[Senate Hearing 112-84]
[From the U.S. Government Publishing Office]




                                                         S. Hrg. 112-84
 
       ADMINISTRATION PRIORITIES FOR EUROPE IN THE 112TH CONGRESS

=======================================================================



                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON EUROPEAN AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 18, 2011

                               __________

       Printed for the use of the Committee on Foreign Relations


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                COMMITTEE ON FOREIGN RELATIONS         

             JOHN F. KERRY, Massachusetts, Chairman        
BARBARA BOXER, California            RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   MARCO RUBIO, Florida
JIM WEBB, Virginia                   JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire        JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware       JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois          JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico                MIKE LEE, Utah
              Frank G. Lowenstein, Staff Director        
        Kenneth A. Myers, Jr., Republican Staff Director        

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

                SUBCOMMITTEE ON EUROPEAN AFFAIRS        

            JEANNE SHAHEEN, New Hampshire, Chairman        

BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
ROBERT P. CASEY, Jr., Pennsylvania   JAMES E. RISCH, Idaho
JIM WEBB, Virginia                   BOB CORKER, Tennessee
RICHARD J. DURBIN, Illinois          JIM DeMINT, South Carolina

                              (ii)        



                            C O N T E N T S

                              ----------                              
                                                                   Page

Alexander, Hon. Paige E., Assistant Administrator for Europe and 
  Eurasia, U.S. Agency for International Development, Washington, 
  DC.............................................................    14
    Prepared statement...........................................    16
    Responses to questions submitted for the record by Senator 
      James E. Risch.............................................    37
Gordon, Hon. Philip H., Assistant Secretary of State for Europe 
  and Eurasian Affairs, U.S. Department of State, Washington, DC.     8
    Prepared statement...........................................    10
    Responses to questions submitted for the record by Senator 
      James E. Risch.............................................    34
Shaheen, Hon. Jeanne, U.S. Senator from New Hampshire, opening 
  statement......................................................     1
    Prepared statement...........................................     3

                                 (iii)




       ADMINISTRATION PRIORITIES FOR EUROPE IN THE 112TH CONGRESS

                              ----------                              


                        WEDNESDAY, MAY 18, 2011

                               U.S. Senate,
                  Subcommittee on European Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:47 p.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Jeanne 
Shaheen (chairman of the subcommittee) presiding.
    Present: Senators Shaheen and Cardin.

           OPENING STATEMENT OF HON. JEANNE SHAHEEN,
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Shaheen. Good afternoon, everyone. I apologize for 
being late. I can always count on a vote being called as soon 
as we have scheduled a hearing. So today was no exception.
    But I am pleased to be here. I expect that we may be joined 
by one or two other Senators. Ranking Member Barrasso is not 
going to be able to be here today.
    Today the Senate Foreign Relations Subcommittee on European 
Affairs meets to discuss the state of transatlantic relations 
and to examine and assess the administration's priorities for 
Europe and Eurasia in the coming years.
    Before we actually begin the hearing, I wanted to share 
some good news that we have gotten today. Just a few hours ago, 
we received reports that journalist, James Foley, and the three 
other journalists who were being held in captivity in Tripoli 
had been released. I am particularly excited about James Foley 
because he is a native of Rochester, NH. James had been 
covering the conflict in Tripoli for Global Post when he was 
captured and imprisoned in April. It is a relief to know that 
his release has been secured, and I am hopeful that he will 
soon be reunited with his family and friends. And I urge any 
and all parties to assist James in making sure that he gets 
home safe and sound.
    I spoke a few minutes ago with his mother, Diane, just to 
let her know how pleased we were to hear the news, and she had 
heard from her son earlier this morning and said that James is 
very excited to return home.
    I also want to just thank everyone who has helped secure 
his release from Libyan captivity. I know that our State 
Department has been working tirelessly on this effort, and that 
has been in spite of the challenges of communicating directly 
with the Libyan government. The State Department has done great 
work through our allies and intermediaries to secure his 
release and that of his colleagues.
    I also want to thank the governments of Turkey and Hungary 
for all of the work they did on the ground in Tripoli to assist 
in this effort. Your embassies and staff have been extremely 
helpful in getting us information and assistance, and I am not 
sure if anyone is here from either Hungary or Turkey at this 
hearing, but thank you very much. Please relay our thanks to 
everybody in the Embassy.
    There are still several U.S. citizens being held prisoner 
by the government in Libya, and I urge the Qadhafi regime to 
release them as well. I know the State Department continues to 
work on their behalf.
    But again, today I am very grateful that James and the 
other journalists at least have been released, and I'm hopeful 
that they will soon be home with their families and friends.
    I do have a short statement that I would like to read for 
the record.
    This hearing will be our second hearing this year in what 
we hope will be an extremely active and constructive 
subcommittee agenda. We have two excellent witnesses this 
afternoon: Phil Gordon, the Assistant Secretary of State for 
Europe and Eurasia--we are delighted that you are here, Phil--
and Paige Alexander, the Assistant Administrator for Europe and 
Eurasia, USAID. Very nice to have you here too, Paige. As you 
pointed out, this is your first opportunity to testify before 
the subcommittee. So thank you.
    I am also very pleased that we have a new ranking member, 
Senator John Barrasso from Wyoming. Even though he is not able 
to be here today, I look forward to working closely with him.
    I do want to recognize the many members of European foreign 
embassies who are here today. Thank you all for joining us.
    Too often in today's media environment, we hear pundits 
decry the decline of the West or disparage the sustainability 
of the transatlantic partnership. I could not disagree more 
with those assessments.
    There is no doubt that we are facing one of the most 
uncertain security environments in recent history, and it is 
true that the daunting challenges facing the United States and 
Europe have grown much more complex since the fall of the 
Soviet Union. There is no doubt that the developing world has 
taken on new significance to world events.
    However, I think it is wrong to suggest that these shifting 
dynamics come at the expense of transatlantic influence. In 
fact, I would argue that this uncertain environment calls for 
an even stronger, more focused relationship across the Atlantic 
and more engagements with our allies, partners, and competitors 
throughout Europe and Eurasia.
    Europe remains America's indispensable partner. We need 
Europe and Europe needs us. Nearly every challenge we face will 
require the U.S. and Europe to work hand in hand, whether we 
are navigating the global economic recovery or the ongoing Arab 
Spring. From climate change to the threats posed by Iran, 
international terrorism, or nuclear proliferation, America's 
close partnership and coordination with Europe remains 
fundamental to U.S. security interests across a wide spectrum 
of challenges.
    Yesterday I had the opportunity to meet with Catherine 
Ashton, the EU's High Representative for Foreign Affairs, to 
discuss a wide range of security issues. I always appreciate 
the opportunity to hear her insights and perspective.
    Next week, the President will make his eighth trip to 
Europe since his inauguration. He will travel to Ireland, the 
U.K., France, and Poland. The subcommittee looks forward to 
hearing some of the goals and objectives of this trip from our 
panelists today, as well as the administration's engagement 
strategy moving forward.
    In addition, as the Congress has finally put fiscal year 
2011 behind us, we will have a chance today to hear the 
administration's budget plans for FY 2012. In an extremely 
tight fiscal environment, we need to ensure that our plans and 
strategies for engaging Europe and Eurasia are meeting our 
security interests in an effective and efficient way, and I 
look forward to hearing from the administration on some of its 
creative ideas and strategies for doing more with less.
    I do have a more extensive set of remarks that provides an 
outline of my views on the transatlantic agenda and lays out a 
brief summary of the subcommittee's interests for the 112th 
Congress. But in the interest of time, I will submit it for the 
record and go ahead and introduce our panelists.
    Philip Gordon has served as Assistant Secretary of State 
for European and Eurasian Affairs at the State Department since 
May 2009 and is a friend of this subcommittee, testifying on a 
number of occasions in the last Congress. He previously served 
as Director for European Affairs at the National Security 
Council and was at The Brookings Institution.
    Paige Alexander is the Assistant Administrator of the 
Bureau for Europe and Eurasia at the U.S. Agency for 
International Development. She has over 20 years' experience 
working in international development both here in D.C. and in 
the field.
    We are happy to have you both here today and we look 
forward to your testimony, and I will ask you to begin, Mr. 
Gordon.
    [The prepared statement of Senator Shaheen follows:]

               Prepared Statement of Hon. Jeanne Shaheen,
                    U.S. Senator From New Hampshire

    Good afternoon. Before we begin today, I wanted to share some 
initial good news.
    Just hours ago, we received reports that journalist James Foley--a 
Rochester, New Hampshire native--has been released from his 
imprisonment in Libya. James had been covering the conflict in Libya 
for GlobalPost when he was captured and imprisoned in Tripoli in April.
    It is a relief to know that his release has been secured. I remain 
hopeful that he will soon be reunited with family and friends, and I 
would urge any and all parties to assist James in making sure he gets 
home safe and sound.
    I just spoke minutes ago with his mother, Dianne, who heard from 
her son earlier this morning. She said that James is excited to come 
home.
    I am thankful to all those who have helped secure his release from 
Libyan captivity. Our State Department has been working tirelessly on 
this effort. Direct communication with Libya has been difficult, and 
the State Department has done great work through allies and 
intermediaries to secure the release of James and his colleagues.
    I would also like to thank the Governments of Turkey and Hungary 
for all of the work they did on the ground in Tripoli to assist this 
effort. Your embassies and staff have been extremely helpful in getting 
us information and assistance.
    There are still several U.S. citizens being held prisoner by the 
Government in Libya. I urge the Qaddafi regime to release them as well, 
and I know the State Department continues to work on their behalf.
    But today I am grateful that James, at least, has been released and 
I remain hopeful that he will return home as soon and as safely as 
possible.
    Today, the Senate Foreign Relations Subcommittee on European 
Affairs meets to discuss the state of transatlantic relations and to 
examine and assess the administration's priorities for Europe and 
Eurasia in the coming years. This hearing will be our second hearing 
this year in what we hope will be an extremely active and constructive 
subcommittee agenda.
    We have an excellent panel of administration witnesses, including 
Phil Gordon, the Assistant Secretary of State for Europe and Eurasia, 
and Paige Alexander, the Assistant Administrator for Europe and Eurasia 
at USAID.
    I am also very pleased to be joined by our new subcommittee ranking 
member, Senator John Barrasso from Wyoming. I have worked closely with 
Senator Barrasso on a number of issues in the Senate, and I am really 
looking forward to his leadership on this subcommittee.
    I also want to recognize the many members of European foreign 
embassies here today. Thank you for joining us.
    Too often in today's media environment, we hear pundits decry the 
decline of the West or disparage the sustainability of the 
transatlantic partnership. I could not disagree more with these 
inaccurate assessments.
    There is no doubt that we are facing one of the most uncertain 
security environments in recent history. It is true that the daunting 
challenges facing the United States and Europe have grown much more 
complex since the fall of the Soviet Union, and there is no doubt that 
the developing world has taken on new significance to world events. 
However, it is wrong to suggest that these shifting dynamics come at 
the expense of transatlantic influence.
    In fact, I would argue that this uncertain environment calls for an 
even stronger, more focused relationship across the Atlantic and more 
engagements with our allies, partners, and competitors throughout 
Europe and Eurasia.
    Europe remains America's indispensible partner. We need Europe and 
Europe needs us. Nearly every challenge we face will require the United 
States and Europe to work hand in hand. Whether we are navigating the 
global economic recovery or the ongoing Arab Spring . . . From climate 
change to the threats posed by Iran, international terrorism, or 
nuclear proliferation . . . America's close partnership and 
coordination with Europe remains fundamental to U.S. security interests 
across a wide spectrum of challenges.
    In addition, it would be wrong to underestimate the transatlantic 
influence in the international community. NATO still represents the 
most successful, most capable military alliance in the history of the 
world. Europe and the United States still make up more than 54 percent 
of world GDP and over 90 percent of global foreign exchange holdings. 
And, as the most open, transparent, and democratic societies in the 
world today, the United States and Europe still represent a model for 
citizens everywhere who support the rule of law and want their voices 
heard and their legitimate needs met.
    Yesterday, I had the opportunity to meet with Catherine Ashton, the 
EU's High Representative for Foreign Affairs, to discuss a wide range 
of security issues. I always appreciate the opportunity to hear her 
insight and perspective. It is obvious from her travel and meeting 
schedule that she and the EU remain incredibly engaged on a number of 
pressing issues--including in Europe's own backyard.
    Next week, the President will make his eighth trip to Europe since 
his inauguration. He will travel to Ireland, the United Kingdom, 
France, and Poland. He will also have the opportunity to meet with 
Russian President Medvedev on the sidelines of the G8 Summit in France. 
The subcommittee looks forward to hearing some of the goals and 
objectives of this trip, as well as the administration's engagement 
strategy moving forward.
    In addition, as the Congress has finally put the fiscal year 2011 
budget behind us, we will have a chance today to hear the 
administration's budget plans for FY12. In an extremely tight fiscal 
environment, we need to ensure that our plans and strategies for 
engaging Europe and Eurasia are meeting our security interests in an 
effective and efficient way. I look forward to hearing from the 
administration on some of its creative ideas and strategies for doing 
more with less.
    Our discussion today will help provide a brief overview on a number 
of important transatlantic issues, including the ongoing debt crisis, 
next steps in United States-Russian relations, U.S. engagement in the 
Caucasus and Southeast Europe and any remaining obstacles to a Europe 
that is whole, free, and at peace.
    I have an extensive set of remarks that provides an outline of my 
views on the transatlantic agenda and lays out a brief summary of the 
subcommittee's interests for the 112th Congress. In the interests of 
time, I will submit those remarks for the record and introduce our 
panelists.
    Philip Gordon has served as Assistant Secretary of State for 
European and Eurasian Affairs at the State Department since May 2009 
and is a friend of this subcommittee--testifying on a number of 
occasions in the last Congress. He previously served as Director for 
European Affairs at the National Security Council and for a long time 
at the Brookings Institution.
    Paige Alexander is the Assistant Administrator of the Bureau for 
Europe and Eurasia at the U.S. Agency for International Development. 
She has over 20 years experience working in international development--
both here in D.C. and in the field. This is the first time we have had 
her before the subcommittee. Welcome.
    We are happy to have you both here today and look forward to your 
testimony.

                   Extended Remarks (for the Record)

                                  nato
    Despite the fall of the Soviet Union and the progress in forging a 
united Europe, NATO still remains fundamentally critical to 
transatlantic security interests around the globe. The alliance finds 
itself engaged in ``out-of-area'' military operations in Afghanistan 
and Libya, as well as taking on new challenges like missile defense, 
cyber security, energy security, piracy, counterterrorism, and 
proliferation.
    At the Lisbon summit in November 2010, NATO adopted a new Strategic 
Concept for the alliance, which more fully defines NATO's role in 
today's world. In the coming year, NATO will also undertake a new 
Defense and Deterrence Posture Review, which will attempt to answer 
some difficult questions on the future structure of NATO's nuclear 
forces as well as its missile defense plans.
    Some challenges remain for NATO as we move forward. The issue of 
burden-sharing remains a consistent area of concern for this 
subcommittee. Only three NATO countries met the defense spending 
targets of 2 percent of GDP in 2010. Declining European defense budgets 
could continue to undermine support and credibility for NATO and could 
lead to a two-tiered alliance.
    NATO and the European Union must do more to work together on 
transatlantic security issues. NATO enlargement and its open-door 
policy, which has served the alliance so well for so long, is now 
unfortunately a contentious issue. In addition, NATO's proposed missile 
defense cooperation with Russia is an intriguing possibility, but the 
alliance should be under no illusion about the difficulty of this 
undertaking.
                         transatlantic economy
    The value of U.S. economic ties with Europe cannot be overstated. 
The numbers speak for themselves. Our economies represent over 800 
million people, 54 percent of world GDP, 75 percent of global financial 
services, and over 66 percent of foreign direct investment movement 
around the globe. However, like any partnership that wants to maintain 
its leadership in a rapidly changing global environment, we need to 
adapt to meet shifting realities.
    The ongoing financial and sovereign debt problems in Europe and 
sluggish recovery rates remain significant causes for concern on both 
sides of the atlantic. We will need to work together and learn from 
each others' mistakes if we are to climb out of the economic and 
financial holes we find ourselves in.
    We should be doing more to try to harmonize differences in 
regulatory policies across the atlantic, which could lead to higher 
incomes, wages, exports and GDP in the United States and Europe. We 
should do a better job of utilizing cooperative efforts like the 
Transatlantic Economic Council (TEC) and incorporating high level buy-
in from the U.S. Congress and the European Parliament. In addition, we 
need to do more to build a common approach to addressing third country 
markets, like India and China.
    As we move forward, I think it will be important to have a U.S. 
Congress that is more fully engaged on the transatlantic economic 
agenda. We should be doing more to work together with the European 
Union and the European Parliament. In the coming year, we will explore 
new ways to utilize this subcommittee in order to develop ties between 
the U.S. Senate and these two important European institutions.
                                 russia
    The Obama administration's ``reset'' with Russia has been an 
attempt to move the relationship ``from confrontation to cooperation.'' 
Russia and the United States continue to share a wide range of mutual 
interests, including nuclear nonproliferation, arms control, 
cooperation on Iran, counterterrorism, Afghanistan, antipiracy and 
trade.
    The reset has led to some significant benefits for both countries, 
the region, and the world. The New START Treaty is perhaps the most 
high-profile success. Because of New START, the United States and 
Russia will have the fewest deployed warheads aimed at each other since 
the 1950s.
    We have seen the successful implementation of the Northern 
Distribution Network into Afghanistan through Russia, which becomes 
even more important as United States-Pakistan relations remain complex. 
We have also seen Russian cooperation on the threat posed by Iran, and 
other less high-profile joint efforts, like science and technology, 
space travel and the International Space Station, nuclear security, 
counterterrorism, health initiatives, and human trafficking.
    Despite all of this progress on areas of mutual interest, we need 
to remember that we disagree with the Russians on a number of critical 
security issues. The reset does not mean that we give up pressing the 
Russians on issues like the ongoing violation of Georgia's territorial 
integrity, the development of human rights, democratic freedoms and the 
rule of law, or NATO enlargement. The real test of the sustainability 
of the reset will come in the next several years as we work with Russia 
on more difficult and complex issues and as we continue to emphasize 
that progress will not come at the expense of U.S. relations with 
allies and partners around the globe.
                       central and eastern europe
    As relatively new, yet prominent members of NATO and the European 
Union, the majority of the countries of Central and Eastern Europe have 
made impressive and rapid transitions to democratic rule since they 
first shed the authoritarian control of the former Soviet Union.
    Though a number of countries still struggle with corruption and 
rule of law issues, the countries in this region remain important 
allies for the United States. They were integral to the ratification of 
the New START Treaty, and they will be essential to any future missile 
defense plans. In addition, the impressive Visegrad-4 effort of 
Hungary, the Czech Republic, Slovakia, and Poland demonstrates that 
Central Europe is prepared to be a leader in engaging the region's 
eastern neighborhood. Finally, the unique experiences of this region in 
democratic transitions should provide some important lessons learned 
for the United States and our allies as we navigate the ongoing 
upheaval in the Middle East and North Africa.
Belarus
    One of the major obstacles to a Europe that is whole, free, and at 
peace remains Belarus and its dictator Aleksandr Lukashenko. Following 
the highly disputed December elections, the repressive Lukashenko 
regime has once again revealed its true nature. Over the weekend, a 
Minsk court sentenced the runner-up in the Presidential elections to 
jail time for his role in the peaceful protests. Five Presidential 
candidates have been put on trial in connection with the 
demonstrations, and more than 20 opposition activists have been 
imprisoned. These convictions are politically motivated, and the United 
States and Europe should consider an expansion of sanctions against 
Belarus. This subcommittee stands behind the United States and Europe 
in calling for the release of all political prisoners immediately and 
without preconditions.
Ukraine
    In its annual Freedom in the World report, Freedom House downgraded 
Ukraine from ``Free'' to ``Partly Free'' and warned of a country headed 
``down a path toward autocracy and kleptocracy.'' Key opposition 
figures are now under investigation, and the U.S. Embassy in Kiev has 
raised concerns about selective prosecution of corruption cases. 
Ukraine is too important a country to let slide down this path. The 
goals and objectives of the Orange Revolution remain unfulfilled. The 
United States needs to stay more fully engaged with the Government in 
Ukraine as well as its still-vibrant civil society if we are to 
strengthen Ukraine's democracy. America should press our EU partners to 
do the same.
Moldova
    Moldova has made some impressive progress on democratic and 
political reform over the last few years. Vice President Biden's 
historic trip to the country in March demonstrates the U.S. commitment 
to Moldova. The United States should continue to strongly support the 
government's reform agenda and assist the country in dealing with 
corruption and human trafficking within its borders.
                                 turkey
    Turkey remains a valuable NATO ally with a predominantly Muslim 
population in a dangerous and geopolitically strategic region of the 
world. How we define our relationship with Turkey over the next decade 
will have significant repercussions for our long-term interests abroad. 
The recent events throughout the Middle East and North Africa have 
increased Turkey's strategic importance as a center of power in this 
complex region.
    Turkey has been a constructive and influential ally for the United 
States in Iraq, Afghanistan, Bosnia, and Libya. If the United States is 
to meet the challenges posed by Iran's nuclear program, the Middle East 
peace process, diversification of European energy resources, European 
missile defense, or ongoing disputes in Cyprus and in the Caucasus, 
America will need to have a constructive relationship with the Turkish 
people and its government.
    We should maintain strong support for a deep and robust bilateral 
relationship with Turkey and its continued integration into Euro-
Atlantic institutions. It is also important to recognize where we have 
had our differences. The Turkish-Israeli relationship--so critical to 
stability in the region--is not as robust as it should be. The United 
States and Turkey also do not share the same threat assessment with 
respect to the danger of Iran's nuclear program. Turkey's vote against 
a fourth round of sanctions on Iran in the U.N. Security Council raised 
additional concerns.
                                balkans
    We've seen much progress in the Western Balkans, but we still have 
a lot of work to do if we are to fulfill the vision of a Southeast 
Europe fully integrated into the EU and NATO. It was only 15 years ago 
that the Dayton Peace Agreement brought an end to the war in Bosnia. 
Today, Slovenia is a thriving member of the European Union and NATO. 
Croatia, already a NATO member, is on the doorstep of EU membership. 
Montenegro has been recognized as a candidate for EU Membership. 
Serbia's current government has shown impressive leadership in 
anchoring Belgrade's future to the West. The trends are positive 
throughout the region, and many countries should be commended for their 
commitment to tackling political, economic, and military reforms.
Bosnia
    Bosnia remains perhaps the most difficult challenge and a major 
obstacle to a Europe that is whole, free, and at peace. Despite the 
need for significant political and constitutional reforms, Bosnia's 
politicians continue to use fear and division as a tool for 
consolidating political power. The international community has made 
strong efforts to help Bosnia with political reforms, and the Euro-
Atlantic community made an important commitment by offering a 
conditioned NATO Membership Action Plan. Since the October 2010 
elections, however, we have seen little progress in Bosnia, and the 
country remains without a government. In recent weeks, unconstructive 
calls for a referendum in Republika Srpska have led to reports of the 
worst crisis since the Dayton agreement in 1995. If we want to keep 
Bosnia from falling behind, we will need creative new ideas and 
stronger regional support on an active political reform agenda.
Kosovo-Serbia
    Another critical challenge for the region is the situation between 
Kosovo and Serbia. There is no question that the dream of a united 
Europe will not be realized without Serbia. To its great credit, the 
leadership in Belgrade has demonstrated their commitment to western 
institutions and has made EU membership its top foreign policy 
priority. Earlier this year, Kosovo and Serbia engaged in direct EU-
brokered talks on technical issues. This is an important step, and both 
countries should be commended for the courageous decision. Such 
discussions will be necessary to eventually pave the way for a more 
creative, pragmatic, and sustainable solution that best protects and 
improves the lives of all ethnicities throughout the region. This is a 
critical opportunity for the people of Kosovo and Serbia to begin to 
turn the page on a troubled and divisive past and start a new chapter 
in their shared history.
                                caucasus
    As an important corridor for energy transit into Europe, the South 
Caucasus is an incredibly important geo-strategic region to American 
interests, and we should work to ensure deeper, more robust U.S. 
relations with Azerbaijan, Armenia, and Georgia. The region continues 
to struggle with the conflict over Nagorno Karabakh, and U.S. 
influence--under the auspices of the Minsk Group--will be key to a 
peaceful and sustainable resolution that turns the page on the violence 
of the past. In addition, the United States has an interest in helping 
the region to achieve a more free, transparent, and democratic 
environment, and we should deepen our support for media freedom and 
political reforms in these countries. Long-term peace and stability in 
this strategically important region is vital to American economic, 
security, and diplomatic interests.
Georgia
    Georgia remains a critical U.S. ally in a tough and important 
neighborhood. It has been nearly 3 years since war broke out in South 
Ossetia and the Russian invasion, yet Russia still remains in violation 
of Georgia's territorial integrity. The United States should continue 
to strongly support Georgia's sovereignty and territorial integrity and 
to reject any claims of spheres of influence in the region. Georgia has 
made an impressive military commitment to the NATO fight in 
Afghanistan, and the United States should support a robust defense 
relationship with the country. In addition, it has made notable 
progress on rule of law issues and corruption. The United States will 
need to continue to help Georgia continue down the reform path if it is 
to strengthen its democracy, economy, and its vibrant civil society.

  STATEMENT OF HON. PHILIP H. GORDON, ASSISTANT SECRETARY OF 
  STATE FOR EUROPE AND EURASIAN AFFAIRS, DEPARTMENT OF STATE, 
                         WASHINGTON, DC

    Mr. Gordon. Thank you very much, Madam Chairman. It really 
is a pleasure to be back before this committee, and I look 
forward to the opportunity to talk about our priorities in 
Europe and Eurasia for the coming year.
    Let me also begin by applauding the good news that you 
began with about the captured journalists' release and also to 
second our thanks to the governments of Hungary and Turkey who 
have both helped us on a number of occasions in Libya looking 
after our interests and working on freeing captive journalists. 
So we join you in thanking them very sincerely.
    I have also submitted a longer testimony for the record. So 
with your permission, I will just make a few opening remarks on 
our priorities.
    And I will begin by underscoring that our engagement with 
Europe really begins with the notion that the United States 
faces--and I think, Madam Chairman, you used this expression 
yourself--a daunting international agenda. And our view is we 
cannot possibly deal with that agenda alone. As we look to meet 
those challenges, we have no better partner than Europe where 
we work with democratic, prosperous, militarily capable allies 
who share our values and our interests.
    To take just the most recent example in the case of Libya, 
it was to Europe and to NATO that the United States 
instinctively reached out to as a partner in this critical 
mission. As President Obama put it most recently, Europe is the 
``cornerstone of our engagement with the world.''
    There are three basic objectives that stand out when we 
think about our relationship with Europe, very briefly.
    The first is we work with Europe as a partner in meeting 
these global challenges. No matter what the issue is, whether 
it is the war in Afghanistan, the Iranian nuclear challenge, or 
the most recent operation in Libya, Europe is a critical 
partner.
    Second, we are still working with Europe on Europe, that is 
to say working to complete the historic project of helping to 
extend stability, security, prosperity, and democracy to the 
entire continent. Our work in promoting European integration is 
not done, and the effort continues in the Balkans, in Europe's 
east, and in the Caucasus.
    Finally, we have sought to set relations with Russia on a 
more constructive course. Our goal has been to cooperate with 
Russia where we have common interests--and we have many--but 
not at the expense of our principles or our friends.
    And I think looking back on the past 2 years, the first 2 
of this administration, we can point to significant progress in 
each area.
    When it comes to working with Europe on global challenges, 
we have pulled together, as never before, with our partners, 
and I will give you just a few specific examples. In 
Afghanistan, European nations now have almost 40,000 troops, 
and the total European financial contribution to Afghanistan 
since 2001 comes to $14 billion.
    On Iran, we have maintained unity in our efforts to engage 
and have, at the same time, seen the strongest-ever set of 
sanctions adopted by the U.N. Security Council and an even more 
robust set of follow-on sanctions adopted by the European 
Union.
    On missile defense, NATO allies have decided to develop a 
missile defense capability that will provide full coverage and 
protection from ballistic missile threats for all NATO European 
territory, population, and forces.
    Finally, in Libya, we consulted and cooperated very closely 
with our European allies to pass the U.N. Security Council 
resolutions 1970 and 1973, and then NATO took over enforcement 
of Resolution 1973 on March 31. Now Europe has over 7,000 
personnel in Operation Unified Protector, over 200 aircraft, 
and 20 naval ships.
    In the second area, extending the European zone of peace, 
prosperity, and democracy, we have had some important successes 
but, obviously, some important challenges remain.
    In the Balkans, the United States--and I think I can say 
the European--view is that Europe will not be complete until 
all of the countries of the Western Balkans are full EU 
members. On all regional issues, including on the dialogue 
between Serbia and Kosovo, on the future of Bosnia, and on 
Croatia's path to the European Union, we have consulted closely 
with Europe.
    In recent days, we stood together to oppose illegal 
measures taken by Republika Srpska that would undermine the 
Dayton Peace Agreement, which we believe must remain the 
framework for governance and the basis for reforms to enable 
Bosnia and Herzegovina to achieve its Euro-Atlantic 
aspirations.
    Another recent example is Belarus where we had, with the 
European Union, a joint response to the recent arrests and 
sentencing of Presidential candidates and others, and together 
we made very clear that our relationship with Belarus cannot 
improve so long as the repression of civil society, opposition, 
and independent media continue.
    In the Caucasus, our efforts with the European Union and 
the region have resulted in progress, but disputes over 
territory and in some cases the need for further political and 
economic reform remain serious obstacles. In Georgia, steadfast 
engagement and generous assistance have aided in transforming 
Georgia into an aspiring democracy and important partner to 
NATO in Afghanistan. Together we will maintain our support for 
Georgia's territorial integrity and sovereignty within its 
internationally recognized borders.
    Finally, Madam Chairman, we believe that our reset with 
Russia has paid significant dividends. Challenges remain but we 
think the results already speak for themselves. We have 
concluded a new START treaty which will significantly reduce 
the number of nuclear weapons and launchers deployed by the 
United States and Russia, while also putting in place a strong 
verification regime.
    We signed an agreement for the transit of troops and 
materiel across Russia that has allowed for more than 1,000 
flights, carrying 170,000 U.S. military personnel en route to 
Afghanistan.
    We have secured Russia's cooperation in dealing with Iran's 
and North Korea's nuclear programs.
    And we have done all of this without compromising our 
principles--in particular, our steadfast commitment and respect 
for human values and human rights and the sovereignty and 
territorial integrity of all the nations of Europe.
    Clearly there is much work that remains to be done on all 
of these issues and while none of them is easy, particularly at 
a time of budgetary austerity, I am confident that the 
partnership between the United States and Europe, which has 
achieved so much in the last 60 years, will continue to achieve 
great things in the years and decades to come.
    Thank you very much.
    [The prepared statement of Mr. Gordon follows:]

  Prepared Statement of Assistant Secretary of State Philip H. Gordon

    Chairman Shaheen, Ranking Member Barrasso, members of the 
committee, watching the wave of democracy protests in the Arab world 
reminds us inevitably of the last time dictatorships across an entire 
region suddenly shook and collapsed under the weight of the people's 
desire for freedom. In 1989, Europe changed suddenly and immeasurably. 
Because of those events and because of the wise bipartisan policies in 
the years that followed, Europe, and our relationship with Europe, has 
changed vastly in the last 20 years. In those days, the major 
preoccupation in the transatlantic relationship was the defense of 
Europe against the Soviet threat. Today, Europe is almost fully 
democratic, largely unified, and is America's essential global partner. 
When the Libya crisis erupted, for example, we worked closely with our 
European allies to pass UNSCRs 1970 and 1973, and we looked to NATO to 
lead the effort to enforce the no-fly zone and arms embargo and to 
protect civilians.
    Beyond Libya, the United States and Europe work together on an 
extraordinarily wide range of issues, from Afghanistan to Iran to the 
tumultuous events in North Africa and the Middle East. On both sides of 
the Atlantic we are working hard to recover from the worst financial 
crisis since The Great Depression. Because our economies are 
intertwined, and we are working together so closely on problems around 
the globe, policy decisions taken in Europe to address the Eurozone 
crisis will have an impact here in the United States. There is a common 
thread that runs through all our engagement with Europe: United States-
European cooperation is and remains essential to achieving our 
strategic objectives.
    Our engagement with Europe begins with the idea that the United 
States faces a daunting international agenda and that our ability to 
deal with it is immeasurably increased by working with strong allies 
and partners. In meeting these challenges, we have no better partner 
than Europe, where we work with democratic, prosperous, militarily 
capable allies who share our values and share our interests. In the 
words of President Obama, Europe is ``the cornerstone of our engagement 
with the world.''
    To help you understand the breadth and depth of that engagement, 
I'll describe the strategic objectives that drive our approach toward 
Europe. Then, I'd like to offer you an assessment of our record over 
the past 2 years on these objectives.
    When I think about this administration's priorities in Europe, 
there are three basic objectives that stand out in our engagement with 
the continent:
    1. First, we work with Europe as a partner in meeting global 
challenges. On every issue of global importance, Europe's contributions 
are crucial to solving major international challenges. No matter what 
the issue is--from the war in Afghanistan, to the Iranian nuclear 
challenge, to the new operation in Libya--Europe is indispensable. We 
are vastly stronger--in terms of legitimacy, resources, and ideas--when 
we join forces with Europe on the global agenda.
    2. Second, we are still working with Europe on Europe, that is to 
say working to complete the historic project of helping to extend 
stability, security, prosperity and democracy to the entire continent. 
The extraordinary success that the United States and Europe have had 
together in promoting European integration, in consolidating and 
supporting the new democracies in Central and Eastern Europe and 
integrating them into Euro-Atlantic institutions demonstrates the 
promise of this enterprise. But our work is not done. And so the effort 
continues in the Balkans, in Europe's east, and in the Caucasus.
    3. Finally, we have sought to set relations with Russia on a more 
constructive course. President Obama recognized that he had inherited a 
relationship that was in a difficult place and that this situation did 
not serve the interests of the United States. Therefore, our goal has 
been to cooperate with Russia where we have common interests, but not 
at the expense of our principles or our friends. As such, where we have 
concerns, such as on Russia's human rights record, or on Georgia, we 
will continue to raise concerns with government and foster connections 
with civil society.
    Looking back on the past 2 years, we can point to significant 
progress in each area.
    First, we have worked together as never before with our European 
partners on global issues, including Afghanistan, Iran, missile 
defense, and the momentous developments in North Africa and the Middle 
East. Specifically:

   In Afghanistan, following the President's West Point speech 
        in November 2009, Europe contributed about 7,000 additional 
        troops, over 100 training teams for the Afghan Army and police, 
        and nearly $300 million for the Afghan National Army trust 
        fund. European nations now have almost 40,000 troops in 
        Afghanistan and the total European contribution to Afghanistan 
        since 2001 comes to over $14 billion.
   On Iran, we maintained unity in our efforts to engage, and 
        we have at the same time seen the strongest-ever set of 
        sanctions adopted by the U.N. Security Council and an even more 
        robust set of follow-on sanctions adopted by the European 
        Union. These additional measures taken by the EU cover a 
        variety of areas critical to the regime including trade, 
        finance, banking and insurance, transport, and the gas and oil 
        sectors, in addition to new visa bans and asset freezes. These 
        steps have raised the price of Iran's failure to meet its 
        obligations and we hope will serve to bring them back to the 
        negotiating table.
   On Missile Defense, NATO allies recognized at the Lisbon 
        summit in November 2010 that the defense of Europe can no 
        longer be achieved just by tanks or bombers. Now, we need 
        defenses against a new and grave set of threats, in particular 
        ballistic missiles in the hands of dangerous regimes. Our aim 
        as an alliance is to develop a missile defense capability that 
        will provide full coverage and protection from ballistic 
        missile threats for all NATO European territory, populations, 
        and forces. This capability will be a tangible expression of 
        NATO's core mission of collective defense. At the summit, 
        allies also welcomed the U.S. missile defense system in Europe, 
        known as the European Phased Adaptive Approach, as a valuable 
        national contribution to the overall effort, and we hope to see 
        additional voluntary contributions from other allies. We are 
        now exploring further ways to cooperate with Russia on missile 
        defense, without in any way prejudicing NATO's ability to 
        independently defend its territory from missile threats.
   In Libya, we consulted and cooperated closely with our 
        European allies to pass UNSCRs 1970 and 1973, which levied 
        sanctions against the Qadhafi regime, established a no-fly zone 
        over Libya, and gave us the authority to protect Libyan 
        civilians from the regime's attacks. NATO took over enforcement 
        of UNSCR 1973 on March 31 and now has over 7,000 personnel in 
        Operation Unified Protector, over 200 aircraft and 20 ships. 
        OUP has maintained a consistently high operational tempo across 
        a vast country. NATO has flown over 6,000 sorties--almost half 
        of them strike sorties--and hit hundreds of critical targets. 
        And this is primarily a European operation. Over 60 percent of 
        the aircraft come from our allies and our partners, including 
        from the region. All 20 naval ships are contributed by Canada 
        and European allies.

    In the second area, extending the European zone of peace, 
prosperity, and democracy, we have had some important successes, but 
equally important challenges remain. As I said at the outset, the work 
of ``completing'' Europe is not finished. What I think is most notable 
about our current efforts under the Obama administration is how 
closely--as part of a deliberate strategy--we are working together with 
Europe to achieve this goal.
    Take, for instance, Ukraine, Belarus, Moldova, Georgia, Azerbaijan, 
and Armenia. These are the countries of the EU's Eastern Partnership, 
an initiative that the United States strongly supports and works with 
to advance democracy, stability, and security in this part of the 
world. We share with our European counterparts a similar approach to 
these countries because of our common goals. As the situation has 
deteriorated in Belarus, including with the conviction of former 
Presidential candidate Sannikov, we have coordinated very closely with 
the EU including on possible additional sanctions.
    The same can be said of the Balkans: the U.S. and European view is 
that Europe will not be complete until all of the countries of the 
Western Balkans are full EU members. On the dialogue between Serbia and 
Kosovo, on the future of Bosnia, on Croatia's path to the EU, we have 
consulted closely with Europe. We also welcomed Albania and Croatia 
into NATO, extended Membership Action Plans to Bosnia and Montenegro, 
and Macedonia will join once the dispute over its name is resolved. 
This degree of accord on the Balkans is the foundation of our success--
we work together every step of the way. The intensive joint diplomacy 
of recent months has shown how closely our visions are aligned, 
something which is essential for progress in the region.
    U.S. and European unity is particularly critical in Bosnia, where 
nationalist politicians are irresponsibly challenging the very core of 
the Dayton Accords and threatening the functioning and integrity of the 
Bosnian state. Bosnian leaders are often privileging their own 
interests above their populations. Bosnia cannot take its rightful 
place in Europe unless it has a state functional enough to meet NATO 
and EU accession requirements. We are, together with our European 
allies, committed to helping Bosnia meet those requirements.
    Another example of the decisive impact that United States-European 
cooperation can have in the region is our joint response to events in 
Belarus. The Government of Belarus's crackdown on civil society and the 
opposition following the flawed election in December has been sharply 
condemned on both sides of the Atlantic. We have made very clear that 
our relationship with Belarus cannot improve in the context of 
continued repression of civil society, the opposition, and independent 
media. The United States and the EU have called for the immediate and 
unconditional release of all detainees and an end to the continue human 
rights violations against critics of the government. We consider the 
five Presidential candidates and other democratic activists who are 
being tried after being arrested in conjunction with the December 19 
Presidential election to be political prisoners; the latest convictions 
and ongoing trials are clearly politically motivated. Both we and 
Europe have targeted measures against those officials responsible for 
the crackdown even as we and Europe support the aspirations of the 
people of Belarus for a modern open society. To that end, the United 
States is providing an additional $4 million in democracy-related 
assistance to help Belarusians create space for the free expression of 
political views, the development of a civil society, freedom of the 
media, and empowerment of independent entrepreneurs. Both we and Europe 
want a better, more productive relationship with Belarus; 
unfortunately, the country's leadership is following a policy that will 
only further isolate Belarus and its people.
    Turning to the Caucasus, our joint efforts with the European Union 
and other international partners in the region have resulted in 
progress, but disputes over territory and a need for further meaningful 
political and economic reforms remain serious obstacles to greater 
stability. In Georgia, our steadfast engagement and generous assistance 
have aided in transforming Georgia into an aspiring democracy and 
important partner to NATO in Afghanistan. Together with our European 
partners, we will maintain our support for Georgia's territorial 
integrity and sovereignty within its internationally recognized borders 
and will continue to support international efforts to find a peaceful 
resolution to the dispute over Abkhazia and South Ossetia. Elsewhere in 
the region, we will continue to press for democratic reforms and an 
opening of the political space such that human rights and fundamental 
freedoms are fully respected, to encourage normalization between Turkey 
and Armenia, and to increase our engagement through the Minsk Group 
with Russia and France to help Armenia and Azerbaijan find a peaceful 
settlement to the Nagorno-Karabakh conflict. In that regard, we 
strongly believe that the time has come to finalize and endorse the 
Basic Principles and move to the drafting of a peace agreement. We 
believe that the United States and Europe must work together to avoid 
further conflict in Europe and help the countries in the region move 
toward democracy, peace, and greater prosperity.
    Our foreign assistance investments remain an important instrument 
in advancing the European zone of peace, prosperity, and democracy. 
There have been reductions to the region's assistance budget in the 
administration's FY 2012 request. They are the result of the 
achievement of some assistance goals in the region and of the 
particularly difficult budget climate in which we find ourselves. In 
future decisions on resource allocations, we will continue to take 
account of vital long-term U.S. interests in this region.
    Finally, what has arguably been the most challenging part of our 
European agenda--our reset with Russia--has paid significant dividends. 
Challenges remain. However, we can now say that our engagement with 
Russia can help with America's security and our global priorities. The 
results speak for themselves:

   Most significantly, we have concluded a New START treaty and 
        following the recent approval by both Congress and the Russian 
        State Duma, it has entered into force. The agreement is the 
        most comprehensive arms control agreement in nearly two decades 
        and significantly reduces the number of nuclear weapons and 
        launchers deployed by the United States and Russia while also 
        putting in place a strong verification regime.
   We signed an agreement for the transit of troops and 
        materiel across Russia in support of efforts in Afghanistan. 
        Under our bilateral agreements, more than 1,100 flights 
        carrying over 170,000 U.S. military personnel have transited 
        Russia en route to Afghanistan. Under a NATO-Russia agreement, 
        nearly 27,000 containers have transited Russia for use in 
        Afghanistan. At this time, 50 percent of U.S. sustainment cargo 
        for Afghanistan goes through the Northern Distribution Network 
        and 60 percent of supplies transiting that network go through 
        Russia. This is a significant benefit for the United States.
   We have secured cooperation with Russia on Iran and North 
        Korea's nuclear programs, both in terms of U.N. Security 
        Council Resolutions 1929 and 1874 respectively, and Russia's 
        decision to cancel a contract for the delivery of the S-300 air 
        defense system to Iran.

    We have done all of this without compromising our principles--in 
particular our steadfast commitment to respect for universal values, 
the sovereignty, and territorial integrity of all of the nations of 
Europe. We firmly believe that the security and prosperity of Europe 
also rests in adhering to commitments to advance human rights and 
democracy. Where human rights problems exist, we will continue to speak 
out and strongly support the rights of Russian citizens and others 
throughout the region to peacefully exercise freedom of expression and 
assembly as guaranteed under the constitution and enshrined in the U.N. 
Universal Declaration of Human Rights and the Helsinki accords.
    And thanks to the work of the Bilateral Presidential Commission and 
its 18 working groups, our engagement with Russian society is paying 
important dividends as well. Polling now indicates 60 percent of 
Russians have a positive view of the United States, a figure not seen 
in nearly a decade.
    This brief overview of the U.S. agenda with Europe demonstrates 
that we work together closely with Europe on nearly every major issue, 
both internationally and within Europe. Whether the issue is promoting 
democracy in Europe's east or south, advancing energy security for the 
whole continent, or contributing to the NATO effort to secure 
Afghanistan, the energy, ideas, and commitment of Europe is something 
we look to and rely upon in pursuing our common goals.
    As you can see, our transatlantic partners have been very busy. But 
appropriately so--we have an extremely full United States-Europe agenda 
because we have so many pressing challenges in the world today, and 
close transatlantic cooperation is the indispensable starting point in 
addressing all of them.
    There is much work to be done to translate this agenda into 
concrete steps toward the security and prosperity of both Europe and 
the United States. This is not easy, particularly at a time of 
budgetary austerity all across the industrialized world. We will have 
to adapt creatively to this new reality by finding ways to make our 
collective defense spending smarter and more efficient. We will need to 
reform NATO and streamline its operations, as we and our NATO allies 
pledged in the recent NATO Strategic Concept. We will have to find ways 
to advance NATO-EU cooperation so that the full resources of both 
institutions can be harnessed most effectively. We must continue to 
build on the momentum of the OSCE Astana summit last December to 
reinvigorate efforts to ensure comprehensive security in Europe. We 
have to create a more seamless and market-based flow of energy into 
Europe and within Europe. If we can do these things, I am confident 
that the partnership between the United States and Europe--which has 
achieved so much in the last 60 years--will achieve even greater things 
in the decades to come.
    With that, I look forward to your questions.

    Senator Shaheen. Ms. Alexander.

 STATEMENT OF HON. PAIGE E. ALEXANDER, ASSISTANT ADMINISTRATOR 
     FOR EUROPE AND EURASIA, U.S. AGENCY FOR INTERNATIONAL 
                  DEVELOPMENT, WASHINGTON, DC

    Ms. Alexander. Chairwoman Shaheen, thank you for inviting 
me to appear before you today. I appreciate the opportunity to 
discuss USAID's development priorities in Europe and Eurasia as 
we aim to achieve a Europe that is whole, free, and at peace.
    The President has requested just under $535 million for 
fiscal year 2012 to build upon the momentum for reform, seek to 
entrench the stability, and address key challenges that inhibit 
the full democratic and economic transitions in the region.
    We have five primary goals in Europe and Eurasia.
    First, we seek to address the most difficult challenges to 
democracy and human rights. As Phil has mentioned, the recent 
example of the government crackdown in Belarus on independent 
parties, civic groups, and media.
    Second, AID's programs aim to enhance stability in the 
Caucasus through assistance for economic growth and democracy. 
In Georgia, our priority is to build on post-conflict gains by 
assisting the reform-minded administration to entrench 
democratic, economic, and social reforms.
    Third, we are assisting countries in South Central Europe 
to reach their goal of Euro-Atlantic integration by improving 
economic opportunities, strengthening viable democratic 
institutions and accountable governance, and promoting 
tolerance and reconciliation.
    Fourth, we are promoting new cooperation with Russia to 
address development challenges, such as our joint efforts to 
eradicate polio, while continuing to support the development of 
a more robust and resilient civil society, the strengthening of 
democratic institutions and processes, and the protection and 
promotion of human rights.
    Finally, USAID programs are promoting democratic and 
economic reform in Ukraine and supporting Moldova's progress 
toward European integration by strengthening democratic 
institutions and promoting economic growth.
    Twenty years of USAID engagement in Europe and Eurasia have 
produced sustainable democratic and economic transitions in 11 
out of the 24 countries where assistance originally was 
received. Seventeen countries have joined WTO, 10 have acceded 
to the EU, and 12 have joined NATO. Once our opponents in the 
cold war, the former Eastern Bloc countries that have graduated 
from USAID assistance, are now among the strongest supporters 
of U.S. foreign policy objectives.
    USAID ensures that Europe's poorest citizens have the tools 
to thrive. By strengthening civil society and increasing 
government accountability, defending universal values, 
enhancing energy independence and security, our programs have 
helped to promote broad-based economic growth to create the 
American markets of tomorrow.
    The U.S. assistance helps to prevent the spread of HIV/AIDS 
in the only region in the world where the prevalence is 
increasing.
    We seek to uphold universal values in a region that still 
counts some of the world's least democratic states as its 
members and promotes economic growth in all countries like 
Kosovo where unemployment rates among youth reach over 50 
percent and where 30 percent of the population lives below the 
poverty line.
    We are confident that the resources the United States 
invests in this region will continue to provide a strong return 
on that investment and help to achieve our core policy 
objectives. By building sustainable partnerships and addressing 
key development challenges, U.S. assistance prevents 
instability and fosters emerging markets in this region.
    Recognizing the tight budget environment, success in key 
areas, and a need to fund other global priorities, the 
President's budget proposes a significant savings from the 
Europe and Eurasia region. AID will work with increased 
efficiency and creativity to address these key challenges and 
advance democratic and economic transitions in this region.
    AID is fundamentally transforming the way that we work by 
strategically realigning Foreign Service officer positions, 
empowering local staff, increasing reliance on cost-effective 
D.C.-based staff, restructuring our field presence, and ending 
AID funding assistance programs in Montenegro, a middle-income 
country that is on a sustainable path to becoming a fully 
democratic, market-based economy.
    Through USAID Forward reforms, we are redoubling our 
efforts to increase donor coordination, enhance sustainability 
through local partnerships and capacity-building, and use 
science and technology to leapfrog global development 
challenges. After 20 years in this region, we can share lessons 
learned from our experiences with transitions, better utilize 
our talented human resources, and better measure our progress 
along the development continuum.
    To further improve efficiency and effectiveness to meet 
continuing challenges, we are leveraging funding to maximize 
the impact achieved with every American tax dollar spent in 
Europe and Eurasia. We are partnering with international 
donors, host countries, and the private sector to amplify our 
results and achieve positive development outcomes.
    Each of these partnerships with local institutions builds 
sustainability so that our assistance continues to achieve 
results beyond our presence. It improves the effectiveness of 
our programs and it enhances the endurance of these alliances.
    I look forward to working with you as we transform the way 
that we work to advance U.S. interests by meeting the 21st 
century development challenges and building strong partnerships 
for the future with stable, sustainable, market-oriented 
democracies in Europe and Eurasia.
    Thank you for your leadership in making sure that Europe 
remains fully engaged on Europe.
    And I welcome any questions from the committee.
    [The prepared statement of Ms. Alexander follows:]

    Prepared Statement of Assistant Administrator Paige E. Alexander

    Chairwoman Shaheen, Senator Barrasso, and members of the 
subcommittee, thank you for inviting me to appear before you today. I 
appreciate the opportunity to discuss USAID's priorities in Europe and 
Eurasia, our successes, and the region's persistent development 
challenges in a period of declining U.S. assistance resources.
    The President's fiscal year 2012 budget request for Europe and 
Eurasia builds on momentum for reform, seeks to entrench stability, and 
addresses key challenges that inhibit the full democratic and economic 
transitions of the region. To accomplish these objectives, the 
President's request includes $513.9 million for Assistance to Europe, 
Eurasia, and Central Asia; $14.5 million for Global Health and Child 
Survival (USAID); and $6 million for the Economic Support Fund.
    Our primary goals are to:

   Address the most difficult challenges to democracy and human 
        rights--for example, the recent government crackdown on 
        independent political parties, civic groups, and media in 
        Belarus. With the $4 million U.S. Government pledge at the 
        Warsaw donors' conference in February 2011, we will increase 
        support to Belarusian civil society leaders, democratic 
        activists, human rights defenders, independent media, and 
        entrepreneurs to promote a freer, more open, and pluralistic 
        society.
   Enhance stability in the Caucasus through assistance for 
        economic growth and democracy. In Georgia, our priority is to 
        build on post-conflict gains by assisting the reform-minded 
        administration to entrench economic and social reforms and to 
        promote further political liberalization and democratic 
        consolidation. Our assistance has gone to internally displaced 
        persons (IDPs) and families and prevented a new wave of IDPs, 
        improved education and health care in rural and urban centers, 
        improved transparency in media ownership, improved electoral 
        processes, and enhanced energy security.
   Help countries in South Central Europe reach their goal of 
        Euro-Atlantic integration, by improving economic opportunities, 
        strengthening viable democratic institutions and accountable 
        governance, and promoting tolerance and reconciliation.
   Promote new cooperation with Russia to address challenges 
        that pose a global threat, such as our joint efforts to 
        eradicate polio, while continuing to support the development of 
        a more robust and resilient civil society, the strengthening of 
        democratic institutions and processes, and the protection and 
        promotion of human rights.
   Promote democratic and economic reform in Ukraine.
   And support Moldova's progress toward European integration.

    We are confident that the resources the United States invests in 
this region will continue to provide a strong return on investment and 
help achieve our core policy objectives.
    Twenty years of USAID engagement in Europe and Eurasia have 
produced sustainable democratic and economic transitions in 11 of the 
24 countries that originally received our assistance. Seventeen 
countries have joined the World Trade Organization; 10 have acceded to 
the European Union; and 12 have joined the North Atlantic Treaty 
Organization. Once our opponents in the cold war, the former Eastern 
Bloc states that have graduated from USAID assistance are now among the 
strongest supporters of U.S. foreign policy objectives.
    Our experiences, successes, and lessons learned through the social, 
political, and economic transitions of European and Eurasian countries 
are particularly relevant as the Middle East faces democratic 
transitions of its own. We have learned that these transitions are 
neither quick nor smooth--they require time and continued commitment. 
Democracy cannot be created overnight nor can democratic principles 
become adopted throughout the region in just a few years.
    In Europe and Eurasia, we are advancing these transitions by 
actively building sustainable partnerships and addressing key 
challenges that further U.S. national security and economic interests. 
USAID assistance prevents instability and fosters emerging markets. We 
have seen that the ability of other countries to weather global 
economic crises directly affects U.S. economic stability in a 
globalized market.
    An authoritarian regime that does not enjoy democratic legitimacy 
is ultimately prone to instability and political upheaval. An 
individual carrying multidrug resistant TB has the potential to infect 
Americans both here and abroad. High unemployment, sharp ethnic 
divisions, frozen conflicts, and spreading epidemics pose significant 
development challenges in Europe and Eurasia.
    Assistance from the American people combats the spread of HIV and 
AIDS in the Europe and Eurasia region, the only region in the world 
where HIV prevalence is increasing--with an estimated 130,000 new cases 
in 2009 alone.
    Assistance from the American people advances government 
accountability, confronts democratic backsliding, and upholds universal 
rights in a region that still counts some of the world's least 
democratic states as its members.
    Assistance from the American people supports human rights activists 
and strengthens civil society to defend those who peacefully advocate 
for increased liberties and accountability. This support is still 
vitally needed. The case of Natalya Estemirova, a journalist who was 
abducted and killed while reporting on human rights in the North 
Caucasus, shows why.
    Assistance from the American people promotes entrepreneurship and 
helps to combat poverty, critical factors in countries such as Kosovo, 
where unemployment rates among youth reach over 50 percent and where 30 
percent of the population lives below the poverty line, thereby 
threatening stability in the region.
    Assistance from the American people seeks to protect victims of 
human trafficking in the region of the world where it is growing the 
fastest, indeed where an estimated 175,000 to 500,000 people are 
trafficked annually.
    USAID ensures that Europe's poorest citizens have the tools to 
maintain social and economic stability and stem global disease threats 
through core investments in health and education.
    USAID works to bolster government accountability by strengthening 
civil society, supporting free and independent media, increasing 
transparency, and defending universal values.
    USAID enhances global energy independence and security by 
diversifying resources and fostering new distribution networks to link 
markets together.
    USAID assistance is aimed at creating the American markets of 
tomorrow by building local entrepreneurship and innovation and 
strengthening rule of law, public institutions, and investment 
environments.
    Recognizing the tight budget environment, successes in key areas, 
and a need to fund other global priorities, the President's budget 
proposes significant savings from the Europe and Eurasia region. 
Compared to FY 2010 enacted levels, the request reduces funding for 
Europe and Eurasia by $97 million (16 percent) for AEECA and $27 
million (82 percent) for the Economic Support Fund.
    We will work with increased efficiency and creativity to address 
these key challenges and advance the democratic and economic 
transitions of the region. We are fundamentally transforming the way 
that we work by strategically realigning our Foreign Service officer 
positions, empowering local staff, increasing reliance on cost-
effective D.C.-based staff, and restructuring our field presence.
    By the end of FY 2012, we will reduce our permanent American 
Foreign Service officer positions in the region by roughly 25 percent.
    By FY 2012, we will move to a model endorsed in the Quadrennial 
Diplomacy and Development Review that will utilize USAID technical 
expertise on a regional basis.
    By FY 2012, we will end USAID funding for assistance programs to 
Montenegro--a middle-income country that is on a sustainable path to 
becoming a fully democratic, market-based economy. While USG funding 
will continue to address remaining issues primarily in the area of rule 
of law, ending USAID's presence in Montenegro will allow us to focus on 
other global priorities. Eleven countries in Central and Eastern Europe 
have already graduated entirely from U.S. nonsecurity assistance. The 
administration will look at the possibility of further phaseouts 
consistent with the needs of recipient countries in the region, the 
advancement of U.S. interests, and the availability of resources.
    Through the USAID Forward reforms, we are redoubling our efforts to 
increase donor coordination, enhance sustainability through local 
capacity building, use science to leapfrog global development 
challenges, share lessons learned from our experiences with 
transitions, better utilize our talented human resources, and better 
measure our progress along the development continuum.
    To improve our efficiency and effectiveness further in meeting 
these challenges, we are leveraging funding to maximize the impact 
achieved with every American taxpayer dollar spent in Europe and 
Eurasia. We are partnering with international donors, host countries, 
and the private sector to amplify our results and achieve positive 
development outcomes.
    In Bosnia-Herzegovina, USAID has leveraged over $60 million of 
additional funding from other international donors, including the 
launch of the first ever jointly funded Development Credit Authority 
loan guarantee program, which generated $40 million to spur local 
entrepreneurship by combining capital with the Swedish International 
Development Agency.
    In Azerbaijan, USAID has nearly doubled the size of its economic 
growth programs through host government cofinancing.
    Throughout the region, USAID has leveraged over $350 million from 
the private sector through Global Development Alliances.
    With congressional support, USAID has financed 10 enterprise funds, 
covering 18 countries, which have leveraged over $9 billion in 
additional financing to strengthen private sector growth. Profits from 
these funds have been reinvested in the target countries to propel 
economic development further, and these funds have already returned a 
total of $180 million to American taxpayers through the U.S. Treasury.
    We are also working to forge new partnerships with emerging donors 
to overcome development challenges across the globe. For instance, 
Administrator Shah signed a Protocol to cooperate on the global 
eradication of polio, which brings together Russian and American 
experts to work side by side in third countries to rid the world of 
this disease once and for all.
    Each of these partnerships with local institutions builds 
sustainability so that our assistance continues to achieve results 
beyond our presence, improves the effectiveness of our programs, and 
enhances the endurance of our alliances.
    I look forward to working with you as we transform the way that we 
work to advance U.S. interests by meeting 21st century development 
challenges to build a strong base of partnerships for the future with 
stable and sustainable market-oriented democracies of Europe and 
Eurasia.
    Thank you and I would welcome any questions from the committee.

    Senator Shaheen. Thank you both very much.
    I want to talk broadly about some of the economic issues in 
Europe, but before I do that, we got a report today that 
Georgian civilians have been wounded by gunfire along the South 
Ossetia Administrative Boundary line, and it would be the first 
incident since March 2009.
    Last week, Senator Lindsay Graham and I introduced a 
resolution supporting the territorial integrity of Georgia and 
calling on the Government of Russia to fulfill its cease-fire 
agreement and return its military forces to prewar positions.
    Can you tell us what you know about this incident and what 
more we can do to emphasize the need for monitoring missions on 
the ground and how we can continue to work to address the 
territorial integrity of Georgia?
    Mr. Gordon. Thank you for raising what is, indeed, an issue 
of great concern to us.
    I do not have all of the details on the incident and so 
prefer not to focus on the specifics, but rather to take the 
opportunity to say that it is precisely this sort of incident 
that happened today that underscores why we are so concerned 
about the unresolved situation in Georgia.
    You are right to underscore in your resolution and just now 
Russia's lack of full compliance with the 2008 cease-fire. As 
you know, our strong view, like that of pretty much every 
country in the world, with a very tiny number of exceptions, is 
to recognize Georgia's sovereignty and territorial integrity.
    And the Russian military presence there, about which the 
Russians are not fully transparent, is a problem, and it can 
lead to just the sort of incident that you mentioned, as can 
the lack of international observation, which is something we 
have pushed for for a long time. It existed prior to the August 
2008 war and now no longer do you have U.N. and OSCE observers 
on the ground which leads to questions. And frankly, again 
without getting into the details of today's events, we may 
never know precisely because we do not have full transparency.
    In the undisputed parts of Georgia, the European Union has 
a monitoring mission. So we know very well what is going on in 
undisputed Georgia. In the rest of Georgia, we have very little 
idea, and that is a problem and it leads to the sort of thing 
that we saw today.
    So we are very focused on this issue. As you know, I 
regularly lead our delegation to the Geneva talks which are 
focused on this. We have made some progress in those talks in 
the incident prevention and response mechanisms but, frankly, 
not enough. And we are going to remain focused on that because 
we really need to see Russia fully implement all of the points 
in the 2008 cease-fire and then start tackling the broader and 
more fundamental point of Georgia's sovereignty and territorial 
integrity.
    Senator Shaheen. Thank you.
    As I said, I really wanted to start with something that we 
do not have a lot of leverage over and that is the ongoing debt 
crisis in Europe. It has been pushed off the front pages 
because of what has happened across the Middle East and Libya 
recently. But I assume that this is going to be a major topic 
of conversation at the G8 during the President's upcoming 
visit. I wonder, Mr. Gordon, what your thoughts are about how 
this is affecting Europe's focus on other issues.
    Mr. Gordon. Thank you, Madam Chairman, again, a very 
important issue and one we are following very closely and, yes, 
no doubt, will be addressed by the President not just at the 
G8, but of course, he starts in Ireland, which has been one of 
the countries most touched by the debt crisis and it will no 
doubt come up there as well.
    It is, of course, primarily an issue for the Europeans, for 
the European Union, for the European Central Bank, and for the 
IMF. And so in that sense, there is not a direct American role. 
But as you suggest, the importance of our trade and investment 
relationship with Europe, which creates millions of jobs in the 
United States and opportunities, and the importance of Europe 
for the global economy makes this a profound interest of the 
United States.
    Our Treasury is in very close touch with counterparts in 
Europe, even while acknowledging that this is primarily an 
issue for the European institutions and the IMF.
    The one thing I would say is that we are impressed with the 
way that a number of these governments are handling what is a 
very difficult situation. I mentioned Ireland, Portugal, 
Greece. All of these governments have recognized the need for 
reforms, the need for very tough austerity measures, and I 
think we can say they have been quite courageous in addressing 
these, and that is the deal on which further money has been 
lent to them. They would acknowledge the need for reforms, 
undertake those reforms, including structural reforms, and the 
European Union's Central Bank and IMF would provide additional 
financing. And we support those efforts and will continue to 
follow it closely because we have such a stake in the outcome.
    Senator Shaheen. So perhaps they could model what we need 
to do here.
    Mr. Gordon. I will leave that without comment.
    Senator Shaheen. Yes. You do not need to comment.
    But that is a segue into what I referred to in my opening 
comments about the extent to which the fiscal crisis we are 
having in the United States drives what our spending looks like 
and our budget priorities. You both referred to this somewhat, 
but could you talk about how the administration views Europe 
within the prioritization of all of the challenges around the 
globe and how we see the budget unfolding and what that means 
for our commitments in Europe?
    Mr. Gordon. Paige will want to talk about the assistance 
part of that ledger, but maybe I can say two brief things about 
it first.
    I failed to answer the part of your question on the 
European debt crisis about the degree to which that might be 
affecting their role in the world and their cooperation with 
us. But I wanted to because I think it is important to note 
that despite their economic challenges, we have actually not 
seen a dropping off in their willingness to engage and be the 
global partner that I began by saying we need. And I think that 
is true across the board.
    There is, no doubt, belt-tightening going on and it is even 
more difficult than it was before to come up with the troops 
and money for the challenges we face together. But in 
Afghanistan, we have seen no dropoff on their willingness to 
commit to the common strategy that we are implementing. I 
mentioned the 40,000 troops that they continue to maintain. We 
are very closely in touch through NATO on the process of 
transition that we have agreed on starting this summer, and we 
expect by 2014 leading to Afghan lead authority throughout the 
country. But that is going to be a process that will depend on 
conditions on the ground, and we are going to have to uphold 
our commitments in the meantime.
    And we have not seen the economic crisis really diminish 
Europe's willingness to do that, which is very important to us, 
nor has it limited their willingness to engage and continue to 
do what we are doing together in Libya which is something none 
of us had been able to plan for or budget but all of us felt 
was something that was absolutely necessary for our values and 
our interests. And as you know, Europeans have actually taken 
the lead in that effort and have provided the bulk of the 
effort to enforce the no-fly zone, enforce the arms embargo, 
and are leading in terms of strike assets, as well, on the 
military side. And there, too, we know how difficult it is for 
them, but we know that we all signed up for this common 
endeavor, and as hard as it is for all of us on the financial 
side, we know we have these important priorities and we have to 
stand by what we are committed to.
    Senator Shaheen. Thank you.
    Ms. Alexander, do you want to speak to that?
    Ms. Alexander. Thank you, Chairwoman Shaheen.
    We are studying ways to work efficiently and effectively to 
meet the remaining challenges in this region. I think, as I 
previously mentioned, looking at different indicators and 
analysis, we decided that USAID assistance to Montenegro is no 
longer necessary. It does not mean that there are not going to 
be assistance programs in Montenegro, but from AID's 
perspective, we have had to look at the budget decline and 
decide where we want to focus our efforts. I think there are 
persistent challenges and, in the places that we are in now, we 
have to address them, like MDR/XDR TB and some of the health 
care programs, we will continue to do that work.
    Senator Shaheen. Why do you not explain what MDR/XTR TB is?
    Ms. Alexander. Sure. Multi-drug-resistant TB is a 
dangerous, hard to treat strain of the disease. Baku, 
Azerbaijan, has the highest level of multidrug resistant TB in 
the world. And so there are areas that we are having to look at 
where we can afford to make a difference at this point.
    But more importantly, we have found a lot of good partners 
in Europe, both as Phil mentioned on the global stage for 
policy, and for the exercise of political will for reform in 
Georgia, for example. I was just there last week and met with 
the President and with nonprofit leaders, and you can see that 
there is a real will among the administration to find ways to 
work successfully on legal and economic reforms and regulatory 
reforms. And so in places like that, we are able to leverage 
that assistance where there is political will.
    Also in Bosnia, with the European Union and with other 
donors who are very active, we found ways to leverage $60 
million for one of our government accountability programs. And 
those are the type of indicators that we look at before USAID 
decides if we are ready to move on.
    Senator Shaheen. Thank you.
    Do you want to expand a little bit more on the comments you 
made in your opening statement about doing more with less? I 
mean, you talked just now about the ability to leverage other 
programs. Can you give us some examples of programs that you 
feel have been particularly effective or ways in which you have 
been able to do better with the resources that you have 
available?
    Ms. Alexander. Sure, I would be happy to.
    In this region, we have leveraged over $350 million in 
global development alliances and public/private partnerships, 
and those are the places where you see the European market 
opening up and you see Americans interested in being involved. 
In that respect, USAID has spent a lot of time with our public/
private partnership activities. So we have been able to do 
more. In Azerbaijan, for example, our economic growth portfolio 
is probably twice the size of the amount that is actually given 
to us each year because we have agreements with the Government 
of Azerbaijan. We have agreements with the private sector and 
other donors.
    In Bosnia, we have a development credit authority lending 
program that, for the first time ever, we have had other donors 
put money into, so that USAID is managing funds from Sweden to 
be able to do additional programming there.
    And so when you have spent this much time in a region and 
you have the ability to have the embassies on the ground and 
the AID missions, you can design programs that are attractive 
not only for U.S. Government funding but for other funders to 
come in and pick it up. And that is where we are trying to 
focus our efforts right now, as well as working with graduated 
countries, for example with the Poles, to talk to them about 
how we can work together more successfully in other countries 
as a part of the Eastern Partnership Initiative. So those areas 
are where we are trying to make the linkages.
    Senator Shaheen. Thank you.
    Mr. Gordon, one of the things that I heard last year in 
traveling through the Balkans was concern from some of the 
countries in the Western Balkans who were looking toward the 
West and hoping to join the EU, that they were getting concerns 
about enlargement fatigue from the EU, from NATO. I wonder if 
we have also gotten those concerns from our European allies, 
and if so, are there ways in which we can help address that? As 
you both point out, as we look at developing a Europe that is 
whole and free and at peace, clearly making sure we incorporate 
those countries in the Balkans as we look at the Caucasus and 
other parts of Europe, it is an unfinished agenda. So how can 
we avoid people being left out because of that fatigue?
    Mr. Gordon. Indeed. We have long believed, as I said in my 
opening remarks, that Europe will not be complete until these 
countries are in Euro-Atlantic institutions. That applies to 
the European Union and NATO. Obviously, we are only a member of 
one of those organizations, and where that is concerned, NATO's 
open door is a core principle. Countries that are interested in 
joining and meet the criteria should be allowed in.
    We think the same about the European Union. Your 
perception, I think, is right. There is a feeling or a fear in 
the region that the door is closing, that the European Union 
has already taken in a number of countries in the past decade, 
and publics, especially in a time of economic austerity, are 
more skeptical about more.
    But we think the European Union and its leadership is 
committed to this process. They do have strict criteria and so 
it is a two-way street. The EU needs to be consistent with its 
pledge to keep that door open for the countries that meet the 
criteria, but the countries who are applying have to do certain 
things as well. And both sides need to live up to those 
principles.
    There are countries making progress on the path to European 
Union membership that we would like to see cross the finish 
line. We believe Croatia is very close and is in the final 
stages of what should be an accession, and it would be a very 
positive signal to the region to see a country like Croatia 
that has come so far over the past decade-15 years demonstrate 
to its neighbors that when you do meet the criteria, you are 
allowed in.
    Again, we think that historically the incentive of joining 
the European Union has been one of the most powerful tools for 
democratization and economic liberalization that exists. And 
that is why the door needs to remain open so that other 
countries in the region, Serbia, Kosovo, Bosnia-Herzegovina, 
Montenegro, Albania, all of them, see that if they make peace 
with their neighbors, reform their economies and maintain open 
and transparent democracies that they too will one day gain the 
benefits of European integration, and we strongly support that 
process.
    Senator Shaheen. Well, you mentioned Serbia. Obviously, 
that raises a question about Kosovo and relations between 
Serbia and Kosovo. I think it is very encouraging that they are 
beginning to talk, and I think both countries deserve credit 
for that.
    Are there ways that we can help with those discussions, and 
what is your assessment of the current status of those? I know 
when I was there, one of the concerns that was raised--and that 
is an area of disagreement--has to do with the northern region 
of Kosovo. Are there more creative ways in which we can address 
that so that we do not have another area where there is an 
ongoing stalemate?
    Mr. Gordon. It is, indeed, encouraging that they have 
started to talk. Indeed, they are talking as we are talking. As 
we speak, I think the fourth round of the EU-facilitated 
dialogue is going ahead in Brussels. And just the fact that 
these two countries are sitting down at a table--we do not 
underestimate the differences between them and they are very 
real, but they are talking about those differences. And we 
appreciate all the EU is doing in full transparency and 
cooperation with us to try to move that process forward.
    Ultimately it is our view that--our view of Kosovo is 
clear. We recognize Kosovo. It is a sovereign, independent 
country. Seventy-four other countries have recognized it as 
well, including most of the critical neighbors and partners and 
those that invested so much in Kosovo over the years, and in 
just 3 short years, it has really made a lot of progress as an 
independent country. It most recently went through some 
constitutional issues and challenges to the Presidency that it 
successfully navigated and came out on the other end with its 
institutions intact and its democracy having taken a further 
step forward. And that, for a country just a few years old, is 
very impressive. So our view of Kosovo and its sovereignty and 
territorial integrity is clear.
    Obviously, Serbia has a different view, but we hope that 
through this dialogue, which is really meant not to focus on 
the issue of status, which the two parties disagree on, but to 
make practical progress on issues that affect people's daily 
lives like electricity distribution and telecommunications and 
customs and law and order, rule of law, having a functioning 
courthouse. If they can just make some progress on those 
issues--and many of them, I have to say, are win-win, they can 
both benefit, it is not zero sum--then Serbia should move down 
the path to European Union membership.
    And we believe that Serbia has taken the strategic position 
to do so. The Serbs know it is in their interest. I met with 
the Kosovo Foreign Minister just this week, and I think the 
Kosovars recognize that it is in their mutual interest for both 
of them to be moving down the path to European Union 
membership.
    The bottom line, though, is that Serbia has to recognize 
that the European Union is not going to be interested in taking 
in a country whose borders are unclear. And in that sense, 
Serbia is going to have to come to terms with the reality of 
Kosovo so that both countries can continue down the path to 
European Union membership.
    Senator Shaheen. And do we have any idea of a timetable for 
progress there? I mean, I assume we can look for the indefinite 
future in terms of the talks?
    Mr. Gordon. It is always difficult to put a timetable on 
these developments. What is clear is that in the course of this 
year, the EU will make some critical decisions about Serbia's 
membership path, candidacy status, the beginning of accession 
negotiations. That is something that we know is before us now. 
We would like to see that move forward.
    We would like to see Serbia become a candidate for European 
Union membership because that, to go back to your first 
question, Madam Chairman, would help combat the notion that 
there is enlargement fatigue and it is basically over. That is 
the last thing we need, to discourage the countries of this 
region and give them the impression that the door is closed, 
they are on their own. That is why we support this process, and 
the closer they get, arguably the more real membership would 
seem to them and the more they might be willing to do some of 
the difficult things they need to to get in.
    That said, in the case of Serbia, again, we think that we 
would like to see the talks demonstrate seriousness and a 
willingness to reach genuine compromise. You talked about 
creativity. Yes, it will maybe require some creativity on both 
sides because it is in their mutual interest, and if they do 
that, then they should be rewarded with a further step down the 
path to EU membership.
    Senator Shaheen. Well, I certainly agree with what you have 
said about the importance of reinforcing for Kosovo and Serbia 
and the other countries in the western Balkans that are looking 
at the potential for EU membership down the road, to see that 
as a real possibility and to be able to see the path for how to 
get there, that that is critical.
    So while we are on the region, let me go back to your 
comments and your opening remarks about Bosnia. And I think it 
was very positive news to hear that the Republika Srpska is not 
going to hold a referendum.
    I guess the question is, Do we see a path to formation of a 
government there and are there additional ways in which we can 
encourage that?
    Mr. Gordon. We certainly hope so because like Serbia and 
Kosovo and the others, we believe that Bosnia too should be on 
the path to Euro-Atlantic institutions which would help 
strengthen its democracy, unity, and peace in the region.
    Unfortunately, there has not been progress on that score in 
recent years. Indeed, arguably there has been not just 
stagnation but regression on the path, and we are doing all we 
can to try to help them turn that around. And I think you 
mentioned two of the most critical aspects of it. Government 
formation is one and the other is the challenge from Republika 
Srpska to the Dayton settlement.
    On government formation, we are frankly disappointed. 
Elections took place last October. We had hoped that would put 
in place a government that could get on with the business of 
the country and dealing with unemployment and making the 
government more functional and even tackling some of the 
constitutional issues that hold Bosnia back. And instead, 
parties have been unable to agree on coalitions. And here we 
are 6 months later and they still do not have a government at 
the state level, and at the Federation level between the 
Bosniaks and the Croats, the government is narrower, on a 
narrower base than it should be, and seen as illegitimate by 
some of the parties.
    So we are disappointed at the pace of government formation. 
Without forming a government at the state level, Bosnia really 
cannot move forward on the path to the European Union. It 
cannot move forward with its IMF arrangements which are 
critical to the economy.
    At the same time, we have the challenge that you mentioned 
from the Republika Srpska President who in April challenged 
essentially the authorities of the Dayton settlement and the 
state judicial institutions in a way that we, frankly, found 
and publicly said was illegal and inconsistent with Dayton.
    And you referred to an agreement to stand down on the 
referendum that he proposed to hold on the authorities of the 
High Representative. We hope that is the case, and we have seen 
references to his agreement to do so, but until it is actually 
done, until the referendum is finally and formally and fully 
canceled and the other conclusions reached by the Republika 
Srpska on April 13, we will need to watch it very closely 
because, again, we cannot stand by and see such fundamental 
challenges to the basic settlement at the heart of the Bosnian 
state. And we will give our full backing to the Office of the 
High Representative to use all of the authorities at his 
disposal to make sure that such fundamental challenges cannot 
move forward. And we are considering our own measures as well 
in the case that the conclusions and the referendum of April 13 
are not withdrawn.
    Senator Shaheen. And can you elaborate on any of those 
measures?
    Mr. Gordon. For the moment, I would just say we are looking 
at different ways that would ensure that no one in the 
Republika Srpska or anywhere else is able to fundamentally 
mount a challenge to the state without consequences.
    And I would add that we are doing that together with the 
European Union which I think feels the same way that we do. The 
European Union, in addition to reviewing its own representation 
in Bosnia, recently gave itself the authority to put in place 
visa bans and asset freezes to individuals who might be 
challenging the Dayton structures, and I think that is the sort 
of thing that we would be looking at together with the EU if 
such challenges continue.
    Senator Shaheen. Good. Thank you.
    You mentioned Russia's reset. Can you talk about the 
administration's next steps with respect to the reset?
    Mr. Gordon. Sure, and President Obama will have a chance 
with President Medvedev when they meet in the margins of the G8 
Deauville to talk about some of this agenda.
    I noted that in the first 2 years, we are very satisfied 
with the progress we made on arms control and the issue of Iran 
and Afghanistan and even building up the trust between the two 
countries, which was one of the issues on the agenda. The 
relationship with Russia that we inherited was really one with 
a total absence of trust, and we think we have made significant 
progress.
    We are not naive about it. There are still real differences 
between us and Russia. We have already discussed some of them, 
including Georgia. We have expressed concern about the human 
rights situation in Russia in a number of prominent cases, 
unresolved murders of journalists, and other incidents that 
show that Russia still has a long way to go in terms of its 
democratic development and human rights.
    So no one would claim that the relationship or the 
situation in Russia is perfect, but we are satisfied that in 2 
years we have made a lot of progress in building on the better 
relationship between the two countries in the pursuit of our 
common interests.
    In the 2 years to come, as we continue to pursue this, we 
want to continue to build trust and cooperation. We want to 
further our cooperation on missile defense. That was one of the 
things that we made progress on most recently at the Lisbon 
summit, agreed to resume theater missile defense cooperation, 
agreed to resume missile defense cooperation in general. We 
have consistently explained to our Russian counterparts that 
the missile defense that we plan for Europe is not targeted at 
Russia. It is designed to deal with threats from outside of 
Europe that are very real, and it is designed to protect all of 
NATO and we would look forward to cooperating with Russia. And 
it is not about, in any way, undermining strategic stability 
between the two sides. So that is one area that we hope to 
build on in the coming period.
    We hope to continue our cooperation on external issues like 
Afghanistan where I mentioned lethal transit is an area where 
Russia has contributed. There are other ways Russia is helping 
as well, including helicopters and helicopter maintenance, Iran 
and the sanctions.
    And then there is the whole economic sphere. President 
Obama has been quite clear we would like to see Russia join the 
WTO, and they have made significant progress in that area as 
well. And we look forward to working with them on that because 
we think it is not just in their interest but clearly in ours 
to get them in a rule-based economic framework so that our 
investors can feel more comfortable investing in Russia and 
trade can expand.
    So there is still plenty to do in the relationship with 
Russia, and obviously, the regional issues, frozen conflicts, 
Georgia. I mentioned our efforts which have so far not been as 
fruitful as we might like, but we are going to continue to work 
on that. On Nagorno-Karabakh, we have actually worked closely 
with the Russians to try to come up with a settlement there. 
There is plenty to do in the relationship with Russia.
    Senator Shaheen. There have been a number of reports 
recently about the relationship between Putin and Medvedev. Is 
there any reason to think that that relationship is affecting 
our ability to deal with Russia in any way?
    Mr. Gordon. I do not think it would be fruitful for me to 
speculate on domestic Russian politics or differences between 
two potential candidates. We do and will deal with the leaders 
that Russia chooses. At present, President Medvedev is our 
President's main interlocutor. We have worked very well with 
him on the full agenda that I just discussed, and we will 
assume that after the Russian election, we will be able to 
continue on the basis of our mutual national interests of 
working together.
    Senator Shaheen. Thank you.
    Ms. Alexander, you talked about some of AID's programs in 
Russia. Can you describe some of those in a little more detail?
    Ms. Alexander. Certainly. The engagement with Russia is 
vital to encourage them to become a global partner in these 
development challenges. I had mentioned that Administrator Shah 
signed a protocol to eradicate polio, and that is just one 
example of where we have been trying to work collectively with 
the Russians on some of these health issues, including sending 
some Russian doctors to Africa to work on best practices.
    At the same time, we have clear challenges with our 
engagement with Russia. The majority of our portfolio, almost 
70 percent, is in democracy and governance programming. And we 
work primarily in the nonprofit sector and with independent 
media and civil society groups to help enlarge the space for a 
free press and free political thought. So in the areas that we 
find ways we can work together, we have been doing that under 
the bilateral Presidential commission. We have worked on a 
number of working groups--USAID has--with a lot of our 
partners, and there is a parallel activity for civil society 
groups that have been doing civil society to civil society 
programs. And we have been supportive of that because I think 
that there is need for us not to just have a government-to-
government relationship, but direct civil society to civil 
society.
    Senator Shaheen. Is there any reason to believe that there 
has been any progress on the free media issue and getting 
Russia to recognize and allow reporters to operate in a freer 
way?
    Ms. Alexander. There are always reasons to be optimistic. I 
think in this case the legal reforms that are in place and some 
of the Freedom of Information Act laws are challenges to how 
the government is treating the independent media. And we will 
continue to focus on that and we have a very active program in 
that area to do so. Print, broadcast, using social media, these 
are all elements that I think help encourage citizens' voices 
to be out in the public sector.
    Senator Shaheen. Thank you.
    We have been joined by Senator Cardin. Senator, would you 
like to begin or do you want me to continue for a little while?
    Senator Cardin. Senator Shaheen, first of all, thank you 
very much for conducting this hearing and let me thank both of 
our witnesses for their incredible service.
    As I think both of you know, I have the distinction of 
being the Senate chair of the Helsinki Commission. So what I am 
going to do is ask some questions about countries. There are so 
many countries in Europe that are of interest right now.
    I also chair the International Development Subcommittee for 
this committee. So I am interested also as to whether we are 
effectively using all the tools that we have available in the 
most efficient way.
    So let me talk about some countries first where we are not 
participating in foreign assistance but are of great interest.
    Belarus. The reaction of Lukashenko from the December 19 
elections is still being felt in that country. I was in 
Belarus, I guess a little over a year ago, and we thought we 
were making some progress. We see now that whatever progress we 
were making, it looks like we are moving in the wrong 
direction.
    Can you just update us as to the current status in Belarus 
as it relates to safety of people generally and whether we are 
getting good information of what is happening on the ground?
    Mr. Gordon. Thank you, Senator, and thank you for 
continuing to focus on that country which is all too often 
overlooked.
    The situation on the ground is that the government 
continues to proceed with sentencing of a number of 
individuals, including primarily Presidential candidates that 
it arrested at the time of the December 19 crackdown. And we 
made clear at the time that we did not believe there was a 
basis for these arrests or sentencing, and we said in advance 
of the trials that were these people to receive sentences and 
be put in prison essentially for running for President, we 
would be obliged to consider them as political prisoners. And 
that is the situation we are in because a number of them have, 
indeed, been sentenced in some cases to long terms. All of the 
trials have not yet concluded, but just this week, Mr. 
Sannikov, one of the most prominent Presidential candidates 
received a prison sentence. And we have told them privately and 
publicly that we would be obliged to consider these people 
political prisoners and take measures accordingly.
    As you know, Senator, already last January, we announced 
measures in response to the December crackdown that included 
extending asset freezes on a number of Belarusian officials, 
travel bans on those officials, and we reimposed sanctions on 
some Belarusian subsidiaries that we had listed precisely 
because, as you said, we had thought we had seen some progress. 
We put those sanctions on in the context of the measures that 
they had taken against democracy, civil society, and freedom, 
and as they gradually lifted those and released the last 
political prisoner, I think with your involvement, we lifted 
sanctions on two subsidiaries. We put them back on on January 
31 because of this crackdown, and we said if inappropriate 
sentences continue, we will continue to look at further 
measures. And that is exactly where we are now. We are looking 
at what else we can do.
    Senator Cardin. Thank you. And if you would keep us 
informed on that, obviously we are interested.
    We noticed today that the administration announced 
sanctions against specific individuals in regards to Syria. I 
mention that because there are several of us requesting you to 
do the same as it relates to Russia in regards to the Magnitsky 
case and other human rights--just raw human rights abuses of 
that country. We are working on filing legislation similar to 
the legislation that was filed in the last Congress as it 
relates to those who have been identified and clearly involved 
in the corruption from the death of Magnitsky in prison to the 
public corruption that he was trying to uncover.
    Will you continue to look at this issue to see whether we 
cannot find a common area? I recently have met with some people 
from Russia, and they also brought out the Magnitsky case as 
outrageous to a lot of the people in Russia itself.
    It seems to me this is an area where we will be doing a 
favor to the people of Russia and their future by trying to fit 
our response appropriate to what has happened within Russia. 
Otherwise, we tend to take it out on other issues that are not 
directly related and they are not as effective, and sometimes 
they have consequences that were really never intended. Here we 
are trying to tailor this to the specific problem that was 
created by the corruption in Russia.
    Mr. Gordon. Thank you, Senator.
    We very much share your and all of Congress' concerns about 
the Magnitsky case which was a terrible tragedy and crime, 
really outrageous, and we have raised that consistently and at 
the highest levels with Russian authorities. I can tell you it 
comes up in the majority of our meetings at every level, and 
they know how strongly we feel about it. They know that 
Congress is looking at it. And senior Russians have accepted 
that there is a real problem there, and they tell us they are 
investigating it.
    We continue to review it, as you have asked, and are 
looking at possible policy measures, including the 
consideration of sanctions. We want to make sure that any step 
taken would be effective. For now, as I say, the Russian 
Government is telling us that they are conducting a full 
investigation and will take measures, and we are watching very 
closely to see if they actually do that.
    Senator Cardin. That is our objective, for Russia to take 
action. The problem is they have been saying this for a long 
time. In fact, it is just counterproductive. They have been 
promoting the people that are involved rather than holding them 
accountable. It seems like they have been rewarded for their 
corruption. Our patience is running thin here. I just would 
make that observation.
    I have time for one more country, so let me move to Bosnia 
for one second.
    Our annual meeting is going to be in Serbia this year. So 
we are going to be close by and we might want to spend a little 
bit of time.
    It seems to me that Bosnia is not making the progress that 
we wanted. Here is a country that has been a friend, and the 
surrounding countries appear to be making more progress than 
they are.
    What can we do to accelerate their constitutional reforms 
that everyone knows are needed so that all the ethnic 
communities are protected, but you have a country with a united 
government that can integrate into the institutions of Europe?
    Mr. Gordon. That is an excellent question and one we ask 
ourselves all the time because we acknowledge that Bosnia has 
not been moving in the right direction. They have failed, let 
alone to address the constitutional reform issues that you 
mentioned, but even to put together a government since their 
elections last October that would enable them to do so.
    We are working very closely with the European Union. 
Senator Shaheen mentioned High Representative Ashton's visit to 
Washington, and we spent some time with her just this week on 
how we together can underscore that the door to European 
institutions remains open so that they have an incentive to 
move forward and engage with them to try to help them put 
together a government and alter the shape of our international 
presence so that we can help them along the path. Ultimately, 
it is up to the Bosnians and the Bosnian leadership to put 
their country's interests above petty and ethnic and partisan 
interests which they have failed to do so far.
    Senator Cardin. Thank you. I think we really need to keep a 
spotlight on this. They have made a lot of progress, but they 
really need to figure out how to get a united government. It is 
in their interest again to move forward to the next plateau.
    My time is up. I will just mention by subject the Roma 
issue, which has really exploded in a lot of countries as far 
as----
    Senator Shaheen. You should go ahead, Senator Cardin.
    Senator Cardin. Oh, thank you. Appreciate that, Madam 
Chair.
    What has happened of late is so discouraging to see so-
called mature democracies take steps that are so punitive 
against a population that has been in their country for a long 
period of time and denied basic opportunities of the citizens 
of their country. And it seems to me that this is an area that 
the United States must maintain the highest priority. Without 
the United States putting a spotlight on it, it is going to be 
a secondary issue in Europe.
    There are some countries that have made some progress. Most 
have not. And we really need to develop a strategy. I know 
there are a lot of conferences going on, a lot of people 
talking about it, but it really cries out for an action plan.
    I see you are shaking your head. I cannot get that on the 
record.
    Mr. Gordon. I will confirm that I was nodding positively 
because I could not agree more. We appreciate that the Helsinki 
Commission and you are focused on this. I was recently in 
Hungary and had extensive discussions of the issue with the 
government there which I think takes it very seriously. And 
Bulgaria. Secretary Clinton is personally very focused on this 
and my nodding was to say that we agree and are trying to 
continue to get the governments of the region to focus and do 
what they need to do.
    Senator Cardin. Thank you.
    And thank you for your patience, Madam Chairman.
    Senator Shaheen. Thank you.
    I do not want to cover every country in Europe, but I do 
have a couple more that I would like to go back to.
    First, I want to follow up on Senator Cardin's questions 
about the sanctions in Belarus. Do we have any reason to 
believe that the sanctions have had any impact there?
    Mr. Gordon. I think it is too soon to say. Our support for 
the sanctions is not just as a matter of principle and the 
desire to do something, but we believe that previous sanctions 
had an impact and that one of the reasons that a few years ago 
the government started to do the right thing in terms of 
political prisoners is that they felt the bite of the 
sanctions. And so in that spirit, it was important for us to 
show that when you do the right things, the sanctions get 
lifted. When you do the wrong things, further sanctions will 
come.
    And I think that is important not just vis-a-vis Belarus 
but more generally around the world to send a message that you 
cannot just crack down on peaceful protesters and arrest 
Presidential candidates and expect us to say that is fine and 
we will just carry on with business as usual.
    So that is why we are moving forward with these sanctions 
and that is why they are as targeted as possible on the people 
responsible for it. And our sense is that the people of Belarus 
support what we are doing.
    Senator Shaheen. Is there any reason to think that Russia 
could be helpful in this regard?
    Mr. Gordon. I think the Russians are torn on Belarus. I do 
not think they have been unhelpful. I think Belarus' desire to 
be free of Russian influence was one of the reasons that it 
started to do the right thing in some ways in the first place. 
And that is what we had hoped. We were trying to show Belarus 
not that we need to be competing with Russia for Belarus but 
that if it wanted to be an independent country, then the path 
was there and it required a minimum of effort on democracy and 
human rights or it just would not be possible. That was the 
roadmap that I personally laid out for them in the summer of 
2009 when they had started to do the right thing.
    I think just before that, that same summer, after Senator 
Cardin and others engaged, they released the last of the 
political prisoners, and I was able to say on behalf of the 
administration carry on moving in that direction. The path is 
there. Look what some of your neighbors have done in terms of 
joining Europe, democracy, prosperity. And we thought that they 
got that until December 19 when it became, unfortunately, clear 
that they did not, and now we think it is necessary for them to 
see that there is a negative consequence if that is what they 
are going to do.
    Senator Shaheen. Thank you.
    I also want to address Ukraine because Freedom House just 
downgraded Ukraine from free to partly free and warned that the 
country is headed down a path toward autocracy and kleptocracy. 
Ukraine, obviously, a very important country for the region and 
as we think about the future of Europe.
    So what can we do in Ukraine to help divert its current 
path?
    Mr. Gordon. Well, in a similar spirit, but making clear 
that Ukraine is not in any sense in the same category as 
Belarus, Ukraine actually last year had a free and fair 
Presidential election, a transition of power. We went to the 
inauguration and applauded that development and hoped that it 
would continue for the same reasons we have just been talking 
about, that these countries really have an opportunity. If they 
develop their democracy at home and respect human rights and 
have a free market economy, they have really genuinely a chance 
to join Europe as free, independent sovereign countries, 
partners of the United States.
    And Ukraine has taken some steps in that direction, but on 
the question of democracy, there has been some backsliding as 
well and a failure to appropriately reform the electoral code. 
The municipal elections did not meet the same standards that 
the previous Presidential election had met. There has been a 
perception of political prosecutions. Obviously, Ukraine not 
only has every right but a duty to investigate corruption and 
malfeasance. But when such a majority of the cases investigated 
and prosecuted are against political figures from the previous 
regime, it is impossible for friends not to ask the question 
about perceived selective prosecutions. And those have been 
highlighted in our own human rights report and Freedom House 
reports.
    And there all we can do is continue to be consistent. But 
there is a path toward the partnership with us and toward 
membership in European institutions, but it requires action on 
these important domestic fronts.
    And just to underscore, we have been very clear about that 
with our Ukrainian friends. Secretary Clinton recently chaired 
the U.S.-Ukraine Strategic Partnership Commission here in 
Washington, and we talked about our common strategic interests 
and the very positive things Ukraine is doing on 
nonproliferation and its agreement to get rid of its highly 
enriched uranium, which is an important priority for President 
Obama. So there are some positive things. But she was also very 
frank about our concerns on the democracy front, and it is 
something we will continue to work with them on.
    Senator Shaheen. Thank you.
    And disappointing, after such progress, to see the change.
    Finally, I want to address Turkey because, as I say in my 
remarks that I entered into the record, Turkey is a valuable 
NATO ally. It has a predominantly Muslim population in a very 
important region of the world. So many of the challenges we 
face today in Europe and in the Middle East involve Turkey. And 
yet Pew Research Center released a poll recently about how the 
Turks feel about us here in America, and our approval ratings 
are at a dismal 10 percent, which is actually lower than in 
Pakistan. Obviously, I think this has implications for the 
future if nothing is done to reverse that sentiment.
    So can you talk about why America is viewed that way in 
Turkey and what we can do in terms of our current relations to 
begin to reverse that?
    Mr. Gordon. Sure. It is, indeed, a very serious issue. You 
have a country of such strategic importance and historical 
partnership with the United States. It is disconcerting to hear 
that only 1 in 10 have a favorable opinion of the United 
States. That number is something we have followed closely over 
the years. Actually at the time of the Iraq war is when it 
first took a real dive, and we have failed, despite significant 
efforts, to bring it back up to where it used to be.
    That has not prevented important cooperation between the 
United States and Turkey which is still a valued NATO ally. And 
we have had our differences with Turkey and we have talked 
about some of them in this committee. We were very disappointed 
about Turkey's vote on Iran in the Security Council last year, 
and we made that clear to Turkey while, at the same time, 
noting that there are a number of other things we work well 
together on and that is also the case.
    I would note on Libya, Turkey has been very helpful in 
standing with us and making clear that Mr. Qadhafi has to go 
and, as a NATO ally, is participating in the enforcement of the 
no-fly zone and arms embargo.
    On Syria, we think Turkey is a critical neighbor of Syria, 
has been sending all the right messages about the need for a 
forum and about the unacceptability of the crackdown. And I 
could give many other examples of how we are very closely 
cooperating with Turkey as well.
    So, yes, clearly on the public opinion side, we have work 
to do. We are doing the work and we are so deeply engaged with 
Turkey there is not a--I mean, you mentioned the vast number of 
countries we could talk about. There are not many that we are 
more closely engaged with than Turkey because it is such a 
player on so many big interests, and all we can do is keep 
those lines going because we need Turkey and they need us.
    Senator Shaheen. Thank you.
    Senator Cardin.
    Senator Cardin. Just a followup on Turkey. The flotilla 
episode, obviously, challenged that relationship, and of 
course, we think that Turkey was very provocative and 
insensitive in the manner in which it handled the flotilla.
    There is talk that there is going to be another flotilla. 
Do we have any information as to how we can avoid another major 
international incident?
    Mr. Gordon. Well, you are certainly right, and I should 
have mentioned that when I mentioned the Iran vote as another 
of the issues that caused tensions and differences in the 
relationship. That, in turn, contributed to the low public 
opinion scores because we had very different perceptions of 
what happened then, while agreeing on the simple fact that it 
was a terrible tragedy what happened last May in the flotilla.
    Yes, we have heard, like you, that there is thought of 
another flotilla actually not just from Turkey, but different 
countries are thinking about sending a flotilla. In some cases 
in May I think the Turkish group that was behind the flotilla 
that led to the tragedy in May has talked about a flotilla 
sometime in June. So we are paying very close attention to 
that.
    One of the casualties, in addition to the tragic human 
casualties of the flotilla incident, was the relationship 
between Turkey and Israel. At a time of such turbulence 
throughout the Middle East, the close Turkey-Israel partnership 
was one positive thing, a majority Muslim country with a Jewish 
state cooperating militarily on intelligence and tourism and 
economically. That has really been undermined by a number of 
things going on in the region, but the flotilla really set it 
back with Turkey withdrawing its ambassador and the 
relationship has yet to be repaired. We are doing all we can to 
get them to put that behind them.
    They have very different views of what happened over the 
flotilla. The Turkish perception was a humanitarian 
intervention against a naval blockade that they do not accept, 
whereas the Israeli perception was that in order to defend 
themselves against rockets and weapons coming into Gaza, they 
have to watch their coastline. And those two divergent views 
among two close allies of the United States is a real problem 
for us.
    Senator Cardin. Well, it seems to me that if they instigate 
on the 1-year anniversary or close to the 1-year anniversary a 
similar effort, it is meant as a provocation.
    Mr. Gordon. Well, I would say two things. The Turkish 
Government says that this organization, the IHH, is an NGO. The 
government did not sponsor the previous one and would tell you 
now that it would not sponsor a future one. This is a private 
organization taking its----
    Senator Cardin. But they clearly supported the efforts both 
from a political point of view as well as where the origins 
started. So they were clearly involved.
    Mr. Gordon. Well, they certainly did not stop it.
    And what I would say, which is a counterpart to that, is we 
have been very clear with them that a new flotilla would in no 
way be helpful. In the year since the last flotilla episode, 
Israel has changed the humanitarian regime for Gaza, made very 
clear that there are alternative ways to get humanitarian 
assistance to Gaza. So any government or NGO that wants to send 
genuinely humanitarian goods to Gaza has a way of doing it that 
is uncontested. And we very much believe that and have been 
very clear with the Turkish Government that that is the case, 
and we have asked them to make clear to any Turkish NGO's that 
might want to send a ship that they should really find this 
other path. We think that was already the case to a degree last 
year, but it is certainly the case now.
    Senator Cardin. Well, I just point out that if there is a 
similar effort and it has the tacit or direct support of 
Turkey, it is not going to help not just Israel-Turkey and the 
whole situation in the Middle East, it is not going to help the 
United States relationship with Turkey either. It is two ways, 
as you know.
    Mr. Gordon. We agree with that, Senator, absolutely.
    Senator Cardin. Thank you.
    Senator Shaheen. I have no further questions. So let me 
just end by thanking both of you very much for being here, for 
your service, and we look forward to continuing to work with 
you. Thank you all very much.
    The hearing is adjourned.
    [Whereupon, at 4:04 p.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the record


    Responses of Assistant Secretary Philip H. Gordon to Questions 
                  Submitted by Senator James E. Risch

    Question. Can you please describe the U.S. contribution to the air 
policing mission for our Baltic allies? How long will the United States 
maintain this commitment in the region?

    Answer. We are committed to supporting the NATO Baltic air policing 
mission and encouraging allied participants to fulfill their pledged 
contributions. The current mandate for the air policing mission runs 
through 2014, and the United States supports extending this mission 
past the 2014 mandate.

    Question. The British have requested U.S. P-3 Maritime surveillance 
aircraft to fly patrols for British Navy Vessels. Are the British fully 
reimbursing the United States for the use of these aircraft?

    Answer. The answer to this question is not within the purview of 
the Department of State. The Department defers to the Department of the 
Defense.

    Question. Ever since the death of Bin Laden we have seen 
announcements from a number of European capitals declaring they either 
will withdraw forces from Afghanistan earlier than anticipated or are 
considering doing so. What is the administration's plan to ensure the 
NATO mission is not underresourced?

    Answer. Osama bin Laden's death sent an unmistakable message about 
the resolve of the United States and the international community to 
stand against violent extremism and those who perpetuate it. But we 
cannot forget that the battle to stop al-Qaida and its affiliates does 
not end with bin Laden's death.
    Forty-eight NATO and non-NATO nations contribute troops to ISAF. 
Their contributions have been critical to our recent progress in 
Afghanistan, and are critical to ensuring security gains are permanent 
and that the transition of security responsibility to the Afghans is 
irreversible. In recognition of this fact, ISAF nations reached 
consensus at the Lisbon NATO summit in November 2010 on a framework of 
transition to Afghan security responsibility beginning in early 2011 
and to be completed across Afghanistan by the end of 2014. At the same 
time, Heads of State and Government committed to provide the necessary 
resources to accomplish that mission.
    Subsequently, at the meeting of ISAF Defense Ministers in March, 
ministers agreed to transition implementing principles which will guide 
troop disposition decisions, and include the need to consult and 
coordinate troop reductions within the alliance, and to reinvest 
transition dividend troops where possible to support further transition 
progress. These principles make clear that while we are transitioning, 
we are not leaving. As the President noted in his December 2009 speech 
at West Point, we will begin a responsible reduction of our forces in 
Afghanistan beginning in July 2011 based on conditions on the ground. 
Allies will no doubt look to our example in formulating their own troop 
decisions.

    Question. Can you please describe in detail the level of 
consultations we have had with our Baltic allies during the ``Russian 
Reset''? Were they brought in during policy formulation? Did State keep 
them informed before decisions were finalized? Or did they learn about 
U.S. policy decisions after Russia was informed?

    Answer. The President and his administration have worked 
intensively--through public engagement and quiet diplomacy--to engage 
with all our European allies on our vision of a strong and secure 
Europe working globally in partnership with the United States. The 
President had a productive discussion on European security with Central 
European and Baltic leaders in April 2010 in Prague and again in Warsaw 
on May 27, meetings in which he reiterated in the strongest terms the 
U.S. commitment to Europe. As part of our robust engagement on security 
matters, we have consulted closely and repeatedly with our Baltic 
allies on issues such as changes to U.S. force posture in Europe, the 
CFE treaty, and missile defense. We also are working to ensure that 
NATO has the contingency plans and capabilities it needs to address 
21st century challenges.
    One of the fundamental principles underlying the ``reset'' has been 
that our efforts to improve relations with Russia should not come at 
the expense of our allies or efforts to promote respect for human 
rights, media freedom, and other civil liberties within Russia. Indeed, 
all three Baltic nations have acknowledged more positive relations with 
Russia following the United States-Russia ``reset.''

    Question. Earlier this week Russian President Medvedev criticized 
U.S. missile defense plans in Europe and threatened to withdraw Russia 
from the New START Treaty. During New START Treaty hearings, 
administration witnesses testified repeatedly that U.S. missile defense 
plans would not constitute the grounds for Russian withdrawal. Why do 
Russian leaders continue to insist that Russia has the right to 
withdraw?

    Answer. As Secretary Clinton explained during the Senate's hearings 
on the subject, as with other arms control treaties, the New START 
Treaty allows a party to withdraw from the treaty if that party decides 
that ``its supreme interests are jeopardized by extraordinary events'' 
related to the subject matter of the treaty. Each party must determine, 
based on its own criteria, if or when its ``supreme interests'' have 
been jeopardized to the point that it believes it must withdraw from 
the treaty.
    U.S. officials have engaged in a series of consultations with 
Russian counterparts to provide policy and technical explanations that 
illustrate that the European Phased and Adaptive Approach (EPAA) 
missile defense system is not directed at Russia and will not pose a 
threat to Russia's strategic deterrent. The United States has also 
offered to engage in transparency and confidence-building activities 
that would demonstrate that U.S. missile defense programs are not 
directed against Russia.
    Following their May 26 meeting in Deauville, Presidents Obama and 
Medvedev committed to continue working together to lay the foundation 
for future cooperation in missile defense. President Medvedev noted the 
importance of maintaining the strategic balance of forces, and praised 
the New START Treaty for helping to improve this balance.

    Question. You mentioned the flow of cargo through Russia in support 
of coalition forces in Afghanistan--specifically you stated that 27,000 
containers have transited Russia. Please provide the amount of money 
that has been paid to Russian contractors to move this cargo and any 
money that has gone directly to the Russian Government in support of 
the GLOC?

    Answer. The U.S. Transportation Command (USTRANSCOM) oversees the 
flow of cargo in support of coalition forces in Afghanistan. USTRANSCOM 
does not contract for container movement directly with Russian 
contractors or pay directly to the Russian Government. USTRANSCOM 
contracts with USG-approved contractors to transport cargo from CONUS 
to Afghanistan at competitive rates. When contractors transport 
containers through the Northern Distribution Network to Afghanistan, 
they may subcontract with various companies for surface transportation 
or pay fees to transit the countries. USTRANSCOM does not have privity 
to costs which are imbedded in the competitive rate, to include costs 
for subcontracts or fees paid to a country.
    The overland flow of cargo through Russia in support of coalition 
forces in Afghanistan is complemented by the flow of military personnel 
and equipment under the United States-Russia air transit agreement 
concluded in 2009. This agreement has resulted in over 1,100 flights 
transferring over 177,000 personnel in support of international efforts 
in Afghanistan to date. The bilateral air transit agreement is cost-
free to U.S. Air Force aircraft; Charter flights are responsible for 
the payment of air transit fees.

    Question. Will U.S. forces continue to support the NATO mission in 
Libya after Friday, May 20, 2011?

    Answer. As the President informed Congress on March 21, the United 
States, pursuant to a request from the Arab League and authorization by 
the United Nations Security Council, had acted 2 days earlier to 
prevent a humanitarian catastrophe by deploying U.S. forces to protect 
the people of Libya from the Qaddafi regime. Over the last 2 months, 
the U.S. role in this operation to enforce U.N. Security Council 
Resolution 1973 has become more limited, yet remains important. We 
support the bipartisan resolution drafted by Senators Kerry, McCain, 
Levin, Feinstein, Graham, Chambliss, and Lieberman, which would confirm 
that the Congress supports the U.S. mission in Libya and that both 
branches are united in their commitment to supporting the aspirations 
of the Libyan people for political reform and self-government.
    The initial phase of U.S. military involvement in Libya was 
conducted under the command of the United States Africa Command. By 
April 4, however, the United States had transferred responsibility for 
the military operations in Libya to the North Atlantic Treaty 
Organization (NATO) and the U.S. involvement has assumed a supporting 
role in the coalition's efforts. Since April 4, U.S. participation has 
consisted of: (1) nonkinetic support to the NATO-led operation, 
including intelligence, logistical support, and search and rescue 
assistance; (2) aircraft that have assisted in the suppression and 
destruction of air defenses in support of the no-fly zone; and (3) 
since April 23, precision strikes by unmanned aerial vehicles against a 
limited set of clearly defined targets in support of the NATO-led 
coalition's efforts.

    Question. In your testimony you said that ``Macedonia will join 
[NATO] once the dispute over its name is resolved.'' Is it the position 
of the administration that a bilateral disagreement should be elevated 
to a condition of membership inside NATO? What is the administration 
doing to help Greece and Macedonia resolve this dispute?

    Answer. The United States strongly supports the full integration of 
all Western Balkans countries into Euro-Atlantic institutions, a 
critical step toward continued peace and stability in the region. NATO 
members concluded during the 2008 Bucharest NATO summit that Macedonia 
would receive a membership invitation once a ``mutually acceptable 
solution to the name issue has been reached.'' NATO members reiterated 
this same commitment at the 2010 Lisbon summit.
    The United States continues to support the U.N. process led by 
Matthew Nimetz to reach a mutually acceptable solution to the name 
issue and we actively encourage both countries to resolve the issue as 
soon as possible. A lasting solution to this dispute is in the interest 
of both countries.

    Question. What is the administration's plan to enhance the security 
of Georgia? Outside of Georgia, can you please identify the other cases 
where the United States has refused to sell arms to a country that the 
United States has supported for entry into NATO? Will we see an arms 
sales package offered to Georgia?

    Answer. The United States continues to have a broad and deepening 
relationship with Georgia in a number of sectors and remains fully 
committed to supporting Georgia's sovereignty and territorial 
integrity. Our security assistance and military engagement with Georgia 
is focused in two main areas.
    First, we are providing comprehensive defense assistance covering 
doctrine, personnel management, education, and training to support 
Georgia's defense reform and modernization efforts along Euro-Atlantic 
lines. This approach supports Georgia's Euro-Atlantic aspirations as 
well as security and stability in the region. Second, we continue to 
train and equip Georgian troops for deployment as part of the 
International Security Assistance Force (ISAF) in Afghanistan. This 
training will ultimately develop four infantry Georgian battalions to 
conduct distributed operations in a counterinsurgency environment. The 
first U.S. trained-and-equipped battalion deployed to Afghanistan in 
March 2010. Georgian troops are currently fighting without caveats 
alongside U.S. Marines as part of ISAF operations in Regional Command-
South, Helmand Province.

    Question. Will the administration recognize the bilateral dispute 
between Russia and Georgia and support a similar condition on Russia 
respecting Georgia's territorial integrity before Russia enters the 
World Trade Organization?

    Answer. Russia's membership in the World Trade Organization (WTO) 
is a step that will benefit U.S. economic interests directly not only 
by increasing market access for U.S. exports, but also by integrating 
Russia into a system of fixed rules governing trade behavior and 
providing the means to enforce those rules and Russia's market access 
commitments.
    Russia is the largest economy that has yet to join the WTO. The 
operation of one of the world's most important economies outside of the 
rules and disciplines that apply to 153 other countries leaves U.S. 
companies, workers, farmers, ranchers, and investors vulnerable to 
erratic Russian trade and protectionist measures.
    The WTO operates using consensus-based decisionmaking. Thus, for 
Russia to be able to join, all Members, including Georgia, will need to 
permit a consensus approving the terms of its accession. Russia and 
Georgia have been meeting under Swiss auspices in an effort to reach a 
bilateral agreement that would resolve their trade issues and result in 
Georgia allowing Russia's accession to proceed. The United States is 
not a party to those negotiations, but we are encouraging both sides to 
engage constructively and flexibly to reach a workable outcome.
    The United States strongly supports Georgia's sovereignty and 
territorial integrity, and continues to urge the Russians to fulfill 
their commitments under the August 2008 cease-fire mediated by 
President Sarkozy, including a withdrawal of forces to preconflict 
positions.
                                 ______
                                 

         Responses of Paige Alexander to Questions Submitted by
                         Senator James E. Risch

         list of recipients of usaid funds in russia, 2009-2011
    Question. Can you provide a list of all the recipients in the last 
3 years of USAID funds in Russia, and how much each entity has 
received?

    Answer. The requested information is provided in the attached Excel 
spreadsheet.




              usaid discretion in selecting russian ngo's
    Question. Does USAID have sole discretion in selecting which 
organizations receive USAID funds in Russia, and do you ensure that the 
organizations are independent of the Russian Government and political 
influence before providing funds?

    Answer. USAID has sole discretion in selecting organizations for 
USAID funding by regulation and policy. Oversight of this process and 
ultimate selection is the responsibility of the USAID/Russia 
Contracting Officer. The Russian Government does not exert pressure or 
influence USAID's selection of organizations for USAID funding.
    Promoting independent civil society in Russia is a major USAID/
Russia objective and we are sensitive to the need to avoid working with 
Russian organizations that are unduly influenced by the Russian 
Government. To that end, USAID/Russia has a variety of methods of 
ensuring such independence.
    Although many Russian NGOs are subject to some degree of political 
influence in Russia, the processes we use for reviewing potential 
partners, selecting recipients for USAID funding, and monitoring 
performance of our partners reduce the chance that selected partners 
will be unduly influenced by the Russian Government in implementing 
their USAID-funded programs. USAID would not select an organization for 
USAID funding that is dominated or controlled by the Russian 
Government.
    Many USAID/Russia awards are competitive, open to both U.S. and 
Russian organizations, with contractors and grantees selected largely 
on the merits of their technical applications as reviewed by evaluation 
committees composed of USAID/Russia staff. As part of the evaluation 
process, past performance reference checks are conducted on both 
potential recipients and key personnel, which could reveal excessive 
political influence. In addition, as part of the Contracting Officer's 
due diligence in making a preaward responsibility determination, a 
review of an organization's business integrity, management capacity, 
and performance record is conducted. In the case of organizations new 
to USAID, a thorough financial, legal, and management survey of each 
organization's policies, procedures, internal controls and management, 
and financial structure is carried out by USAID staff, and links to the 
government, in corporate structure or governance, would be identified. 
USAID/Russia also has a number of noncompetitive grants, mainly to 
longstanding Russian partner organizations, several of which were 
created with USAID funds over the past two decades. Performance under 
all awards is monitored by a USAID technical officer through site 
visits and performance reporting.
    Many of our partners work primarily with regional and municipal 
governments rather than the federal government, further reducing the 
opportunities for central government influence. Some of our partners 
who offer policy analysis and other services in Russia are in fact 
highly regarded, including by the Russian Government, for their 
independent, objective analysis.
    While there is no litmus test for an organization's relationship 
with the Russian Government, given the processes outlined above and the 
close working relationships between USAID/Russia and its partners, we 
are comfortable that USAID's partners are independent from the 
Government of Russia.

                                  
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