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Special Report

How Should U.S. Respond to Turmoil in Egypt?

This is a rush transcript from "Special Report," November 22, 2011. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

VICTORIA NULAND, STATE DEPARTMENT SPOKESWOMAN: We are looking forward to the naming of a new Egyptian government. That government's first responsibility will obviously be to organize and ensure that free and fair elections do move forward in a peaceful environment.

JOHN BOLTON, FORMER U.S. AMBASSADOR TO U.N.: If next week these elections for parliament go forward, the Muslim Brotherhood and even more extremist Islamist groups are projected to do very, very well. And they will of course then have an influence not just on government policy but on the presidential elections in the spring.

(END VIDEO CLIP)

SHANNON BREAM, ANCHOR: And as the bloodshed and protest continue in Cairo, it's time to discuss it with our panel. Welcoming back Juan, Nina, and Charles. Nina, I'd like to start with you. I mean, there is a lot of talk about what the U.S. should or shouldn't be doing and what our policy is as far as being involved or not in Egypt.

NINA EASTON, COLUMNIST, FORTUNE MAGAZINE: And the key number here is $1.3 billion in aid, military aid we are still sending to Egypt with no strings attached. And I think the big problem in Egypt is that the military controls the economy. They control 80 percent of manufacturing for example.

You could -- and the IMF is not giving any money as they did with Turkey in the early '90s, gave them money and forced them to privatize the industry and that actually pushed the military to the side. Now you have got this situation in Egypt where the military has its fingers in everything. Saudi Arabia has given $4 billion in a grant, so that means no strings attached or nothing, and Saudi Arabia has a vested interest in the status quo there.

We are not using our -- any potential strings attached to our aid. Although some in Congress are calling for it to try to get the military to privatize, to extricate it from the economy, because until you do that, you can't have an open society there.

BREAM: Charles, what do you make of the projections that the Muslim Brotherhood is gonna do very well in these elections next week?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think it will and I think that is the reason that the Brotherhood has cleverly not joined the huge demonstrations that we see in the street right now. Those demonstrations are young, liberal urbanites. And the three parties in play here, the military, the Brotherhood, and the young liberal urbanites, the latter are the weakest. They are the ones who will be swept away by this. If anybody expects they were going to have a liberal democracy emerging as a result, I think they're gonna be disappointed.

The Brotherhood is going to win the parliamentary election. The only question is will it win outright the presidential election and seize all power next year?

The military is on the defensive now. It's no longer in control. In fact, it made concession today that it will relinquish all power on the 1st of July next year. But the demonstrators aren't accepting that. It's like in the last hours of the Mubarak regime. He made a few concessions at the end, but what they want is the government to resign today. If it does it could be a catastrophe because it would be unstable, it will be a government of national unity led perhaps by Mohamed ElBaradei, the famous IAEA inspector who covered Iran's nuclear program for 10 years and was awarded with a Nobel Peace prize. That tells you a bit about Norway and the peace prize and the value of the prize. But nonetheless, it would be a weak civilian government dominated by the Brotherhood.

Our interest is anything except an Islamist Egypt. If Egypt is Islamist, the largest, strongest, most important Arab country in the world it would be a catastrophe regional and global.

BREAM: But Juan, there are some, many out there and some within this administration who downplay the Muslim Brotherhood and what kind of threat it represents and whether it is a hard-line Islamic group, whether it's a secular group. What is your take?

WILLIAMS: I don't think there is any question they are a hard-line group. The thing is, that in Egypt. They have said that they are willing to join in the running of a government which would require them then of course to moderate some of their positions.

So some in the administration have had the feeling like, well, let's look and see. We're pro-democracy. We want more democracy in the Middle East. And that is part of the story. Sometimes the outcomes of election are not to your liking.

But here is the puzzle. I mean, for the United States, we support that military. And clearly these demonstrations are against that military. So once you get that then you start to look at the cause for it. Initially the take would be, oh it's the Muslim Brotherhood. They are the ones that are pushing people into the streets.

And it's quite a puzzle to me, just in reading the story to come to realize of course, the Muslim Brotherhood as everyone in the panel said would do well in the election. So they are not the ones forcing the folks to the street. It turns out there are more conservative, more radical elements present in the society. And that is a puzzle because I think everyone agrees we don't like the Muslim Brotherhood. They have not been supportive of American interest in the region.

KRAUTHAMMER: But the Brotherhood is mature and disciplined. And that is why it's not joining in the demonstrations. It's afraid if the demonstrations are out of control and the military is on the defensive it will declare martial law and postpone or cancel the elections, which the Brotherhood will win. So it's showing the maturity and the discipline that the young urbanites don't have.

Look, in the history of the French, the Russian, and the Iranian revolution, it starts with idealists who want to have a democracy, and we know how it ends. It doesn't always end that way. But with the military and the Brotherhood contending, if I were a young liberal urbanite I would be a little careful about what I hope for.

EASTON: I would be careful, though, of saying that an Islamist governance in Egyptian is de facto a disaster. I mean you do have Turkey as a model. And ya know, this isn't going to be everything the U.S. wants, but there is a model for a more moderate Muslim governance. And so I don't think to, you know, to just say it's absolutely ya know, going to be repressive, a disaster.

The military right now is a repressive regime. And as I said before controls the economy. And it can close an economy and prevent any kind of openness in our society.

WILLIAMS: They are our guys.

(CROSSTALK)

EASTON: That's why we won't condition our aid to them.

KRAUTHAMMER: The difference is that in Turkey, it didn't come about as a result of a revolution. In places in which it comes as a result of a revolution and chaos, the best example is Iran, it was one man, one vote, one time. And that could happen in Egypt as well.

BREAM: And we have to remember today, too, that we got news that three American students who are over there have been taken in. We understand the State Department is making contact with them. Another complication of how involved we got.

Alright, that is it for the panel. Stay tuned. It may be a holiday week, but that is not stopping the 2012 GOP candidates from campaigning. Hear how one of them responds to the accusation that he is putting all of his eggs in one very important basket.

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