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World Leaders Square for Showdown over Greenland at Davos; ECB Chief Says Europe Facing a "Wakeup Call" on Preparedness; U.S. Stocks Down as Greenland Rift Stokes Investors' Fears; European Allies Call for Dialogue with U.S. over Greenland; Global Military Spending at Highest Levels in Decades; Syrian Forces Search for ISIS Fugitives after Prison Break; UAE President Accepts Trump Invitation to "Board of Peace"; Canadian Prime Minister Speaks at World Economic Forum. Aired 10-11a ET

Aired January 20, 2026 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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UNIDENTIFIED MALE (voice-over): Live from CNN Abu Dhabi, this is CONNECT THE WORLD with Becky Anderson.

BECKY ANDERSON, CNN HOST (voice-over): And welcome to the second hour of the show from our Middle East programming headquarters. I'm Becky Anderson

here in Abu Dhabi, where the time is just after 7:00 in the evening.

Can European leaders defuse president Trump at Davos?

He's now leaking his chats with world leaders. The Treasury Secretary urging calm over Greenland.

Well, 365 days into president Trump's second term, has he fulfilled his promises?

We will discuss the highs and the lows with our panel of experts.

And ISIS detainees escaped from a Syrian prison amid fighting between government forces and Kurdish-led militia. More on that is coming up.

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ANDERSON: Well, a growing geopolitical storm hangs over the World Economic Forum in Davos, Switzerland. It is the annual gathering, of course, there.

And it gets underway in earnest today. The top tiers of government and business converging at a time of extreme uncertainty.

U.S. president Donald Trump will be heading to Davos just hours from now, fresh off his mounting threats to take over Greenland and to slap new

tariffs on anyone who gets in his way.

Ahead of his arrival, the European Commission president making Europe's position very clear, that support for Greenland and Denmark is strong and

territorial sovereignty is,, quote, "non-negotiable."

That's as Mr. Trump reveals some pre-summit messages via his social media.

One of them from French president Emmanuel Macron, who says, "I do not understand what you are doing in Greenland."

Mr. Macron, speaking a short time ago at Davos with a rebuke against president Trump's coercion tactics. All of this setting the scene for some

really contentious talks on the island this week in Davos, where this year's official theme, by the way, is the spirit of dialogue.

CNN's Melissa Bell has the view from Paris this hour, where president Macron has offered to host an emergency G7 meeting after Davos. And Richard

Quest is at the heart of the action at the top of the hill.

Richard, let's start with you. European leaders very much laying the groundwork, standing their ground before president Trump arrives. Take us

through what you've heard there so far today.

RICHARD QUEST, CNN HOST AND CNN BUSINESS EDITOR AT LARGE: If you look at the different leaders that have come here, the message has been consistent,

that Greenland and the sovereignty of Greenland with Denmark is non- negotiable. And they keep repeating this.

Ursula von der Leyen made the clear, that talking about the spiral and further downward descent, if it continues. Emmanuel Macron, you'll hear

about it in a second, he makes the point very firmly that it's non- negotiable.

And also, this ever-increasing use of tariffs, which he describes as unacceptable. But if you want to pull the strands together, what this is

really all about, you have to listen to Christine Lagarde, the president of the European Central Bank, who I spoke to this morning.

At the end of the day, what she says is really what all the leaders now believe. This here is a moment in time. And Europe cannot be found to be

failing.

(BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: I'm going to tell you something which I hope will be proven right next year. This is a wakeup

call, a bigger one than we ever had.

And I think that Europe is going to look at its strength, look at its weaknesses, do a, you know, a big SWOT analysis and decide, what do we need

to do to be strong by ourselves, to be more independent, to rely on the internal trade that we do with each other.

So that we can just not ignore but at least be prepared and have a plan B just in case the normal relationship is not restored.

(END VIDEO CLIP)

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QUEST: You see the problem here, Becky, is that, at the moment, the harsh reality is that Europe cannot do what it wants without the assistance of

the United States, either economically or militarily.

If you look at the hyperscalers -- the Googles, the OpenAIs, all the U.S. giants, Microsoft -- Europe doesn't have any equivalents. If you look at

the military side of it, it does need the United States, whether it's Ukraine or Greenland.

And that is the difficulty they face now with an emboldened Donald Trump and what they say is a weakened or a weaker Europe.

ANDERSON: Melissa, let's just pause for a moment, have a think about what we heard from president Macron earlier on. We are shifting to a world

without rules. He said -- those are the words of the French president, Emmanuel Macron, speaking at the World Economic Forum earlier.

Competition from the U.S. aims to subordinate Europe, he said and this is unacceptable. As Richard has pointed out, Christine Lagarde suggesting that

Europe is effectively, you know, devising its strategy in the face of Mr. Trump's threats on Greenland and these new tariff threats.

Which really begs the question, what is the European plan at this point, is it clear?

MELISSA BELL, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think what Christine Lagarde has described as plan B, should the relationship not be

restored, is exactly what's being worked on behind the scenes in the context of what Richard was just explaining.

This existential difficulty that Europe has been facing for some time now but that it believes now needs to lead to its standing stronger than ever.

And that was the context in which president Macron stood a little while ago and made this speech -- the aviator sunglasses, the result of an eye

infection, Becky. This is what he had to say.

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EMMANUEL MACRON, PRESIDENT OF FRANCE: It's as well a shift toward a world without rules, where international law is trampled underfoot and where the

only law that seems to matter is that of the strongest. And imperial ambitions are resurfacing

(END VIDEO CLIP)

BELL: He feels that Europe has no choice but to act. And behind the scenes of this growing row over Greenland, what you've seen is Europeans prepare

to do something they hadn't really dared to do so far, which is stand up to president Trump, certainly in the realm of tariffs.

Now they continue to insist, the Europeans, that they will continue to engage and they plan to do so tomorrow in person when they meet with

president Trump on the sidelines of Davos on the question of Greenland.

But it is a series of measures that they're looking at and that they will continue to look at through Wednesday when they meet in Brussels, the

European leaders.

That include things like the suspended countermeasures, 93 billion euros worth of them, that had been planned at the last round of this trade row

before the deal was reached between the E.U. and the U.S. They're suspended until February.

They're suggesting that, should the now Greenland tariffs, as they've become known, be implemented on the 1st of February as threatened, then

these would be allowed to come into effect.

So they're hoping to stand much further than they had, firmer than they had in the past, because, so far, one year into Donald Trump's second term,

what they understand, I think, is that no amount of appeasement has worked so far.

And they appear to be willing now or determined now to draw the line at Greenland because, as president Macron just told the assembled crowd at

Davos, it is about sovereignty in the end. And that is a line that they cannot allow president Trump to cross. Becky.

ANDERSON: And just before I let you both go, Richard, Emmanuel Macron insisted earlier today that the rule of law and predictability, still the

rules of the game in Europe, he said.

And he said, it's my guess that that isn't priced into the market, which I thought was really interesting. This was an impassioned plea for Europe and

the European space, although he said it needs fixing; you've got to take a look at growth and where Europe is headed.

But it was certainly also -- and Melissa and I discussed this last hour -- it was a real dig at the U.S. president.

QUEST: Oh, yes. And don't underestimate the fact that president Macron spoke in English. He speaks perfect English. But often on an event like

this, he would speak in France because we're in Switzerland.

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And why not?

But he chose to speak in English. He wants this message to be absolutely crystal clear.

And indeed, on this point of the rule of law, Christine Lagarde said to me, if you keep attacking the rule of law again and again, if you keep

attacking business, contracts, sanctity of contracts, event -- well, look, as I'm speaking on the screen, there you have the markets. This is what

happens.

The market uncertainty creates and grows and gets worse. And this ever- defeating cycle gets ever worse. And that's where we are at the moment. Becky. That's exactly the situation.

ANDERSON: Yes, it's fascinating. It's good to have you both. Thank you very much indeed.

Richard is in Davos. Melissa is in Paris.

Well, it has been exactly a year since Donald Trump was sworn in for his second term. And he is clearly pleased with himself.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: One year. I don't think there's been a term like it. I don't think any president has had a better first year than we've

had in terms of success.

(END VIDEO CLIP)

ANDERSON: Well, it's certainly been eventful. Last June, the man who ran on an American -- America First anti-war platform bombed Iran's nuclear

sites and he once again threatening to intervene in the wake of the anti- government protests in Iran.

Just a few weeks ago, U.S. forces attacked Venezuela, capturing its president in the dead of the night there.

And then, of course, there's the attacks on the Federal Reserve, with federal prosecutors opening a criminal investigation into chairman Jerome

Powell, seen here.

And now it's all about Greenland and Mr. Trump's threats to take over the Danish territory.

Look, this is far from an exhaustive list. And through all of this, he has continued to, frankly, drag European allies through the mud, something

we've seen yet again on full display today in the Swiss alps, a year on.

The world order, perhaps on shaky ground before he retook office, now all but completely turned on its head. You could argue that there is an

underlying theme here and that is one of disorder.

Well, I want to bring in my panel. Leslie Vinjamuri is the president and CEO of the Chicago Council on Global Affairs. She joins us live from the

conference in Davos.

And our chief U.S. national affairs correspondent, Jeff Zeleny, back with us live in Washington.

Leslie, let me start with you. Davos, traditionally an event for international cooperation. But the reality is that European leaders are on

the defense. There is no doubt about it. Take a listen to what E.U. Commission president Ursula von der Leyen had to say earlier.

(BEGIN VIDEO CLIP)

URSULA VON DER LEYEN, PRESIDENT, EUROPEAN COMMISSION: Europe needs to adjust to a new security architecture and realities that we are now facing.

And this is why Europe is preparing its own security strategy, which we plan to publish later this year.

And as part of this, we are upgrading our Arctic strategy, too. And at the heart of this will be the fundamental principle. It is for sovereign people

to decide their own future.

(END VIDEO CLIP)

ANDERSON: So the Europeans are trying to work out how, frankly, they rein Trump in or they deal with him.

You know, a year in, what is this playbook look like?

What do you make of this playbook?

How do you describe Donald Trump's playbook at this point?

LESLIE VINJAMURI, PRESIDENT AND CEO, CHICAGO COUNCIL ON GLOBAL AFFAIRS: Well, I think the one thing that we've seen consistently is that the

president is aiming to disrupt; he is really pursuing basically the exact opposite of a rules-based order.

His entire way of governing is to unsettle, disrupt, create uncertainty, in part, to get a better bargain, to get a better deal and to really

fundamentally reorder and rethink international relations.

He's the opposite of what I think America, with the exception of him in his first term, has been trying to do for eight decades. So we have, you know,

this question of the international order clearly gone, as it's said in the national security strategy.

But here at Davos, I think there's a real question within that about the transatlantic partnership, which is, you know, a distinct feature of that

international order. And there, all bets are off. You know, to the clip that you just played from Ursula von der Leyen, there's a real question

here. Absolutely.

But how much time will it take?

You know, Europe is investing in its own security. That is the most significant change perhaps to scale.

[10:15:03]

But there's still a real question about speed. And it's going to take time. And in that time, America very clearly has a very big hand to play, a very

big upper hand to play.

ANDERSON: Yes. And it's not as if the Europeans haven't been facing this all year and indeed shouldn't have been warned about this. It almost feels

like rinse and repeat. I mean, you know, this is like, you know, two or three times now.

I mean, I'm thinking of the Munich Security Conference you know, just six weeks or so into Donald Trump's administration, where the first really big

salvos were launched by his vice president, JD Vance.

Stand by. I want to bring Jeff in on this.

Trump facing plenty of problems at home, Jeff. You have the protests against ICE, increasing frustration about affordability and health care.

You know, he's underwater on a number of issues when, you know, polling across the board is done.

How is Trump's focus on Greenland and other international issues playing out amongst U.S. voters?

I think it's really important to kind of nail this one.

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Becky, it's very much intertwined. I mean, for all of the focus that the White House and

president Trump has had on Greenland over the last several weeks, voters here in the United States simply are not responding in kind.

Take a look at these numbers. These are numbers we do not see, really, on any other topic. They're 25 percent, just a quarter of voters favor the

U.S. taking control of Greenland; 75 percent do not favor it.

But look at the breakdown among independent voters. Of course, those are among the most important set; 82 percent of independent voters oppose this

idea, even among Republicans. It is a near split.

Republicans have largely gone along with most everything the president has wanted or talked about. Not on this matter. We've seen Republican officials

on Capitol Hill, senators, representatives saying, no, this is something that would be a red line that's crossed. We'll see about that.

We'll see if there's anything that can be dissuaded for him to change his mind here or if he goes through with it. But among the broad cross-section

of American voters, there simply is not an appetite for this.

One of the reasons, perhaps, he hasn't really explained. He's never really delivered an address to the country, if you will, saying why this is

necessary. He's had a variety of answers for this. It started back in 2018, 2019, during his first term in office.

He talked about it as a real estate deal. He talked about seeing something on a map that he liked. Now, of course, it's a matter of security. But

there's really been no persistent or a consistent message here.

But Americans are not in favor of this and this is contributing to his lower overall job approval numbers. And one of the reasons that almost six

in 10 Americans say the first year of his second term has been something of a failure.

ANDERSON: Leslie, I want to just concentrate for a moment on global military spending, which has reached an all-time high, $2.7 trillion in

2024, up more than 9 percent. That is the steepest increase since the end of the Cold War.

That comes with economic and social tradeoffs. Let's be quite clear. The debt bells are ringing really loudly for many of the world's erstwhile most

important economies. And this is also at a time when global populism is surging.

How concerning is that number from an historical perspective?

VINJAMURI: Look, it's deeply concerning. I think, though, when it comes to spending on defense and national security, it's not a global question. It's

very much a national question for each individual state.

And -- but the point still holds. It comes at a severe tradeoff, especially for European states that have very -- are spending a lot of money on

welfare at home, that are struggling to invest in their services. Many economies needing to do more to improve the things that they've

historically been good on but that are suffering.

In the U.K. that's obviously, you know, health, transportation, any number of things that make investment better. And when you're faced with having to

make those tradeoffs, you know, we're seeing the first thing that goes is spending on foreign assistance and development.

And that's going to have a global implication which will eventually reverberate back and make security challenges worse.

But when it when it comes to welfare, you know, people are looking at this and they're saying, in the United States, why is Donald Trump so focused on

national security, on foreign policy and not on affordability?

[10:20:02]

We're seeing this across states in Europe, where people were populist. Leaders are easily playing to the crowds. The one possible solution -- and

I think European states in particular need to focus on this -- is to make spending on defense a part of a job strategy.

And you can do that if you don't make spending on defense about buying American products. President Trump's wants European leaders to buy American

defense products. Europeans know that they need to invest in their own defense industrial base and that could be a job strategy.

But boy, in the short term, populist leaders are really succeeding in whipping up anti-defense sentiment. And it's a real risk, especially in

Europe.

ANDERSON: Yes.

Jeff -- and Jeff, you know, Donald Trump is all about an era of strength, of power, of military might. You know, it was just in the last couple of

days we heard his second-in-command, Steve Miller, talking about how important this new era of strength and power and military might is.

So many headlines coming at us, rapid fire: the military action in Venezuela, the threat of something similar in Iran, the demand for

Greenland. Frankly, it can be a challenge, certainly for those who will be watching us today, to observe this administration and also to observe the

followup or lack thereof on any one of these massive stories.

Is that part of the Trump strategy, to flood the zone, as we've discussed in the past, to distract people from watching what the administration

actually does after all this shock and awe?

ZELENY: There's no question about it: flood the zone. And also really try and keep, you know, friend and foe alike off balance. I mean, that has been

one of the hallmarks of the Trump presidency.

One of the differences in this second term, I think, is just the exhibition of a power, extraordinary executive authority, really stretching from the

military to foreign affairs. And I think that, yes, flooding the zone is a part of his strategy.

But he does believe most everything he's saying. And no, of course, he won't accomplish all of this. And he moves on from one thing to another

thing.

But the question here is, at what point does the exhaustion take over?

I mean, he is a lame duck president. This is his final term in office. There's no doubt that Trumpism will continue on and on for years to come.

But he knows his time is limited. So that is one of the things, that he is absolutely legacy building and trying to acquire. And he is in that

acquisition mode.

We will see if he gets his wings clipped, though, in this midterm election year. That's another reason he's trying to do so much right now. A year

from now, as he enters his third year, things could be entirely different perhaps with a Democratic majority in Congress. And that, of course, would

make all the difference in the world. Becky.

ANDERSON: Yes, those midterms, of course, in November this year. That seems a long way off at the moment.

Leslie. Jeff, thank you very much indeed to both of you.

Right. You're watching CONNECT THE WORLD with me, Becky Anderson. It's good to have you on board.

Still to come, Kurdish forces say they've withdrawn from a large camp in Syria holding tens of thousands of ISIS-linked families. We break down why,

up next.

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ANDERSON: Well, a manhunt is underway in Syria after dozens of ISIS fugitives escaped from a prison there in the northeast over the weekend.

Government forces wrested control of the area from the Kurdish-led Syrian Democratic Forces or the SDF.

Meantime, the SDF says it withdrew from al-Hol camp, which holds tens of thousands of ISIS-linked families, they say, due to international

indifference. Syria's defense ministry says it is ready to take over the camp and all ISIS prisons in the region. CNN's Ben Wedeman is live from

Irbil for us, tracking this story.

And, Ben, can you just explain the significance of this camp changing hands and what we know about those who may have already fled one of these camps?

BEN WEDEMAN, CNN SR. INTERNATIONAL CORRESPONDENT: Well, what we understand from the SDF is that, as far as from the Shaddadi camp, which is south of

0Hasakah in the eastern part of Syria, is that 1,500 ISIS detainees have fled the Syrian government.

However, for its part, says it was only 120 and that 81 of them have been apprehended. As far as the significance goes, keep in mind that, after the

defeat, the total defeat of ISIS In the beginning of 2019, obviously the coalition and the SDF captured about 9,000 prisoners, members of ISIS.

I was there, I saw it when it happened. But, of course, the problem is that many of them come from other countries and most of those other countries

don't want to take their nationals back.

In addition to that there are around 40,000 women and children, some of them no longer children, of course, who were in camp in al-Hol and another

camp called el-Roj, which was guarded -- al-Hol was guarded by the SDF but the SDF was forced to withdraw.

Now the question is, how capable will the government in Damascus be to maintain the security of the prisons and the camps?

Keeping in mind, of course, that the Ahmed al-Sharaa, once known as Abu Mohammad al-Julani, got his start with Al Qaeda and many people still

suspect he has sympathies for Al Qaeda, out of which ISIS grew, of course.

And therefore there's not complete trust in their ability or willingness to keep these ISIS prisoners under guard.

Now we've just gotten a statement from the Syrian president's office, in which he says that they have decided to give the SDF four days for

consultations as far as implementation of an agreement they reached on Sunday evening.

Now if that -- SDF agrees to this, the government says that they will not enter the centers of the cities of Qamishli and Hasakah and that they will

not go inside Kurdish towns. That could avoid what appears to be a developing civil war in the northeast part of Syria between its Kurdish

minority and the government in Damascus. Becky.

ANDERSON: Good to have you, Ben. Thank you very much indeed. Ben Wedeman there in Irbil for you today.

Well, ahead on CONNECT THE WORLD with me, Becky Anderson, we are watching for the Canadian prime minister's speech from Davos as the transatlantic

alliance, frankly, hangs in the balance. That is after this.

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ANDERSON (voice-over): Welcome back to CONNECT THE WORLD. You're watching CNN with me, Becky Anderson. Here are your headlines.

French president Emmanuel Macron says the world is shifting away from rules and international law. He spoke today at the World Economic Forum in Davos

in Switzerland, warning about a rise in authoritarianism.

He also called U.S. president Donald Trump's threatened use of tariffs and his move to acquire Greenland, quote, "fundamentally unacceptable."

Well, a manhunt is underway in Syria after dozens of ISIS fugitives escaped from a prison in the northeast amid fighting between government and Kurdish

forces in the area. This comes as Syrian Democratic Forces say they are withdrawing from al-Hol camp, which holds tens of thousands of ISIS-linked

families.

Syria's defense ministry says it is ready to take over the facility.

Spain's prime minister is promising to get to the truth behind the cause of a deadly train crash. At least 40 people were killed and dozens more were

injured after two high-speed trains collided on Sunday night. Recovery crews are now using heavy machinery to reach the remains of people who are

still missing.

ANDERSON: Well, new information coming in to CNN about the so-called "board of peace" that the U.S. president is setting up. The UAE is

accepting the U.S. invitation to join this new international body.

The ministry of foreign affairs spokesperson, posting on X, in part, "The UAE's decision reflects the importance of fully implementing president

Donald J. Trump's 20-point peace plan for Gaza, which is critical for the realization of the legitimate rights of the Palestinian people.

"His Highness reaffirmed the UAE's confidence in president Trump's leadership and commitment to global peace, exemplified by the historic

Abraham Accords," end quote.

Meanwhile, the prime minister and minister of foreign affairs of Qatar was asked about this last hour in Davos.

MOHAMMED BIN ABDULRAHMAN BIN JASSIM AL THANI, QATARI PRIME MINISTER: I think that all the countries who are joining this board of peace needs, you

know, to work hard and to make sure that this board of peace is functioning in a way that serves the purpose and become a stabilizing factor.

UNIDENTIFIED MALE: And Qatar is on the board.

AL-THANI: Yes. We were invited to that board. Of course, we are happy to be a contributor to peace and stability in our region. Now there are a lot

of challenges in the implementation. But we have no alternative path to seek right now.

(END VIDEO CLIP)

ANDERSON: Well, prime minister al-Thani calling the board of peace the only path toward peace and stability that he sees right now.

Well, joining me to discuss all of this from Davos in Switzerland is the U.N. under-secretary-general for humanitarian affairs, Tom Fletcher.

[10:35:00]

It's good to have you. Let's start with the board of peace.

Its charter, obtained by "The Times of Israel" and confirmed as authentic by sources to CNN, says it is, quote, "an international organization that

seeks to promote stability, restore dependable and lawful governance and secure enduring peace in areas affected or threatened by conflict."

And that suggests, Tom, a wider scope than Gaza. In fact, Gaza not mentioned once in the whole document.

What exactly do you see as the purpose and mandate of this body?

TOM FLETCHER, U.N. UNDER-SECRETARY-GENERAL FOR HUMANITARIAN AFFAIRS: Well, I think we'll learn more about the board of peace over the coming days. I'm

sure that president Trump will speak a lot about it when he's here in Davos.

For us, look, we're all interested in that. The United Nations, no one cares more about peace than us. And we're out there in the field, working

for peace every day.

And, of course, all of us want to see the success of the president Trump plan for Israelis and Palestinians to live side by side in security,

justice and opportunity. And I hope that this board of peace will focus heavily on that and help us deliver the second phase of that crucial

agreement.

ANDERSON: Yes. And the charter also justifies the borders are, quote, "more nimble and effective" international peace building body. And there is

a burgeoning school of thought who believe Donald Trump is trying to replace your very organization, the United Nations.

And you and I have talked about, you know, making that organization more effective, more efficient and frankly, more, you know, nimble going

forward.

Is this an effort by Donald Trump to sideline the United Nations?

FLETCHER: Well, I think that's a question you'd have to put to president Trump. I'm unclear. And my colleagues are clear that the United Nations

isn't going anywhere. We're out there delivering right now, trying to end conflicts. We're looking to save 87 million lives in the course of 2026.

And look, United Nations wasn't built for easy times. It was built for hard times. And 2026 looks set to be a rough year. But we're laser focused on

getting out there and delivering for the hundreds of millions of people around the world who we serve.

ANDERSON: Stand by. I'm going to take a very short break. I want to come back to the work that you are doing, what you are looking at in 2026 and

the challenges that you face after this very short break. I just want to get your mic fixed. So stand by, Tom.

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ANDERSON: Right. I'm Becky Anderson, you're watching CONNECT THE WORLD. I want to get us straight back to Davos, where the Canadian prime minister is

set to address the annual gathering there. Let's listen in.

[10:40:02]

(JOINED IN PROGRESS)

MARK CARNEY, CANADIAN PRIME MINISTER (through translator): -- and a duty.

To be with you tonight in this pivotal moment that Canada and the world are going through. Today I will talk about a rupture in the world order, the

end of a pleasant fiction and the beginning of a harsh reality, where geopolitics, where the large main power geopolitics is submitted to no

limits, no constraints.

On the other hand, I would like to tell you that the other countries, especially intermediate powers like Canada, are not powerless. They have

the capacity to build a new order that encompasses our values, such as respect for human rights, sustainable development, solidarity, sovereignty

and territorial integrity of the various states.

The power of the less power starts with honesty.

CARNEY: It seems that every day we are reminded that we live in an era of great power rivalry, that the rules-based order is fading, that the strong

can do what they can and the weak must suffer what they must.

And this aphorism of Thucydides is presented as inevitable, as the natural logic of international relations reasserting itself. And faced with this

logic, there is a strong tendency for countries to go along to get along, to accommodate, to avoid trouble, to hope that compliance will buy safety.

Well, it won't.

So what are our options?

In 1978, the Czech dissident, Vaclav Havel, later president, wrote an essay called "The Power of the Powerless." And in it he asked a simple question.

How did the communist system sustain itself?

And his answer began with the greengrocer. Every morning the shopkeeper places a sign in his window, workers of the world unite. He doesn't believe

it. No one does. But he places the sign anyway to avoid trouble, to signal compliance, to get along.

And because every shopkeeper on every street does the same, the system persists, not through violence alone but through the participation of

ordinary people in rituals they privately know to be false.

Havel called this living within a lie. The system's power comes not from its truth but from everyone's willingness to perform as if it were true.

And its fragility comes from the same source, when even one person stops performing, when the greengrocer removes his sign, the illusion begins to

crack.

Friends, it is time for companies and countries to take their signs down. For decades --

(APPLAUSE)

CARNEY: -- for decades, countries like Canada prospered under what we call the rules-based international order. We joined its institutions. We praised

its principles. We benefited from its predictability.

And because of that, we could pursue values-based foreign policies under its protection. We knew the story of the international rules-based order

was partially false, that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically.

And we knew that international law, applied with varying rigor, depending on the identity of the accused or the victim, this fiction was useful. And

American hegemony in particular helped provide public goods, open sea lanes, a stable financial system, collective security and support for

frameworks for resolving disputes.

So we placed the sign in the window. We participated in the rituals and we largely avoided calling out the gaps between rhetoric and reality. This

bargain no longer works.

Let me be direct. We are in the midst of a rupture, not a transition. Over the past two decades, a series of crises in finance, health, energy and

geopolitics have laid bare the risks of extreme global integration. But more recently, great powers have begun using economic integration as

weapons.

[10:45:00]

Tariffs as leverage. Financial infrastructure as coercion. Supply chains as vulnerabilities to be exploited.

You cannot live within the lie of mutual benefit through integration when integration becomes the source of your subordination.

The multilateral institutions on which the middle powers have relied, the WTO, the U.N. the COP, the architecture, the very architecture of

collective problem solving are under threat.

And as a result, many countries are drawing the same conclusions, that they must develop greater strategic autonomy in energy, food, critical minerals,

in finance and supply chains.

And this impulse is understandable. A country that cannot feed itself, fuel itself or defend itself has few options. When the rules no longer protect

you, you must protect yourself.

But let's be clear-eyed about where this leads. A world of fortresses will be poorer, more fragile and less sustainable. And there's another truth. If

great powers abandon even the pretense of rules and values for the unhindered pursuit of their power and interests, the gains from

transactionalism will become harder to replicate.

Hegemons cannot continually monetize their relationships. Allies will diversify to hedge against uncertainty. They'll buy insurance, increase

options in order to rebuild sovereignty, sovereignty that was once grounded in rules but will increasingly be anchored in the ability to withstand

pressure.

This room knows this is classic risk management. Risk management comes at a price. But that cost of strategic autonomy of sovereignty can also be

shared. Collective investments in resilience are cheaper than everyone building their own fortresses.

Shared standards reduce fragmentations; complementarities are positive sum. And the question for middle powers like Canada is not whether to adapt to

the new reality. We must.

The question is whether we adapt by simply building higher walls or whether we can do something more ambitious.

Now Canada was amongst the first to hear the wakeup call, leading us to fundamentally shift our strategic posture. Canadians know that our old,

comfortable assumptions that our geography and alliance memberships automatically conferred prosperity and security, that assumption is no

longer valid.

And our new approach rests on what Alexander Stubb, the president of Finland, has termed value-based realism. Or, to put it another way, we aim

to be both principled and pragmatic.

Principled in our commitment to fundamental values, sovereignty, territorial integrity, the prohibition of the use of force except when

consistent with the U.N. charter and respect for human rights.

And pragmatic and recognizing the progress is often incremental, that interests diverge, that not every partner will share all of our values. So

we're engaging broadly, strategically, with open eyes. We actively take on the world as it is, not wait around for a world we wish to be.

We are calibrating our relationships so their depth reflects our values. And we're prioritizing broad engagement to maximize our influence and,

given the fluidity of the world at the moment, the risks that this poses and the stakes for what comes next.

And we are no longer just relying on the strength of our values but also the value of our strength.

We are building that strength at home. Since my government took office, we have cut taxes on incomes, on capital gains and business investment. We

have removed all federal barriers to interprovincial trade.

We are fast-tracking $1 trillion of investments in energy, AI, critical minerals, new trade corridors and beyond. We're doubling our defense

spending by the end of this decade and we're doing so in ways that build our domestic industries.

And we are rapidly diversifying abroad. We've agreed a comprehensive strategic partnership with the E.U., including joining SAFE, the European

defense procurement arrangements. We have signed 12 other trade and security deals on four continents in six months.

In the past few days, we've concluded new strategic partnerships with China and Qatar. We're negotiating free trade pacts with India, ASEAN, Thailand,

Philippines and Mercosur.

[10:50:04]

We're doing something else. To help solve global problems, we're pursuing variable geometry; in other words, different coalitions for different

issues based on common values and interests.

So on Ukraine, we're a core member of the Coalition of the Willing and one of the largest per capita contributors to its defense and security. On

Arctic sovereignty, we stand firmly with Greenland and Denmark and fully support their unique right to determine Greenland's future.

(APPLAUSE)

CARNEY: Our commitment to NATO's Article V is unwavering. So we're working with our NATO allies, including the Nordic-Baltic Eight, to further secure

the alliance's northern and Western flanks, including through Canada's unprecedented investments in over-the-horizon radar, in submarines, in

aircraft and boots on the ground, boots on the ice.

Canada strongly opposes tariffs over Greenland and calls for focused talks to achieve our shared objectives of security and prosperity in the Arctic.

On plurilateral trade, we're championing efforts to build a bridge between the trans-Pacific partnership and the European Union, which would create a

new trading bloc of 1.5 billion people.

On critical minerals, we're forming buyers' clubs anchored in the G7 so that the world can diversify away from concentrated supply. And on AI we're

cooperating with like minded democracies to ensure that we won't ultimately be forced to choose between hegemons and hyperscalers.

This is not naive multilateralism nor is it relying on their institutions. It's building coalitions that work, issue by issue, with partners who share

enough common ground to act together. In some cases, this will be the vast majority of nations.

What it's doing is creating a dense web of connections across trade, investment, culture on which we can draw for future challenges and

opportunities. Argue the middle powers must act together, because if we're not at the table, we're on the menu.

(LAUGHTER)

CARNEY: But I'd also say the great powers, great powers can afford for now to go it alone. They have the market size, the military capacity and the

leverage to dictate terms. Middle powers do not.

But when we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what's offered. We compete with each other to be the

most accommodating.

This is not sovereignty. It's the performance of sovereignty while accepting subordination. In a world of great power rivalry, the countries

in between have a choice: compete with each other for favor or to combine to create a third path with impact.

We shouldn't allow the rise of hard power to blind us to the fact that the power of legitimacy, integrity and rules will remain strong if we choose to

wield them together, which brings me back to Havel.

What does it mean for middle powers to live the truth?

Well, first it means naming reality. Stop invoking rules-based international order as though it still functions as advertised. Call it

what it is, a system of intensifying great power rivalry, where the most powerful pursue their interests using economic integration as coercion.

It means acting consistently, applying the same standards to allies and rivals. When middle powers criticize economic intimidation from one

direction but stay silent when it comes from another, we are keeping the sign in the window.

It means building what we claim to believe in. Rather than waiting for the old order to be restored, it means creating institutions and agreements

that function as described and it means reducing the leverage that enables coercion.

That's building a strong domestic economy. It should be every government's immediate priority.

And diversification internationally is not just economic prudence. It's a material foundation for honest foreign policy, because countries earn the

right to principled stands by reducing their vulnerability to retaliation. So Canada, Canada has what the world wants.

[10:55:00]

We are an energy superpower. We hold vast reserves of critical minerals. We have the most educated population in the world. Our pension funds are

amongst the world's largest and most sophisticated investors. In other words, we have capital talent.

We also have a government with immense fiscal capacity to act decisively. And we have the values to which many others aspire. Canada is a pluralistic

society that works. Our public square is loud, diverse and free. Canadians remain committed to sustainability.

We are a stable and reliable partner in a world that is anything but, a partner that builds and values relationships for the long term. And we have

something else. We have a recognition of what's happening and a determination to act accordingly.

We understand that this rupture calls for more than adaptation. It calls for honesty about the world as it is. We are taking the sign out of the

window. We know the old order is not coming back. We shouldn't mourn it. Nostalgia is not a strategy.

But we believe that, from the fracture, we can build something bigger, better, stronger, more just. This is the task of the middle powers, the

countries that have the most to lose from a world of fortresses and most to gain from genuine cooperation.

The powerful have their power. But we have something, too, the capacity to stop pretending to name reality, to build our strength at home and to act

together. That is Canada's path. We choose it openly and confidently and it is a path wide open to any country willing to take it with us. Thank you

very much.

(APPLAUSE)

ANDERSON: Well, not for the first time today, a Western leader with a bleak assessment of where the world is and where it is headed.

Mark Carney insisting, quote, "We are in the midst of a rupture, not a transition; a series of crises have laid bare the risks of collective

action and integration."

But this was a powerful speech by a clear-eyed Mark Carney, the Canadian prime minister, laying out what Canada is doing in the face of this global

disorder, building coalitions that work, with allies who share enough common values.

That work, he said, is middle powers. This was a classic line. If we are not at the table, we are on the menu.

We'll do more on this. We're going to take a very short break, as I understand it, at this point.

On the other side, with my colleagues at CNN, we will discuss Mark Carney's words. As I say, a powerful statement that my colleagues on "ONE WORLD"

will discuss. It's fascinating times.

We are, as many are saying here today -- and we've heard the same thing from Emmanuel Macron today; from Christine Lagarde, the head of the ECB;

from Ursula von der Leyen, that the old rules are breaking. They are broken. And what next is really up for debate.

That is it for CONNECT THE WORLD. Stay with CNN for continuing coverage from Davos with my colleagues on "ONE WORLD" up next.

END