German Chancellor Angela Merkel and Russian President Vladimir Putin (L) listen to their national anthems before talks at the Chancellery in Berlin, June 1, 2012. REUTERS/Thomas Peter (GERMANY - Tags: POLITICS CIVIL UNREST TPX IMAGES OF THE DAY) - RTR32XLW
Vladimir Putin and Angela Merkel

When they speak on the telephone Vladimir Putin and Angela Merkel switch between German and Russian. They are both so fluent they can correct the interpreters that are usually on the line for official discussions.

Having learnt her Russian growing up in communist east Germany, Ms Merkel, the German chancellor, knows something of Mr Putin’s Soviet past. Having perfected his German as a KGB officer in Dresden, the Russian president understands Ms Merkel’s DDR origins.

But this personal familiarity has not prevented the worst crisis in Russian-German relations since the cold war. Ms Merkel’s decision last month to back EU sector-wide sanctions against Russia in response to the shooting down of Malaysia Airlines flight MH17 marks a break with a decades-long co-operative approach to Moscow. As Der Spiegel magazine put it: “The wreckage of MH17 is also the wreckage of diplomacy.”

The developments raise difficult questions about Germany’s future ties with Russia, relations with its western partners, and its softly-softly approach to foreign policy. “This is a turning point for Berlin,” says Josef Janning, senior fellow at the European Council on Foreign Relations, the think-tank. “It could take a new generation in Moscow before friendly relations can be restored.”

Berlin has played an unprecedented lead role in the west’s response to the crisis, with Ms Merkel establishing herself over the past six months as the main point of contact with Mr Putin – making more than 30 increasingly fraught telephone calls.

After keeping a low profile in global politics in the decades after the second world war, Germany has in the past 25 years played a growing role that reflects its economic superpower status. But its previous interventions, such as in the former Yugoslavia and Afghanistan, were contributions to missions led or co-led by western partners: the US, the UK and France.

This time, Berlin has been in charge. It has acted because of its longstanding political ties with Moscow, its wide economic relationship and its proximity to eastern Europe.

Also, the crisis has struck at a time when the US, the UK and France are engaged in other global hotspots. As Henry Kissinger, the veteran German-born US diplomat, said this year: “Germany is doomed in some way, to play an increasingly important role [in the world].”

Ms Merkel prefers the familiar headaches of EU politics to negotiating with the Russian leader, a man who has broken international law with the annexation of Crimea. She complained to US President Barack Obama that Mr Putin was “in his own world”. But, from the outset, she wanted to protect Germany’s interests and ensure western responses were not dominated by US belligerence that Berlin feared could exacerbate the dispute.

Following the latest sanctions, the immediate question for Ms Merkel is what happens next, not least the Kremlin’s reaction and any possible US demands for a tough counter-response. In the absence of a western military response to Moscow – which has been categorically ruled out – she has repeatedly argued that negotiations are the only way forward. After the MH17 disaster, she said: “These events have once again shown us that what we need is a political solution.”

Ms Merkel is likely to stick to the middle ground, trying to maintain Berlin’s influence by acting as the pivot between hawks headed by the US, Poland and the UK, and doves, notably Italy, France and Spain.

But the new toughness in her approach may be sustained. The MH17 disaster has shocked Germans as it has others around the globe. The images of the pro-Russian separatists failing to protect the dead – and even robbing victims – has changed public opinion. It has created a political consensus in Germany and in the EU for a tough reaction.

This consensus may not last. There may be intra-EU disputes about implementation: for example, many Germans complain that France’s €1.2bn Mistral warship sale to Russia is still proceeding. As the measures are to be reviewed in six months, there could be more squabbling. But Ms Merkel will deal with things as they come. “Step by step,” is her motto.

The latest developments are unfolding against a ground-shaking shift in Germany’s view of Russia. Since the Ostpolitik of the cold war, Germany has seen itself as Moscow’s closest western partner. Knowing their security was guaranteed by Nato and EU membership, German leaders approached the Kremlin and secured close ties, symbolised by the construction of Soviet-German gas pipelines.

Geman diplomats took pride in this co-operation, especially after it eased the way to German reunification. So did many social democrat politicians, who disliked Germany’s dependence on the US. For some, sympathy for Russia reflected respect for the Soviet sacrifices in the second world war. For others it was a corollary of anti-Americanism highlighted by protests against the Vietnam war, US cruise missile deployment in Germany, and the Iraq war.

The relationship with Russia brought commercial benefits, with Germany becoming the west’s biggest exporter to the country, and Russia supplying a third of Germany’s gas and oil. Money and power mingled, sometimes contentiously. While in office, former chancellor Gerhard Schröder backed Nordstream, a controversial Baltic sea pipeline controlled by Russia’s Gazprom. After leaving office in 2005, Mr Schröder became the Nordstream chairman. This year he celebrated his 70th birthday at a lavish St Petersburg party. The host was Gazprom, with Mr Putin the chief guest.

When Ms Merkel’s third coalition took office late last year, foreign minister Frank-Walter Steinmeier, Mr Schröder’s ex-chief of staff, sought to improve relations with Russia.

Since his re-election in 2012, Mr Putin’s former grudging willingness to co-operate with the west had been replaced by a nationalist agenda. The priority was restoring Moscow’s influence in the former Soviet Union, not least Ukraine.

As the crisis has intensified, German hopes of a rapprochement have given way to a profound loss of trust. Mr Janning of the ECFR says: “The Russia sympathisers are almost speechless with frustration.”

Asked if Berlin could in the long term restore its ties with Russia, Philipp Missfelder, parliamentary foreign policy spokesman for Ms Merkel’s ruling CDU party, says: “Yes, but not without dramatic political changes in Moscow.”

German business is in a quandary. Corporate leaders initially lobbied hard against sanctions. The influential Eastern Committee, which represents companies active in eastern Europe, said 25,000 German jobs were at risk. But the committee softened its opposition after what it called “the catastrophe” of MH17.

Executives calculate that the Russian market is deteriorating anyway, because of what they view as a corrupt authoritarian regime choking the economy. Sanctions may not hurt companies so much except those directly hit by embargoes, such as high-tech oil equipment makers. Russia is only Germany’s 11th largest export market.

That said, executives still hope to get back to business. Eckhard Cordes, Eastern Committee chairman, says the time limit on the sanctions is “an important signal that the dialogue . . . will be maintained.”

In the EU, the conflict has reinforced Berlin’s dominance. Charles Grant, director of the Centre for European Reform, a London think-tank, wrote that during the euro crisis Germany became the EU’s “unquestioned leader” on economic policy. “In foreign and security policy, Britain and France have generally set the EU agenda. The Ukraine crisis, however, may allow Germany to lead in this field, too.”

With the UK mulling an exit from the EU and France mired in economic stagnation, Berlin’s pre-eminence looks set to last.

For the US, the Ukraine crisis has erupted amid a dispute prompted by whistleblower Edward Snowden’s revelations of extensive US surveillance, including eavesdropping on Ms Merkel’s mobile phone. At times the affair has made handling the Ukraine crisis harder, with the German public furious at the assault on privacy.

But the fact the west has united in response to the crisis has, in Berlin’s view, reinforced the transatlantic alliance. Ms Merkel said last month that it was “important to work together very closely and jointly” with the US on global issues such as Iran.

Much depends on Nato, which holds a summit next month with eastern Europe back on the agenda after years when Russia was no longer seen as a threat. A crucial test will be the alliance’s response to calls from east Europe, notably Poland, for an increased local military presence. The US is supportive. Berlin worries about further inflaming the Kremlin.

Meanwhile, the crisis is testing Germany’s longstanding reluctance to engage in geopolitics – a restraint dating back to the disastrous Nazi expansion. Berlin has faced such pressures before: in Bosnia in 1995 it sent troops abroad for the first time since the second world war; in Kosovo the air force joined the bombing of Serbia, in the military’s first aggressive act since 1945; and in Afghanistan, Germany deployed up to 5,000 men in its largest post-1945 foreign mission.

But it remains a reluctant contributor. Thomas Paulsen, international director of the Körber-Stiftung, a think-tank, says: “It’s by default that Germany is in the lead [over Ukraine . . . It’s not because there’s been a decision to take the lead.”

The head-down approach to global challenges, especially military engagements, has not prevented Germany from advancing its interests. As John Kornblum, a former US ambassador to Germany, says: “The idea of Germany as a political dwarf is a myth.”

The best example is Germany’s dominance of the EU. But even in the military sphere, Germany looks after itself. Over the past decade it has been the third-largest arms exporter, behind only the US and Russia, according to the Stockholm International Peace Research Institute.

Moreover, these exports come on the back of low domestic defence spending. Sipri says this totals 1.4 per cent of gross domestic product versus a Nato target of 2 per cent. France is on 2.2 per cent, the UK on 2.4 per cent and the US on 3.8 per cent.

Germany’s allies grumble about Berlin freeriding on collective security. Recognising the challenge, German leaders this year launched a debate, with president Joachim Gauck urging Germany to employ its armed forces more decisively.

However, the German public is not keen. In an opinion poll published by the foreign ministry, only 37 per cent supported an active foreign policy with 60 per cent against. Mr Paulsen says: “Only a real threat would mobilise Germany. A large terrorist attack.”

Across the west, support for activist foreign policies has generally waned since the global financial crisis and the failure of the Iraq and Afghanistan invasions to bring stability.

So Germany is edging on to the stage with its softly-softly policies, just as other western countries are becoming less keen to intervene militarily – and, in the process, a bit more German.

Ukraine is a test case. With western military action ruled out, Russia seems a good country on which to deploy German-style diplomacy. In the Crimea, Mr Putin has breached international law. In the handling of the MH17 victims’ bodies, he has been accused of lacking decency.

If Berlin persuades him to reconsider, it will do a service to eastern Europe, as well as protect its own regional interests. But if it fails, the limitations of its approach will be clear.


Foreign minister: The relentless veteran who keeps his cool

Frank-Walter Steinmeier, Germany’s foreign minister, might have been forgiven for missing his ministry’s summer press party. But even with the Ukraine crisis in full swing, he spent three hours with his guests enjoying the drinks, the food and the balmy evening.

“You have to make time to relax,” he says, glass in hand. His officials say that the 58-year-old veteran has a remarkable capacity for packing his schedule. It helps, they say, that he needs little sleep.

He is not only busy with Ukraine, which has led to repeated visits to Kiev and eastern Ukraine, as well as meetings and phone calls with counterparts around Europe, not least Sergei Lavrov, his Russian counterpart.

But Mr Steinmeier has also remained committed to the rest of the ministry’s agenda, notably a year-long policy review that he ordered in December and events commemorating the 100th anniversary of the first world war.

Despite the conflicting pressures, he keeps his cool. Long flights do not seem to tire him, nor seemingly useless meetings that end without concrete results. On Ukraine, you have to keep talking, he has said, given that the alternatives of war and an outright economic embargo are unthinkable.

Mr Steinmeier has publicly lost his temper only once, with a tirade against pro-Russian protesters during a May Berlin rally. Confronted with cries of “warmonger”, the social democrat shouted down the demonstrators, saying the world was “sadly complicated”. A video of his performance went viral on YouTube, with 2.6m hits.

Later Mr Steinmeier explained he was under attack abroad from hawkish countries such as the US for being too soft on Russia, and criticised at home for being too tough, especially from the left.

Social democrats argue that dialogue with Moscow – once called Ostpolitik – helped finish the cold war, reunite Germany and free eastern Europe.

As a former chief of staff to Gerhard Schröder, the Russia-friendly former SPD chancellor, Mr Steinmeier is steeped in this approach. He helped negotiate Nordstream, the Baltic gas pipeline controlled by Russia’s Gazprom, of which Mr Schröder later became chairman.

When Mr Steinmeier took office last year he was widely expected to stick to the pro-Russia line that he followed when he last ran the ministry in 2005-09.

But during the Ukraine crisis he has grown more critical of Moscow in response to its belligerence towards Kiev, accusing Mr Putin of returning to old-fashioned “spheres of influence” politics. He says he is ready for further economic sanctions but first comes “relentless diplomacy”. And relentless he is determined to be.

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