rather difficult development have returned on a growth path and therefore i'm convinced that if we do fiscal consolidation in structural reform and also in southern europe that we will be in a position to return to the past and basically it's not about just us territory but a deficit of fourteen percent you know no one was buying any solar and control them so you have to do something in that situation and secondly we're talking about a broad based structural reform system gracewood and support is going to develop a taxation system with the european help also a better administration system so that straightforward basic things more privatization for instance. you know maybe not only sold in a pharmacy but also in a supermarket going to things that would be self evident in other posts of the world and i actually practice that so of course it is true especially for the public administrations who for many years have been benefiting from a number of. situations all the status quo it's very difficult for them to accept

that this is structural reform but it's. actually out of the question that there's reforms on this rate now the question is how can we really spread the burden of those changes and this is very difficult and globalised world i mean people just disappear the ones that should be bearing the burden and leave the people in the street to themselves and therefore actually we're displaying some little parity within europe and other solidarity based on the understanding that we're not going . not going to bring europe forward if we just say we're not going to tell anyone the truth i'm not going to hurt each other that this is going to work for a couple of years but when ten years time we would no longer be competitive it's china you hear it from russia and from brazil from other countries will not be looking on and see whether we are taking the right conclusions in europe if they can produce cheaper better more innovative. they obviously are going to do it because those people want to live in prosperity as well so i'm firmly believed.

this is not just bawling tired of the question of what the euro will stick together it's about whether europe in twenty years time can still be a motive a model for europe or whether europe will be an excellent holiday destination people who just want to see where the automobile was invented or where the big goose and the first big commercial chemical plant was built on the contrary i want europe to remain a prospering continent to compete with the rest of the world and therefore sometimes we have to have to be quite strict to one another. you see presently. which is a with your permission. it's not just the markets went down somewhat after the announcement of mr bernanke a gold also collapsed why did it happen and i think that people were expecting the strengthening of the dollar for the benefit euro and some regional currency that would produce changes also in the commodities market and we should take that into

account in our current economic policy and. the question that. madam chancellor. importance not only for the euro zone but also for us i said in my speech that we need to find a balance a combination of affective action in order to address the strategic tasks and also current operational tasks in principle it's similar to what is happening in the euro zone addressing unemployment in the east and south of the euro zone and stimulating growth as a whole it's a similar kind of balancing similar tasks even though. i can say. our economic situation is healthier and employment rate is five point five percent it's a historical minimum in our country. we have no debt. and practical

to the external debt. of the russian federation. two point five percent two point five percent for a simple euro zone it's up to one hundred percent if you look at the. domestic. percentage where the historical minimum in terms of inflation. is somewhat higher now but after the decision related to putting a brake on the growth of terrorists of the national monopolies i think that would strike a blow against inflation so the basic starting conditions for growth are quite satisfactory i'm not saying good that factory budget problems is comparable to what the federal republic and other countries in the euro zone have to tackle or so i agree with chancellor she knows my position i believe that the approach.

before making injections injections for whether it's funny or caviar we should make sure. these nice things well not just vanish will not just disappear we need to do a lot in this regard sort of experience which i want to open the floor to questions i'm looking for a quick question in particular on energy policy because the president talked about the softness we've seen in commodities and also economic policy if we can have a microphone here into the soul of the room i'm sure you're going to you can stand up and be great and then we go to the other side of the room there to the left about the fifth row down you're going to go to floor. it on. thank you mr president chancellor merkel for your tresses question for president putin and major technological developments are unfolding in the oil and gas industry relating to tide over oil and shale gas that are affecting the energy balance supply potentially price how do you see these developments affecting the russian economy

and what kind of strategies does russia have for addressing these new developments . change is something that happens all the time and the world adjusts to change in some way always and it's true of our economy too i do not see any cardinal change the fact that we in the american market. share. that it's a factor in which that affects. the economy today particularly the energy markets but. fundamentally we have not seen big changes first of all the cost to. the production of shale gas a multiple cost of normal gas production. i'm afraid that.

remember it's like sixteen dollars for one thousand kids. from one dollar per one thousand cubic meters of gas and secondly the change is related to. environmental protection as you. very well know where shale gas produced people cannot always bitterly often see something black in the tap water instead of water and therefore production of shale gas because it's related also to explosions requires large territories long. territory's one explosions another explosion and those territorial canal longer be used for the economy and they are in terrible shape afterwards of course those technologies will improve as of today producing shale gas and perhaps a shale oil is more which is also possible which is if you know the.

production also as possible so they don't want price for the consumers one hundred twenty dollars one hundred cubic meters and if you add she'll equivocation and then deal equivocation transportation. then for the european market that mean up to. three hundred fifty four hundred dollars per one thousand cubic meters that is the price at which today cast from sells by playing gas to its main consumers mostly in europe it's about the same for the american market this would get some positive results. at least today. the world natural gas energy market i do not see. changing as yet what we need to do together as i said today i spoke about the

energy to the energy people we need to think about cardinal changes in the technology. together we are able to produce that then it will be a breakthrough we should assume that. cheap energy will not be available that we need to. go to those reserves that are difficult to extract that cost more that will also require new technology and new to new technologies will be a great step in developing world energy and a question from the floor i think their. advocates uniter. and john thank you and both of you thank you for your comments and this is for president putin russia has over the last decade a very well deserved reputation for discipline and prudence and you've touched on

this a little bit higher but if you would be a little more granular as the economy has slowed here how do you plan to balance the need for stimulating growth with the need to really maintain that discipline that you've earned so well over the last ten years. i would like to say a few words. and i would like to. draw your attention to a number of factors we need to achieve drastic reduction in inflection we need to create fundamental preconditions for economic growth secondly we're going to develop our banking systems and based on the solution of the first issue we are going to reduce interest rates we will enhance the accessibility to credit resources both for large scale companies and for small and

medium sized enterprises we're going to reduce. the administrative burden and we will reduce costs and we will develop the infrastructure those. projects that i mentioned are just. going to work in many other ways as well of course of this this requires a lot of resources but. this task. is a mutually exclusive. we will be trying to create value to preserve basic preconditions for economic growth and also at the same time the. investments in the infrastructure and everybody is talking about. investments in human capital enhanced level of education improvement of the health

care we have developed a lot of programs to that effect. it was a good question from the second row because you can apply yourself. you're going to be able to the german investor in russia happy investor to say over a billion invested and able to do it in a normal fashion thank you very much for the excellent reception here thank you very much for your indication of the great cooperation between the g eight heads of state and your commitment to europe in the russian european cooperation so my question to both of you is on russian partners ships in these rooms here i think it was a few years ago in two thousand and five game and peter mandelson negotiated the four common spaces between the e.u. and russia because space we cannot make space where we have free movement of goods a space of security just in the sense of time i don't mean to be rude only to get to the question the question is could we now because we condition for the falklands basis we did move good security and education to be implemented was that russia

would join the world trade organization now eighteen years later it has happened could we go back to the plans of two thousand and five and implement the four common spaces between russia and the e.u. to come to a genuine t.d. partnership for growth for russia and the you thank you very much thank you mrs merkel would you like to take that first. he let's put it behind us that's the potential of partnership between the european union and russia is not being fully utilized. i think it's a very important step for russia to have become a member of the i wouldn't you know there regularly consultations in some areas we've made progress as firstly cooperation is concerned i've already talked about the energy cooperation and it's probably germany that is that important part no i think yesterday we had to prime minister here many countries france for instance they were intensely collaborating working together with russia and of course there

are things that have not been solved yet russia would wish will have faster progress in the visa waiver program and i'm quite open about that so we have to slow so as russian about and we have to make progress also as far as the. free movement of economic cooperation is concerned for those people that are engaged in economic cooperation and we're also returning to. discussions on human rights in that we are disputed and sometimes that at least good can be quite. significant but if you look at the long term strategic mississippi's let me say as someone who is a european in the sense of the european union that partnership with russia i think is a central strategic role that it's playing so obviously any setbacks any questions or issues should not be in our way we have to settle them those disputes that it's well known the russian president is not someone that is keeping his voice down but

indeed speaks up on regular occasions and that does not stop us from continuing those efforts in the future. so what. is there we have to say lofty words to be had maybe i was talking too loud but. i would like to apologize for that but i don't know why we should come back to two thousand five. hundred chancellor. was one hundred percent right when she said that if. russia exceeded two w t o one a mandelson graph. most important they have held the negotiations and the most important task was to ensure russia's accession to w g o there are lots of. misunderstandings that lots of things that need to be how many ways.

you might join calls in the field of human nature and rights we need to understand how to ensure human rights how to protect them what values we share a lot of things need to be agreed a lot of things need to be understand but what is very important we need to be. very attentive to what we need to treat each other with respect and russia is always ready to hear to listen to. under the condition that we no one dictates their rules to us in mentoring term well i would like to say that i haven't seen such examples over the past several years. a must win for months one thing is media where we have emotional people who are not very well informed. about what happens in real life. they have been

watching it on. their own and this is. something. to take the blame for because if we inform the mass media. we won't have all those rumors circulating vote. yes there are lots of debates about it's shit. economic development because each country each side is trying to achieve the best but the one who. sells wants to sell at a higher price than one who buys wants to buy at a lower price this is nothing unusual about it but we managed to come to a common solution we have acceded to the w t o and now. head of another organization international organization is. in the auditorium here is

a good. and. thinking together with him how to solve the problem of russia's accession to o.e.c.d. if even if it doesn't happen to model we understand that we need to harmonize our domestic internal rules with o.e.c.d. standards i'm not we are working on a regular basis. i'm not going to give you any dates with the important thing is that we listen to one another we hear what the other side has to say. we have. debates going on with the european union about. energy we haven't been able to come to terms with. it. as madam chancellor said that we build the. pipeline

together. i think we have. a very deep. interest so our consumption is going to grow in china. in japan or europe is faced with certain difficulties blood. responsibility of. segment of the global economy but. we have more than. a hundred. turn. towards achieving all those goals that we formulated several years ago but the second question from mrs merkel big decision last night overnight e.u. finance ministers decided to recapitalize banks but there was

a caviar put forward by germany that national governments need to share the burden my question for you chancellor is want to shut out the economies that need it most because the state can't afford spain italy portugal greece for example the recapitalization of the banks are you satisfied it will do what it's needed to do. i think that's. right you know i think it would be. precisely would not have a plan to do it because within the european union we are not a national state we are a community of many national states and so important for me and for germany is not the question of liability to join glory ability. and i join forces with decision making should be a one stop us organization you can't say you're recapitalizing european banks whereas the german federal chancellor cannot influence that decision in terms of

how a bank in spain portugal. will be capitalized because that again would be in the responsibility of the national forest just basically we need to match of the things together the european treaties or the moment as such and many most european countries do not want to change those treaties because this is very complicated to do that and so therefore we must make sure that the treaties that we have if we apply them in the correct direction and if we get more unfortunate rights in terms of your opinion situations well we have to be ready to change those to amend those treaties now when it comes to the and when it comes to the recapitalization of punk's all of the issue here at hand this and i haven't seen it in writing yet the decision the agreement was on a sequence of in the case of difficulties of a bank is in charge of capitalizing on that guy like after the financial crisis we said you shouldn't always people taxpayer numbers no matter what the constituent automatic. stands in for their liability whenever

a bank is in dire straits and they will work towards that like the g twenty but we're never going to get a situation where a bank is too big to fail because you're too big you can feel forced upon you to explain the world the liability to venice are so we need the cascade of responsibilities now what happens if the bank itself is not in a position and also the face capital. the equity of the bank is not sufficient what will happen in that scenario in such a case you know what it true boy what has consequences for the economy the state has to come in and if the state cannot do that well then we have our european solidarity mechanisms only as a last resort and then the state has to apply to the same and so on the support and part of the volume of them is there and also. should be available for this for this purpose but. we as governments can actually do much from governments the business or the business has to be changed the size has to be amended you know

obviously as a german chancellor i cannot get a stake in the bank elsewhere so if you have to find people who have to change your business model this is not it's going to work and therefore the political responsibility or is i'm responsible for the money of the german taxpayer and elsewhere governments are in charge of other i suppose money so therefore we have to be also accountable to our own taxpayers where we are using our tax funds we have to get something out of it and couldn't force one of those funds and i can only do that together with my colleagues all completely changing treaties. granting the rights to the e.c.b. or some other institutions european institutions that would have. those measures but you know if that happens before the top happens governments will have to seize the authority they have over their savings banks or other national banks to supranational organizations or germany's indeed for solidarity how to strew some of which means that the liability risk that you're taking is part of your decision

making and it's also legitimized by parliament otherwise it's not going to work thank you very much i want to ask our host before i to give you the microphone mr president. if. i don't want to be. the federal chancellor stated that so far she doesn't know who is responsible for the recapitalization on. he just pressed anxious that in the same time she mentioned that sometimes i'm very. telling what i think so i wish i hadn't thought it's not going to be at the expense of the customers. before i go back to the floor i want to ask her a host and your guests mr president i don't want to be accused of running over time but there's a lot of questions from the floor do we have ten more minutes is that suffice for you madam chair so you're ok as well. they are the most even in president well i

have to speak with the president later on i think we can do it yes indeed. because i'm here to be in discussion with all of you very much. sir though the brief question if we can. if we could even more as. i know. this is kind of a question. for all chancellors are privy to from springer in berlin you just said actually limited the opportunity so you have in europe to actually enforce what you have to say but when do you think we're going to see a european economic and political union because we're talking about twenty seven different countries with twenty seven different constitutions or twenty seven different constitutional courts and twenty seven different different ministers of defense i mean that is a weakness only a political union can really be strong i think. yeah.

i think a political union which all those competences mr veto that you've just mentioned would be cool to you in the sense of a european government such a political union. will take a long time until it comes into being because we have already has ceded some competition to the european. union. if we have an end. to the proceedings with china over solar panels. with the he needs then i have to explain to the chinese government first that i have very limited opportunity to speak up on that because the entire responsibility is with europe and many decisions that have been taken with a qualified majority. you know or some possibly an internal matter energy single market package i'm not necessarily happy with but we have voted out of that. consent within europe and there we are so i don't think

you can actually win more full most trying to win europe by delegating all three t's more and more to europe and in fact this is one of the findings with. german federalism you can do many things better by coordinating it's not about. derogating competence or sort of those we can always find multilateral arrangements that everyone it has to while still maintaining the specificity of the social legislation and others in every national government or that have grown over the years so for me the european method is not only about ceding competence as a way. to europe but also one of those european methods is to coordinate better among the group of european governments headquarters is not always better than a number of local decision making situations what is important.

for me and europe is an area where we need to convince people and to raise awareness is that we have no legal claim to be good. those who are good in this world is decided by competition not because we have been leaders for one hundred fifty years we continue to be saying and i think europe right now is faced with a process of. understandingly globalization is placing entirely new challenges in front of us and we can only counter them together. and only then can people have very specific problem solving so i'm not pessimistic but more political collaboration of a central super political state of europe is not going to happen. but the. good news is a pivotal issue you raised this but. this is very your chance was very accurate in his statement and i would allow myself to hear from each side you cannot imagine

in the back to the operation of a single currency zone without a single party fiscal and the single market comic processed food in particularly. the members of this union on the subject on with different economic development levels. how will this be done. some of the salt of the english that you will unite. to be the state the united states of europe oh is it going to be possibly done on the basis of the different agreements that it really doesn't make a difference in the result is what counts there are so many jokes that you can. about it. no matter what you do during your first. night after your marriage the result should be always the same. one quick question such as are merkel one quick question for president putin and then we'll wrap it up

a very important decision overnight mrs merkel and there was a move to block the accession talks for turkey to the european union after the protests that we saw are but the government response which i understand affected you quite personally you took it quite hard is this movie reversible the accession talks with turkey into the european union have to what we saw. and then byzantine and put says. after all we're in a process something very different question is that asked as regards succession procedure with turkey there is one mandate. that enables us to negotiate in a free and open way and this mandate entails said new chapters opened a long way for a number of years now we have not opened new chapters and what is under discussion now is whether this is the right point in time whether or not a technical preconditions are in place to e.

open a new chapter but there is no doubt that the negotiations as such will go on the new we have a disk situation which is much much more difficult than the one that we have right now namely. the problem that so far turkey has not fulfilled the so-called project which means that turkey. as because all of the member states of the european union has to have the same quality of trade relations and the trouble of cyprus looms large here on the horizon and this is why certain chapters have already had not yet been opened and by no other chapter is closed because fast and foremost that is the issue that needs to be dealt with the so-called at work protocol i made my public comments on what i saw happening on the streets in turkey i was shocked to see how they dealt with the authorities dealt with the demonstrators at the values that we .