 A very warm welcome wherever you're watching and welcome to this CNBC debate live from Davos. The timing of this event is extraordinary. We've just had the European Central Bank step up to the plate with a QE programme that the markets have decided they can work with. The topic of our debate here today is recharging Europe and no doubt we're going to talk a little bit in the context of recharging Europe about what QE is going to mean for Europe going forward. I have a wonderful panel here for you today so let's introduce them. Let's start with Wolfgang Scheuble, the German Finance Minister. Welcome. George Soros is here from the Soros Foundation. We have Ignithio Visco, the Governor of the Italian Central Bank. George Osborne, the UK Chancellor and Louis de Gindos sitting right next to me, the Spanish Finance Minister. Thank you for all being with us on this CNBC debate and thank you our audience for the very warm reception. So let us get started here with the first question and I'd like if possible to ask you Governor Visco because we've had this significant announcement from the European Central Bank. You were part of the process. Why was the size and timing more important than the element of risk sharing? Well, you never compare various elements. It was important to have a decision that was a consensus decision. We had unanimity in deciding that this was a tool that can be used for monetary policy and we had a very large majority, a very large majority to decide that this was the moment to use it. The consensus was important because this is a single monetary policy decision. We are a central bank for the Euro area and we look at the Euro area. We don't look at individual countries in the decision. Then there was an issue which was very importantly considered by some of us. Of course, didn't consider it very much that given the fact that we are not in a fiscal union, then risks have to be carefully evaluated. But I think this is a secondary element vis-à-vis the size, the composition and the timing of the decision. So you're very comfortable that in no way does the 80% burden falling on national central banks, that in no way damages the foundation of the Euro zone, that there should be mutuality? No, I agree with that. This is an element which was discussed. There is a risk of financial fragmentation that we have some emphasised. There is a counterpart defined that we are going to be pretty sure that there will be behaviour on the part of governments that will make risks less than they may appear. And these implies that interest rates may benefit from that. You are all in some way part of the process or the machinery of government and policymaking except George Soros, who is a market participant, although I understand George from your dinner the other night, you claim to be less actively involved in the hedge fund than you used to be. But let me ask you, you've been a vocal critic of what you've perceived to be Germany's reluctance to allow fiscal and monetary policy to assist Europe at this difficult time of crisis. Did Germany just get outmaneuvered or does this package still fall short of what we need in Europe? I remain a critic because a balance between fiscal policy and monetary policy would do the job better and it would not create other imbalances which relying only on monetary policy can create because it works in depressing the value of the euro, which of course helps exports and of course it will create a possibility of an asset bubble which can have other negative effects. But my main concern actually is that it will make the divergence between rich and poor bigger than it already is because it will benefit the owners of assets and actually wages will remain under pressure to competition and unemployment, so this will I think reinforce a major concern which is the difference between rich and poor and it will have political consequences. We have seen dramatic movements on the single currency, the euro has dropped below 112 even as we speak here, that's the first time since 2003. In spite of your concerns, the policy is having its expected effect, isn't it? It's starting to make the market's expectations change. Definitely the sheer size of the massive injection and the duration and so on will have undoubtedly an effect. It will also have of course a lot of effect on international currency markets and if I were still active in the business I could see some fairly substantial moves coming and financial instability can also create dislocations and turmoil from time to time. So those are the negative effects and all this would be better if you had a better balance between fiscal policy and monetary policy. Ladies and gentlemen, there will be time to call your brokers when we get to the end of the programme. So don't rush to take your phones out quite yet. Finance Minister Scheubler, can I come to you, at the end of the day was it more important do you think to preserve the perceived independence of the European central bank than uphold German objections to QE? Look, the independence of the central bank in Europe is given and it's to be respected and therefore we have set a problem of the underlying problem of the European currency union. We have one monetary policy but we have different fiscal and economic policy and therefore the burden for the ECB is very high to stick with one monetary policy. Therefore I don't comment decisions by ECB never ever because the monetary policy is up to the European central bank and they do their job very well and that's trust. That is not the problem. We as government have to care on fiscal policy and then economic policy by the way we do it in Germany rather good. I think George Osborne has listened carefully to Mr. Soros in some way because don't forget the lessons of history and having said this because I must do this. I would like to say if I got it right the president of the ECB, Mario Draghi, in presenting the decision of the ECB yesterday in TV said don't believe that monetary policy can prevent growth. That's up to national politics, fiscal policy and economic policy. We have to care and grow. They have to fight, they have to prevent price stability. That is the mandate of the ECB. They do it very well and they have to fight the risk of inflation. That's fine. I will not comment but they can't and that is the only problem we see. What is called the moral hazard. It would, some people could misunderstand that they have not to do what they have to do as governments, as parliament and so on because to implement structural reforms is always a difficult political task. I can't be because you need majority, stable majority in member states. I will not intervene in the discussion on the decision of the monetary policy. It's fine. We do our job and I think we have strengthened the economy and fiscal policy. Let me break in. I think we are very clear on what your position is with regard to structural reform. Let me ask you again, is this in any way likely to increase German fears of back door deficit financing now for countries like France, perhaps maybe Italy that are perceived to have been slow on structural reforms? I know what I am saying and I know what I would say but I don't want to say what you want to me. We are, once again, of course you can see in German media there is a very difficult reaction on the decision on the DCB yesterday but that's the independence of institution and that is one of the principles of Western democracy. You have checks and balances and independent institution but if you are convinced that the independence of institution is right and I am totally convinced then you have to respect and you must not ask who has been defeated. Everyone has to stick to its own responsibility. My responsibility is fiscal policy, economic policy. Perhaps you can comment then on some of the reaction because in the German papers today there are Germans who have been asked how they feel and one of the quotes was this is what has happened to my money. So the message very clearly from the German public is this is not a welcome step. I have read it, yes. I think we should not waste our time. To play a game I will not play. Let's move on and we can come back to you in just a moment. Chancellor Osborne, if I can come to you. Firstly, just to clarify Britain's position in this debate, are you in or out of the EU? We want to be in a reformed EU and I am tempted to say the lesson from history which George Soros taught the United Kingdom is when you fix your exchange rate with other European economies it opens up a heap of troubles as we have seen. My view is that Europe needs to be the place, Britain included, that is the centre of business innovation and science and discovery and education as it has been for much of the recent history of the world. All the nations of the European Union have an obligation to their populations, many of whom are unemployed, many of whom lack economic opportunity to make the reforms necessary. Where I agree with Wolfgang from what he implies is that the European Central Bank action by itself, welcome as it is, is not going to solve the problem. It is a necessary but not sufficient condition of European recovery. And the countries of the Eurozone need to use this opportunity now to do the structural reforms, to get their public finances in order, to make the changes that are going to attract business and investment from around the world to Europe. They have got this opportunity, there is a window now and governments in Italy and France and the like need to take that opportunity. I should say this is not a, sometimes there is probably an unremitting feeling to the Eurozone problems but actually if you look at what Spain has done, Spain was in a desperate situation two or three years ago but took some very difficult decisions on labour market reform and the like and is benefiting, you can see investment flowing to Spain in the way it is not flowing to some other Eurozone countries. So I would say Ireland is another example of people who are getting it right. So I think there is in front of us examples of Eurozone economies that have taken difficult decisions and are being rewarded for it. Equally of course there are examples of Eurozone countries who have not taken sufficient action and are being punished for that. Your party has pledged to have a referendum so are you in or out? Well I want us to be in a reformed European Union but two, there are two conditions. One is the whole of Europe as Britain included needs to undertake that economic reform. The EU needs to be a job creating organisation. Second, the United Kingdom is the second largest economy in the European Union, the second largest contributor indeed on projections we are going to be the largest economy in the European Union by 2030. Now we have interests and rights that need to be respected as a non-Eurozone member. We are not going to join the Euro. And at the moment the treaties of the European Union I do not think adequately reflect this situation where you have a large member state that is not going to join the Euro, is not part of the centralising project of the European Union and we are happy with that, it is our decision not to be part of the Euro but the treaties need to reflect the changes that that causes. Also the economic differentials it can bring about, the pressures it can bring about through things like free movement of people. So there are changes that need to be made but I am confident we can achieve those changes and by the way I think they also fit in with other changes that need to be made to the treaties to for example put the monetary union on a sound illegal footing. Ladies and gentlemen, maybe we can have a go at this ourselves. Who would like the UK to stay within the EU and maybe I could ask the panellists to raise their hands on this one as well. Who would like the UK to stay inside the EU? If I could ask you to give us a show of hands. The reformed European Union is what we want. Ask the counter question. OK, I will ask the counter question. Who would like the UK to leave the EU? Who thinks it would be either a better EU or a better UK if it were outside? OK, well I think that is fairly definitive, isn't it? Good. There you go. Maybe that will shell the election. The referendum is not actually going to be conducted at the World Economic Forum. Unfortunately. I think we could probably solve a lot of problems if we just got on with this. Mr Degindos, let me come to you, Minister. George Soros has talked about the risks of QE. Basically putting wealth into the pockets of those who already own assets. As Chancellor Osborne points out, Spain has come a remarkable way in improving its growth dynamics and that showing up in all the key data points at this stage. But do you think that large body of unemployed people in Spain are going to be prepared to stand by and see the owners of assets get wealthier as a result of QE? Will we have a problem with inequality in Spain and will that lead to nationalism? Well, the first thing that I have to say is that in 2014 an employment in Spain has dropped by almost half a million people. So it's a stark contrast with the situation that the dynamics of the labour market in Spain has been having transformed. Secondly, I think that I endorse always the decisions taken by DCB. I ask Wolfgang, we are firm believers in the dependence of central banks. But I think that there is one point. You cannot address structural problems with monetary policy. Monetary policy is not an almighty instrument. You have to address structural problems with supply side reforms. I think that the case of Spain is quite relevant in this situation. In Spain, we were, as you have said on the brink three years ago, we implemented a very ambitious reform agenda. We restructured our banks and we overhauled our labour market regulation. And we have started to reap the rewards of those policies. Now Spain is growing above 2%. We have reduced our fiscal deficit. The dynamics of the labour market are totally different. We have a current account surplus. So I think that is a good example about the kind of policies that we should implement. But you still have deflation? No, but the deflation in Spain is because of the evolution of oil prices. Because of the reforms that we have taken in the energy market, very rapidly, perhaps Spain is the market where this translation of wholesale oil prices more rapidly go into the price of the pump. We have a negative inflation rate. But this is positive. This is a positive sign that, you know, in Spain oil prices are reducing the inflation rate. And it's not because we have deflation. It's totally different. The deflation is like cholesterol. There are two kinds of deflations. The bad one and the good one. You know, in Spain, we have, you know, the good kind of deflation. That is the deflation that is favouring, you know, the pockets of the households. Well, what about the rest of the Euro area? Have they got the good kind of cholesterol deflation? Well, I think that, you know, in the rest of the Euro area, perhaps not with the intensity of Spain. But, you know, we have a similar situation. There is no deflation. Deflation is a visual circle. It's a combination of the expectation of lower prices that delays expenditure decisions. And this is not taking place in Spain. Just very briefly. I mean, there is a chance that the Spanish economy will do 2% or 2% plus this year. That was already forecast before we had the announcement from the European Central Bank. Was it actually necessary, given that there is an improvement in some of the lending data as well coming up to this announcement, was it necessary to have this amount of QE delivered at this point in Europe's turnaround? Well, as I have told you, I do not comment on the decisions. I always endorse the decisions of the ECB. But I can tell you one thing. If you look at, you know, the flows of new credit in Spain, you know, they are on the rise since 12 months ago. So this is something that is important. It has to do, especially with the restructuring of the banking industry in Spain. So, you know, the decision of the Central Bank is welcome. I think that is very important. I think that they are sticking to its mandate. But I think that, you know, when you improve, for instance, the banking industry, when you improve, for instance, the dynamics of the labour market, labour and capital is much more mobile. And so, the monetary stimuli are transferred to the real economy much more softly and much more efficiently than when you do not have this kind of reforms. George Soros, if I could just come to you off the back of this conversation, because you've put money into Santander, Warren Buffett has opened an office in Madrid. It seems to me that the money is going where it believes the reforms are taking place. Does that mean the reforms aren't taking place in Italy, France, Portugal or any of the other members that I haven't named? Outside of Germany, of course. Well, when I'm talking about fiscal stimulus, I'm talking about a European fiscal stimulus. There is one source of first class triple A credit that is totally unused. And that's the credit of the European Union itself. If that were used for European infrastructure projects that would pay for themselves, particularly with the current rate of interest, you would have, you would create employment, you would create a growing economy. You would actually have the euro appreciate rather than depreciate. And I think it would be very much in Germany's interest to use that credit for the benefit, because Germany itself has a very rundown infrastructure. They built a new port that is now can export very rapidly and so on. But the roads leading to the port are full of potholes. So it would be for Germany's benefit. And it would also reassure the German public that the currency is appreciating that the retirees are losing their... What about Mr. Junker's three hundred and fifteen billion fund? Maybe we could use that to fill some of the potholes. Is it enough to help stimulate Europe on the fiscal front? Well, I think if you had that money supported by European credit, you would need less monetary stimulus. You would have a better balance. And you wouldn't have this... Both in the exchange rate and in the relationship of rich and poor. You wouldn't have this equilibrium developing. Minister Scheubler, your body language suggests that you don't really buy into the proposals that Mr. Soros has laid out. I don't know if Mr. Soros is the best expert in German fiscal and economic policy, by the way. Look, we have achieved that, even in last year, with all these uncertainties, close by one point five. That's not so bad. We have raised our expenditure for research and development. We have by far the highest rate of expenditure for research and development in all European countries. And we do this in a lot of years. It's not by thought that we have a better economic development than other member states, because we invest it in research and development. We will invest more in infrastructure. It's a matter not only on federal level, but also on state government and local government. We have strongly supported the economic situation, the budget situation of local communities by federal manner, which is difficult in line with our constitution. I think it's always a little bit more differentiated if you look at the different problems. We will increase our investment rate in the coming years again and again. We will use all the room of manoeuvre, which we have with our fiscal policy, because we are sticking to the rules of the European Pact on stability and close. We started when I became finance minister, we had a debt to GDP ratio rate by 80%. On behalf of European rules, we have to bring it down to 60%. And some member states take European rules as serious. And I think a relation, a debt to GDP by 130%. So, Herr Schroeble, who on the panel is? In this line, we will spend any euro to increase investment. We do it in different ways. We do it on the national level. We have already agreed by a network of banks for development, KFW, to other developing banks all over Europe, by 3 billion, 3 billion euro. Bilaterally, we do it to support other investment. And we will contribute to... I'm not sure we have time to run through the German budget for 2015. Let me just say, can I ask you? If I'm asked on German fiscal policy, I have to explain because I know it better than everyone else. But you've said some things here that I think do need an answer. Who on this panel is not abiding by the rules? Who in Europe is not abiding by the rules? You can look at the different rules of the spectrum stability and those debt rules, deficit rules. We will discuss it Monday, Tuesday in Brussels, in the Eurogroup, and in the Ecofin. I will not... Everybody knows, and therefore I must not mention. I'm only saying, we stick to the rules and I will tell you, if you want to fight euro skepticism in population, what is it, even Mr. Socher has mentioned, you must tell people that you can trust that agreements that have been taken by every member state are taken serious. Because if that is not the case, you get problems all over Europe and you can see it. And by the way, if you want to get close in Germany, you need some demand. We have the highest consumer demand we used to have in the last decades. Because we have regained by our fiscal policy, the confidence of consumers said our fiscal policy is sustainable. That's not so bad. But we come back to this old debate as to whether it is actually easier to make those reforms while you have growth. I think Chancellor Osborne, you often talk about umbrellas and patching umbrellas or patching roofs to prepare yourself for the next crisis. Fixing the roof when the sun is shining. Absolutely. I'm not sure how the UK would fare under Heshoibla's very strict definition of the rules and their implementation. But let me ask you on that question. A lot of countries in Europe are being forced to take dramatic action at a time when they have limited growth and a bit more fiscal flexibility at this time surely would be no bad thing. I agree with Wolfgang that fiscal credibility leads to consumer confidence and investor confidence. And it is always the case that there are people who say spend more money. They spend more money in good years because you can afford it, spend more money in bad years because you need it. There's always an argument for increasing borrowing. But we had a sovereign debt crisis in Europe just a couple of years ago. And it is still the case that too many of the public finances of European nations are not on a sound footing. And in the UK's case, I inherited a budget deficit of almost 11% of GDP, the highest that the UK had endured outside of a war. We have halved that deficit as a percentage of our national income, but it's still 5%. That is too high. And the idea that at this point, a country like the United Kingdom gives up on the progress we've made, allows the borrowing to soar, leaves itself exposed to whatever the world throws at it with a debt to GDP ratio of 80%. That's just not acceptable. And it wouldn't be me doing my job of trying to provide economic security for my country. So we've got to go on dealing with our budget deficit, eliminating that deficit. I think in good times you should run surpluses to bring your debt down and insulate yourself better against global shocks. Now, that, I think, by setting out a clear plan alongside in the UK's case, activist monetary policy, structural reform, clear leadership, you put those things together, you have an economic plan. And the UK has benefited, I think, from having a clear economic plan with the fastest growing we've been the fastest growing major economy in the world in 2014. Our unemployment has fallen faster than any time in our history. It fell again this week. So the benefits are there. The investment is flowing in. The UK is now the go-to location for a lot of international investment. So the benefits of having the panel. And I think all of that would be lost if you started turning on the spending taps. And whatever thing you bought for that money would be more than outweighed by the things you would lose, because the investment would flow away. The jobs would be lost. Business confidence would disappear, because ultimately consumer confidence that your country had got its act together would disappear. Governor Visco, Italy's unemployment level is double Germany's in spite of the jobs act that has been implemented. The Prime Minister, Renzi, has pushed through. 11 out of the last 13 quarters have seen GDP fall. Can I ask you, has Italy really begun the reform process properly at this stage? I will give the answer immediately. First, if you allow me, I just would like to say one word to complete the discussion that had been started on deflation risks, whether we are in or not. The main problem that we faced was low inflation. And much lower than the level that we consider to be consistent with price stability. This has an implication on real interest rates. If inflation expectations start to fall following the low level of inflation, then the real interest rates can only go up, because we are at the zero lower bound. This has effects on the real economy all through Europe. So this is a material risk and we in the central bank don't look at individual countries. We look at the euro area. This is our mandate and this is why we did what we did. At the same time we didn't do something dramatic. We had a fall in our balance sheet of one third in two years and a half. That means 30% less of creation of money. So we are creating, compensating, creating the money that was there. In the United States, the Federal Reserve increased the supply by 60%. The Bank of England by 15% up. So it is clear quantitative easing in our case is different also in the effects than elsewhere. We have mostly a banking sector that finances the real economy. So there will be different channels. We are trying also to have other channels besides the banks to be affected. On Italy, first of all the jobs act and the unemployment rate are unrelated because the unemployment built up before the jobs act was introduced. So the issue is whether this will help and whether this is in the reform agenda the first reform. But first of all I think that reforms are there at least since the sovereign crisis. And there have been a sequence of reforms. The problem is that there are two problems. One is that they have not appeared to be within a comprehensive package. So there have been one of the time in the judiciary, in the area of professional services, in the labour reform, in pension reform, very important pension reform. Italy is one of the countries that is more stable on that side with ageing because of that pension reform. But at the same time what is missing is growth. Notwithstanding this sequence of reforms growth has not picked up. There are reasons for that, very crunch during the sovereign rate. Political reasons for that? Is it the instability politically? The most important one is uncertainty. And one of the uncertainties that are relevant is political uncertainty. I made a statement in parliament recently discussing a number of things. And one issue that was obvious is that while we had minister Schoible for the three years which have been in the government bank of Italy always there, I had five finance ministers. So this is a major problem. We need certainty for investment. You cannot have reforms that are pushed and then when the new government comes there is a question on the part of entrepreneurs or foreign investors will those reforms will still be in place? We have to have a stability of reforms. Obviously monetary policy cannot deliver real growth, productivity growth, innovation and so on. It can deliver however our source of reduction of uncertainty, stability on the price level. Well that begs the question then will this current government actually last to push through those reforms? It is going on. We are pretty considering positively what is being done. We have the reforms on the bureaucratic problems, corruption in the past. The big problem is implementation. And so on the implementation side this government will be judged. It has to follow up. It has to be effective in that. And if it does there is a lot of opportunities in the country. We are lagging behind a number in a number of areas that only picking up that in that sector in that no sectors could really benefit a lot. For them being potential growth is just an extrapolation of past growth. But we need a discontinuity here. And this is what is the challenge for the government. I think you raise a very interesting question that we can link together the panel on this. And let me bring it up with you Mr Degindos. We talked about the Germans do not want their money transferred to places where they perceive there is instability. The question I think that perhaps you could help answer at this point have the other members of the Eurozone that have challenges with their economies at the moment displayed enough commitment for the German taxpayer to trust them. Well I think that there is one point that perhaps we are overlooking a little bit and I can't tell you why. I think that the solidarity within the boundaries of the Eurozone has been quite sizable. And let me put you an example. Gris. The Eurozone has lent to Gris 210 billion euros. Do you know what's the contribution of Spain? 26 billion euros. Our exposure to Gris is 26 billion euros. That's more or less what we spent in unemployment benefits in one year in Spain. That is a country with an unemployment rate above 23%. So I think that solidarity is there. And the solidarity has been short among the different countries. How many times Wolfgang we have reprofiled the loans to Gris? I think that two or three times continuously. We have extended the maturities. We have reduced the interest rates. So the solidarity is there. We are not thinking about the taxpayer in Spain. We are not thinking about the taxpayer in Germany. We are thinking about a political and economic and financial project that is the Euro. Well Spiegel says Chancellor Merkel has looked at a plan that would allow Gris to leave the Eurozone. So apparently the Germans have been doing some modelling on what the Eurozone would like without Gris. Or is Spiegel wrong? Look, if I would care on any file which is in media, I would not get in 48 hours a day my job done. It's totally clear we have proven. Look at the facts. We have proven in years and years as Louis Kindlitz has mentioned that we did whatever could be done to support Gris in difficult times. Again and again. And I can tell you the whole story on this. We had to convince IMF to make very extraordinary conditions in line with IMF rules that we could support Gris. I could tell you endless, nightless, when Louis was not already Finance Minister at the time, endless discussions over nights and nights when we supported again and again and again Gris. We did, Germany did it by the way, additionally, by literally a lot of things for Gris. Therefore, it's not a matter of always nonsense. But if someone is saying in Gris, we don't need any program. We believe it. Okay. If I am right in reading the decision of the ECB yesterday that we can ask Governor, if Gris has no program, Gris will not take part in the QE on behalf of the ECB. How should we treat the commentaries? I think we will wait on the election in Gris on Sunday. And then we will see who ever win elections. That's up to the Greek people to decide. I have already seen two elections in early 2012. And whenever the Greek people had to decide, they decided that they had to do what they can in a very difficult situation. But the reason for the problems of the Greek people is not Europe. It's not European Union. It's not Brussels. It's not Berlin. The reason for the problems of the Greek people and that should Greek political leaders tell their population are the mistakes in the past for a long time. That is the truth and anything else is not the truth. Against this backdrop, we have Cyprus saying things like what's been imposed on Gris is like fiscal reform, waterboarding. Let me perhaps ask you again. It's a way of campaigning. You may like it or not. I don't like it. But let me ask you again because I don't remember you answering the question. Has Germany modelled Greece's exit? Yes or no? We don't model any exit. We are in favour that the Eurozone sticks together and we did whatever we can together with all our partners, with all institutions to make this and we have proven this. But I do not intervene in campaigning in any member states. That is up to them. They have to do it. But if you look at the OECD, you have just mentioned before, structural reforms you should deliver in good times. That's true. That's a theory. The practice in politics is that normally you can only get structural reforms decided in times when you are under pressure. That is the reality in politics. In good times you like to be a little bit more not so decided. Having said this, if you look on the last OECD report, which member states of OECD have performed best in implementing structural reforms? The five member states under different European assistance programs Spain, in the lead, Ireland, Portugal, Cyprus and Greece has best performed in implementing structural reforms. Therefore the conditionality in the given European programs was something of fiscal and economic union we don't have in the governance of the Eurozone. But this is one of underlying structural problems in the Eurozone that we have only come in monetary policy. Therefore Greece has in any way being member of the Eurozone or not, Greece has to suffer major structural reforms to become competitive. Otherwise Greece will never be able as member of the Eurozone or not to stand to the expectation political leaders of the Eurozone. I don't want this to get too negative. Let's talk about some positives. We have implemented structural reforms. It sounded like a horse race. Greece has made impressive progress better than we expected two years ago. Much more. The growth is better in Greece. Reduction of deficit is better. It is the first time in decades a primary surplus. Therefore they are in the right way. The expectation of the calculation of IMF is that Greece will have in 2020 a debt to GDP ratio by 112. Two years ago the expectation was they will be far above 120 in 2020. They are better than expected. They are doing very well. They have made impressive progress. And of course, they are doing better than we expected. Let's move on. Chancellor Osborne, I want to come to you. Something the UK has achieved which many countries would like to see replicated. As you have taken out some public sector jobs and reduced salaries in that area or frozen them, we have actually seen the private sector step in. And we have seen companies pick up some good jobs growth in the UK, and we're also now starting to see wages inching up, almost the holy grail of getting us to a virtual circle, if you like. How has the UK done it when it hasn't been achieved in other economies in Europe at this stage? Well, first of all, you know, the UK five years ago was in a very difficult situation. So I agree with Wolfgang that often it takes a very difficult economic situation for a nation to have to face up to the difficult decisions that are required. Second, we set out as a new government five years ago a clear plan, and we have delivered that plan. We've, I think, earned trust by saying what we were going to do and then doing it. And was that £375 billion of bond buying also critical to encouraging those private individuals to invest alongside you? Well, I think the Bank of England, its activist monetary policy made it easier and has made it easier to deliver the fiscal retrenchment and the economic reform. I don't think by itself it would have done the job, but it was part of and is part of an economic plan. So that plan commands confidence. I think, you know, the European public are well aware that our countries face big questions about how we're going to earn our living in the future, not just coming out of Eurozone crisis or financial crisis, but a big challenge to our continent, which is, is this going to be the place that's creating prosperity and higher living standards and jobs in the future? And I think politicians who front up to that, who tell their publics that, you know, there are no free lunches, that there aren't easy decisions out there, it's going to be, you know, difficult, but the rewards are for those who take those difficult decisions that, you know, that fortune favours those with a clear vision, a clear economic plan and clear leadership. And, you know, I hope, obviously we've got an election coming up in the UK. You know, I hope people will see the progress we've made. I think the public understand there's been a huge amount done, but they also understand there's a huge amount more to do, that the journey is not complete. Just let me be very clear here. I think a tax cut for oil services businesses operating in the North Sea is not a free lunch. Well, the oil price fall, I think, is, you know, going to be very significant for the European economy, including the UK. And it's a very positive thing for Europe. And it puts money into the hands of consumers and businesses. In the UK, it is a positive thing, but of course it has a big impact also on the North Sea oil and gas sector. It's a mature basin, it's a brilliant industry, but of course it's going to be affected when the oil price halves. And so we've already started to take action at the beginning of this month. I cut some of the taxes we levy on the North Sea because not because I expect to see a return tomorrow on that, not because I'm claiming it's going to pay for itself, but because I want to make sure in 10 years' time and 15 years' time we're still pulling oil and gas out of the North Sea that that brilliant industry in Aberdeen is thriving. And it's a classic, with four months to go to a general election, you wouldn't normally have a UK Chancellor contemplating further reductions in the tax on the oil and gas sector. But because actually we are investing in the long-term economic future of this country, it is something, of course, we are looking at. And it is, and I think the public understand that, they understand that ultimately, if you don't make those sort of long-term decisions for your economy, you lose jobs, you lose your living standards fall. And unfortunately, people in Britain went through that five or six years ago, so they have a fairly recent example in the fresh in their memory of what happens when economic policy is short termist, fails, relies on borrowed money. And I'm confident that we probably don't want to go back. George Soros, let me come to you. You have said that you are not as bullish on the current state of the market, well, on the markets as many who are active in the markets seem to be at this point. One of the important elements of QE and the kind of restoration of confidence that Chancellor Osborne has talked about is the need for the markets also to allow animal spirits to a certain extent to run their course and there to be risk taking by entrepreneurs. All of this may falter now. If the markets don't work with the bankers and with the finance ministers, what are the risks here do you think that we don't get that release of risk taking in animal spirits? Well, you need less uncertainty. So to the extent you have, let's say, instability in exchange rates, that's a negative. In so far as you have political uncertainties, and I would like to emphasize because most of the disturbing things today, things that can go wrong are actually political and we have been focusing here only on the economy and I think we would make a big mistake not to consider the political situation globally. You are not just talking about George Osborne not getting reelected in May. This is something else. I'm talking about, for instance, the threat posed by Russia, a resurgent Russia. The European public and apparently many of the leaders are not sufficiently aware of that danger and Europe doesn't behave like an association of countries that is under attack. So that's one of the major uncertainties and it's really up to the international authorities to provide Ukraine the financial support that it needs in order to stand up to an actual military and financial assault, which is an assault on the very foundations of the values that the European Union is based on. So that's one very important thing we should talk more about. But on the whole, I think there is a very positive development coming from the central bank. Unfortunately, it's the only instrument that is actually acting. There is a lack on the fiscal side, but you should nevertheless not underestimate the importance of the sheer physical mass of money pouring into the markets. And I'm sure that there will be lots of animal spirits, but there will be difficulties more to making more money than actually making long-term investments. Thank you. Minister Schoibler, could I get Germany or the German perspective on Russia as George Soros expounds it? I think it is a little bit difficult to touch this very difficult issue in one minute in a discussion when we have, of course, the political framework is most important, by sure. And, of course, we have German government, German federal chancellor together with all their colleagues. We have cared whatever we can do. It's a difficult situation. We don't. But I don't think that we are to be very frank. It's a right forum to discuss in a serious way the Ukraine issue as well. Of course, political uncertainty is always a bad framework for growth. But if we want to discuss the Ukraine-Russian issue seriously, we should ask maybe our foreign ministers and so on and not to do it by occasion in two minutes. It makes no real sense. All right. Well, let's just point out that there are seven elections at least in key economies across the Eurozone. I think the political issue is going to be significant in terms of risk this year. I think Spain has an election to come at the end of the year. So let's not just focus on the UK, but you are one of many countries that are facing this political VZ economic challenge this year. Is there in any sense a real risk that we might see the EU founder through this political process? Well, you are totally right. In the case of Spain, we have two elections. We have general elections at the end of the year and we have regional and local elections in at the end of May. Well, that's democracy. I think that, you know, the point, in my view, the important point is that, for instance, in the case of the Spanish voter, the Spanish voter is wise, is sensible, is mature. I think that the Spanish voter is going to look backwards. He's going to see where we stood three years ago. We were in the aid of the storm. We were on the brink. We were on the verge of collapse. And now Spain is growing. There is no room for complacency, for sure, but it's growing. We are outperforming our European and Eurozone partners. We have much better fundamentals in terms of macroeconomics. And the Spanish voter knows perfectly that political stability is an advantage. So, for sure, that they will take into consideration all these elements and they will vote accordingly. So, this is the only thing. Governments, what have to do in the case of Spain, for instance, is to try to modify, to redirect an economy that was, you know, on the verge of collapse. And to have now an economy that is growing, that it has a very high unemployment rate, that you have to do a lot of things, but that the future is much better than it was three years ago. I think that this is going to be the real element that they are going to take into consideration. I hope you are right. But let's look at the example of the UK. We have economic indicators improving in many areas. More people, and I'll say this, Chancellor, more people are in jobs in the UK than ever before. But the threat in the UK is not coming from the traditional left to this Conservative Party. It's coming from an anti-incumbent UKIP party on the right. What does that tell us about the willingness of the European public and the British public at the moment to accept the status quo as they have had it since the financial crisis? I think it would be very surprising if you had had an economic shock of the kind that the UK experienced six or seven years ago, not to have that had an impact on the political system. I mean, the political system is a reflection of the anxieties and the hopes and fears of people living in the country. And you're right that the traditional alternative to the Conservative Party, the Labour Party, has not provided an answer. So people who are unhappy with the difficult decision the government has taken look elsewhere for that answer. But I think in a general election, and this isn't true so much in European elections or local elections, but in a general election, people know ultimately they've got to make a choice about who they want the Prime Minister to be, which economic policy they want. And whenever you ask these voters who say at the moment they will support one of these minority parties, they do say they'd rather have David Cameron, they'd rather have the Conservative Economic Plan. So we have to focus people's minds on this election. We actually have to tell people it's a really important election because it is Britain faces a big choice about the future direction of economic policy, about whether we go forward with the plan I've described or go backwards. And I think by communicating that clear choice, by saying only two people can walk into the door of 10 Downing Street on the day of the election, we will actually get people to support the government. And I think in the end people can judge us by our track record and by the platform we offer for a brighter future. We actually set ourselves the goal, the UK becoming the most prosperous of the major economies in the next generation. I think we can achieve that. So it's a platform based on optimism about the future with a track record of delivery. You represent a country that is not part of the currency union. One of the outcomes of the action that was taken yesterday is we've now seen the single currency falling very rapidly. That is not going to help the competitiveness of the UK in international export markets. Is that a potential headwind this year and may that affect the political outcome in May? Well, we don't target an exchange rate because last time we tried George Soros made a lot of money. And so we don't, as I say, try and have a particular exchange rate in mind. We have a floating currency. I think it's in Britain's interests that our friends on the continent of Europe do well. It's clearly an art. We're so interconnected as economies. And so I support anything that is going to improve growth rates in Italy and France and the like. And that is good for the UK because we export 50% of what we make to Europe, 40% to the Eurozone. So we welcome any action that improves growth. But as I said at the beginning, it can't just be monetary action. It's got to be structural reform. It's got to be sound public finances. And I think ultimately the competitiveness of our industry, the competitiveness of our exports does not depend on our exchange rate. It depends on us having a highly skilled workforce, great innovation, good science, good business investment decisions. That's ultimately what makes for great exports. And because currency, you know, currencies can go up and down. George Thoris, currencies can go up and down. But not when they're pegged. And then a peg gets removed. And then we have that extraordinary hindsight moment where every economist tried to pretend they'd forecast the Swiss central bank removing the link. Can I ask you, that has now happened? Where next will these hot money flows go to cause trouble? Well, fortunately, I am genuinely not involved in the markets. So I'm not paying attention to that. I must say, the sudden move, I mean, as you say, pegs are very dangerous, because eventually they are liable to break. And if when they break it, they are discrete shock to a lot of economies, it will be a big shock for for Switzerland. Switzerland will will now face a an overvalued currency and economic slowdown. But it was an inevitable move. And certainly in retrospect, I could have foreseen it. Mr. Soros, thank you so much. And I just want to wrap up our program here with one final question on an election. There is an Italian presidential election coming up very soon. Let's go. I've seen your governor, let's go. I've seen your name mentioned in connection with this. Should we get used to calling you president at some point soon? Should you allow me not to answer at all to this? It is a question we should not be put unless you really want to talk with a coffee and some nice, nice conversation. No, I mean, obviously you should not. I guess the way you do these things is you deny you, deny you, deny until you accept the position. No, no, there is nothing. I've never been told anything. Well, we look forward to you running in the race. Let me thank our panelists for their contributions and thank you everybody for tuning in to this special CBC debate from the World Economic Forum in Davos.