The NewsHour with Jim Lehrer

PHIL PONCE: Good evening. And Happy New Year. I'm Phil Ponce. Jim Lehrer is off this holiday. On the NewsHour tonight 11 European countries begin using their new currency; Cuba marks 40 years of rule by Fidel Castro; Mark Shields and David Brooks, filling in for Paul Gigot, talk politics; and U.S. poet laureate Robert Pinsky reads a New Year's poem. It all follows our summary of the news this New Year's Day.

NEWS SUMMARY

PHIL PONCE: Eleven European countries celebrated their new common currency today. In Germany, thousands met at the European Central Bank Tower in Frankfurt and formed a human "E," symbol of the euro, as the money's called. Major foreign exchanges were closed for the holiday; they'll reopen on Monday, with the euro expected to trade at about $1.17. We'll have more on the euro right after the News Summary. Back in this country Chief Justice Rehnquist urged Congress to stop making federal crimes out of cases already covered by state laws; these include car jackings and failure to pay child support. In his year-end report on the federal judiciary, Rehnquist said the trend toward federalizing crimes "threatens to change entirely our federal system." In Cambodia today Prime Minister Hun Sen reversed himself and said two former Khmer Rouge leaders will have to stand trial for crimes against humanity. The two men were associated with the repressive regime that ruled Cambodia from 1975 to 1979. Under that regime, an estimated 2 million people died of starvation, disease, or were executed. On Monday, Hun Sen embraced the two men and urged his countrymen to "forget the past." But in a nationally televised address today, he said local and international preparations for a war crimes tribunal would proceed. Today marks the 40th anniversary of Fidel Castro's rise to power in Cuba. On January 1, 1959, Castro, then the leader of rebel forces, proclaimed victory over the dictator Fulencio Batistat. Tonight, Castro, now 72 years old, was to give a speech in Santiago Cuba, the city where he first addressed the Cuban people as their leader. We'll have more on this anniversary later in the program. Also coming up, the euro debut, Mark Shields & David Brooks, and a poem for the new year.

FOCUS - COMMON CURRENCY

PHIL PONCE: Tom Bearden begins the new European currency story.

TOM BEARDEN: The new money is called the euro. It won't be jingling in anybody's pockets for another three years. But as of New Year's Day it is the currency of choice for banks and other financial institutions in most of Europe. Eleven of the European Union's 15 countries are taking part: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. They have a combined population of over 289 million people. Britain, Sweden, Denmark and Greece are staying out, at least for now. Residents of the 11 nations, which have taken the nickname Euroland, aren't giving up their francs, Deutschemarks, and lira just yet. The conversion to the euro is gradual. On New Year's Eve finance ministers announced the final exchange values between their currencies and the euro.

SPOKESMAN: (speaking through interpreter) The first of January 1999 marks the beginning of a new era.

TOM BEARDEN: Each nation is being assigned a six-digit conversion rate, which will be permanent and unchanging. What this means is that one Euro will always be worth 6.56 French francs or 1.96 German marks, for example. The ministers also set exchange rates with foreign currencies. The announcement was capped off with the celebration in the courtyard of the European Central Bank in Brussels. But real business will start after the New Year's holidays, when governments and businesses will keep their accounts in euros; so will banks and stock exchanges. Also after the holiday, the recently created European Central Bank, housed in Frankfurt's euro tower, will begin to set interest rates and make other monetary policy decisions for Euroland. On January 1, 2002, euro coins and bills, which are already being minted, will begin to circulate. Exactly six months later, the old currencies will be unusable. In the meantime, banks like this one in France have installed converters to help customers calculate how much the new money is worth. But that's not all the banks have to do. The publication of the full set of official currency exchange rates on Thursday also mark the start of a frantic 100-hour race to convert cash balances, re-denominate bonds, re-code computer programs, and much more, all of which falls on the shoulders of thousands of bank employees. Banks have hired information technology specialists to work the weekend to integrate banking systems with other banks around the world.

VENDALINE VON BREDOW, Merrill Lynch: We have bout 500 people in Europe working full-time. It's a major logistical effort.

TOM BEARDEN: Many retailers across Europe have been preparing their customers for the euro for sometime. Stores like LeClerk in France have been advertising the euro price alongside the price in France. They even produced mock euros to let shoppers experience in advance what shopping with the new money would be like.

PHIL PONCE: Elizabeth Farnsworth in San Francisco has more.

ELIZABETH FARNSWORTH: Some perspective now from Phillipe Schmitter, professor of political science at the European University Institute in Florence Italy and author of an upcoming book on democracy and the European Union; Horst Ungerer, author of a book on the history of European monetary integration and former staff economist at the German Central Bank; Jurek Martin, freelance journalist and former foreign editor of the "Financial Times," a London-based international newspaper; and Stephen Overturf, economics professor at Whittier College in Southern California and author of "The Economic Principles of European Integration." Thank you all for being with us. Just to get this clear, Mr. Schmitter, for the time being the euro will be used mostly in electronic financial transactions.

PHILIPPE SCHMITTER: And in bank statements. Most people will not be aware of it as money until they get their first bank statements, and then presumably they will be continued to be denominated in the national currency and then underneath there will be notion in euro.

ELIZABETH FARNSWORTH: And if you're in Italy and you have to buy something, the interest rate on that is determined by this Central European bank in Frankfurt.

PHILIPPE SCHMITTER: That's true, but through this process of convergence, interest rates now in European countries are very similar anyway, so there's going to be no dramatic change that people will notice in interest rates because they've been forced to converge on a relatively narrow range. I think Italy, in fact, is the only country - at least for the basic rate - which is still out of line -- if they didn't change yesterday.

ELIZABETH FARNSWORTH: How historic is this? Is this a milestone in European history?

PHILIPPE SCHMITTER: Absolutely. I think especially for those of us who are interested in European politics because the question we have always asked - and which has no answer - and which has generated an enormous amount of controversy is what is the nature of the relationship between economic integration and political integration? How far can you go to opening up your markets and allowing people to live in each other's country and to circulate, so to speak, and not have a common political authority that people recognize as a legitimate government?

ELIZABETH FARNSWORTH: So you're saying --

PHILIPPE SCHMITTER: Many people said it will stop at economic integration and there will be no political integration; that the two are separate. I believe they're very closely connected. And I believe that monetary unification is the missing link, which will drive Europe toward greater political unification.

ELIZABETH FARNSWORTH: So that's why you think this is historic, because of that possibility?

PHILIPPE SCHMITTER: Absolutely.

ELIZABETH FARNSWORTH: Mr. Ungerer, is that why you see this as historic?

HORST UNGERER: Yes. I think I have more or less the same kind of documentation. We have to see this policy in a historical and in a political context. We cannot separate the monetary issues from the general economic issues or in the longer term at any rate from the political issues. The policies, after all, is going on since 50 years. It started all out with the Marshall Plan of the United States. It moved on to the European Payments Union, then we had the establishment of the European community, now called the European Union, and that road led to the Maastricht Treaty, which is the basis for what we are - what we see now, and with the establishment of the European Central Bank and the introduction of a single European currency, the euro.

ELIZABETH FARNSWORTH: Mr. Overturf, these are nations that slightly more than 50 years ago were fighting each other, and now they have established this monetary union. Did you think it would ever happen?

STEPHEN OVERTURF: Well, I was hopeful that it would. Actually, I was pretty sure it would in that historical context, and I'm glad to hear both the historical side of it mentioned here, as well as the political side, because if you look back at when it originally started, it was in 1952, with the idea of John Monet, it was to bring these nations together beginning politically, yes, it was through the economic back door, if you will, of these particular kinds of industries, coal and industry, the kinds of industries that would wage war. But then it moved on very quickly into the European economic community. And then they began to look at the monetary side in 1970 with the Werner Plan. That didn't work, but in 1979, the European Monetary System attempted to fix exchange rates. And that worked really well. From that a very energetic commission president, Jacques DeLores, put together a committee, which tried to build upon the single market to again create a common European currency. And I guess the emphasis needs to be made that this is all economic in nature. But there's a political agenda behind it, and here we are facing this very thing coming about very quickly here.

ELIZABETH FARNSWORTH: Mr. Martin, how do you see the economic and the political agenda, given the fact that Britain is not in it at this point?

JUREK MARTIN: Yes. It was one of the largest surprises to me, that Tony Blair decided, suddenly announced about 15 months ago that Britain would not enter the first stages of this grand and extremely important project until after there's been another election in Britain, which has to be by 2002. It could be before then. I think Britain has always underestimated - ever since the very beginning - this will in Europe to collaborate after the war. It underestimated even the coal and steel community; it underestimated -- sometimes it was frustrated by Charles DeGaulle, president of France, for example. But it has consistently underestimated European will. And I think that's cast something of a long shadow on Tony Blair. Tony Blair comes in, beating the conservative government, which had been torn to pieces with divisions over Europe, presumably with the opportunity or a lot of us thought with the opportunity, with the British economy in such very, very good shape last year, to leap in and say we're going to be a charter member. He chose not to I think for political reasons, rather than for economic reasons.

ELIZABETH FARNSWORTH: What do you mean, what kind of political reasons?

JUREK MARTIN: I think there are complicated political reasons inside Britain. It's always dangerous to underestimate the question of British sense of sovereignty. That is, after all, what Mrs. Thatcher had become famous for, for so long, emphasizing sovereignty, bashing the bureaucrats in Brussels with her hand bag every time they disagreed with her, and so on and so forth. So I think Blair was conscious of that. Blair was also conscious of the fact that the British press, large segments of the British press - none of it might I say run by Brits - they're run by either Rupert Murdoch, the Australian American, or Conrad Black, the Canadian, a virulently and viscerally anti-European in all its manifestations. I think Blair had to take these people on board, so he was cautious.

ELIZABETH FARNSWORTH: Mr. Schmitter, sovereignty is a concern in all the nations. I mean, everybody has to deal with some of the same factors that Tony Blair was doing - was dealing with. What were the benefits for say France, or Italy, that made it possible to overcome those sovereignty concerns?

PHILIPPE SCHMITTER: I'm not sure they're overcome. I think people are redefining what sovereignty means for these countries, and there has - as the gentleman just pointed out - it has different meanings in different parts of Europe. Sovereignty seems to be much more sensitive, incidentally in the United States, as well as in Great Britain, but the main difference, I think, is that people on the continent are more aware that sovereignty in the classic sense doesn't exist anymore, that countries no longer have the degrees of freedom and autonomy to act in those realms which they nominally are supposed to have their freedom in. So, in fact, the Bundesbank was serving as the European Central Bank before the European Central Bank was created.

ELIZABETH FARNSWORTH: Because the mark was so strong.

PHILIPPE SCHMITTER: So giving up sovereignty for the French franc - or least of all the Italian lira - was not giving anything up, because, in effect, they didn't have a wide range of choices for their currency or for their exchange rate.

ELIZABETH FARNSWORTH: Mr. Ungerer, do you agree with that? How would you describe the benefits for Germany that made Germany give up sovereignty concerns?

HORST UNGERER: Well, let me talk first about this problem of sovereignty. I completely - I agree completely with Mr. Schmitter. And we are not talking anymore about abandoning, giving up sovereignty. We are talking about sharing sovereignty, and that this is in the context of a totally different world, compared with 100 years ago. And it was this extreme concept of sovereignty, which, after all, over centuries brought Europe into a situation there after World War II -- it realized - well -- the way out is to cooperate.

ELIZABETH FARNSWORTH: So, Mr. Ungerer, are you saying that for an ordinary German who goes out to buy whatever they have to buy Monday morning - and I know they don't have to use the coins yet -- but they understand that the euro is now in effect - they're thinking about the fact that the wars of this century make it worthwhile to give up whatever sovereignty Germany had to?

HORST UNGERER: I think so. I think so. I mean, it's known that the German population is fairly skeptical about the euro on purely monetary grounds for a number of reasons, which I don't want to discuss in detail, but at the same time, the German population accepts fully heartedly European integration and accepts as result the fact that there will be a European currency because they realize we have to give if you want to get something. The European population, according to surveys, when you seize the advantage of European integration in the future as a promise for the future and in peace, and that is the overriding consideration for them -- then look at the thing not just in monetary terms but in a political context.

ELIZABETH FARNSWORTH: Mr. Overturf, will the other countries that have stayed out come in, say Sweden, Denmark, Greece? I know that Greece didn't meet certain economic criteria that it's trying to meet, and what about Eastern European countries?

STEPHEN OVERTURF: Yes. This is particularly interesting to me. I agree with this notion that Britain will eventually come in because they have had this tradition, unfortunately, of standing out until the new institutions have proved themselves, and then they've come in a little bit late to influence things. The Danes are a very interesting country because they've always been a little bit skeptical. They're members of the European Union, but they actually voted against the Maastrict Treaty before then changing their mind and going in and voting for it, but they voted for it only with an opt out, that they wouldn't necessarily have to come in. The Fins decided to come in and the Swedes decided to stay out. There are many, many reasons for that; possibly one of the largest is to not be influenced by Brussels. They're also concerned - these countries, which tend to be high welfare states, that they not necessarily sacrifice that, which is something that they've appreciated well over the years. The Eastern Europeans want to come in and they want to come in right now. The only problem, of course, is entry, in general, will involve an enormous number of questions and problems, and the currency will only be the very last of those.

ELIZABETH FARNSWORTH: Mr. Martin, what are the key risks now?

JUREK MARTIN: Oh, I think there are considerable risks, mostly they will have to be defined in economic terms. What's happening in Europe is that the European Central Bank becomes likes the United States Fed. The Bank of France becomes rather like the Kansas City Fed. And when did you last sort of read a headline about the Kansas City Fed? So, consequently, a large part of economic policy, that is monetary policy, which is very important, is now vested in one central authority in Brussels. Now if that authority handles its job well, if the world economy stays in reasonably good shape, if there are no horrible shocks knocking it off course, that's fine; it's possible to manage the monetary affairs of Portugal, as it the monetary affairs of Germany, even though Portugal and Germany are rather like Mississippi and California in that sense. But the Fed manages Mississippi and California at the same time. So if it all goes well, there is no reason why it shouldn't work. What if it goes wrong? What if there are localized, adverse economic conditions in Mediterranean countries, for example? Can the central bank, the European Central Bank in Frankfurt, necessarily be sensitive to those local conditions, unemployment, whatever it happens to be, in Southern Europe, and if it's not, is there social and political unrest in the countries of say Southern Europe? So these are the tests which are still to come.

ELIZABETH FARNSWORTH: What do you think the risks are?

PHILIPPE SCHMITTER: Well, I think he's put his finger on the major problem. Ironically, it is precisely those countries where the population is most in favor of giving up national currency and accepting the euro, countries like Italy and Spain, who are going to have the most trouble adjusting to this -- and this is for essentially two reasons: One, these are countries themselves characterized by normal internal disparities between regions, so the problem is not so much disparities between Portugal and Germany, which are not quite Mississippi and California, but the analogy works, more or less. It's within Italy, within France, perhaps even with Portugal, inside these countries that this uniform rate then is going to have more dramatic effects.

ELIZABETH FARNSWORTH: Because if there's a weakness in the economy of Southern Italy and the interest rates favor Northern Italy, they say, why aren't you helping us.

PHILIPPE SCHMITTER: For example, Northern Italy has been living on the European scale and with European interest rates for a long time; Southern Italy, which depends very much, incidentally, on subsidies, those subsidies are jeopardized because under the new rules the Italian government is not going to be able to run as consistent budget deficits in order to redistribute income to the South. Same for the Spaniards. In those cases, particularly in France and Italy, where they have strong regional governments, the main tension is going to be, so to speak, between parts of the regions, if you wish, of Spain. It's really in the other European countries.

ELIZABETH FARNSWORTH: Mr. Overturf, what will be the effect on the American economy and on Americans?

STEPHEN OVERTURF: Well, that's an interesting one. We're creating a very new, very large financial market that is potentially very large, indeed, and we're already looking at new bond issues and new stock issues coming out in euros. I think that will be interesting for the average person who has, let's say, a pension fund or mutual funds as a nice way to spread that risk. Right now you might not think about buying an Italian bond or a French stock, but certainly if these are issued in euros, where there's very little worry about fluctuations in the exchange rate, I think you're much more likely to set that happen, so I suspect that will happen. Actually, part of the success, if that does occur, is that it could actually cause interest rates to rise a little bit for the United States. They no longer will be drawing all these funds in. And so that might have an impact on the average American.

ELIZABETH FARNSWORTH: Well, that's all the time we have for now. Thank you very much.

PHIL PONCE: Still to come on the NewsHour tonight, 40 years of Castro, Mark Shields & David Brooks, and a New Year's Day poem.

FOCUS - 40 YEARS OF CASTRO

PHIL PONCE: It's been four decades since Fidel Castro came to power in Cuba. Our two part look at this anniversary was prepared earlier this week. We begin with an interview with Roberto Salas. He and his father started photographing Castro even before he became Cuba's leader. A book of their pictures called "Fidel's Cuba" has just come out.

PHIL PONCE: Welcome, Mr. Salas. Just very quickly, your own personal background, your father immigrated to the United States from Cuba. You were born in New York, and that's how you - and the two of you started working together.

ROBERTO SALAS: Yes. We started working, and my father had a photographic studio in Manhattan, and I - at an early age -- I didn't finish high school - I went to work with him, and to help out with, you know, the family economy, as you might say.

PHIL PONCE: And your father passed away a few years ago.

ROBERTO SALAS: My father passed away in 1992.

PHIL PONCE: And the - some of the earliest pictures in the book were taken by your father.

ROBERTO SALAS: Right.

PHIL PONCE: And one of the first images in the book is an image of Fidel Castro that one normally doesn't associate with him, Fidel Castro in Central Park. What was he doing in Central Park?

ROBERTO SALAS: Well, the thing is that this time he had just returned from - he came to the United States -- he had just been released from the prison under the Batistat Regime.

PHIL PONCE: This is in 1955.

ROBERTO SALAS: This is in 1995. And he went to the United States - he came here specifically to drum up support for the revolution that he expected to make.

PHIL PONCE: And to raise money.

ROBERTO SALAS: And to raise - basically to raise money from Cubans who were living here.

PHIL PONCE: In fact, one of your - one of the other pictures that your father took is - is of Mr. Castro at a fund-raiser and there are - what is that pile in front of him? What is it?

ROBERTO SALAS: That's a pile of money. Unfortunately, that picture is not the last one. The pile grew a little bit larger than that. But that was collected - that was in Palm Garden - a meeting that they had there where there was an enormous amount of Cubans there where they collected - the money that was collected there was then later used to purchase equipment and weapons, et cetera, in Mexico.

PHIL PONCE: And all this went towards his revolution, which, obviously, was ultimately successful. He came back to the United States.

ROBERTO SALAS: Already when the revolution finished in 1959.

PHIL PONCE: We have a picture of him at the United Nations. Tell us about this picture.

ROBERTO SALAS: Well, this picture was a visit he made to the U.N., and this one is mine. This was taken in '59, in April of 1959. He sat at the position where Cuba sits because at that time I figured, just like now, the UN was not in session. But in other words, they made it sort of a courteous visit there, and he sat there and for the press and to take some pictures there, et cetera.

PHIL PONCE: Moving on to Cuba, you were at the Bay of Pigs when that happened, and we have a picture here. Describe what it is we're seeing.

ROBERTO SALAS: Well, this image in particular, this was taken after the invasion of the Bay of Pigs was finished. All those people that are in the background there, these were all the - the invaders that came that were captured.

PHIL PONCE: These were prisoners of war.

ROBERTO SALAS: These were the prisoners - more than a thousand and some odd - that he had a meeting with all of them and then there was a sort of a cross-fire of he asked them questions, they asked him questions.

PHIL PONCE: What kinds of questions?

ROBERTO SALAS: Really, I don't really - you know, some of the questions were what did he expect to find in Cuba, and questions of the prisoners - what they used to ask him - no, they thought that the situation was this way or that way, and they understood that it wasn't the way they thought it was.

PHIL PONCE: It was a nature of exchange or a debate?

ROBERTO SALAS: It was a sort of an exchange and a debate, et cetera, with all of them. That was - oh, I'd say at about a week after the invasion was over.

PHIL PONCE: And a picture of Fidel Castro that you took, along with Che.

ROBERTO SALAS: That's right. That one in January, 1959.

PHIL PONCE: Oh, that's earlier then.

ROBERTO SALAS: That is the first picture I ever tookof Che - coincidental.

PHIL PONCE: Their relationship.

ROBERTO SALAS: Their relationship - really, there has been so many stories about that relationship - some people say that they tried to - for obvious reasons - they tried to separate them in the sense that there was -- that Che had left Cuba because there was a sort of a power struggle, et cetera. But actually from my personal point of view and I think the point of view of many people it wasn't that way.

PHIL PONCE: And, of course, when we say Che, we're talking about Che Guevera, the number 2 person in the revolution.

ROBERTO SALAS: That's right. And the thing was that Che had left Cuba because one of the conditions that he had with Castro in '55 when he came was that one day eventually he would keep on moving on to start his revolution that he wanted to do in his own country - was Argentina.

PHIL PONCE: Your personal favorites in the book, the pictures you like the most in this edition.

ROBERTO SALAS: Well, I would say that it's a little bit divided. I would say some are favorite because I took them; some are favorite because my father took them.

PHIL PONCE: Your father took one of Fidel Castro with Ernest Hemingway.

ROBERTO SALAS: That's right. That's one of them.

PHIL PONCE: Tell us about this picture.

ROBERTO SALAS: Now this photograph is - believe it or not -- is the only time that Hemingway and Castro ever met - even though Castro had mentioned even before that many times that he had been inspired by Hemingway's writings, especially the book on the Civil War of Spain. Yet, for reasons unknown, that was the only time they ever met. And my father was fortunate to get the picture. And that is one of his - can we say one of his most famous ones.

PHIL PONCE: And your father also took of a fairly well-known profile of again Che Guevara?

ROBERTO SALAS: Of Che smoking. I would say in my father's - retrospectively of his work - those are the two most photographed that he personally liked the best.

PHIL PONCE: And he enjoyed the extreme close-up. Like there's one of - there's an extreme close-up of Fidel Castro with a cigarette.

ROBERTO SALAS: That's right. That is another one. My father was a portrait photographer. He started as a portrait photographer, as I mentioned in the studio. And in an obituary that was written a couple of years ago when my father died, somebody brought to my attention the fact that you can take a photographer out of the studio but you cannot take the studio out of the photographer. My father loves the head shot; he loved the close-up; and - but he had a very peculiar way of doing it. In other words, there was a little bit more of an informal sense to those photographers - in other words, these portraits, that you can see in the book, in a couple of places are very, very close, very close shots of different personalities, but, yet, they are very - snaps - you know -

PHIL PONCE: There's one picture that's not a close-up that's sort of -almost a monumental photograph of Fidel Castro, certainly from a low angle - this is it.

ROBERTO SALAS: Yes. This is mine. This was taken in Caracas, Venezuela. This was the first visit that Fidel made outside of Cuba at the beginning. And this was January 17, 1959.

PHIL PONCE: And you took this when you were sort of lying flat on the bed of a truck, yes?

ROBERTO SALAS: Yes.

PHIL PONCE: I mean, it was kind of a serendipitous shot. You weren't planning it or anything.

ROBERT SALAS: No, I wasn't planned. As a matter of fact, I, really, I don't know how I even got on the truck, because when the plane arrived, the plane was mobbed by people, and the soldiers were there all the way up to the stairs. Castro shows up in a door. I pushed my way in front of him. I try to get down the stairs. And I'm on the bottom of the stairs to get him as he's coming down, you know, that classical shot.

PHIL PONCE: And I understand you got sort of stuck with a rifle in your stomach and you sort of staggered to the truck with the help of some friends.

ROBERTO SALAS: They really butted me in the stomach and I fell to the floor. I didn't know what I was seeing. And somebody pulled me up on the truck. And I was laying on the bed of the truck, and Fidel had been on top of the truck and from the bottom up I was looking up, and this is the image that I saw.

PHIL PONCE: Mr. Salas, you've been taking pictures of Fidel Castro for almost 40 years. What are your thoughts about the person?

ROBERTO SALAS: He's a very charismatic person. For me it's been - you might say it's been sort of a - now - as you see when the book comes out - you start to recognize or feel a sort of a pride that you've been able to do this. It's an honor for me. It's been a privilege to be able to be a part of the history of the country, and to be able to record and leave something behind me, not only what I left - in other words - leave what I have done and leave what my father has done, so other people can see a part of a - a fraction of what a history of a country is.

PHIL PONCE: Mr. Salas, I thank you very much for being with us.

ROBERTO SALAS: Thank you very much.

PHIL PONCE: This anniversary attention on Castro comes at a time when there are some calls to re-think American policy towards Cuba. Castro has been in power through nine U.S. presidents, and despite an American economic embargo and numerous attempts to remove in. In September, a group of former Republican officials and politicians, including Henry Kissinger, Lawrence Eagleburger, Howard Baker, and Senator John Warner urged President Clinton to establish a national bipartisan commission to review U.S. policy towards Cuba. We take that up with two leaders in the Cuban American community in Florida. Rafael Penalver is president of the San Carlos Institute in Key West, a Cuban cultural education center; Raul de Velasco is president of the Cuban Committee for Democracy.

PHIL PONCE: Gentlemen, thank you for being with us. Mr. De Velasco, how do you react to this call for a bipartisan commission to re-think American policy?

RAUL DE VELASCO: Well, I think that after 40 years of a policy that has not achieved its intended purposes, I think it's reasonable to - this is the time to look at it and see what can we do about it. I don't think it has achieved its purposes. I wanted to make it clear that our organization is in opposition to the Communist government of Cuba and that we're certainly not sympathizers of the president of Cuba, Fidel Castro.

PHIL PONCE: Mr. Penalver, your reaction to the cause for re-thinking of U.S. policy.

RAFAEL PENALVER: Well, I think any policy has to withstand examination, but I caution, I caution the motives of what's really being done here. We have a situation where a number of Republican leaders might incredibly be providing the political cover for President Clinton to soften his position on Cuba, and it would be tragic, it would be a tragic betrayal of principle to the Cuban-American community that has really built up the Republican Party in Florida from a party that was non-existent a few decades ago to a party that next Tuesday is going to be inaugurating Jed Bush as its Republican governor, and based in large part to the support that Cuban-American community for some Republicans to make this call providing political cover for President Clinton. Nonetheless, I think we have to look at Cuba not in terms of softening to Castro, but in terms of bringing freedom and democracy to the Cuban people.

PHIL PONCE: Mr. Penalver, you talked about your concern about the motives. What do you think the motives might be?

RAFAEL PENALVER: The motives could be very well be economic, and unfortunately, Fidel Castro is no Communist; Fidel Castro has no ideology other than what it takes for him to remain power. A brutal dictator, I'm really upset by some of the comments in the earlier segment about the pictures of Castro because if the Cuban people had to present to you the pictures of Castro during the 40 years, they would present some very different pictures. They would present pictures of Castro murdering the Cuban people, Castro denying the most basic human rights, a Castro that has forced over 2 million Cubans out of a population of 6 million when he took power into exile. So it seems like we are in a way creating a legend here based on facts that are not there. Castro is a totalitarian dictator who will do anything to stay in power. Now, if it takes for him to become a capitalist and to sell Cuba to capitalist interests, parcel by parcel, giving them sweet deals in order for him to remain in power, he will do so.

PHIL PONCE: Mr. De Velasco, will Fidel Castro turn to capitalism as a way of staying in power?

RAUL DE VELASCO: Well, I think he will probably change if he wants to stay in power, but I think Mr. Penalver articulated very clearly one of the reasons why this policy has failed for over 40 years, and it's because we are looking at it in the terms of what is important for Florida and the Cuban-Americans and not what is in the interest of the United States and more importantly the interest of the Cuban people.

PHIL PONCE: Mr. De Velasco, what is in the interest of the Cuban people, in your opinion?

RAUL DE VELASCO: The interest of the Cuban people is to maintain the Cuban sovereignty, national reconciliation, and peaceful transition to democracy in Cuba. I think there are policies in the United States and policies in Cuba, which are directed by the Cuban government, will interfere with that. In our organization we're trying to do the best that we can to change those policies to allow the three basic principles that we believe in: national reconciliation, Cuban sovereignty - respect for Cuban sovereignty, and peaceful transition to democracy in Cuba. Certainly a policy that its intent purpose is to create a situation in Cuba that is a violent - violence -- and that will cause the change is certainly not a policy that will lead to a peaceful transition to democracy.

PHIL PONCE: Mr. Penalver, have there been any positive changes in your opinion? There have been - I mean, we've seen the -

RAFAEL PENALVER: This week, for example, if you want to call it a positive change, I think the fact that Castro for the first time has officially legitimized the celebration of Christmas - now Cubans are given this great gift -- Santa Fidel is going to allow them to celebrate Christmas. That shows you the degree of repression, the degree of suppression of that people.

PHIL PONCE: So you do not see that as a positive change?

RAFAEL PENALVER: It's a positive change, but it's a minimal change, when what the Cuban people really want is a free Cuba without Castro. We should not do anything that will permit Castro to remain to maintain his hold to power. I agree with Dr. De Velasco when he says about that peaceful transition-we all want that - we all want changes in Cuba. But let's not be na ve in the process. What some of the persons who are calling for a review of U.S. policy really want is not a Cuba for the Cuban people; it's a Cuba where the capitalists' interest of the world are going to become partners with Fidel Castro and his cronies, keeping the Cuban people in the enslaved condition that they have been the past 40 years. Let's look at what has happened with European investment in Cuba over the past decade. There have been many countries that have built hotels and other facilities in Cuba; those facilities are off limits to the Cuban people; they cannot --

PHIL PONCE: So, you're saying that the Cuban people, themselves, have benefited very little from foreign investment. Dr. De Velasco, your response to that?

RAUL DE VELASCO: Well, certainly when there is limitation that the engagement that the Cuban government can make - and I'm not defending the Cuban government - I'm defending the - what we want to have engagement with just a certain type of investors in Cuba - which actually are investors that will look for a rapid return on their money. I don't that is in benefit of the Cuban people for certainly, and that is why we want to favor a policy of widening the possibility to invest in Cuba. I think that when we look and say that there is a hidden agenda that the agenda is just for American capitalists going to Cuba and exploit the Cuban people and make money. I think that occludes and tries to cloud the issue, and the issue is that the policy has not succeeded, that the policy is not succeeding in bringing peaceful transition to democracy in Cuba. I think it's best to look at the policy and at its merits and not to really try to identify who is behind that, for example, what is behind the intention of the Pope in doing the same thing. Certainly, it's not to increase capitalist investments of church in Cuba.

PHIL PONCE: How about that, how about the Pope's visit, Mr. Penalver?

RAFAEL PENALVER: The Pope's visit definitely created an air of expectation in the Cuban people. The Pope expected Castro to make changes that have not happened. In fact, the Vatican, itself, has issued its -- this appointment at the changes that were supposed to take place and were expected to take place and have not taken place.

PHIL PONCE: Has there not been an increase in freedom of religion, people more freely allowed to go to church, and that sort of thing?

RAFAEL PENALVER: Yes, again, some people are allowed to go to Church - as long as they do not criticize in an way the regime - just like in those pictures that were shown earlier, Castro talking with some of the prisoners and given the impression that he allows room for debate -- while that picture was being taken, there were thousands of Cubans being placed -- being taken to prison just for expressing the most minimal dissent in Cuba, and those political prisoners are still in jail. I think what we need is to express strongly, help the Cuban people in Cuba to get rid of Castro, help the Cuban people by making a determinant effort, just like we did in South Africa, like we have done in other areas around the world. Let's help the people of Cuba have Cuba, their homeland, for them to enjoy and for them to benefit, not for others to exploit it.

PHIL PONCE: Dr. De Velasco, how about that, the suggestion that if there's going to be a change in U.S. policy, there should be a - there should be a corresponding commitment to democracy in Cuba?

RAUL DE VELASCO: Well, I don't think that that necessarily has to be a pro quo like this, but I think I would like to make just a little comment in the sense that whenever you make religion and politics together, and what Mr. Penalver was saying, that they allow them to go to church but not to protest the policies of the government, that would be a sure way of impeding progress of religion, freedom of religion too; you have to appreciate that it is a totalitarian or authoritarian government in Cuba; nobody disputes that. We want to have an evolution of what is in Cuba to a more open society. And I think that that has to be done in a way that is different with hostility, as has been done up to the present time.

PHIL PONCE: Dr. De Velasco, should the United States - the Clinton administration be engaged in a dialogue, a direct dialogue with Fidel Castro?

RAUL DE VELASCO: I think so. And I think that many people say who should begin. And I look at it this way: when there is a conflict between two people and we want the conflict to be resolved, I think the first step has to be made by the person who is the strongest; that is the person who has least to lose. And I think certainly the most powerful nation in the world, the most powerful nation in the history of the world right now should be - it would be easier for them to make this first step and see what happens.

PHIL PONCE: Mr. Penalver, should the United States be the ones to - to initiate this dialogue?

RAFAEL PENALVER: We have taken so many steps over the past five years; that Castro has been basically given a red carpet around the world with the blessings of the United States and including the Papal visit to Cuba. For him to begin the - a process of peaceful transition, he has not done so. Unless we force with our economic element, this is our only bargaining card -- if Castro makes vocifercral moves and opens Cuba to democracy, yes, we open up investments. Otherwise all that we are doing is giving Castro the money, the economic means of increasing his suppressive regime on the Cuban people. We are going to be further financing his repressive apparatus that keeps him in power.

PHIL PONCE: Gentlemen, I'm afraid that's all the time we have. I thank you both very much.

FOCUS - POLITICAL WRAP

PHIL PONCE: Now, end of the week political analysis and to Correspondent Terence Smith.

TERENCE SMITH: We get that analysis from syndicated columnist Mark Shields and David Brooks, senior editor of the Weekly Standard. Paul Gigot is on vacation. Gentlemen, Happy New Year. Mark, let me ask you, we saw a familiar phenomenon in Washington this week as it prepares for a presumed Senate trial of the president, and that was a trial balloon. Tell us what it's all about.

MARK SHIELDS: Well, a trial balloon, first of all, is set up a proposed policy option is kind of floated, with a doctrine of deniability, that the person who is writing it in this case, presumably the majority leader of the Senate, Trent Lott - has no fingerprints on it, but the idea is that so he can deny it if it's shot down or if it's embraced he can then later claim credit for it. But this one, quite simply, is for a short - the premiums on short Senate experience, the operating premise is that there are not 2/3 of the Senators ready to vote for the removal from office of President Clinton, who's been impeached by the House. So get the trial over with. And one way of doing it, and the preferred option or recommended option would be to have the senators and if the evidence is presented, the case, very briefly, said the House managers and then president vote, in fact, whether 2/3 of the Senators vote in favor, that this is impeachable as presented, that the president would be removed from office, can be convicted; that crimes and misdemeanors, high crimes and misdemeanors spelled out rise to that level. If not, then the Senate would immediately go into - out of the trial and discuss censure or some other appropriate --

TERENCE SMITH: And all of this could be done in a relatively short time.

MARK SHIELDS: Preferably two weeks and maybe ideally before the 19th of January, which is the scheduled date for the State of the Union, and that's when the president must speak to both Houses of Congress.

TERENCE SMITH: Well, David Brooks, there's a bit of dissension among the Republicans about this. Is the air going out of this trial balloon?

DAVID BROOKS: I think it probably is. You sympathize with their motives. I mean, these guys in the Senate see this big mudslide coming at them. It knocked off two speakers in the House. What's going to happen to them? And they're sort of dodging - maybe if I turn this way, I won't get dirty - you know. But it's coming, and Trent Lott is trying to get out of the way. But there are significant numbers of senators who are saying, no, we've got to do our duty. It's not so much all the conservatives who want to have the full trial, because there are a lot of conservatives who want to get it done very quickly. It's the guys who sort of say, well, the House did their duty; history's cast us in this role; let's do it -- and let's show some respect for the House and for the House Republicans, because if we just throw it away in a week or two, it looks like they're just a bunch of hotheads. Let's show some respect for what they did. So that's -- it's not an ideological split; it's sort of an institutional split. And Trent Lott is left how do I handle all this.

TERENCE SMITH: And managing it is a big challenge for Trent Lott.

DAVID BROOKS: That's right.

TERENCE SMITH: I don't think -- has he encountered anything like this before?

DAVID BROOKS: No. No. This is the biggest test so far, and it's tough because it's the Senate; it's not the House. In the Senate a couple of guys can throw sand in the works. And it's hard for Trent Lott too because here's a guy three weeks ago - or two or three - when we were bombing Saddam - who was the most anti-Clinton. He was opposing the bombing of Saddam. Now he wants to get impeachment out of the way the fastest. So he's anti-Clinton - he's pro-Clinton. It's a sign that having a perfect haircut maybe doesn't mean you're the most organized guy in the world.

MARK SHIELDS: Two points to follow up on David -- observations. First of all, this is the first time Trent Lott has had center stage. I mean, he came into the job succeeding Bob Dole, who had been an authentic giant in the Senate and eclipsed by Newt Gingrich, who was certainly the architect and engineer of the Republican revolution. And now - you know - three out of four people in the Republican House Caucus have a tough time naming their leadership, and so here's Trent Lott - center stage - and this is - you're absolutely right - it's his first big test - more than that at a very crass, venal, political level, which I will quickly descend to -- he's got to be concerned because the line up in the Senate right now is 55/45 Republicans. And Bill Clinton - if you'll recall - ran extremely well in the Northeast and in the Midwest in this country - '92 and '96. He carried Pennsylvania twice. Once of the Republican Senators up in 2000 is Rick Santorum, conservative from Pennsylvania - who - stayed with Bill Clinton - still quite popular; Michigan, Spencer Abraham, another Republican who was elected in '94 up in 2000; Jim Jeffords in Vermont - I mean, you can go through the list. And Mike DaWi in Ohio. So Trent Lott is concerned about preserving his majority and not exposing to charges of piling on the worst - the Republican colleagues in the Senate who face re-election in 2000.

TERENCE SMITH: Is a full scale trial, in your view, something that would benefit the Republicans?

DAVID BROOKS: I think it would be a disaster. You know, they're talking about calling witnesses, which is something they didn't do in the House, but are talking about doing it in the Senate. And the people they are talking about are people like Vernon Jordan and Betty Currie, who would be on the president's side, presumably, and they would be very effective witnesses. And then on the other side, who are they going to have, Linda Tripp, Lucian Goldberg, Monica Lewinsky? It doesn't look like an edifying process or a politically beneficial process for the Republicans. It seems to me the way out of all this is just have a trial without witnesses, which is moderately short, but it's a real trial; it shows some respect for the House. One suspects that's where they might end up.

TERENCE SMITH: Is that your fearless forecast as well?

MARK SHIELDS: I don't have a fearless forecast. I think that if I were advising the White House, which happily for them I'm not, I think the president should go to the well of the Senate himself in his own defense. I think he should make his own case. I think his presidency, quite frankly, is in tatters. And the hope - in spite of the 73 percent approval rating, or whatever else it is this week, name the most admired man by all Americans yesterday in this week's Gallup Poll, running 11 points ahead of his Holiness, Pope John Paul II, you know, I mean, it's just amazing. But still the presidency is in trouble. I mean, he cannot command the bully pulpit that presidents historically have used. And I think that's where he has to go if he - has any sense of acquittal and a sense of momentum coming out of it.

TERENCE SMITH: David Brooks, we have two additional and more formal candidates for the presidency now in Vice President Gore, who's filed his papers, and Sen. John McCain. Is this race finally taking shape?

DAVID BROOKS: Yes. It's only about 600 fund-raising days till the election, which is what this thing is all about. That's why you announce that you can really begin fund-raising, and I think they have to raise $60,000 a day for the next year to get the 25 million people --

TERENCE SMITH: Including Sen. John McCain.

DAVID BROOKS: Right. Sen. John McCain, who doesn't like fund-raising, as he says very volubly. He's an interesting case. He looks weak on paper; he doesn't have the fund-raising that some of the others have; he doesn't have grassroot support among conservatives. He was for a tobacco tax hike and campaign finance reform. He doesn't have the on-the-ground organization that some of these guys like Lamar Alexander and Steve Forbes have who have been running, you know, since 1776, or whatever it was. But he does have first, an incredibly heroic war record. And he's a normal guy. He's a guy who reaches out to independence. He's proven he can win votes among Hispanics. He's a plausible candidate; to me, he and George W. Bush are, in fact, the only two plausible candidates who you can see as president and actually winning this thing. And he's running in a party that is not intellectually self-confident anymore. They've been battered by Bill Clinton; they've been battered by impeachment, and a normal guy is up for the nomination. So he's formidable.

TERENCE SMITH: Al Gore, is he the prohibitive favorite for the Democratic nomination?

DAVID BROOKS: He is. I mean, a vice president - it's a job that's all in-door work and no heavy lifting - I mean, he basically can run around and get the nomination - I mean, George Bush being the most recent example, Fritz Mondale before that, Dick Nixon; it's a great advantage in seeking the nomination. But on David's point on John McCain, John McCain is remarkable; he does have a great personal story to tell. Unfortunately, he suffers from being every Democrat's favorite Republican right now, which could be the kiss of death, just as Sam Nunn was every Republican's favorite Democrat. But he also comes from Arizona, a state that has produced Barry Goldwater, Mo Udall, the late Mo Udall, beloved figure, Governor Bruce Babbitt, and a state where, as Mo Udall once remarked, mothers don't tell their children they can grow up to be president. I mean, these are three distinguished Americans who sought the presidency unsuccessfully.

TERENCE SMITH: David, we expect a new speaker of the House this week, Dennis Hastert of Illinois. Is it the Hastert era?

DAVID BROOKS: Yes. Historians a thousand years from now will be calling this the Hastert era. Yes. His primary job I think is to hold on to his job for about three or four weeks, or at least longer than the last guy had it. Once again, he's inheriting a party which is - you know - just emotionally spent; they're exhausted by what's been going on. And it's a party that I think is less intellectual - intellectually aggressive than they were. You know, Newt Gingrich wanted to transform civilization. And he's a wrestling manager; he's just a "hands-on" guy.

TERENCE SMITH: And in the last few seconds, Mark, his prospect of uniting this divided House and getting anything serious done, like Social Security reform?

MARK SHIELDS: I think better than certainly his immediate predecessor, Mr. Gingrich. Denny Hastert is a man of the House. He is what most House leaders have been, whether you're talking about Tip O'Neill or Sam Rayburn. He doesn't do the Sunday morning shows. He doesn't do think tank symposiums. He doesn't do American enterprise dinners. He's a guy that the other members trust, listen to, he listens to them -- and as Nancy Kassebaum, the former Senator from Kansas, pointed out - in passing health care portability in 1986, that Denny Hastert was absolutely indispensable. So he's an effective guy but he won't be the visionary that the party is somewhere looking for.

TERENCE SMITH: Gentlemen, thank you both.

FINALLY - HAPPY NEW YEAR

PHIL PONCE: Finally reflections on the New Year and to NewsHour contributor Robert Pinsky, poet laureate of the United States.

ROBERT PINSKY: Traditional cartoons show the old year with a long white beard, hunched and weary, and the new year as a happy toddler. The 17th century poet John Dryden goes further than that. In the wonderful chorus at the end of his "Secular Mask" Dryden has the figures of time and comedy deride the recent doings of Mars in war, Venus in love, and Diana in the chase. Time begins by remembering the old days. "The world was then so light, I scarcely felt the weight. Joy ruled the day and love the night. But since the queen of pleasure left the ground, I faint, I lag, and feebly drag the ponderous orb around around. Then comedy lets the gods have it. All, all of a peace throughout. Thy chase had a beast in view. Thy wars brought nothing about. Thy lovers were all untrue. 'Tis well in old age is out, and time to begin anew. All, all of a peace throughout. Thy chase had a beast in view. Thy wars brought nothing about. Thy lovers were all untrue. 'Tis well, and old age is out, and time to begin anew." And then Dryden's "Mask" ends with a dance of huntsmen, nymphs, warriors and lovers. I wish you to a frolicsome and innocent New Year.

RECAP

PHIL PONCE: Again, the major stories of this New Year's Day - 11 European countries celebrated their new coin of the realm. It's called the euro, and today it became a legal currency. In Cambodia, Prime Minister Hun Sen reversed himself and said two former Khmer Rouge leaders would have to stand trial after all for crimes against humanity. And in this country the chief justice of the Supreme Court called on Congress to stop making so many crimes federal offenses. We'll see you on-line and again here Monday evening. Have a nice holiday weekend. I'm Phil Ponce. Thank you, and Happy New Year.