THE WARSAW INSTITUTE REVIEW

Date: 31 July 2018    Author: Grzegorz Kuczyński

Germany-USA: a discrepancy protocol with Russia in the background

A special geopolitical relationship is coming to an end before our very eyes: an old union, now almost 70 years old. It represents an unusual relationship, as it is one between the defeated and the winner: a union that has brought many benefits, and not only to both these sides.

Brussels, Belgium, 11 July 2018. Germany’s Chancellor Angela Merkel (top) walks past US President Donald J. Trump (R) and US First Lady Melania Trump during a family photo in front of the Arcades du Cinquantenaire during a NATO Summit. NATO member countries’ heads of states and governments gather in Brussels on 11 and 12 July 2018 for a two days meeting. © CHRISTIAN BRUNA (PAP/EPA)

The agreement between the United States and the Federal Republic of Germany has been beneficial to the entire Europe, and to the West in general. The current format of cooperation is now exhausted – and it is not Donald Trump who is responsible for destroying this connection; rather, he is only trying to diagnose the problem and expects it to be resolved. Washington’s relations with Berlin may continue to deteriorate or, on the contrary, may result in finding a new formula for cooperation. This is important for every country in Europe, but, in the context of the Russian threat, this is of particular importance for the countries of Central and Eastern Europe.

Ich bin ein Berliner“: the words spoken in June 1963 by US President John F. Kennedy may symbolize decades of the exemplary German-American alliance. The Alliance was undoubtedly the key to peace and security in the Old Continent, especially during the Cold War. West Germany was the central frontier of the West’s defense, but on the other hand, of this special relationship with the United States. This protective umbrella provided by the Americans enabled Germany to quickly recover from the destructions of war which then led to impressive economic development. Therefore, it may be regarded as somewhat ironic that one of the main sources of their current dispute concerns economics.

However, the discrepancy protocol is much longer, which means that German-American relations must be reorganized. This does not mean, though, that Donald Trump’s current aim is to isolate and weaken Germany. All the more so, it is not a foregone conclusion that Washington’s disputes with Berlin will result in a permanent weakening of Europe and the transatlantic alliance. Since the shock victory of Trump in November 2016, the reaction of the German elite, the media, and public opinion has been a mixture of moralization combined with hysteria as well as, most of all, disappointment at the defeat of Hillary Clinton: “Germany and America are bound by values – democracy, freedom, as well as respect for the rule of law and the dignity of the individual, regardless of their origin, skin color, creed, gender, sexual orientation, or political views. On the basis of these values, I offer close cooperation to the future president of the United States of America, Donald Trump” – such words, uttered by Angela Merkel the day after the elections in the USA, suggested that according to Berlin, all these standards were now under threat by the fact that Trump was in power. It seems that the German Chancellor made the same mistake as many other politicians, by admitting that she was counting on a different candidate and denying the winner from the very start. Perhaps Merkel had forgotten that she was now dealing with the leader of the greatest power in the world.

In the US presidential campaign, there were accusations in Trump’s power base that Clinton was, indeed, an “American Merkel.” The German Chancellor was a tried and tested ally of Barack Obama, the fact of which could disqualify her in the eyes of Trump. Merkel also pursues an immigration policy that is entirely at odds with the ideas of the current US President. She opposed Trump on trade and climate change at the G7 and G20 summits in 2017. In May 2017, she said that Europe could no longer rely on the Americans. Meanwhile, she survived a humiliatingly short and dry visit to the USA in April 2018. She does not react to the attacks of the new US Ambassador to Berlin, Richard Grenell. She survived Trump’s attacks at the Brussels summit. The reason for Trump’s aversion towards Merkel cannot be underestimated. In the case of this president, we clearly see an increase in the importance of the personalization of politics at the highest level, as evidenced by the summits in Singapore and Helsinki. However, it would be a grave mistake to reduce the current crisis in US-German relations to purely personal issues.

“Russian captive”

The main accusation made by Trump of Germany, judging by his public statements, is in a sense “life at America’s expense.” Berlin benefits from the military protection of the USA and is careful in its own defense spending. What is more, by buying gas from Russia, Germany finances the armaments of the largest enemy of the West. “I think it’s very sad when Germany makes a massive oil and gas deal with Russia, where you’re supposed to be guarding against Russia, and Germany goes out and pays billions and billions of dollars a year to Russia. So we’re protecting Germany. We’re protecting France. We’re protecting all of these countries. And then numerous of the countries go out and make a pipeline deal with Russia, where they’re paying billions of dollars into the coffers of Russia,” Trump said.

Quebec, Canada, 8 June 2018. German Chancellor Angela Merkel (L), US President Donald J. Trump (2L), and French President Emmanuel Macron (R) participate in a working session of the G7 Summit in La Malbaie. © LUDOVIC MARIN (PAP/EPA)

Not only is the United States losing out on this situation, as it bears the greatest military effort in the Alliance, but also countries close to Russia, which are exposed to its aggression. There is, therefore, a convergence of interests between the USA and Central and Eastern Europe, with Poland at the forefront. It is no coincidence that Trump, during his infamous breakfast with NATO Secretary Jens Stoltenberg at the summit in Brussels, juxtaposed the politics of Berlin and Warsaw: “And you have a country like Poland that won’t accept the gas. You take a look at some of the countries — they won’t accept it, because they don’t want to be captive to Russia. But Germany, as far as I’m concerned, is captive to Russia, because it’s getting so much of its energy from Russia. So we’re supposed to protect Germany, but they’re getting their energy from Russia.” In short, from the point of view of the US, Poland is a more reliable ally than Germany, not only because it strives to reduce supplies from Russia and develop imports of American LNG; rather, Warsaw does not want to finance Russian armaments by buying gas from that country, and continues to develop its military potential and increase its defense spending. In other words, Poland is in this sense the complete opposite of Germany.

Germany imports as much as 80% of its gas, half of which comes from Russia. As a result, gas from Gazprom accounts for 10% of Germany’s energy. However, the construction of Nord Stream 2 would result in even more Russian gas on the German market. Berlin explains that it is increasing its imports from Russia because it pays off economically (unlike American LNG, for example).

Germany needs to close the gap in the energy balance that they have created, and to do so as soon as possible. The blind obsession with renewable energy resources and the phasing out of the nuclear sector have resulted in a current electricity bill for Germany that is five times higher than the total value of the market. On the other hand, electricity in a German home is on average three times more expensive than in an American home. Once again, let me quote Trump from Brussels: “If you look at it, Germany is a captive of Russia. They got rid of their coal plants, they got rid of their nuclear; they’re getting so much of their oil and gas from Russia.”.

Trump’s words on Germany’s gas cooperation with Russia have been the subject of criticism. Experts point out that Berlin is not so dependent on supplies from the East, and that it has the potential to diversify its imports significantly. Even if we consider that the current scale of cooperation with Russia does not threaten Germany’s security and that Moscow does not have such a position of leverage here as it does with with Ukraine, it does not change the fact that Berlin finances the Russian state with such a policy and allows it to strengthen itself on the gas market throughout Europe. Moreover, while Ukraine, the Baltic States, and Poland, for historical reasons, are for the time being heavily dependent on Russian supplies and exposed to a form of energy blackmail, Germany voluntarily allows Russia to put a noose around its neck.

The gas pistol

The problem is that at the same time they weaken the position of other countries, especially transit countries lying between Russia and Germany. That is why, in the case of the Nord Stream 2, the positions of the USA, Poland, the Baltic States and Ukraine are in line with the fact that the German-Russian project poses a threat to European security, and not only to energy security.

The construction of Nord Stream 2 and the pumping of vast quantities of gas into Germany and through Germany (the share of gas imported from Russia is growing, which is then sold by Germany to its neighbors) across Central Europe can effectively halt the diversification efforts of the countries of the Three Seas Initiative.

The primary objective is to build North-South connections and LNG terminals through which gas other than Russian will be supplied to this gas network. The flooding of the region with cheaper Russian gas (it can be assumed that Moscow is even capable of dumping prices in order to eliminate competition) may seriously impede the financing and defense of projects such as the Baltic Pipe and the terminal on the island of Krk in the eyes of public opinion of individual countries (one should bear in mind Russia’s threatening disinformation machine).

In this case, therefore, the interest of the energy security of the Three Seas Initiative countries is convergent with the economic interest of the USA. This is because American LNG may contribute to the diversification of supply sources in Europe and the reduction of dependence on supplies from Russia, mainly in Europe. Undoubtedly, this was one of the main reasons why the US President supported the Three Seas Initiative. Trump came to Warsaw in July 2017 from Hamburg and talked about the development of cooperation in LNG with Poland and Croatia.

Since June 2015, when the intention to build Nord Stream 2 was announced, Berlin has consistently supported the project, disregarding the objections of its NATO and EU allies, minimizing the influence of Brussels and arguing that this is a purely commercial idea, and outside the project parties, primarily companies from Germany and Russia, nobody should care. It was not until this spring that Berlin changed its rhetoric, and for the first time Angela Merkel admitted that the gas pipeline also had a political dimension. However, this does not mean a reduction in support for the project. Together with the Russians, Germany will reduce the risk for Ukrainian transit – and this, according to Berlin, will solve the problem. However, according not only to Kiev and Warsaw but also to Washington, it will not solve the problem. A certain modification of the German position results only from the growing pressure of the American administration and the threat of U.S. sanctions. The public demands made by Trump to Germany on Nord Stream 2 are beneficial for Central and Eastern Europe, NATO and transatlantic ties, as they hit the Berlin-Moscow axis.

However, too much enthusiasm is not desirable because Trump has only been tough on one country at one end of a potential pipe. Moreover, after all, Nord Stream 2 is a project that involves Russia in particular. The warning signal should be Helsinki. There, Donald Trump presented a much softer position regarding the gas pipeline. He said that the US is now one of the largest gas producers and that it will “compete as hard as it can” with Russia. There was no word uttered about the security issues and fears of the countries in the region. Trump inscribed in the narrative that the opposition of the USA results only from business calculations (Americans want their LNG to compete with Russian energy in Europe). Trump suggested that it was Berlin that took the decision to build but did not mention any sanctions. He only confirmed that American LNG would compete with Russian gas in Europe, although the Nord Stream 2 project has a geographical advantage.

Cars instead of tanks

According to Trump, the increase in gas imports from Russia is all the more outrageous as, at the same time, Germany is failing to meet its defense spending target of 2% of its GDP. The results are visible: the Bundeswehr is in a terrible condition. The army lacks tents, winter clothes, bulletproof vests, and most (yes, most!) of the heavy equipment like tanks, planes, helicopters, and ships are not suitable for combat. According to NATO’s estimates, Germany is currently ranked 17th out of 29 members of the Alliance in terms of the percentage of GDP allocated to defense. This constitutes only 1.24%, slightly more than in 2014, when Berlin, like other NATO allies, decided to increase this expenditure in view of the Russian threat.

Contrary to the Nord Stream 2 issue, the Chancellor agreed with the US President on the issue of insufficient defense spending. Angela Merkel asserted that Berlin felt obliged to aim for 2% of GDP to be spent on defense. “We are doing this year by year, also in 2018 and 2019, and in 2024 we will be spending 80% more on defense than in 2015.” However, it will still be a long way from 2% of GDP. Defense spending is growing steadily, from $38 billion five years ago to today’s $45 billion, but it is still expected to be just $57 billion in 2025. That is 1.5% of Germany’s GDP. Trump’s pressure on defense spending puts Merkel in a difficult situation in her own country. No other issue than defense spending raises such tensions in the coalition between the German Union parties and the Social Democratic Party of Germany.

Low expenditure on the army, which also affects the condition of NATO as a whole, cannot be defended by the claim that post-war Germany abandoned its militaristic idea of doing politics and preferred to build a powerful position by peaceful means; namely, through economic expansion. It was Europe that felt this most, naturally, with various consequences (the Greeks and the Italians could say the most about this). One such complaint is that the trade disputes and claims of the USA against the European Union are mainly due to German domination on the Old Continent. The Americans, who have been protecting Germany for decades, have every right to ask openly where this huge US trade deficit in relations with Germany ($64 billion) comes from. On average, the European Union imposes higher customs duties on imports from the USA than the Americans impose on imports from Europe. In the case of the automotive sector, which is of crucial importance for German exports overseas, this difference is four times as big! Donald Trump, who fights for the votes of the inhabitants of the industrial Rust Belt, cannot ignore such a problem. Therefore, although the imbalance in trade affects the entire EU, Trump deliberately focuses on accusing Germany of exploiting America. It should be remembered, however, that the war rhetoric concerning Berlin is not an exception in the policy of the current White House, but the rule: Trump’s business claims also apply to other countries, such as China. In the case of this conflict of interests between the USA and Germany concerning trade, Berlin must proceed with caution. There is too much to lose; and much more than the effect of Trump introducing customs duties on imports of steel and aluminum in March. The structure of trade between Europe (especially between Germany) and the USA makes a trade war unprofitable for Germany. Merkel understands this very well, so all personalities of the President of the European Council, Donald Tusk, to Trump have been replaced by a visit by the President of the European Commission, Jean-Claude Juncker, to the White House, which distanced the vision of the commercial battle.

Who is our friend and who is our enemy?

German anti-Americanism would be the easiest way to explain Trump’s policy. However, this is not the case. Most of these attitudes have been present in German society and elites for a long time. The only difference is that now it is possible to express them openly. For years, Germany has been one of the most anti-American nations in the Old Continent (even if they loved Obama). Even the reaction to the disclosure of the fact that American NSA was invigilating German politicians was hysterical in Berlin compared to the reaction of Paris. The Germans set up a commission of inquiry and expelled the head of the CIA residence in Berlin. It is hard not to notice that the reaction to Russian hackers accessing the Bundestag’s computer systems in 2015 barely released a fraction of these emotions. The Germans went so far as to mock American democracy since that made it possible for someone like Trump to take power. However, it is they who should be watching closely the rise in popularity of their own political parties calling for the ‘improvement’ of the current democratic system, seeking models found in the Putin regime. Since Merkel is becoming weaker and weaker, some political forces in Germany, such as AfD and Die Linke, are even openly against America. The SPD and the Liberals are also becoming increasingly anti-American. Merkel must take into account Germany’s internal political situation, all the more so as it is in the weakest position in many years. In July, the popularity of the CDU-CSU coalition (which is tormented by a dispute over immigration policy) dropped to a record low of 29%, while already 17% was recorded by AfD, a coalition, which is anti-American and pro-Russian (as are more and more Germans). The May survey for ZDF showed that only 14% of Germans trust the US, 36% trust Russia, and 43% trust China; while as many as 82% of respondents do not trust the United States. In addition, 67% are in favor of Merkel taking a harsher attitude towards the US, and 32% believe that Trump represents a higher risk for Europe than Putin (52% think that they are of equal risk).

The indignation caused in Germany by Trump’s words about Berlin’s ties with Moscow only testifies to the hypocrisy of the national elite between the Oder and the Rhine. The US President was severely criticized for the very fact of holding a summit with Putin in Helsinki. A little earlier, in May, three key members of the German government had traveled to Russia: Foreign Minister Heiko Maas (May 10, Moscow), Minister of Economy and Energy Peter Altmaier (May 15, Moscow), and Chancellor Angela Merkel (May 18, Sochi). Support for Nord Stream 2 and increased energy cooperation with Russia in Berlin – while still maintaining support for sanctions – is independent of party divisions. Altmaier and Merkel are Christian Democrats, and Maas is a Social Democrat. It is true that the latter is being confronted with an excessively strict policy towards Moscow by his colleagues from the SPD. It can be seen that in the ranks of the Merkel coalition, the camp of friends of Russia is growing in strength. For example, Manuela Schwesig, Prime Minister of Mecklenburg-Vorpommern, who made relations with Russia one of the priorities of her government, made her first trip abroad to St. Petersburg. She is also head of the German-Russian Friendship Group in the Bundesrat.

The growth of pro-Russian attitudes among German elite and society, despite clear warning signals, may be a cause for concern, especially among the countries of Central and Eastern Europe. It is no longer just about solidarity with allies who may be attacked in various ways by an aggressive Russia. The worst thing is that in Berlin, many decision makers do not want to take notice of Moscow’s unfriendly actions towards Germany. In November 2017, the head of the German BND intelligence service listed five major challenges for Germany’s security and foreign policy until 2030. In second place, Bruno Kahl pointed to the growing ambitions of the Russian Federation, for which an effective counterbalance to the eastern flank can only be created with the help of the USA. In short, Russia is a threat, and the Americans are allies in neutralizing it. The German secret service and the Ministry of Defense have long regarded Moscow’s policy as a significant threat and have alerted politicians. The second characteristic of the German secret services is that they point to the USA as the cornerstone of European security and Berlin’s most important ally. Unfortunately, the political front in Germany, founding its security and defense policy on an alliance with the USA and NATO, seems to be weakening. Another camp is growing in strength, namely one calling for an alternative policy to distance itself from the US and to focus on building one’s own capacity within the EU, mainly in close cooperation with France.

The Loneliness Trap

It is hard to ignore the fact that the dispute between the government in Berlin and the core of the German political elite and Trump and his supporters in America concerns fundamental issues in the field of international politics. It is no longer just a matter of personal animosity of the leaders, commercial disputes, German weakness to Russian gas and allergy to expand defense potential. After all, there are also differences in matters such as Iran, immigration policy, and climate policy. The today’s US policy towards Germany is also the result of a new approach to the EU as a whole. Previous administrations were in favor of integration, and the current one is more focused on the union of nation states.

Orzysz, Poland, November 26, 2015. Bundeswehr soldiers during German-Polish combat support training exercises on the training ground of the Ground Forces Training Centre. The training exercises are attended by 350 soldiers from the 15th Mechanized Brigade of Giżycko and from the 21st Armoured Brigade of the Bundeswehr in Augustdorf. © Tomasz Waszczuk (PAP)

Heiko Maas, even if he is not pro-Russian enough according to his SPD colleagues, certainly meets their expectations when it comes to the USA. At the beginning of June, the head of German diplomacy strongly criticized Trump’s policy, claiming that none of the recent US measures “would make the world better, safer or more friendly.” Moreover, they are harmful to Europe, which according to Maas the host of the White House is aware of. The head of the German MFA believes that there are “differences between the USA and Europe that can no longer be swamped under the carpet.” It is clear what course the German government has taken. Faced with growing confrontation with America, Germany is trying to involve the entire European Union in it. This is, of course, more advantageous for Berlin. As a result, not for the first time in the recent history of united Europe, German interests turn out to be European interests, and threats to Germany are threats to the EU; a little like with Russian gas, which is also supposed to be a blessing not only for Germans but for all inhabitants of Europe. The manifesto of such a policy formed the basis of Maas’s speech in Berlin on 13 June. The SPD politician said that the European Union needed reforms and that its members needed to create a more united front in the face of a changing global order. Although Maas mentioned Russian “attacks on international law” and Chinese “expansion” as signs of this change, the biggest challenge is the “America First selfish policy.” According to the head of the German Ministry of Foreign Affairs, in the face of challenges posed by Trump’s team (termination of the climate agreement, abandoning the nuclear agreement with Iran, threats of sanctions against Europe, and protectionism), “we Europeans have to act as a conscious counterweight when the US crosses red lines,”he said.“Where the US government aggressively throws into question our values and interests, we have to react more robustly.”

The only problem is that Germany may find it increasingly difficult to find allies in Europe ready to adopt such a line of action towards the USA. Germany’s strongest potential partner would be France. In fact, in terms of customs, Paris is even more determined to confront the Americans than Berlin (because it is also less risky in economic terms). However, that is the end of it. From the outset, it has been signaled that France could be the USA’s primary partner in Europe, and not the UK, not to mention Germany. Trump successfully plays this role, as illustrated by the juxtaposition of Macron and Merkel’s visits to the USA in a short period: a very pompous and honorable welcome was arranged for the French President, and a brief, even humiliating reception was waiting for the German Chancellor. The French, with their superpower syndrome, are also keen to let Trump tease their vanity when, for example, the US President invites them to join military operations (as in April in Syria). How different this is from Obama’s behavior, which ridiculed the French in 2013 by withdrawing from the decision to launch a rocket attack on Assad at the very last minute. The French ships and aircraft sent to the Syrian region also had to withdraw. In addition, if Berlin is looking for people with whom to discuss America, it will not find them in Rome either. The current populist government in Italy has not been hiding its aversion to Germany from the outset, and it has also turned out that Italy’s Prime Minister Salvini enjoys talking to Trump. However, the situation is no better in the so-called new Europe. These are different times than a decade or so ago, when the area between Germany and Russia became a zone of mixed influence of both these countries (some called it a condominium), and such a state of affairs perfectly satisfied Obama, who was not interested in Europe and eagerly accepted that Berlin should keep an eye on the continent’s order. We could see with the example of Ukraine how it all ended. The year 2014 can be seen as the termination of Moscow’s unwritten agreement with Berlin on influence in Central and Eastern Europe.

Nevertheless, it was Angela Merkel who left the issue of resolving the conflict in Ukraine to Obama. Four years later, it appears that the peace process has hardly begun. Meanwhile, the situation has become even more complicated for Berlin. Opening Europe’s gateway to immigrants from Asia and Africa has led to the most profound divisions in years between Germany and its neighbors in Central Europe. The turning point was the change of the governing team in Poland. The most influential country in the region ceased to be a customer of Berlin and became an ally of Washington (and of Trump).

Stuck with each other?

The change in the situation in the USA has significantly weakened Berlin’s position in Europe. After years of ruthlessly imposing their commands on others, at some point Germans may become virtually alone, surrounded by indifferent, disappointed, and even reluctant or hostile countries. Then their only strong partner will be Russia. Such a scenario is not beneficial for either Germany or Europe. It would only benefit Moscow – just as it benefits from the differences within the Euro-Atlantic community with regard to Nord Stream 2.

Further developments in this geopolitical game will indicate whether this bleak scenario could happen. If Berlin persists and consistently continues with their project, the Americans can impose sanctions on German construction companies. This will lead to a worsening of the situation and may trigger retaliatory measures on the part of Germany, both at a bilateral level and in the European Union. Besides, relations between Berlin and the countries of Central Europe and Kiev will automatically deteriorate. Of course, the Russians will continue to reach out to the Germans.

The question that Germany should ask itself is this: is it worth risking relations with several neighbors and, above all, exposing ourselves to serious economic losses by means of one gas pipeline? However much Berlin imports gas and oil from Russia, the United States is and will remain its most important partner outside the EU. It is America that is the largest market for German exporters. Every fifth euro in Germany’s trade surplus comes from the US taxpayer’s pocket. No wonder that the results of Juncker’s visit to the White House in Berlin were received with relief. It may be possible to avoid a trade war, but German concessions are necessary for this. The problem is that two problematic issues, i.e., defense spending and Nord Stream 2, have already mostly become hostages to internal politics in Germany. If surveys show that more Germans see Trump as a threat to world peace than Putin, it means that improving bilateral relations will be a difficult task. On the German side, only Merkel can take on this responsibility; yet one major problem in this regard is that she is becoming increasingly weaker. That is why Trump should embrace this paraphrased Polish saying: “Respect your partner, because you may always get a worse one.”

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