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Obama, Merkel Hold a Press Conference

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Friday, April 3, 2009; 1:34 PM

GERMAN CHANCELLOR ANGELA MERKEL: [As translated] (JOINED IN PROGRESS) the front of the building. This time, I welcome him to the south of Germany on the occasion of the 60th anniversary of NATO.

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And this is actually the first time that you visit the United States -- oh, sorry -- I mean, the Federal Republic of Germany, we're very pleased, very pleased, indeed, to be able to meet on this anniversary of NATO and to find a new format for this alliance.

In our talks, we were saying, again, that we have long traditional ties of friendship that join our two countries. I'm certainly sure that we will be able to continue that over the next few years to come.

We have actually talked about the whole broad area of conflicts issues that we need to contend with. We look back on London, which we considered both to be a very successful meeting.

The world has shown that it is willing to cooperate. Last, but not least, it was also a successful meeting because, clearly, the United States has shown that they are willing to cooperate, to show that spirit of cooperation.

I think that this is a common task indeed for us to shape also this alliance in this cooperative spirit, because this string in this trans-Atlantic relationship is also one that helps us to overcome the current financial and economic crisis.

The Federal Republic of Germany wants to give its contribution to overcoming international problems. We were dealing today with relations between Russia and the United States, how we can shape this future relationship between Europe and Russia and the United States.

We will have the upcoming summit in Prague between the European Union and the United States.

We will also, we think, on the bilateral (inaudible) be able to lend a contribution to solving the problems of Afghanistan. This is a big, a huge responsibility for all of us. We want to bear our burden of responsibility.

We want to do something in order to train the Afghan national forces, but also the police in Afghanistan.

We want to shape relations with Iran in such a way that a nuclear rearmament is simply made not possible, but that, at the same time, we make it possible for the Iranian people to have a hopeful and prosperous future.

We are very gratified to know that the United States wants to have a fresh beginning, a fresh start in this relationship.

We also talked about the Middle East, where the peace process will have to be pursued in the (inaudible) and in the direction of a two-state solution.

I think there is, indeed, a broad array of issues that we need to contend with. The Federal Republic of Germany stands ready to give its contribution towards solving them. And we would like to bid you a very warm welcome, indeed. I think you've seen that the press actually was showing a great deal of welcome to you, and you saw the people along the way who were waiting for you for many hours, with their little flags waving, and we're pleased to have you.

Welcome. We hope to welcome you again soon.

PRESIDENT BARACK OBAMA: Thank you so much.

It is wonderful to be here in Germany. And I want to thank Chancellor Merkel for her leadership, her friendship, and to say to all the Germany people that we are grateful to have such an extraordinary ally, and I think I speak on behalf of the American people that we consider the relationship between the United States and Germany to be one of our most important relationships.

And I have been spending quite a bit of time lately with Chancellor Merkel and continue to be impressed with her wisdom and leadership and diligence in pursuing the interests of her people.

Over the last several days, what we've been grappling with is an economic crisis that is unlike anything we've seen since the '30s.

And just a stark reminder for those of us in the United States, our jobs report came out today and it showed that we had lost 663,000 jobs just this month, which has pushed our unemployment rate to 8.5 percent, the highest in 25 years, and we've lost 5.1 million jobs since this financial crisis and recession began.

So, obviously, this is hitting the United States hard, but I think what we discussed and the reason we acted swiftly and boldly in London was the fact that none of us can isolate ourselves from a global market; that the economies now are so interdependent.

Capital flows across borders occur in the blink of an eye and, as a consequence, if we do not have concerted action, then we will have collective failure.

I'm very proud of the work that was done in London. I think the fact that we have a regulatory framework that can prevent this crisis from happening again, the fact that we have taken, collectively, steps to not only encourage growth, but also to make sure that we're helping emerging markets and poor countries deal with the consequences of this financial crisis, none of those things alone guarantee immediate recovery, but they are necessary foundations for recovery.

And because we committed to meeting again in the fall, it allows us to review what we've done and if what we've done is not sufficient and we continue to see a deterioration in the situation, then we're going to go back at it and keep on doing so until we get it right.

As Chancellor Merkel mentioned, the economy is just one of our challenges and as we celebrate this important landmark for NATO, we are reminded that not only do we have immediate joint efforts in Afghanistan that have to be bolstered and have to become more effective, but we also have to have a strategic framework for how NATO moves forward.

This has been the most successful alliance in modern history, an alliance that was so effective that we never had to fight, and that kind of vision that was implemented, that kind of imagination, has to be adapted to the 21st century challenges that we face.

Not just Afghanistan, but there are a whole host of other hotspots and challenges and we've got to figure out what is NATO's role in that, what is the partnership between the United States and the European Union's role in that, whether it's issues of climate change or poverty or trying to bring about peace in regions that have known conflict for a very long time.

In all of these areas, cooperation is going to be critical and leadership from our two countries is going to be critical.

So I'm very pleased to have a partner in Chancellor Merkel in these efforts and I am confident that moving forward, that we are going to be able to make slow and steady progress to advance the cause of peace and prosperity.

With that, why don't we take some questions?

MERKEL: [As translated] Well, maybe we ought to start with the German side.

QUESTION: (OFF-MIKE) here in the streets of Baden-Baden by the people. But there is also fear and anxiety in Germany about what the future might bring.

Your administration is calling for a fundamental reform of NATO or perhaps, in your words, change. But what, Mr. President, is your personal grand design for the new NATO? Will it be the policemen of the world, the global one?

Should Germany shoulder more responsibility, especially in Afghanistan?

One question for the chancellor.

[As translated] Madam Chancellor, where do you see the limits of NATO and where do you see the limits of German engagement in the world?

OBAMA: I don't come bearing grand designs. I'm here to listen, to share ideas, and to jointly, as one of many NATO allies, to help shape our vision for the future.

If NATO becomes everything, then it's nothing. So, obviously, we're going to have to define and clarify its roles, responsibilities for the 21st century. And what we should expect is that we will set up a process in order to do that.

I don't think Germany should feel anxious about that. I think that the United States and Germany and all the other NATO countries should see this as an opportunity to put together an architecture that is as successful at meeting our new challenges as the prior architecture was at meeting the challenges of the Cold War.

And, obviously, we already have one test case, and that is in Afghanistan. It is as complex of a problem as we're going to see, partly because it's not just a problem of Afghanistan, but it's also a problem that exists in Pakistan.

We've put forward a new comprehensive review of how we think should approach this that recognizes that the military alone cannot solve these problems; that we have to have a significant military force, but that it has to be combined with a diplomatic effort and development effort that can stabilize the region; and, it has to be focused on the true problem which is violent extremists that can project attacks not just against the United States, but also against Europe and worldwide.

I think that the strategy we put forward can and will be successful, but we've got to be disciplined, we've got to be coordinated, and we've got to execute.

And Germany, I'm -- thanks, Chancellor Merkel, for the extraordinary efforts that have already been made by the German people, both in terms of resources and troops.

We do expect that all NATO partners are going to contribute to these efforts. They have thus far. The progress in some cases has been uneven, but I think that's not just a problem of lack of resources, it's also a problem of a strategy that was allowed to drift.

And so what we're going to do is refocus the strategy and then make sure that the resources are there to do it, and I'm confident that Germany, as one of the most important leaders in Europe, will be stepping up to the plate and working alongside us to get the job done.

MERKEL: [As translated] Well, what is indeed gratifying to note is that the new approach of the new administration of the United States as regards Afghanistan is very much in step with what Germany is envisaging, the sort of networked security, as we call it, or an integrated security, where you have a civilian component of rebuilding, training, and last, but not least, obviously, also, the capacity of the Afghans to really defend themselves.

That is actually what we were after with our mission to Afghanistan.

And now that brings me to NATO.

(AUDIO GAP)

QUESTION: Thank you, Mr. President.

I'm going to read my question and hope that's not too much of a breach in protocol here.

I have a question about surplus in deficit countries and trading balances.

Mr. President, you said in London that the world may not be able to rely in any longer on the U.S. as a, quote, "voracious consumer market."

Did you talk with Chancellor Merkel about Germany's enormous trade surplus and its impact on the global economy going forward?

And, Madam Chancellor, some say that Wall Street's excess was fueled by easy money supplied from surplus countries such as yourself. Another large bubble and burst is inevitable if Germany and China and others do not move closer to balance.

What is your response to that?

OBAMA: Well, John, I do think that even as we are trying to solve the immediate crisis, we've got to learn some lessons from the previous years to figure how do we avoid another crisis.

And if you look at the U.S. economy, what we've seen is a series of bubbles and then busts, much of it having to do with huge flows of capital into speculative sectors of the economy.

Part of the problem that we saw was a lack of regulatory oversight. And so we're moving very aggressively on that front. And in the short term, my biggest concern is how do I just make sure that people get back to work.

So our stimulus package, our efforts to stabilize the housing market, our efforts to remove the toxic assets from the banks so that banks start lending more effectively and businesses can open and people can get hired again, all that is focused on my top priority right now, which is making sure that we're no longer hemorrhaging jobs we start creating jobs.

As we emerge from the crisis, though, we're going to have to take a look at how do we ensure, a term that Chancellor Merkel spoke quite a bit about at the summit, and, that is, sustainable economic growth.

And in order for growth to be sustainable, it can't be based on speculation, it can't be based on overheated financial markets or overheated housing markets, or U.S. consumers maxing out on their credit cards, or us sustaining nonstop deficit spending as far as the eye can see.

So once we've stabilized the economy, we're going to have to start bringing these huge deficits that our government is running, we're going to have to start bringing those down.

Families are going to have to start making more prudent decisions about spending and increasing their savings rate.

Businesses are going to be making investments and we want to spur as much investment as possible, but the whole point is to move from a borrow-and-spend economy to a save-and-invest economy.

OBAMA: Now, the U.S. will remain the largest consumer market and we are going to make sure that it's open. One of the principles that we very clearly affirmed in London was that protectionism is not the answer.

It's not the Germans' fault that they make good products that the United States wants to buy, and we want to make sure that we're making good products that Germans want to buy.

But if you look overall, there is probably going to need to be a rebalancing of who is spending, who is saving, what are the overall trade patterns.

And by the way, it doesn't just include developed economies like Germany and the United States. It also means we want to encourage emerging markets to consume more.

If you start seeing China and India improve the living standards of its people, both are huge markets where we can sell. And that's why, the last two days that I've spent talking about the international economy, relates to directly to the jobs that are being lost in the United States.

I know this was a long answer, but it was a big question.

The bottom line is that as long as the United States and Germany are keeping our open trading relationship, as long as our approach to currency is one that ensures fairness, which, generally speaking, the relationship between the United States and European central banks has been very cooperative and very solid, as long as we have proper rules of the road and regulatory frameworks in place, then the key is to have friendly economic competition, the United States making the best products, making the best decisions, making the best investments, and Germany doing the same, and then all of us can do well together.

MERKEL: (SPEAKING IN GERMAN)

QUESTION: (SPEAKING IN GERMAN)

Mr. President, one of the points of your strategy in Afghanistan now is, and you've put a lot of emphasis on this all the time, is to focus more on Pakistan.

What does this mean, in concrete terms, for the Europeans and NATO? Do you see that there might be a military role for NATO in that or do you want -- what do you want the Europeans to do in Pakistan? MERKEL: (SPEAKING IN GERMAN)

OBAMA: I think that was an indication that my answers have been too long. So I'll make this one quick.

No, my focus on Pakistan does not envision NATO troops activities in Pakistan. It does mean that U.S. and NATO partners have to work more effectively with Pakistan to enable them to root out the safe havens for extremists that post not just a danger to us, but now pose an extraordinary danger to Pakistan.

That is going to be a very complex task. It's going to have a lot of facets to it. The more diplomatic resources that we bring to that, the more countries can assist Pakistan in its development efforts, the more effectively we can provide training for a different type of conflict than the one that Pakistan has traditionally prepared for.

Those are all areas where I think NATO can work together very effectively and we need to -- we can't ultimately, I believe, be effective in Afghanistan if we have not addressed the problems across the border.

Last question.

QUESTION: Thanks, Mr. President.

Earlier, a couple of hours ago, on the French side, you said that with France, you never had to drag them kicking and screaming in Afghanistan.

I'm just curious if you have a similar problem with Germany under Chancellor Merkel or you're sensing that Germany is more willing and more likely to contribute or just as likely as France.

OBAMA: Germany has been a stalwart NATO ally from the start of this conflict and has contributed troops, has contributed resources, and will continue to contribute troops and resources.

You just heard Chancellor Merkel emphasize that at its core, what has made NATO so effective is the Article 5 principle that if one ally is attacked, then all allies come together to deal with the problem.

That's been the unchanging element of NATO and, by the way, an element that I don't envision changing as a consequence of the strategic review that may take place. That's the essence of a successful alliance.

And so what I've said to Chancellor Merkel is the same thing I said to President Sarkozy and the same thing I'll say to all the NATO heads of state this evening, and that is that we have lost our focus in Afghanistan. Now we have refocused.

We have a strategy that, I think there is a broad consensus, brings all elements of our power to bear and will allow us to succeed. We will now all have to make additional efforts and sustained efforts in order to succeed, with the understanding that our ultimate goal is not to occupy Afghanistan and not to run Afghanistan, but rather to provide the Afghan government the capacity to provide for its own security and ensure that it is not, once again, a safe haven for terrorists.

It will not be an easy task and one of the changes in our approach is that we are going to insist on a consistent review of the progress that we're making.

And if we discover that the approach we're taking is not effective and is not working, then we will change it.

he one thing that I would say to the German people is the same thing that I've said to the American people, which is I understand that after a long campaign in Afghanistan, people can feel weary of war, even a war that is just.

Nothing is harder than sending young men and women into harm's way and nothing is more sobering as a leader than signing a letter of condolence to a family of somebody who's died in war.

And so I understand why both Americans and Germans would be feeling a sense, particularly in the midst of economic crisis, of why are we still there.

But I believe strongly and I think that our NATO allies believe strongly that we cannot allow a territory in which people who would kill our citizens with impunity can be permitted to operate.

So we've got a difficult job to do, but I am absolutely convinced that we can carry it out, and Germany is going to be a strong partner with the United States and other NATO allies in getting the job done.

Thank you, everybody.

END


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