Stratfor 27-Nov-13
Summary
Germany's status as a NATO member and one of the most important members of the European Union stands in contrast to its interest in a strong bilateral relationship with Russia. The issue returned to the fore early Nov. 27, when German Chancellor Angela Merkel's Christian Democratic Union, its Bavarian sister party, the Christian Social Union, and the Social Democratic Party reached a coalition agreement. Apart from agreeing on new domestic policies such as the introduction of a minimum wage, the agreement outlines the parties' foreign policy priorities. As in the past, one of these priorities is to broaden collaboration with Russia.
Next year the bilateral relationship is unlikely to see any drastic change. However, apart from preserving the cohesion of the European Union, Germany's main foreign policy challenge over the coming years will be managing its relationship with Russia at a time of European structural weakness and Russian resurgence. In particular, Russia's growing involvement in Central and Eastern Europe will conflict with Germany's aspirations of European cohesion.
Analysis
Both located on the North European Plain, Germany and Russia have had to keep each other in mind while formulating foreign policy. Berlin has conflicting national interests when it comes to Moscow. First, Germany has an interest in securing and enlarging its sphere of influence on the Continent. Germany improved its economic integration with Central and Eastern Europe through the accession of those countries into the European Union in the mid-2000s, when Russia was still emerging from the weakness after the Soviet collapse. Now that Russia is a relatively stable power again, it is a threat to Germany's interests in the region.
Video: Germany's Geographic Challenge
http://www.stratfor.com/video/germanys-geographic-challenge
On the other hand, Germany accommodates Russia's concerns. Historically and from the long-term strategic perspective, Germany wants to be Russia's main European partner to ensure that no alliance emerges between Russia and Germany's western neighbors, France and Britain, that could threaten Berlin. Moreover, Germany has high demand for Russian energy supplies. The country has a strong industrial base but lacks the domestic energy supplies to fuel it. More than a third of the natural gas Germany consumes comes from Russia. Importing energy through the existing infrastructure is more economically viable than the
alternatives Germany is pursuing.
Several events in the past decade have demonstrated the
significance of the Russian-German bilateral relationship.
One such event was the construction of the Nord Stream
natural gas pipeline, which provides a direct link between
Germany and Russia. Another was Berlin's opposition to
closer NATO ties with Ukraine and Georgia in 2008. These
are examples that show Germany understands it must
accommodate Russia even if it means going against the
wishes of Central and Eastern European partners and
Washington.
The Future of the Relationship
By late December, Germany will likely have a new
government in place, giving new impetus to relations with
Russia. The coalition agreement is a broad outline of
policies, many of which will be overtaken by events, but it
gives an indication of the direction Berlin hopes its
relationship with Moscow will go.
A draft of the agreement notes that the coalition aims to
broaden the relationship with Russia. This was already noted
in the political agenda of the previous governments. In this
draft it is further said that Germany will try to form a more
coherent EU policy toward Russia and that the trilateral
dialogue between Germany, Poland and Russia (which has
taken place before) will play a key role.
The inclusion of Poland with regard to Germany's relationship with Russia
did not figure into the previous coalition agreement.
Wedged between Germany and Russia, Poland is
particularly sensitive to the development of Berlin's
relationship with Moscow. The mention of Poland in the
coalition agreement suggests Berlin is well aware of Central
and Eastern European countries' concerns with regard to
resurgent Russia in light of the weakness of EU structures.
These countries will likely be increasingly worried about
Germany's reliability as a political partner as Russia
becomes more assertive. Indeed, Russia's recent success in
foiling closer ties between Ukraine and the European Union
and its notable role in the debate over military action in
Syria have demonstrated Moscow's strength.
Central and Eastern European countries do not rely on
Germany for military security; NATO membership and ties
to the United States -- for example, through the ballistic
missile defense shield plans -- are seen as more important
guarantors of security. Instead, these countries seek German
support in defending their interests in energy relations with
Russia.
Berlin is more focused on securing lower natural gas prices
for itself than exclusively addressing the concerns of EU
partner countries, but it also has leverage because Russia
relies on German demand. Germany can therefore use its
importance as a consumer to benefit partner countries. Both
Russia and Germany hope to reduce this energy
interdependence in the long term. With its transition to
renewable sources of energy, Germany is trying to decrease
its dependence on energy imports and probably also hopes to
profit from the shale gas boom in North America. Russia, on
the other hand, is trying to reduce its reliance on the
European market by focusing on more energy sales to Asia.
Gunther Oettinger, a German politician, is the current
European commissioner for energy, and thus over the past
years Germany has played an important role in driving the
bloc's policy of integrating the European Union's natural gas
market. Central and Eastern Europe hope Berlin will
continue to support this policy with the aim of weakening
Russia's leverage in those areas.
Due to EU parliamentary elections in May 2014 and the
replacement of the EU Commission later in 2014, decisionmaking
at the EU level is likely to be frozen in the second
half of next year. However, Brussels is likely to pressure
Moscow in the first quarter of 2014 as a result of an
investigation into Gazprom's activity in a number of Central
and Eastern European countries. This does not mean
Germany must forgo its own good bilateral relations with
Russia. Germany is unlikely to directly interfere in this
process in order not to undermine the European Union.
Nonetheless, Berlin will defend the strong bilateral energy
relationship with Russia at the EU level and try to ensure the
pressure on Gazprom does not affect the bilateral
relationship.
Beyond Energy
With the construction of Nord Stream, the countries' strong
bilateral energy ties are secure. However, there is room to
improve general economic ties. Next year Russia is likely to
make greater efforts to strengthen its industrial base and
decrease its dependence on the energy sector. Given
Germany's industrial competitiveness, German companies
will be seen as important partners from which to acquire
technical expertise. Russia will likely try to buy German
companies and will work to attract them to set up production
sites in Russia.
While both countries have an interest in building economic
relations, there will also be tensions. Germany has an exportoriented
economy and is interested in greater access to the
Russian market in light of the European economic crisis.
Germany will probably argue for closer business ties (for
example, through visa liberalization) while also demanding
that Russia grant greater access to German exports, which
could challenge Russian producers.
As a result of Europe's structural crisis, Germany has
assumed a greater leadership role in recent years. However,
it is still in the process of defining an independent national
strategy. One of the key challenges for German
policymakers will be the balance between European
cohesiveness and relations with Russia.
Summary
Germany's status as a NATO member and one of the most important members of the European Union stands in contrast to its interest in a strong bilateral relationship with Russia. The issue returned to the fore early Nov. 27, when German Chancellor Angela Merkel's Christian Democratic Union, its Bavarian sister party, the Christian Social Union, and the Social Democratic Party reached a coalition agreement. Apart from agreeing on new domestic policies such as the introduction of a minimum wage, the agreement outlines the parties' foreign policy priorities. As in the past, one of these priorities is to broaden collaboration with Russia.
Next year the bilateral relationship is unlikely to see any drastic change. However, apart from preserving the cohesion of the European Union, Germany's main foreign policy challenge over the coming years will be managing its relationship with Russia at a time of European structural weakness and Russian resurgence. In particular, Russia's growing involvement in Central and Eastern Europe will conflict with Germany's aspirations of European cohesion.
Analysis
Both located on the North European Plain, Germany and Russia have had to keep each other in mind while formulating foreign policy. Berlin has conflicting national interests when it comes to Moscow. First, Germany has an interest in securing and enlarging its sphere of influence on the Continent. Germany improved its economic integration with Central and Eastern Europe through the accession of those countries into the European Union in the mid-2000s, when Russia was still emerging from the weakness after the Soviet collapse. Now that Russia is a relatively stable power again, it is a threat to Germany's interests in the region.
Video: Germany's Geographic Challenge
http://www.stratfor.com/video/germanys-geographic-challenge
On the other hand, Germany accommodates Russia's concerns. Historically and from the long-term strategic perspective, Germany wants to be Russia's main European partner to ensure that no alliance emerges between Russia and Germany's western neighbors, France and Britain, that could threaten Berlin. Moreover, Germany has high demand for Russian energy supplies. The country has a strong industrial base but lacks the domestic energy supplies to fuel it. More than a third of the natural gas Germany consumes comes from Russia. Importing energy through the existing infrastructure is more economically viable than the
alternatives Germany is pursuing.
Several events in the past decade have demonstrated the
significance of the Russian-German bilateral relationship.
One such event was the construction of the Nord Stream
natural gas pipeline, which provides a direct link between
Germany and Russia. Another was Berlin's opposition to
closer NATO ties with Ukraine and Georgia in 2008. These
are examples that show Germany understands it must
accommodate Russia even if it means going against the
wishes of Central and Eastern European partners and
Washington.
The Future of the Relationship
By late December, Germany will likely have a new
government in place, giving new impetus to relations with
Russia. The coalition agreement is a broad outline of
policies, many of which will be overtaken by events, but it
gives an indication of the direction Berlin hopes its
relationship with Moscow will go.
A draft of the agreement notes that the coalition aims to
broaden the relationship with Russia. This was already noted
in the political agenda of the previous governments. In this
draft it is further said that Germany will try to form a more
coherent EU policy toward Russia and that the trilateral
dialogue between Germany, Poland and Russia (which has
taken place before) will play a key role.
The inclusion of Poland with regard to Germany's relationship with Russia
did not figure into the previous coalition agreement.
Wedged between Germany and Russia, Poland is
particularly sensitive to the development of Berlin's
relationship with Moscow. The mention of Poland in the
coalition agreement suggests Berlin is well aware of Central
and Eastern European countries' concerns with regard to
resurgent Russia in light of the weakness of EU structures.
These countries will likely be increasingly worried about
Germany's reliability as a political partner as Russia
becomes more assertive. Indeed, Russia's recent success in
foiling closer ties between Ukraine and the European Union
and its notable role in the debate over military action in
Syria have demonstrated Moscow's strength.
Central and Eastern European countries do not rely on
Germany for military security; NATO membership and ties
to the United States -- for example, through the ballistic
missile defense shield plans -- are seen as more important
guarantors of security. Instead, these countries seek German
support in defending their interests in energy relations with
Russia.
Berlin is more focused on securing lower natural gas prices
for itself than exclusively addressing the concerns of EU
partner countries, but it also has leverage because Russia
relies on German demand. Germany can therefore use its
importance as a consumer to benefit partner countries. Both
Russia and Germany hope to reduce this energy
interdependence in the long term. With its transition to
renewable sources of energy, Germany is trying to decrease
its dependence on energy imports and probably also hopes to
profit from the shale gas boom in North America. Russia, on
the other hand, is trying to reduce its reliance on the
European market by focusing on more energy sales to Asia.
Gunther Oettinger, a German politician, is the current
European commissioner for energy, and thus over the past
years Germany has played an important role in driving the
bloc's policy of integrating the European Union's natural gas
market. Central and Eastern Europe hope Berlin will
continue to support this policy with the aim of weakening
Russia's leverage in those areas.
Due to EU parliamentary elections in May 2014 and the
replacement of the EU Commission later in 2014, decisionmaking
at the EU level is likely to be frozen in the second
half of next year. However, Brussels is likely to pressure
Moscow in the first quarter of 2014 as a result of an
investigation into Gazprom's activity in a number of Central
and Eastern European countries. This does not mean
Germany must forgo its own good bilateral relations with
Russia. Germany is unlikely to directly interfere in this
process in order not to undermine the European Union.
Nonetheless, Berlin will defend the strong bilateral energy
relationship with Russia at the EU level and try to ensure the
pressure on Gazprom does not affect the bilateral
relationship.
Beyond Energy
With the construction of Nord Stream, the countries' strong
bilateral energy ties are secure. However, there is room to
improve general economic ties. Next year Russia is likely to
make greater efforts to strengthen its industrial base and
decrease its dependence on the energy sector. Given
Germany's industrial competitiveness, German companies
will be seen as important partners from which to acquire
technical expertise. Russia will likely try to buy German
companies and will work to attract them to set up production
sites in Russia.
While both countries have an interest in building economic
relations, there will also be tensions. Germany has an exportoriented
economy and is interested in greater access to the
Russian market in light of the European economic crisis.
Germany will probably argue for closer business ties (for
example, through visa liberalization) while also demanding
that Russia grant greater access to German exports, which
could challenge Russian producers.
As a result of Europe's structural crisis, Germany has
assumed a greater leadership role in recent years. However,
it is still in the process of defining an independent national
strategy. One of the key challenges for German
policymakers will be the balance between European
cohesiveness and relations with Russia.
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