Press Gaggle by Dana Perino and National Security Advisor Steve Hadley

This is just for news about an upcoming scheduling event. On June 26th President Bush will address the White House Office of Faith-based and Community Initiatives national conference in Washington, D.C. This conference will bring together over 1,000 public and private sector leaders to explore and expand the ways the faith-based and community initiative is transforming government's approach to human need, in partnership with the nonprofit sector, to solve problems ranging from addiction and homelessness to malaria.

The initiative has achieved real, measurable results to help people in need across the country and around the world. Participants will include Secretary Chao, Attorney General Mukasey and Ambassador Mark Dybul, and they will explore the scope and scale of the initiative's impact and what the future holds now that this foundation has been laid. So that's on June 26th.

And now let me turn it over to Steve.

MR. HADLEY: Good afternoon. We've just finished, of course, the U.S.-European Union Summit. This is the President's eighth -- my fourth; I think Dan's eighth, Judy's fourth -- Judy's third. I think it was probably the best one we've had, and I say that because there was a broad range of issues, even broader than normal. They are important issues; they are issues in which we -- the United States and the EU -- are working together. And what struck me also is the wide range of agreement of what needs to be done going forward. And to try and give you a feel for it, I'm just going to go through the issues and give you a texture of sort of what was discussed.

This Transatlantic -- the TEC, Transatlantic Economic Council -- is actually a very important vehicle for removing regulatory barriers between the United States and Europe to encourage trade and investment. The EU representatives noted that if we can do the work that the TEC has outlined for itself it would result in $10 billion in savings for U.S. and European countries. This is an indication about the importance, I think, and the significance of that effort, which was started just a year ago.

Climate. Very real consensus, as you heard in the press conference, that the key needs to be for the developed countries and the major developing countries -- like India, China -- need to be involved, need to be willing to accept goals, and need to be willing to make commitments on how they are going to achieve their own midterm goals. That, I think, is an emerging element of consensus that is important for getting an effective global climate agreement.

Doha, similar. I think the United States and the European Union are probably working together better on Doha than they ever have before. They have made progress on agriculture. More needs to be done in terms of the non-agricultural manufacturing, the NAMA items, particularly important for some of the emerging developing countries like Brazil and the like. These are potential markets for developing countries. It is important that as much as developed countries open to developing countries, it is also important that developing countries open to each other. That is also an area of agreement between the two sides.

Western Balkans. As you all know about the close coordination there has been on the declaration of independence by Kosovo. Also very close coordination and integrating all of the Balkan countries eventually into transatlantic institutions, into the European Union, but also the transatlantic institution of NATO. Good cooperation there. Good cooperation that we need to hold open the door for Serbia also to join those institutions. Part of a strategy that the United States and the EU are working very closely together to bring stability to the Balkans.

We're working very closely together in Afghanistan. The President specifically thanked the European Union for all the support it is doing to this emerging democracy in Afghanistan. It's symbolized by this, of course, upcoming Paris Conference, where countries are going to come forward and make additional commitments, economic commitments to Afghanistan.

Middle East. Again, close coordination through the Quartet on the Israeli-Palestinian talks. But also the EU again is very active in helping the Palestinians, particularly the government of Prime Minister Salam Fayyad, build the security and economic institutions of a Palestinian state; very important work.

Also agreement in terms of approach to Latin America, particularly in Cuba, an area where there has been disagreement in the past; great emphasis on the importance of supporting democracy and human rights in Cuba; and agreement also that, as you heard from the leaders, the first step or the real indication that something is going to be different in Cuba will occur when Cuba releases its political prisoners. And both the U.S. and the EU are calling for that.

Emphasis on the importance of the Colombia free trade agreement, the Europeans agree. Need, again on the food crisis, to help countries grow their own food so that we can solve this problem in a more enduring way.

Cooperation on Zimbabwe, emphasis on the importance to flood Zimbabwe with human rights and election monitors in anticipation of this rerun -- sorry, this second-round election the end of this month.

Discussions about health in places like Africa and the like, and urging in the way we are cooperating on malaria and HIV/AIDS, also be willing to cooperate on expanding health workers in dealing with these neglected tropical diseases.

Burma, Doha -- long list; important issues -- U.S.-EU working very closely together and generally having the same approach. That's, I think, the takeaway from this summit, a good set of meetings.

Q A question about -- during the press conference he said he appreciated Solana's attempts to go talk to Ahmadinejad. Why is that not simply negotiating via proxy?

MR. HADLEY: Not Ahmadinejad. What he said was his attempts -- he is going to be taking the refreshed offer that was worked out in the EU-3-plus-3 -- which is Germany, France, the UK, China, Russia, the United States -- have worked on a refreshed offer. And it is going to be conveyed here in a week -- within the week by Solana to Iran. He is going to meet with a number of leaders in Iran; I do not believe that Ahmadinejad is one of them -- and is part of carrying out the strategy that the President outlined, which is basically to say and show to the Iranian authorities, and show to the Iranian people that there is a way forward for the Iranian people that involves an end of their isolation, a reestablishment of their ties with the West, and concrete political, economic and diplomatic benefits -- including support for a truly peaceful nuclear energy program.

All of this is on the table and open to the Iranian people if the Iranian regime will simply suspend the enrichment and come to the table. This is the sort of the one hand -- there is a way out for the Iranian people; on the other hand, as the President said, if they do not take it then the Iranian people need to understand that the choice their regime is making is going to result in increasing isolation of the Iranian regime and, regrettably, the Iranian people as well.

So it is to confront the Iranian regime with a strategic choice and to urge them to make the right decision for the benefit of the Iranian people.

Q You mentioned increasing isolation if Iran does not accept that offer. What, specifically, do you have in mind?

MR. HADLEY: Of course the issue of implementation, the latest of the three U.N. Security Council resolutions -- Resolution 1803. There also, as you know, were a number of steps that were taken outside that resolution, unilateral authorities that the EU has, that the United States has. And also as you know, we have been talking to banks and companies around the world and letting them know the risks -- particularly if they deal with Iranian banks, but also the Iranian government -- that they may be involved with entities that are engaged in money laundering and moving money basically for proliferation purposes and for supporting terror. And of course if you're a reputable company, reputable bank, why would you want to be involved in something like that?

So there are a range of things that can be done.

Q Are you providing any specific evidence to those banks to show that kind of detail that you're describing -- money laundering and --

MR. HADLEY: Well, as you know, it was covered in the press at the time; Hank Paulson began this process of consultation some time -- almost a year ago. Also the Financial Action Task Force has taken this issue on and has been a repository for information. So the information of what Iran is doing is pretty well known.

Q Can you explain the difference between what they're talking about now, the package of incentives and sanctions, that's different from the 2006 one?

MR. HADLEY: I can't as I sit here. We've got it. Let us get you a couple points on that; that's the easiest thing to do.

Q And also on this issue, on Iran, what about -- what does he want from Merkel, what is his message going to be to Merkel?

MR. HADLEY: I'm sorry?

Q On Iran, what does he want to discuss with her on Iran?

MR. HADLEY: I think it will be the general strategy that we're talking about, to make sure that we all see it eye to eye. And secondly, the concomitant is we make the good faith, we put down the package, we urge the Iranians to adopt it -- but the concomitant needs to be that if the Iranians are not willing to do so, if the Iranian regime is not willing to take this opportunity, then we need to turn up the pressure.

Q So are they not implementing the sanctions that have been issued?

MR. HADLEY: There has been some reluctance, I think it's fair to say -- generally there's been some reluctance, I think, to implement the 1803 sanctions because of wanting to complete the refreshed package and put the refreshed package on the table. And to make it clear that it is a good faith offer -- and it is a good faith offer.

So that is the message that people have wanted to send, to make it clear to the Iranian people that if their regime will make the right decision, there is a positive way out. That means, of course, that it is open for all of us to get much more aggressive on implementing U.N. Security Council 1803 if the Iranian regime rejects the package.

Q The reference in the communiqué to the banking things, does that signal a broader EU acceptance of taking further steps, or is it sort of a promise to take further steps, or consider them after the --

MR. HADLEY: Well, I think everybody is on the same page, really -- we're going to make this offer, and if the Iranian regime denies the Iranian people the benefit of the offer, then we're going to have to turn up the pressure. And I think everybody recognizes that.

Q How long will you be willing to wait on that?

MR. HADLEY: Depends on the reaction that we get next week when Solana goes.

Q Are you aware of the Iranian counter-proposal that they've apparently prepared? Is there anything to that? Is that an opening of real negotiation?

MR. HADLEY: It has some elements to it, but I think we're pretty skeptical about whether it is really intended to advance a negotiating process, because it does not have, of course, the key thing that the international community has set as a test for sincerity of the Iranian regime, that is, a willingness to suspend their enrichment program.

MS. PERINO: Thank you, everybody.

END 5:19 P.M. (Local)

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