SECRETARY OF DEFENSE LEON E. PANETTA: Everybody ready? Okay.
First of all, buonasera. Good evening to everyone. I want to thank you for coming tonight. Most of you, I believe, have heard the statement that I gave today at the Ministry of Defense, so I'll be very brief before moving on to your questions.
I guess I'll just note for you that any time I come to Italy, it's a very special occasion for me, as the son of Italian immigrants. I think the first time I came to Italy with my parents -- as I said, both of whom were immigrants who came in the '30s and then decided in the '50s that it was time to go back to Calabria and visit the home. And I had a chance to do it.
My grandfather actually came out in 1938 to visit my mother in Monterey. And because the war broke out, as an Italian, he was not able to come back to Italy. So he spent most of his time raising me, because my parents were working in a restaurant. So I got to know my nonno very well. And that's where I learned to speak Italian. I had to in order to eat, to be able to talk to him to make sure that he did that. So I had a chance -- my nonno came back to Italy and had a chance then to come back and visit him and my nonna, who were still alive at that time.
Since then, I've come back a number of times to Italy in different capacities, both in the Congress. I came back in a private capacity a number of times to be here and then also as chief of staff to President Clinton, who visited here on the anniversary of the war, the anniversaries from the war. And obviously, I came here as director of the CIA and now as secretary of defense.
So it is -- it's something that is very important for me to be able to go back to the roots of my family and to enjoy the great hospitality of Italians, and not to mention the great food and great drink that you get, as well.
Let me -- let me indicate to you that today, in addition to the meetings that I had with Minister Di Paola, I had a very good consultation today with President Napolitano, with Prime Minister Monti, and also with Minister Terzi. I had a good discussion on a number of issues and expressed to all of them, again, my deep thanks for the great partnership that the United States has with Italy, particularly when it comes to security issues.
In all of the meetings, we reaffirmed the importance of the alliance between the United States and Italy and our commitment to strengthening our defense relationship in order to meet future security challenges together. I was also particularly honored to be able to pay tribute to Italy's war sacrifices at the (El Tati de la Patria) and be able to, again, do this in remembrance of all of those that have been lost in past wars.
America deeply appreciates Italy's steadfast support over the last decade of war and its continued leadership in Afghanistan and the continued support that we receive in the many bases that host our American men and women. We will never forget -- never forget that Italy stood with us after 9/11 in every way.
Let me mention to you at this point, if I might, that I've just been informed about what happened in Algeria. And I received an initial briefing on this, and obviously we're continuing to review the situation to determine exactly what happened.
By all indications, this is a terrorist act, and the United States strongly condemns these kinds of terrorist acts. It is a very serious matter when Americans are taken hostage along with others. We will continue to review the situation. We're in consultation with the Algerians, as well as the British, to determine exactly what happened and what the situation is. And I want to assure the American people that the United States will take all necessary and proper steps that are required to deal with this situation.
So with that, I'm open to your questions.
GEORGE LITTLE: We'll start with the Associated Press.
Q: Mr. Secretary, on that particular note, do you happen to know whether the al-Qaeda reports that seven Americans have been taken hostage are accurate or not? Do you have any sense of how many and whether or not there are any casualties?
And then as a follow-up, just on what you just said about what the U.S. would do in this regard, how do you think this -- how do you think this is associated with the Mali operation? Have you made any further decisions on U.S. assistance to Mali? And doesn't something like this make the case stronger for the U.S. to take action? Or does it (off mic)
SEC. PANETTA: Yeah, I do not have, you know, firm information as to how many hostages are involved. We do believe that there are Americans involved here, but I don't know the number of hostages that have been taken.
And I also, you know, don't know what the -- whether there is any relationship to the situation in Mali. I do know that terrorists are terrorists. And terrorists take these kinds of actions not just in Algeria. They take them elsewhere. We've seen their terrorism in Pakistan. We've seen their terrorism in Afghanistan. We saw their terrorism against the United States on 9/11. And we have witnessed their behavior in a number of occasions where they have total disregard for innocent men and women, and this appears to be that kind of situation.
MR. LITTLE: We'll turn to the Italian press, TG2.
Q: Mr. Secretary, I'm here.
SEC. PANETTA: Where are you? (Laughter.) Thank you.
Q: My -- (inaudible) -- same (off mic)
SEC. PANETTA: No, really? (Speaking Italian)
Q: (off mic)
SEC. PANETTA: (Speaking Italian) (Laughter.)
Q: So a question please -- what kind of specific commitment is necessary in Mali by USA and by Italy at this moment?
SEC. PANETTA: Well, we had a good discussion on Mali with the minister of defense and, frankly, with the others who I met with. And I believe that there is a consensus that France took the right step here to try to deter AQIM from taking even further action there and that there will be an effort to try to bring the European community together. I believe tomorrow there will be a meeting to discuss what additional assistance will be provided to help France in this effort, and the United States is going through the same process.
The goal, though, I think is -- for all of us, the goal is to do what we can to ensure that ultimately the African nations, at ECOWAS and the other West African nations, ultimately come in and play a key role in providing for the security of Mali.
MR. LITTLE: Washington Post.
Q: Mr. Secretary, if I could follow up on Mali, to what degree -- you know, I realize information is still coming in about the hostage situation, but that seems to escalate quite a bit the urgency of this conflict in northern Mali and Algeria, that Americans are involved in, and as we haven't seen many Americans targeted in Mali or Algeria, it's been Europeans. Have you had discussions today with others in the administration about perhaps an escalation of military cooperation with the French? And have you been in touch with your Algerian counterparts, as well? Might the American military take steps to intervene in the hostage situation?
SEC. PANETTA: I have not specifically with regards to this issue. As I said, I was just briefed before I came here. And we're continuing to engage in consultations to determine exactly what the situation is.
Obviously, with regards to -- to Mali, it is a situation that involves AQIM. This is an al-Qaeda operation, and it is for that reason that we have always been concerned about their presence in Mali, because they would use it as a base of operations to do exactly what happened in Algeria. I mean, that's the kind of thing that terrorists do. And that's why we're concerned about it.
MR. LITTLE: Republica?
Q: Good evening, Mr. Secretary.
SEC. PANETTA: Good evening.
Q: Can I ask you something about the bilateral issue between U.S. and Italy? There are two questions, one about the F-35, the fighters. You know that -- (inaudible) -- debate in Italy about the cost and the numbers of the airplanes.
And, secondly, recently in Sicily, the -- (inaudible) -- administration blocked the -- (inaudible) -- that you are going to build there. What is your opinion about the current situation? And are you going to offer to the local Sicilian authorities guarantees about the safety, the mission, the -- (inaudible) -- mission of this plan? Thank you very much.
SEC. PANETTA: Thank you. First of all, with regards to the F-35, as I indicated today, the United States is fully committed to the development of the F-35. It is the future in fighter aircraft. And it is an important investment.
And the reality is that we have made very good progress in the development of that plane and in dealing with issues that have been raised with regards to the plane and its operations. The testing of this plane has been very successful in almost all three models, I think, that we are dealing with.
So we believe it is a -- it's a very good investment. We believe that the F-35 will be a reality. And we appreciate Italy's commitment to -- willingness to participate with regards to the F-35.
The F-35 is the plane of the future. That's the reality. And I think countries like Italy and others that are participating in this process recognize how important it is to our future defense system.
With regards to the satellite MUOS, this is the location of a communications facility in Sicily that the United States has been interested in, in order to advance our defense communications. And I understand the concerns of the people there.
The people of Sicily have been very supportive of the United States mission, particularly with Sigonella, and so I deeply appreciate the support that we have received from the Sicilians.
But I also -- as I said, I understand their concerns here. We are working with the minister of defense to try to address those concerns. There have been studies that have indicated that I know their concern is in particular with regards to, you know, perhaps what it might do to impact the health of citizens in the vicinity. I understand those concerns. We have done studies to indicate that there are no -- there are no risks in terms of health as a result of that.
But I want to make sure that we do everything possible to address the concerns of those residents so that they, too, have to be convinced that this is something that can be done without impacting on their health or well-being.
MR. LITTLE: New York Times?
Q: Mr. Panetta, given that what you say is the urgency of what is happening in Mali and now Algeria, why has the administration not yet announced any kind of specifics for aiding the French in this conflict? And do you believe that AQIM is an imminent threat? I mean, I know there are -- there's discussions of -- some of the administration perhaps do not see the immediate threat here.
SEC. PANETTA: Yeah, no, I think the administration takes this very seriously. And they have, indeed, been reviewing areas where assistance can be provided. And I'm confident that we're going to be able to provide that assistance.
Frankly, we already are providing assistance in terms of information to them to try to help in this effort. So, you know, we are going to be taking steps to provide assistance to them. And with regards to AQIM, with regards to al-Qaeda in general, I guess, you know, I say this from my own background in having dealt with al-Qaeda. They are a threat. They're a threat to our country. They're a threat to the world. And, you know, wherever they locate and try to establish a base for operations, I think that constitutes a threat that all of us have to be concerned about.
Q: Just to follow up, what is the delay in the -- in announcing any kind of (off mic)
SEC. PANETTA: I think what they want to make sure is that, you know, it is -- it's the kind of assistance that the French are -- you know, that could help the French in this effort and, two, that we have the proper legal authorities to be able to provide them.
MR. LITTLE: CBS Radio.
Q: Can I ask you what -- the attack in Algeria apparently happened very close to the Libyan border. At the same time, you've had the Italians recently close their consulate in Benghazi. The U.S. State Department is saying it's not going to open or reopen a permanent facility in Benghazi. The British have pulled out of Benghazi. What does that say for this region that we're talking about? And how much of the U.S. military effort is focused on that?
SEC. PANETTA: Well, as you know, it is because of security concerns in that region that we have a large presence in the Middle East. And we have a deployed significant force to the Middle East. Both our troops and bombers and planes and ships are located in that region specifically for the purpose of dealing with security threats that are there.
And the reality is that, you know, we continue to be concerned about the threats to security in Libya and elsewhere throughout that region. And it is for that reason that I think the United States has to be fully prepared to deal with potential contingencies that we're going to have to confront. This is a real consideration that security in this area is one we have to keep a close watch on to ensure that we protect Americans from the threats that are taking place.
MR. LITTLE: TG3.
Q: Good evening.
SEC. PANETTA: Good evening.
Q: There are big cuts that are going to be done on the Pentagon budget. How do you think this will affect the security in this -- in both of the regions, Afghanistan and also Africa, which is becoming the new failed area where al-Qaeda can sort of reorganize? And do you think that the next administration should change any way its strategy that's being followed so far?
SEC. PANETTA: First of all, I don't -- I don't think they ought to change the strategy. I don't know if you're talking about future administrations. Who the hell knows what future administrations may or may not do? But this administration is not going to change, I think, in terms of the strategy that has been put in place.
Just to give you a little background, we were handed a number in the Budget Control Act of $487 billion to reduce the defense budget, almost a half a trillion dollars. And the approach we took in dealing with that was not to cut across the board, as has been done in the past, but to develop a strategy for the kind of defense system we need not just now, but in the future.
The defense strategy consists of some very key points. Let me just briefly state those, first of all, that we know we're going to be smaller as -- and leaner as a result of the coming out of the wars in Iraq and Afghanistan. But we have to be agile, we have to be flexible, and we have to be quickly deployable, and we have to be on the cutting edge of technology.
Two, that we have to be able to have force projection in the Pacific and in the Middle East, because of threats that we confront in both of those regions.
Number three, that we have to have a presence elsewhere in the world, in Europe, in Latin America, in Africa. And that presence we will continue through rotational deployments of our forces that will go in and develop alliances, help develop partnerships, as we have in this area with Italy, and continue to train and exercise and develop their capabilities so that we can develop the kind of alliances and partnerships that help -- can help provide security.
NATO is a perfect example of the capability to do that. They served us well in Libya, and they are serving us well in Afghanistan. And it's a model for the kind of partnerships we would like elsewhere.
Fourthly, we need to be able to confront more than one enemy at a time, because we have to do that. We may face a war in North Korea or in -- and at the same time, face a closing of the Straits of Hormuz. We've got to be able to deal with both of those threats.
And lastly, we have to invest in the future. This can't just be about cutting. We have to invest in the future, invest in unmanned systems, invest in cyber, invest in space, invest in special operations, and invest in the capability to mobilize. Those are all elements that are part of our budget.
Yes, we have to make cuts, and we are making cuts, in every area of the defense budget. And we will -- you know, I think we feel confident that we can do this. We can meet our fiscal responsibility and meet our responsibility to national security. We don't have to make a choice.
But having said that, there is a threat of additional severe cuts to the Defense Department in something called sequester. And my fear has always been that if sequester should happen, it would badly damage our national defense and it would probably force us to throw that strategy out the window.
So if we are kept to the numbers that we're dealing with now, we think we can remain the strongest military power in the world. If sequester happens, then I fear that there could be deep and severe cuts to defense that could take place.
MR. LITTLE: The Wall Street Journal?
Q: Back to Mali for a minute, you mentioned proper legal authorities, but you've said -- you've described repeatedly this week that the enemy in northern Mali is al-Qaeda, the 2001 authorization for the use of military force authorizes military force, not just support for another nation for al-Qaeda. Can you describe the sort of legal issues here in any more depth? Does this really reflect a division within the American government about the threat of AQIM?
SEC. PANETTA: No, not really. I mean, look, one thing I've learned is every time I turn around, I face a group of lawyers. And it's no different now. You know, lawyers basically have to review these issues to make sure that they feel comfortable that we have the legal basis for what we're being requested to do.
And I understand the need for that. I think the president understands the need to ensure that we have that kind of basis. So I think those are the discussions that are occurring.
I would not -- you know, I'm not going to say that these questions are insurmountable. I think because of what you pointed out and because of some of the legal authorities that we have, in terms of dealing with al-Qaeda, I'm confident that we'll be able to provide the assistance that's requested.
Q: And just to follow up, do you think that the Italian announcement of logistical air support and the German announcement of air cargo support, will that -- does that increase the pressure on the U.S. to sort of work through these issues quickly?
SEC. PANETTA: I don't think there's any question that all of us -- and particularly in the discussions that I had today -- I think all of us concur that we want to provide whatever assistance we can to assist the French in their effort and to ultimately, as I said, ensure that the West African nations themselves ultimately take responsibility for security in Mali. That's going to ultimately be the answer to the challenge we're facing now.
MR. LITTLE: I have to get the secretary off to a nice Italian dinner soon, so we only have time for a couple more questions. Bloomberg News?
Q: (off mic) quick one -- (inaudible) -- you still say to assist France, to support French, but this is a French war? Is this is just a French war?
SEC. PANETTA: I think this is an international -- I think this is an international effort. You know, France obviously took the action they did, but I believe this should be an international effort. And the U.N., in confirming that these steps should be taken, I think made clear that the international community should do what we need to do in order to confront AQIM.
MR. LITTLE: Bloomberg?
Q: Good evening, Mr. Secretary. Just on the -- on Mali, what is the end game that you foresee? Is it one of hanging over the responsibility at certain point to the African nations, like you're saying? Or is it capture and killing of a particular number of AQIM members? What is the end game you foresee in Mali?
SEC. PANETTA: Well, I think -- you know, look, as I indicated, this is -- this is not easy. This is difficult. Elisabeth asked that question yesterday. And the reality is that you are dealing with a dispersed enemy. It requires, you know, important intelligence efforts to be able to develop the kind of targets that are necessary here.
So this is not an easy challenge. At the same time, it is important to try to do whatever we can to try to stop the momentum of AQIM in what they were trying to do in Mali. And I think France has done a good job at taking that first step. More needs to be done.
I think ultimately what needs to be done is to be able to develop a situation -- similar to what we did in Somalia -- where the African nations themselves can then come in and provide the kind of security and the kind of support on the ground that will ensure that they continue to bring pressure against AQIM. This is -- you know, as we've often found in these kinds of wars, it isn't something where you can kind of throw your hands up and say it's all over. This is -- this is the kind of war that's going to require continuing pressure over a period of time.
MR. LITTLE: One final question.
Q: Thank you. Mr. Secretary, the U.S. troops in Afghanistan -- (inaudible) -- this spring. How successful has the ISAF operation been? And are Afghan forces ready to take security lead?
SEC. PANETTA: Yeah, thank you. That was -- that was an important discussion last week with President Karzai when he came to Washington. I had long discussions with him, and so did the secretary of state, and so did President Obama.
Prior to that, a few weeks before, I had the opportunity to go to Afghanistan and visit our troops there and visit the areas -- some of the more difficult areas, particularly in the south.
I -- in asking -- I met with most of our key military leaders. And to a person, everyone of them felt very confident about what was taking place, that the Afghan army was developing greater capability, they were taking on the battle, they were incurring casualties, but the fact is, they were taking on the battle, that they felt that they have, in fact, impacted on the Taliban.
The Taliban has been unable to regain any territory that has been lost. They'll continue to be there. They'll continue to be a threat. But all of the -- all of the military officers and generals involved felt very confident that, working with the Afghans, that they could, in fact, provide better security for the Afghan people.
We have seen this transition taking place. We have five tranches that are supposed to take place of provinces that we would transfer to the Afghans. We have done that in three of the tranches. We're implementing the fourth tranche of areas. That represents over 75 percent of the population in Afghanistan that now is under Afghan control and governance. The fifth tranche will take place sometime in 2013.
I think a reflection of our confidence in the Afghans is the fact that General Allen felt confident enough that, in 2013, in the spring of 2013, he felt we could, in fact, convey to the Afghans the lead on combat operations with ISAF in support. And that's what we'll happen. I think that's an indication that we are making progress and that we have growing confidence in their ability to be able to provide security.
But nobody's naive about what's happening in Afghanistan. We have made good progress. I think we're on track. We're implementing General Allen's plan, a plan that was affirmed in Chicago by NATO. But we -- you know, the Taliban continues to be resilient and we have to be continually vigilant about that. Secondly, Pakistan continues to represent a safe haven for those that come across the border and conduct attacks, and that continues to concern us. And, thirdly, we have to be assured that ultimately the Afghans can develop the kind of strong governance that will ensure that Afghanistan can secure and govern itself in the future.
MR. LITTLE: Thank you, everyone, for joining us tonight. Grazie.