Ms Merkel. Good afternoon. Ladies and gentlemen, we have decided to combine the two occasions we have had today to see one another. First of all, there have been meetings between the German Federal Government and the Spanish Government, as you can also see by the presence of several Spanish Ministers, and we are glad to have the Foreign Affairs Ministers here at this press conference. Secondly, Spain is the partner country at CeBIT this year and it is truly a great pleasure that the President of the Spanish Government, José Luis Rodríguez Zapatero, has come to speak with us today and visit CeBIT with us tomorrow.
Spain has assumed Presidency of the European Union Council, so it is a pleasure to speak with our Presidency regarding what we can expect between now and the end of June.
We began by speaking about the European Union's 2020 Strategy because we clearly want to come out of this economic and financial crisis stronger for it as a Union and we want to take advantage of the opportunities that present themselves. We would like to establish a few specific objectives that we agree should reliably guarantee the future of the European Union. This future will be built, in part, by aspects related to the digital world, innovation and a common energy policy, but also through innovative and joint industrial policies.
Also, based on the information that Commission is going to provide us with over the course of the forthcoming European Councils, we are going to achieve significant progress in terms of a European strategy.
Furthermore, we agree on a desire for increased coordination of our economic policies, because we believe that the Stability and Growth Pact is of vital importance. This importance has been made extremely clear in recent days by the debate currently surrounding the Euro, which is obviously going through very challenging times, and needs every Member State to respect the Stability Pact as soon as possible, something I am glad to have heard said by Greece itself. All countries need to respect the Pact, including Germany.
After the considerable stimulus packages we have created and after having rescued various Banks from disaster, we must now return to solid budget policies because, if we do not, our common currency, the Euro, will become vulnerable and could cause great damage to us all.
We also touched on several international topics as well, such as the preparation for possible actions against Iran by the Security Council in the event that Iran refuses to accept the offers made some time ago now by the International Community. And, of course, we spoke about the Middle East peace process. I have said that Germany will support Spain as much as we can, which can also be said for the Federal Ministry of Foreign Affairs regarding the whole issue of preparing for the Latin America Summit and the Mediterranean Summit.
Along similar lines, Germany will continue to work on the matter of renewable energies, especially solar power, ahead of the Mediterranean Summit.
We met prior to the Spanish Presidency, we have met again today and I can truly say that Spain and the Federal Republic of Germany agree on many issues and have a great deal in common. So, we thank the Spanish Presidency for its excellent job of coordinating the work undertaken by all Member States of the European Union.
President of the Government. Thank you very much, Chancellor.
I would firstly like to express my satisfaction at being here today in Hannover, my gratitude for Spain having been invited to the leading trade fair in terms of European innovation in Information and Communication Technology, a key sector for the economic future of the entire European Union, and my pleasure at seeing how this invitation has enabled us to validate, to consolidate, our shared vision of the main problems currently faced by the European Union and the priority objectives at this stage for the rotating Presidency and the strongest country in the European Union, the largest country, Germany; something that is always extraordinarily useful.
This meeting also provides the opportunity to build on the excellent bilateral relations that exist between Spain and Germany in economic, political and social areas.
Chancellor Merkel has provided an excellent summary of the fundamental topics we have discussed today.
The central subject for this six-month period, this period in which Spain holds the rotating Presidency, is the 2020 Strategy for exiting the crisis and returning to economic growth, job creation and preparing the European Union to be a more competitive and more innovative economy.
As part of that joint strategy, Europe must make a commitment to productivity, to innovation, to competitiveness, to talent and to research. That means a commitment to telecommunications, a commitment to the digital market, a commitment to efficient energy and to renewable energies, and a commitment to greater economic cooperation within the European Union; a European Union that has rules and guidelines, one of which is a Stability Pact that must be complied with and acts as a fundamental and inseparable rule to what is, and what is represented by, a single currency; to what the single currency policy basically means. We are, of course, fully convinced that the difficulties currently surrounding a country we whole-heartedly support, Greece, can be resolved whilst respecting and within the scope of compliance with the Stability Pact.
Among the most important of the other issues we discussed from the international arena were, basically, the Middle East, Iran and the challenges faced by the dialogue processes in various regions where conflict exists. We placed special emphasis on the projection of the European Union in foreign policy.
The Spanish Foreign Affairs Minister and the German
Foreign Affairs Minister, who are here with us today, have tackled a joint agenda covering highly important issues with a direct influence on how the bilateral Summits scheduled for these six months play out. Due to their significant importance, I will make special mention of the EU-Latin America Summit and the Mediterranean Summit, which are to be held in May and June, respectively, in Spain.
We are glad to see how Germany is very involved in the dialogue and agreement process with Latin America. This is excellent news for Spain, it is excellent news for the European Union and excellent news for Latin America.
Finally, I would like to mention some things that are representative of the relationship between Spain and Germany. The first thing I feel should be highlighted is the fact that Spain is the leading destination for German tourists; ten million Germans regularly enjoy their holidays in Spain. I would like to take this opportunity here to express my gratitude to all those Germans who visit Spain and add that we are currently undergoing a comprehensive modernisation process of our entire tourism infrastructure.
This process is part of the important plan we have recently implemented to modernise the Spanish economy and we are particularly glad to know that the German Foreign Affairs Minister and the German Chancellor are also people who greatly enjoy visiting Spain. Please know that you will always be very welcome in our country.
I must also mention that Germany is the country from which Spain purchases the most goods. Germany is the largest source of Spanish imports. There have been years in which the volume of goods purchased by Spain from Germany has amounted to forty thousand million euros; a very significant amount indeed. Basically, the products that Spanish companies and families most prefer are German products and that is a fact I should stress here today, right now.
It is also true that there is a significant volume of exports that leave Spain for Germany, which is among the leading recipients of Spanish exports in the world, second only to France. This therefore demonstrates the strength of commercial relations between our two countries, but there is also a significant volume of investment. Germany invests almost eighteen thousand million euros in Spain, employing 160,000 people in our country, and Spain invests some eight thousand million euros in Germany, employing, here in Germany, close to 90,000 people at companies with Spanish investment.
Furthermore, we are extremely pleased that Germany is one of the countries where the flagship of our culture, of the Spanish language, can be most prominently seen beyond our borders; I refer, of course, to the Instituto Cervantes. The Instituto Cervantes has five centres in Germany, something that clearly demonstrates the interest held by the German people in Spanish culture and, of course, the interest Spain has in having as great a presence as possible in Germany.
Whenever I have had the opportunity to be in this country during my time as President of the Government, I thank Germany in my public appearances for its efforts in building Europe and for its commitment to the solidarity project that is the European Union, because that project and that solidarity with the European Union has enabled many countries, Spain included, to achieve levels of modernisation, development and prosperity that we could have only dreamed of two or three decades ago.
Therefore, we always encourage Germany to maintain its commitment, its conviction, in favour of that common project that is the European Union.
Thank you, Chancellor, for your collaboration with this Presidency and thank you for this invitation, an invitation that is always greatly welcomed by the Spanish people; the invitation to be here, in your country, even more so on the occasion of a trade fair of such transcendence from an economic perspective for our societies and, or course, for the technology industry. Thank you very much indeed.
Q. I have a question for Chancellor Merkel. Over the past ten years, the German export economy has been the main beneficiary of the structural inequalities that exist between the countries within the Eurozone. Does that situation make you feel that Germany has any particular responsibility to remedy things now that the Euro is going through tough times?
Can I put the same issue of governing body responsibility to the President of the Spanish Government? In 2004, you took over a sick economy from the Partido Popular, from the management of Mr Aznar, didn't you? Why did you not say back then that that the slogan "Spain is OK" was a lie? Did you not know? Did you know but it was too complicated to acknowledge it? Do you regret now not having done so?
Ms Merkel. I am convinced that every country in the Eurozone has greatly benefited from the Euro. Of course, Germany is among those countries, because our export market is mainly the European Union. In fact, not just the Eurozone but the entire European Union. It is actually very interesting to see the high percentage of the single market in the European Union.
However, there is also opinion in Germany that thinks we have had to pay a higher price for the Euro than other countries, perhaps because valuation of the German Mark before the Euro forced Germany to rationalise for many years. But if we look closely at the high rate of increase to real salaries in Germany, of qualified workers in Germany, the price has been very low. We could also take statistics from that and compare them with other countries to see whether Germany has also paid a price but I do not think those comparisons are worth anything.
We opted in to a single currency because it is something positive for everyone. We knew that we would have to comply with certain criteria, hence the Stability and Growth Pact, to enable the proper handling of our finances in the Eurozone.
We have said that we need to better coordinate our economic policies to truly be able to comply properly with the Stability and Growth Pact. In that sense, we are all living through unique times in history, unprecedented in the world, in a single currency zone, and we should feel proud of that.
What do we do now that this currency is having problems? It is very important for those things we call 'the markets', which are right now trying to work against the Euro, to have real confidence in the Euro.
What Germany believes is that, on the one hand, this means we must be aware of the suitability of the Euro but, on the other hand, it means we have to comply with the criteria we ourselves established. For that reason, the Commission, together with Greece and the ECB, with technical help from the IMF, must guarantee that Greece presents a program that is truly able to comply with the criteria we ourselves established.
From there will come respect from the markets and we are, of course, going to accompany Greece along this path. The Greek Prime Minister will be in Germany on Friday and we will be discussing all these issues.
But the job of returning the Euro to a position from which it is seen by the markets as something solid and ensuring we do not again have the debate we are having today is a job that, first and foremost, each country must assume and resolve on its own. That is our position.
This is a very delicate time in Europe and there should be no national debate over who has benefited the most but rather we should all see it as our single currency and that we have all benefited from it.
President of the Government. The question makes me think back to 2004 and I can assure you that is not an easy thing for me. However, what nobody knew, not in 2004, nor 2005, nor 2006, nor 2007, was that in 2008, towards the end of 2008, we were going to experience an economic and financial crisis of such magnitude that would result in the worst economic crisis since the Great Depression of eighty years ago. We now have plenty of illustrious voices that, assuming and debating this crisis, are saying we should have seen the signs. That is not true.
In my work as opposition leader between 2000 and 2004, I made a point of the problem we had with the real estate bubble. It's true that it was a problem and that, what's more, it detracted from our capacity to increase productivity and competitiveness in the economy. It was a problem that could have required corrective policies under normal circumstances.
That was the scenario we were working with in 2005, in 2006 and in 2007 and that is why we passed a Land Act and that is why we changed our real estate financial aid policy. However, logically, what we couldn't have foreseen was to experience the worst economic and financial crisis in such a long time and whose impact on our economic reality has caused a spectacular fall in an over-sized sector, the construction sector.
So, in 2004 there were certain problems for the Spanish economy but problems that would have been surmountable under normal circumstances and which would have simply led to lesser growth. The economic and financial crisis has caused a sudden collapse of the construction sector, a sector that has been a pillar of our growth in the past.
I must say, going beyond the situation in Spain, that the financial and economic crisis has affected all developed countries, affected all over-sized sectors or those with the most difficulties with effects on those sectors that in some cases have manifested themselves, as they have in our country, in an increase in unemployment, a massive increase, and in other countries with the fall of part of their financial sector, which is also a medium-term problem.
Therefore, in 2004 we had certain problems within our economic growth that have become significant problems because there was an economic and financial crisis in 2008 like we have not seen for eighty years.
Under other circumstances, these problems would have been much more easily overcome than they are proving to be today.
Q. Ms Merkel, I understand that you continue rejecting a program of assistance for Greece. Is that true? Does the President of the Spanish Government share this position?
Ms Merkel. I have made it clear that the task consists, and this is why Commissioner Rehn is currently in Greece, of Greece doing what the Greek Government has already announced, in other words, achieve the deficit reduction target of 4 per cent and for this target to be truly achieved. Both the current Prime Minister of Greece, our colleague Mr Papandreu, and I both insist that he is the first in a long time to deal with such a problem.
I insist so strongly because only when the markets make an assessment, when the markets give a good impression of Greece, will the Euro return to more solid ground. I believe that Greece can do this and it is important that the European Commission, the Central European Bank and also the International Monetary Fund, which has plenty of experience in these matters, provide their assessment. This will be important for the markets and will bring us to the opinion that Greece is truly going to return to the coherence of the Eurozone with this highly ambitious program; this will be the best way to minimise the speculation against the Euro.
Q. President Rodríguez Zapatero, a judge from the Spanish Central Criminal Court has discovered signs of cooperation from the Government of Hugo Chávez with the terrorist group ETA. The journalists among us from Madrid would like to know whether you directly have asked for an explanation from Caracas or whether this was done by a member of your Government and whether you have protested, or think of protesting, to Chávez on the issue.
President of the Government. Firstly, we must respect the actions of the Spanish Central Criminal Court and, secondly, I can confirm that the Minister for Foreign Affairs has taken the pertinent steps with the Government of Venezuela for it to provide an explanation in light of the information taken from the actions of the Spanish Central Criminal Court. We are, logically, awaiting that explanation from the Government of Venezuela and, depending on the explanation and the statements made by the Government of Venezuela, the Government of Spain will act accordingly.
Ms Merkel. Thank you.