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Bloomberg Audio Studios Podcasts Radio.
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News.
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Welcome to our Bloomberg audiences across television and radio. A big focus on the United Nations General assembly here in New York and a big focus on the skies over Europe. Joining us right now is the Secretary General of NATO, Mark Naito, Mark Ruda, joined right now by Bloomberg's Editor in chief, John Micklethwait.
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John, thank you. Mark Ruta, thank you for talking to once again to be on can we begin with all these incursions by Russian fighter flight, fighter jets and Russian drones into NATO airspace and Poland, Estonia, Denmark, those sort of areas have been hit by this. And we report today that Britain, France and Germany have told the Russians that if that happened again, NATO's, particularly with the jets, would shoot them down. Is that, is that your understanding as well, or you don't know?
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Well, these type of, this type of messaging is taking place all the time, of course, informal, so not for me to comment, of course, but let's face it, we have trained and prepared for these situations and our fighter jet pilots know exactly what to do. For 50 years now, from the Soviet days now with Russia, we have had these incursions before. They will assess the danger. And if the danger is such that they feel they really have to take down the plane, then they can. But they can also decide that there is no imminent threat and then they will escort them outside of the airspace.
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I think the message has got through to the extent that you don't expect the Russians to do it again.
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But again, there is a bit of risk that we all getting now thinking, thinking, hey, we need new rules or whatever rules are there. We have our military people, our military commanders have all the rules in at their hand, have all the authorities they need to deal with these situations. And this is not new. We are doing this for tens of years, decades. And we have seen this from the Russians. It is reckless. It's unacceptable. We still assessing whether the drones in Poland and the, the fighter jets in Estonia, whether it was intentional, we don't know yet. Still being assessed, of course, with Copenhagen, with Denmark. I spoke with the prime minister this morning there. We are still assessing who was behind this. Also very worrying what happened there, obviously, and they're all working on that. But when it Comes to these fighter jets, that's not new. It's bad. It should stop. But our pilots know what to do and if necessary, they can do the ultimate.
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So it's a difference though, isn't the Russian with the fighter jets, there seems to be quite a clear policy, as you've said, that's been for years. Russian jets should not come into NATO airspace. The drones is much more complicated because there tend to be lots of them. They're hard to defend against it. And there you seem to have a kind of, there's the intentionality problem that you pointed out. You know, is this on purpose? Isn't it? But another big one is just having the kit to deal with.
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Exactly.
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As I understand it, what would happen at the moment is you might have to use a very expensive missile to shoot down a very cheap drone. Is there a kind of kit problem with this as well?
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In the short term, yes. And by the way, I was very proud of the Dutch fighter pilots last week who took down or two weeks ago now who took down these drones in Poland. F35 pilot. And it's exactly what we need to do because first of all, we have to prioritize the safety of our people. But you're right, it is not sustainable that you will take down 1,000 or $2,000 costing drones with missiles which cost you maybe half a million or $1 million. So this is why our supreme Allied Commander in Europe, together with the colleague working on transformation, all of us in NATO are rapidly developing the technologies, learning from the Ukrainians. And we will start to apply technology over the coming weeks and months to make sure that next to the more traditional way to deal with this, we also have these drone, this drone interceptor technology at our hands.
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C
And this is not something, you know, you've only done it for a year or something. You look at, you look back. Do you think NATO in some ways has been slow to react to the new reality of drone warfare?
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I don't think so, because we have this joint center together with Ukraine, jtech, which is based in Poland, where we take all the lessons from the Ukraine war. Ukraine being in war is two or three weeks ahead of the Russians and they at an incredible speed, innovate during warfare. So we can learn from them. We will adapt as soon as possible. In the meantime, if there are drones in our airspace, we will still take them down. We will protect our people.
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Is part of the problem here that actually it's Ukraine which is really good at making these things, but they're the people who most need Them. So for the rest of NATO, it's, it's hard to source this kind of kit.
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Well, the Ukrainians are proud of course what they can do and also to help us supplying that technology. But you're right, of course they have to prioritize their own safety. But we have also other ways, of course to get our hands on this type of kit. So we are working on that also developing where necessary the technology ourselves. So this is all being processed now. So we, we are really stepping up and this is why we launched Eastern Sentry last week. Eastern Sentry is there to move from policing to, and from air policing to air defense on the entire eastern flank with the traditional means, but also figuring in as soon as possible these lead latest anti drone technologies.
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Another thing which happened this week is that Donald Trump seemed to, he did change tack and he suddenly said it's possible for Ukraine to get back all its land. What do you, what do you read into that?
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Well, I think this was a fantastic post he made two, two days ago. He, he mentioned Russia as a, he called him a paper tiger. And then the Russians for a full day. Have you seen that? Of course, full day saying we are not a paper trying to be a bear. Hey, if you are a bear, everybody will notice. So you don't have to explain that. So probably they are not. Probably the President was right and it's, and it, and it hit a nerve in the Kremlin and potentially at the highest levels in the, in the Kremlin.
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But there is a, there is a, there is an issue there with the last time I looked, you know, Russia is still advancing on the ground in.
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Ukraine very slowly, very slowly. And they have lost by now million people dead or seriously wounded. They lose now in one month what the Soviet union lost in 10 years in Afghanistan. This is now the Russians are losing in one month. This is not sustainable with only very little to show for it. The problem is that whilst they are not competent to get this done, that still if you have a president willing to sacrifice 1 million people, we have to prepare ourselves for what they are willing to do without lots of success, but still trying to create difficulties for us. And first of all, we have to make sure that Ukraine is in the strongest possible position. So I really commend what the president for, President Trump is doing. He also opened the floodgates, as you know, a couple of months ago, of us kids both lethal and non lethal into Ukraine paid for by allies. So we are working on that. This is crucial stuff Ukraine needs. So in that Sense, I think us, the President, Europe, NATO working together is a strong signal.
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It's the weakest part of Russia, actually, the economy. A lot of reports coming out saying the Russian economy is not Cleveland. We've done some. The Russian economy doesn't seem as strong. Do you think there is a sense that Putin is perhaps stronger on the battlefield than he is economically and he's.
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Not strong on the battlefield either. Because if you have so many losses and you only gain a couple of square miles a week, I mean, nothing to show for it. But I think you're absolutely right. The economy is in difficulty. We see the long lines now waiting at the gasoline stations to fill up the cars. We have seen the Russians deciding to bring down the exports to countries like India and Turkey, oil and gas, etc. And this is also because Ukrainians are successful in targeting the Russian oil infrastructure. And it is famously difficult to get an oil refinery up running again after it has been hit by missile or drone. So Ukrainians are good at this. I always thought that they had this fantastic central banker somehow in Russia who was able to paper over the problems, but I think she cannot any longer. And it's now the cracks are showing and the Russian economy is in a, in difficulty. You're totally right.
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There's been talk of, you know, from the Ukrainian side of, you know, Russians should prepare to live in shelters like they do. Does that sort of talk about the direction that Russia, the Russians should prepare to live in shelters if, you know, NATO's start supplying more long range weapons that Ukraine would be able to hit deeper into, into Russia?
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Well, I should not speculate about that, I think in public media, but obviously we are in constant discussion, the Americans, the European allies with the Ukrainians, how can we help you best and all options are always on the table. But obviously we should not speak so much about that in public.
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You worry at all on the, just on the battlefield going back to that, yes, it's very obvious the Russians are losing huge amounts of people, but they still have managed to replenish them. Ukrainians have that problem with the amount of materiel they have. Partly the weapons you've talked about also getting enough people to go forward. That problem about recruiting young soldiers. This is the first time ever anyone's ever tried to fight a war with old soldiers.
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Yeah, but first of all, when it comes to the weapons with the US supply, the Czech ammunition initiative, you have the Danes and Lithuanians who started this initiative to directly sourced from the Ukrainian defense industrial base. There are some indicators now saying that Ukrainians are able to up to 50, 60% source what they need from their own defense industrial base. And then on the people side, I discussed this also with the President, President Zelensky this week. Again, they are not doing that bad. They really are catching up and keeping close, close to what the Russians are doing. And the Russians are losing four to five times more people on the battlefield than the Ukrainians are. And because of this, this crazy way of warfare, the Russians have decided to do this.
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Other big thing that happened this week was Frederick Merckx just said that it's fine to take maybe 140 billion euros of frozen Russian assets, which hitherto Germany's been pretty reluctant to touch, to use that to help finance. Is that a game changer?
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Yes, I think I was reading that opinion piece. I think it was on the FTSE website and by the Visible Competitor. Yeah, sorry. But next time he will no doubt publish it. The Economist or so. Yeah, Bloomberg. And no, no, no, no doubt. But I think it is, it is an important step, I must say, in the division of labor between NATO and the eu. This is more being dealt with at the EU side. Of course, I have very close relationship with Ursula von Delight, the President of European Commission. So this is not something I'm dealing with every day, the Russian assets. But of course I follow it closely. And I thought, hey, this is a development and this is probably a way to work around some of the illegal problems to get access to this.
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Is that what you spent a lot of your time trying to do is that the interconnection between money, which Ukraine needs, weapons, which then as you said countless times, are all spread, spread out across different parts of NATO. And then finally that question of the front line.
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Yeah, I mean, in the end what we need to achieve is for Ukraine to sustain in the fight and to, to be in the best possible position when peace talks would start, that is weapons, that's money. Is of course making sure that when it comes to the pressure on the Russians, that when it comes to sanctions and all that is also more on the US side than NATO. But I'm really impressed by what President Von delay is doing now. Working with Secretary Besson to White House, but putting more pressure on the Chinese. Of course we have the discussion on cutting off the oil supply from Russia into Hungary, Turkey, Slovakia. Not easy, but all working on it because we want to make sure that the Russians don't have access to either any of these sources of income. By the way, the shadow fleet also important. So we're working on all that, sometimes nature in the lead, sometimes the EU in the lead, and also in close conjunction with President Trump and his team.
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C
One sort of flip side of what Trump said this week is it would seem that a peace deal in Ukraine is as far away as ever. Is that your reading of it?
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The problem is of course, that he and I was, I'm really commended for that. He brought a deathlock with Putin. He, he started to dialogue with him. He had the meeting in Alaska testing him and. But somehow we have not been able yet to get them to the table. And there should be a table not in Russia, but somewhere in the world where at least Zelensky and Putin are sitting down and discussing the difficult issues, how to end the war. And, and Zelensky is willing to do that. Putin clearly is not. And that means that we have to up the pressure on the Russians to make sure that he will come to the table. And I'm fairly confident we will get there at a certain moment. And the President's efforts here are extremely important.
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C
You've been very good at praising and keeping Donald Trump on side. Do you think that you've changed fundamentally the way he looks at NATO? I mean people that was when you came in, there were a lot of doubts and Stoltenberg was a very good leader as well, but there were a lot of doubts about how Trump saw NATO. Do you think fundamentally now he is committed to NATO and a way that.
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You know, it was not. It was absolutely clear what he felt. I mean I was prime minister when he was 45 and we discussed this many times. He was always in favor of NATO's and Trump, 47 was in favor of NATO's. But he has an expectation. Expectation was hey, you guys in Europe you have to spend the same. We are spending what Jens Stoltenberg did, he started this process in Naito assessing what do we need to be able to do if Article 5 would ever be triggered. So this is called the capability targets each country. What do they have to deliver. This led to the 3.5 heart defense spending, 1.5 defense related spending. This complete, this total of 5% when in the Hague under President Trump's leadership, nature was able to agree on this 5%. This AirTrain was done, was gone. This was there since Eisenhower and he was able to solve it. So I think it was one of his biggest forms policy successes. So he also got it committed to NATO. NATO. But this irritant, this big pebble in the shoe was there and it had to be removed.
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I think arguably NATO is as strong as it has been for several decades since the end of the Cold War. If you look at all the things we've talked about, you have countries saying they will take on Russian train planes coming to their airspace. You have people pushing up towards that 5% target. You have a much more committed Europe in terms of what is happening. Do you, do you feel much more confident about NATO now?
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Yes, I always felt confident about Naito, but I think President Trump coming into office has really helped because I spoke to many countries in November, December, not yet on 2% to all 2%. From 2014. We had to achieve by 24, 25, which will be difficult, Mike. I'm not sure we can get how do we do this? And then Trump came into office in January and From February, March, two phone calls came in all countries, not in 2%. Are we going to get to 2% this year? And then we came to the NATO summit and we were able, with 32 countries, to agree on the 5%. Not only because Trump needed this as a win to show to the American people that we are equalizing the spending between the U.S. and Europe, but also in Europe and in the U.S. and in Canada because we have to defend ourselves against against the Russian threat. The Chinese challenge is there and we cannot do that as 2%. We have to get to the 5%.
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It's very generous and perhaps shrewd of you to share the credit for this with President Trump, but thank you for talking to Bloomberg.
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Thank you for having me. It's a real pleasure.
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