PRESIDENT OBAMA: Please, everyone, have a seat. Good morning again. It is an honor to welcome my good friend and partner Chancellor Merkel back to the White House. We had a wonderful dinner last night, one on one -- although, as you saw again this morning, Angela's English is much better than my German.
Michelle and I are very much looking forward to hosting the Chancellor and Professor Sauer at tonight's state dinner, where I'll have the privilege of presenting Angela with the Medal of Freedom.
As I said earlier, Germany is one of our strongest allies. We see our partnership in the drive of our workers and businesses who sustain the largest trade relationships in the world. We see it in the students and teachers, the scientists and researchers who are unlocking new innovations, including the clean, renewable energy sources that we need to combat climate change and create the industries of the future.
We see our partnership in the courage of our service members who stand shoulder to shoulder in Afghanistan -- where Germans serve under Americans and Americans serve under Germans. Chancellor Merkel, I want to thank you and the German people for your strong commitment to this vital mission, and our hearts go out to the wounded warriors and all the families, American and German and others, whose loved ones have given their lives to keep us safe. We remember and honor them all.
We see our partnership in the skill of our diplomats who prevent the spread of deadly weapons and stand up for democracy in Europe and beyond; and in the passion of our development experts as they work to avert suffering in countries like Sudan.
This is the essence of our alliance -- two peoples, bound by common values and committed to the security, the prosperity, and the dignity not just of our own citizens, but those far beyond our borders. And that's also the essence of my partnership with Chancellor Merkel.
Angela, I believe this is our tenth meeting together. That doesn't include the many phone calls and video conferences that we seem to have at all hours of the day and night. There's hardly any global issue where we don't consult one another. I've said before I always value Angela's pragmatic approach to complex issues, her intelligence, her frankness. I trust her. And as she's said herself, it's just fun to work together. And it has been, again, fun today, even as we've addressed some very urgent challenges.
Germany is one of our largest trading partners, and we discussed how to keep our economies growing and create the jobs that our people need. As Angela mentioned in her remarks at the opening ceremony, hundreds of thousands of American jobs are supported by our exports to Germany; hundreds of thousands of Americans work for German companies that have chosen to invest in America. I'm pleased that billions of dollars more in German investment is making possible new plants -- steel in Alabama, manufacturing in Tennessee -- all of which go to create thousands of new American jobs.
The Chancellor and I discussed the need to eliminate regulations and barriers so we can unleash even more trade and investment, including in the area of electric vehicles, where both our countries are leaders and where the possibilities of American-German cooperation are enormous. And of course, I very much appreciated the Chancellor's views on the financial situation in Europe, which we agree cannot be allowed to put the global economic recovery at risk.
With regard to security, we discussed our progress in Afghanistan, where we've broken the Taliban's momentum, trained Afghan forces, and are now preparing to turn a corner in our efforts. We're scheduled to begin the transition to Afghan lead. And I reiterated that we'll begin reducing American forces this summer, even as we join with Germany and our NATO allies in supporting Afghans in their political and economic efforts to forge a lasting peace.
I thanked the Chancellor for her support for the principles that I laid out last month as the basis for negotiations between Israelis and Palestinians. And I want to commend Angela for her personal efforts to bring the parties back to the negotiating table. Just as we agree that both sides will need to make difficult choices, we agree that unilateral actions -- such as Palestinians seeking a vote on statehood at the U.N. General Assembly -- should be avoided.
We agreed that Iran's continuing nuclear program, and its refusal to engage in any meaningful talks with the international community, remain a very serious concern. So we agreed that if the International Atomic Energy Agency this week determines again that Iran is continuing to ignore its international obligations, then we will have no choice but to consider additional steps, including potentially additional sanctions, to intensify the pressure on the Iranian regime.
Finally, we discussed the historic changes underway in North Africa and the Middle East. With regard to Libya, I'd note that Germany's deployment of additional resources and personnel to Afghanistan has allowed other NATO allies to increase their support for the mission to protect the Libyan people. The Chancellor and I have been clear -- Qaddafi must step down and hand power to the Libyan people, and the pressure will only continue to increase until he does.
And following our agreement with our G8 partners in Deauville, the Chancellor and I discussed our support for political and economic reform across the Middle East and North Africa, especially in Tunisia and Egypt. The United States and Germany are the two largest donors of assistance -- largest donors of assistance to the region, and we agree that this historic moment must not be squandered.
Along with the entire world, we have an enormous stake in seeing that these transitions to democracy succeed. And given the Chancellor's own remarkable life story -- and her experience helping to heal the wounds of the past and build a united Germany -- I very much appreciate her leadership and her partnership in this effort.
So, again, I'm very grateful to the Chancellor for being here. I'm confident that the great alliance between our nations is going to remain an indispensable pillar of a world that's more secure and more prosperous and more just. And I very much appreciate the personal friendship that I enjoy with the Chancellor. So, Angela.
CHANCELLOR MERKEL: (As translated.) Well, ladies and gentlemen, Mr. President, dear Barack, I would like to use this opportunity to thank you most warmly for this wonderful reception. I'm saying this also on behalf of the members of my delegation.
This reception I say to the White House is welcome that I see as a testimony of our very close friendship, of our partnership. If we remind ourselves of the fact that every fifth American today rightly points and perhaps also with a certain degree of pride to his German ancestry or her German ancestry, we can safely say that we, indeed, share common roots. And if we look at the names that loom large in American history, Frederick Steuben, but many leading leaders of the German -- of the American business community, Guggenheim, Steinway, Strauss, Singer -- all of these German names. So that is a broad foundation on which we can build.
And we are still grateful that so many Germans found asylum and a safe place to live during the Second World War in the United States. We have a broad-based exchange of students. We have cooperation in science. We work in air and space with the ISS. We share a lot of successes. I mentioned the 50,000 soldiers -- American soldiers -- that are present today in Germany are very welcome, indeed, in my country.
Let me say this on a personal note. Without the United States of America, I would in all probably not be able to stand here before you today. Overcoming the Cold War required courage from the people of Central and Eastern Europe and what was then the German Democratic Republic, but it also required the steadfastness of Western partner over many decades when many had long lost hope of integration of the two Germanys and Europe. Many perhaps didn't even want this anymore. But the then-President George Herbert Walker Bush said German unity, European unity, is indeed something that deserves our support.
So there are a lot of tasks that we have in common, a lot of challenges that we need to meet together. We're doing this in this spirit of freedom, of shared values. We want to bring these values to bear on the international agenda. We're dealing and -- ever since the month of January with these issues, the Arab Spring in Syria, in Tunisia, in Egypt, in Libya. That is a very great challenge.
But if I remember -- let me take you back perhaps to the period after the Second World War when, through the Marshall Plan, Germany was able to get back on its feet again. I see this also as our common task, as a task of the Europeans and of the Americans and the Germans to support this change, to make it possible for these young people to have a perspective for the future.
We talked about this. We talked about Germany in particular with its experience and vocational training schemes, offering an alliance for jobs, for training and education. We're working together with the Egyptians and the Tunisians on this with our foundations. Building up institutions, for example, is something that we want to do.
I said that we after all opened up an office in Benghazi that will serve as a clearinghouse for training schemes, for example, for the security forces, the police there on the ground, and we will also, through an additional commitment to Afghanistan, lend a contribution to mastering the common challenges.
We talked about economic issues in the G20. We worked very closely together, and I believe we have been able to make a lot of progress there and be successful. The situation in the Euro group in Europe obviously is also of very great interest over here. Finance ministers talked about these issues, but we, too, talked about this at some length. And I said, yet again, for Germany, Europe is not only indispensable, it is part and parcel of our identity. We've always said German unity, European unity and integration, that's two parts of one and the same coin. But we want, obviously, to boost our competitiveness.
We are very much aware -- very well aware of the fact -- both of us, I think -- that we are in a tough competition with the emerging economies. So Europe needs to be competitive and we also need to be competitive if we wish to remain an interesting economic partner for the United States. This has to be done on the basis of strength, of competitiveness. So this is why the Germans are pursuing a policy of a competitive Europe, and this is -- and it is also an approach of solidarity, so we need to show solidarity to the countries that need it, but they also need to come to enhance competitiveness.
We talked about the Middle East peace process. I think this was a very important initiative to point out yet again that the United States of America, just as Germany and the European Union, wish to promote a further development of the peace process. We're saying this to both countries: We want a two-state solution. We want a Jewish state of Israel and alongside a independent Palestinian state. Unilateral measures are not helping at all to bring about this cause, and we agree that we wish to cooperate very closely on this, because as we both say, time is of the essence. And looking at the changes in the Arab area and the Arab region, it would be a very good signal indeed if it came out that talks between the parties are again possible.
The commitment we take in Afghanistan shows that we're very close. We're very grateful for the close cooperation in the north of Afghanistan; that has turned out excellently. We share the opinion that in Afghanistan we wish to approach an -- the matters in the sense of an integrated security approach, a network security approach. It was said we want to build up not only the military side of it, but the civil side of it. We wish to go in together, out together. Afghanistan will need our support, however, in the long run. So we will not abandon them.
Barack, thank you very much again for the very friendly talks, for this very warm atmosphere, for making it possible to have this exchange of views in a very candid manner. I think even though we make look differently than our predecessors we have a lot in common, I think, and we have a lot to discuss.
PRESIDENT OBAMA: I'll start off with Steve Holland of Reuters.
Q Thank you, Mr. President. You both face economic troubles. Mr. President, how worried are you about the threat of a double-dip recession? What specific policies are you considering to help head it off? And abroad, do you expect Germany to fund another bailout for Greece?
And Chancellor Merkel, is Europe concerned about the possibility of the U.S. defaulting on its debt? Thank you.
PRESIDENT OBAMA: I'm not concerned about a double-dip recession. I am concerned about the fact that the recovery that we're on is not producing jobs as quickly as I want it to happen.
Prior to this month we had seen three months of very robust job growth in the private sector. And so we were very encouraged by that. This month you still saw job growth in the private sector, but it had slowed down. We don't yet know whether this is a one-month episode or a longer trend.
Obviously we're experiencing some headwinds, gas prices probably being most prominent. It has an enormous impact on family budgets and on the psychology of consumers. And so we are taking a range of steps to make sure that we've got an energy policy that can bring some stability to world oil prices.
But the overall trend that we've seen over the last 15 months -- 2 million -- over 2 million jobs created over the past 15 months -- a rebounding of the manufacturing sector in the United States that's exemplified by the recovery of the Big Three automakers here -- all indicates that we have set a path that will lead us to long-term economic growth.
But we've still got some enormous work to do. And as long as there are some folks out there who are unemployed, looking for work, then every morning when I wake up, I'm going to be thinking about how we can get them back to work.
Some of the steps that we took during the lame duck session, the payroll tax, the extension of unemployment insurance, the investment in -- or the tax breaks for business investment in plants and equipment -- all those things have helped. And one of the things that I'm going to be interested in exploring with the members of both parties in Congress is how do we continue some of these policies to make sure that we get this recovery up and running in a robust way.
We then have a set of long-term competitiveness challenges that aren't so different from what Germany or any advanced country is having to go through in the 21st century, where we have emerging markets who are becoming more competitive themselves. And we're going to have to step up our game.
So making sure that our school systems are working well and we've got the best-trained workers in the world; making sure that we're investing in infrastructure so that we can attract businesses to our shores; making sure that we reform our tax system so it's less complex, more transparent, and is encouraging of business investment; and getting a hold -- getting a handle on our deficit in a way that's balanced and sensible.
So we're going to have some days where things aren't going as well as we'd like. There are going to be some times where we're surprised with better economic data than we expected. We are on the path of a recovery, but it's got to accelerate. And that's going to require a continuation of a lot of the steps that I've already discussed.
With respect to the European situation, I have had extensive discussions with Angela about the situation there. It's a tough situation and I think we all acknowledge it.
Greece's debt is significant, and it is taking some difficult steps to improve its situation. But they're under the gun from the international capital markets, and as part -- as a member of the euro zone, they necessarily are going to be looking to other members of the euro zone to help them figure out a path forward.
Germany is going to be a key leader in that process. And the politics of it are tough. You recall how difficult it was for us to make investments in our own auto industry or to make sure that we didn't have a financial meltdown here. Well, imagine if you're having to make those same decisions with 27 other countries with respect to somebody else's economic problems. That gives you some sense of how tough the politics are.
But I am confident that Germany's leadership, along with other key actors in Europe, will help us arrive at a path for Greece to return to growth, for this debt to become more manageable. But it's going to require some patience and some time, and we have pledged to cooperate fully in working through these issues both on a bilateral basis but also through international and financial institutions like the IMF.
CHANCELLOR MERKEL: Well, in Europe we are very well aware of responsibility for the global economy. Barack just outlined what the Americans are doing in order to generate growth and combat unemployment, which is what we're doing in Europe as well.
Through the global financial and economic crisis, we've seen how interdependent we are. And the stability of the euro zone is therefore an important factor of stability for the whole of the global economy. So we do see clearly our European responsibility and we're shouldering that responsibility together with the IMF.
We've seen that the stability of the euro as a whole will also be influenced if one country is in trouble. And that is what this assistance is all about. There are actually -- there's actually a ban on bailouts in the treaties underpinning the stability and growth pact. But if a country is in danger and thereby endangers the euro as a whole, it is in each and every country's vested interest to see to it that this common currency area is not endangered. And we will act in such a way, however, that sustainability is guaranteed, as I said previously.
As far as the situation in the United States is concerned, I think each and every one ought to deal with his or her own problems. We in Europe have our hands full already with what we need to do, and I'm absolutely convinced that as we shoulder our responsibility and meet our responsibility, so will the United States of America.
Q (Off-mic) -- of her accomplishments in the past, or is it as well an expression of the expectations that you would have for the future? And if so, where do you see areas globally where the Chancellor and Germany can do more?
(As translated.) And Madam Chancellor, addressed to you, Germany is after all actually being praised in America through its economic might, its progress. Does this mean, however, also that it entails certain enhanced responsibilities and where you have to live up to responsibilities, or do you think Germany needs to do more in the future?
PRESIDENT OBAMA: With respect to the Medal of Freedom, it certainly is a recognition of the Chancellor's remarkable career. I think not only has she been an excellent steward of the German economy and the European project, but she represents the unification of Europe through her own life story and the capacity to overcome the past and point towards a brighter future.
So the extraordinary work that she's already done I think would by itself merit the Medal of Freedom. Fortunately she's going to be around quite a bit longer. And so she's going to be doing outstanding work in the future. Her leadership will be critical on economic issues of the sort that we just discussed in the euro zone. And I very much compliment her on the courage with which she approaches some of these very difficult political issues, at some significant political costs to herself.
On the international stage, there's no issues that we don't coordinate closely with Germany. And our work in Afghanistan, our work together with NATO, the approach that we've taken with respect to the Middle East and the Arab Spring, our approaches to development issues and how we help the poorest countries find their place in the international economy, these are all going to be areas where I think Angela's leadership will be welcomed and will be absolutely critical for us to be able to achieve the kind of more peaceful and prosperous world that we want to see.
So she's not finished yet; she's got a lot more work to do. I know sometimes she probably wouldn't mind a couple of days off, but she'll have to wait for that.
CHANCELLOR MERKEL: Well, I believe when you see me standing here before you today and receiving this prestigious award of the Medal of Freedom, it will perhaps also be a moment where one needs to look back to 1989 and German unification, and what actually happened there.
If you like, Germany entered into a qualitatively new phase. We were all of a sudden a reunited country, a country with all rights, but also with all the obligations.
If I think back to the beginning of the "90s, we were struggling for a decision that would enable us to send ships on the Adria, taking part in reconnaissance missions. And if you compare this to where we are today, you see the road that we have traveled in the direction of assuming more international responsibility. Military missions -- participating in military missions are part and parcel of that -- on the Balkans, in UNIFIL, in Afghanistan, in combating piracy, and in many other areas.
But what's also important in this context -- and that's an approach that we both share, Barack and I -- is that we need to combine military and civil engagement. And so I think we live up to our international responsibilities. The world is full of problems that we need to address. That's a reality and you cannot have enough partners that work together with you in a coordinated way, and this is why this cooperation is so extremely important for our common future.
I'm saying this also as someone who comes from Europe. The changes in North Africa are changes that happen on our doorstep. Those are our immediate neighbors and we have a choice. Either this works out well or we have an enormous refugee problem.
And so it's not only out of charity that we help people. There's not only a moral obligation. But we have also a vested interest in seeing to it that this continent, this region, comes on its feet.
Q Thank you, Mr. President, Chancellor Merkel. Mr. President, you called Chancellor Merkel one of your closest global allies, but you have differed in approach on a couple of key issues -- Libya and the global economic recovery over the years. In Libya, do you believe more German military involvement in that operation would bring it to a faster, more decisive conclusion? And did you ask Chancellor Merkel for such a commitment?
And on the European economic question, did you ask her specifically to drop her insistence that the private sector become involved in the Greek debt bailout, which is holding up that and which you've blamed the European sluggishness for America's own stalled recovery?
Chancellor Merkel, if I could ask you, do you believe NATO was mistaken in getting involved militarily in Libya? And if not, why are you not more directly involved militarily there? And what more can you do to promote an accelerated European economic recovery? Thank you.
PRESIDENT OBAMA: Well, first of all, with respect to Libya, I think it is important to note that this is a NATO operation that's fully integrated, which means you have German personnel who are involved actively in these activities in their NATO role. As I indicated before, Germany has stepped up and taken additional responsibilities in Afghanistan that have freed up resources for us to be able to conduct our operations in Libya.
Chancellor Merkel and I share the belief that Qaddafi needs to step down for the sake of his own people. And with respect to the pace of operations and participation, I think if you look at where we were three months ago and where we are now -- or two months ago and where we are now -- the progress that has been made in Libya in significant.
Our goal there was to protect the Libyan people from a potential slaughter. We have done so. Benghazi is free from threat of the Libyan regime right now. They are hunkered down. Misurata, which was under severe attack, is now in a situation where although still threatened, Qaddafi's forces have been pushed back. So what you're seeing across the country is a inexorable trend of the regime forces being pushed back, being incapacitated. You're seeing defections, oftentimes of some very high-profile members of the Qaddafi government, as well as the military. And I think it is just a matter of time before Qaddafi goes.
And each country that is part of this coalition is playing a different role. So we did a whole bunch of stuff at the front end to disable Qaddafi's air defenses, to take out some of their most significant firepower. Now we are in a more supportive role as other countries have stepped up.
Germany -- we did discuss last night Germany's role, and there is going to be a lot of work to do when Qaddafi does step down, in terms of getting the Libyan people back on their feet -- economic, political work that's going to have to be done. And my expectation is going to be that there will be full and robust German support as there has been in the past from Germany on a wide range of issues.
With respect to the economy, as I said before, this is a tough and complicated piece of business. And ultimately, Europeans are going to have to make decisions about how they proceed forward. What you have to do is balance the recognition that Greece has to grow, and that means that there has to be private investment there. They've got to make structural reforms that make them more competitive. They have to have greater transparency in their economic system.
But given their level of debt, it also means that other countries in the euro zone are going to have to provide them a backstop and support. And frankly, people who are holding Greek debt are going to have to make some decisions, working with the European countries in the euro zone about how that debt is managed.
What we've done is to say to Germany and other countries that are involved; we will be there for you; we are interested in being supportive; we think that America's economic growth depends on a sensible resolution of this issue; we think it would be disastrous for us to see an uncontrolled spiral and default in Europe, because that could trigger a whole range of other events. And I think Angela shares that same view.
And so we're going to have to work through this issue methodically, and we will be supportive in any ways that we can to make sure that all the best ideas are brought to bear on the problem.
But let me just make one larger point about -- because it relates also to the question that Steve asked earlier. I think people on both sides of the Atlantic are understandably frustrated with the ups and downs of the economy, the world economy. And it's just very important for folks to remember how close we came to complete disaster.
The world economy took a severe blow two and a half years ago. And in part that was because of a whole set of policy decisions that had been made and challenges that had been unaddressed over the course of the previous decade. And recovering from that kind of body blow takes time. And recovery is going to be uneven, and there are going to be times where we are making progress but people are still skittish and nervous, and the markets get skittish and nervous, and so they pull back because they're still thinking about the traumas of just two and a half years ago.
And so economic data that in better times would pass without comment, now suddenly people wonder, well, are we going to go back to this terrible crisis? And all that affects consumer confidence, it affects business confidence. It affects the capital markets.
And so our task is to not panic, not overreact, to make sure that we've got a plan, a path forward in terms of how we make our economies competitive; making sure we're dealing with the structural issues and the basic fundamentals that will allow us to grow and create a good, sound business environment.
So in America, for example, the need for us to get a handle on our debt and our deficit is going to be important, making sure that our investments in education, in clean energy, in infrastructure -- that we find a way to do that.
In Germany and Europe, there are going to be different sets of challenges. But the important point is, is that -- I think Angela would agree -- what we try not to do is to look day to day at whatever is happening in the marketplace or whatever headlines are taking place and be reactive. Our job is to set a course for the medium and the long term that assures that not only both our economies grow, but the world economy is stable and prosperous. And I think we can do that together.
CHANCELLOR MERKEL: Well, maybe I should comment briefly on this as well. Two and a half years ago, we experienced something that didn't exist for decades -- ever since the "20s and "30s of the previous century. And generally around, because we cooperated so well, we were able to ward off the worst that could have happened. And now we have a situation that we believe is something that meets the challenges of the future.
Before the crisis, we discussed what sort of format are we to choose -- a G20, G8, G30. Now we have the G20, which is a good format, has proved to be a good format, and has, for example, as regards settling this situation and setting up rules for the financial markets, has been able to come up with credible solutions. And that has strengthened our cooperation, although we do debate matters in a controversial manner. For example, do we need more stimulus? How much do we need? How many savings programs and cuts programs do we need? What structural programs do we need?
I think that shows great openness because we're all breaking new ground. These are unchartered waters, and we cannot, with all due respect, rely completely on the financial business community to give us good advice every day. They have their own vested interest. So we were dependent on our own good and sound judgment. And exchanges will be necessary on this in the future as well.
As regards Libya, the United Nations resolution is apply -- still applies. Qaddafi needs to step down and he will step down. I'm convinced of that, because we have made great progress. And then there will still be a lot of work to do. And in the future when we have the talks on this, we agree that Germany is showing -- will be showing that it is responsible and committed to the Libyan cause. There will be a lot of problems still to contend with, and we'll be in the closest possible contact.
We support -- Germany supports the NATO operation simply by being present in the stance there, and also by stepping up our commitment in Afghanistan. It is our joint will that this NATO mission is successful. And this is important for the people in Libya, but it's also important for NATO, for the alliance at large. And here we have one heart of allies that beats with the other allies.
Q (As translated.) The German decision on Libya has burdened the German-American relationship somewhat. Were you surprised by these irritations and this warm reception? Is this something like a reset button or a breaking up out into a new future? And you, President Obama, were in Buchenwald and Baden-Baden, but as a new President not in Berlin. Why not? And will this happen once you have your new term of office?
CHANCELLOR MERKEL: Well, I believe that this present event here today after all has been agreed for a long time, and our partnership, our friendship rests on a very broad basis, as I said this morning. And sometimes there may be differences of opinion in such a friendship and partnership.
What's important is that we wish each other every success. Not each and everyone can be in on missions. For example, we participated in UNIFIL where the United States are not participating.
Without sort of mixing up things here, there will be areas in the world where we shoulder different responsibilities. Partners are doing together with others things that we believe can be useful. And this is what we want to do. We want to see to it that our contribution is bringing about a success, is encouraging other people to now see we wish to live in a democracy, this is good, this is sensible.
So I see today's event as a wonderful reception, but it's not something that's so unusual. I see it in a continuity of our very close relations, and I do see it as another starting point, if you like, for meeting other challenges of the future.
On the question of Germany, you said that the American President some people say in Germany has not really been to Germany at all. He was in Dresden, he was in Buchenwald, he was in Baden-Baden for the NATO conference. Berlin opens its arms to him every day. But the Berliners can also wait. They have proved this throughout their history.
PRESIDENT OBAMA: I look very much forward to being in Berlin. And the last time I was there we had a lot of fun. (Laughter.) And I'm sure that I'll have a wonderful time the next time I'm there as well. And I appreciate you assuming that I'll have another term. (Laughter.) And so I'll have plenty of time to be able to put Berlin on my schedule. All right? Thank you very much, everybody.
CHANCELLOR MERKEL: And I can promise that the Brandenburg Gate will be standing for some more time.