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Merkel attacks latest US anti-Russia sanctions

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

Shortly after the joint statement of the German and Austrian foreign ministers angrily denouncing the new sanctions against Russia voted on by the US Senate, Angela Merkel has added her voice to the protest and is making her opposition to the latest sanctions clear.

In her usual Sphinx like way Merkel avoided making a statement herself.  However her views have been made known by her spokesman Steffen Seibert in a briefing earlier today

There is considerable assent to the contents of this statement. The chancellor shares fears listed in the text……the case in hand are sanctions for Russia’s steps but which affect European companies.  It is inadmissible.

Sigmar Gabriel, Germany’s Foreign Minister who issued the joint statement criticising the Senate’s sanctions with the foreign minister of Austria yesterday, is a member of the SPD, whose Martin Schulz is challenging Merkel in the parliamentary elections in the autumn.  Gabriel moreover is known to be a strong supporter of close ties between Germany and Russia.  There was therefore some doubt about whether yesterday’s statement reflected the united opinion of the whole German government or that of just Gabriel and the SPD.

Seibert’s comment on Merkel’s behalf settles the issue, and makes it clear that yesterday’s statement does reflect the united opinion of the whole German government.

Yesterday’s German-Austrian joint statement makes clear what is the cause of Germany’s anger.  It contains this paragraph

To threaten companies from Germany, Austria and other European states with penalties on the U.S. market if they participate in natural gas projects such as Nord Stream 2 with Russia or finance them introduces a completely new and very negative quality into European-American relations.

In other words, the Germans are willing to support sanctions against Russia provided they do not affect their economic interests.  Since the Germans consider Nord Stream 2 to be essential to their economic interests, they are reacting furiously against what they perceive to be US threats to derail the project by threatening penalties on their companies.

The episode once again shows the trap Merkel led Germany into by reversing the Ostpolitik policy Germany has followed since the 1960s by backing in July 2014 the sanctions US President Obama was pressing her to impose on Russia.

It is often said, quite correctly, that Russia is for Germany a relatively minor trading partner and that the impact of the sanctions on the German economy has been small.  Whilst this is true it ignores the greater truth that – as I had repeatedly heard for myself – the German business community before the sanctions had come to think of Russia as they key to Germany’s economic future: a huge country of boundless economic opportunities, culturally and geographically close to Russia, with a strongly pro-German President, which had the potential to be for Germany what the West was for the United States.

Whether this view was ever realistic is another matter.  However, as I saw and heard for myself, in Germany it was widely held.

Beyond that there is the further factor that with Germany intent on closing down its nuclear and coal industries the obvious source for Germany of cheap energy is Russia.

Merkel’s decision in July 2014 to slap sanctions on Russia brought the first part of this strategy to a grinding stop, whilst as is now clear it has also exposed the second part of this strategy – the part that relates to Germany’s energy security – to the vagaries of the political conflicts currently raging in the US,

It has also left Germany hostage to the political whims of an unstable and extremist Ukrainian government, which it has become increasingly clear Merkel has neither the will nor the ability to control.

Merkel took this step in July 2014 because she was assured by Germany’s intelligence agency the BND that Putin would quickly capitulate in the face of the sanctions or risk an oligarch led coup.  Since it became clear in the autumn of 2014 that that wasn’t going to happen she has looked increasingly at sea, with no clear idea of what to do.

On the one hand Merkel clearly does not want to put herself in a position where before an election she appears to be sacrificing Germany’s economic interests to the political whims of politicians in the US at a time when those same economic interests are being defended by the SPD, and this explains why she has got her spokesman to make the comments he made today.  On the other hand, as her comments during her recent trip to Russia show, she cannot bring herself to admit defeat by agreeing to have the existing sanctions lifted.

Sooner or later patience in Germany is going to snap.   In the meantime by supporting Gabriel’s statement Merkel has once against done what she does best: buy herself time.

Given the weakness of the alternatives to her, it will almost certainly be enough to get Merkel through the election in November.  However if the crises in either Ukraine or the US – over both of which Merkel has no control – escalate, she could find herself in trouble.


The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

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