Mutzelburg: To a large extent, that is an artificial debate. India has declared a unilateral moratorium that it will not test. The difference between a unilateral moratorium and a binding national treaty is that it can be lifted. You can renounce the treaty under certain circumstances. Secondly, if a state thinks that its vital interests call for a nuclear test, then it will go ahead and test — treaty or no treaty. Of course, such testing will cost India a political price. You are duty bound by a unilateral moratorium; if you test the deal is off. There is also the question of what circumstances prompted the test and then one will have to discuss how valid the reasons were. If there is a threat from any country, then it would be a different situation. But there would always be a political reaction to a nuclear test. It is an understood fact that India will not test. So, it is rather an illusory debate.

•Alia Allana: What is your view on Iran’s nuclear ambitions?

Nobody is contesting Iran’s right to a peaceful use of nuclear energy. The problem is that once you know how to use the process of enrichment, you can also produce nuclear weapons. There is reason for a certain mistrust of Iran’s ambitions and therefore, we must insist Iran provide answers to the issues before it and offer enough transparency in order to ascertain that it cannot acquire nuclear weapon capability. We agree with India that there must not be an Iran with nuclear weapons. That would lead to further proliferation.

•Alia Allana: Is a nuclear arms race foreseeable in the future?

I don’t think this question can be answered in the affirmative yet. But there is certainly a danger that a nuclear race may emanate, until and unless we are able to ascertain that Iran is not developing nuclear weapons. The danger of proliferation is a fact. North Korea, for instance, is still wriggling out of the understandings achieved.

•Dheeraj Nayyar: There is considerable euphoria in France over the collapse of the ‘Anglo-Saxon model of capitalism’. Is there now a case for the ‘Continental model’ of capitalism?

I don’t think that anybody can be in a state of euphoria. This is the gravest threat to the world economy since 1929 and there is no reason for triumph. We need to have a rescue package by the US. Secondly, we will need to cope with the most serious threat inherent in the capitalist system — namely greed. Even the Wall Street does not believe in these self-healing capabilities of the market. Otherwise, they would not be continuously asking for rescue packages. The market is not providing the amount of security and the stability you need. It is not providing for even the public good. So, obviously there are certain things that cannot be done by the market. In France, they believe in the importance of the state as the guarantor of the public interest. In Germany, we have a market economy which is described as a socialist-oriented economy. We have been having a serious debate as to whether our economic system still provides the necessary amount of social justice. One of the reasons why we have been asking for more transparency in international markets even before this crisis is because we saw things suddenly happen that were threatening the stability of our political system. Suddenly, hedge funds were buying up German companies with big loans at the expense of the company purchased, cutting formerly healthy companies into pieces and throwing them into the market again — transactions through which some became rich and many lost their jobs. How do you explain that to your citizens?

•Dheeraj Nayyar: You are saying the entry of hedge funds basically brought in instability? So you prefer the older model where companies are controlled by promoters and big banks?

I am not saying that the entry of investment banks and hedge funds per se brought about this instability. It is a lack of transparency and regulation which is the cause of my concern. When you ask a small savings bank to correspond to certain capital base regulation, why should the same not apply to huge investment banks which are coming into the market with a million times the leverage and could have a more pronounced destructive effect? I am saying that you need to extend the regulatory system, which we have accepted for the classical banks, to the other financial instruments.

•Suman Jha: Does this financial crisis mark a break in the consensus that globalisation was the model for the entire world? Now countries have to devise localised methods that would combine global economic models as well?

To a certain extent you already have that. The state takeover of insurance companies and banks in the US is more pronounced than what President Chavez has been doing in Venezuela until now. We all have mixed economies and the mix we choose has to depend on the specific history and the requirements. However, this does not raise questions about whether market economies are still the right way to go. On the contrary: German history, for example, shows the success and strengths of a market economy. As soon as we opened up our markets, we were able to get the dynamic forces inherent in our economy to play out and that created enormous prosperity. The same is true for the situation we faced in Germany during reunification. There, the economic challenge was to takeover a socialist planned economy (of the German Democratic Republic or East Germany) which was not able to deliver the goods. The state was, basically, bankrupt and we introduced the parameters of a market economy, but one that was socially cushioned. We also introduced our health insurance system, our pension insurance system, and so on.

•Neeraj Chauhan: Intelligence inputs say Sikh terrorist outfits have their meetings in Germany. Do they have bases in Germany? What is the status of terrorism in your country?

India and Germany have agreed to cooperate closely on combating terrorism. We also have a working group which meets regularly. In Germany we have a rule of law which says you can arrest people and you can conduct necessary judicial processes if evidence is provided. We can also prosecute people in our country if they commit a crime in some other country, but for that we need evidence. And we need evidence that can stand up in German courts. With respect to a number of outfits, we have never been able to move as we have never been provided with sufficient evidence to do so.

•Neeraj Chauhan: Do they have German citizenship or are they staying there legally?

If they are staying in Germany, illegally, they will be arrested and all the other consequences of the law will come to bear on them. Also, Germany itself has been confronted with terrorism at an early stage. We had our own homegrown terrorism problems in the late Sixties with the Red Army Faction, a group of alienated dissatisfied young people who felt they could change society by means of terror. We have been able to come to grips with that phenomenon. In the meanwhile, we have been subject to terrorism that has become more and more international. You know that some of the bombers of 9/11 had been studying at Hamburg, fortunately, we did not have a major terrorist incident. Germans, who have been exposed to this kind of terrorism, have not fully understood the kind of reaction terrorism has caused in other countries, particularly in the United States. We have all been continuously exposed to terror; it was only the Americans who thought that nobody could attack them. As a young man, I was negotiating the prohibition of certain inhumane weapons. We were talking about napalm and other incendiary weapons. The European countries favoured banning the use of napalm in areas of civilian concentration, even if the attack might be on military targets. The only ones who were pleading for its use in civilian concentrations was the USA. Why? Because they could never conceive anyone using napalm against them. Basically, they were living in a sanctum and that sanctum has finally been taken away.

•Anubhuti Vishnoi: Do you think 9/11 helped bring about a kind of world solidarity against terrorism?

Absolutely. The then German chancellor Gerhard Schroeder said after 9/11 that we were all Americans. There was a lot of solidarity behind the USA those days. Of course, we didn’t fully understand what America did with the war against Iraq. Certainly, Saddam Hussein was a dictator of sorts. But his was a secular government. We did not understand how the kind of terrorism that caused 9/ 11 could be combated by the war against Iraq. And that was where the division came up. But we all face a common challenge, namely the challenge of fundamentalist terrorism.

•Anubhuti Vishnoi: How do you view the role of Pakistan which is both the victim and home to terror?

On one hand, I think Pakistan is instrumental in our ability to stabilise Afghanistan. So we need them and their cooperation. But I also share Indian reservations on the state in which Pakistan finds itself today. It is very unstable they have a very volatile internal situation. There is a government but nobody knows how long it will survive. It is a very difficult situation for a country that is not homogenous at all. However, I think we would be well advised to involve Pakistan in stabilising Afghanistan. That means we must make it easy for the Pakistani government to combat terrorism. In the long run, fundamentalist terrorism cannot be in the interest of any government in Pakistan.

•Neeraj Chauhan: Why isn’t India able to fight terrorism?

This isn’t a problem specific to only India. With respect to terrorism you always face two issues: how to cope with the incidents and how to allow your state organs to deal with them. But if you do not think somebody is innocent until proven guilty, then you might achieve exactly the opposite of what you wanted to achieve. Guantanamo Bay, for example, has created more terrorists than it detained. It has perhaps taken out some potential terrorists but the resentment at this kind of treatment of people who may or may not have been part of the terrorist scene, has created an atmosphere where people feel they should do something against this injustice. The larger question is: what is causing terrorism? And there, of course, you deal with more complex phenomena. People only resort to terrorism if they are being alienated, if they are being misled by other people with all kinds of religious promises. This you can treat with a mix of political measures beginning with improving the situation in which people live. There is a hardcore fundamentalist terrorism which you will not be able to reach with that. But you have already achieved a lot if you can reach out to potential sympathisers of terrorism.

•D K Singh: How does Germany view the recent incidents of attacks on Christians in India?

We are concerned about violence in general and about violence against minorities in particular. At the same time our concern is that we see a rise of parochial and communal tendencies which are linked to politics becoming more confrontational and competitive. For India to remain stable as a state, we need a secular India in which the religious beliefs of all groups are fully respected.

•Dheeraj Nayyar: There are two interesting things about new wave of German cinema. One, that it is commercially successful. Second, that it is confronting difficult facets of Germany’s past. Like the recent film, Baader Meinhof Complex, and others on the collapse of communism, Hitler. What explains these changes in German cinema — a generational change?

Each generation re-invents its art forms. This is true for cinema. As an artist you need a certain distance in order to be in a position to deal with complex issues of the past. Right now we have a generation that is far away enough from the experiences of fascism in Germany, also the immediate time after World War II. People have the distance needed to deal with the Bader Meinhof phenomenon in an intellectually more sober and convincing way. And there have always been successful German films, films of Fassbinder for example were shown throughout the world.

Transcribed by Debesh Banerjee