Handelsblatt Exclusive

Foreign Minister Supports Qatar, Bashes Trump

German Foreign Minister Sigmar Gabriel gestures during a joint news conference with Palestinian Prime Minister Rami Hamdallah in the West Bank city of Ramallah
Never one to mince his words. Source: Reuters

Germany’s Foreign Minister Sigmar Gabriel criticized the treatment of Qatar by other major Arab nations in an interview with Handelsblatt, likening it to a “Trumpization” of relations. “Apparently, Qatar is to be isolated more or less completely and hit existentially,” Mr. Gabriel said. “Such a Trumpization of treatment is particularly dangerous in a region already plagued by crisis.”

The foreign minister and German vice chancellor warned of a further worsening of the conflict, which saw several Arab countries sever ties with Qatar in a coordinated action on Monday, accusing the Gulf state of supporting Iran and Islamist groups. “A further escalation would serve nobody. The Middle East is a political and a military powder keg. Religious, ethnic, political and ideological conflicts are now also dividing the Gulf monarchies,” Mr. Gabriel said, adding that he was very concerned over the “situation’s dramatic escalation” and its impact on the entire region.

Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed relations with Qatar and closed their airspace to commercial flights on Monday, in the worst split between powerful Arab states in decades. Qatar vehemently denies the accusations against it. US President Donald Trump on Tuesday took to Twitter, saying Arab states had told him about their disputes with Qatar during a recent trip abroad. “During my recent trip to the Middle East I stated that there can no longer be funding of Radical Ideology. Leaders pointed to Qatar – look!,” Mr. Trump tweeted.

Mr. Gabriel criticized the US president’s Middle East policy. “The latest gigantic military deals by US President Trump with the Gulf monarchies are exacerbating the risk of a new arms build-up,” he said. “That is the completely wrong policy approach and certainly not that of Germany.” Mr. Trump had sealed a $110 billion arms deal with Saudi Arabia when he visited the kingdom in May as part of his first trip abroad.

Mr. Gabriel said the nuclear deal with Iran, brokered by Germany and its allies in 2015, had averted the risk of an arms race in the region for the time being. He added that Berlin counted on talks to resume soon, allowing for a diplomatic resolution of the conflict in light of the region’s severe challenges, such as the fight against extremist group Islamic State, the Syrian War, the impact of climate change and the demographic development. “A profound fight among neighbors is actually the last thing anyone needs in this situation,” the foreign minister, who will soon meet his Saudi Arabian colleague, Adel Al-Jubeir, said.

The latest Middle Eastern spat could also impact the travel plans of Qatari Sheikh Tamim bin Hamad Al Thani, who is set to visit German Chancellor Angela Merkel directly after the end of the Muslim holy month of Ramadan, in late July, sources have told Handelsblatt.

The conflict is also feared to have wide-ranging economic repercussions, with oil prices falling as experts expect the rift to complicate talks among oil-producing OPEC nations to tighten supply. “There will definitely be constraints due to the suspension of air and sea travel,” said Felix Neugart, head of the German-Emirates Chamber of Commerce in Dubai.

Qatar, one of the smallest and most wealthy Arab nations with a population of 2.4 million, only 10 percent of whom are Qatari, is one of the world’s largest liquefied natural gas (LNG) producers. With all land borders closed, the peninsula will depend on freight travel by sea and the country has so far ensured supply to its customers, shipping LNG mainly to Japan and China. “Every attempt to stop Qatari exports would result in a severe crisis,” said Robin Mills, head of consulting firm Qamar Energy.

German companies Volkswagen, Deutsche Bank and Siemens, which all list Qatar as a shareholder, as well as railway operator Deutsche Bahn, which is highly active in Doha, all said they were watching the situation and developments in the Gulf region. “The topic indeed is of quite an explosive nature and could turn into a problem for Deutsche Bank if the situation continues to escalate,” an institutional investor, who declined to be named, told Handelsblatt. It remained to be seen whether Germany’s largest bank could continue to do business in the region if customers in other Gulf states started avoiding the lender as a result, the investor said.

But the German company likely impacted most directly by the row is container shipping line Hapag-Lloyd. The Hamburg-based company only a few weeks ago completed its merger with United Arab Shipping Company (UASC), a Gulf company that counts the state-run Qatar Investment Authority, as well as Saudi Arabia among its major shareholders. As a result of the successful merger, Qatar now is Hapag-Lloyd’s largest shareholder with 14.4 percent, while Saudi Arabia, as well as allied Gulf countries Bahrain and the United Arab Emirates, hold a total 13.7 percent of the shares. This power deadlock between the hostile nations could eventually take the Gulf conflict directly into Hapag-Lloyd’s German boardroom, where both a Qatari and a Saudi official have a seat on the supervisory board. Hapag-Lloyd declined to comment on the situation.

Thomas Sigmund is the bureau chief in Berlin, where he directs political coverage. Mathias Brüggmann is the head of Handelsblatt’s foreign affairs desk. Dieter Fockenbrock is Handelsblatt’s chief correspondent for the companies and markets desk, focusing on corporate governance, opinion and rail transport. Yasmin Osman, Christoph Schlautmann and Matthias Streit contributed to this story. To contact the authors: sigmund@handelsblatt.com, fockenbrock@handelsblatt.com, brueggmann@handelsblatt.com


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