the european union has made borders less and less important. we have the single market and for people your age it's normal. you is seen this. it has not always been like that. trust has also made the euro possible. and of course we had to trust each other when we widened europe. we had the german reunification. we accepted new countries. and now we are all the same members of the same history. we are now 28 member states. we know that the rest of the balkans want to join us. we need the new european perspective. therefore, it is all the more important that we all trust each other.

that everybody makes an effort, so that this trust remains. the berlin statement of 2000 that i mentioned earlier is still important. we want to transmit to the next generation this happiness, this luck of being together and of being europeans. the european union has always been a very peculiar structure. it's not always understood on other side of the atlantic, by the way, but it is not a classical image. but now we are in a world that is constantly changing. we are part and parcel of it. also, the population of this planet keeps growing. if we want to bring our values, to this globalization, we need to have more europe, rather than

less europe, if we want to do that. so we have to give shape to the political union. the euro didn't make it yet. but, of course, not everybody agrees on the shape that europe should have in the future. but we have a commission that functions as a government of europe. we have a strong european parliament. which is becoming stronger and stronger throughout history of europe. with a council, heads of state, which is the second chamber. we have a european court of justice, which is our supreme court. many of you will have to keep on building this house of europe for us. and i can promise you your generation has a lot to do. you have a lot of work to do,

and for me it's going to be interesting to have this discussion that we're going to have. what do you think of europe? what are your expectations? what is your vision? what do you want to add? do you think that everything functions ideally and, well, therefore, it is good that not only i was able to talk to you, but i'd also have the possibility to have a discussion with you. thank you for listening. >> translator: mrs. chancellor, thank you very much for this very interesting expose.

and now it is my job here to be the moderator of the discussion. for me, i think my job is more like to provoke the discussion. i want to widen and sometimes what you said, and we have many, many questions also that are coming from our students. i hope that in the 30 minute that we have -- no. we can talk for half an hour. thank you very much. i hope that we're going to have some answers, because i know that the young people here have already discussed in groups, they've prepared the questions. they've prepared the themes. and i think there is a fear among them. they wonder if this europe that we've already built, is it going

to last for the rest of their life, or not? that's a big question for them. i apologize for my poor german grammar. but i hope that you will see that my very un-british passion for europe is better than my german grammar. i have a question myself, and then immediately after that, i'm going to defer to the students' questions. recently you have said often, mrs. merkel, that if the euro fails, europe will fail. but at the same time you have said that the solution of this crisis is to go towards more europe rather than less europe. more integration. you mentioned that today. and i would ask you.

you mentioned fiscal union. what do you mean exactly when you say "fiscal union"? isn't it what a lot of germans mean when they say a transfer union? and are you going to be able to convince your own citizens to accept a transfer union? >> translator: the fiscal union is not a transfer union. what we mean when we talk about the beginning of a fiscal union is what we have already decided. that is to say, the stability and growth, a pact of which is now going to be binding. so we talked a lot about reducing the debt. people want to put that in their constitution sometimes. but for the first time, the european commission has the right to come and check whether

the member states have really translated the stability pact in their legislation. and if they have not done it, the european court of justice can sue them. it's a paradox, if you want. we have a stability and growth pact, which is like european legislation, if you want. for all the other european legislation, for all the directives, the supreme court, the european court of justice, can sue a country that would not have applied the directives and the country must apply them. but in the lisbon treaty, we said okay, we're going to do the same with the stability pact. all the heads have said oh, no, no, no. we're not going to do that. it's so important because it's hitting our budgets. so we don't want the european court of justice to meddle with

that. and we saw that it doesn't work, especially when you have a common currency. then it should be even more binding. so it's not a question of a transfer. it's a question of finding a way to apply what we had already committed ourselves to. and if we don't, we'll be sued. but within every country there are transfers. in germany there are transfers. you asked me if the fiscal pact was a union. i said, no. so now you are asking me are there transfers within countries? of course. in every country there are transfers. in germany we have a history of that is 60 years old where we compensate the finances from one land to the other. there's a huge discussion right now in germany, because a small

number of lenders in germany are paying for the vast majority of the lend eer. but as i said we have a european community which is not a lender. they are national competencies. and they are competencies that have been given to the community. so in 2005 until 2013, the project is to transfer 350 billion euros within the eu. so some countries are paying -- germany, britain, and a lot of others, and then there are countries that receive in order to bring up their structure to the level of the rest of europe. and, of course, we are giving these funds to eastern europe and to spain, greece, portugal. so the question that we have is what happened?

the euro is ten years old. we have given a lot of the 350 billion euros. and what happened? the difference in competitivety is worse than it was before. so my question is, did we use well these 350 billion euros? and these funds of the structural fund are not all spent. there is some left. so, what? should we keep on spending it to build more roads and tunnels? if you go to madera, for instance, you would be completely convinced that it is great because you see lots of nice tunnels on the island, and lots of freeways. but what happened? are they more competitive? no. it's not the case. so i think we have to rethink all this. have we given this compensation fund the right way? >> translator: all right. thank you very much.

now i'm going to defer to the students. and there are many students from different european countries, from the south, from the east. first question comes from germany. it comes from anna. >> translator: you talked a lot about sustainable policy, coordination, coordination of the economic policies, but in the last ten years, the unbalance got worse between member states. don't you think that maybe we should tell the germans to work a little bit less, to export less and through the coordination to be a little bit more like the south europeans? >> translator: so pushing southwards. huh? so do you think that we should

go more towards the north or more towards the south? no. first, in the stability pact we talked about the unbalance between member states. the question is, when we have the same currency, should we see each country individually? when we all have a single currency? the answer is no. in germany, we have never said ah, well, the bavarians have more money, in bremen they have less, so let's all do like the people in bremen to rebalance the whole thing. no. in germany, people who give the funds don't have to be more like the people who receive the funds. i mean, that would be a really strange thesis. no. what we have to do, and it's true for the european union, we

should not aim for an average so that everybody is the same, towards the middle. so perhaps that would please the financial markets, because then we could all have euro bonds and common responsibility, and the countries would be more like each other. but your living standards would be jeopardized, because we would no longer be competitive on the world stage. the fact that we have the living standards that we have is because we are very competitive worldwide. so we have to pull the others towards us, and not try to bring ourselves down towards the average. that's why i talked about best practices, and not about convergence. we have discussed a lot about that. should we be more competitive or should we be more like each other? i think we have to look at the

best in europe. the average will not be enough to maintain our living standards in the world. if you compare us with the rest of the world. >> translator: second question, from poland, jan jacob. provance. >> translator: i've gathered all the questions. if you have a question in the back over there, you have to really wave your hands, because we don't see you very well. >> translator: you can make a little airplane and send it to mr. peal. >> translator: i have the impression that the narrative of the founding fathers after world war ii no longer applies. people don't understand in europe, especially young people

in europe and people who are not members of the elite. >> translator: who? >> translator: the people who are not part of the elite. the average citizens. my question is the following. don't you think that we should have a much stronger social dimension in the european union? that is to say, we could have european unemployment insurance. that would be a new narrative that would be much more understood by the population of europe. >> well, you know, today and in the future even less, we can no longer base ourselves only on the roots of europe and mention the foundation, because we are in a totally different situation.

that's why today i insisted on the fact that for me, the justification of europe, besides the historical justification, which remains true, that if we want to maintain our living standards as a way of life, a way of life in europe, we have to be more competitive. and because we are together, we are worth more together than individually. and, of course, we have to defend our interests. especially freedom. so europe must defend itself and be itself in the world of 7 billion people, since we're only 500 million. now, you're talking to me about the social dimension. in the lisbon treaty, we have

signed on the social market forces. everybody has its own interpretation of what that means. but i don't think that the only pillar of europe should be social. i think it can be one of the pillars of europe, but also we need community and research in our development policy. we also must make the same efforts to reduce our national bureaucracies. we have a lot to create. we have to create a european public, a european space. we don't have that today. during european crisis, for instance, everybody talks about countries. we talk about greece. everybody is talking about greece. pointing their fingers at greece. but when you look at the press

in europe, everybody talks about this crisis in a different perspective. and we need a europe with the mobility of workers. it also means that we need transfer possibilities so that everybody can have portable pensions, for instance. if you work in five different countries, you need to be able to take your pension with you. and also we have to harmonize the retirement age. in some countries it's 55. in germany it's 67. we have a lot to do. that is to say the social dimension is one of the aspects. but it's far from being the only one. but what we have to create is of course as students you are more together than our workers, for instance. but we need more of a european public. we have to know that we all belong to the same area, for instance. >> translator: thank you.

now i have a question about the relations between germany and the others. what about the image of germany abroad? and a person from france is going to ask the question. >> translator: no, you can speak without microphone. i can hear you well. you have a good voice. >> translator: many in europe have a very positive image of germany with all the reforms that you have already gone through. germany is admired in many countries, but in many other places people resent germany. what can we do? you said earlier we have to learn from each other, but germany already did its homework. so don't you think that the rest of europe has to catch up? and that doesn't give you a very good image.

>> translator: well, first, i have talked about a european public. the crisis started that now we tend to talk about them, the germans, the french, the spaniards, the greeks and so on. we have germans that are active. we have lazy. we have germans on the right and left. we have germans who like to visit museums like this one, others who don't. it's the same in every country. and the big achievement in europe was that we had stopped saying that whether somebody showed their passport, we knew exactly it was a french person. and i'm completely against that. the germans, the germans, they are federal minded and the french, oh, the french. everything is in the center. they're centralists.

that is exactly what europe should take us away from. in greece, they are people who did not always agree with governments. they have suffered under the governments. it was not always wonderful in germany. not everybody is happy either. it is true, we did our home work. but it gendz what you're looking at. if you look at the budgets, at our capital needs and many other things, our home work is not completely done. and when i look at the federally policy in france, they've had it for 25 years. they are far more advanced than we are. in germany we're still discussing how we're going it feed the kids at lunch when we're all at work.

we have done a few things, it's true. it was not easy. the germans were not all that pleased with all the changes that we went through. we have to change a lot of things in germany. we changed a lot of things in eastern germany and presently for me coming from east germany, i have the experience that change with be good. a lot of people think when you mean change, it means their situation is going to worsen. i can assure you, change can be nice. it can be good. it can be positive. and we brought them freedom. we have to avoid saying that one country has already done its home work and the others have to catch up.

and if you see germany how long it takes to build a mile of road or a new train station, you'll see that we're still far from our goal. >> translator: back to poland, justina? >> translator: mrs. chancellor, you talked a lot about trust. and unfortunately, a lot of young people have lost their trust in the euro. they have lost trust in europe. what kind of vision can you give us? are we going to have a european dream? what is the vision that you hear about in the european commission? is it one vision? is there -- are there many visions? what can we expect for the future say ten years from now? >> translator: you have to build with us to build europe with us. you can always decide what party you're going to vote for. are you going to give your vote to a party that is in favor of

the european construction or to another one? i mean, it's up to you. i told you what my vision was, but my vision is not the only one. and we can dream even more. look at, for instance, defense policy. we have a lot more to do. we have some countries in europe that are not nato members, some nato members, this always causes problems. for instance, germany is not an easy partner either because in germany we have a law in the parliament. and every time you want to send soldiers abroad, you have to pass a new law in the parliament. so we are not easy to deal with. and i don't want for to create headlines in the press and make people believe that i want to go

around the parliament or cancel that law. that's not what i'm saying. but we have a lot of personal problems. but we will have more trust among each other when we all do our homework on one side, and also when we all decide to have more europe. and i'm happy to have europe-friendly british journalists. and i know it does not represent the majority on the british isles. we need great britain in the european union. i'm going to say that. europe is always a little bit more competitive, thanks to britain. britain is always one of the best in the single market. and of course they are not always very happy when we ask for more sovereignty to be given to europe. but we're going to work on that.

we're going to see how we can find a balance so that it's not always the same who are disappointed. and yet to go towards more and more integration. >> translator: we are here in this wonderful building. the architect was an englishman. and it would be very nice if for europe we could also find a few british architects. but at this time, there are not. >> well, let's not be too mean, mr. peele. great britain is a country that is -- that takes the single market very seriously. and among others for the service directive, you have always in the foreground, it is not

britain that slows europe down. so if we want more information, more research, freer trade -- for instance, look at the position of europe at the world trade -- at the wto. britain is always in the right position. so i must say we cannot do without britain. and very often britain is more pro european than a lot of other countries. >> i have a question from greece. zinovia. in the back. we are under these greek columns. i hope it's a symbol of solidity and solidarity. >> translator: i have two short questions. >> translator: no, no, one question. >> translator: okay. let's say less than two. do you believe, really, that if

greece applies all the measures imposed by the troika we will solve our problems? i'm not representative of the greek people, but i want to represent my generation in greece. and we really don't know what to do. there are many greek people who want to go back to greece, but they can't. the unemployment is enormous in greece, especially among young people. it's so bad i've tried to see what jobs i could find in greece so that i could go home. so i checked out the greek employment agency. and you know what?

i found jobs for germany and for the rest of the world, but none at all for greece. >> translator: yes, i think that right now greece is in a very difficult, very complicated situation. which is the result of several reasons. one was that the political system in greece. and in the past, whatever government you had, none of your governments had reached the transparency that was necessary for the rest of the world to see