♪ >> dr. merkel, [speaking german] >> normally, we would meat -- both -- meet in davos. this time, we meet virtually. last time, we were in davos, talking about how we can shake this world more inclusively,

more sustainably in these issues that have gained more of a priority due to the pandemic. due to the virus, there is an increased need to increase the resiliency of our systems. i would say that you have been able to guide germany, europe, the world, you have shown farsightedness, you have steered this ship through the unruly waters of recent months. looking ahead to your assessment, allow me to add, one of the goals of this virtual meeting is to rebuild trust in our ability to shape the future.

part and parcel of this is the international cooperation, as one of the preconditions for doing just that. chancellor, a warm welcome to you. very much looking forward to your address. >> thank you, professor. thank you, ladies and gentlemen. covid-19 has changed the world. that is also illustrated by this year's format, which is a virtual one. there was to be a physical meeting, but not in davos. this time, and -- in singapore. it is a vibrant place in this world. today a year ago, i think no one would have thought that we would

live a pandemic this year, but some actually were farsighted enough. the head of biontech the year before that to actually change the format of the whole research program and develop an rna vaccine against this virus. what he contributed and many others contributed now have a vaccine only 12 months after. it shows humankind is capable of such great scientific feats, is capable of doing groundbreaking research. and i think this shows the way out of this pandemic, although this is going to be a very arduous road, much of an uphill battle. much more difficult than many think. biontech, pfizer, other

companies all over the world have developed vaccines. biontech was a start up. people from 60 different nations worked on this start up. it's a clear lustration also of the shared value of international cooperation and what you can actually do with this kind of cooperation. the pandemic has left deep in -- deep imprints on our society and economy. that is going to determine in many ways a way we live, do business for the next two years. hundreds of people -- hundreds of millions of people have become infected. millions have died. there are certainly only the official figures. in many ways, davos is the right place to discuss how we can forge a future looking forward. anything that contains this pandemic as not only good for the health of the people, but

for the economic, the social possibilities, the cultural possibilities. he chose as a motto this year's motto. do we really need this great reset? perhaps we need less and the goals we set for ourselves a reset, but more in the resolve that we show in anything. so there are three questions i think are important at this point in time. and what this pandemic has really driven home to us. it has shown us clearly how much we are interlinked. how much we are globally interdependent. we think of the origins of this virus and will hunt, china, how it has spread over the whole globe, it was clear to see what globalization actually also means.

we all live in one planet. in such an excess and crisis, trying to shut yourself off from others, trying to isolate yourself with this virus, it has clearly failed. secondly, our vulnerability has become obvious. somehow, this virus was transmitted from animals to human beings, which has shown us yet again that we are part of a natural habitat of our natural environment. and although we have a lot of knowledge, technological knowledge and other knowledge, we still depend on nature. that is something very common, very soothing, but it has its consequences. with regards to germany, this pandemic is something like a natural disaster that only appears once in a century. in many ways, it has tested the resilience of our systems, such as societies, and has shown

flaws, weaknesses in our social systems, our strengths have also become apparent, but we want to address primarily those weaknesses, those flaws. maybe we should start with what germany has learned, what are our weaknesses, strengths? i can say, there is something we could rely on. that was the fact that so many people stepped up to the play. they showed a sense of community . in spite of all the physical -- all the difficulties, it also has advantages. it brings responsibility to a lower level. it also -- we have also seen germany as part of europe. very quickly, we learned the

lesson. speed is a problem. we have seen that our processes have become very bureaucratic, they take too long. and that is something that we need to address. there's one good thing, a foundation. are solid and sound finances. we were able to actually help companies to help our citizens introduce short term work, keep the economy going, launch more than 100 billion strong economic impetus programs, all of that has strengthened our resilience. there are flaws, also, weaknesses, a lack of digitalization of our society, which starts with the super regional networking of our national health services, local health services, digitalization of education systems, for example, online teaching, online

learning. this is where we said, we have to step in with our economic impetus program, with our economic growth program, and address that. we also saw a resilient health system is important, and in germany, we have a really good individual health care system, but community health for example, preventive medicine, here, we do not have sufficient resilience built in our system. that, too, something we need to learn from this pandemic. we feel confident in our research policy. ever since we have come to office, we have steadily increased rx furniture -- our expenditure for developments. gdp has now been exceeded. we would like to approach it. anything we see with vaccines and other technologies is

promoting a very strong research and development policy. it is certainly inviting. a great question is to be discussed -- that's to be discussed, needs to be debated, the world's sovereignty seems to be on everyone's lips. many of the supply chains have been interrupted. they have not really proved the resilience. what we have to ask ourselves, is that indeed a weakness, the five that we depend so much on global supply chains? or, should we rather render the supply chain so resilient, so strong, that they actually also tolerate that sort of strain in terms of -- in times of pandemic? we have to prevent people resorting to an inward-looking policy again, but that is something we need to be honest about. we need to honestly debate this. but supply chains have to be rendered more stable, more resilient, even at such a time

of crisis, you want to depend on them. vulnerability is something i mentioned earlier run. this will their ability -- earlier on. this will their ability -- this vulnerability came to the fore when the virus erupted. it moved from an animal to a human being. all of our conventions on sustainable it, be it the biodiversity convention, the climate convention, be it the paris agreement, absolutely to the point on this. and we need to work much more to bring them to bear, to show much more resolve to implement them. for proof, this year, we will have a china biodiversity conference. and also when we implement the paris agreement, we can prove we have learned our lessons. that the european has, as a first step, showed it's learned its lesson.

we have our european goal, our national goal for co2 emissions, from 40% to 55%. it is something we want to aim at for 2030. we have committed ourselves for 2050 to climate neutrality. which may well lead to a situation where europe, once we have achieved that, is the first climate neutral continent. we have a very hard months ahead of us, because we have to now find a form, how to reach that goal of a 55% reduction in the new green deal. we have already changed 40% of our energy generation to renewables, but we also know that it is demanding tremendous effort, if this will their ability due to climate changes to be overcome -- vulnerability

due to climate change is to be overcome. we have to take people along. changing over to hydrogen, moving away from coal, moving over to electric mobility. we have to -- and also, hydrogen, maybe, we have to be open minded. the european union, and all of its efforts for a recovery, we have taken a very unusual step for european union standards. we have said in this recovery plan that we do not want to do business as usual. we really want to set priorities, clear priorities. more than 35% of all of the funds used a need to surf climate protection, -- serve climate protection. that is forward looking investment. we want to have more sustained

ability -- we want to have more resilience, more sustainability. mainly sustainable development goals for 2020. that is indeed something that an encumbrance of way shows the way ahead. how do we want to act if we don't want to be as vulnerable as we currently are? during the meeting of the united nations last year, they also should clearly that that showed clearly that we lag far behind expert tatian's. -- they also showed clearly that we lag far behind expectations. we concentrate on our own policies and not caring for developing countries. that is something we must avoid at all costs. that is why the german objective is, and this also, with regards to the recovery program, we must not actually reduce our expenditure in our cooperation

with developing countries, but rather, do more. the third step is digitalization, in the sense of the dependencies that we have all over the planet, and that is something that actually was very much something that we needed to contend with. it's become very clear to me, even more clear, i should say, that we ought to choose a multilateral approach. that shutting ourselves off against others will not help us solve our problems. we see it on the vaccination front. because that obviously is how we get out of this pandemic. that clearly also shows whether our acts match our deeds. they have done a tremendous legal thing under the saudi presidency and committing them subs to a multilateral approach -- committing themselves to a

multilateral approach. the wealthier countries need to pay into this fund. the eu is participating, germany is participating. financial funds are one thing. whether someone has a vaccine is also of the essence. i am happy kovacs was able to conclude contracts. many have received authorizations through email. i am very pleased that the world -- that the world bank is supporting this very intensively. we will try to do everything we can in order to see that the distribution be launched as quickly as possible. the question of who receives

which vaccination how quickly over the planet again creates a new narrative, if you you like -- if you like, because when you receive at such an hour of need, help, he will remember that for much longer than help that was extended to you in good times. this is the era of multilateralism. what does multilateralism mean? multilateralism does not only mean somehow working together, but it means showing transparency. we have to be honest at the beginning of the pandemic. -- we had to be honest at the beginning of the pandemic. as we got the information released by china, as to the origins of this virus, also with regards to information of the who policy, that does not mean we should ought to simply look back, but we ought to look ahead, draw conclusions from it.

there is a team now in china, coming up with reports. we ought to strengthen the who. it is a message, after the transition, after joe biden has become president of the u.s., they have to cleared they wish to be participating in the who. that is very important. global links, global commitments mean that we have to have an interest in how the rest of the world is faring. cooperation is in our natural interest. we want to strengthen the links, investments and africa. as you remember, we have launched the compact with africa, supported by the imf, by the world bank. we are going to be participating in this in the future, as well. fair international trade -- that is a wide open field.

the wto is working for open structures. there's been a standstill over the past two months. right now, the arbitration panel unfortunately has not been set up. so wto cannot really act. so, i, as you know, a great champion of bilateral action, bilateral relations, but still, i think wto is absolutely of the essence if we want to achieve multilateralism. we see number of multilateral trade agreements. in the asian -- on the asian continent, we see something very remarkable. countries are very different structures linked by this

instrument to the german presidency. we have made one step further. we have gone one step further with regards to the eu-china investment agreement that's been negotiated ever since 2013. we have tried to put that on the market to put in -- to come to an agreement. why have we been unable to make this step? this in a way has injected any -- a new quality in the relationship between the european union and china, because we can do more now that is more in line with reciprocity, with transparency, as regards subsidies, particularly as regards state owned companies, but it also opens up a more predictable access to high-technology areas, state-of-the-art technology, that is, and it also has a lot to do with standards of labor, particularly along the lines of

i.l.o. if we want to have multilateral organizations, multilateral conventions and agreements, certain standards have to be put down, common standards as regards the conditions of work, as regards the environmental norms. that is why these core norms of the i.l.o. it is of importance, and that is part and parcel of this agreement. we had to beat fast at fighting -- we have be fast at finding multilateral answers to challenges. particularly with the new american administration, i hope we will be able to continue the work, particularly as regards taxation of digital companies, that we are also in a better position to looking at the global importance of competition laws, in order to prevent global

monopolies, because we have these tendencies all over the world, and we need to address that. if we do not do it, if we go it alone, do it insufficiently, because going it alone will not suffice to address those monopolies. we hope an economic recovery will happen all over the world. europe has been rather hard hit, but this year, we have predictions as to more growth, but obviously, this has to happen in a more concerted way all over the world. and so, coordinated measures are necessary. the g20 and the italian presidency has a central role to play. i know italy is working in this direction. if we look at what the pandemic has left us with, i would say that, in many ways, it is a confirmation of what, in many

ways, was the spirit of davos over the past years. the questions you asked for the right ones, but a german writer used to say nothing good happens unless you do it, and the pandemic has made it very clear, i think to all of us, that discussing, debating, intellectual exchange is important, but the pandemic is also sure and very clearly that now is a time for action. now is the time when we ought to act together, ought to abide by the same principles, the obviously we need to discuss and agree on previously, but that we need to do something to address those weaknesses and overcome them. that is it by way of my remarks. thank you for your attention. dr. schwab: thank you madame chancellor. allow me, if i may, to take you up on this last point.

one of the consequences of this pandemic, as far as we can say, is that companies are much more aware now of their social responsibility. their responsibilities for society. we have not less partners but even more partners since the beginning of this pandemic, particularly because these companies work in our working groups, in a number of our working groups, because they want to do what you said, match their words with deeds. just one example, we have a number of working groups, meetings here during this virtual annual conference, one small example -- the commitment to set up a platform, for example, to plant one million new trees. in the course of this decade.

re-skilling and upscaling the further training of people, for the education of people, that is something we need abilities that are far different than the sort of skills that we used to have. there is one moment left us. i would like to come back to two or three issues that you addressed. you are speaking about the vulnerability that we all felt. we have to render our societies more resilient, which means that that effort needs to transcend the current crisis situation. we have seen, we have showed in our report, how many risks we need to contend with in the world at large. maybe it may -- maybe it may be of interest how you see this.

there were certain efforts made at the european level, particularly in the health sector, that are now building resilience, not only against covid-19 but also future risks. what is your take on this? how do you see this, particularly as a scientist? chan. merkel: i think our economy, or the way we do business in general, in good times has a certain tendency to actually try and use all of the different -- all the lee room we have, the wiggle room we have. efficiency is sort of number one. but then you have no buffer zone, as it were.

there is no real buffer in built in the system. you start from the assumption that everything works. you can see this when you have, for example, airplanes that have to stay on the ground simply because, all of a sudden, there is a bad weather front. the more the world is connected, the more a disturbance in one part of the system leads to ripple events -- ripple effects. and we see how a linear event can change it to a nonlinear event. that is something that i think we ought to learn, that, in good times, we also have to have something up our sleeves, that we can then use the necessary funds, for example, or the necessary beds and icus or the

necessary medicinal drugs, that we have the necessary medical personnel. did armies know that they need to draft reservists -- good armies know that they need to draft reservists in the case of war. so i think it would be a good thing if all of these really elementary functions of our societies, the underpinnings of our societies, if we screen them very carefully and try to analyze where we need more of a buffer, as it were. for example, in climate change, we are already in the fire mitigation, so we need to adapt to risks before we can actually come to change, so that is a lesson from this pandemic. that we need to be very careful not to assume that everything will always work just fine, will always be perfect, but that we

have to also contend with certain problems. so, in a way, what we need is a precautionary activity and agility. yes, in a way, you are bringing together two magic terms. in the context of corona infection numbers, there is no -- when you look at the course that infection rates have taken, and the phenomenon of exponential growth means that literally you can see it at the beginning, but you have to take action exactly during that period. that is a major lesson we have

to draw from the pandemic. also apply that to other areas, if you want to ensure that the world does not end up in a shape that makes it difficult for us to control development. that even in extremely difficult situations, we would be able to act in a wise manner if we were to pursue such a precautionary approach, and we are aware of is not being able to fight everything the same time. we have to pursue a step-by-step approach, trying out things, seeing whether we can control this phenomenon that is so difficult. i support this concept of precautionary agility. dr. schwab: madame chancellor, one of the consequent as of this crisis is the enhanced role that the states governments have to

play. as was mentioned earlier, the rules has to be played by leading companies, and they have to act in a spare that prevented -- protects the environment and sees the social needs of people. what does that mean for our long-term social model and for our long-term business model? i am asking you this question because you know that i been very committed to this principle of stakeholder capitalism, and i've been surprised again that this seems to be triggering some resistance of a psychological nature. i believe that companies are not only an economic unit, but they also have a social function to play, and i do not think there contradict each other. what is your future social model

that you think we should strive for? and perhaps a second question added up to this 1 -- is it leading companies of the world that will emerge from this crisis stronger whereas the medium and smaller size companies are especially hard-hit that are of importance because they have a very special role to play? chan. merkel: well, i would say that we do have smaller companies and we have big companies. that have benefited, to some extent, from crisis, because other things are in demand now. demand for digital solutions is exploding, so to speak, whereas other companies are especially hard-hit and when you think of restaurants, think of event managers, when you think of artists and their work, when you

think of smaller shops and department stores once the pandemic has been overcome. you will be able to ease restrictions and then take a closer look at what to maintain in terms of infrastructure. i think there are groups and companies that have benefited from this crisis in an unexpected manner, but you may be a big company but nevertheless be hit -- hard-hit by the pandemic. the question you put to me was of a very fundamental nature, and i think it is not impossible to respond to this in five minutes time. what has become obvious time and again is that what we call the social market economic model is a good model. it puts man in its center.

we have to think things from the perspective of men, of human beings. we have to use or exploit fully the inventiveness and imagination of men and women, but come at the same time, we have to set certain rules and -- but, the same time, we have to set certain rules and provide timelines. and we had the think of that digital sovereignty of each individual. whereas the basic approach is always the same, that it is not static in nature. we have to strike the right balance between the actions of the state, the government, and allow the individual to realize itself why it is providing the long-term frame of conditions. we have purposes of concentration that have to be stopped if they become too powerful. that is the competition law, which makes it so important in times of globalization, when you pursue a national labor policy, you always have to think of the

global interconnections. you have to internalize prices. climate protection be in one case in point. i believe the best sentiment is putting a price control on co2 emissions. you have to make it mandatory, because i do not think any individual company would do it on itself, or not quickly enough, and not the totality of companies. when you take a look at the last 15 years or so, i would say that , in 2007, 2008, when we were facing a major financial crisis, we had a trend in the direction of too much freedom, not enough rules with regards to the efficiency of financial markets and capital markets. then, in the wake of the crisis, we have the opposite, excessive development, too much regulation. we went down that road together.

the internalization of what is so important for us in our life, economy, ecology, the price on emissions, makes the actions of the state so important. we cannot rely solely on the companies acting in a way that will be to the best of the world. however, we have to be careful as not to allow the pendulum swing too much in the other direction, where the state feels he is the best entrepreneur, because that would put a damper on the creativeness of the human element. so it is a perpetual -- you have to strike a balance. you can no longer think along as national lines as you use to in the past. that is the way in which i would describe this. dr. schwab: i think stakeholder

economy -- you stress the importance of multilateralism. yesterday, president xi jinping spoke and warned us against the evolvement of blocks, and he focused on multilateralism and underlined its importance. do you think that we can hope for multilateral cooperation, given the trends we have been observing of late? also, in the context of bringing back home supply chains, can we prevent the involvement of blocs ? chan. merkel: perhaps i may respond first to multilateralism. the chinese president spoke yesterday, and he and i agree on

that. we see a need for multilateralism. but there is one question where we are not in immediate agreement. the question of what it means when you have different social models. to what extent -- when does interference begin? where does a begin and where does it end? when do you stand up for elementary values that are indivisible? the president of china has committed itself to the united nations charter, so we have to discuss this issue, no matter what social system we come from. and you end up quickly with different interpretations of what the meaning of multilateralism is. it does not necessarily or simply mean the coexistence of

entities that seem lifeless, but we are talking societies here that consist of human beings. and thus, we also need to engage and exchange views on these different social models. transparency is a second important model of multilateralism. i mentioned that earlier. transparency about what is happening within the country, so as to allow you to assess whether things are still -- trade is happening on the basis of a rules-based system or whether you are playing out certain advantages against another country. and of course, this leads to tension areas. i would very much wish to avoid the building of blocs. i do not think it will do justice to many societies, to say this is the united states and there is china, and we are

grouping around one or the other. this is not my understanding of how things ought to be. i think we will have more values that we share, more positions that we hold in common, but there will also be differences of opinion and different interests. i am not in favor of a total decoupling of all digital activities. we should not strive for that, because it would feed into a division of the world. but as you said, each and every one of us has to identify the vital and elementary life functions of one's society, and the pandemic has taught us a lesson here. even if my multilateral partner leaves me for asian point in time, i can, nevertheless, to what is of elementary -- importance in my society. we have open societies -- i am not thinking china in particular.

the united states, for example, has a war act enforced in regards to the import and export of vaccines. this also affects important components that go into the production of vaccines. of course, this is undoubtedly going to feed in to -- the original expression is there something that lack, you need to make sure you can produce it back at home. dr. schwab: madame chancellor, in a way, one could say you have a special part to play in this regard. perhaps i'm a coin a phrase or word -- as far as this stress on multilateralism is concerned. they give very much, madame chancellor. we hope to see you, maybe in

♪ >> c-span's washington journal. every day we take your calls live on the air, and discuss policy issues important to you. coming up we talk about the aydin administration's manufacturing agenda with -- biden administration's manufacturing agenda with scott. next we talk with leslie clark -- lesley clark. watch live this morning at 7:00 a.m.. french president emmanuel macron spoke about the global response to climate change and the leadership needed to restore the economy in 2021.