Question: Ms. Nuland, the East and the West are clashing in Europe again. Is Bulgaria the frontline?

Assistant Secretary Nuland: Well, first, Polly, it’s great to be with you today. It’s great to be back in Bulgaria. It is a really important time, and as President Obama said when he gave his speech in Brussels last week, for us, for all of us in the transatlantic community, this is about Ukraine and its right to choose its own future, but it’s about far more than that. It’s about the values that we have all lived by and benefited from — rule of law, the right of citizens to choose their own future. It’s about all of those things. Bulgaria has been a beneficiary so that is why all of us who value those things need to stand together and support the Ukrainian people, but also make it clear that we want to live in a world where rules matter. We want to live in a world where people can determine their own future, where governments work for the people, not the other way around. And this has implications for our own Euro-Atlantic space, but also for other parts of the world — for Asia, for Latin America, for Africa — is this going to be a civilized planet that we live on, or not?

Question: You talk about rule of law, but do you really believe that Putin is afraid of those sanctions? I mean, there are gas and economic interests between the West and Russia. So what will prevail — money or international law?

Assistant Secretary Nuland: Well, that’s going to be up to Putin whether he understands or not that when you flout international law, when you violate the sovereignty of another country, when you choose for others rather than letting them choose themselves, that there are costs as the President has said. Those costs come in the form of political isolation. Nobody is going to Sochi for G-8 in June. They also come in the form of the economic sanctions that we have already agreed to, the U.S. and Europe together, and we have made clear that if we cannot resolve this diplomatically, which is obviously our choice, there will be more costs. And we do believe that those costs are starting to bite in Russia. You see what is happening to the ruble, you see the capital flight now, you see that they are being downgraded in the markets. So there is an impact to what we have already done, and there will be more of an impact if he continues, if he doesn’t reverse course.

Question: Okay. We talk about sanctions, but Bulgaria already lost from sanctions against former Yugoslavia. So who will compensate Bulgarian now?

Assistant Secretary Nuland: Well, obviously there has to be a conversation within the EU if we have to do more sanctions about sharing the pain somewhat among the European countries, because everybody has got different interests if we have to go to sectorial sanctions. But we do believe that if we are smart about it, we can tailor sanctions if we have to go in that direction, that have more impact on Russian than they have on us. But we’re also going to have to display solidarity and help each other if that’s the direction we go as we’ve had to help each other in the past.

Question: Ms. Nuland, what does America expect from Bulgaria in this situation? To stand firmly against Russia? Are you familiar with the history between Russia and Bulgaria?

Assistant Secretary Nuland: We don’t want to force any country to choose. We don’t want to force Ukraine to choose between Russia and Europe, Russia and anybody else; we don’t want to force Moldova to choose, we don’t want to force Bulgaria to choose. But what we do want to do as a community of civilized nations is make the point that in the twenty-first century you cannot change borders by force. If we go down that path, any country could be carved up, and we won’t live in the kind of prosperous, peaceful world that we want, that we want for our children. So we have to stand firm together. We stood firm together in the past when we needed to. We have every confidence that as a strong NATO ally, as a beneficiary and strong member of the EU that Bulgaria will continue to work with all of us to send a strong message. And that actually will also protect Bulgaria in the long run.

Question: Do you think that the federalization of Ukraine is a solution of the crisis, and what will be the American reactions if the borders continue changing, if Moscow continues to pile on troops along the Ukrainian border?

Assistant Secretary Nuland: Well, first with regard to the future constitutional structure of Ukraine, as you know the Rada has already begun a process of amending the Constitution…

Question: It was an issue in the conversation between Mr. Lavrov and Mr. Kerry…

Assistant Secretary Nuland: It was and I participated in that conversation last night. So, Secretary Kerry’s message very strongly, in private and in public to Foreign Minister Lavrov and to Russia, was that it’s up to the Ukrainian people to decide how they want to amend their Constitution, how they want to structure their society. The transitional government has said that it very much supports devolving more autonomy to the regions, giving them more control of their taxes, more control of their language, minority rights, these kinds of things, more protections. And if that’s what they want to do with this Constitution, but it’s not for Russia to tell Ukraine how to organize itself. It’s for Ukrainians to decide.

Question: Ninety percent of the Crimean people who voted in the referendum wanted to join Russia. What is this — the will of the people, of the sovereign, or Russian aggression?

Assistant Secretary Nuland: You know, I can’t get inside the minds of the voters. All I can witness here is that this was a referendum that was called on two weeks’ notice, through the barrel of a gun after 20,000 additional Russian troops landed in Crimea, with no opportunity for public discussion, no opportunity to consider whether this could or should be done in conformity with Ukraine’s own Constitution. So from every perspective that we have lived by in the transatlantic community for twenty-two years if not more, this was illegal, it was unconstitutional, and you know, who knows whether there was intimidation as well in the minds of voters when they went to the polls.

Question: Let me ask you in another way. Wasn’t it the same in Kosovo? Where is the difference?

Assistant Secretary Nuland: It’s a completely different scenario. In Kosovo, remember that the population of the country had been murderously rampaged over by their own government. Their own government turned on them. There were thousands and thousands dead. There was a war fought to pacify the situation. You know, there were international conferences to try to settle the situation, to try to negotiate the situation, to try to find resolution. After the war, there was a strong UN Security Council resolution which organized the structure of Kosovo, put it under protectorate status, organized a referendum. That process, first of all, started with a murderous rampage by a government against its own people, and it ended with a UN resolution that allowed for a referendum all under international law and the process went on for more than a decade.

Question: The big question is how will end this crisis?

Assistant Secretary Nuland: How it started or where it will go?

Question: Where will the crisis end?

Assistant Secretary Nuland: How will it end?

Question: Yes, yes.

Assistant Secretary Nuland: So let me reiterate that from a United States point of view, we still believe that there could be a diplomatic solution here. This is why President Obama has been having phone calls with President Putin, as has Chancellor Merkel, as have other world leaders, to convince him that it doesn’t have to go this way - aggression on the one hand, sanctions on the other. That the Ukrainians themselves have already begun processes to address a lot of the issues that Russia has asserted it has problems with. This issue of devolving autonomy, protection of minority rights, demobilization of irregular forces, all of these processes are underway. So it’s a question to put it back to the president of Russia - does he want to take the off-ramp of a diplomatic solution that’s on offer and that was the question that Secretary Kerry again put to Foreign Minister Lavrov yesterday, the whole international community would welcome that. Or is he bound and determined to continue to make choices for Ukraine with aggression.

Question: Some time ago, did you really say that phrase about the EU and could you repeat aloud the word you said on the phone?

Assistant Secretary Nuland: I think you are probably referring to a private conversation…

Question: Yes, private but leaked…

Assistant Secretary Nuland: …that was illegally taped, was released to the public. I am going to guess that every single one of your viewers has said things in private conversations that they never expected would be out in public….

Question: But we are not diplomats…

Assistant Secretary Nuland: No, but again, that they are not particularly proud of, that do not represent the totality of their views. That was a very particular situation where we were trying to get some international support for Ukraine, we were looking for a vehicle to deescalate. If you listen to the conversation you understand that we ended up focusing on the UN at that moment.

Question: Do the United States and Western Europe have different interests today?

Assistant Secretary Nuland: Do the United States and Western Europe have different interests today?

Question: Yes.

Assistant Secretary Nuland: I don’t think so. I think if anything…

Question: When you mentioned the F word, I mean…

Assistant Secretary Nuland: No, no, no, that was a tactical moment in time, where in a private moment there was a temporary frustration because we couldn’t get some help that we…

Question: Are you sorry you for the word?

Assistant Secretary Nuland: Suffice to say that have been many apologies issued, it was a private moment, it was a private frustration at a tactical place and time. I have had a number of colleagues throughout the European Union say things like “You’d be amazed what we say about you.” I mean, look, this is another issue here -- in civilized society we don’t tape private conversations and put them on the Internet. This was part of a campaign to manipulate events in Ukraine, to manipulate relationships between the United States and Europe and it very much backfired.

Question: I am asking you because America was involved in some leaked telephone conversation between world leaders, we know about Edward Snowden, we know about WikiLeaks, etc. Don’t you think this undermined the prestige of the United States?

Assistant Secretary Nuland: Well, this is a different issue, this is the issue of how we handle signals intelligence, the question of what we do in intelligence channels to protect our security, whether, in fact, we have capabilities now that grew too large too fast after September 11. As you know, the President, when all of this came out, was himself quite surprised by some of the things that were underway and he insisted on a complete review, there was a government review, there was also an outside private review and as a result of those reviews, he’s made significant changes and we’ve also been in direct dialogue with our partners about that.

Question: In the beginning of our conversation, you told us you are happy to be here, but Ms. Nuland, why are you here? This is your very first time in Bulgaria, what exactly does America expect from Bulgaria - support for Ukraine, support for American energy interests or something else? Why are you here?

Assistant Secretary Nuland: Well, first, I have been on the job for about six months, I think you know that at the State Department my responsibility covers 50 countries – from the Atlantic all the way to Vladivostok. I actually had hoped to come - and I visit all my countries as much as I can – I had hoped to come to Bulgaria a month ago but I got diverted to go to Kyiv with Secretary Kerry. But in fact I think this visit is even more timely - in part because it comes almost to the day on the ten-year anniversary of Bulgaria’s membership in NATO. I’d like to congratulate you and the Bulgarian people on that.

But also it is a very, very important moment for all we do together - defending peace, stability, democracy in the Transatlantic community as we talked about, in the face of these kinds of threats. We are also doing a huge amount, the United States and Bulgaria, to promote business and trade and investment, and the trade between us is going up. We are working together, as you said, in the energy field, with the Westinghouse investment and others. This period of time also reminds us that energy diversification is also part of national security so we are proud to work with Bulgaria on those things.

I also had another message for the government and for the Bulgarian people today which is that as we look to defend our way of life, as we look to advance opportunity for all of our citizens, and ensure that our sovereignty is protected, there is another menace out there that threatens democracies around the world and that’s corruption. And so we’ve got to be vigilant. And particularly in the current context where we want to ensure that those who govern us are really representing the interest of the people.

We say in the United States Government “of the people, by the people, for the people.” So we all have to be vigilant and governments have to be vigilant and open to ensure that oligarchic interests don’t have control over the economy, control over politics, control over the media. We all have to be vigilant that as we recover from this economic recession and our economies begin to grow again that it’s not just the top echelon of society that benefits, that all the people benefit, in particular in a country like Bulgaria, where there are big income disparities. We want to see Bulgaria grow and prosper in a healthy and clean manner that we think that’s what you deserve and we’ve worked together a lot on that in the last ten years or so, so we have even more work to do there together. So I came to also pledge our support as you continue to work here in Bulgaria to root out this potential cancer of corruption.

Question: Thank you very much.

Assistant Secretary Nuland: Thank you very much, it was a pleasure to be with you.