11:50 A.M. (L)

CHANCELLOR SCHROEDER: I have introduced the President and Madam Secretary to Mr. Adenauer's study, and both of them thought that it was possibly lighter and brighter and possibly even nicer than what we've got over there. But, as you might imagine, that wasn't the focus of our consultations.

I'm rather pleased indeed that, for the second time by now, I have the opportunity of welcoming President Clinton here in the Chancellory on behalf of the European Union. And I am very pleased also to note that Mr. Santer has come here again -- the last time wearing the hat he's presently wearing. And I think soon he's going to join the European Parliament and he's going to try to narrow it down to certain specific things that he would like to see happening. He's going to do that with the same sense of humor as he's done it so far.

We have adopted some important documents regarding the transatlantic relationship. The Bonn Declaration that you have already got, or that will be handed out to you very soon, is very much going to deal with the spirit of the transatlantic partnership. And in the spirit of this, we also want to see to the individual trading problems that do exist, but that we think can be overcome.

Of course, as you might imagine, the situation in Kosovo and on the Balkans played an important role during our discussions. I am very much of the opinion that what we have triggered, being the Presidents of the European Council in Europe, was to trigger the stability pact for the Balkans, and the contours of that agreement have been drafted by the meeting of the Foreign Ministers very recently -- but that will have to be promoted further with strong dynamism. And President Clinton and the European Union very much agree that this was promoting and developing further.

So we think that still in July and in close cooperation with the Finnish presidency, we call for a meeting of the heads of state and governments -- all governments involved in the stability pact. And that meeting is meant to happen in Sarajevo.

Ladies and gentlemen, in having it there, we want to set a clear signal that the region can very much rely on the fact that we are not just talking about providing assistance, but that we really want to help and will help.

During the discussions, we also said we want to show rigidity and decidedness on the military side, but diplomatic skill on the political level. And arms have now gone silent since yesterday, it is definite. And after we've won the dispute, we will now win peace for us, and we will only succeed in doing so if we go in and economically develop that region and we get it closer to Europe -- in individual steps, in phases, but expeditiously, rather. I think this is certainly an interesting part of joint cooperation between the European Union and the USA.

Dear Mr. President, I'm very pleased to have you here yet again, and actually even more pleased about this wonderful spirit, sir, of cooperation and friendship that has reigned over our talks here, and joint conviction. Thank you.

PRESIDENT CLINTON: Thank you very much, Chancellor and President Santer. Let me just make a few brief comments on the issues that Chancellor Schroeder has mentioned. First, on Kosovo.

Yesterday, the Serb security forces completed their withdrawal. Russia is now participating. The KLA is demilitarizing. I spoke late last evening to Mr. Thaci after the agreement had been signed. KFOR is moving in, and the refugees are on their way home.

I congratulate Chancellor Schroeder on initiating this stability pact as a device for the long-term redevelopment of Kosovo and all of Southeastern Europe. We will be full partners.

We are interested in bringing this reconstruction to life. Our experts are now assessing the needs. We will have a donors' conference in July to finance the immediate reconstruction projects, and one later in the fall to deal with long-term development of the region.

We have also agreed, as the Chancellor said, to get the leaders together in Sarajevo -- both the benefactors and the beneficiaries of the stability pact -- to plan for the future of Southeastern Europe, and after the pattern followed in the Marshall Plan of World War II to get the people of the region to work together to define their own future. We think this is very important.

I'd also like to thank the business leaders involved from Europe and the United States in our business dialogue for their willingness to mobilize the private sector to help in the reconstruction of Kosovo.

Let me say just a word about one other subject that I think is worth some discussion because of the interest to the public opinion in Europe and increasingly in the United States. We discussed the need to have unresolved trade disputes not define our relationship at a time when we're working together so well on so many fronts. With a relationship that covers such a large spectrum of economic activity, it is inevitable that there will be occasional friction -- some small, some large. We must not let them cloud the fundamental soundness of our relationship.

We've made a lot of progress in recent months on some irritants, but a lot of work remains. Let me just give you one example. I know there's deep concern in Europe on the question of food safety. It's also an important priority for me; I've done a lot of work on food safety as President in the United States. And it's important for our farmers because they have an enormous interest in providing safe and wholesome food to the world. We need to develop open and scientific regulatory processes in each country that actually command the full confidence of ordinary citizens.

This is an issue of enormous consequence on both sides of the Atlantic. We must approach it constructively. We're already making progress under our transatlantic economic partnership, establishing a pilot project for scientific review of new biotech projects. And I am pleased that the G-8, under Chancellor Schroeder's leadership, asked the OECD to undertake an analysis of international food safety.

So I want you to know that I am committed to this. All of us should have one standard only: what is the right thing -- what is the right thing? That's the only thing that should matter. What is the truth? What does the science tell us? And that will be my commitment.

Finally, I think it is important that all of us honor the decisions of international tribunals when they are rendered on these trade matters.

Let me say, in closing, Chancellor, I'd like to bid farewell to President Santer as he leaves his present position and goes to work in the European Parliament. I thank him for the work that he has done. This has been a remarkable period of European integration with the European Monetary Union and common security and other policies. We welcome Romano Pevi as his successor.

I also thank Sir Leon Brittain for his work and wish him well. And I would like to acknowledge and greet the newly-confirmed American Ambassador to the European Union, Dick Morningstar, who was recently very quickly confirmed by the United States Senate.

So we are preserving this relationship as we change some of the personnel involved. It is a long-term commitment by both the Europeans and the Americans, and I'm looking forward to it. I think what we are about to do in Kosovo, in the Balkans, and what we have done there is something that our people will be proud of for many decades to come.

Thank you.

PRESIDENT SANTER: Mr. President, Mr. Chancellor, this summit takes place at a crucial moment in Europe's development and in the development of the United States-European Union relations. I'll make only four points about our discussions this morning.

First, we have discussed Kosovo and the wider Southeastern European region. The European Union nations shared equally with the U.S. in NATO action in the Kosovo crisis, and the EU has taken the lead in putting together the stability pact for the region, and the EU will play a leading role in financing reconstruction. The European Commission will work with the World Bank to coordinate the donor effort for the region. And the Commission will be overseeing the negotiation in proposed EU association and stability agreements with the countries in that region.

This all shows that the EU is capable of sharing these burdens equally with the United States and it is a full and equal partner with the United States in pursuing our common goals.

We have discussed how the EU and U.S. interests can now jointly use their cooperation under the new transatlantic agenda to ensure that our partnership is at the heart of the rebuilding of a stable, democratic and prosperous Balkan region.

Second, we have agreed the Bonn Declaration, which builds on the new transatlantic agenda, can strengthen it in a number of areas and affirms our joint commitment to a full and equal partnership. We are committed in particular to work together to prevent and deal with regional crises, and Europe's emerging common security and defense policy makes this much easier.

But too often in the past, President Clinton and I have had to spend time on damaging disputes, like Helms-Burton, bananas and hormone-treated beef, even if 98 percent of our trade relations are trouble-free. By setting up an effective early warning system, we are seeking to resolve such problems before they become politically damaging.

And we have agreed that it would be a good thing to have our scientists work together on health and consumer safety issues. The details still need to be worked out in order to prevent -- (inaudible.)

To summarize, the transatlantic relationship, four and a half years after the signing the new transatlantic agenda is in fine shape. Kosovo has demonstrated as clearly as anyone could wish how important the relationship is, and it has put our occasional trade disputes into perspective. And we look forward as we go into the new millennium to continuing to deepen the relationship for the good of the whole transatlantic community.

Q Chancellor Schroeder and President Clinton, I wonder if you could be precise on the definition of humanitarian aid to Yugoslavia, to Serbia proper. The G-8 was unable to reach an agreement on this point, but would you consider providing as part of your humanitarian assistance to the Serbs rebuilding their electrical power plants and rebuilding their bridges to enable people to go to work as part of humanitarian assistance to the Serbs?

CHANCELLOR SCHROEDER: Well, I think -- I'm not as certain as what you're doing with your question -- you have to differentiate between humanitarian assistance on one hand side and reconstruction on the other. You cannot let people starve just because they follow the wrong president, or they have the wrong president. If they are in need of medical assistance to survive, we have to grant this medical assistance to them, even if they feel they want to support Mr. Milosevic as their President. And that applies for as long as they have him as a president. So humanitarian assistance, yes, but making a tangible contribution to reconstruction, that can only ever happen with a democratic Yugoslavia.

That is very much my conviction. And you cannot look at it in abstract terms, what is humanitarian, and what is kind of more than humanitarian. So we have to know what is needed here to be able to take a proper decision. That is the line that I consider the right one.

PRESIDENT CLINTON: First, I agree with everything he just said. But to take your specifics -- I saw the interview that President Chirac did with you, and what he said about the electrical power I thought was pretty good, that it would depend. That is, for me, it is important that if the Serbs want to keep Mr. Milosevic, and don't want to be part of Southeastern Europe's future, that at least they not freeze to death this winter and that their hospitals not be forced to close. So they need some power.

In terms of rebuilding the bridges so people can go to work, I don't buy that. That's part of their economic reconstruction, and I don't think we should help -- not a bit, not a penny. So that's -- but on the other hand, I think their hospitals ought to be able to function. I think -- babies will be born, people will get sick, and people shouldn't be cold in the winter if we can help that. That's basically where I draw the line.

But we will -- the reason the G-8 -- we didn't have a disagreement about it. We recognized that -- the Chancellor read us through this -- we recognized that we would have to have people in place in whom we had confidence, who could make most of these decisions on a day-to-day basis, and if they had a question, they could then kick it back to us. But I'll give you -- I'm just giving you my kind of feeling about it.

Lori.

Q In your discussions over the past few days, did you win specific commitments -- in your talks over the past few days, did you win specific commitments from the European leaders for the billions that you'll need for the reconstruction effort? And are you confident that they will carry the lion's share, as you said you wanted?

THE PRESIDENT: I think that their commitments and mine are in good faith. Let me restate what I said in my opening remarks. There will be -- let me back up. I expect, in the next several days, all of you will hear various things about how much the immediate reconstruction of Kosovo will cost, what we're looking at in terms of long-term development. Then you will see both Europeans and Americans say we will or won't pay this or that amount of money.

I think that that -- almost all of that is going to be rather fruitless in the end. What we have to do is have our people go in there and figure out, ballpark, what it's going to cost to get Kosovo up and going and whole again. And then we have to convene the leaders' meeting as well as have people look at what it would take to have a long-term development strategy for Southeastern Europe. And obviously, there will be greater flexibility there; in other words, the more money you have, the more you can do; but there will be some flexibility there. And then we will -- I will try to allocate our responsibilities.

But I am absolutely convinced -- you heard what President Santer said -- I think that all of us are committed to doing this. And let me just say to the American people and to -- who would be listening to this and to our friends in Europe, it will probably cost more than most people think, but I promise you, it will be a lot cheaper than a continuation of the war would have been. It will be phenomenally less expensive than a land invasion of Kosovo and a protracted conflict would have been.

So I want to say what I said again, is, the most expensive peaceful reconstruction is still cheaper than the cheapest war. This is a responsibility we should assume and it will pay for itself many times over in future conflicts avoided, in future trading partners, in future cooperation.

Q Mr. President, China last week bluntly rejected Under Secretary Pickering's explanation of the bombing of its embassy in Belgrade. What is your reaction to that? Does it have any merit, their position, and have you given up -- do you think you've lost any chance of reaching a WTO agreement with China before the end of this year?

PRESIDENT CLINTON: Well, the answer to the second question is no, I have not given up. The answer to the first question is, I think -- as they have time to review the information we gave them, and reflect on it, I think they will conclude that it was a truly tragic accident, that a series of very bad mistakes were made and a tragic accident occurred.

I also, frankly -- after Mr. Pickering made his important, but difficult journey there, I noted that the reports, the contents of the report, were highlighted in Chinese news for two or three days thereafter, which I took to be quite a positive sign, actually.

So this is a difficult, painful period for them and for our relationship, but I'm not -- I haven't given up on the WTO, I'd still like to see it finished this year. And I think we'll work through this.

CHANCELLOR SCHROEDER: Last question.

Q Mr. President, your ability to keep your commitments on aid to the region is dependent upon a Congress that has been very reluctant to come up with money. Do you anticipate difficulty there? And have you done anything to lay the groundwork with the Congress?

THE PRESIDENT: Well, yes and yes. Yes, I anticipate some difficulty; and, yes, I've worked hard to lay the groundwork.

We have had lots of meetings on Kosovo, as you know, larger meetings with Congress. I have said all along that I thought that we had to participate in the long-term reconstruction, that I thought that we -- just as in the peacekeeping, we can have a marginally more modest role in peacekeeping and reconstruction because we had a relatively larger role during the air campaign and paid a lot of the cost of that.

But we have -- the Congress did give us funds, for example, in this supplemental, to help to pay for the relocation of the Kosovars' home and the attendant costs related to that. So I think that if we can make the case, that they will be willing to support it. And it's part of our responsibility.

You know, I just want to urge you to give us some time to come up with a plan for the short run, and then let the leaders in the region come up with a long-term plan and let us all sort of join together.

I think that our Congress and our taxpayers will be like most people -- they want to know what is the big picture; what is the long-term objective here; how does it relate to the interests of ordinary families in Germany and the United States, throughout Europe. And I think these are questions we'll be able to answer and I think we'll get the support we need.

Do you want to take a European journalist question? Equal time here. (Laughter.) You guys owe me one.

Q Mr. President, you are going now to Slovenia. What's the purpose for the visit and also the message of your visit in Slovenia?

PRESIDENT CLINTON: Well, first of all, I'm going to Slovenia to highlight our partnership, our shared values and our shared future. But I want the American people and the rest of the world to see a successful country in Southeastern Europe that has done a good job of promoting democracy, of advancing prosperity, of working for integration in the region and with the rest of Europe.

It represents what I believe a whole region can become. So the Slovenians have been, in my view, very good citizens and good partners with all of us, and I have to highlight that. But I also want the trip to spark the imagination of others, both within the Balkans and beyond it, about the kind of future, the kind of societies we can build in all those countries if we work at it.

Thank you.

Q Mr. President, take one more, Mr. President?

CHANCELLOR SCHROEDER: One question for a European journalist. (Laughter.)

Q Thank you very much, Mr. Chancellor. Thank you, Mr. Chancellor.

Kosovo obviously now urgently needs an administration. How quickly do you think that can be facilitated via the OSCE or the European Union, and can the U.S. Americans contribute to that?

And now, one thing regarding President Clinton -- 6,000 soldiers on the ground; how long are they going to stay there for? How long will you want them to stay there? How long will your Congress, which has actually taken a bit of a negative attitude, be able to maintain that period?

CHANCELLOR SCHROEDER: Well, the question as to who's going to chair the civilian administration is a decision that lies in the field of the United Nations Secretary General, and I think it would not be appropriate to give him advice from here. But he knows that we need a highly qualified person who links two things: firstly, the kind of political degree of skill and sensitivity and, on the other hand, experience with administration, somebody with -- think in economic terms, as well. All of those I think are the job profile descriptions. And I think the Secretary General will very, very speedily pick and choose that kind of person who will then dominate the reorganization in the civilian sense.

PRESIDENT CLINTON: One is, I agree entirely with what Chancellor Schroeder said about the person the United Nations should pick. I called the Secretary General and I said that I had no particular candidate and I did not care from what country the candidate came; that the most important thing was that we get someone who can do the job -- someone with high energy, with organizing skills, with vision, with the ability to communicate.

It's a fascinating job; I'd give anything if I could do it. It's a wonderful job if you think about it. It's a very interesting job. But it's very important that we pick the right person. There will be no politics in this, nothing. So I made it clear: I don't care where the person is from, I just want the right person picked.

The second question you asked me is, how long could we stay. I hope we will stay until the objectives of the mission are completed. And I went out of my way, since I thought, and our military thought, in Bosnia we knew how long it would take, and we were wrong, I went out of my way not to make the same mistake twice and not to put a timetable on our involvement, but to say here are our objectives; when we've achieved our objectives, we'll get out.

Now, in Bosnia, we've gone way down, all of us have. You know, the military force in Bosnia is only about, I think, 30 percent, maybe 25 percent of what it was when we first went in. But we are still there. And I personally believe, again, having a modest force there, if it avoids war, promotes peace and prosperity, it is much, much less expensive than letting these conflicts occur. So I hope we will stay until our mission is complete.

Thank you.

Q This is my last shot. Are you going to take --

PRESIDENT CLINTON: Your last shot?

Q My last shot.

PRESIDENT CLINTON: Why? You're not leaving us, are you? Where are you going?

Q I'm going to 60 Minutes.

PRESIDENT CLINTON: All right, you guilt me into doing it. If you ask me a lousy question, I'll never speak to you again. (Laughter.) Go ahead -- (laughter) -- which would make you happy --

Q Thank you, Mr. President.

PRESIDENT CLINTON: Anything for the farewell.

Q That's right. Sir, the last administration left you Saddam Hussein, and you have spent billions of dollars trying to keep Saddam Hussein contained. I understand that there are many covert things that you can't discuss, but can you assure the American people that you did not send their sons and daughters into harm's way just to leave Milosevic in power?

PRESIDENT CLINTON: Well, first of all, I can ensure the American people that we sent our soldiers, our airmen, into harm's way to get the Kosovars home, to get the Serbs out of Kosovo, and to have -- the Serbian forces, not the people, the Serbian forces out -- and to have an international peacekeeping force. That's what I defined as our objectives and we achieved them. And I thought they were worthy.

Now, I have, furthermore, said that I would be adamantly opposed to any reconstruction aid going to Serbia as long as Mr. Milosevic is in power. He has now been indicted by the International War Crimes Tribunal, and every day we see fresh evidence of mass killing and oppression taken under his guidance and with his orders. So, I think that is clear. And I can assure the American people that I'm not going to change my position on that.

But, you know, if we never did anything in the world until we could get everything done we wanted, we often would not do anything at all. What we have done here is to reverse genocide and ethnic cleansing, and it is very important. Would it also be good if we could have a new leader in Serbia? Of course, it would. But the main beneficiaries would be the Serbian people.

And our ability to build the kind of future in Southeastern Europe we want would be enhanced if we had new leadership and full participation in Serbia, but we can do an awful lot of good whatever happens there.

Let's don't mix apples and oranges, Mr. Pelle. I told the American people what the objectives are. We've achieved those objectives. Now we just have to win the peace. But would it be a good thing if Serbia had a democratic leader who didn't do things like what we've seen in Bosnia and in Kosovo? Of course, it would. And I can't wait for the day when that happens.

Thank you.

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