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German Chancellor Friedrich Merz told world leaders at the World Economic Forum that a “new era has already begun,” urging European nations to stand closer together as geopolitical tensions and economic uncertainty reshape the global order.

Speaking in Davos, Merz said Europe must strengthen unity, deepen cooperation, and take greater responsibility for its own security and economic resilience. His remarks come as the continent faces pressure from the war in Ukraine, shifting U.S. policies, and growing strategic competition with China and Russia.

Merz emphasized that Europe can no longer rely on old assumptions and must adapt quickly to a rapidly changing international landscape.

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00:00At the moment of profound change, geopolitical tensions are high, trade is
00:07fragmenting, security has become an urgent priority and technological change
00:14is reshaping our economies at remarkable speeds. Europe must respond to these
00:21challenges and Germany as Europe's economic engine carries the particular
00:26responsibility, shaping the continent's future. I know after your speech here you
00:33will be going to Brussels in another meeting but as you saw also Mr.
00:40Chancellor, things do happen in Davos, there are processes and I guess the
00:45discussions around Greenland is going to be a little bit easier this evening in
00:50Brussels. Since taking office you have sent important signals, a shift in fiscal
00:58policy, significant investments in defense and infrastructure and a more active
01:04German role on the international stage. As Mario Draghi has warned, without bold
01:11action Europe risks a slow agony. This moment therefore calls for leadership that
01:18provides clarity, confidence and resolve. We very much look forward to your speech
01:24and thank you for your very important leadership in challenging times for Europe
01:30and Germany. Now, President Borger-Brendel, ladies and gentlemen, the comment piece up here on the magic mountain in Davos
01:53is at stark contrast to a world whose old order is unravelling at breathtaking pace. Let me share with you how the new German government is looking at these tectonic shifts and how we are addressing them.
02:19These shifts have the most profound ramifications for our freedom, for our security and for our prosperity. In these weeks and months we are witnessing a new era has already begun. Russia's war of aggression against Ukraine
02:47Ukraine has been the most drastic expression so far. But change runs much deeper. China, with strategic foresight, has worked its way into the ranks of the great powers. The United States' global pole position is being challenged.
03:14And Washington reacts by radically reshaping its foreign and security policy. We have entered a time of great power politics. The international order of the past three decades, anchored in international law, has always been imperfect.
03:41Today, its very foundations have been shaken. This new world of great powers is being built on power, on strength, and when it comes to it, on force. It's not a cozy place. We do not have to accept this new reality as fate.
04:08We are not at the mercy of this new world order. We do have a choice. We can shape the future. To succeed, we must face harsh realities and chart our cause with clear-eyed realism.
04:15Two days ago, Mark Carney said, Mark Carney said, in this hall from this place, we must no longer rely only on the power of our values. We must also recognize the power of our values. We must recognize the power of our values.
04:22I share that view.
04:23I share that view.
04:29And when I look into this room.
04:30And when I look into this room, into this hall, I want to say most of us share it.
04:36And that is a good starting point.
04:37European friends, if I may say so.
04:38European friends, if I may say so.
04:39Our power today rests on 31 years.
04:40Our power today rests on 31 years, base of 9.
05:06Our power today rests on three pillars, our security, our competitiveness, and our unity.
05:19First, we must invest massively in our ability to defend ourselves, and we are doing this.
05:26Second, we must rapidly make our economies competitive, and we are doing this.
05:37Third, we must stand closer together among Europeans and among like-minded partners.
05:49We are doing this.
05:51As we forge ahead, we must never forget one thing.
05:55A world where only power counts is a dangerous place.
06:04First for small states, then for the middle powers, and ultimately for the great ones.
06:14I do not say this lightly.
06:17In the 20th century, my country Germany went down this road to its bitter end.
06:25It pulled the world into a black bias.
06:30So let us bear in mind, our greatest strength remains the ability to build partnerships and
06:36alliances among equals, based on mutual trust and respect.
06:43I remind you, after 1945, the United States of America inspired us Germans to embrace this logic.
06:57On this foundation, NATO became the strongest alliance in history.
07:06This is why we hold true this idea.
07:10Now, in recent days, the United States administration has vehemently demanded greater influence in Greenland.
07:21Washington has argued that this is an imperative to counter security threats in the high north.
07:27We welcome that the United States is taking the threat posed by Russia in the Arctic seriously.
07:39This threat is itself an expression of great power rivalry.
07:47It is in both at Europe and the United States.
07:54We experience it daily in hybrid attacks in the Baltic Sea and in Russia's winter war against the people of Ukraine.
08:05We share the conviction that, as European NATO allies, we must do more to secure the high north as NATO.
08:18This is a common transatlantic interest.
08:23Germany is doing just that.
08:25We are doing it in the framework of NATO and we will do more.
08:32Our neighbors and partners in Europe, including Denmark and the people of Greenland, can count on our solidarity.
08:42We will protect Denmark, Greenland, the north from the threat posed by Russia.
08:53We will uphold the principles on which the transatlantic partnership is founded, namely sovereignty and territorial integrity.
09:05We support talks between Denmark, Greenland and the United States on the basis of these principles.
09:11I have discussed this with President Trump, Prime Minister Fredrickson, Secretary General Mark Rutte and others in these days.
09:19The aim of these talks is to agree for closer cooperation amongst allies in the high north and beyond.
09:28It is good news that we are making steps into that right direction.
09:34I welcome President Trump's remarks from last night.
09:37This is the right way to go.
09:41This is the right way because any threat to acquire European territory by force would be unacceptable.
09:51And, ladies and gentlemen, new tariffs would also undermine the foundations of transatlantic relations.
09:59If they are put in place, Europe's answer would new age of great powers.
10:06Europe must stand together resolutely and sovereignly.
10:12And secondly, we should not give up on NATO.
10:17At the historic NATO summit in The Hague last June, we created the material prerequisites for this Europe
10:27will invest hundreds of billions of euros in its security.
10:33It was a remarkable transatlantic success.
10:36Now we must repair the trust on which the alliance is built.
10:43Europe knows how precious it is.
10:46We feel deeply that it can be the United States' strongest competitive advantage in an age of great powers.
10:56The democracies do not have subordinates.
11:03They have allies, partners and trusted friends.
11:09Let me paraphrase this in German in a few words.
11:12We have the path to a new world of great powers.
11:17We have been in a new world of great powers.
11:19In this world we are a rower wind.
11:25This world will us to force our fears and threats.
11:27We all feel it.
11:28This world will us to force our fears.
11:30We all feel it.
11:32We all feel it.
11:33Make us but also clear.
11:34This world is not delivered.
11:37We can create it.
11:39So let's do it in our own strength.
11:47And that's what we do.
11:50We invest massively in our own security.
11:54We make our economy again wettbewerbsfähig.
11:57And we hold it in Europe together.
12:00That will help us, the demands of this new time better to trot.
12:05And especially, it will open us new doors and make new chances.
12:12For our sovereignty, we will be engaged in our sovereignty.
12:17And our neighbors in Europe can leave us on our solidarity.
12:24Let us please, by all the frustration and anger of the last months,
12:29the transatlantic partnership will be abolished.
12:33And that is not a well-feiler reference to the principle of hope.
12:38We Europeans, we Germans, know how costable the trust is, on what the NATO is.
12:45Im Zeitalter der Großmächte werden auch die USA auf dieses Vertrauen angewiesen.
12:53Es ist ihr und unser entscheidender Wettbewerbsvorteil.
12:59Ich sage es auf Deutsch.
13:01Autokratien mögen Untertanen haben.
13:04Demokratien haben Partner und verlässliche Freunde.
13:10An diesem Satz wollen wir uns orientieren.
13:13Wir werden hartnäckig dafür arbeiten, dass dies nicht in Vergessenheit gerät.
13:19Unter my leadership, ladies and gentlemen, the new German government set two goals.
13:23First, Germany has to regain economic strength.
13:28Second, we want to make Europe a key player again in global politics, economically and particularly in defense.
13:38We need to be able to defend ourselves.
13:42And we need to do so fast.
13:45These goals are complementary.
13:48Economic competitiveness and the ability to shape global politics are two sides of the same coin.
13:56Germany can only lead the way in Europe if we are economically strong.
14:03And Europe's geopolitical influence and our defense capability largely depend on the continent's economic momentum.
14:11Ladies and gentlemen, our policies now need to be exceptionally ambitious and courageous.
14:18We must make progress in four simultaneously areas.
14:23We must continue supporting Ukraine in its fight for just peace.
14:28We must become capable of defending ourselves on our own in Europe.
14:35We want to reduce dependencies that currently make us vulnerable.
14:41And fourth, we want to ensure that our economy can tap into its full potential for innovation and growth.
14:53This will only work if we work together as one European Union.
14:58And be assured, Germany pledges to take a special responsibility here.
15:04That is why we decided right at the start of my tenure to increase Germany's defense spending up to 5% of GDP.
15:14That is a huge increase.
15:16Boosting our military capabilities means to assert our sovereignty.
15:24By systematically strengthening our defense, we are reducing our economic and technological dependencies.
15:33And there is no room for isolationism and protectionism in this agenda.
15:40Instead, we are talking about strategically coordinated ties worldwide.
15:47Europe's trade ambitions are crystal clear.
15:51We want to be the Alliance offering open markets and trade opportunities.
15:58We want to strengthen the rules for fair trade and level playing fields.
16:04Europe must be the antithesis to state-sponsored, unfair trade practices, raw material protectionism, tech prohibition and arbitrary tariffs.
16:18Tariffs, again, have to be replaced by rules.
16:23And those rules need to be respected by trading partners.
16:28On this, the EU is making great progress.
16:33Mercosur has been signed.
16:36And, by the way, I deeply regret that the European Parliament has put another obstacle in our way yesterday.
16:45But rest assured, we will not be stopped.
16:49The Mercosur deal is fair and balanced.
16:53There is no alternative to it if we want to have higher growth in Europe.
17:00And most likely this agreement will provisionally be put in place.
17:07In a few days, this time, the President of the European Commission will travel to India to establish the principles of a free trade agreement between the subcontinent and the European Union.
17:18I was in India a week ago and I have no doubt whatsoever that the era of great powers presents an opportunity for all of us and for all countries that favour regulations above arbitrary rule and see greater benefit in free trade than in protectionism and isolationism.
17:39And, Europe is joining forces with new partners, as you do see in our efforts to finalize trade agreements with Mexico and Indonesia.
17:51In order to make best use of these new partnerships, we need to put our house in order at home.
17:58We are aware of those problems.
18:01Both Germany and Europe have wasted incredible potential for growth in recent years by dragging feet on reforms and unnecessarily and excessively curtailing entrepreneurial freedoms and personal responsibility.
18:17We are going to change that now.
18:20Security and predictability take precedence over excessive regulation and misplaced perfection.
18:28We must reduce bureaucracy substantially in Europe.
18:32The single market was once created to form the most competitive economic area in the world.
18:38But instead, we have become the world champion of over regulation.
18:44That has to end.
18:46I have therefore mobilized EU leaders to convene for a special summit on February 12th, at which we intend to set the course.
18:56Georgia Meloni and myself, we have formulated a set of proposals we would like to see addressed.
19:03Amongst them are some new ideas.
19:06We propose an emergency break for bureaucracy, discontinuity for legislative work, a modernized EU budget putting competitiveness center stage.
19:20We want to have a fast, dynamic Europe and a service-oriented administration.
19:27I will insist that rapid progress be made, including on the capital markets union.
19:33We cannot allow our European champions to continue being dependent on capital markets outside Europe.
19:44Instead, they should be able to grow in Europe, they should be able to be financed in Europe and they should be able to go public in Europe.
19:57At home, we are making Germany competitiveness again as a place for business and investment both, in industry and our many small and medium-sized enterprises.
20:10Let me tell you, the so-called Mittelstand in Germany has to be reckoned with.
20:16We are providing more targeted support to innovators, removing obstacles from their path and making it easier for them to access capital markets.
20:28We have reduced energy costs.
20:31The focus for our electricity supply is on a combination of renewable energies, storage and modern gas power plants.
20:40In the coming years, you will see massive investments in state-of-the-art power plants, power lines and heat supply.
20:48We will speed up efforts to expand and modernize infrastructure.
20:53500 billion euros have been made available for this purpose.
20:58At the heart of our efforts lies digital transformation.
21:02Artificial intelligence requires industrial scale.
21:06Germany has one of the world's largest pools of industrial data.
21:11That is just one reason why we are investing in high-performance AI, gigafactories, speeding up the expansion of data centers and creating the digital infrastructure for a competitive AI economy in Germany.
21:27Our research and technology policy is guided by a new high-tech agenda.
21:36We are global leaders in so many areas of cutting-edge research.
21:40We want to ensure that innovation gets to market more consistently building industries of the future.
21:48And whoever wants to invest in the future, let me be clear, you will find a very strong partner in Germany.
21:57We want to be a leading investment location for global capital.
22:02Our policy is to mobilize private sector investments in infrastructure, high-tech and industrial transformation with clear rules, strong institutions and long-term reliability.
22:15Now, ladies and gentlemen, let the headlines of the day not confuse you.
22:21I urge you, look at the bigger picture.
22:24The world around us is changing at unprecedented pace.
22:28The direction it takes must worry us.
22:31The world of great powers is a new reality.
22:35Europe has gotten the message.
22:37Germany has as well gotten the message.
22:40We must and will live up to these challenges.
22:44My government will do its homework and pursue an ambitious reform agenda revolving around security, competitiveness and European unity.
22:55Let us be inspired by what is maybe the most important lesson of enlightenment.
23:01Our fate is in our hands.
23:04It is in our responsibility and our freedom to shape it.
23:10This historic task lies ahead of us.
23:14Germany wants to play a key role in mastering it.
23:20Many thanks for your attention.
23:22Thank you so much, Mr. Chancellor, also for being able to create some optimism when this meeting is probably taking place against the most complex geopolitical backdrop.
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