TRANSCRIPT: Olaf Scholz: “Germans Will Decide Their Democracy!”

And that’s the case. There is no difference between the digital world and the analog world, to say it like this. And we have to be very clear that hate and all this which is so bad for our society should not be the reality of public debate.

Defence Spending and Economic Policy

INTERVIEWER: Let’s turn to the subject that I think you hoped the Vice President would address yesterday. Let’s turn first to actually defence spending, which you made some very strong points just now about what you thought needed to be the scale of defence spending and what needed to change in Germany in order to pay for it, particularly the debt break. Will this be, you said there was a majority in this country after the election. Does that mean you think it should be a condition of any coalition agreement that there should be a reform of the debt break?

OLAF SCHOLZ: To my point, it’s necessary that we change the view we have on these questions since many years. It will be absolutely impossible to finance 2% and even more without changing the debt regulation we have in Germany. It is impossible.

We had this out of the situation with this extra fund of 100 billion which gave us the opportunity to do the necessary investments and to have more than 2% of GDP invested into defence now. And we will be able to continue, but this fund ends in 2027.

And then we have to take a decision for the next future. And it will not be that we raise taxes by 30 billion. And it will not be that we cut investments into streets and railways and investments into the future of our society or in social cohesion because of doing more for defence.

So it is absolutely clear that without a change in the view of looking at this debt regulation, we wouldn’t be able to fulfill the request of 2% and we would be absolutely unable to do more. And this is the same with many other countries in Europe, and that’s the reason why I said we have to rethink also in Europe the question.

And my concrete proposal here is that we think that when it goes over 2%, we have to have something where our criteria of debt regulation are not against spending.

INTERVIEWER: Absolutely, and you echoed comments made by Ursula von der Leyen yesterday where she proposed something similar. Can I just clarify that both on the European side and with the debt break, is this a permanent change? Should defence spending permanently be excluded from the debt break?

OLAF SCHOLZ: I think it should be for a long time and possibly permanently. We have to discuss this together. But we have to be very careful. It is clear it is not for doing new pension schemes. This is something we have to afford with our own capabilities in our countries.

But if you look around the world, you will not find too many countries that are able to do that much for defence if they are not using also their chances for going to finance with sovereign bonds and the like.

And so it is absolutely necessary that we are clear on this question. And I’m really, really a bit disgusted that we have, especially in my country, but also in other places, the idea that it’s something which we will be able to do just in a way. It will not happen.

If we are not serious, if we are not honest with the people, telling them that spending more for defence will mean that we have to increase also the debt we have, we will not succeed. And it is something we wouldn’t do. And that’s the reason why so many countries in Europe did not fulfil the 2% criterion, why they were not able to do it without acting against the cohesion of their own society.

And I can tell you, I spoke with many leaders in Europe, and behind closed doors, they are absolutely clear. “If I would do this, I would have no chance to convince my public.” And so we have to be honest in this case, and all these not honest debates are the problem for a real decision. They were in the past.

And if there would not be, to be very clear, if there would not be this war of aggression of Russia against Ukraine, nearly every country would have said we look for the 2% without doing anything. And this should not happen again. That we meet in Wales, everyone is signing a document about 2% and not doing a bit for getting there.

When I started in office as the finance minister, the budget of the defence ministry was 37 billion. Now it is, together with the extra fund, nearly 80, together with the defence spending and other resources like foreign office and so on, it is 90 that we spend.

So what sort of an increase we had in the past, we would not have been able to do this without the extra fund, and we will not be able to do it without extra debt. And we have the chance for doing so. Just tell this, everyone in G7 has a debt to GDP ratio of over 100%, but Germany. We are going down to 60. The United States are above 120. Italy is above 140. Japan is above 200 something.

So that is the reality we are facing. We have the strength, we have the power and we have the economic capabilities to do what is necessary.

INTERVIEWER: You have put this very starkly and very clearly and I think it is a very strong argument you make that politicians have not levelled with their public. Have you done enough to level with the German public, perhaps before today? Because do you think the German public is ready for the scale of defence increased spending that you say is necessary?

OLAF SCHOLZ: Yes, I think so because there is a broad support for all those saying we should do more. But there is a reason why it did not happen in the past and this is what I explained. But if we would tell the people this would mean cuttings of 30 billion, 40 billion a year in all the necessary things to be done in the country, they will not agree. So it is the only possibility to do something which is about these regulations we have.

German Elections and International Representation

INTERVIEWER: Can I just turn in our last questions to something more short term. President Trump has clearly signalled that he would like to get President Putin around the negotiating table and do this quite quickly. The next weeks, months are going to be very important. You have an election next weekend. If the polls are to be believed, you are unlikely to win this election.

OLAF SCHOLZ: This was the same last time. But I won.

INTERVIEWER: But you will be Chancellor until a new coalition agreement is formed. For the outside world, how will Germany speak with one voice? How will Germany be a credible partner in the coming weeks and months if there is no clarity around the world about what the next government will be or indeed what their positions will be. How will you ensure that you can be the leading voice in Europe in the next weeks and months?

OLAF SCHOLZ: This is a long tradition in Germany that the cooperation even between parties that are fighting against each other in elections is strong enough that we always look at our country and how we represent it in a situation like this. So I have no doubt that we will be able to act for the broad consensus in Germany.

INTERVIEWER: So you will be working together to ensure that you have an…

OLAF SCHOLZ: We did all the time and why should this not be the case again? And so I’m very sure. This is one of the achievements of the German constitutional framework where we learned our lessons from the Weimar Republic. We have a very strong government that always is able to act and we have a broad consensus between the democratic parties about the need of transatlantic partnership of peace and security in Europe so that I think that we will be able to do all what is necessary with a sort of consensus that also gives the legitimacy for what you can do.

Ukraine, Russia, and International Support

INTERVIEWER: It’s unclear from the various comments from the Trump administration precisely what their approach is going to be towards Ukraine and towards Vladimir Putin. But one consistent theme seems to be a greater role for Europe, a less role for America in supporting Ukraine. If they take the radical end of that which is really pulling back from any American support, is Germany in particular and Europe willing and able categorically to step up?

OLAF SCHOLZ: I do not understand the United States administration in this direction. So even what we heard from the defense minister, what we heard from many others and also from the president is that they will continue to support Ukraine. This was also what I learned from my talks I had with President Trump when we were discussing especially the situation in Ukraine and everyone should know and I think the United States administration knows that it is also an important and necessary message to Putin that he cannot count on a reduction of the support because otherwise he would not do the necessary compromises.

And so I think a strong Ukraine which gets our support, a strong message to the Russian president that the support of the United States and of Europe will continue and then the request for a fair peace that is not a dictated peace is what we should look for and what we can achieve. Because in this meeting we should be very clear that Putin did not reach a relevant of his goals. He was looking for making NATO more weak and getting it more away from him.

Now he has Finland and Sweden as new members. Nearly everyone is spending 2% of GDP for defense. We are more looking at defending our countries in Europe if there would be a military aggression against NATO. So this is a complete difference to the time before.

Second, he was looking for something of a proxy regime in Ukraine. His wording for this is denazification but he means that he should control who is the president and what they are doing. This will not happen. Ukraine is now a strong democratic nation on the path to the European Union which we opened and which is merit-based but is the path where they can get to the end and be a member of the European Union.

And the third is what he always mentions also in the phone calls I had with him a completely demilitarized Ukraine. But the truth is that Ukraine now has nearly one million soldiers under weapons if you count all together that are relevant for the battlefield that they are well equipped or could be better but they are really equipped by Western munition arms and all the kind.

And because of this, it’s absolutely clear that a post-war Ukraine would have a very strong army. But this leads me to the question how should… what is what we could get for… guaranteeing that Ukraine will not face the next war with Russia some years later. And my view is the first of all is a strong army of Ukraine which will be over the size of their economy, which they could not afford from the strength of their own economy.

So there will be a responsibility in the post-war times for Europe and for United States and for the international partners and friends of Ukraine to make this happen. And all the sort of security guarantees we give should be designed from this basis.

INTERVIEWER: So the key is a strong Ukrainian army which you help fund and support. But beyond that there will also be a need for security guarantees. What security guarantees should there be? Do they have to, to be credible, need to include the US?

OLAF SCHOLZ: Yes. And this is the basis of NATO, that we do always the same things. And I will be very clear that this must continue to be the basis for what we are deciding, that there is not a split security between the United States and the European partners and that we are always involved.

So we felt involved when there was this aggression against the United States and went to war in Afghanistan as partners. That’s one of the cases where we worked together. And this must be always the basis for what we do, that it is clear that if there is an aggression against soldiers of European states in Europe, it is also the question of the United States.

So we should always do the same. This is the basis of NATO and our strength. And for making Russia clear that they cannot split us.

INTERVIEWER: Chancellor Olaf Scholz, thank you very much indeed.

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