Europe
Subscriber Only

Exposed, wounded Germany is experiencing a political and economic earthquake

Merkel’s legacy unravels as Germany reckons with its gas dependence and war response

The German Historical Museum (DHM) in Berlin is home to many mementos of political and military failure, most notoriously the hat Napoleon lost on his defeat at Waterloo. Next Thursday, April 28th, Angela Merkel faces her own Waterloo here, when a new DHM exhibition opens tracking her political life in portraits – from 1991 until her fourth term as chancellor ended last year.

Five months after photographer Herlinde Koelbl’s striking portraits appeared in book form, to widespread acclaim, the museum is braced for a very different reception now.

'Mrs Merkel is largely responsible for the fact that Germany became dependent on Russia for the import of natural gas and hard coal. She misjudged Putin completely'

Berlin’s BZ tabloid has already denounced the Merkel exhibition as “inappropriate” given the “enormous mistakes of her tenure, which become apparent with the war against Ukraine”.

“Mrs Merkel is largely responsible for the fact that Germany became dependent on Russia for the import of natural gas and hard coal. She personally misjudged Putin completely,” it argued. “The chancellor, who was always celebrated as a rational scientist who thought things through from the end backwards acted out of short-term political calculation.”

Putting the finishing touches to the exhibition this week, one person involved offered a chastened observation: “We always knew Merkel’s legacy would be reassessed at some point – but no one thought it would come so quickly, or be so harsh.”

Russia’s invasion of Ukraine has triggered a political and economic earthquake in Germany. Simple geography means that, along with Poland, Germany is on the refugee front line. But as the war enters its third month next week, Germany’s previously close political engagement with Russia – its economic ties and energy dependencies – have left the country exposed, wounded and engaged in a debate that overshadows even the most emotional arguments of the euro crisis or the pandemic.

But this is no longer about about a virus or a currency. This is a no-holds-barred debate about who Germans want to be in Europe – and in the world. It is a debate that is far from over, with many furious with their country’s response so far to Russia’s invasion of Ukraine.

“The federal government is doing as little as possible under international pressure, we are not facing our responsibilities,” argued Prof Moritz Schularick, a macroeconomics and economics expert at the University of Bonn, in the Süddeutsche Zeitung daily. “The hesitance of Berlin politics will, in the end, cost us much more.”

Taboo-shattering

Three days after Russia invaded Ukraine last February, German chancellor Olaf Scholz delivered a “watershed” speech promising record defence spending at home and taboo-shattering weapons deliveries to Ukraine.

Two months on, there are many unanswered questions about the former and growing disillusionment about the latter – even among Scholz’s own coalition partners, the liberal Free Democrats (FDP) and the leftist Greens.

This week their frustration burst into the public arena, with the FDP accusing the Scholz chancellery of consistently doing “too little too late”; senior Greens – in a major leap from the party’s pacifist roots – warned that, by delaying heavy arms deliveries to Ukraine, Germany “will prolong the war”.

For two months, the critical charge has been led by Ukraine’s undiplomatic ambassador in the German capital, Andrij Melnyk. His chief targets to date: ex-chancellor turned Russian gas lobbyist Gerhard Schröder and his former chief of staff Frank Walter Steinmeier, later foreign minister and now federal president.

It was their close ties to Russia and Vladimir Putin, argues Melnyk, that saw Russian gas pipelines built under the Baltic Sea. Following their lead, he argues, Angela Merkel increased German dependency on Russian gas – to 55 per cent of the total – to fill energy gaps left by her decade-old decision to exit nuclear power by this year. These decisions, he argued this week, have real consequences.

“In this year alone, we expect that Germany will transfer €32 billion for gas to Russia, that is half of its annual military budget,” he told ZDF public television, reiterating his government’s demand for an embargo on Russian oil and gas. “This is difficult, we know how much the German economy will be affected but, given the images from eastern Ukraine, this decision is overdue.”

Melnyk’s one-man shame campaign has yielded remarkable results in a short time: Gerhard Schröder is now a pariah, while Steinmeier – told he was not welcome in Kyiv – has apologised for “clinging to bridges in which Russia no longer believed and which our partners warned us about”.

The political reckoning will not stop there: a day before the contested Merkel exhibition opens, Scholz will appear before the Bundestag defence committee to explain his government’s strategy on the Ukraine war.

Bruising encounter

Scholz aides, under daily attack in Berlin and further afield, are ready for a bruising encounter and have already begun their counter-attack.

They insist that, with little fanfare, Berlin has delivered a “steady stream” of military equipment to Ukraine, including armoured vehicles, radar systems, tank artillery attachments and tow trucks. This week Berlin told Kyiv it will pay for up to €1 billion in arms it orders directly from German companies.

This country, that triggered two World Wars, is hypersensitive to any sudden action which could, however well-intentioned, unwittingly trigger a third

In a fluid and fast-moving conflict, Scholz administration officials admit struggle between doing the right thing and the prudent thing. This country, that triggered two World Wars, is hypersensitive to any sudden action which could, however well-intentioned, unwittingly trigger a third.

“Considering our history, we have really pushed things to the limit so far, but because of our past, Germany will never push ahead in this conflict,” said one official.

Meanwhile former Merkel officials have pushed back at claims she left Germany dependent on – and exposed to – the whims of the Kremlin.

“Everyone seems to have forgotten how she managed to avoid a Russian-Ukraine war in 2014 with the Minsk protocol,” says one former Merkel aide.

While Germany’s reckoning with the recent past – and its political leaders – will continue, the more pressing question is what will happen now.

Chancellor Scholz, not even five months in the job, is facing pressure from leftists within his own Social Democratic Party (SPD) and an unusual alliance of German industry and unions. While the German Union Federation (DGB) has posted a “#nomorewar” sign in the window of its Berlin headquarters, the DGB head warned this week that a Russian energy embargo would trigger “production shutdowns, deindustrialisation and job losses”.

‘Panic-mongering’

Berlin’s DIW economic institute dismissed such claims this week as “panic-mongering that cannot be proven”.

Many other senior analysts and energy experts agree. Economist Veronika Grimm of Germany’s national Leopoldina academy suggests that losing Russian energy would be “not a complete economic catastrophe, but a challenging, manageable situation”.

The Scholz administration – mindful of record inflation of 7.5 per cent, keeping the social peace at home and the knock-on effects of a German recession across the EU — has so far pushed back against calls for a Russian energy embargo.

One economics ministry source suggested this week, however, that – after Berlin shifts on other policy fronts over Russia – “the energy question has not been answered finally”.

'We will pay a price, we have to say this. We will become poor and society will have to shoulder this'

German economics and energy minister Robert Habeck – an early advocate of arms for Ukraine and energy sanctions against Russia – has embraced a policy of radical honesty over the war in Ukraine: “We will pay a price, we have to say this. We will become poor and society will have to shoulder this.”

Shrugging off their old traumas over war and inflation, 74 per cent of Germans are ready to accept a financial cost as a result of the war and sanctions, according to a survey this week – and 85 per cent would support even tougher sanctions against Russia.

After two months of war in Ukraine, Germany has made a greater leap towards energy independence than in the previous decade of its so-called “Energiewende” or energy transition. Russian oil imports have come down from 35 per cent to 25 per cent, while Russian gas imports have slumped 55 per cent to 40 per cent.

‘Dirty deals’

At a Berlin energy conference in March, a month after the human tragedy in Ukraine began to unfold, Habeck vowed that “clean energy cannot come from dirty deals”. In the audience was Ireland’s Eamon Ryan, Minister for Transport, Climate, Environment and Communications.

At a bilateral meeting the two ministers agreed closer co-operation on renewable energy supply chains, from wind turbines to the equipment needed to transform wind energy into so-called “green hydrogen”.

After signing a bilateral agreement on energy in Berlin, Ryan says Ireland is ideally placed to help Germany break its Russian energy addiction – with wind energy generated offshore in Ireland.

A century after Germany’s Siemens helped transform Ireland with its Ardnacrusha hydroelectric plant, a historic crisis in Europe may yet yield a historic opportunity to return the favour.

“This is Ardnacrusha to the power of 100 in terms of amount of power,” Ryan told the Irish Times.

“We are very clear that this will be a co-operation between our governments, something that is going to be very real in the near future.”

Read More

Recommended