BRANDON J. WEICHERT | THE WEICHERT REPORT
At another tour-de-force interaction with the press, American President Donald Trump detailed the success of his meeting with the four leaders of the Baltic states. In that meeting, Trump established that, contrary to fears among the Washington, D.C. political class, under his presidency, NATO has gotten a substantial increase in funding. The Baltic states are now meeting their minimum requirement under the NATO charter of contributing no less than two percent of their GDP to defense expenditures; indeed, most of the European members of NATO are now at that two percent benchmark (the United States is around four percent annually, while nearly 80 percent of NATO support comes from the United States). However, the one NATO partner that continues dragging its proverbial heels on the matter of adequately sourcing its support for NATO is the one country that is the sine qua non of the European political and economic establishment: Germany.
Germany has been taking advantage of the United States, not only in regards to NATO, but in many other areas as well. And, they’ve been doing it for decades. President Trump rightly noted that, even as the Germans ignore the requirements not only for NATO’s collective defense, but also their own defense, they continue undermining European security by increasing their reliance on Russian fossil fuel sources–notably natural gas. During his remarks, Mr. Trump criticized Berlin repeatedly for having recently inked a new deal with Russia to link up yet another pipeline with Russia, thereby increasing Berlin’s reliance on the Russian Federation, and creating linkages with Moscow that empower Russia.
To be fair, Germany is a glutton for affordable energy. Until recently, Russia was one of the surest bets to receive readily available, relatively cheap energy. Whereas before 2010, Germany had access to nuclear energy, which mitigated their need for ever-increasing stores of Russian fossil fuel energy, after the Fukushima nuclear meltdown in Japan in 2010, the German government systematically reduced its nuclear energy dependence. All but one of their nuclear reactors have shut down in the intervening years. Yet, the Germans still require relatively cheap and clean, abundant energy. To offset their energy demands, the Germans embraced natural gas from Russia. Now, they are addicted to it.
The German reliance on Russian fossil fuel is compounded by the fact that the Kremlin has spent decades assiduously building its ties with German business and political leaders. In the case of energy, Germany’s former Chancellor, Gerhard Schröder, is an open-and-notorious close, personal friend of Russian strongman, President Vladimir Putin. Since exiting high office, Mr. Schröder has had his hands in a variety of Russian-backed energy enterprises in Germany. He skillfully managed Gazprom’s Nord-Stream pipeline deal linking Russian natural gas to German consumers. The Nord-Stream pipeline exists under the Baltic Sea and, the project received a secret €1 billion loan guarantee from Germany just three days before Schröder left office.
At the time of his departure from the German chancellory, Adam Smith of Time wrote that, “[Schröder’s] close relationship with [Vladimir] Putin triggered charges of cronyism from Germany’s politicians and [once the secret German loan to Gazprom was uncovered] that [Schröder] sold his country out.” A leader of Germany’s ultra-Left Green Party, Reinhard Bütikofer, argued that, “Gazprom is Putin and Putin is Gazprom. By taking [the Gazprom job], Schröder has made himself a salesman for Putin’s politics.”
Despite Germany’s official position as standing in solidarity with its Western partners against Russia, Schröder–along with a retinue of German political notables from all sides of the German political divide–has made constant public argument against harsher German policies toward Russia. Schröder comes from a long line of German thought, political, and business leaders who believe that Germany’s future rests closer to Moscow than it does to Washington, D.C. In fact, during Gerhard Schröder’s time as chancellor, it was he who led the crusade against what was viewed throughout Europe as an American imperial agenda vís-a-vís Iraq in 2003. Whatever your opinion on the Iraq War of 2003, one thing is certain, there was a concerted effort on the part of some of America’s closest allies–notably the Germans and French–to complicate and reduce America’s ability to intervene in Iraq. In both cases of Germany and France, as I’ve shown in my lecture series at the Institute of World Politics in Washington, D.C., the leaders of both countries were heavily influenced by Vladimir Putin and Russia–to the point that they had formed an unofficial strategic triangle between Moscow, Berlin, and Paris.
For Schröder, like his predecessor, Helmut Kohl, peaceable relations with Russia was a vital necessity whereas the West–in particular, the United States–was to be kept at relative arms-length and regarded with deep suspicion. Going back to the 1990s, Schröder had a fondness for Russia that was matched only by his dislike of the United States. This fondness was reciprocated by Vladimir Putin, who spent the formative years of his KGB career in Germany. In fact, Putin had sent his daughters to a German school in Moscow. Putin has always favored the German sense of purpose, orderliness, and punctuality (as well as fine German engineering, as represented by Mercedes-Benz). Also, as Ian Buruma and Avishai Margalit outline in their bestseller, “Occidentalism: The West In the Eyes of Its Enemies,” Germany has historically charted a separate and distinct cultural course from that of the West. While it is mostly Western, like Russia, it has a deep attachment to ideals and values that are anathema to most Westerners. Schröder and Putin’s fondness for each other was so great that the two families routinely spent their respective Christmas vacations together and, in 2004, the Schröders even adopted a three-year-old child from St. Petersburg, Russia.
In 2017, despite European sanctions being in place, the former German chancellor became a leading board member for Rosneft, another Russian state-owned enterprise–and the world’s largest publicly-listed oil producer (by volume). Rosneft hopes to expand its interests–and therefore the interests of its largest shareholder, the Russian government–in Germany. Schröder who, despite being retired from German politics, continues to be a key player in German politics (in the form of a quiet kingmaker), will undoubtedly use his extensive contacts to further the interests of his Russian bosses.
Schröder’s links to both sides of Germany’s political divide is legendary. Although he was the head of the Left-leaning Social Democratic Party (SPD), Schröder maintained close contact with Angela Merkel’s Right-leaning Christian Democrats (CDU). In fact, in Merkel’s first government as chancellor, her foreign minister was handpicked by Schröder. Frank Walter-Steinmeier was an outspoken critic of Schröder’s successor, Angela Merkel, and her “values-based” foreign policy. For her part, Merkel stood opposed to the Schröder Russophilic foreign policy of dealing with Russia as equal partners, based solely on national interests as opposed to intangible values. Steinmeier, a loyal servant–and close personal friend–of Gerhard Schröder’s shared his old boss’ worldview and let the world know it when Merkel rose to power.
In 2013, Die Zeit published an op-ed which read, “Steinmeier considers himself a friend of Russia [and he should not be the] foreign minister [in Angela Merkel’s new government].” Because of Schröder’s pull, these criticisms of Steinmeier fell on deaf ears, as Merkel made Steinmeier her first foreign minister in her Grand Coalition government, which began on December 17, 2013. Steinmeier was opposed to Ukraine and Georgia’s acceptance into NATO at the infamous 2008 Bucharest Summit, in which Putin railed against NATO expansion. In 2014, he continued to oppose the idea of Germany taking a tougher-line on Russia, even after the Russians illegally annexed Crimea.
Steinmeier wasn’t alone in Germany–or even in Angela Merkel’s purportedly pro-NATO cabinet. He was soon replaced by Sigmar Gabriel, the longest-serving leader of the Social Democratic Party since the noted Willy Brandt. Gabriel, while not as openly pro-Russia as either Steinmeier or Schröder spent much of his tenure as foreign minister advocating for an easing of sanctions on Russia (in exchange for gaining Moscow’s cooperation in resolving the Syrian Civil War) and insisting on a generally more passive, predictable, and peaceful relationship with Russia.
It is only with the rise of Merkel’s third foreign minister, Heiko Maas (who, like his two predecessors, is also of the SPD), that German foreign policy has become notably more bellicose against Russia. Last year, Maas was an ardent supporter of tougher moves against Russia. Yet, by the beginning of 2018, these stances changed, and Maas took on a much more conciliatory tone with Moscow. It shouldn’t be surprising that the actions of Germany remains strangely disconnected from the rhetoric espoused by the Merkel government. This is likely because the Germans have long viewed Russia far more favorably (49 percent of Germans disapproved of harsher measures against Russia in the aftermath of the Crimea invasion) than the United States; it is also likely because the Germans have a deep antipathy toward President Donald Trump; and the German experience in World War II and the Cold War has made them averse toward militarism of any sort, meaning they will eschew supporting any policy that threatens to increase their military expenditures, whilst seeking to maximize their financial gains.
As for the general political parties in Germany, as we’ve seen there is a general bent toward Moscow within the more mainstream center-Left Social Democratic Party. However, both the hard Left and Right have ties to Moscow. Die Linke is known to have received support from Russian sources and the alternative Right-wing party of Germany, the Alternative für Deutschland (AfD), arose from the former Soviet territory of East Germany. In fact, according to Marcel H. Van Herpen, the former East German Communist Party is the progenitor for the AfD. And, while the policies of the AfD are far removed from the old Communist movement in eastern Germany, the AfD initially began as a product of the German Left–created as a more technocratic movement by disaffected elements of the Social Democratic Party. Ultimately, the AfD moved farther right and ousted many of its founding Left-wing members. Today, however, the AfD has received support from Russian sources.
What’s more, the AfD was the greatest beneficiary from the recent contentious election in Germany. Today, AfD has previously-unthought-of power in the German parliament, and given what’s occurring in Germany today, it is assumed that they will continue to enjoy greater political gains going forward. While it is unfair to call AfD an arm of the Kremlin, they do have troubling ties to Russia and their leaders are far more likely to take a Schröder-like approach to Russia than they are to support NATO’s position on Russia.
German Trade & Economic Policy is Closer to China’s
This is to say nothing of how Germany has free-ridden in terms of trade off the United States. For starters, Germany manipulates its currency along similar lines to China. For years, as the head of the White House Trade Council, Peter Navarro, argued in February of 2017, Germany has an undervalued currency relative to its neighbors because of the depreciation of the Euro during its “good” years. Had Germany never embraced the Euro as its primary currency and instead kept the Deutschmark, the latter currency would be far stronger today compared to the former currency. If the strong Deutschmark were the primary German currency, then Germany’s overall economy would be far weaker than it presently is. Further, Germany has refused to support the kind of monetary and fiscal policies that would necessarily raise inflationary rates for the Euro (which would therefore weaken Germany’s economic standing today).
Because the Euro is undervalued, and Germany uses the Euro as its primary currency, German exports are notably cheaper. This has allowed Germany to create a trade surplus (particularly in relation to the United States). For their part, the German people have generally benefited from this reality. Germans are among the greatest savers–and the thriftiest folks–in all of the West today. The Germans enjoy a far greater standard of living compared to many of their fellow Westerners.
And, while it is true that Germany does not exert direct influence over the European Central Bank (ECB), the fact that Germany is without a doubt Europe’s strongest economy–the country that is more relied on to keep the European economic experiment going and to prevent the debt-laden south from breaking the EU apart (which, it should be broken apart, by the way)–gives Berlin unprecedented amount of leverage and influence over the rest of the Europe. Also, Germany’s account-surplus is the result of not only its currency manipulation, but also of its protectionist trade barriers aimed at protecting critical German industries (particularly in the high-tech areas).
As Ian Fletcher pointed out in 2010, “a huge key to [Germany’s] trading success is a vast and half-hidden thicket of de facto non-tariff trade barriers.” The German government loosely refers to these barriers which “include agricultural and manufacturing subsidies; import restrictions; bans on select goods and services; non-transparent and restrictive regulations and standards” (all of which presently exceed EU requirements), as “trade balancing measures.” Such euphemistically titled trade barriers, as Fletcher outlines in his fabulous article, have encouraged the aforementioned trade surplus and allowed for Germany to sell off most of its indebtedness to weaker states (notably the Southern European countries).
Also (which should come as a surprise to our “better informed” democratic globalist leaders in Washington, D.C. and New York), Germany lacks a credit system to subsidize short-term consumption (credit being considered by most neoliberals in the United States as being essential to modern society). Thus, most available money goes toward investment rather than consumption. Oh, yeah, and Germany’s Value-Added Tax (VAT) of 19 percent has the salutary effect of generating massive revenue for Germany (they effectively tax all goods from the United States, generating income for the German government whereas German goods entering the United States faces no similar requirements).
Then, Germany has spent decades focusing on building up its highly-exportable manufacturing goods. Thus, Germany’s trade balance is healthy whereas the United States’ is not (our only trade surplus is in the services-sector which, as we’ve seen, is hardly a sustainable sector, if one wants to generate a livable income that can provide for a family).
Plus, since the election of Donald Trump in the United States, Germans and their government’s policies have become markedly more independent of–even hostile to–the United States. For instance, Chancellor Angela Merkel has taken a decisively oppositional approach to her public dealings with President Trump (even happily embracing the unofficial title of “leader of the free world,” given to her by members of the Obama Administration upon their departure from the White House). What’s more, Germany has purposely expanded its trade relations with China, becoming a key conduit for China’s Belt-and-Road Initiative (BRI) in Europe. For the uninitiated, the BRI is China’s attempt to reconstitute the ancient Silk Road routes (both on land and at sea) as a means of undermining America’s hegemonic position on the critical trading routes in the world. It is also a way for China to exert undue influence throughout all of Eurasia.
Germany (Sensibly) Does What’s In Their Own Interest
In other words, not only has Germany practiced unfair trade for decades, but they are now actively undermining the United States by expanding their relationship with China on trade–at America’s expense! Yet, the Washington masters of the universe-types continue chastising Trump for turning a “friend” like Germany into an enemy. Sorry, Germany is not our friend; they are a strategic partner, but, despite their lofty rhetoric, Germany has–and will continue to–act according to their strict, national interests.
Yes, German leaders have espoused their deep and abiding shame over the excesses of German militarism in the last century. The Germans have certainly hewed closely to their postwar foreign policy of peace and trade. But, no, the Germans have neither acted benignly nor magnanimously in their foreign and trade policies. The Germans have instead learned to fully channel their geopolitical desires away from the battlefield and into the boardroom. Though, to be sure, as the Germans have increased their considerable wealth (and therefore political influence and power), the Germans are now seriously entertaining the idea of fully building up a German military (which, they should).
The German leadership has consistently acted in accordance with the needs of their people. While their policies have, at times, been self-destructive (as was the case with Germany’s idiotic stance on immigration), for the most part, Germany consistently defends their best interests. This explains why successive German leaders have taken to Russia far more than their Western counterparts–even as Russia replicates the kind of excesses not seen since the heady days of the Cold War. It also explains why Germany is so much wealthier compared to their so-called “partners” (more like vassals) in Europe, and even in the United States. In fact, in 2010 during a particularly contentious meeting at DePaul University, I argued that the European Union was, in fact, nothing more than the more peaceable Fourth Reich; a new Hanseatic League (the German Union, if you will).
German leaders from Helmut Kohl to Gerhard Schröder; from foreign ministers like Joschka Fischer to Frank Walter-Steinmeier; from political parties such as Die Linke and the AfD, all have favored softer stances on Russia. These leaders and parties understand that Russia is a great source of material wealth and Germany’s existence in mitteleuropa allows it to balance its interests off those of larger powers, like Russia and the United States. As the two juggernauts balance against each other, Germany–as the middle power existing between them–can disproportionately benefit. What’s more, German trade and economic policies (despite being submersed in the lofty rhetoric of global free trade) are not aimed at either the neoliberal yearning for increasing levels of spending coupled with consumption, or with benefiting the world. Instead, German policies are aimed at empowering Germans at the expense of the rest of the world.
All in all, President Trump was completely correct to call out Germany. At the same time that Angela Merkel “leads” the “free world” in a rhetorical crusade against Russia for “hacking” elections everywhere (read, giving that hooligan Donald Trump the Oval Office–which, by the way, Putin did not do that), her government and country sidles up even closer to Moscow. If they can do business with and have peaceful relations with Russia, why can’t we (and the rest of the world)? At the same time that Frau Merkel insists on bashing America’s “weak” response to Russia, it is the United States, Great Britain, and the Baltic states that disproportionately fund NATO. Even as Merkel insists upon greater, more open trade, her government engages in the exact same kind of anti-free trade actions that Trump espouses.
No, Germany is not America’s friend. But, perhaps the United States should take a few pages from Germany’s playbook, and start acting in closer accordance to its own national interests. That’d be a wonderful change from the last 30 years of deficit spending; needless wars based on “values”; and other missteps that have only weakened the United States, empowered our enemies, and harmed the American people.