For the past two decades, Germany’s ship of state has calmly charted a straight, undisturbed path. In the wake of Russia’s invasion of Ukraine, an unexpected gust of wind has struck Berlin’s sails and the ship is abruptly tacking in a new direction. A steadfast supporter of the principles of sovereignty, peaceful dispute settlement, and democratic ideals that define the North Atlantic Treaty Organization, the European powerhouse could no longer stand by as soldiers leveled buildings about 932 miles from its capital. With a population eager to respond to the conflict, but a government that is aware of the long-term security and economic vulnerabilities that come with such a pivot, Germany has now decided to detach itself from Russian oil and gas while revolutionizing its industry and military might. These sweeping transformations are here to stay.
While Europe’s leadership felt divided at the beginning of the crisis and had an unsynchronized response to Russia’s troop build-up, unity came swiftly after the invasion. European powers have rallied together in the past few months to demonstrate solidarity for Ukraine by sending military aid and heavily sanctioning Russia. Unfortunately, in doing so, they are all engaging in a delicate balancing act, some more than others. In the effort to cut all ties with Russia as a response to the Kremlin’s unspeakable acts in Ukraine, European countries are absorbing significant blows to their economy, which risks destabilization and citizen unrest.
Trapped in Russia’s Web
Blessed with an advantageous geographical terrain that has endowed it with a wealth of natural resources, Russia has gradually locked European partners in an inescapable partnership by heavily prioritizing energy exports to the continent. With 17 billion tons of oil and 48 billion cubic meters of gas in its reserves, Russia dominates the domestic production of its European neighbors and has historically been willing to profit from this imbalanced relationship. In the 1970s and 1990s, Russia constructed two significant pipelines running through Eastern European countries to continue leveraging their influence, dodging American resistance along the way. In the 1960s, Europe’s importation of Russian gas and oil was in the single digits. It has now reached a staggering 60%.
Indeed, after 2010, Europe’s natural gas production fell precipitously as it came to rely on Russia for its essential imports while opting for a shift to alternative sources of energy in the long run. As a result, many countries overlooked Russia’s incursions in Eastern Europe in 2008 and 2014 because of the mutually beneficial economic exchange— houses were heated, tanks were filled, and industries were powered in Europe while Russia’s pockets were filled. Nonetheless, the integral role that Russian resources played in the well-being and survival of European citizens made the relationship precarious from the beginning. Germany is perhaps the most striking example of a European country that has been forced to come to terms with its entrenched dependence.
In 2021, Germany received more than half of its natural gas and about a third of its oil from Russia. Consequently, the detachment process will affect practically every citizen and have a monumental impact on its economic foundations. “You have to take a gradual approach,” Julian Mueller-Kaler, a resident senior fellow at the Atlantic Council’s GeoTech Center, told The Politic. “Weaning an economy the size and importance of Germany off gas and oil from Russia overnight is counterproductive.” Despite the country’s willingness to come to Ukraine’s defense, the economic ramifications that come with swift action, including high inflation rates, have led to a divergence between what the government says and does. A public opinion poll conducted by public broadcaster ZDF highlighted that 55% of Germans favor an embargo, but the government, fearing a devastating recession, has been unwilling to take such a dramatic measure.
“Decisions will be heavily… but not completely influenced by public opinion,” said Tyson Barker, the head of the Technology and Global Affairs Program at the Council on German Relations. There are “some concerns as to whether or not the German public is aware of the kind of sacrifices that will be required” to completely divest from Russian resources. This is because Germany is entering another era of Wendepolitik; literally, politics of the shift.
Disentanglement and Communication
Barker enumerated a series of transformational “u-turns” that Germany has taken in its history which can be compared to today’s energy and military shift. They include Germany’s rapid reunification in 1989-1990, the country’s sudden announcement that it would be shifting away from nuclear power after the 2011 Fukushima incident, sectoral sanctions against Russia in 2014, Chancellor Merkel’s decision to open the country to a massive flow of refugees in 2015, and finally, the euroization of an investment stimulus package in 2020 following the outbreak of the pandemic. “Germans tend not to reverse positions once they have made a commitment,” said Barker. The changes being witnessed today are most likely here to stay.
Germany will also need to address weak communication between its leadership and the general population if it intends to keep public opinion high. Dr. Stormy-Annika Mildner, the Executive Director of the Aspen Institute Germany, emphasized the crucial role that communication plays in such a crisis. “There needs to be even more information on what could happen to prices in the medium to long run when the war continues and how the government is going to react to this,” she said. Mildner was also a Fox International Fellow at Yale University.
This exchange of economic indicators and future projections is a “fine line to walk,” according to Mildner. On the one hand, the more the government promotes transparency about rising prices, the higher the probability that consumers panic and buy lots of goods in the short term. On the other hand, keeping communications opaque can leave citizens disillusioned about the steps that the Economic Ministry and other committees are taking to alleviate pressure.
Germany’s reckoning of an unhealthy dependence on Russian resources has forced the country to reconsider how it wants to tackle a green energy revolution. Before the invasion, Germany established a set of noble benchmarks to phase out its emission of greenhouse gasses until 2045, targeting a 65% and 88% reduction in 2030 and 2040, respectively, compared to 1990 levels. Although its success in meeting these goals is expected to be subpar, according to an August 2021 draft government report, key members in the Bundestag, Germany’s parliament, have been pioneering serious climate reform to stay on track with proposed environmental reform. Moreover, following the nuclear accident in Fukushima, Germany also promised to shut down all of its nuclear power plants by the end of 2022.
These initiatives were widely praised by German citizens before resources became scarce. Now, there has been talk of reneging on these commitments so that Germany can become energy independent before aspiring to environmental friendliness. “I think that you [will] probably see a compromise on climate goals,” Jörn Fleck, deputy director with the Europe Center at the Atlantic Council, told The Politic. This is because resource independence from Russia will need to happen quickly, and green energy goals were planned for multiple decades from now.
A Few Steps Back
One immediate reaction to rising energy prices was to propose delaying the shutdown of Germany’s three remaining nuclear plants. Unfortunately for Germany, the process is not so simple. A 2017 deal decommissioned the factories’ funds to a public trust and it would be difficult to reserve this decision. For the past few years, operators in the final three plants have completely focused their energy on shutting them down and many have expressed discontent with the German government’s sudden policy shift. Mueller-Kaler also pointed to “significant risks in terms of reactor securities” which would impede this reversal. He believes that these complications mean that Germany will instead opt for “restructuring [its] energy sector.”
The country has turned in various directions to successfully execute this transition, recognizing that it may have to walk back on environmental ambitions. Germany is accelerating the construction of liquified natural gas (LNG) terminals connected to the United States and other suppliers to wean itself off Russian gas more quickly, according to Fleck. Coal-burning processes previously viewed as unhealthy for the environment are restarting. Berlin has also attempted to strengthen rapprochement with Middle Eastern countries to divest from Russian oil. In March 2022, Germany forged an energy deal with Qatar after the Minister of Economic Affairs visited Doha.
All three of these initiatives will help Germany acquire enough energy to last through the end of the year in the event that it completely detaches itself from Russia. Noble environmental legislation will presumably return to the table after the worst of the economic pain is over.
These partnerships have also been helpful for integrating renewable forms of energy into the economy. For instance, Germany and Saudi Arabia agreed in the same month to cooperate on the production and importation of hydrogen by using renewable power through a process called electrolysis. Not only would this represent a success for renewable energy in Germany since hydrogen does not emit nearly the same quantity of greenhouse gasses as burning coal, for example, but it is also an example of strategic international cooperation.
The recent accord with Saudi Arabia represents an ideal scenario for Germany: attentiveness to renewable energy, reinforced ties with a country to acquire indispensable resources, and the further erosion of Russian ties. This balance is difficult to strike, and Germany’s reciprocity with a country like Saudi Arabia is not guaranteed to persevere in the long run. “I think this can only be a short-term thing,” said Mueller-Kaler, explaining that collaborating with Middle Eastern countries is a “transitory, stop-gap measure that has to be taken” to mitigate the vertiginous rise in prices.
Like many other European countries and the United States, Germany will have to prudently thread the needle between long-term environmentally conscious policy and immediate responses to the Kremlin’s war crimes. Proponents of these policies, especially within Germany’s Green Party, “will have to take a really hard look at their ideas of energy policy and a green transition in the short-term,” according to Mueller-Kaler. Wind and solar electric systems could not keep an industry-heavy country like Germany afloat if it chose to completely cut ties with Russia. Thus, the crisis in Eastern Europe will force German leaders to juggle climate goals, economic ties to Russia, and support for Ukraine at the same time.
Energy Within the European Debate
The main problem as it relates to energy, once more, is inconsistent communication. “On the one hand, the government has told the German public that even if Russia decides to cut off oil and gas deliveries… Germany would be able to get by,” said Rathke. “Other statements from the government have… said the opposite: We have to keep buying oil and gas from Russia for the time being even if we don’t like it or else Germany would face an energy crisis.” Mixed messages complicate national unity and trust. For example, a variety of German academics are pressuring Chancellor Scholz to impose an embargo on Russian resources sine die. Scholz bitterly remarked that their mathematical models amount to nothing short of encouraging Germany to fall into an irrecoverable crisis. While this may be true, ambiguity in policy has compelled scholars and economists to propose radical embargos, highlighting the need for clear communication in the months to come.
Alongside its European neighbors, Germany is undergoing a revolutionary process that may upend the way that the continent operates on a day-to-day basis. European countries are combating inflation before it reaches insurmountable levels while keeping their gaze on long-term measures to promote renewability. In doing so, however, they will have to overcome internal disputes, recognizing the particular situation in which each country finds itself. Polish and Ukrainian officials sharply criticized Germany for continuing to buy Russian natural gas in April 2022, claiming that the Chancellor is doing nothing short of directly financing Putin’s war.
Although the frustration is justifiable, especially as more information about the invasion comes to the forefront, Western allies must keep in mind that German citizens can only absorb so much inflation and that the country’s leadership depends on a coherent national response. If citizens suffer under an untenable recession, they will lose faith in international associations like NATO and will blame the German government for inadequately dealing with Ukraine. With public opinion polls showing quite the opposite sentiment, the government should stick with its progressive approach if it deduces that it is the only economically viable option.
The Second Major Shift: Defense
Instead of keeping all hands off the ropes, Germany’s ship of state will need to establish a clear sense of direction in the coming years. Despite its remarkable economic preponderance in the European balance of power, Germany has absolutely failed militarily during the post-WWII years of relative international peace. Berlin’s armed forces have been left to atrophy due to few exterior threats and exceptionally low defense spending, and strategic calculations have been absent from German discourse for all too many decades.
Such an assessment can be drawn by comparing Germany’s military expenditure to other countries and following the divergence between its economic growth and defense spending since its 1871 reunification under Otto Von Bismark. Between 1871 and 1912, German military expenditure as a share of GDP hovered around 2-3%. When WWI ravaged Europe, the numbers went from 3 to 55% in the span of two years, peaking at 59.35% of its GDP in 1918. However, this immense share of its economy was eclipsed by an incredible 94.5% in 1944 at the height of the Second World War. After an abrupt decline in 1945 at the conclusion of the conflict and a gradual downward path, Germany’s defense spending hit its 2-3% level in the 1980s, but did not stop there. Instead of returning to previous levels of investment, the country dropped its military expenditure as a share of GDP to 1.73% in 1991. It hit an all-time low in 2012 at 1.15% and since then has barely exceeded a measly 1%.
While less expenditure in this industry may initially seem like an indication of beneficent intentions, Germany did not fall in line with the requirements it had to fulfill as a part of NATO. In 2006, members of the organization agreed that they would dedicate a minimum of 2% of their GDP to defense spending for military vigilance by 2024, a recommendation that Germany seemingly ignored. The striking dimension of its inferior military spending becomes obvious when one looks at the country’s formidable GDP growth since the reunification. In 1871, the GDP per capita of an ordinary citizen, adjusted for inflation, was $2,896. In 2016, it was $44,689, approximately a 1,543% increase. Thus, the fact that Germany’s military expenditure as a share of GDP in 1991 was only 1% below its 1900 levels is deceiving because the GDP saw an enormous increase.
Up until the Russian invasion of Ukraine, Germany has abandoned its commitment to ensure security on the European continent despite its superior GDP. Indeed, smaller European neighbors emphasized the degree to which Germany’s military decline was a cause for alarm. Despite having smaller GDPs, Romania, Estonia, Latvia, Poland, Lithuania, France, Norway, and Greece all met NATO’s 2% requirement in 2020.
Three days after Russian forces entered Ukraine, the German ship of state finally recognized that prioritizing military and strategic capabilities is indispensable in a world where territorial encroachment and neglect for a rules-based international order are still prevalent. Chancellor Olaf Scholz announced on February 27 of this year that Germany would raise its defense spending to above 2% as soon as possible to fortify German and European security. “Scholz didn’t directly link the 2% to aid for Ukraine… He said we’d have to invest more in security to safeguard peace in Europe and to safeguard our freedom and democracy in light of Putin’s imperialistic behavior,” said Ronja Ganster, a research and program assistant at the Berlin office of the German Marshall Fund. She explained that financing weapons deliveries and increasing defense spending constituted two different pillars of Scholz’s monumental speech.
At the heart of Germany’s recent initiatives to provide aid to Ukraine and offer a more definitive defense to the Kremlin is its objective to assume a “security and defense role that is more commensurate with its economic weight,” according to Rathke. “Some people have talked about Europe as being an economic superpower and a strategic dwarf. You can apply the same description to Germany.” In 2020, Germany spent 51.4 billion euros on defense, or 1.57% of its GDP. Scholz has announced an additional 100 billion euros dedicated to defense spending over the coming years. Germany will also borrow 220 billion euros for industrial transformation. With such an enormous amount of money being funneled into these projects, Germany clearly hopes to undergo a long-term, structural shift to replace its enfeebled image within the European alliance.
Although the announcement is yet another monumental example of Germany’s Wendepolitik, another turn in its history marked by a significant event, the reality is that this transformation will be incremental and multidimensional. “It’s not off-the-shelf stock,” Mueller-Kaler explained, noting that the types of material that Germany is planning to buy will be delivered at the end of the decade. According to Mueller-Kaler, there will be “changes in procurement policy at every stage— at the supplier stage and the demand stage— that is going to require some disruption in the way Germany has done business in the past 30 years.”
The revolutionary nature of this shift will open the door to fresh discussions about a centralized European strategy, a topic of conversation that has been absent in international discourse for quite some time. For example, according to Fleck, there has been a debate driven principally by France about how Europe should become more independent from the U.S. Germany, with its increased military spending, new leadership, and improved capabilities, could help lead Europe in an effort to “create greater European security and defense capacities,” said Fleck. However, Fleck stressed that for Berlin, a “European security architecture” would always include a transatlantic dimension linked closely to the United States and would differ from French conceptions of “strategic autonomy.”
A More Complete Picture
Chastising Germany for its debilitated military does not tell the country’s whole story since WWII. Thomas Kleine-Brockhoff, Vice President and Executive Director of the Berlin office at the German Marshall Fund, explained that it would be misleading to depict the post-war era as one of uninterrupted peace. During the Cold War, when Western Germany found itself between two hostile ideological blocks, it engaged in a debate about whether it should rearm itself between 1950 and 1955, according to Kleine-Brockhoff. This was “accompanied by huge, massive opposition ten years after the war,” said Kleine-Brockhoff, and eventually culminated with the creation of the Bundeswehr, Germany’s armed forces.
Western Germany’s debate about rearmament came amidst a successful collaboration between the United States and European countries to fashion international institutions like NATO to guarantee transparent democratic processes with baseline military capabilities. Barker added that to maintain a balance of power within these associations, Germany considered acquiring nuclear weapons in the 1960s and had the largest military in Europe in the 1970s, spending more than any other country on the continent.
Germany “got used to being a contributing member of NATO and saw its benefits,” said Kleine-Brockhoff. He added that after 1990, when the Cold War was over, Germany’s defense budgets declined as world leaders encouraged a “peace dividend” to decrease defense spending. Eventually, this turned into a “love affair with the status quo” since citizens did not want to return to a time of military confrontation. Naturally, fewer arms, fighter jets, and tactical weapons were purchased after the end of the Cold War as people celebrated the apparent triumph of liberal democracy in what Francis Fukuyama dubbed the “end of history.” Despite multiple warnings that it was time to focus on defense spending once more, it took Russia’s invasion of Ukraine for countries such as Germany to understand the importance of not completely abandoning military expenditure.
Overshadowing Germany’s recent trend to bolster its spending is the harrowing and unforgettable role it played in World War II. “Germany is deeply rooted in the crimes and the horrors from WWII under the Nazi regime and that… moment has been seared into many Germans’ identities and the way they see the ‘never again’ question,” said Barker. This partially explains why the German industrial giant of the 20th century welcomed the idea of military dormancy. According to Barker, German citizens “really want to keep themselves bound in systems” that prevent escalation and bellicose rhetoric.
Indeed, in order to maintain the European balance of power, Germany will need to do its best to not dramatically exceed the forces of its neighbors. “The German defense budget as of next year will be the biggest in Europe and one of the highest in the world,” said Kleine-Brockhoff. However, “it only supports a small force, will consist of make-up investments for a long time, and is supported by all of Germany’s immediate neighbors.” In other words, Germany absolutely does not aspire to become a hegemonic power in Europe. Its recent spending, prompted by a security threat, will remain within the confines of the international institutions it is a part of. Thus, in addition to communicating openly with its citizens, the German government will also need to regularly divulge military operations to other European countries so that they can unite behind a shared mission instead of worrying about whether their allies will backstab them.
Other onlookers don’t see this as a point of concern. “I fear a powerless Germany more than a powerful one,” said Mueller-Kaler. “Any step-up in military spending will be firmly embedded in NATO, in an integrated EU.” Rathke reinforced this sentiment, adding that even if Germany defense spending “increases after these newly announced measures, it is not going to make Germany a potential threat to any of its neighbors, almost all of which are in the EU.”
Mistakes Made in the Liberal International Order
Germany’s failure to build up its military is not solely a byproduct of its destructive legacy from WWII. It is the culmination of an almost naive confidence in the magical reshaping effect of rules-based norms. Despite the warning signs that Russia was not afraid of intervening in Eastern Europe, “there were lots of [Germans] who believed that mutual interdependence would prevent conflict and war” with Russia, said Mildner. This idea emerged from Cold War relations whereby Germany and the Soviet Union never severed economic ties, stabilizing relations between the two powers. Mildner emphasized that there was a strong belief within the German defense community that “interdependence is good and mutual trade relations would prevent war.” Clearly, this did not happen.
While the economic integration of the EU absolutely helped to curb conflict between the association’s members, these very same countries made the dire mistake of applying this experience to Russia and China, according to Mildner. She pointed to two key lessons that governments worldwide can learn from this blunder. First, it is “never healthy to be so dependent on individual suppliers,” no matter how tempting it may be to rely on other states’ production in a functioning international system. For Germany, this took the form of an unhealthy dependence on Russian oil and gas. The United States and Europe as a whole must closely monitor imbalanced trade relationships, such as China’s production of 90% of rare earths. This leads to Mildner’s second point, which stipulates that “dependence on financial payments seems to be less of a vulnerability [than] dependen[ce] on the material.” European inflation certainly underscores this observation.
Kleine-Brockhoff focused on politicians’ failure to anticipate authoritarian bellicosity despite indications that countries were tending in this direction. Freedom House, a non-profit that conducts research on democracy, plainly demonstrated how the number of democracies in the world has been declining for the past 15 years.
The so-called victory of democratic values was a flawed idea from the start, according to Kleine-Brockhoff. Adherents to the concept of the Western world’s victory after the Cold War overlooked several significant events that may have been guiding international politics for the past three decades. “We understood the fall of the [Berlin] Wall to be the seminal moment that would… make all other countries democracies,” said Kleine-Brockhoff. “What if the seminal moment was not the fall of the wall in 1989 but the [Tiananmen] massacre in China?”
Both events happened in the same year, but American and European politicians chose to focus on the former, overlooking how China may have been signaling its willingness to uphold authoritarianism at all costs. “We’ve been overextending and we’ve been misreading history in an all too optimistic and partially triumphant post-Cold-War way,” Kleine-Brockhoff believes. Countries like Russia and China liberalized economically to reap the benefits of a dynamic international system but had no intention to backtrack on their authoritarian trajectory. In fact, they even succeeded in entangling Western countries in a web of economic dependence based on their monopoly over scarce resources.
The fact that certain countries like Germany may have misread history does not absolve Russia of its egregious actions in Ukraine and it does not necessarily suggest that NATO bears the responsibility of this crisis. “We have to remember that this is a revanchist war,” said Kleine-Brockhoff. He explained that Russian soldiers set foot in Moldova in 1991, a time when NATO enlargement was never on the table, and have never left the territory since then. On the day before invading Ukraine, Putin delivered a speech in which he only mentioned NATO thirty minutes into his discourse, choosing to focus on Trotsky and ancient figures of Russian statecraft.
“Yes, NATO is a part of the Russian narrative, but I would ask the Russians to take some responsibility for their own strategy and their own version of world events,” said Kleine-Brockhoff. These facts will be important for Germany to point to when linking arms with its European allies so that the country can create a unified front with its strategic partners. They can also build a well-founded counter-argument to Putin’s claims about NATO as a provocative force during future diplomatic exchanges.
Next Steps for the German Government
Just like its effort to separate from Russian energy resources, Germany must unquestionably be clear, precise, and direct with its communications. Chancellor Sholz may have faltered a bit at the start in this respect. The decision to increase Germany’s defense spending “was made in the inner circles of power, mostly between the chancellery, foreign ministry, and finance ministry,” according to Mueller-Kaler. “Ordinary parliamentarians were only consulted once the course of action had already been taken.” Although this delayed disclosure of information is understandable given the quickly unfolding circumstances materializing during the third and fourth day of the invasion, it reflects neither the collective decision-making of the Bundestag nor that of the German people.
At the end of the day, like in most other democratic countries, German citizens rely on a mix of what their government communicates and what is reported to them from abroad to receive their information. When an urgent event like the invasion of Ukraine takes place, public opinion changes as a result. “If the immediate event goes away, I’m not so sure that the change is going to stay,” says Mildner. Financing defense capabilities will not be the general public’s main priority after the war in Ukraine terminates and the ship goes back to drifting peacefully. However, German decision-makers within the political elite are there to keep him awake. These individuals “know about the risk of China, the Middle East, and the Pacific” in the long run, says Mildner, and they may thus be inclined to keep defense spending above NATO’s 2% threshold far beyond the crisis.
Germany’s immense economy has certainly made it stand out on the world stage. Its European allies expect it to be an active and meaningful bulwark to defend international norms. German politicians are prepared to accept this new role and the responsibility that entails, including smart troop placement, regular maintenance of weapons, and most importantly, the development of a national strategy. While fulfilling these obligations, Germany will probably try to avoid looking like a new “hegemonic presence in Europe,” according to Barker. It just wants to be “one of the gang” in the EU, he added.
Caught unprepared in its energy and military strategy, the German ship is back on course and beginning a transformative process that may set it apart as a major power in the coming years. First, to uphold its commitment to territorial integrity and peace, Berlin will have to execute a gradual transition away from Russian energy while attempting to not erase its environmental progress in the renewable sector. It will also need to incrementally bolster its military expenditure in a way that does not overwhelm its unrehearsed forces. And finally, by increasing domestic communication and open exchanges of policy information with its neighbors, Germany can reimagine the role it plays in Europe and craft strategic responses to authoritarian powers that are unwilling to embrace a rules-based international system. In this way, Germany will have the opportunity to assume a much-needed leadership role in a Europe that has been shaken by an unthinkable war.