SPIEGEL Interview with Chancellor Angela Merkel 'The Crisis Has Deeply Shaken Us'

In a SPIEGEL interview, German Chancellor Angela Merkel, 56, discusses the recent controversial deal she struck with French President Nicolas Sarkozy on the euro, disputes within her coalition government in Berlin and her country's contentious immigration and integration debate.

SPIEGEL: Madame Chancellor, after forming a coalition with you, the Social Democratic Party (SPD) slipped to 23 percent of the vote. Now the black-yellow coalition between your party, the conservative Christian Democratic Union (CDU), the Christian Social Union (CSU) and the business-friendly Free Democratic Party (FDP) has been governing for one year. The FDP is down to 5 percent in the polls. How do you always manage to cut your coalition partners down to size?

Merkel: This is a non-issue for me. For the past year now, we have been working in a coalition of the CDU and the FDP, and we are now in a phase in which important decisions are being made, which are, of course, also contentious. Now is not the time to focus on surveys, but rather on decisions.

SPIEGEL: Polls don't interest you at all?

Merkel: I acknowledge them, but they do not determine my actions.

SPIEGEL: Your party, the CDU, is at 30 percent in the polls. What has gone wrong?

Merkel: In the beginning, we were unable to adequately convey the meaning and purpose of certain decisions. But those days are over: We are now focusing on setting an agenda that will, at first, not please some segments of the population. But once people see the impact and the successes, we will win them over. Politics is not about constantly putting your finger to the wind, but rather following through with your convictions.

SPIEGEL: Politics in times of your black-yellow coalition is primarily about in-fighting. The summer of blissful political harmony was extremely short-lived; after a short break, the coalition is squabbling again. Why can't you manage to create a long-term congenial coalition climate?

Merkel: We have a congenial climate in the coalition that is, as a rule, characterized by very, very good personal relationships. Nonetheless, situations are bound to arise from time to time in which differing viewpoints emerge.

SPIEGEL: That is a nice euphemism for conflict.

Merkel: It is a shame that in the language of journalists there are no longer any nuances between conflict and harmony. The German language is actually more expressive than that.

SPIEGEL: This past summer, Bavarian Governor Horst Seehofer of the Christian Social Union (CSU), the sister party to the CDU, vowed that he would treat you in a congenial manner in the future. Now he is casting doubt upon raising the minimum retirement age to 67, which is a key tenet of your platform. Do you feel that he has let you down?

Merkel: Legislation raising the retirement age to 67 has been passed into law and will be implemented. It will not be fully effective until the year 2029, however. Horst Seehofer has pointed out that we have to combine the gradual introduction of this legislation with better opportunities for older employees to remain gainfully employed. That is how I see it as well. Furthermore, the past few years have very clearly shown that there is a significant increase in the number of older individuals in the workforce. So things are moving in the right direction.

SPIEGEL: Now your coalition partner the FDP is also rebelling and accusing you of betraying the stability of the euro. It was, in fact, not particularly congenial of you not to consult with German Vice Chancellor and Foreign Minister Guido Westerwelle on your strategy for the negotiations with French President Nicolas Sarkozy. Why did you bypass Westerwelle on this issue?

Merkel: In Deauville, President Sarkozy and I spoke primarily about what will happen when the euro bailout package expires in 2013. For quite some time now, we have been in agreement within the coalition that we need amendments to European Union treaties in order to create a new and markedly improved crisis management mechanism -- one that also includes private creditors, like banks, for instance. We don't want to see the member states, in other words, the taxpayers, have to foot the bill again. So it was a major success to persuade the French to open up to such a treaty reform. And this agreement is fully in line with the coalition's objectives.

SPIEGEL: Nevertheless, it was a solo effort. You did not bring your foreign minister on board.

Merkel: He was also on board.

SPIEGEL: He sees that differently.

Merkel: We are all in the same boat.

SPIEGEL: How did you bring him on board?

Merkel: We discuss our approach together on a regular basis.

SPIEGEL: Did you discuss with him that you would offer Sarkozy the option of waiving an automatic mechanism for sanctions against countries that exceed the allowed limit for budget deficits?

Merkel: The process that we are now considering calls for considerably more stringent sanctions than what we currently have, and this would involve an automatic mechanism. The French president and I were totally in agreement on this point. The details were mutually agreed upon by the finance ministers.

SPIEGEL: Is one of the lessons from the Greek financial crisis that Europe needs an economic government?

Merkel: We need instruments that prevent such a situation from occurring. We need to learn to observe countries at an early stage so that, based on a range of indicators, we can assess their actual level of competitiveness. We have to find ways to harmonize the competitiveness among European countries -- and this should not be done by simply targeting the average or gearing ourselves to the slowest. Instead, we should always learn from the best. In this sense, we are working as an economic government.

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