Merkel and Putin: Have I got a deal for you!
For Merkel, it was a diplomatic triumph. She overcame ferocious opposition from President Donald Trump and half-hearted objections from Biden to get the $11 billion project done. She had only to promise to place economic sanctions on Russia should Moscow cut off fuel supplies to Ukraine, through which passes an old alternative gas line.
For Biden, the agreement was a cave-in, forcing the American president to suspend his assertion that, because Russia represents a threat to both Europe and the NATO alliance and has invaded two European countries, the pipeline should not be completed.
Rather than an insignificant blip on the international scene, Merkel’s insistence of finishing Nord Stream 2 displays a face of German foreign policy that irritate not only the United States but also some of Berlin’s European allies.
Veiled behind verbal oft-repeated devotion to the NATO alliance, the European Union and what she calls a “rules based” global order, Merkel has in reality nurtured a nationalistic Germany First policies that puts even Trump, whose own bombastic America First diplomatic style upset allies, to shame.
Her primary policy is the defense and expansion of Germany’s status as a major export economy. From the German point of view, the reasons are obvious. Exports account for nearly half of German GDP (in the U.S., the export share is less than 12 percent). Without robust trade, German prosperity evaporates. Anything that gets in the way of German trade relations must be avoided. In a play on words on mercantilism, Germans call her policies Merkel-tilism.
The Nord Stream 2 issue put it on vivid display. The new pipeline, the second to Germany that runs beneath the Baltic Sea, will increase direct natural gas supplies to Germany. Germany also depended on a current land pipeline through Ukraine which in turn feeds some eastern European neighbors. Construction was lucrative for German businesses, a boon for the port city where it ends and saves Germany added costs due to money paid Ukraine for transit fees.
No one else in Europe seemed to think the pipeline was necessary. NATO allies in eastern Europe, not to mention Ukraine, opposed it on security grounds. The US sanctioned companies involved. All feared Russia’s Vladimir Putin can threaten Ukraine with energy supply cut offs in order intimidate Kiev from pressing for EU membership and even to join NATO. Russia had already occupied parts of Ukraine in 2014 to block a pro-Western government from cozying up to the EU and NATO.
But Merkel insisted that the pipeline was not an open invitation for Putin to flex expansionist muscle, just a “commercially-driven enterprise.”
After a bit of hemming and hawing from Biden, he and Merkel agreed the pipeline should go ahead, though with the threat that Russia will face economic sanctions if it uses using gas supplies to intiidate Ukraine.
Critics have reason to be skeptical. A host of economic sanctions on Russian officials imposed since 2014 have yet to reverse either Russia’s backing for rebels in east Ukraine or Moscow’s outright annexation of Crimea. Ukraine President Volodymyr Zelensky protested. All he got in return was the consolation prize of a White House invitation.
There was a further cost to Germany: erosion of its self-cultivated image as global human rights defender.
During the Trump years, European and American commentators mused whether Merkel had become the new “leader of the free world” and a “benign hegemon” able to unify an economically powerful Europe in the service of concern for human dignity and democracy that the US had abandoned.
Nord Stream 2 suggested that was unrealistic. Merkel had resisted initial sanctions on Russia over the Ukraine invasion and was adamant in separating Germany’s displeasure over Putin’s dictatorial tendencies from its business dealings with Moscow. In particular, she rejected any link between the pipeline project and the attempted poisoning, and subsequent jailing, of Russian pro-democracy dissident Alexei Navalny.
“The attitude towards Nord Stream 2 is unaffected by this for the present,” she said, rejecting pressure to use Nord Stream 2 to press for Navalny’s release.
Her economics minister Peter Altmaier provided a more clear-cut explanation for Merkel’s position. Business interests cannot be held hostage to human rights concerns. “Business relationships and business projects that have existed for decades are one thing and serious human rights violations and our reactions to them are another,” Altmaier told the newspaper Bild am Sonntag. Merkel and China’s Prime Minister Li Keqiang: Can I interest you in a new BMW?
German scholars attribute Merkel’s ambivalence toward Moscow’s faults to what they call the “Russian temptation.” Many German leaders have long looked east for resources and trade, and at least in the 19th Century, an alliance against its more pressing enemy to the west, France. Even after World War II, close relations with Russia were imagined by some politicians as a way to balance America’s political dominance of Europe. What Russia does inside its borders was of secondary interest.
While not rejecting American influence on the continent, neither does Merkel want Germany to be caught up in a new American-led Cold War. “Irrespective of all the differences, it is nevertheless strategically advisable to remain in contact on many geostrategic issues,” she said, when defending the need to distance Navalny’s jailing from other issues.
The Russian temptation is not the only lure that separates Germany from some of its allies—and especially the US. The other lure is, of course, China, and its vast market. For five years running, China is Germany’s biggest trading partner.
There is a kind of dance regarding Germany-China relations based around security and human rights issues and how they might affect trade. On the one hand, Germany has followed other Western countries in condemning China’s treatment of its Muslim Uighur population and its crushing of democracy in semi-autonomous Hong Kong. There was quiet concern that Xi Jinping’s emergence had finally killed the notion that China’s entry to world trade would inexorably lead to democratic liberalism.
But business goes on, and accelerates, as usual. Merkel has visited Beijing a dozen times in 16 years, most recently in 2019 while the clampdown on Hong Kong’s pro-democracy protestors was in full swing. She oversaw the signing of a dozen private business deals during the trip.
At June’s Group of Seven leaders’ summit, Merkel signed on to a statement critical of China’s Uighur and Hong Kong policies and a call for a re-investigation of the pandemic’s origins. But in private, she urged G7 leaders, and especially Biden, to be cautious about condemning China.
Merkel resisted use of the words “adversary” and “threat” to describe China–she customarily prefers the use of ambiguous vocabulary, like “multilayered,” “nuanced” and “complicated.” Climate change is often a talking point Merkel uses to justify her soft touch with China, as if Chinese President Xi Jinping is sitting in Zhongnanhai awaiting word from Germany on how best not to use coal.
Before Biden took office in January, Merkel tried to set European Union economic relations with China in stone, even as accusations piled up that Beijing committed genocide on the Uighurs in their home province of Xinjiang. In late December, she wrapped up a deal with Xi, seven years in the making, to ease European investment access to China. Biden’s transition team in Washington had asked her to delay the pact until after Biden took office in January, but she refused.
In a nod to concerns over human rights , and specifically forced labor of the Uighurs, the pact asked China to “make continued and sustained efforts” to comply with international work rules. Unimpressed with the requirement, the usually supine European Parliament declined to sign off on the agreement.
As the idea that Germany can lead the West fades, questions arise Berlin’s place in the Western alliance.
Take Germany’s relations with NATO. Because Trump had so bluntly demanded that Germany invest two per cent of its GDP on defense, it is largely forgotten that the requirement did not originate solely with the US, but was a pledge made by all the allies 2014. Though Germany is far from the only laggard, it is also Europe’s biggest economy and unlike others can certainly afford the two per cent.
Merkel said Germany will pay up sometime in the early 2030s; it now pays in about 1.4 per cent of GDP. (It is unsurprising that, besides the US, Greece and United Kingdom, the other NATO countries that have fulfilled their pledge are Bulgaria, Estonia, Romania, Lithuania, Latvia and Poland—all closer to Russian tanks than Germany.)
So far, Biden and Merkel have papered over their differences. They were just spats among good buddies. During a brief press conference after meeting this month in Washington, the pair used variations of the root word “friend” eight times to characterize their relations. A few weeks earlier, Secretary of State Antony Blinken earlier set the stage for the lovefest by telling reporters in Berlin that, “I think it’s fair to say that the United States has no better partner, no better friend in the world than Germany.”
Methinks they protest too much. With hostilities with both Moscow and Beijing heating up, Germany, not alone among myriad other countries with economic interests in Russia but especially China, may have to take a stand. The US, facing its own tough decisions, will then see what friends are for.