 Guten Tag, ich entschuldige mich, aber es war beim Abflug schwierig. Guten Morgen, ich entschuldige mich für das Abflug hierher. Der Abflug war schwierig und das Abflug auch schwierig. So, jetzt geht es weiter. Vielleicht kannst du uns hören. Ich werde nicht alles, was ich gesagt habe, als Interview beantragen. Ich möchte unser Minister von Finanz zu diesem Interview, Mr. Schäuble, willkommen. So, let's start. You've had extensive negotiations with your coalition partners. There's been a vote at the SPD, but it would appear that there have been different views that have been expressed. You've just come back from Schloss Misseberg, where you've had a retreat. Could you tell us whether building the team has worked? The answer is yes, it's worked quite well. We had an election campaign and then followed by an election that we won. But then we had to form a government with the social democrats because we were just barely below the absolute majority. And they didn't really want to join the government following this rather bad defeat. Because basically the electorate wanted the policy to continue as under Chancellor Merkel and Germany is not doing so badly. In the past few weeks the open debate has shown that we will have to change things a little compared with what we've done in the past years. Whereas we should maintain what has been successful in the economic and financial policies. There are certain things that have to be adjusted and this has to be negotiated and that went right up to the Christmas break. And at Christmas everything comes to a standstill. But the media have to go on producing and that gives the impression that marginal conversations were more substantive. But that's not always caused by the media. It's also due to the fact that many ministers have voiced their opinions about policies that they could not bring forth at the meetings. But that's not so important. We found an agreement and this has been confirmed by the two days retreat at Schloss Miesseberg. The climate, the ambiance, the atmosphere were very good. Some colleagues are more newcomers than others and it's a good thing to get to know one another. We all have the common will to pull together for four years and be successful with our policies. And then in the next election will probably be the main opponent. Well, four years, it has to be four years maybe earlier. The federal government has promised some goodies, for example in regard to pensions to reduce the retirement age and to grant pensions as of the age of 63 without any deductions. Well, that will cost billions and you also want to reduce the overall debt. So how will you be able to manage this? Four years ago there was a bet that we would not achieve this reduction of debt. Well, we have achieved not raising further debt. So we have a structural deficit of two to three percent per annum, but we will not make use of it. The financial policy has been quite successful and is one of the reasons why the labor situation is so good and we've decided to continue this policy. It wasn't that easy for the partners to accept and that's why I'm still the finance minister. The pension for mothers was a promise of the CDU during the election campaign and we have implemented this as well because there has been a gap. Children bought after 1992 have a better position than those born before 1992 and you cannot really reproach women for having had children before 1992 and they cannot understand this difference. That's why we promise to change this, but we will not change anything in the financial policy. Zero debt financial policy and this is also something we want to implement to help the domestic demand. We don't have a surplus as far as the EU is concerned, so we have delivered on our promises internationally and it is only in this framework that we are implementing step by step what we have promised in the election campaign. We're going to be a reliable strong partner, but that is going to assume all its responsibilities. Let's get back to the international responsibilities. How willing is Germany to go in for reform? You said that there is only one exception and that's the pension age, which is a symbol of course. Does this mean that Germany is going to stop reforming and is going to rest on its laurels? Answer no. One also has to define what is a reform. Those who want an improvement in the pension system say it's a reform and those who are against it are saying it's a reform as well if you don't do anything, but reform is not yet a definition in the energy area. There still is no agreement regarding the peaceful use of nuclear energy. We have just decided the new Minister of Economy, Mr. Gabriel, has taken steps which we were not able to do in the previous government because of the opposition, but we need an energy policy that also makes sure that the competitive edge and situation of Germany as an interesting location is not harmed. We have to explain to our partners also outside of Germany in the rest of Europe that in Germany we are perhaps a little more risk-averse and that we have a very high standard of social security. We spend about twice as much compared to GDP than in other industrialized countries. Germany is part of the mainstream, but we want to stick to this course. Not everyone in Europe can put forward this argument of competitiveness, but we have to keep a good balance. But are we able to do this simply because just now we are doing quite well and our performance, our economic performance is quite good but isn't this a situation which should give us some concern in the future? In Politics one has to realize whatever one has achieved currently remains forever and ever. It's always a tightrope act. You have to win over the public opinion again and again. The change in communications technology all over the world has questioned the possibility of stability within the population. It's not the biggest problem in Germany, of course, but in other parts of the world it is a big problem and it is an ongoing task. One has to remain competitive. You can only spend as much as you earn and that's what we're trying to do in Germany. We're doing it quite well. We haven't been criticized for not being successful enough. We're being criticized for being too successful. I don't accept that criticism either. We simply bear our responsibility also on behalf of our partners in Europe. But it's always a tightrope act. Well, regarding your partners in Europe, what can these partners expect from this new government, especially with the Euro debt? What can be expected? Will you be a little more lenient regarding the debt countries? Well, we have managed to save the Euro from the crisis despite all the apocryphal messages and expectations. And you can see this at every meeting at the where for the G20. Europe is no longer the main culprit for all these crisis situations. We still have duties and responsibilities at the beginning of Brussels. I already pled in favour of everyone bearing their responsibility when I spoke to the European Parliament. This crisis in trust in the European currency which stemmed from the banking crisis which didn't originate in Europe but spread dramatically in Europe and became a crisis of trust. How can a currency function when there are 17 and now 18 states involved with only one central bank? It's extremely complicated, but we managed to look at the interest rates in Portugal, in Greece, in Spain, in Ireland, in Italy at the developments in the past few years. We are no longer the main source of concern for the financial markets. We are not completely out of it, but if we consider Davos, which is quite high, we've come far. But do you think that the crisis has come to an end? No, no, no, there are still efforts to be deployed. The Eurozone has come out of recession economically speaking. It wasn't really bad, simply because Germany was the locomotive, a growth locomotive without Germany. The recession in the Eurozone would have been much worse, and that is part of our European responsibility. We really made sure that we helped maintain the financial stability. The German economic competitiveness and performance, and that's what our partners in Europe say as well, is one of the reasons why our EU partners were able to recover. Export-Surplices are in third countries, not members of the EU. When we export to such third countries, then a lot of this is only possible, thanks to part of these products being manufactured or delivered by our partners. And if we did not have such surplus exports, then many of our partners in Europe would suffer. So we are the driving force in economic terms in Europe, and we are also helping in European integration. You've just mentioned Greece. Some progress has been made, but the debt situation is still dramatic in Greece. So how can this ever be resolved without simply reducing debt? Well, we already cut debt by 53% of non-governmental loans. It was a very hard fight. And the finance minister was very much in favour of this. Together with the Greek government, there was a lot of resistance. Many said that it would be impossible, unfeasible. I remember well how things were at the time, and it was said that Greece would only manage if we had such a cut of debt by 53%. And that was the basis for the rescue programme of Greece, for Greece. Greece has made tremendous progress, but Greece is still by far the most difficult, complicated country. If you look at the results of the tourist season last year, it was much better than many years previously, thanks to German tourists in particular. So Greece has had to implement a lot of reforms, was part of the rehabilitation policy and are highly disputed in Greece because the social consequences are certainly not trivial. I wouldn't want to have to implement such a programme in Germany. What the Greek population has to bear is incredible. Things are moving, but they're still not out of the woods. Greece has made more progress than anyone who has dealt with Greece ever thought possible a few years ago. Take a glass of water. Are these half full or half empty? I can tell you, the Greek glass was pretty empty two years ago. You couldn't have said it was half full or half empty. It was nearly empty. Obviously, there's still a lot to be done, but the support from the population for the government is extremely fragile and that is mentioned again and again. But isn't that a trap, don't you think, that if there were a change in government in Greece, everything that has been invested in Greece in monetary terms would simply be disappearing because of a change in government that might be more extreme? Well, every day one has to deal with new tasks in politics and one has to keep a balance. This balancing act is a daily task. The financial crisis and the banking crisis also had an effect on Germany. We had never experienced such a recession or such a reduction in GDP, not ever since Germany was created in 1949. 5.1% reduction, perhaps during the oil crisis, the energy crisis, but compared with what Greece has had to go through, this is nothing. We're doing everything we can to avoid such an incident again. That's the whole European debate. We always have to explain to people again and again that European integration, that is say compensation between those who are well off and those that are not that well off, especially the countries that were behind the Iron Curtain until 1989. Look at the Baltic states, the efforts they've made and they're on track, they're making great progress, but the states that have so much prosperity are so worried and they feel that the world is going to come to an end the next day. They want to be better and better off. Greece has to make tremendous efforts and one has to explain to them again and again that they are on track going in the right direction. They've always disfied it in favour of continuing, even if the majority is very slight. But Greece also is suffering from the immigration from Africa and they need our support and solidarity when it comes to integrating refugees and immigrants from other parts of the world. That's one of the sources of the domestic political instability in Greece and this is of course used by the right wing parties, by putting the fear of God in the population about immigration and refugees. And we have to help Greece. Europe has to have an integration policy for refugees and immigrants as well. European solidarity is not just a question of spending money that one does not have and create a date, but it's also explaining to the people why certain policies have their raison d'être. You've just mentioned the European elections and of course there are going to be some slogans of all sorts. What is the positive side of European history that you can tell European people so that they will take part in this election? Well, we have many celebrations this year or anniversaries. You can read up in history books what the situation was 100 years ago at the end of January 1914. There was an atmosphere of change, of great change and it's similar to the situation today. And a few months later they all went off to war singing and chanting and it was a disaster. We've become a little wiser. After the first war we weren't strong enough or wise enough to know better and it took another second world war. And then we went through the split between the east and the west which was then overcome. So we have all these anniversaries. Is it enough to just look back? Well, let me get to the second point. When I speak out in favour of the European elections I need a few sentences to explain this to the German people. One has to be aware of the situation. We live in a Europe without frontiers, no borders. The Prime Minister of Saarland has just said that she wants to make sure that all children grow up speaking two languages, be bilingual. We've also introduced in our political programme that every young person should be able to spend one year abroad doing their education and training. We live in a globalised world, especially the young people my generation couldn't even imagine living in such a world. We have social prosperity, we have an economic strength which was unimaginable in the past. And without European integration it wouldn't have been possible at all. We are in the 21st century, the century of globalisation. We only make up 10% of the world population but we still have 50% of social expenses in Europe. And if we want to defend our interests then we can only do this hand in hand together. One day, even Switzerland will participate more and the UK will remain integrated in Europe. Well, we'd have to have a special panel for that says the interviewer. We won't have enough time for that. Now, how is our European policy perceived abroad? Do you feel that one has explained sufficiently and in enough detail what this policy is? It's not that there's a revolving door where the German politicians follow other national politicians of other states. But the Germans aren't very frequent here. They're not very vociferous. We're in a rather strange situation. We just formed a new government before Christmas. We've only just started. The Chancellor then had a skiing accident, not so far away from here. It's not Switzerland's fault. Well, maybe she was skiing on old skis. No, no, it's easy to fall when you do cross country skiing and if you don't fall very cleverly. Well, anyway, we have to start our work now. The Chancellor will begin next week with her first speech and declaration on the government's policy. It's not a question of being able, well, perhaps we have to send second-class politicians to the web because the top dogs were involved in the discussions at the cabinet level and in the coalition. We're not the best in class everywhere, after all. Maybe we have fewer problems than others from the point of view of these others and that doesn't make you very popular in class. And then if you always have to make sure that the easiest path is not at all times to reach certain solutions, then one is less popular. We can only achieve our goals if we remain at a certain level of competition and competitiveness and that is hard work for the whole of Europe. We always campaign in favour of these solutions. Our partners are not always very happy. I always try and place myself into the shoes of others and then I don't always see myself as such a fantastic guy. Well, I'm sure they'll always find reasons. Are there enough Europeans, convinced Europeans, pro-Europeans in Europe? It's the same self-problem. Success is tiring. Sometimes we would like to rest, but you have no time to rest. The world is too much of a challenge. All over Europe one has to continue the debate. Europe is very bureaucratic and European structure is not enough to guarantee success. Even before the last European Council, the Chancellor said in the German Parliament before Christmas that we urgently need, not in this legislative period, but we need a change in the contracts, the European contracts. We have to improve the structure in Europe. I can understand the criticism that is voiced by the European Parliament. Are there any concrete proposals? It's difficult to amend the treaties. It's only possible if it is unanimous. The Lisbon treaties are such that everyone says it's too complicated, let's not even try it. But in the long term, European integration will only be achieved if we improve the institutional infrastructure and structures. And then we have to find agreement on what we want to do together in common in Europe and not only at the national level. There are all sorts of things such as integration policy or refugee policy, something that we cannot handle nationally any longer. It has to be at the European level. We can see this from recent debates and certain initiatives have now been taken. Years ago we already decided in financial and economic policy that it's not possible to go it alone. And Switzerland has seen the problems it had with the Swiss Franc. This German economy would be much worse off if we didn't have this European currency, the Euro. But now we also have to have the proper European institutional underpinning so that these decisions can be taken by the European institutions and not intergovernmentally. One last topical question, France, the president announced recently that there'd be substantial changes in economic and financial policy. Will this preserve France from becoming the major risk for the Euro in the near future? Well, France with Germany is our most important partner. European unification would not work without France. Well, economic not either. No, no, no. If Germany and France do not pull on the same economic we have responsibility. We carry jointly also in terms of leadership. France is a strong country. But we certainly do not censor one another openly. We talk together. I'm going to meet the finance minister in France next week at the Franco-German Council. And we have very close contacts ongoing and permanently. So I know what the situation is in France. I know the French figures. France is and remains a strong country. And France will be able to take the proper, the right decisions. And we have seen that the French president has taken these necessary decisions. It's the right thing to do. And I'm very confident that the role France is playing will continue strong and that we'll be able to develop Europe together. Well, that's a three-plus evaluation, isn't it? Well, it's confidence in making progress in Europe and that we're going to make this progress together. Only work with France. Everyone knows this. If you carry out an opinion poll in both countries the answer will be to the question who's your preferred partner. The French will say the Germans and the Germans will say the French. And this is fantastic if you consider all the wars that have opposed us in the last centuries. Now, a comment regarding banking regulation. You've just announced stricter bank regulation and what will the banking industry have to accept or expect? Well, we will continue step by step what we have already started internationally and globally within the G20. We'll have to make some progress in regulating the shadow banking. That's something we started two years ago and at the G20 in Cannes. The stability report now has to be implemented. In Europe we have already started. Part of Basel 3 will be implemented step by step. We have to make sure that things don't lag too much and very important decisions have been taken in Basel. We will launch the banking unit with a bank supervisory authority. We will discuss the regulations and the objective is that in future the owners, the investors, the managers have to bear the responsibility for any losses that are made so that risks and opportunities have to go hand in hand. That is simply one of the rules and regulations that we have to abide by. Thank you very much, Mr. Scheuble and I hope you enjoy your stay in Davos.