: And there’s another report out this morning suggesting the sterling would fall by 20 percent, growth would decline, unemployment would be up as well.

MR. DONILON: Yeah. So weakening – you know, weakening the United Kingdom is a serious interest for the United – a series interest for the United States, yeah. And you’ve seen, as evidenced by this gathering here, and the president’s trip to Britain, a pretty intense level of interest and engagement by the United States. And it’s because of the stakes – because of the stakes we have in a strong U.K. And second, we want to see a strong U.K. in Europe, because we think it does strengthen the European Union immeasurably.

Third, we don’t want to see a Europe, a U.K., that’s is inward looking insular, and in a period of extreme uncertainly over what could be years after an exit. That’s not in the U.K.’s interest, it’s certainly not in the interests of the United States. You know, as national security advisors, I think we both say that the first call that we would make, and made, with respect to any international situation or crisis or development would be the United Kingdom. It’s a very important relationship for us, deeply rooted in cooperation for many, many years, and in our ties. And the last point I think is kind of the strategic point with respect to the U.S. interests, and that’s the interest in the European project generally, which has been – you know, has brought peace and stability and prosperity to Europe. It should not be taken for granted.

And these forces of fragmentation could not at a worse time. You’ve had a cascading set of crises from the recession, to the eurozone crisis, to migration, to terrorism, to threats from Russia. And so at the very time that you need more unity and effectiveness in Europe, this would be a force for less unity and more fragmentation, and could really I think be, as Steve said, a force for fragmentation and unraveling, as opposed as a force for dealing with the problems Europe has, which are substantial.

MS. KAY: Stephen, how does that play out, the unraveling, in your mind? So June 23rd, Britain votes to leave the European Union. How does this impact Europe? How does it precipitate an unraveling of the European experiment as we’ve known it?

MR. HADLEY: Well, as we’ve already said, there’s an enormous amount of pressure on Europe. We identified – Tom just identified it. I would give one other pressure, which is the pressure Vladimir Putin and Russian policy is putting on Europe. They are very much betting on weakening and fragmenting Europe.

The concern is that if the British people vote to leave the EU, there are already five or six countries where there is some ferment within, saying, well, if the British get to have their referendum on the EU, why not us? And the risk is that it would lead to a cascade of referendums. And when the European project has been put to a vote variously, whether it was the Maastricht Treaty or any of the rest, it hasn’t done well.

Why is that? Because in this sense the folks arguing for Brexit are right: The EU has sadly been an elite project. It has not been a project that has been sold and explained to the people of Europe. And that is a weakness, the chickens of which, in some sense, are coming home to roost. And so the problem is in light of that problem, the concern is that a British exit would provoke a number of other referendums, which could have a cascade of countries leaving.

What’s the solution? You know, the Brexit people are right in this sense. There are problems in the EU. It has been an elite project. It has not been sold to the people of Europe. What’s the solution? It isn’t to dismantle it. It’s for Britain to stay in, work with other leaders to fix the problem of the EU, and then take it an explain to the people of Europe why historically the European project, which the United States and the U.K. have been partners on for 60 years, why that European project has brought unprecedented peace and prosperity to Europe, and sell it to their people. That’s what needs to be done. Don’t dismantle it.

MR. DONILON: And you see it already. I mean, you see it in the polling data, right? Places like Germany, Italy, Sweden, Hungary, where I think the polls now show that over 50 percent of voters asked in those – or population asked in those countries said if there’s a Brexit we favor a referendum here. So you already have, you know, that present. And you have the pressure from these problems that the European Union is facing. It’s really an unprecedented degree of pressure and fragmentation. And that’s something that needs to be addressed and not exacerbated.

The other thing I wanted to mention is the pressure on the U.K. And I mentioned I think the period of uncertainty. I think that’s clear, right? I mean, I don’t think that – this is not a fear issue, it’s living in the real world. The real world implications of a withdrawal with respect to the relationship economically between the United Kingdom and Europe is something that would have to be worked out maybe over the course of years, right? And I fear, right, that it would cause the United Kingdom to have to be insular and inwardly focused for an extended period of time, which is not in Britain’s interest and certainly not in the interests of the United States.

MS. KAY: Let’s talk a little bit about security issues. Of course that’s, you know, what you both dealt with and dealt with in respect of Britain and of your European partners. Not everybody believes that being in Europe makes Britain more secure. Michael Hayden, former head of the CIA, Richard Dearlove, former head of MI6, have both come out and suggested that actually being part of the European Union weakens Britain’s security. What do you make of that?

MR. HADLEY: I don’t know what the argument that they’ve made that it weakens their security. I guess you have to look at it at two –

MS. KAY: That Britain is constrained by European institutions – for example, the European Court of Justice – which can make the pursuit of individuals more complicated, is one argument.

MR. HADLEY: Well, you have to look at it at two levels. At the broadest level, you have to ask yourself the question: Is Britain more secure, is Europe more secure if you continue on this 60-year project for a Europe whole, free, and at peace. Or is it more secure if actually you renationalize security, politics, economics, and go back to the nation-state system. If you look at history, that has not worked out particularly well for Europe, and has required the United States in the 20th century twice to go to war in Europe. So if you look at the historical case, that doesn’t sound like a prescription for a more secure, prosperous Europe.

In terms of the mechanisms, you know, most – in terms of dealing with terrorism and the like – most of the cooperation, of course, is not between the individual countries and the EU. It is among the individual countries. The intelligence services are a national responsibility, not an EU responsibility. And one of the things that the terrorist attacks in Brussels and Paris have shown, is that those intelligence services are not cooperating the way they should be. So my argument for Michael Hayden and others would be, let’s not talk about, you know, dismantling the EU. Let’s talk about the problem.

And the problem is that the intelligence services have not been cooperating, sharing information, the way they should. Europe had the wake-up call we had on 9/11. We learned after 9/11 our intelligence agencies, law enforcement, were not cooperating, were not sharing information. Europe regrettably did not learn that lesson before Paris and Brussels. It’s going to have to learn it afterward. So I would say, let’s focus on that, because that’s where the rubber hits the road in terms of dealing with the problem of terrorism.

MS. KAY: But, Tom, were there never times when you were in the White House where you were dealing with your European counterparts where you scratched your head and you thought, oh my god, these Europeans are driving me mad – that they are not sharing intelligence, they’re not sharing data in the way that they need to be doing it. And actually, the argument in Britain on those on the leave side seems to be if we were more autonomous we could run our own intelligence, that we could directly with the Europeans more – with the Americans more effectively and more directly with those individual states.

MR. DONILON: Well, let’s go through it.

Number one, the United Kingdom and the United States deal directly and quite effectively on intelligence matters. It’s the closest intelligence relationship we have in the world, and leaving Europe’s not going to – not going to enhance that.

Secondly, as Steve said, it can’t possibly enhance European security or U.K. security to have the problems exacerbated with respect to information sharing, intelligence sharing, border control, and things like that. You can’t hide yourself off from the world, right, and expect to be safer. It doesn’t work that way, right? Intelligence is intelligence, right? You know, information sharing is absolutely critical to going forward.

And the United Kingdom has a very significant interest in seeing Europe do better. Now, can Europe do better with respect to counterterrorism and should it? Absolutely. And I think, as Steve said, the Paris and Brussels attacks should have been, and I hope are, a wakeup call, because today there are really serious problems with respect to databases, information sharing, intelligence sharing, border control. But the answer to that, which is actually calling for more cooperation, right, is not to actually step in and become a force for less cooperation, more fragmentation. That can’t possibly be right.

MR. HADLEY: Let me just make one thing. Look, in dealing with terrorism, in dealing with ISIS, we’re dealing with a network. And the only way you can defeat a network is to have a bigger and more powerful network. (Laughter.) And if you think the way you do it is to have this pristine autonomy, and you want to then deal with terrorists on your border, fine. I would rather be part of a network that deals with terrorists where they live and disrupts them where they live before they get to my border. So I think this notion that somehow with this pristine autonomy Britain can defend itself really misjudges the threat. It is a global network and U.K. needs to be part of a global network to defeat it.

MS. KAY: I’m going to ask – do jump in with questions. So go ahead, yes.

Q: Do we have a microphone?

MS. KAY: I think it’s probably small enough. I can repeat it.

Q: I’m Harlan Ullman with the Atlantic Council. Thank you. Two questions: one for Katty, one for Steve.

Katty, why is Number 10 running such a lousy PR campaign in terms of Brexit? I mean, you talk to Ed Llewellyn, others, they say we’re going to wait, et cetera, et cetera. I know that Cameron is preoccupied with the Panama Papers and ministers being caught in a very delicate situation, but it seems to me that their campaign is not very good.

And to the two national security advisors: What is plan B in the event that Britain does the unthinkable and says we’re going to leave the EU? What do we do? What do we do about – you know, what would be your recommendations for the United States in the event that Britain does leave?

MS. KAY: I’m not really here to speak for Number 10 on their PR campaign. I think they’re up against a strong force in the country that has always been very skeptical of Britain’s engagement in the European Union, and countering that. And if we look at the numbers as being basically 40 percent decided one way and 40 percent decided the other say, and we’ve got 20 percent floating in the middle, perhaps the fact that they’re at 46/43 suggests that once we see the debates more extensively.

And we started to see them a little bit this week on the security issue, both from Boris Johnson and from David Cameron – those numbers may shift in the remain camp’s favor. Boris Johnson is a powerful advocate for the leave campaign. And in coming on board for leave, made a difference. And he – you know, now that he is not mayor of London anymore he has an awful lot of time to devote to the project. (Laughter.)

I will leave the intelligence side to you.

MR. HADLEY: Well, as Mike Allen would tell you, my plan B is always make plan A work. (Laughter.) So the preference here is that the British people in their wisdom decide it is not in their interest to go after the EU. Second of all, I don’t know what the plan C will be, because there are going to be a lot of knock-off factors. We’re not going to know what this looks like. If there are other referendums and those referendums carry, we will probably as the United States try to weigh in. But you know, once Britain decides to leave, the momentum for dismembering the EU is going to be very strong.

Second question, and this is not a question for Americans at all. It’s an internal question for the people of the United Kingdom. What does it do to the United Kingdom? Does the Scottish referendum come back on the table? What does Northern Ireland, which is dependent on – gets a lot of money from the EU. What is their view? So I think in some sense we don’t know what plan C is until we – until the ground stops shaking. And it’s – but my view will be, whatever that plan C is, I think it will be much less congenial to America, U.K., and European issues than my plan B, which is make plan A work, and have the U.K. stay in the EU, help reform it, and then take the European project and sell it to the people of Europe.

MR. DONILON: And I agree with Steve. The United States is and will continue to undertake strong efforts to try to strengthen the European Union, right, through trying to bring to fruition and completion the TTIP negotiations which is in the interest of the United States and the interest of Europe, to continue to press Europe to do a better job on intelligence and counterterrorism, which, as we talked about earlier, it has real faults right now. And to continue kind of press for more effective European action, to press against the forces of fragmentation.

That will get harder with an exit by the United Kingdom and the knock-off effects, and the momentum that that would give the forces of fragmentation. This could not be a worse time to do this for Europe. And it’s just really highly ill-advised from – I think from Europe’s perspective – from Europe’s perspective – from a U.K. perspective, from a Euro perspective, and certainly from the United States perspective.

MS. KAY: I want to get onto NATO in a second, because we also had the letter from the five former NATO chiefs published in the U.K. too. But just spell it out for us, Tom, a little bit: You’re in the White House, there’s an issue you want to deal with on security, and Britain is out of Europe. How does that change the way you would deal with Britain on security issue?

MR. DONILON: Yeah. You know, a couple things. We’ll maintain a very close security, intelligence relationship with the United Kingdom in all events, right? We’ll maintain strong support and engagement with NATO, as the principal military alliance that we have in the world. But with respect to a number of the things that are in addition to NATO, right, and our bilateral relationship, including a lot of things that the EU does as a unit – we have been deeply involved with Europe on a number of major diplomatic issues, like the Iranian nuclear deal, for example, like dealing with migrant issues, like dealing with development issues around the world. And the U.K. won’t be at the table. And I don’t think that’s good for us. I don’t think it’s good for the European Union. But in that case, for example, it will be dealing with – it won’t be dealing with the leaders of the European Union with respect to some of these major global political and security issues, so.

MS. KAY: Would it ever make Britain not your first phone call?

MR. DONILON: Well, you know, I think that the ties are deep. I mean, it’s interesting, the visible and extensive engagement by the United States in this issue, right, is indicative of two things. It’s indicative of the states, which we’ve been talking about in our discussion with you. And it’s also indicative of the ties that we have with Britain. And those ties are real. But they’ll be a weakened partner. And on a number of things that Steve or I would have to deal with as national security advisor, where the EU as a unit is a player – trade negotiations, major negotiations on security and political negotiations around the world – we’ll be dealing with European partners, continental European partners, going forward, should they – by necessity, should U.K. exit.

MS. KAY: You had a question, sir. Yes.

Q: Yeah. I’m the Belgian ambassador. Thank you so much for your introduction.

The question I have is the following: What makes you so much scary – and it’s, of course, a question that I ask to get more of your insight – what makes you so scared of U.K. leaving the European Union? Whereas today already we have a U.K. that has a lot of left – of doubt. You know, that U.K. is not part of Schengen. U.K. is not part of the monetary union. You know that the sensitive areas that you are currently discussing like foreign military engagement, homeland affairs – homeland security affairs are being worked out under the rule of unanimity, consensus. So they have a veto there.

So for all practical purposes, we already have today some kind of, you know, two-tier Europe. And many of us are discussing indeed that should the U.K. remain – which, of course, I can tell you, as a Belgian, we absolutely hope will be the case – but that most probably the European Union is going to evolve towards a two-tier Europe. That is, a core Europe for whom the European Union is a project in the long term, value-based, and then a periphery, for whom the European Union essentially is, you know, a deed, a transactional affair.

Now, my question is: What makes you so much scary of, you know, them leaving or them just being part of the periphery in a two-tier Europe as regards the current situation? Thank you.

MR. HADLEY: It’s one thing to have a two-tier Europe within a unified Europe. It’s another to have an un-unified Europe. And the concern is that if the British – as we said up here – if the British leave it will provoke other referendums and others will leave. And you won’t have a two-tier Europe. You won’t have a Europe.

Secondly, on Katty’s question, the first call will always be to the U.K., sure. But the issue is going to be on any major issue, where is Europe? Because, quite frankly, the center of gravity is in Europe and on the continent. And so the question will be, in that meeting of Europe foreign ministers or heads of state, where they – where the decision will be made about what is the position of Europe and where the resources of Europe will be committed to diplomatic, military, economic – committed to an issue. The U.K. will not be in that meeting.

So when the president of the United States is going to talk to somebody to try to persuade them about what position Europe should take, the phone calls aren’t going to go to the U.K. prime minister, because the U.K. prime minister will not be in the meeting. And the problem becomes – it’s a problem for us in two ways. One, because the United States and the U.K. are probably closer in terms of our geopolitical views than any other country in Europe. So the United States will not have an advocate within Europe of a point of view that could reflect American interests. And secondly, the weight of Europe will be reduced of the U.K. is not part of the discussion, as will the weight of the U.K. be reduced if it is not talking with Europe. That’s the problem.

MS. KAY: Yes, in the back.

Q: Thanks, Katty. I’m Michael Allen. Steve, Tom, nice to see you. Formerly worked with Steve. I’m with Beacon Global Strategies.

Russia. We’ve read so much about the centrifugal forces in Europe, and the hybrid warfare in Germany, and the funding of pro-Russian political parties. Can you speak a little bit more how a Brexit might benefit Putin’s aims in Europe?

MR. DONILON: Yeah. I can address that. I think that an express aim for Putin, Michael, is fragmentation and less unity in Europe. And as Steve said, you know, the United Kingdom is typically the country closest to the views of the United States with respect to approach on economic and security and other matters. And I think that Putin would cheer a fragmenting – cheer a pulling back of the United Kingdom from Europe. The things that you talked about, right, designed to put pressure on Europe in terms of fragmentation, in terms of interfering in European politics.

So I think it’s a significant negative. It’s one of the centrifugal forces, right? It’s one of the – it’s one of the forces of fragmentation. Different Europe – different members of the European Union have different relationships with Europe. And keeping that unified, right, is a real challenge in Europe. And I think that adding to the forces of fragmentation would only be – would only be to Putin’s benefit. And I think it would be – frankly, make it more difficult to maintain a unified front in the face of a real challenge today from Russia. Russia has, since Putin has come back into office, has obviously taken it an entirely different direction with respect to its strategic outlook and its conduct.

And essentially today, for lots of reasons, including domestic political reasons in Russia and outlook that Putin has with respect to zero-sum outcomes and a sense of grievance, Russia has taken essentially an attitude and struck a pose where their foreign policy and security policies are defined in contradistinction in the negative way to the West and the United States. It’s a real challenge today. It’s a challenge all through Europe. It’s a challenge in the Middle East and around the world. And it’s one that we need to deal with in a unified way if we’re going to deal with it effectively.

MS. KAY: Steve, did you want to weigh in on that?

MR. HADLEY: Yeah. I mean, what would be in Putin – in Russia’s wildest dreams as to what would happen in Europe? I think it’s three things. One, the EU would split. Two, he would be able to show that NATO’s Article 5 guarantee to come to the defense of NATO members is not worth the paper it’s written on and Russia would be able to reestablish a sphere of influence in the former Soviet space and with the former Warsaw Pact. You know, that would be a great deal for Vladimir Putin.

I think it’s not a great day for European interests, British interests, or American interests. And my concern is that a British makes all of those things more likely. I don’t think that’s in Britain’s interest. I don’t think it’s in Europe’s interest. I certainly don’t think it’s an American interest.

MR. DONILON: And also, you know, Mike, it gives this – you know, this kind of this really pipedream of a Eurasian Union that Putin had been pressing, and one of the reasons, I think, that he acted in the Ukraine, it gives that legs, right? He’ll portray it as an alternative to a – to a divided – to a divided Europe.

MS. KAY: Yes.

Q: Good morning. Sunjin Choi, Langham Partners.

U.K. has option. If U.K. stay in, keep calm and carry on, this one option. U.K. choose alternative option – U.K. decide to leave – it has impact on both parties. Conservative Party, Prime Minister Cameron would not last 30 seconds and it will divide within Conservative Party, as you, Ms. Kay, mentioned about Boris Johnson and perhaps Mike Gordon might go to divide Conservative Party. And it has impact on, would they join UKIP? And also, Labour Party has impact: Blairite, or soft Labour Party, vis-à-vis current Jeremy Corbyn. So I’d be interested in the speakers’ views on what are the impact of referendum U.K. political systems. Thank you.

MR. HADLEY: I – (laughter) – I struggled being national security advisor –

MS. KAY: You want to talk about Boris Johnson’s prime ministerial ambitions? (Laughs.)

MR. DONILON: Are you announcing today? (Laughter.)

MR. HADLEY: I had enough trouble figuring out American politics. (Laughter.) And I can’t do Europe – you know, U.K. politics. I mean, it’ll scramble the eggs. There’s no question about that.

MS. KAY: Mmm hmm, certainly in the Conservative Party.

MR. HADLEY: But in terms of the details, I leave that to others.

MR. DONILON: But look what will happen – I guess, stepping up back, kind of a macro look, it will be exceedingly disruptive. It’ll cause Europe – it’ll cause the United Kingdom to be inward-looking for an extended period of time, to have to deal with the fallout. The day after this, if it happens, right, Europe won’t have any idea – U.K. won’t have any idea what its economic relationship is going to be with the European Union, and it will take years to figure out. There’ll be pressures within the European – within the United Kingdom with respect to Scotland and Northern Ireland and other aspects, which will take a tremendous amount of, again, inward focus. And I just fear – I think it’s predictable that it’ll be a time of great uncertainty and insularity in the United Kingdom. I think we can predict – we can predict that.

MS. KAY: Divorce is generally messy.

MR. DONILON: Yeah. Yeah.

MS. KAY: And unpredictable.

MR. HADLEY: And one of the questions is, if these projections are right of the economic impact on the U.K., what does that do to U.K. politics? And does U.K. really want to go into an environment – given the pain that has involved getting out of the 2008, 2009 recession – does the U.K. really want to go into another period of downturn? What’s that going to do to its politics?

MS. KAY: And I think, you know, we certainly seeing at the moment – we’re in a moment of populism around the world, whether it’s in the Philippines or in Austria and in the U.K. too. And I think that there are echoes of what we are seeing in this election campaign here, and in the rise of Donald Trump, in the Brexit campaign. The sense that existing structures have not served the people well, the people have had a bad deal from the European Union, and perhaps the future is not been gamed out meticulously but they know that what they have at the moment they don’t like and this is a protest vote, to some extent. And I think you’re seeing some of that reflected here and in other countries too.

MR. HADLEY: And that’s why it’s important, not just that Brexit be defeated, but also that European leaders then respond to this discontent and respond to the criticisms of the European institutions, and get together and fix them, and then go to their people and explain it and defend it. That’s what – we’re not saying defeat Brexit and everybody goes to sleep. It is the European project needs to be fixed. It needs to be supported by its people. But the way to get there is not to dismantle it first. The way to get there is to fix it, and then bring it to the people of Europe.

MR. DONILON: And it can only be done through leadership. I think Steve’s exactly right. It should be – the events of the last five or six years should be a wakeup call for the European Union and European leadership. And this should – this should be an inducement to – an inducement for Europe to address a number of these issues much more effectively.

MS. KAY: In the back.

Q: Yes. David Bartlett, American University.

Two quick questions. First, would an adverse result in the referendum necessarily be legally binding on the Cameron government or a successor government? Now, the second question is, even if Britain left the European Union, wouldn’t there remain a significant degree of de facto, if not de jure, integration into the single market and other economic, commercial dimensions?

MR. DONILON: Well, the latter is just not at all clear. (Laughs.)

MS. KAY: We don’t know, is the – I mean, to some extent we don’t know.

MR. DONILON: Yeah. That’s not at all clear. And I think you can do a sector-by-sector analysis. You don’t know – you don’t even know today the state of – the clear status, I think, of 2 million Britons who work in – who work in Europe today.

MS. KAY: Right. Or the status of European banks who are based in the city of London, and vice versa, British banks who are working on the continent. That has not been spelled out yet. And it would depend, to some extent, on the terms of the divorce. We will go to the lawyers and the Europeans will have very little vested interest, I think, in offering Britain an amicable settlement, or an advantageous settlement. So we can’t – and I don’t know on the security side to the extent, Stephen, to which we know exactly what happens on issues like cyber and data sharing.

MR. HADLEY: Well, on your first point, is it – I don’t know whether it’s legally binding on the U.K. government or not, but it’s certainly politically binding. I mean, Cameron has said: We will have a referendum. I think it’s impossible if the British people vote to leave Cameron to say, oh, I’m not going to take it into account. His government would fall. His government may fall anyway. So I think as a practical matter, you know, we’re going to be stuck with it.

The negotiations are going to be very interesting because one of the things, if you’re European leaders and you’re still committed to the project, you want to send a deterrence message to these other countries that are thinking about referendums that getting out of Europe is not so easy and not so beneficial. So there are going to be all kinds of incentives on the part of the European negotiations to make this as rough on the U.K. as they can, in order to deter others from going down a referendum and exit road.

So you know, I think Tom made the point, in a world that is already extremely uncertain, for the U.K. and Europe this will put uncertainty on steroids – uncertainty as the future of the United Kingdom itself, does it stay united? Uncertainty about what its economic, political, and security relationship will be with the rest of Europe. And uncertainty about where does Europe go? And do you really want to do all that, inject that new level of uncertainty, in a world that is as uncertain as it is today?

MR. DONILON: At a time when you currently may have gotten – you take an economic downturn. On the security side, Katty, I think the answer is: All these arrangements will have to be negotiated de novo. I think that’s the – that’ll be the attitude, that basically there’s now not the same legal relationship between the United Kingdom and the European Union that existed. And all these arrangements are going to have to be looked at in terms of what they are going forward.

And trade’s an interesting one as well too, with respect to the United States. You know, both Ambassador Froman, our special trade representative, and President Obama have made clear that the principle trade negotiation the United States is entering into with Europe right now is the TTIP with the Union as a block. And the United Kingdom cannot expect that queue.

MS. KAY: The leave campaign, by the way, and I should put this out there, would say that this is part of the fearmongering of the remain campaign, that they are painting the most disadvantageous outcome possible for Britain if they decide to – if they vote to leave.

MR. HADLEY: And you know, the answer to that is, you know, it’s not an effort to make a fear campaign. And what we’ve been saying here is the Brexit folks have a point and that their concerns need to be addressed. But the truth is, if you look at the facts, it’s not a fear campaign, it is a factual statement that if U.K. leaves there’s a lot to fear. That’s just the way it is, given these uncertainties. So it’s not fearmongering. It is a recognition of the reality that would follow.

MS. KAY: Yes.

Q: I’m from the Bertelsmann Foundation – thank you – (comes on mic) – and we’ve been doing a lot of work recently on the economic projections of a Brexit and the potential impact on all the member states. And it seems across the board, everybody loses. But I want to turn this on its head just a little bit and see what you think about this. We’re talking to a lot of people who will say, you know, maybe this isn’t the worst thing. Maybe if we see Britain leave, others may look at this and say let them be the canary in the coal mine. And maybe they’ll see that the impact is severe, both from an economic and a geopolitical perspective. And it may make the others step away from the abyss and say: Maybe we ought to rally around the EU, and it will actually encourage a stronger EU at the end of the day. Would you put any stock in that?

MR. HADLEY: The problem is what Katty mentioned, the mood in Europe, the mood in the United States, the mood almost globally of a rejection of the political class, rejection of the status quo. I just think it’s more likely that it’s a canary in the coal mine in the sense that everybody else decides it’s time to get out of the coal mine.

MS. KAY: Well, no, I mean, presumably, if they see sterling decline by 20 percent, growth decline by 1 percent, unemployment go up, they may say, to your point, that didn’t work out so well.

MR. HADLEY: The question will be one of timing.

MS. KAY: Right, how long they’re prepared to wait, yes.

MR. HADLEY: How long will it take for these effects to come in, because, you know, there will be an interim period. The estimates – I think the actual EU convention says that after a party says that they want to leave, there’s a two-year negotiating period. And there’s going to be a lot of questions about what applies during that two-year period. So the effects may not be – the economic effects may not be immediate. They may be over the longer term. The political effects that I’m talking about may be more immediate.

So you know, you could make that argument. I would like to have people say: Let’s agree now there are things that have to be fixed and issues that need to be addressed. And let’s start addressing them now, rather than doing it after a year or two process where we see how it works out for the U.K.

MR. DONILON: Because we don’t see any of those dynamics yet in Europe, right? I mean, the dynamics are all in the other direction – dissatisfaction with the way that the European Union has handled the migrant issue. Great difficulties in terms of cooperating and dealing with that issue over a long period of time. Great difficulty in extended period of negotiation with respect to the eurozone issues.

So the dynamics are just in the other direction. And we talked earlier about the polling. You see large numbers of voters in a number of European countries looking for referendums of their own. And I guess – you know, as Steve said, you don’t really have – you shouldn’t be looking for a car crash in order to learn that you should drive safely, right? You know, that’s not really the way for responsible leaders to act.

MS. KAY: There, to that question.

Q: Thank you very much. Damon Wilson, here at the Council.

I wanted to go and ask about U.S. policy in the context of the forces of fragmentation that you’ve referred to. And the European project has long also been an American project. And we’ve had a long-term strategy of how U.S. policy actually supports a Europe whole, free, and at peace. And while we have clarity of policy and sort of U.S. advising caution on Brexit, what else could or should the United States be doing to push back against the forces of fragmentation, supporting a Europe that holds?

Recognizing that we have a NATO summit coming up where there are some divisions about how much to move the alliance east, how much to push back on Russia. We have a migration crisis, in which we’re more in an observer posture and we’ve sort of closed our borders to some degree rather than sharing that challenge with Europe? And TTIP as a flagship agreement, in which we may not have the votes or even public support. So can you broaden beyond the Brexit issue, where can the United States actually play a supportive role in the idea that Europe holds together?

MS. KAY: Stephen.

MR. HADLEY: Well, I would say one of the things we can do is to become more aggressive in helping address some of the issues – other issues, in addition to Brexit – that are putting so much pressure on Europe. That means doing some of the things that have been talked about to strengthen NATO American and European presence in the Baltic States, in Central and Eastern Europe, and in the Balkans, so as to deter President Putin from trying to reproduce there what he did in Crimea and eastern Ukraine. I think it is enhancing even further our terrorism cooperation to reduce the terrorist threat to Europe. I think, quite frankly, it’s getting more active on the ground in Syria, to try to get a situation to stop these refugee flows that are – that are putting so much pressure on Europe. So I think the way to do it is to help Europe address some of these things that are pushing on the pressure.

There’s one other thing, if I could say. You know, the mega-American issue, interest, is what you say. We have had a 60-year effort to try to help Europe put its past behind it, and create a unified Europe that has made some progress, and have produced a level of security and prosperity in Europe that’s really unprecedented. That’s been very much an American interest. It’s in America’s interest to have a strong European partner. We learned in the 20th century that when Europe falls apart, we get dragged in. it is in our interest that this European project go forward.

And we say this to our U.K. friends. We understand they get to make this decision. We wouldn’t have it any other way. But what we’re saying is, that we have interests here. We think our interests are actually aligned with the U.K. interests, but the people of the U.K. will decide that. But in any event, we have real interest here. And we would like our friends in the U.K. to take our interests into account as they make a decision based on theirs.

MR. DONILON: Yeah. Katty, we were talking earlier today about the – there’s a memory problem here too in Europe. You know, and as you get further away from European history, and you get more taken for granted as the sort of natural state of being a continent of peace, prosperity, and stability, you take for granted the structures and efforts that put that together. And I think that’s an important thing for European leaders to remind European publics.

Just on your point, Damon, on the specifics about the United States, one is the United States should continue to pursue, and finish this year if at all possible, the TTIP negotiations. That’s a unified European project. It’s important for the United States. It really is an important test of our relationship. And it’s a positive for – ultimately for the European economy.

This NATO summit coming up is an important moment for NATO to determine what its role is. And I think Steve’s right. I think there should be a set of determinations about how to prevent and respond to and deter hybrid war and other kinds of threat from covert and other threats from Russia. I think a lot of work can be done, I think, on protecting the southern flank of Europe with respect to migration. But hard work on thinking about the future of the alliance at this NATO summit I think is pretty important.

And third, I think the United States needs to continue, as we talked about earlier, to engage Europe quite directly and forcefully on counterterrorism. I think the failings in Europe today with respect to intelligence sharing, information sharing, border control, databases, is a clear and present danger to the United States, and as it is to Europe. And a lot of work needs to be done going forward. And that should be something we should be engaged jointly on.

MS. KAY: Stephen has a plane to catch, so I’m going to let him slip away, and make sure he doesn’t miss it. Thank you all very much for coming. This is a debate that’s going to carry on both, clearly, in Britain, but also here in the United States for the next couple of months. Stephen Hadley, Tom Donilon, thank you very much for joining me.

MR. HADLEY: Thank you, Katty. (Applause.)

(END)