Honeymoon Is Over for Russia and Germany

Denis Grishkin / Vedomosti

Germany's Russia policy has undergone a profound shift since the start of the crisis in Ukraine. Berlin has moved from its long-established view of Russia as a country that it should embrace to one whose great power ambitions it must resist.

The upending of the old consensus is a striking example of how Russia's actions in Ukraine have changed its relations with Europe. Among European Union countries, Germany has by far the most developed political and economic relations with Russia, and Berlin has unexpectedly found itself at the forefront of Western efforts to find a solution to the crisis.

The pressure for a re-evaluation of Germany's Russia policy had been growing since Russian President Vladimir Putin's return to the Kremlin in 2012 because of increasing disillusionment among both the Christian Democrats and the Green Party in Germany about Russia's overall direction and, in particular, the muzzling of civil society.

A decade ago, German diplomats could claim the best relations with Russia in 100 years. In their view, a German-speaking Russian president with affection for Germany provided an opportunity to deepen relations and secure the long-term inclusion of Russia in Europe. With the fall of the Berlin Wall followed by fast-track unification, Germany was at pains to prevent the appearance of new divisions in Europe. Understandably, it felt a deep debt of gratitude to Moscow for allowing the Cold War to end peacefully and on such favorable terms for Germans.

A sign of the new times is that German Chancellor Angela Merkel and Foreign Minister Frank-Walter Steinmeier are firmly aligned on Germany's response to the Ukraine crisis, reflecting a broad consensus within the German government that Berlin's efforts to pursue a "modernization partnership" with Russia can no longer be the goal when the Russian leadership does not share this vision. Importantly, Berlin and Warsaw share a common view of the crisis in Ukraine, and this axis is the pillar of current EU policy for addressing it.

Seeing the tireless efforts of the chancellor to continue dialogue with Moscow, German business leaders have accepted that on this issue, politics trump economics. The president of the Federation of German Industries, Ulrich Grillo, recently said that the damage from sanctions would be more than offset "if we can succeed in giving force to international law in Europe as well as to our legal principles."

Official statistics indicate that German exports to Russia will be down by as much as 20 percent this year and the influential Committee on Eastern European Economic Relations has warned of between 50,000 and 60,000 jobs lost if exports cannot be redirected to alternative markets.

Speaking on the margins of the recent Group of 20 summit in Brisbane after several hours of reportedly fruitless talks with Putin, Merkel used her sharpest language yet to condemn Russia's behavior in Ukraine. She said that "old thinking in spheres of influence together with the trampling of international law must not be allowed to succeed."

Echoing earlier statements about the need to view the crisis in a long-term perspective, the chancellor added that such an approach would not succeed "no matter how long it would take, however difficult this might be and however many setbacks it might bring." At the same time, she declared the EU's political and economic support for Ukraine and its readiness to keep sanctions in place against Russia for as long as necessary while maintaining the commitment to seeking a political solution to the crisis through dialogue with Russia.

Foreign Minister Steinmeier's visits to Kiev and Moscow last week yielded no progress. He said that while he took Russia at its word that it did not want to destroy the unity of Ukraine, "reality speaks another language."

This was explicit recognition that Berlin's mantra of the need for Russia and Ukraine to fulfill the terms of the Minsk Protocol agreed in September to defuse the conflict in southeast Ukraine has been overtaken by events.

In a sign that Berlin is clutching at straws, Steinmeier has proposed that representatives of the EU and the Russian-led Eurasian Union should meet to try to find new ways of reducing tensions in the EU-Russian relationship.

This initiative appears aimed at addressing the Russian concern that Ukraine's signing of the association agreement with the EU will have negative consequences for the Eurasian Union because of the danger of EU goods being relabeled in Ukraine and entering the Eurasian Union under Russia's free-trade agreement with Ukraine.

Yet it is hard to see how it can achieve a breakthrough so late in the day when the deadline for lifting Ukrainian tariffs on EU goods has already been put back to the end of next year, apparently to assuage Russian fears.

Without Berlin's newly found position of principle on Russia's actions in Ukraine, the EU could never have imposed sectoral sanctions on Moscow. The test for Germany's leadership of the European response to the crisis is what more it can do if talking to the Russian side remains as unproductive as it has in recent months.

Amid increasing signs of economic collapse in Ukraine, it is clear that persuading the German taxpayer to dig deep for Ukraine as part of a European aid package to stabilize the country may prove to be an even bigger challenge.

John Lough is an associate fellow with the Russia & Eurasia Program at Chatham House.

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