[Feature: The Future of International Order] Shogo Akagawa: Germany's Shaking Policy Shift—Will the "Silent Giant" Change?

2022/07/05

As the confrontation between the democratic camp and authoritarian states deepens, Europe has become the front line of a "New Cold War." Germany, which has been criticized for being conciliatory toward Russia, has shelved its idealism of prioritizing diplomatic dialogue and strengthened its confrontational stance. Despite its deep energy dependence and historical and cultural ties, Germany is pushing forward with a break from Russia. This paradigm shift in German politics will determine the direction of Europe as a whole. Within it, one can glimpse the resolve, dilemmas, and dangers of Europe's leading power.

Half a century ago in 1970, in the midst of the Cold War, West Germany agreed to import natural gas from the Soviet Union via pipeline. For West Germany, the Soviet Union was a stable energy source, and for the Soviet Union, West Germany became a valued customer providing precious foreign currency. Fifty years later, the structure of mutual dependence in the energy sector has been completely transformed by Russia's invasion of Ukraine.

The European Union (EU) has agreed on an embargo of Russian coal and oil. The next focus is gas. Germany, which relies on Russia for half of its gas, publicly advocates caution, claiming the impact would be too great, but in reality, acceptance is gradually spreading within Berlin's political circles. "Eventually, we will have no choice but to implement an embargo," replied a senior official of the ruling party close to German Chancellor Scholz. Another ruling party lawmaker told me, "A situation where trade with Russia is completely halted is also conceivable."

The German political world is no longer considering "whether to embargo" but rather "when to embargo." However, they want to buy as much time as possible until alternative energy sources are found. This is the impression I get from repeated reporting in Berlin.

The response of companies here is interesting. While lobbying the German government through industry groups to avoid a gas embargo, they anticipate that "the German government will eventually have to move toward a total gas embargo." "We can no longer rely on Russian products." According to interviews with multiple corporate sources, the Federation of German Industries (BDI), Germany's equivalent of Keidanren, has compiled an internal document urging member companies to prepare.

The movement to withdraw from Russia is spreading in the business world. They fear criticism for profiting in Russia. An executive at a major logistics company revealed his painful inner thoughts: "Currently, we are only suspending services, but we will sell our Russian business within the year even if it means taking a loss. If we cling to Russia and our corporate image declines in the West, it will be irreparable."

The brave slogan of "de-Russianization" is all well and good, but what about the impact on the economy? To give the answer first, negative growth and inflation—stagflation—are unavoidable. Nevertheless, the view of the government's Council of Economic Experts is that the break from Russia should be undertaken. In their economic forecast released on March 30, they recommended that "dependence on Russian energy should be ended."

Why hurry to break from Russia to such an extent? There are three reasons. The first is pressure from Ukraine. "German companies are still connected to Russia," and "You only think about the economy." In March, Ukrainian President Zelenskyy fiercely criticized Germany in a public speaking engagement before the German parliament.

He listed how Germany had been hostile to Ukraine while being conciliatory toward Russia. He also targeted Germany's reluctance toward Ukraine's membership in NATO and the EU, going so far as to say Germany had "built a wall" in Europe. After World War II, tearing down the Berlin Wall was Germany's national policy. Being denounced for "building a wall" must have made the members of parliament who heard the speech feel unbearable.

The second is pressure from Eastern Europe. In May, I had the opportunity to speak with Latvian Prime Minister Kariņš, a hardliner toward Russia. When I asked, "When should the gas embargo be introduced?" he immediately replied, "From tomorrow. No, it should have been introduced yesterday." This was nothing less than a jab at the cautious Germany.

The Scholz administration, which took office at the end of last year, made European solidarity a campaign pledge. This was a reflection on the previous Merkel administration's push for "German interests" during the Greek and refugee crises. Therefore, Germany has no choice but to listen to the opinions of anti-Russian hardliners within the EU, such as Poland and the Baltic states.

The third is disappointment in Russia. Many German politicians believed that if they persistently continued dialogue and deepened economic exchange, Russia would move toward democratization. They were looking at the reality of Russian politics through the lens of idealism, which is why the feeling of being betrayed by President Putin is so strong.

"I don't want to believe that Russia will attack Ukraine, but if they do invade, we will have no choice but to impose powerful sanctions. It will be a break with Russia." In February, when the invasion of Ukraine became a reality, Ralf Stegner, a member of the Bundestag and a heavyweight of the left wing of the ruling Social Democratic Party (SPD) who has led dialogue with Russia for many years, spoke as if reflecting deeply.

However, the decision came too late. The "Putin Doctrine," which seeks to subdue regions considered spheres of influence by force, had been clear for some time. At the latest, Germany should have increased its vigilance toward Russia after the annexation of Crimea in 2014, but it consistently maintained a soft stance. "Even after the Putin dictatorship became clear, Germany tried to import gas from Russia." When I called Olena Zalishchuk, a diplomatic advisor to the Deputy Prime Minister of Ukraine, she launched a fierce critique of Germany. A former senior German government official confessed to me that "something like an obsession with having to understand Russia" clouded their judgment.

Such a policy of conciliation toward Russia cannot be discussed without historical context.

To begin with, the decision to import gas from the Soviet Union half a century ago was made by West German Chancellor Willy Brandt (in office 1969–74), a charismatic politician considered the father of the modern SPD. As the first West German Chancellor from the SPD after World War II, he championed Ostpolitik (a policy of conciliation with the Communist bloc) and met with Soviet leader Brezhnev around the same time as the gas imports. Brandt's path of dialogue, for which he received the Nobel Peace Prize in the same year and which became the starting point for German reunification in 1990, is still legendary. The SPD headquarters is named "Willy Brandt House" after the former chancellor.

Historical awareness of "atonement" toward Russia also plays a role. During the war, the Nazis caused the deaths of millions of Soviet prisoners of war through abuse and malnutrition. In 2015, the 70th anniversary of the end of the war, then-German President Gauck apologized for the massacre of Soviet soldiers, calling it a "great crime." Will the atonement and apologies built up after the war be wasted by being hostile to Russia? The left-liberal camp is still troubled by this.

Pro-Russian sentiment in eastern Germany also cannot be ignored. Residents of the former East Germany have a sense of victimhood, feeling they have been treated as "second-class citizens" since German reunification in 1990. Therefore, they feel nostalgia for the Soviet Union, which was the backer during the Cold War era when East Germany could take pride in being a "model socialist country." The opposition Left Party, based in eastern Germany, has long called for the dismantling of NATO. I have a long relationship with Hans Modrow, the chairman of the party's Council of Elders (former Chairman of the Council of Ministers of East Germany = Prime Minister), and have interviewed him dozens of times. Every time we meet, he repeats, "Germany should not become a military threat to Russia."

The histories of Germany and Russia have been intricately intertwined. Both were late-developing capitalist countries, and the Russian port city of Kaliningrad was the core German city of Königsberg before the war. Even Alexander Graf Lambsdorff, deputy parliamentary leader of the ruling Free Democratic Party and known as a hardliner toward Russia, can trace his ancestors back to a foreign minister of the Russian Empire.

However, as mentioned earlier, just because there is a historical background does not mean that a policy of conciliation toward Russia is still permissible.

Sergej Sumlenny, a former Russian dissident journalist and former Director of the Heinrich Böll Foundation's Kyiv office, is harsh. "Germany also committed atrocities in Ukraine during the war. It is wrong to feel a sense of debt only toward Russia and not toward Ukraine." If Germany continues to hide behind historical awareness and maintain a policy of not rocking the boat, the criticism will only intensify.

Regardless of the past, the challenge for German politics, which is leaning toward a break from Russia, is a sense of speed and clearly communicating to the public where their nation is headed. However, the current Scholz administration is failing to do that.

The provision of heavy weapons to Ukraine, Germany's military expansion in preparation for the Russian threat, the energy break from Russia, and the total withdrawal of German companies from the Russian market—the ambition to tackle things that were unthinkable until recently is evident. However, a clear roadmap is not visible, and it is unclear what will be done by when.

Despite a 180-degree turn in policy that prioritized dialogue and strengthening economic relations with Russia, no blueprint has been presented. Voices from within the ruling party leak that "communication is failing."

The movements of Chancellor Scholz, who should be the compass, are slow. For example, although he pledged the "provision of heavy weapons," an urgent matter for Ukraine, it took months to realize. Instead of receiving gratitude from the Ukrainian ambassador to Germany, he was met with shouts of "too slow."

I have met Mr. Scholz many times. We have even had lively discussions late into the night with wine in hand. Because he speaks in a low mumble, I honestly don't feel a sense of charisma, but he has a seriousness that answers any question sincerely. Still, to a public seeking a clear message from a politician, he likely appears a bit lacking.

Since much of it was off the record, I will refrain from introducing specific remarks, but I received the impression of a very enthusiastic pro-European who is dedicated to European integration. On the other hand, he approached authoritarian states like Russia and China with an emphasis on dialogue—in other words, he was a successor to the traditional SPD line.

After the invasion of Ukraine, he decided to abandon this line and transition to a "confrontation through power" with Russia, but it seems he has not yet fully decided on Germany's position. Is it really right to cut ties with Russia? There is still hesitation. Is he afraid of triggering World War III, or does he still want to avoid the blow to the economy? Scholz's style is closed-door politics, making decisions only through discussions with a small number of close aides. In the future, it will be necessary to verify Scholz's fluctuating feelings and the advice of his aides through requests for the disclosure of public documents.

Climate change measures are likely to be significantly affected by Germany's policy shift. Germany intended to realize a decarbonized society by promoting the spread of renewable energy while relying on Russian energy, but those calculations have gone awry.

That said, it is unthinkable that the Scholz administration, which gained power supported by liberal votes, would neglect climate change. The coalition government also includes the Green Party, which has led the environmental movement in Europe.

For the time being, while maintaining the strategy of chasing three rabbits—phasing out nuclear power, phasing out coal, and phasing out Russian energy—they will likely try to somehow put a brake on the increased burden on companies and households caused by soaring energy prices. Specifically, targeted tax cuts for items like food and gasoline, as well as subsidies, are conceivable. The spread of renewable energy will also likely proceed at a rapid pace.

There is a view in Japan that phasing out nuclear power under these circumstances is too reckless. Even in Germany, the number of people who accept nuclear power is increasing, but the sense of rejection is stronger among the younger generation. Even if the total abolition of nuclear power scheduled for the end of 2022 is postponed due to anxiety over energy shortages, the construction of new plants is unthinkable.

Ultimately, economic issues such as the break from Russian energy can be solved through fiscal, economic, and monetary policies. The problem is foreign and security policy. While the German way is to value ideals, principles, and concepts and to prefer striving toward high goals, the essential vision for the nation's future is not visible.

Following the invasion of Ukraine, the sense of crisis regarding "20th-century style warfare" has increased. Armed conflict between nations is actually occurring, and there is a need to prepare again for combat involving tanks and fighter jets. Germany has announced a significant increase in defense spending.

With this, the center of gravity for foreign and security policy in Europe has shifted from "dialogue" to the "balance of power." To prepare for the Russian threat, Sweden and Finland abandoned their traditional neutrality and decided to join NATO. Coupled with Germany's military expansion, it has become clear that Europe will confront Russia with military force, and the "Iron Curtain," which was supposed to have disappeared, is being resurrected. The world is transitioning from globalization to bloc formation, and the democratic camp has cut off not only diplomatic and economic relations with Russia but also cultural and sporting exchanges.

What role will Germany play in such a situation? A senior German government official I interviewed was troubled. "Is it okay for us to become a military power again?" he whispered, as if asking himself. If Germany, Europe's largest economic power, continues its military expansion, it will mathematically become Europe's largest military power before long. This is the source of his grief.

"Surrounding countries tell us to take responsibility for European security. But if Germany stands out in Europe in both economic and military power, what will neighboring countries think?"

Moreover, "political changes" in various countries might force Germany to shed its skin. What should be noted is the impact that elections in France and the United States will have on Germany.

In France, the incumbent Macron fended off the pursuit of the far-right Le Pen in the April 2022 presidential election. However, the fear remains that there will be a "President Le Pen" in the next election five years from now. In the United States, a return of Trump is possible in the future. The birth of nationalist governments in France and the U.S. is a worst-case scenario for the world. "If that happens, Germany will have no choice but to become the core of NATO. Even the discussion of nuclear armament would emerge," said a German government source.

Germany is no longer the "Silent Giant" that seeks peace and does not interfere in the European order as it did during the previous Cold War. Nevertheless, it holds dilemmas and remains indecisive. It still carries the past of having triggered two world wars. To prevent its own prominence, the only strategy seems to be to create a "European Army" or "EU Army" and incorporate the German military into it. If realized, it would become a pillar alongside the United States within NATO.

Russia's invasion of Ukraine forced a policy shift in Germany across various aspects such as diplomacy, security, energy, and trade. What about Japan? Both the public and private sectors are clinging to Russian resource development, and opinions are divided even on the withdrawal or reduction of Russian business.

Certainly, securing energy is important, but will we continue to pay money to Russia out of fear that "China will take it" or that "inflation will occur"? If we continue Russian business, we will be turning a blind eye to the Putin regime, which has disregarded international law and sovereignty and taken many lives.

During the Cold War, Japan actively engaged in business with the Soviet Union and Eastern Europe under the logic that "European companies would take the Communist bloc market." The result was the 1987 Toshiba Machine COCOM violation incident. Initially, the Japanese side had little awareness that they had created a hole in the Western security system, and their response was delayed.

In Europe, even Germany is trying to break from Russia. If that happens, attention will focus on Japanese companies clinging to Russia. Next year, Japan will be in a position to coordinate Russian sanctions as the G7 chair. The response must not be delayed. Does current Japan have the preparedness to brace for a long confrontation with authoritarian states?