There is still a chance that the United Kingdom could leave the European Union with a deal, said Chancellor Angela Merkel during her speech in the German Bundestag. The German government will continue to work towards this goal, but the country is prepared for a no-deal Brexit.

"Europe must develop new strengths"

Although Europe will maintain economic and cordial relations with the UK in future, Angela Merkel pointed out that post-Brexit, Europe will have an "economic competitor on its doorstep".

"We will also be weakened by the withdrawal of the UK," said the Chancellor. On the other hand, this is an opportunity for Europe to develop new strengths. The new President of the European Commission, Ursula von der Leyen, sent the right signals when she presented her team on Tuesday. Europe must lead the way in terms of climate action. It has ground to make up in the field of digitalisation. And in all technological sectors it must once again be world-class.

Angela Merkel also pointed to the shift in global power – the trade conflicts between China and the USA and Russia’s new geostrategic strength. "I believe if we work together we can engineer a win-win situation," she said, but "respect for human rights is crucial for us. That also applies to Hong Kong, where we believe that the principle one country-two systems is the right one."

Europe still has close links to the "super power that is the USA". But it cannot automatically be assumed that the USA will protect Europe. Germany intends to respect its pledge to raise defence spending as a percentage of gross domestic product (GDP) toward the two percent mark. The EU must also step up its common defence policy.

Climate action for the generations to come

The Chancellor also stressed, "If we forge ahead with climate action, it will cost money. This will be money well spent." It would cost more if we do nothing. On 20 September the Climate Cabinet will launch concerted climate action measures – a major accomplishment.

Putting a price on emissions of the climate-damaging gas carbon dioxide, and managing volumes of emissions are ways of reducing our carbon footprint. For this, the use of renewables will have to be further expanded. And that in turn will need people to accept new transmission cables and wind turbines, most of which are built in rural areas. Angela Merkel called for efforts to counter a "certain arrogance" on the part of people who live in towns. An alliance is needed she said, between town and country. Local authorities could share in the profits generated by wind plants.

Converting the social market economy to digitalisation

By the end of 2020, 99 per cent of households will have access to broadband, pledged Angela Merkel. The G5 network is also to be swiftly rolled out.

Smaller and medium-sized companies too must understand that today just producing goods is no longer a guarantee of economic success. Artificial intelligence is moving into every aspect of our lives. What is important today is data sovereignty and how artificial intelligence is used to benefit people. "The social market economy is taking on a new dimension. It must be converted to digitalisation," said Angela Merkel.

Zero tolerance of hatred and racism

Finally, the Chancellor spoke out against hatred and racism. "If it is not clear that in this country there will be zero tolerance of racism, hatred and antipathy towards other people, coexistence is not going to work." In Germany, attacks on Jews or foreigners have become everyday occurrences, as has hate speech. "That is something we must fight," demanded the Chancellor. The foundation for voluntary engagement founded by the Chancellor has an important role to play here, she said.

The general budget debate is the highlight of consultations on the national budget in the German Bundestag. The Chancellor speaks during the debate as do the leaders of the parliamentary groups in the German Bundestag.