"Once again the eyes of the world will be on Germany," said the Chancellor in the run-up to the G20 summit, which is to be held on 18 and 19 June. "Germany is strong, Germany is the locomotive of Europe’s economy and its anchor in stormy seas. Germany also uses its strength and its force – to benefit not only the people in Germany, but also to help foster European unification and to serve the global economy."

Germany’s strength is not unlimited

The Chancellor also made it clear that Germany’s strength is not unlimited. The country’s special responsibility is to realistically gauge its strength and to use this to maximum effect for Germany and for Europe. This is the only way to move gradually towards a political union in Europe.

The euro zone will only be able to find its way out of the crisis if all member states accept the facts and gauge their own strength realistically, said the Chancellor.

She emphasised that efforts to foster growth must go hand in hand with moves to consolidate national budgets. Both are indispensable. The path out of the crisis will be long, hard and stony – but there is no other way.

Mediocrity must not become our yardstick

Apparently simple ideas about communitarisation are not constitutional and would, in any case, be entirely counterproductive, she said. "They would elevate mediocrity to the yardstick for Europe," declared the Chancellor. "We would have to abandon our aim of retaining our level of prosperity in the face of global competition."

The fiscal pact is vitally important, she continued, because it is the first step on the way to combining greater community with greater authority at European level. "Liability and controls are inextricably linked. Any discussion that tries to pretend otherwise cannot hope to provide a genuine solution to our problems," declared Angela Merkel.

All states have a duty

Angela Merkel also made it quite clear that the euro zone alone cannot put in place the conditions for global growth. Our partners within the G20 will have to resist the temptation to generate growth by borrowing more, she said. An action plan is to be adopted in Los Cabos.

The consolidation of national budgets will be an indispensable element of the action plan. All states will have to face and remedy their own specific weaknesses. "Germany has made an unequivocal commitment to cutting its debt and to putting its economy on a sustainable footing," said the Chancellor.

Green growth at the top of the agenda

The situation of the global economy, development policy, trade, employment and the international finance markets are on the summit agenda.

Green growth is a priority of the host country, Mexico, said the Chancellor. Ways must be found to harmonise the imperatives of economic growth, climate change mitigation and environmental protection worldwide.

"The aim must be to take equal account of economic, environmental and social factors," said Angela Merkel. In concrete terms this means fighting hunger in the world, conserving biodiversity and tackling climate change.

The German model as an example

Looking at employment, the summit will be focusing on the worldwide problem of youth unemployment, explained the Chancellor. Numerous proposals of ways of creating jobs for young people have been discussed. Angela Merkel declared her conviction that Germany can and will contribute its wealth of experience with the dual vocational training system, in which trainees split their time between theoretical school-based instruction and practical in-company training.

International trade generates impetus

The Chancellor announced that Germany would not be mincing its words when it comes to free trade. "All too often only lip service is paid to free trade." The G20 states do not always take their voluntary commitments vis à vis trade barriers seriously enough. "Protectionism is an obstacle to growth." Specifically, in Los Cabos efforts will focus on extending the so-called rollback commitment to remove potentially trade restrictive measures, which is set to expire in 2013.

Greater influence for emerging economies

In terms of strengthening international institutions, the Mexico summit will be dealing with the realisation of the quota reform of the International Monetary Fund (IMF) adopted in 2010. Emerging economies will be granted more influence within the IMF in view of the changed economic circumstances. Germany has already implemented the change at national level.

The Group of Twenty (G20) has, since 2009, been the central forum for international economic cooperation. The most important industrialised nations and emerging economies deliberate on the economic and financial-policy measures required. The next summit is to be hosted by Russia in 2013, followed by Australia in 2014.