Did Germany lose out at the European summit last Thursday and Friday?

The whole of Europe gains if we put the debt crisis behind us once and for all. But this is not something that can be achieved overnight. We’re making progress. With perseverance, we’ll get there in the end. Sound budget management, growth based on competitiveness, solidarity with our partners: that’s our strategy. The Compact for Growth and Jobs that’s now been agreed will mobilize European funds for future-oriented investment. We’ll give particular priority to tackling youth unemployment. Growth can’t be bought by piling up new debt, it must to be earned by reforms that enhance competitiveness.

Does this summit in your view signify the emergence of a new balance of power in Europe? Do you see the Franco-German engine moving towards a system in which Italy or also Spain will play a more prominent role?

Italy has played a prominent role from the start. After all, it was a founding member of the European Communities. The only way out of the debt crisis is for us Europeans to work together. Only by working together can we take European integration forward. Close Franco-German partnership has always been a driving force for European integration. And that’s how it will remain. Yet there’s nothing exclusive about it. Cooperating on equal terms is something Germany views as very important. We need strong and viable partners with successful reform programmes. That’s the way to overcome the crisis. We see Italy definitely in the vanguard here.

Are the summit decisions final or will Germany try to renegotiate them when the Eurogroup meets on Monday?

What’s been agreed in the European Union, stands. It’s vital, however, for our citizens and the markets to regain confidence in Europe’s capacity to act. We believe it’s very important for political as well as constitutional reasons that not only governments but also national parliaments – which in Germany means the Bundestag – are fully involved in all decisions on further steps to overcome the debt crisis.

Has the relationship between Chancellor Angela Merkel and Mario Monti, Italy’s Prime Minister, been affected by Monti’s threatened veto at the Summit if nothing concrete was done about the high interest rates on Italian bonds? Is this likely to influence or have an adverse effect on their relationship?

The immense importance the German and the Italian Government both attach to their bilateral relations is clearly underlined by the German-Italian consultations taking place today in Rome. The Federal Chancellor and several ministers are in Rome to discuss with their Italian counterparts the whole spectrum of our close bilateral relations. We hold intergovernmental consultations of this kind only with our closest partners.

In recent months contacts between both Governments seem to have intensified. What political projects could Germany and Italy drive forward together in Europe?

I see considerable potential for joint action. Overcoming the debt crisis is of course the first priority. As Foreign Minister, however, I’m also thinking here of the Common Foreign and Security Policy. In today’s multipolar world the European countries have to join forces. That’s the only way they can pursue their interests and uphold their values effectively in the concert of new global players. In tackling other global challenges, too – ecologically sound and affordable energy, environmental protection, the fight against climate change – Italy is one of our key partners.

We need to reflect together on what the Europe of the future should look like. I firmly believe the situation we have now calls for “more Europe”. And I know our Italian colleagues take the same view. That’s why we’re working with my Italian opposite number Giulio Terzi in our Future of Europe Group on practical suggestions for how Europe might evolve over the years ahead.

Will Italy be able to overcome its economic problems on its own or will it need outside assistance?

Italy’s a large country with a diversified, modern and competitive industrial sector. It has tremendous economic assets which will stand it in good stead. Here I’m thinking particularly of its many creative and highly specialized small and medium-sized enterprises.

In a globalized world competition is of course the name of the game. Our competitors are no longer confined to our own neighbourhood, they’re located all over the world. That’s why reform is a never-ending task, in Germany, in Italy and throughout the EU. If we’re bold and determined about putting our house in order, making the employment market more flexible, rigorously reducing bureaucracy and modernizing our social systems, we can once again become one of the most competitive regions in the world.

Reforms may be painful, but they truly pay off. This is something of which we Germans have first-hand experience. Ten years ago, Germany was still considered “the sick man of Europe”. But then we embarked – in the face of fierce opposition – on a programme of radical reform. Today Germany is once again one of the most competitive economies in the world. Unemployment is lower than it’s been for a generation.

Is Germany willing to give Greece two more years to implement the planned reforms?

It’s good that after two general elections there’s now a new government in Athens with a stable majority. What Greece agreed with the Troika and the European Union obviously still stands. In terms of implementing reforms, the election campaigns clearly cost valuable time. So I’m pleased the Troika is now going to Athens and will have talks there with the Greek Government. It will then report back on how the reforms are progressing. How we go forward will depend on the Troika’s findings. One thing is clear: the jointly set and agreed targets are not up for discussion.

What needs to happen for Germany to agree to the so-called eurobonds? When could they be introduced? Would that require changes to the Basic Law?

The mutualization of debt in Europe would be a fundamental mistake, a mistake which would jeopardize the European idea as such. So for Germany this can’t be a goal, not even a long-term goal. A lack of solidarity is a threat to Europe – but too much solidarity is no less of a threat. There’s a limit to what the German economy and German taxpayers can cope with. Asking too much of Germany is just as unhelpful as too low expectations regarding our partners’ capacity for reform.

Germany’s exporters fear they may be put at a disadvantage by Germany’s tough stand on the EU debt crisis. They complain that their partners are increasingly reluctant to do business with them. Half Europe celebrates when Germany loses to Italy in the European Football Championship. Are you worried about Germany’s image in Europe getting tarnished What can the German Government do to improve this image?
In these difficult times I’m rather concerned to see a number of prejudices and negative stereotypes resurfacing – in all quarters, I may say. This is something we must adamantly oppose. Everyone in positions of responsibility should lead by example here. We need to drive home the message to people all over Europe: Europe is our common destiny, politically, economically and culturally. As Europeans, we belong together, we have a common future. And if I may add in all modesty, the solidarity Germany has demonstrated in Europe over these past months has been exemplary. We have taken on liabilities equal to the German Government’s entire budget for a whole year.

The interview was originally published in Italian.