Merkel Could Have Brokered Peace in Ukraine. Instead She Fanned the Flames

Merkel could have acted as a much-needed mediator to help end the conflict in Ukraine. Instead, she has been openly hostile towards Russia

For at least six months, I have been trying to fathom Angela Merkel’s policy on Russia. Finally, the Eureka moment has arrived.

Let us recall for a moment that in the spring of 2014, following the coup d’etat in Kiev that brought to power the radical nationalists of the Maidan movement, and soon after the Russian response became clear and the fate of Crimea hung in the balance, the consensus of political commentators was that Angela Merkel would be the honest broker reconciling Russia and the United States. As an Ossie and Russian speaker, she was said to have a special relationship with Vladimir Putin and could find solutions to patch things up like no one else.

However, with the passage of time, Frau Merkel emerged as the leading force on the Continent working against Putin and Russia. She was the one who declared early on that Putin was living in another reality, hinting at his being delusional. And her most recent statements keep up the unrelenting personal attacks on the Russian president: a week ago she explained to the press that Putin would not be invited to the G-7 on her watch, because the Russian ‘does not share our values.’

Verbal attacks aside, Merkel has also insisted on tough sanctions against Russia.

By December 2014, dissent in the German ranks found coverage in the press. We read the Open Letter of Germany’s great and good who denounced Merkel’sOst Politik. We read the harsh critique of the sanctions by Matthias Platzeck, head of the business lobby German-Russian Forum, and former party chief of the SPD (Social Democrats), Merkel’s coalition partners.

Other observers may be equally puzzled over how and why Chancellor Merkel persists in Russia-bashing but they have not let on, instead declaring with certitude that Merkel was and remains ‘clueless.’ Indeed, for a time I was persuaded that only American blackmail could explain the behavior of the Chancellor, which seemed to so flagrantly contradict the interests of her party and her nation, Russia’s biggest trading partner in Europe, where 300,000 jobs depend on doing business with Russia. Why other than under duress would she be doing Obama’s bidding and promoting sanctions that harm German business interests in Russia which took decades to develop? Had the American espionage of her phones uncovered some extremely damaging kompromat about her sexual orientation or about family ties to the Stasi? Speculation fed speculation.

But in the end, I am satisfied that the conundrum of Merkel's position has been clarified and that there are no dirty little secrets here, only a definition of the German national interest that is not reflected in any way in public statements by the Chancellor or by other leading politicians.

I believe that Merkel is not doing Obama's bidding on sanctions. She has her own policy, which just happens to overlap with US policy in the region in some respects. She is indeed working against the interests of part of the German business community, including some major firms. But at the same time she is serving the interests of another part of German business which may be politically more important to her.

And who might Merkel’s allies on her Russian policy among German businessmen be? I freely acknowledge that my guess is based on anecdotal evidence; but it is firsthand, rather than hearsay, and I am persuaded of its qualitative value.

One of the most concrete cases that comes to mind dates from the summer of 2013. I happened to attend a high society engagement party in downtown Brussels which was multi-cultural, indeed multi-civilizational since the prospective groom is an EU Commission legal officer of German nationality, a long- time resident of Belgium, and the bride is Chinese from an outlying province of the PRC. At the banquet, I was seated next to a friend of the groom, a German industrialist in the metalworking sector who has long owned his primary factory near Antwerp and then several years ago opened another works in Poland just across the border from Germany.

Over appetizers, he was boasting about this Polish operation, about how the unusually well trained workers are so grateful for salaries that German peers consider a pittance and about how there is no organized labor to deal with, no labor disputes in Poland. I asked whether he had any thoughts of looking for production facilities still further to the East, namely in Russia, where costs could be still more attractive. He dismissed the idea of investing in Russia with disdain. Russians were crooks, in his opinion, with whom you could not do business.

A bit further into the meal, the conversation at our table turned to the then ongoing banking crisis in Cyprus and the very novel decision to perform a haircut not on bond holders but on depositors, the so-called ‘bail-in.’ My German industrialist expressed his delight with this solution, since he fully expected those most adversely affected to be Russians, whose capital in Cyprus had to be illegal proceeds of money laundering. Others at the table chimed in with their hearty agreement.

That constellation of opinions was striking, but seemed peculiar and irrelevant at the time. However, In the perspective of current German foreign policy, it appears highly illuminating.

In the past few years, there has been a great deal of talk in Western business media about the Polish economic success story, how Poland was virtually the only EU country not to suffer recession in the wake of the 2008 global financial meltdown. The relative high Polish per capita GDP is widely cited and has been held out to Ukraine as an example of what awaited it upon signing the Association Agreement with the EU. However, no one stops to mention the structure of the Polish economy, which is heavily dependent on foreign owned plant from which it supplies bits and pieces of industrial products. Meanwhile purely Polish enterprises are just subcontractors for similar bits and pieces exported to Germany. Complete cycle production is rare.

All of these cheaply procured bits and pieces make German industrial products that much more competitive on world markets, supporting the country’s position as a top exporter and underpinning its economy.

But this relationship locks the supplier, subcontracting country(ies) in a gilded cage. No one bothers to ask why there is not a single international Polish brand you can name.

The situation is not dissimilar in the Czech Republic, Mitteleuropa’s other great industrial nation, where the economy has also been colonized, chiefly by German manufacturers, though companies like Volkswagen have established full cycle production there.

These are the success stories. Bulgaria, Romania and the other losers among the new EU members have seen their Soviet period industry swept away without any replacement.

While the fact of large-scale and unceasing Polish emigration has emerged in recent investigative reporting on the country’s demographics by The Financial Times, the situation is even worse in the weaker economies of Eastern and Southeastern Europe. With its strong drawing power as a vibrant economy, Germany is a major beneficiary of the cheap labor of these new Gastarbeiters, who, unlike the Turkish immigrants of the more distant past, pose no religious or ethnic challenges whatsoever to the German majority.

By its economic policy among its Eastern neighbors, Germany is fulfilling the pre-WWI dream of Mitteleuropa - a German dominated Central and Eastern Europe. In the domain of diplomacy, commentators have for some time spoken of Germany finding its voice and taking a more active role in international affairs. However, there has very little discussion of what that means.

It is common knowledge that the European Economic Community, and after that the European Union, was built on a Franco-German tandem. The difference in economic might of the partners was apparent from the very beginning. What France brought to the partnership was international acceptability which Germany, with its dark past of Nazism, sorely lacked. Now Germany has outgrown these constraints and has stepped out from behind the French screen. The policy it is pursuing would do Bismarck proud, indeed might win plaudits from Wilhelm II.

The keystone of this policy is profound accommodation with Germany’s largest and most ambitious neighbor, Poland. Whereas under the resentful Kaczynski brothers at the start of the new millennium, relations with Poland were fraught, Frau Merkel has flattered and cajoled their successors into joining the German bandwagon. Hence her backing for the appointment of Polish President Donald Tusk to the post of Council president notwithstanding his provocative positions on Russia and his exceedingly modest qualifications for the job, beginning with his poor linguistic skills in a position that is all about communication.

From the beginning of the Ukrainian crisis, indeed in the couple of years prior to the November 2013 showdown with Yanukovich over the Association Agreement, Merkel let the Poles and Lithuanians run with Ukraine as fast and far as they could, even as they committed one terrible blunder after another. The net result is that she has the Poles eating out of her hand, the Lithuanians eating out of her hand, and the Baltics lining up at her side.

In this configuration, the ever-vain Polish political class is finally realizing its dream of replacing France as the number 2 power in Europe. Russia is no longer a strategic partner for Germany. Meanwhile the PIGS of southern Europe are Untermenschen if ever there were any.

The content of the EU is being changed right under our noses, but everyone's eyes are looking elsewhere, to the familiar landscape - to the European Central Bank and Quantitative Easing, to the job creating 315 billion of Commission President Juncker .

I think we have all underestimated Merkel, who mumbles through undistinguished speeches when she appears on the international stage. We have overestimated her peers.

We have also overestimated the extent of US villainy in the Ukraine affair. It takes more than one superpower to create a mess of the dimensions of Ukraine today. Berlin is crucially important in the sanctions policy against Russia and in the confrontation over Ukraine generally.

As for France, they have earned the contempt of the Germans by their own consistent efforts over the past twenty years. When Germany went into austerity at the start of the millennium, Socialist France enacted its 30 hour work week and other self-destructive policies that set its economy ever farther back from the Germans. France allowed itself to be lured by the US into an imperial role and white man's burden sharing in Africa and the Middle East. Germany kept its own counsel and focused on concentrating its power in Europe. Now we see the consequences of this divergence. France is completely marginalized even if President Hollande thinks that the Charlie Hebdo march put Paris back at the center of the universe.

The UK continues to contemplate it belly button, or to be more precise, nurses its ideological pique over the over-regulated, over-spending European Union, focusing instead on its mythical special relationship with the USA to give it global clout. Should there be a British exit from the Union, then that special relationship will be in tatters as the UK will have outlived its usefulness to Washington in managing the Old World. Still more tragically, with Britain withdrawing from Continental governance and France pursuing imperial dreams in the greater world, every element of the German foreign policy objectives from Bismarck through Wilhelm II will have been achieved. This is surely a terrific way to mark the centenary of WWI.

Meanwhile, in the US foreign policy establishment, there are no doubt many who are rubbing their hands in glee over Frau Merkel’s leadership of an anti-Russian coalition in the EU that has so far succeeded in putting in place cruel sanctions that match the US intentions. What they have not asked themselves is why she is so accommodating and what the new Germany means for American control of the Continent, which becomes very problematic the more Germany consolidates its neocolonial rule. After all, American foreign policy over the last 50 years or more has been built on preventing any power from challenging its own hegemony on the Eurasian continent.

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