Germany struggles to adapt to a new era – POLITICO

Ivo Daalder, former US ambassador to NATO, is chairman of the Chicago Council on Global Affairs and host of the weekly “World Review with Ivo Daalder” podcast.

Russia’s invasion of Ukraine created a deep identity crisis in Germany.

The first shots of the war effectively shattered Berlin’s longstanding security, energy and economic policies. And although the coalition government has taken immediate and significant steps to deal with the crisis in the eight months since, it remains to be seen whether Berlin will take a course that these new times demand.

Since the end of the Cold War, a reunited Germany has approached its role in Europe and the world based on three assumptions: that its security rested on dialogue and engagement rather than on defence; that its energy needs could be met by cheap Russian gas and oil; and that its future prosperity rested on exports to an ever-expanding Chinese market.

None of these choices were inevitable. Indeed, Germany’s friends in Europe and across the Atlantic have repeatedly warned of the dangers that these policies entail. But no matter which political party was in power, Berlin refused to listen – until Russia’s invasion finally forced a new coalition government to change course.

The much-criticized Nord Stream II gas pipeline that was supposed to bring gas directly from Russia to Germany has been mothballed. Chancellor Olaf Scholz announced a special fund of 100 billion euros to reinvest in the German army and pledged to devote 2% of GDP to defence. And the country’s longstanding dependence on Wandel durch Handel — change through trade — was eventually challenged.

These immediate course corrections represented a much-needed acknowledgment that Germany needed to change course. Yet in these changes, Berlin has so far failed to chart a new, more sustainable path, both for its future and that of Europe.

Take security policy, for example. For many decades, even during the Cold War, German governments advocated dialogue as the best way to engage adversarial government. Called Ostpolitikthe approach was based on the idea that change comes through commitment — Wandel durch Annäherung – and he was considered successful in ending the Cold War without gunfire and with the reunification of Germany.

But dialogue and engagement alone will never be enough to ensure Europe’s security. It also required a strong defense — which the United States and NATO provided, and without which dialogue and Ostpolitik surely would have failed.

Yet after the Cold War, and as the cost of unification rose precipitously, successive German governments ignored defense responsibilities, leaving Europe’s largest country with an army that could barely fight or deploy.

And while the proposed €100 billion defense fund will start reinvesting in military capabilities, it’s barely enough. Germany’s underinvestment in defense has been going on for decades, while more serious allies spend at least 2% of their GDP on defense – a level Germany last reached in 1991. And to at a time when many of its neighbors are beefing up defense spending at 3%, Germany will now only meet its 2% obligation by relying on the special fund to bridge the gap.

Not only does Berlin still not spend enough, but it continues to hope that dialogue with Russia will also bring peace. For months, Scholz was reluctant to say that Germany wanted Ukraine to win the war, and he refused to send tanks to help Kyiv retake territory lost to Russia at the start of the war. In the end, negotiations may well end the fighting – but only if Ukraine is able to negotiate forcefully.

Germany’s energy policy has also been flawed. The mistake began 50 years ago, when the then Bonn government entered into negotiations with Moscow to build a gas pipeline from Siberia. Since then, Germany has deepened its reliance on Russian gas, dismissing frequent warnings that its reliance would give Moscow influence over its policies. Even when Russia has repeatedly weaponized the energy against other countries, successive German governments have continued to invest in the country’s gas, authorizing a second Nord Stream pipeline and selling its gas storage facilities to Gazprom. .

Germany is now paying for this madness.

He traveled the world in search of alternative supplies to fill his gas reserves for the winter, causing world gas prices to rise sharply. The government has promised to help consumers and industry bear this burden by allocating up to 200 billion euros in subsidies, but such largesse has now undermined the European effort to tackle the energy crisis – that Germany’s overreliance on Russian fuel partly caused it.

Fortunately, the new government has made it clear that it will end its dependence on Russian fossil fuels. It has stopped importing Russian coal and will end oil imports before the end of the year. Gas imports have also slowed and the government is unlikely to support the repair of the Nord Stream pipelines that have burst.

However, a major challenge remains for Germany: its reliance on a growing Chinese market to drive its export-led growth.

The Chinese market has been essential for Germany’s advanced automotive and manufacturing industries – the backbone of the country’s economy – and that will have to change. Not only is the Chinese economy failing to grow as fast as German industry had expected, but as it becomes even more authoritarian and its economy increasingly controlled by the state, the risks to depend on China will outweigh the benefits.

Fortunately, in this area, Berlin has already begun to apply the lessons learned from Russia. When it comes to doing business with Beijing, Foreign Minister Annalena Baerbock recently told German CEOs that they “cannot afford to follow the ‘business first’ mantra on their own, without giving due consideration to the long-term risks and dependencies”.

Germany is currently at a crossroads. Now that the illusion of its past policies has been shattered, it has the opportunity to do what it should have done a long time ago: to become a real leader of Europe, supporting and, if necessary, guaranteeing security, prosperity and freedom of the continent.

His past mistakes and future potential demand nothing less.

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