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Merkel praises EU, criticizes Russia at Davos

Elizabeth SchumacherJanuary 22, 2015

Speaking at the World Economic Forum in Switzerland, the German Chancellor gave her outlook on a wide array of issues. Her talk touched on everything from Ukraine, to digitization, to a Greek exit from the euro.

Merkel in Davos 22.01.2015
Image: picture-alliance/epa/L. Gillieron

German Chancellor Angela Merkel spoke at the World Economic Forum at the Davos resort on Thursday under the banner of "global responsibilities in the digital age," but her talk covered issues including the Ukraine conflict, climate change, and the need for female entrepreneurs.

"Our values need to be defended," Merkel said, opening her talk with a reminder of how "we have problems that do not stop at the borders of Europe," and offered her sympathy to the families of the victims of the attacks that shook Paris earlier this month.

She also took a moment to call out Russia for the "flagrant violation" of the "territorial integrity" of Ukraine, before turning to economic issues.

This year Germany will take over chairmanship of the G7, and Merkel said that Berlin would use this opportunity to promote sustainability, protect the climate, reduce poverty and "very importantly to me," empower women to start their own businesses.

Austerity versus growth

Chancellor Merkel took an opportunity to rebuff criticism that the painful austerity measures dogging many European economies stem from her policies because Germany, as the biggest economy in Europe, steers the financial course of the continent.

"It isn't so black and white," Merkel argued. "So-called austerity is often pitted against so-called growth. We need to encourage public investment yes, but also just as much private investment." Merkel also said that the EU is a 28 member union whose decisions must be by consensus, claiming that this meant that the priorities of larger and smaller members counted equally.

As for digitization, the advertised theme of the talk, all Merkel offered was "digitization and how we react to digitization will be important," calling on Europe to invest more in digital infrastructure, saying the continents was falling too far behind the United States and parts of Asia.

From Vladivostok to Lisbon

After her remarks, Chancellor Merkel answered questions from Klaus Schwab, founder of the World Economic Forum. He asked her about the long-term outlook for Ukraine, which gave Merkel an opportunity to soften the harsh words she leveled at Russia earlier in her talk.

Davos WEF Auftritt Poroschenko mit Bus Trümmerteil 21.01.2015
Ukraine's Poroshenko condemned Russian 'terrorism' in his own Davos speechImage: Reuters/R. Sprich

The first step is to regain stability on the basis of the Minsk agreement, Merkel said, but argued that Europe needed to also think of the "sensitivities of Russia" and not push for a "hasty" rapprochement between Ukraine and NATO.

The ultimate end goal, the German chancellor said, was to have broad economic cooperation "from Vladivostok to Lisbon, as President Putin himself once said."

Merkel: No 'Grexit' in sight

One of Schwab's final questions was on the subject of a possible Greek exit from the eurozone, often dubbed a "Grexit," which has unsettled investors and pressured some markets in anticipation of a possible victory by the anti-bailout Syriza party in this Sunday's Greek elections.

Merkel dismissed the ‘Grexit' as an immediate possibility, explaining that she has been assured that the majority of Greeks wish to remain in the eurozone. She called for a combination of "solidarity" with suffering countries but also highlighted the need for nations like Greece to shoulder their own responsibility. She praised Greece, as well as Portugal, Spain, and Ireland, for taking measures to pull themselves away from the brink of insolvency.

The Chancellor's last comments were calls to Europe and Europeans to be "less parochial" and inwardly-focused, but she also praised the "great strength" of the organization to reach consensus and improve the lives of its citizens.