north korea is claiming it has test—fired what it calls a new type of tactical guided weapon with a powerful warhead. state media says the test was overseen by kimjong—un himself, and describes it as having weighty significance. the former president of peru, alan garcia, has died after shooting himself as police arrived at his home to arrest him over corruption allegations. mr garcia who had served two terms as president was accused of taking bribes from the brazilian construction firm, odebrecht. robert mueller‘s long—awaited report on russian interference in the 2016 us election is to be published, in part, on thursday. but there's plenty of controversy about it already. attorney general william barr is to hold a press conference on it before the redacted version is published. that decision has been criticised by the democrats. now on bbc news, hardtalk‘s stephen sackur is in berlin
for an exclusive interview with germany's vice chancellor and finance minister olaf scholz. welcome to hardtalk from berlin, i'm stephen sackur. 30 years after unification, germany is still the economic powerhouse of europe, but is it running out of gas? growth is down, so our exports and critics say the german economy is dangerously reliant on the technologies of the past, not the future. today i have an exclusive interview with germany's vice chancellor and finance minister 0laf scholz. is germany's economic model in trouble?
vice chancellor 0laf scholz, welcome to hardtalk. in the 30 years since german unification, we've become used to germany as the dominant powerhouse economy of europe, but right now the german economy is faltering. there are clear weaknesses. how worried are you?” am not very worried, because we have just softer growth, which is not a recession. it is far away from that. well, it is not far away from recession. you nearly sank into recession. you nearly sank into recession at the beginning of the year. no, it is far away from that. if you are a really globalised economy, if you are a big exporter and importer, all the developments in the world economy have an impact on the development of your country, and we know that there is a slowing of the growth for the economy, this
is happening to germany, and we know where this comes from. it is mostly political reasons, tensions between the united states and china for instance, and trade questions, possible tensions between the united states and the european union which i hope will not take place, and also the brexit. we will talk about all of those tensions, i promise you, but i am very mindful thatjust a short time ago at the spring meeting of the imf germany came in for a great deal of criticism, including from the finance minister of france, your partner in the european union, bruno lemaire, he said countries with solid budgets must invest more. it is quite clear he was talking about germany. he said those with the means shouldn't horde their money for years and years, allowing growth to deteriorate. very pointed comments directly at you. it is
absolutely clear that we have a european debate about the european economy and if you look at the german economy and the big corporate from germany you see they invest all over europe, so it is absolutely 0k that anyone is discussing questions like this. but, as i said, we have a very good development in our economy still. we have the highest number of people employed ever and the number of employed people will grow. if someone of employed people will grow. if someone would find out how 500,000 ori million people could enter the german labour market they will be employed in a second and this is not a difficult economic situation. it is something we have to deal with. and you should know that we already started increasing our public investment. we have now more than 80 billion together which is the highest figure we had for decades. we reduced taxes for low and middle income families. we increased the spending we do with the social
welfare system in germany. but i do very much agree with all those in germany saying that we should not have that. it is a very good policy that we have enough debt in germany and that it should not increase and we will stick to the rule of not further increasing the public debt. in that case, it seems to me there are serious questions about the vulnerability of germany to the current geopolitical climate. you are an economy driven by your prowess at exports, at manufacturing and then exporting, particularly in the engineering field, particularly in the auto manufacturing field. right now, looking at germany and the world, that is the us and china in particular, you've got a big problem. protectionism, trade wars, they are going to harm germany. we are very much working for a multilateral approach in the world
economy and we see that there are many other countries supporting this idea. and the biggest stronghold we haveis idea. and the biggest stronghold we have is the european union. as i already said, there is something coming out which is a european economy. it is possibly false today to continue today to speak about a german, french, spanish economy. if you look at the big companies, the big corporate is, you see they invest all over the continent. and this is the strength that europe has and we will be effective in the world that is to come and in a world of 10 billion people we will have in the midst of this century if we work together as european union, and this is what we are working on. with respect it is not the european market that is going to save germany from low growth. your growth may be as low as 0.5%, one reason is because of a slowdown in exports to china. germany is very vulnerable to a china slowdown. jim 0'neill one of the leading economists in the uk formally with goldman sacks says
germany is in danger of becoming a derivative of china you are so dependent on china. possibly this was not in a scientific comment, but the hope of the commentator.” was not in a scientific comment, but the hope of the commentator. i don't think so. i think so. there is not good reason for that. we are still really successful. it would be a really successful. it would be a really big economic mistake to act as if we would be in a recession when we have the highest number of people in our country. but look at the united states. it is notjust the united states. it is notjust the china problem. the united states is now a country considering slapping tariffs on european auto exports. for germany that would be a disaster. i think the german and the european economy are strong enough to be successful in different situations. there is always up and down in the economy. you have to be able to face this. and if you want to be successful in the times we live in, you must be effective in
the way that even the medium—sized companies are successful on the world market. this is what happens to germany and this is one of the parts of our success. and one of the outcomes is that we always have to face the situation that there is — a bigger growth, or a slower growth in the world economy. and this has some effects on europe and on germany, but we will be able to face it. how did you feel when donald trump called europe a foe in terms of economic and trading relationships? he is not right and anyone who knows... he is the president of the united states. saying he is not right isn't going to help you build a relationship with the administration. we have very good talks with the american administration. i had a very good conversation with my colleague in the united states, in washington in the united states, in washington in the last week, and we will have a debate about trade questions between the european union and the united
states. it is very good that president trump and president juncker agreed to have these talks and this shows that this is the real area of trade talks, it is the european union and the united states. when mr trump says as he said recently, isee states. when mr trump says as he said recently, i see mercedes cars all over fifth ave in said recently, i see mercedes cars all overfifth ave in new said recently, i see mercedes cars all over fifth ave in new york, said recently, i see mercedes cars all overfifth ave in new york, but how many chevrolets do i see in germany, he has a point, doesn't he? and in that sense you remain deeply vulnerable. it is something you don't appear to be ready... the biggest exporter of cars from the united states are german car manufacturers within the united states and this is what i wanted to view at. if you are one of those who have this national list propaganda thinking that we are living in times which are 100 years ago, this will not work. if you look at the supply chain of all the different things we have in our countries, whereby the
cars, the goods and all the other things, you will find out that they are produced at several places all over the world. and this is the mistake of all those people doing this propaganda that they believe, that you can just stick to your own country in a world that has already changed. it sounds like, ifi may say so, it sounds like you are prepared to play hardball. you are advising to play hardball in trade negotiations with the united states. we yesterday said that there would be talks between the eu and the united states and that there will be a mandate and i am always supporting the idea of talking and getting agreements. and a final one on the united states relationship before we get to more strategic issues. the united states is adamant that germany must up its game when it comes to military spending. it must commit to reaching the 2% of gdp target for military spending, which is regarded by all nato members as
the threshold for military spending. germany of course right now is at roughly 1.25%. you as finance minister have questioned whether germany can even get to 1.5% by 2024. it is something that the americans regard as unforgivable here in berlin. next year we will have 1.37%, not here in berlin. next year we will have1.37%, not1.5%, as here in berlin. next year we will have 1.37%, not 1.5%, as you said, and we have the biggest increase in military spending in the three years since i am responsible as finance minister. we are doing from 2017—18, from 18—19 and from 19—20 you will see it is billions more than expected and in the before line of expectations looking at the budget. and to be cautious... your words are not going to please washington, are they? i think so, that they are able
to understand what we say. it is a clear decision that we don't want to have extra debt. there is these politicians always drawing lines with their pencil, always saying, yes, we will do all of the different things and then it is not too much, it is 10 billion, 50 billion, 100 billion too much. ifi may it is 10 billion, 50 billion, 100 billion too much. if i may say so, minister, your german obsession with no new date is therefore going to trump your core responsibilities to nato. are you happy with that? we are increasingly spending as i already said and this is a fact —— debt. all of the other things i words. all right, let's talk a strategic overview of the strength of germany 30 years after unification. it is striking how reliant your economy is on auto manufacturing. i mean, the numbers are extraordinary. it directly employs 800,000 people in this country. it represents up to 8% of national gdp. and yet the fossil fuel combustion engine based auto industry is in serious trouble. and
i wonder whether you believe germany is well placed to transition from the combustion engine to electric vehicles. it is, and this is releva nt vehicles. it is, and this is relevant not just only for vehicles. it is, and this is relevant notjust only for germany, because, as i already said, i think that the german car industry is already a european, with a lot of pla nts already a european, with a lot of plants all over europe with poland, slovakia, hungary and spain, many other places, also the uk. and so they invest a lot and their decision is now very clear. after the european union said that there will be very restricted emissions rules in 2030 they decided to take the challenge and that they will be ready to meet this challenge. for instance, all the car manufacturers decided already that they will spend tens of billions to invest into
electro mobility and plug—in hybrid cars. look at the facts, minister european commission has just charged bmw volkswagen with colluding to prevent the introduction of this technology. your auto manufacturers just don't get it even today.” don't know what will be the outcome of this starting procedure, because iam not of this starting procedure, because i am not in the inner decision—making processes of the car manufacturers. but you are not right about the future. i think the german car manufacturers will be the leading car corporate in the world looking at electro mobility. do you really believe that? i really believe that. did you read the national industrial strategy document looking in february i to 2030 here in germany which is that if the digital platform for autonomous driving with artificial intelligence is to come from the usa and the batteries for the cars of the future come from asia, then germany could lose over 50% of its
value added in this sector. so, let me draw you a picture. there will be ten or 12 big factories for batteries in europe, some of them germany. we are now producing the necessary decisions to that. it will be millions of cars that will be produced in the next years and in germany and other places in europe. and they will be the biggest players in electro mobility in the world, i am sure. a lot of people think when it comes to ai, for example, the technology will lead to a push to driverless cars. the united states and india china are far ahead of germany. if one looks at key indicators, for example germany, 29th out of 34 industrialise economies for fast internet connection. look at the take—up of cloud service computing from big businesses in germany. 16% of businesses use cloud services as a key productivity enhancer,
finland, finland! 57%. germany is in danger of being left behind. no. it's fine to say no... it's not speaking about reality. you are a little bit complacent, minister. germany has been so successful earlier, as you said, a thriving city and a thriving europe economy. yes. discussing the future with people like you is that they always say there would be a catastrophe and things will go down and things like that. if i would hear two people like this they would have to go to the seller and never come back. the me tell you we're living in a situation where we all understand the necessities of investing the future. this is why i could tell you —at future. this is why i could tell you — at the start of our debate, that we are increasing public investment.
we are increasing the public investment and private investment into artificial intelligence. we are increasing the investment into it because we want to be part of those countries in the european union that are countries in the european union that a re successful countries in the european union that are successful in the upcoming world. for me to make one point very clear, if we are not, if we are not people having hybrids... hubris? hubris. we would live in a world where there are big countries like the european union, like russia, like the united states, like india, like the united states, like india, like indonesia, it could be a very fine world if we accept any of them has a chance for wealth and growth but that we are working very hard to make clear that the european union and that europe will be one of those strongholds of this new world. for
wii and, just a couple of thoughts about the european union. in the recent past —— just before we go. there has been a preoccupation with trying to make racks that work. the eu has had to offer a further extension till october 31 —— trying to make brexit work. do you think the eu will continue to offer the uk extensions as long as it need to come to an agreed brexit position?” was always a fan of this pragmatism andi was always a fan of this pragmatism and i hope europe has learned its lesson as far as the point comes back at the united kingdom is taking the necessary decisions. you are smiling, but i suppose the question from the british point of view is, there is no indication right now that theresa may can find a pathway toward an orderly, agreed brexit. are you sending a signal that if, by october 31, britain remains in this
brexit mess, there will be another extension on offer? i'm sending a signal to please come together and start with some that might be absolutely new to the british system of parliamentary system. because you have not really the experience of bipartisan cooperation, but this is what is needed in a national question like this. let me ask it's another way. some presidents like emmanuel macron believe that the continued uncertainty and toxicity of this british arguments about how to live the european union —— argument is actually deeply damaging to the european union. you agree? no. i think that the brexit tensions, the trade tensions we see in the world, our unilateralism, it's something like a catalyst for
working very hard on getting a better european union and more integrated european union. so, icy it the opposite. —— i see it is the opposite. i think it is necessary that the british parliament is taking a decision and i hope it will be very soon and i know that brexit is one of the questions that is a difficulty for world economies. when i was difficulty for world economies. when iwas in difficulty for world economies. when i was in washington last week i discussed with the imf and all the other people. everyone agreed that questions of politically made, man—made uncertainties like the trade tensions between the united states and china, like the brexit are one of the reasons for the slower growth in the world economy because all of the weight for them to cease —— wait. i think it is the
reason why for anyone who forecasts about germany, the european union, the world economy says there will be better growth at the end of this year or the next year because eve ryo ne year or the next year because everyone is hoping that the tensions will decrease and the man—made political uncertainties will vanish. a final thought on politics. it brings us back to where we began, referring to the 30 years anniversary after unification. germany itself it seems to me, is at a crossroads. your party, the social democrats and the christian democrats, they are losing popularity. they are losing their grip on politics of this country. and what we see in germany, as in so many other european countries as a rising tide of nationalist and populist sentiment, particularly in the east of your country, which, despite unification is materially much less well off than the west. do
you believe that actually, german unification has in some ways to accept that it hasn't delivered for the people of the east of your country? no. it delivered to the people of the east of my country, those people over there see it like this. why are they politically rejecting your party and the christian democrats and many of them are embracing the far right afd. they are not rejecting our parties, but you are right there is a populist support which we have all overin populist support which we have all over in germany and in the european union and in many parts of the world. i think we should understand that something is happening to all of us. we in this rich, democratic countries, the former so—called industrialised countries are facing a new period which is different to the ones we had before. even those
who are employed and have a good income and development understand that possibly this might not be the case in the next ten, 15 or 20 yea rs. case in the next ten, 15 or 20 years. they are afraid that this might not be clear for their children or grandchildren or friends of them and things like that. this is the reason why for instance there was this development in the united states which had the outcome of electing president trump. i think this is the reason for the brexit and this is what we should understand. in the rest of the world billions of people are becoming more confident and happy about the future, billions grew up into something like a middle class in asia. in the rich countries, people are asia. in the rich countries, people a re less asia. in the rich countries, people are less confident than they were ten, or 20 years ago. they have good reasons for not being so sure about the future because all of the big
developments coming from globalisation and technological progress are producing more wealth of the countries, but not necessarily for older people. of the countries, but not necessarily for older peoplem of the countries, but not necessarily for older people. if i may say so, the feeling of a political class which includes people like you —— it's a failing.” think it's a problem that could just be solved if we make it clear that anyone has the right very good income, very good job and that even if things are changing fast like they will in the future, we will be able to manage it that they have a good job and prosperous life. this is what they ask us for and we have to deliver. so yes, i guarantee is the answer to that question and social cohesion is the answer to that question. i'm absolutely sure that question. i'm absolutely sure that we can give the idea that anyone can be part of the game. again, back to the people, this will increase the support also for the
social democratic parties all around the world. olaf scholz, we have to wend their stopper thank you very much for being on hardtalk. —— we have to end there. thank you for being on hardtalk. hello again. wednesday was a perfectly acceptable day for many parts of the british isles, but it may well be put in the shade by what we are expecting to see quite widely across the british isles on saturday. the temperatures could peak around london at 25 degrees. for those of you who have opted for the stay—cation for this particular holiday weekend, well, you are certainly beating those who have decided to head
down anywhere really, from iberia right across to the eastern mediterranean. the reason for a settled spell of weather is that the jet stream, as we move through the weekend and into the start of next week, should be well away from the british isles. we're trapped on its warmer side. you'll notice there is a pocket of somewhat cooler air not a million miles to the west of us as we start the new week. more on that in just a second. thursday starts off rather cloudy across eastern scotland and the eastern side of the pennines, but as the day gets going that cloud dissipates. a little bit of fair weather cloud, not much more than that. on the east coast the onshore breeze is around ten, 11, 12. inland is widely in the upper teens, if not in the 20s. for all that we have to thank that big area of high pressure, which i'm sure you're getting used to, it's been there over scandanavia for a wee while. it will certainly dominate many of us as we get on through the weekend. friday, just maybe the odd passing shower to start the day in eastern
parts of scotland, but friday is a really glorious day across many parts of the british isles. and those temperatures, notjust a south—east phenomena. widely in the upper teens. and again, many locations could see 20 — 21 or something in that order. a fly in the ointment as we move towards the weekend. the weather front will be pushed closer to the northern and western parts of scotland, maybe northern ireland too, tempering the feel of the day there certainly. but as i say, widely 22—23, maybe 24 or 25 across the south—east. not much change into easter sunday, we will have the remnants of that weather front trying to work its way down across scotland, thickening the cloud here, the odd spot of rain more, i suspect, towards the far north—west. sunshine rather hazy across northern ireland. but elsewhere, if you've got plans for the outdoors, get out and enjoy it. a word to the wise, the pollen is really quite high at the moment. and if you're out for any length of time, the uv levels are also worthy of consideration.
a very warm welcome to bbc news, broadcasting to viewers in north america and around the globe. my name's mike embley. our top stories: north korea is claiming it's tested a new type of tactical guided weapon. it would be the first public missile test since the hanoi summit with president trump. peru's former president alan garcia dies. he shot himself as police tried to arrest him on bribery charges. gearing up for the mueller report. washington braces for new revelations in the russia investigation, but still not everything will be made public. bells toll and church bells ring out across france to mark the exact time notre—dame went up in flames.