eastwards easing?

Germany’s foreign minister suggests lifting sanctions on Russia

Außenminister Gabriel in St. Petersburg
"Poor Germany, so far from God, so close Russia" (with apologies to Mexico's Porfirio Diaz). Source: DPA

Germany, forever wishy-washy on Russia, showed signs of warming further to Moscow this week. Foreign Minister Sigmar Gabriel suggested lifting economic sanctions if a ceasefire holds in Ukraine.

Speaking to a gathering of a committee lobbying for German business in Eastern Europe, Mr. Gabriel said if Russia is willing to stick to a ceasefire in East Ukraine that is monitored by the United Nations, the country should be rewarded.

The European Union and Russia imposed sanctions on Russia after the annexation of Crimea in 2014. Two agreements, the Minsk protocols, sought to end fighting in the region and listed steps to return relations between Russia and Ukraine to normal, including the full sovereignty of the latter.

In December, the European Union extended economic sanctions against Russia by six months. The US is mulling further penalties in February, which could span freezing the assets of oligarchs close to Russian President Vladimir Putin, or possibly excluding Russia from the SWIFT global payment system.

Now, there is controversy over whether some of the sanctions could be partially rolled back before the Minsk agreement is fulfilled. Mr. Gabriel said the idea that Russia should first wholly implement the Minsk agreement and only then should all sanctions be lifted is “divorced from reality.” He criticized new sanctions on Russia by the United States, saying these would also affect German energy interests.

Russia is an important business partner for Germany and a key energy supplier. The sanctions applied by the US could potentially impact Nord Stream 2, the joint project between German and Austrian companies and Gazprom of Russia. Major investors in the pipeline include Uniper and Wintershall, two German energy companies. But German interests in Russia also include carmakers and engineering.

It’s the unilateral sanctions imposed by the Trump administration last year that have most angered Berlin. While Europe’s economic sanctions are having little effect on Russia, those applied by the United States dramatically affect the country and its dealings with Europe, according to Janis Kluge, an expert at the German Institute for International and Security Affairs. He predicted the US sanctions could remain in place for up to 10 years.

At the event, Mr. Gabriel also spoke out against US President Donald Trump’s economic policies and their effect on European – and German – business. “We can’t accept a US strategy that makes us into enemies, economically speaking,” he said.

“The TV reports constantly about insidious plans targeting Russia.”

Denis Volkov, sociologist

The foreign minister’s implicit pivot east is in line with the loyalties of his party and his country. The connection between the countries runs deep, despite the division of Germany and Soviet occupation of the East.

That strong relationship is thanks partly to sustained efforts by German leaders from Willy Brandt to Gerhard Schröder – both Social Democrats, like Mr. Gabriel – which helped bring about a thaw. Nor was that confined to the SPD; after the annexation of Crimea, Chancellor Angela Merkel was also the only western leader to consistently maintain dialogue with Mr. Putin.

But the annexation put Germany in a difficult position. Gerhard Schröder, the former German chancellor, chairman of Nord Stream and a board member at Russian partner Rosneft, continued to promote dialogue as relations deteriorated. At the same time, Berlin also pressed for tough action against Mr. Putin.

The fraying of that delicate connection was reflected in a recent poll carried out in Russia about the biggest international threats. The survey by the Levada institute found that 57 percent said they were worried about the West – namely US, NATO and the EU – compared to just 5 percent Islamic State – while 6 percent said they were newly worried about Germany, showing the country’s image has suffered from the perception it is steering EU policy. The last time the poll asked the question, in 2012, Germany wasn’t named as a concern at all.

Listing Germany as a threat would have been unthinkable before the Crimea annexation, when Berlin was seen as a special friend to Russia, said Mr. Kluge, the Russia observer at the foreign policy institute in Berlin. And yet he added: “Given how hard Germany pushed for sanctions, I’m actually surprised it’s not more.” More worrying, he said, remains the significant deterioration in US-Russian relations.

Observers attribute Russians’ fears to the media. Denis Volkov, a sociologist working at the Levada center, said, “the TV reports constantly about insidious plans targeting Russia.” This is unlikely to change in the coming months, as Moscow prepares for a presidential election in March. However, while much depends on the way Mr. Putin campaigns, Mr. Kluge said perhaps Russia would try to present a more friendly and open image when it hosts the World Cup soccer championships in the summer.

But polls show fears are also on the rise in Germany: The Huffington Post reported earlier this year that 49 percent of Germans see Russia as a threat. And in May 2017, 64 percent of Americans saw Moscow as Washington’s enemy. As investigations continue into Russia’s possible involvement in influencing elections in the US, a thaw in these relations doesn’t seem to be imminent.

Allison Williams is deputy editor of Handelsblatt Global. Andre Ballin is Moscow correspondent for Handelsblatt. To contact the authors: williams@handelsblatt.com, ballin@handelsblatt.com

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