Germany's Relationship With Russia Under a New Government
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.
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, decision-making 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 export-oriented 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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