SPIEGEL: Chancellor Merkel, the US magazine Forbes has named you the world's most powerful woman for the third time in a row. When was the last time you felt powerless?
Merkel: That isn't a feeling I normally have, even though I can't always achieve what's important to me right away, of course. I have to be patient and convince others to go along with me. This applies to both domestic politics and international affairs.
SPIEGEL: Has the German chancellor's power grown as a result of the euro crisis?
Merkel: It's hard for me to say, because we all work within our own context. In any event, the German government's policies are attracting a great deal of international attention. Measures have been approved in recent years that in the past I would have thought were unlikely. For example, after the ratification of the European Union's Treaty of Lisbon in 2009, many believed that European development, at least with regard to major changes to treaties, was finished for the time being. Then came the sovereign debt crisis and we, for example, were forced to introduce a fiscal agreement, or the European Stability Mechanism, which can be used to help crisis-ridden countries, provided they commit themselves to a restructuring plan. This shows that Europe is capable of change and reform, perhaps more than we would have given ourselves credit for.
SPIEGEL: You just had a visit from Chinese Prime Minister Li Keqiang. Who has more power at home, he or you?
Merkel: In our meetings, we discuss issues that are important for both of our countries, like the condition of the euro or the situation in the South China Sea. Of course, I try to put myself in the shoes of the person I'm meeting with, and if we are sitting across from each other, people expect us to be able to get things done in our respective countries.
SPIEGEL: The mixture of one-party rule and capitalism seems to work very well in China. Nevertheless, will the Western model, the combination of market economy and constitutional democracy, ever stand a chance in such countries?
Merkel: Human rights are indivisible. Human dignity isn't just important in Germany, but everywhere in the world. I'm convinced that the rule of law, democracy and freedom will be unstoppable everywhere in the long run.
SPIEGEL: Does that mean that countries like China will come to resemble Europe more than the other way around?
Merkel: Human rights are indivisible. Aside from that, it's important for Germans and Europeans to recognize that China is going to great lengths to become prosperous, as well. If, in doing so, it behaves fairly in relation to global competitors, we have no right to stand in its way. Instead, we have to make sure that we keep up with this dynamic economic development and take advantage of our opportunities in connection with the country's rise to prominence. At the same time, I'm under the impression that the Chinese leadership is certainly aware that the population expects greater respect for the rule of law, more efforts to fight corruption, more environmental protection and more freedom.
SPIEGEL: Are Western democracies too slow to keep up with radical global changes?
Merkel: Speed is important, but it isn't everything. Democracy remains superior, partly because built-in checks and balances make it less prone to failure in the long term. But it is true that we need to speed up the pace of our decisions in a global financial crisis. I, for example, have turned my attention once again to the law that regulates the recognition of foreign professional qualifications. It took decades to get this sort of legislation up and running, and only this administration managed to succeed. Did it have to take so long? I don't think so.
SPIEGEL: How far has Europe already fallen behind in terms of global competition?
Merkel: We are among the most developed regions of the world. We are so developed that we don't have to emphasize quantitative growth alone but can also focus on qualitative growth. At the same time, Europe is not consistently on top when it comes to research and development, because some countries haven't invested sufficiently in this area. In some areas Europe is very pro-regulation or, put differently, too bureaucratic. Those who make up just 7 percent of the world's population and generate 20 to 25 percent of global economic output, while at the same time providing just under half of the social benefits in the world, must explain how this can be paid for in the long term.
SPIEGEL: And how is this supposed to work with an aging population?
Merkel: It can also succeed with an aging population. A person who is 70 today is like a 60-year-old 25 years ago. Aging alone is not a reason for a society to stop being innovative. Fortunately attitudes toward aging are changing. Staying active and life-long learning are becoming increasingly important. Many old people have a great deal of experience to contribute. This was not sufficiently taken into account when early retirement programs came into effect in Germany. Because we want to maintain our standard of living, we decided to extend the retirement age to 67, so that people can work longer than in the past. Many can and want to do so.
SPIEGEL: As chancellor, do you also feel responsible for countries like Spain and Portugal?
Merkel: We are all connected to one another, because for us in Germany, much depends on what happens in Portugal, Greece, Spain and other countries. We are all in the same boat. No European country can be strong in the long term if others are not doing well.
SPIEGEL: There is a curious circumstance by which you are very popular here in Germany but a controversial figure in other parts of Europe. Do you pay too much attention to German interests and too little to European neighbors?
Merkel: As the German chancellor, I always want to best for Germany and for Europe because I am profoundly convinced that Europe's prosperity in 20 years depends on how we set the course today. If we do not view ourselves and our strengths and weaknesses in a global context, if we forget or ignore how hard countries in Asia or South America are working to become more competitive, Europe will fall behind globally. We have to have this discussion, even if it is controversial at times.
SPIEGEL: How long can Brussels continue to impose austerity on countries like Spain and Greece, a policy that the majority in those countries does not support?
Merkel: Democratically elected governments are our partners in all of these countries. My Greek, Spanish and Portuguese counterparts are all democratically authorized to pursue their courageous and arduous course of reforms. In politics, we are repeatedly forced to make decisions that are not popular at first. Take, for example, the retirement age of 67, which we've already addressed. It still has little support in the polls, even if it remains unavoidable.
SPIEGEL: Once again, what makes you so confident that the countries in Southern Europe will subject themselves to your austerity mandate in the long run?
Merkel: Many people in these countries know that years of undesirable developments led to these problems, and that this is why something has to change. At the same time, I know all too well that the necessary reforms demand a great deal of them. Many often justifiably raise the question of fairness, and whether too much is being asked of ordinary working people while the more affluent seem to be getting off lightly. In many countries, for example, labor laws for young people have been made very flexible, which means that when a company runs into difficulties, they are the first ones to lose their jobs. There is also a fierce debate over fairness when it comes to older workers, although in their case we cannot forget the reasons for the difficulties.
SPIEGEL: Youth unemployment in Southern Europe is above 50 percent in some cases. The austerity policies you have imposed are having disastrous consequences.
Merkel: Budget consolidation and reform mandates were negotiated with the governments of these countries and are offset by the solidarity that these countries are getting from Europe and, therefore, from us. Youth unemployment was already high before the crisis in some of the hardest-hit countries. The German government intends to do its part to ease the situation in that, for example, we are planning a loan program for countries in Southern Europe, funded through the government-owned KfW Bank.
SPIEGEL: A common accusation against you is that you lack a grand scheme for Europe's future. Some say that you don't have such a plan because you pursue a policy of small steps. Others say that you most certainly do have this grand scheme, but that you chose not to reveal it because it would provoke unnecessary resistance. Who is right?
Merkel: I really do believe that it is reasonable and promising for us to work our way out of this crisis step by step, because the one overarching solution doesn't exist. But, of course, you can only take these steps if you have an idea of the direction you are taking.
Merkel Addresses the Euro Hawk Scandal and Arms Exports
SPIEGEL: Then let's examine your plan. Should the European Commission become a sort of European government?
Merkel: In some areas, such as agricultural policy, the national governments are already hardly capable of making decisions on their own today. At this point, I see no need to transfer even more rights to the Commission in Brussels in the coming years. Instead, French President François Hollande and I want to see improved coordination in the areas of policy that are critical to strengthening our competitiveness. We are referring, for example, to labor market and pension policy, as well as to fiscal and social policy. Economic coordination in Europe is far too weak and has to be strengthened, which is not the same thing as giving more authority to Brussels.
SPIEGEL: Are you in favor of having the president of the European Commission elected directly by the people?
Merkel: I'm cautious in this regard, even though I know that the Christian Democratic Union (CDU) adopted a resolution to that effect at its convention. A Commission president elected directly by the people would have to be provided with a completely different level of power than is the case today. This, in turn, would throw the entire structure of the EU out of balance. The European Parliament and the European Council should be jointly responsible for the election of the president.
SPIEGEL: That's already the case today. Why shouldn't the parliament decide on its own who should lead the Commission? Because it would deprive you of power?
Merkel: It's true that this is already the case today, and I don't want to change that, either. I believe that it is beneficial to the balance among all institutions for the heads of state and government to play a role in this decision, as well.
SPIEGEL: If we take democracy seriously, we ought to say: the sovereign decides. And the sovereign is the parliament.
Merkel: Because I want the Commission president to be given a coordinating function over the policies of the national governments, I think it's essential that the national heads of state and government have a voice in his or her appointment.
SPIEGEL: But that's precisely where the democracy deficit in the EU lies. Citizens are supposed to do their part and participate in the European elections, but in the end the parliament doesn't even have the power to decide whom to appoint to head the Commission.
Merkel: You greatly underestimate the European Parliament. It has considerable power, as we are now witnessing in the debate over the EU's financial framework for the coming years. A proposal by the Council is needed, but so is the parliament's approval. At some point, it might make sense to give the parliament the authority to introduce bills, but right now I don't think it's a good idea for us to spend our time on theoretical discussions about what the European structures will look like in 10 or 15 years. The citizens of Europe and me face far more pressing issues. These include which products and services we intend to produce as our contribution to world growth, how we want to earn our money in the future, how we can simplify the process of starting a company, thereby generating jobs, and how we can ensure that all countries -- as was in fact agreed upon 10 years ago -- will finally spend 3 percent of their gross domestic product on research, and much more. Once we have answered these questions, we will also learn how the EU institutions work most effectively.
SPIEGEL: But the frustration over a non-transparent EU is also affecting you. A party like the new euro-skeptic Alternative for Germany (AfD) wouldn't exist if people were satisfied with the EU.
Merkel: There are many parties in Germany, founded for the most varied of reasons and with a wide range of goals. The Pirate Party is an example we've witnessed in this legislative period, and the Green Party is one we've seen in the past.
SPIEGEL: That sounds as if you were taking the AfD very seriously.
Merkel: I devote my efforts to making the right decisions for our country, and it's been my experienced that this is what convinces people.
SPIEGEL: Will the Bundeswehr become part of a European armed force one day?
Merkel: Our armed forces are controlled by the parliament. The parliamentary restriction lends stability to our decisions, but it also requires different decision-making processes than in other European countries.
SPIEGEL: So a joint armed force is unlikely?
Merkel: That's right, because completely different issues will be at stake in the foreseeable future. Partly because of limited financial means, we will have to cooperate a lot more militarily. We have to dovetail NATO and the European security and defense policy more effectively and achieve a true division of labor on issues of defense, but that too will not be easy, because, of course, the defense industries in the individual countries are competitors.
SPIEGEL: If you are asked at a party gathering why your administration is wasting more than half a billion euros on the Euro Hawk surveillance drone, which apparently doesn't work, how do you respond?
Merkel: The defense minister has announced that he plans to submit an extensive report this week on the project since it began more than 10 years ago. I won't anticipate that report. We have already seen, with some defense projects as well as major civil projects, that timetables and cost estimates are evaluated differently at the end than at the beginning. In general, we have to improve the ability to plan major projects.
SPIEGEL: It wasn't just that the Euro Hawk turned out to be more expensive than planned, though. In the end, it emerged that it was completely unusable.
Merkel: I'm not going to anticipate the defense minister's report.
SPIEGEL: Are you pleased with Thomas de Maizière's management of the crisis?
Merkel: Thomas de Maizière is taking the time necessary to provide the Bundestag with the most comprehensive summary of the situation possible. Besides, it won't be much longer before he submits his report.
SPIEGEL: The most controversial part of your foreign policy is the delivery of weapons to countries like Saudi Arabia and Qatar. Why are Arab potentates getting German tanks?
Merkel: When it comes to export licenses for weapons, we adhere to precisely the same principles that guided early German administrations, and they too approved shipments to Arab countries. Of course, we have always known that most of these countries are not democracies, but we also know that they are important partners for Germany and the EU on a large number of regional and international issues, such as the fight against international terrorism. We always evaluate these issues on a case-by-case basis and consider all aspects. In addition, we have a commitment to a few countries…
SPIEGEL: …to supply weapons?
Merkel: We have a commitment to provide some countries and regions, in Africa, for example, with training missions so that they will be able to assume responsibility to cope with potential conflicts on their own. This also includes the discussion of arms issues.
SPIEGEL: You seem to have a clean conscience on this issue. Why then do you make these decisions behind closed doors, in the secret Federal Security Council? Why don't you provide more transparency?
Merkel: There are good reasons for our long-standing policy of meeting secretly in the Federal Security Council, especially in terms of our foreign policy as it relates to our partners. Moreover, before we reach a final decision, we have to account for the understandable business interests of the companies involved. We cannot publicize every inquiry before a final decision has been reached. To establish the necessary transparency nonetheless, it has been a tradition for decades to present a detailed arms export report to the parliament and then to the public once a year. Many now feel that once a year isn't enough, and that such information should be presented earlier and more often. In the next legislative period, I am willing to discuss whether final decisions should be published shortly after they have been reached. Besides, when lawmakers submit inquiries on these matters, we already inform them directly about final decisions by responding to their questions.
SPIEGEL: Your foreign minister has proposed the creation of a secret committee in the Bundestag that would then have to be informed in a timely manner.
Merkel: At the moment, this type of information is provided without a secret committee. But as I mentioned, in the next legislative period I will be willing to discuss the possibility of reporting on arms exports more frequently than once a year in the future, while at the same time continuing to make allowances for matters of foreign policy as well as the concerns of companies.
SPIEGEL: Chancellor Merkel, thank you for this interview.