As Merkel Weakens, EU Sanctions Unity Cracks

The details are extremely murky but with Merkel’s position coming under increasing pressure and with growing dissatisfaction with the sanctions in France and southern Europe it is clear a battle of some kind over their pending renewal is underway.

The country at the centre – as always – is Germany.  Here there are visible signs of a split.

Merkel herself stated publicly on Tuesday through her spokesman that she wants to see the sanctions renewed unaltered. 

The fact Merkel felt obliged to make her stance public is itself a sign of conflict.  On every previous occasion when the question of renewing the sanctions has come up she has maintained her preferred Sphinx-like stance of silence.  She was able to do that previously because there was no pressure on her to change it.  The fact that on this occasion she has been forced to go public shows that disagreement with her sanctions policy is growing and that she has therefore felt the need to go public to hold the line.

As to where the disagreement with the sanctions policy in Germany is coming from, the signs of that are everywhere. 

The German business community is known to have been upset by the way the sanctions were renewed without discussion last January.  Meanwhile prominent members of Merkel’s own coalition are now making their disagreement with the policy increasingly clear.  Both leaders of the two parties who form Merkel’s coalition – Sigmar Gabriel of the SPD and Horst Seehofer of the CDU’s Bavarian sister-party the CSU – have in recent months travelled to Moscow where they have met with Putin and made known their desire to renew ties.  Gabriel moreover recently attended a “Russia Day” trade fair in the former East German town of Rostock where he met with representatives of the Russian business community and spoke for renewed ties .  As for Seehofer, his personal relationship with Merkel appears to have completely broken down.  Not only has he publicly criticised Merkel’s immigration policy but he is openly manoeuvring to become Chancellor-designate of the CDU/CSU coalition in place of Merkel in the forthcoming parliamentary elections which are due in 2018.  Seehofer in turn has become the target of public attacks from Merkel’s allies, such as Finance Minister Wolfgang Schauble.

That there is an international political dimension to the public battle between Merkel and Seehofer – with relations with Russia at centre-stage – became obvious at the Munich Security Conference held back in February 2016.  Though most attention was given to Russian Prime Minister Medvedev’s speech warning of a renewed Cold War, the single most interesting event at the conference was actually the US delegation’s decision to boycott a public dinner hosted by Seehofer and the Bavarian government.  This very public snub was clearly intended to show US anger with Seehofer for his meeting with Putin in Moscow.

As Merkel publicly battles it out with Seehofer – with Gabriel lurking in the shadows – Germany’s foreign minister, Frank-Walter Steinmeier, has been busy making a pitch of his own.  He is signalling that he wants the sanctions relaxed.

What Steinmeier appears to be proposing – at least according to this article in Der Spiegel – is that individual travel bans and asset freezes imposed on certain Russian businessmen and officials be lifted in return for Moscow’s help in organising local elections in the Donbass.

Nothing in this sort of diplomacy is ever straightforward and Steinmeier’s proposal – if it is being reported properly – is a case in point.

As Steinmeier certainly knows, it is Kiev not Moscow that is actually obstructing the holding of the local elections in the Donbass, just as it is Kiev not Moscow which has failed to implement any of the key political provisions of the Minsk II agreement.

Steinmeier undoubtedly also knows that the Russian government is completely indifferent to whether individual travel bans and asset freezes are lifted or not.

Steinmeier also probably knows that some at least of these travel bans and asset freezes will at some point almost certainly be declared illegal by the European Court of Justice on the grounds that the individuals involved have no discernible role or influence in the making of policy by the Russian government.

On the face of it what Steinmeier is therefore proposing is a deal whereby the Russians help with something they have always wanted – and which they actually demanded in Minsk – the holding of elections in the Donbass – in return for the lifting of sanctions they don’t care about and which the European Court of Justice is likely to declare illegal anyway.

That hardly looks like a serious offer and not surprisingly the Russians have shown no interest in it.  Der Spiegel effectively admits as much:

“The Russian side has already indicated that talking is not sufficient, a message consistent with Moscow’s extreme self-confidence since the beginning of Putin’s intervention in Syria…… As such, Berlin’s new approach to Russia is not without risk. Indeed, even if the EU agrees collectively to pursue such a course in relation to Moscow, there is a danger that Russia will simply reject it as being too little, too late.”

It is difficult to avoid the impression that Steinmeier’s proposal – if Der Spiegel is reporting it correctly – is really just a tactic intended to hold the EU sanctions coalition together by giving the doubters the impression that Germany is willing to show flexibility when in reality it is showing none. 

That Merkel and Steinmeier are struggling to hold the EU sanctions coalition together is admitted by Der Spiegel:

“More and more EU member states have begun questioning the strict penalty regime, particularly given that it hasn’t always been the Russians who have blocked the Minsk process……. Indications are mounting that getting all 28 EU members to approve the extension of the sanctions at the end of June might not be quite so simple.  Berlin has received calls from concerned government officials whose governments have become increasingly skeptical of the penalties against Russia but have thus far declined to take a public stance against them.”

Der Spiegel then follows up with a long list of European countries which are making clear their growing exasperation with the sanctions policy: Austria, Italy, Spain, Greece, Portugal, Hungary, the Czech Republic and France.

That there is a growing revolt across Europe against the sanctions policy has in fact become obvious over the last few weeks.  The Italians, the Slovaks and the Greeks have made public their insistence that there be no automatic renewal of the sanctions in June such as happened in January.  In Italy the local council in Veneto has voted to recognise Crimea’s unification with Russia.  In France the National Assembly recently voted to lift the sanctions, though with only a small number of deputies voting. The powerful French farming lobby is known to be very unhappy with the sanctions and at a time of growing unrest in France with Presidential elections pending opposition to the sanctions in France is hardening.

That it is this growing anger across Europe with the sanctions that lies behind Steinmeier’s proposal is again confirmed by Der Spiegel.  It explains it this way:

“Berlin’s argument is that, in a Europe where those in favour of sanctions and those opposed to sanctions are drifting ever further apart, it is necessary to find a way to keep the EU on the same page. Two weeks ago, Steinmeier warned that, with Brussels set to vote on an extension of the penalties soon, resistance to doing so is growing within Europe. It is becoming more difficult, he said, to arrive at a uniform EU position on the issue, which is necessary since the sanctions extension must be passed unanimously. The German line is that Putin must not be given the impression that he can divide the EU.  “The highest priority is that of preserving the EU consensus,” says Gernot Erler of the SPD, who is the German government’s special coordinator for Russia policy. “If we have to pay a price for that, we should be prepared to do so. The worst outcome would be the disintegration of European unity and the EU losing its role.””

Why Steinmeier should be taking this approach is an interesting question.  Like Gabriel he is a member of the SPD.  He is said to have once been close to the SPD’s former leader and German Chancellor Gerhard Schroder who is a known friend of Putin’s and of Russia’s.  Until the start of the Ukrainian crisis it was widely assumed Steinmeier shared Schroder’s views.

There have been claims that Steinmeier’s views on Russia have hardened over the course of the Ukrainian crisis and that he is now – like Merkel – a hardliner.  It was for example widely reported that he had a difficult meeting with Putin in Moscow shortly after the G20 summit in Brisbane in the autumn of 2014, when supposedly to his dismay (and Merkel’s) he found Putin and the Russians completely immoveable.

Against that Steinmeier has spoken for Russia’s eventual readmission to the G7 – another proposal the Russians are completely uninterested in – and his latest proposal for relaxing the sanctions puts him publicly at odds with Merkel – who has come out strongly against any relaxation of the sanctions – and the US – which also strongly opposes any relaxation of the sanctions.

It could be that Merkel and Steinmeier are playing a game of hard cop/soft cop.  However the merest hint of a relaxation of the sanctions of the sort that Steinmeier is proposing is enough to enrage the US, which begs the question of why – if Merkel and Steinmeier are in agreement – Steinmeier is agreeing to take the heat for her in this way.  Already neocon attacks on Steinmeier are appearing, such as this recent one in an article published by The Atlantic Council which all but accuses him in amazingly intemperate language of colluding in a Russian hybrid war campaign to destabilise Germany, weaken Merkel and split the Western alliance:

“Even in the face of these subversive actions, Germany has made it a matter of policy to minimize Russia’s negative approach to the West. For example, at the 2016 Munich Security Conference, Russian Prime Minister Dmitry Medvedev made the disturbing declaration that the world is “rapidly rolling into a period of a new Cold War.” German foreign minister Frank-Walter Steinmeier refused to acknowledge Moscow’s belief that we are once again in a Cold War, and took upon himself to clarify the Russian position in order to downplay Medvedev’s adversarial language: “What Medvedev meant to say is that we need to avoid a new Cold War.” Despite such belligerent statements by Moscow, Germany continues to work very hard to avoid provoking Putin while also encouraging other Western countries to compromise with Russia.

Current German policy continues to seek compromises that cater to Russian interests despite Moscow’s blatantly harmful behaviour. This year, the NATO-Russia Council convened for the first time since April 2014. NATO had suspended the meetings two years ago as a consequence of Russia’s annexation of Crimea. However, despite Russia’s continued aggression in Ukraine, the NATO-Russia Council was held again last month because it was a priority for Germany. Steinmeier also recently declared his support to bring Russia back to the G8 grouping of states. Such policies not only cater to Russian interests, but also drastically weaken the overall European response to the Ukraine crisis.

Although the German government is aware of subversive Russian actions in its country, it continues to pursue policies in Russia’s favor. Germany’s policies of avoiding criticism and catering to Moscow are inconsistent with German national interests. Russia is actively seeking to harm Germany, destabilize the country, and weaken Chancellor Merkel. By downplaying Russia’s deliberately harmful actions, by apologizing for belligerent Russian rhetoric, and by emphasizing compromises despite Russia’s continued aggression in Ukraine, Germany is ignoring a major threat to its own security.”

Possibly Steinmeier is trying to take an intermediate position between Merkel on the one hand and people like Gabriel and Seehofer on the other.  Steinmeier and Gabriel are old rivals and with the SPD slumping in the opinion polls it may be that Steinmeier is positioning himself to take over from Gabriel by pitching himself as someone who though willing to be flexible with the Russians is not prepared to sell out to them.  The furious attack on him in the article published by The Atlantic Council shows how difficult he may find that to be.

Regardless of what Steinmeier’s personal motives are, it is surely no coincidence that Jean-Claude Juncker, the EU Commission President who is known to be close to Steinmeier, has suddenly announced that he is travelling to Russia to attend the St. Petersburg International Economic Forum, which Western officials and businesspeople had previously boycotted in 2014 at the time of the Crimean crisis.  No doubt whilst there Juncker will use the opportunity to talk to the Russian leadership who will all be there.  No doubt his task – given him by Steinmeier and by others – is to explore ways with the Russians to help the Europeans get themselves out of the hole they have dug themselves into.

Despite all the intrigues in Germany and the protests against the sanctions across Europe, it remains overwhelmingly likely the sanctions will be renewed in June without being softened. 

Merkel’s authority has become bound up with the sanctions to an extent she undoubtedly never imagined when she forced the EU to impose them in July 2014.  Were they to be relaxed or lifted now, with the Ukrainian conflict still unresolved and against her publicly stated opposition, her authority in Europe and in Germany would be shattered. 

Despite the recent slump in Merkel’s popularity (concerning which see the recent article by my colleague Alex Christoforou) it is likely she remains politically strong enough for the moment to ensure that the sanctions line holds and that this June the sanctions are renewed.

As for the intrigues that are swirling around Merkel – both in Germany and in Europe – it is impossible for an outsider who is not party to them to know all that is going on.  However it is not necessary to do so.  The fact that the intrigues are taking place at all tells its own story. 

Though Merkel’s hard line on the sanctions for the moment is just about holding, it is cracking – and not just in Europe but in Germany too.