Steffen Kampeter HARDtalk

situation. They have not yet fully have identified it as a terrorist

attack. It is now time for HARDtalk. Welcome to HARDtalk. Angela Merkel

is a politician caught between a rock and a hard place. In Germany,

a new party accuses her of doing too much to keep alive the hated

Euro currency. Other eurozone members say her government is doing

not enough, fearful of those domestic critics ahead of the

autumn's federal election. HARDtalk speaks to Germany's deputy finance

minister Steffen Kampeter. Just how big a price is Germany prepared to

pay to save the euro project, and Welcome to HARDtalk. How would you

describe the state of the eurozone? De eurozone is more stable than it

has been one year ago. We have the markets calming down, the political

progress to reorganise the shape of the European Monetary Union in a

way that means more stable activities, more supervision is

under way. I am satisfied with what we have achieved but we have to go

on. Yet you would except that fragility remains? Of course. If we

would stop the reforming we have already been achieving and go on a

different course, leaving the fiscal path, it would mean more

uncertainty and more pressure on the European Monetary Affairs and

economic development. We should not do that. The fragility remains but

the political will to keep on his larger. Is that the case? You say

that if you stick with the fist will pop which has been set out,

you will see the benefit of that. Ireland is a prime example of doing

the right thing, he said in March it is our view that the Irish

example shows the way. But last week, Ireland asked for and got a

seven-year extension to repayment of the bailout. But there is

flexibility? Keeping on track does not mean you have to be inflexible.

If the situation changes you have to react. The general tone is that

we need more fiscal consolidation and we need more growth enhancing

politics. There are proposals on the table and people are calling

for the opposite, the European leaders and the European finance

leaders across staying on track. That is what I'm expecting from

them and what I would recommend. Yet your own boss, the finance

minister said originally before this proposal was accepted, more

time equals more money. They got seven years more time. That is more

money. There is a shift going on, it is happening? I would see the

Irish and the Portuguese story as it less or more successful stories.

It was the case that Ireland needed some solidarity and they got it.

Ireland has changed its economic behaviour and fiscal policies and

the general tone of the economic debate. Now it gets the benefits

that they will except the programme. The same I'm expecting from

Portugal, they are re-entering the market and if I look to other

places in Europe like the Spanish case, the spreadsheets for Spain a

lower than I have been one year ago. That is why I say the situation is

improving. It is still fragile but we are on the right direction?

Sydney is fragile. It was found that there were financial

imbalances in 13 member states and they were unbalances for Slovenia

where they were considered excessive. The economic affairs

commissioner said on the same day we have to be aware of these

problems continue to take a toll on our economies. The commission added

the weakness of economic activity and the fragile economic outlook

may have aggravated the risks and the cross country spillover is?

have a challenging economic situation not only within the

eurozone but within the world economy. Nobody is denying that. If

I take a sharp look on the programme countries, rebalancing

has taken place. They have enhanced their competitiveness and reduced

the deficit. This is what we asked them for. This does not mean the

growth path we have for the world economy is satisfying everybody.

This is something which is not related to the euro is a currency

but to the world economy as a whole. Within the eurozone, you have

talked about the countries who have already looked for a bail-out and

got one, what about the other countries, are they doing enough to

ensure the long-term sustainability of the eurozone? As I stated before,

there is much more credibility in the will of the European states to

keep the economic pressure on growth enhancing reform up. If we

see the development over the past 12 months, we have established a

new framework, not only for the economic policy but for the court

nation of economic policies in general. This means that the growth

perspective so will probably get better year by year as we going to

these integrated policies. You will not receive an easy result after a

few months, you will have to keep this -- stable politics. We do not

want a fast movement on the left or right-hand side, just keep on track

and then we will come to better developments? But momentum matters?

Francois Hollande pledged at the time of his election that he would

cut GDP to 3%, now they say, auditors that growth will be below

the average. That seems impossible for France to achieve that? What

should it do? It is not a problem that can be limited to France. If

you look to the economic development in the UK will United

States we have to have a dress with tailor-made programmes and policies

Max's that we have to enhance our growth potential. Forgive me for

interrupting, the reason I ask her about France is that France is in

the eurozone and one of the important economies. You have no

locus for the UK for US, but France to have influence over. Do you

think they should cut more? We are on good speaking terms to the UK

and United States in co-operation and co-ordinating economic policies

as well. That is not just the German and French battle. Every

country must look at its growth potential and do their homework. It

is not the case for Germany to lecture anybody. He say it is not

the case -- other countries have different challenge us. They will

know it is time to act now. I have one to ask you about the German

economy in a moment. And the implications for your export-led

economy which has been hit by what has been happening in the eurozone.

You say it is not a position of Germany to lecture, some people

might say Jimmy does not want to offend France but it is happy to

defend countries on the periphery of the eurozone. The Ku -- the

Cypriot president said his country had been served poison? De eurozone

policies are made by 17 Prior -- finance ministers. They have a

common voice. Sometimes they do not sound that common, but this is not

the German or French or Spanish politics. It is eurozone politics.

They agree you anonymously. It is not just the way Germany does it,

we feel it is the best way to go for the eurozone. You say that, but

the IMF President said in an interview that the reality of is

that the largest country, the leader of the country's calls the

tune. It sets the time and calls the shots. That is the reality in

the eurozone? You are the largest and most powerful economy? You call

the shots? Germany is contributing a very big proportion of solidarity

does not mean we are the only one to run the game. We have co-

operated with her to find a common ground amongst the 70 members of

the eurozone, we are now doing it with the French and the actual

Spanish and the Italian government. It is a misinterpretation that this

chorus has only one voice. It has 17 forces. Germany is aware we are

a strong voice in this course but not the only one. You made us think

you are a strong voice, it is clear that Germany wants to impose its

views on the pupils of southern Europe. The toughest decision was

that for Cyprus according to the Greek Foreign Minister talking on

Greek television at the end of March. It was a ruthless decision

to wreck the finance system of the country which have terrible

consequences. He laid the fault at the door of Germany? It is not a

Germany point of view but that view of the European tax player. We need

some solidity and exchange. This is view. I do not see that there is

one European leader that is addressing his parliament and says,

I invest my people's money in another country and I do not get

anything out of it, including a Let us talk about what Germany gets

out of bed and the state of your economy at the moment. You expect

this to continue in 2013? I would love to have stronger growth in

Germany but at the moment, we have not a very growing world economy.

We have unstable internal demand at the moment and we are a challenge

because some of our partners in the world are not as stable as farce. -

- as us. Germany has to go on and stabilise internal demand and

stabilised the world economy by growing imports. Our import high at

the moment is stabilising the economy is of a partner countries.

The US Treasury Secretary was in Berlin a week ago and hinted that

it would be helpful that if countries to have the capacity

would implement policies to encourage a bit more domestic

consumer demand. We do what we can. Wage bargaining is not a state

activity in Germany. If you look at the latest wage bargaining results,

you see that we had a growing contribution to private demand. If

you look at the West, I do not see a growing deficit spending there. -

- if you look at the US. Everyone is on a different wage. Then no-one

is spending more than they can at the moment. On a question of what

is happening to how all your neighbours affects the German

economy. German exports fell in February but wouldn't it be known

eurozone countries, they grew. The concern ought to be for your

country that in a sense, the policies that you are driving in

those parts of the eurozone that are struggling are actually hurting

your own country. It is not like you describe it. We are not

intending to hurt anybody. Our economic model is based on

innovation and competitiveness. We are delivering goods and services

all over the world. If we have good economic circumstances, our

companies are going quite well. In the emerging countries, the

economic development is positive. If we have slow-growth within the

EU, we cannot export as much as we would like. This has nothing to do

-- this is nothing that we're trying to tease or penalise anyone.

based economy but we are competing with other countries and we are

doing quite well. It is doubling to blame us for. It is not a question

of blame at but a question of saying that is there not some

enlightened self-interest for Germany in encouraging growth in

the neighbouring countries rather than pursuing, so relentlessly, the

theme of austerity? A day to see a contradiction between the

consolidation path and the growth path. You cannot buy growth.

Disillusion has led to the state crisis which we are facing at the

moment. What we do at the moment is regain trust that growth by fiscal

consolidation and on the supply side, we have to do labour-market

reforms, open markets for Trade, try to stabilise the supply-side

potential. I do not see the alternative on the one hand of

ideological concepts of austerity and on the other of Britain have

images. The German. Did you eat much more pragmatic to consolidate

and to invest in growth. Some observers wonder where you could

narrow the gap in the eurozone by the introduction of euro bonds. But

the debt of any individual are underpinned the surpluses of any

other member country. There is that people promise that if they hit

trouble, they will be redeemed. Let me put what non blogger said a few

weeks ago. He said that the danger of default would disappear as

wooden bricks premiums. Bank balance sheets would receive a

boost as we have here in debt and budgets. They would not rule in

Germany's credit-rating but rather compare favourably with the bonds

of the West, the UK, and Japan. -- of the US. I don't know whether a

speculator is a good adviser for economic policies. The focus should

be for the pound which was damaged by the activities... This is not to

be played out in his interview. I would keep the focus that the

interest rates increase were too low to keep pressure on economic

reform. The concept of Euro bonds is taking interest rates will and

Apology for the loss of subtitles for 331 seconds

without conditionality. This is the Whether we are challenged by a new

party does not change our position. We are always challenging democracy.

This is nothing new. Left wing of centre-right competitors. What

about the challenge outside of Germany?? E said at the start of

the interview that things have calmed down but there was a hiatus.

The markets know that you cannot change policy until you're safely

re-elected. Once you are safely re- elected, they will be able to

challenge? We will not change our goals. If you see the majorities,

Angela Merkel always gets for European politics, it shows that we

have and 80% to 90% approval rating in the German parliament. It is

mostly beyond 90%. What about the market's? With in any election,

there will be no change in politics. What about the market's? Will they

tolerate that? The markets have calmed down. I see no policy change.