SPIEGEL Interview with Finance Minister Schäuble 'Germany Does Not Want to Rule Europe'
Part 2: 'We Cannot Solve Italy's Problems in Germany'
Schäuble: Italy has to do its homework! Italy has to convince the markets that it is willing and determined to rapidly tackle and implement the necessary reforms. The rescue fund doesn't come into question for Italy. The Italian government is also aware of this -- and Italy can rise to the occasion.
SPIEGEL: In other words, rescuing the euro depends on the Italian government doing what is needed?
Schäuble: Rescuing the euro depends on everyone in Europe assuming their responsibilities. This means that we help each other. But it also means that European assistance is there to help countries help themselves. We cannot solve Italy's problems in Germany -- they have to be solved in Italy. But I think you will agree that the crisis throughout Europe has helped raise awareness of the need for a culture of stability.
SPIEGEL: What does Rome have to do?
Schäuble: It has to do what the Italian government has promised its European partners: that it will rapidly and significantly reduce the budget deficit, bring down its debt and strengthen growth in the Italian economy. Italy requires structural reforms on the labor market and in its social security systems. European governments have strongly encouraged their colleagues in Italy to take this path.
SPIEGEL: Do you think they've gotten the message?
Schäuble: Italy has declared its willingness to introduce reforms. Now, they have to be implemented. This is crucial. Announcements alone do not help.
SPIEGEL: What will happen if Italy doesn't keep its promises?
Schäuble: Then the markets will react accordingly. Italy has huge financing needs. So it stands to reason that the country has a vested interest in keeping its interest burden at an acceptable level. To achieve this it needs to implement the reforms. Deeds are what makes Europe work -- not the fact that we all assure each other that we are good people.
SPIEGEL: Perhaps the government in Rome is counting on the fact that, if push comes to shove, the European Central Bank (ECB) will buy its sovereign bonds.
Schäuble: The independent role of the ECB has been clearly defined in the treaties. This is precisely why in their summit communiqué the heads of governments reaffirmed that they are familiar with the treaties.
SPIEGEL: In Italy, such references coming from both you and Chancellor Angela Merkel are often seen as being akin to a Teutonic dictate. Are you not afraid that the rest of Europe will begin to resent Germany?
Schäuble: No. If I am correctly informed, the same references are coming from France's outgoing president of the European Central Bank, Jean-Claude Trichet, European Commission President José Manuel Barroso, who is Portuguese, and European Council President Herman Van Rompuy, who comes from Belgium.
SPIEGEL: But you cannot deny that the decisions of the past week have unmistakably German traits.
Schäuble: It is, of course, gratifying when even SPIEGEL occasionally acknowledges that the German government is doing a good job...
SPIEGEL: ...you're welcome...
Schäuble: ...but we will get nowhere in Europe if we conduct this debate according to national points of view. It is an undisputed fact that high government debt is the main cause of the crisis. So the response to the crisis cannot be that of further increasing the debt level. The response to the crisis can only be that of enhancing stability policies.
SPIEGEL: That sounds about as German as it gets. Is Germany on its way to becoming a hegemonic power in Europe?
Schäuble: Nonsense! The success of European unity is of existential interest to the Germans. What is good for Europe is good for Germany. Europe cannot be constructed according to the principle of hegemony. We of course don't want to rule Europe -- that is just nonsense. As the largest member state, however, we are regularly expected to take a leading role in close cooperation with France. After all, challenging issues can often only be resolved if Germany and France act in concert.
SPIEGEL: One of these issues involves shaping the future economic government that is planned for the euro group. What do you have in mind?
Schäuble: We have had until now a common monetary policy in the euro zone, but no joint fiscal policy. That is the problem, and we have to gradually change that. On a European level we need more commitment and enforceability. To achieve this we will have to adapt the European treaties to a certain extent.
SPIEGEL: Does the euro zone need a finance minister, as outgoing ECB President Trichet has suggested?
Schäuble: No. I tend here to subscribe to the ideas of European Commission President Barroso. In the future, the monetary affairs commissioner should have a position that corresponds to that of the commissioner for competition. According to this scenario, the monetary commissioner would monitor whether the finance policy regulations for the euro-zone members are actually respected. If there are violations, he should be able to impose sanctions unilaterally -- and do so without a majority of the Commission being able to veto his decision. At the same time, the European Court of Justice should be allowed to proceed against budget offenders.
SPIEGEL: Some euro-zone members take a rather skeptical view of the German-French axis. Can you confirm that?
Schäuble: Not at all. Joint signals from Berlin and Paris are often precisely what Europe is expecting. Sometimes even I find that somewhat exaggerated.
SPIEGEL: Can you give us an example?
Schäuble: At some sessions of the Council of Ministers, I ask myself why I am always expected to speak first. The others could start for a change, particularly as my English accent is not the best in the world.
SPIEGEL: You reportedly feel more at home with French.
Schäuble: That perhaps has to do with the fact that my home region of Baden is close to the French border. But seriously, as the largest economy on the continent, Germany has a special responsibility to ensure that we in Europe achieve joint results.
SPIEGEL: Mr. Schäuble, thank you for this interview.
Interview conducted by Christian Reiermann and Michael Sauga
Translated from the German by Paul Cohen
- Part 1: 'Germany Does Not Want to Rule Europe'
- Part 2: 'We Cannot Solve Italy's Problems in Germany'