Munich Security Conference

Cold War Debate Clouds Trade

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Dmitry Medvedev: a man with two faces in Munich.

In a world of war, there was a glimmer of peace ahead of the Munich Security Conference over the weekend. The major powers, above all the United States and Russia, had agreed on Thursday to work toward a ceasefire in Syria. Yet it took only a day for the news of peace to turn to renewed saber rattling.

During his speech to the Munich Security Conference on Saturday, Russian Prime Minister Dmitry Medvedev warned of a “new Cold War” with the West and NATO. His combative statements set the tone of the public portion of the conference and provoked immediate responses.

U.S. Secretary of State John Kerry took the stage to accuse Moscow of “repeated aggression” in Syria and Ukraine.

The mood soured even more when Russian Foreign Minister Sergei Lavrov, during a subsequent panel discussion, said the freshly inked ceasefire in Syria was unlikely to hold.

“If you believe what you saw [over the weekend], it was almost entirely bad news,” Wolfgang Ischinger, a seasoned German diplomat who chairs the Munich Security Conference, told Handelsblatt. But “behind the scenes,” he added, “it was much calmer.”

“The centrifugal forces in Europe are without a doubt increasing. That is very worrying.”

Thomas Enders, CEO Airbus

Just hours before his headline-grabbing speech, Mr. Medvedev had struck a very different tone at a meeting of German and Russian business leaders. The prime minister emphasized Germany’s importance as Russia’s second largest trading partner. He even lamented missed opportunities.

“It’s now clear that we are wasting our resources on political confrontation,” Mr. Medvedev said.

But when the Russian prime minister delivered his political broadside later in the day, the diplomats who had attended the morning business meeting could hardly believe their ears.

“Everyone was a little startled; those were two different people,” a diplomat told Handelsblatt on condition of anonymity. Mr. Medvedev had a completely different tone when discussing the economy, the diplomat said.

That should come as no surprise, as the West, when it comes to the economy, has the upper hand. The economic sanctions that the United States and the European Union have imposed on Russia over the conflict in Ukraine are biting.

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Mr. Steinmeier and Mr. Medvedev shared views on the sidelines of the Munich conference. Source: Dmitry Astakhov/DPA

 

Moscow originally sought to compensate by expanding trade ties with China, but that strategy has come up short. Unlike Germany, China generally doesn’t share technological know-how when it invests abroad, and it brings its own workers instead of hiring locals.

Siemens, Deutsche Bahn and German suppliers now see an opening to edge out China in the competition to build a high-speed rail link between Moscow and Kazan.

Wolfgang Büchele, head of the Linde Group, called for Russia and Europe to resolve their differences in Ukraine so “a process to ease the sanctions can begin.” German business, he added, wants “cooperation with Russia to have new substance.”

Though German companies would like to see the sanctions end as soon as possible, “the majority is clear that there cannot be a return to normal until the Minsk II agreement has been implemented,” one business leader told Handelsblatt on condition of anonymity.

A year after Minsk II was adopted, the ceasefire in eastern Ukraine has generally held, but the process of political reconciliation has yet to begin. According to a participant in Saturday’s meeting, Mr. Medvedev is aware of the problems.

“It appears that the West and Russia can agree to a ceasefire in Syria before they can find a solution to the conflict in Ukraine,” a diplomat told Handelsblatt on condition of anonymity.

The dividing line at the Munich Security Conference ran not just between East and West, but also within the European Union. French Prime Minister Manuel Valls rebuffed German leaders on the refugee crisis.

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Mr. Valls said the mood is “not favorable” to Ms. Merkel’s call for a permanent quota system. Source: AP

 

“We are taking in 30,000 refugees and not any more,” Mr. Valls said. There’s no majority in Europe for Chancellor Angela Merkel’s plan to settle refugees based on a quota system, he added.

Later Mr. Valls told reporters that Europe cannot take in all the refugees from Syria, Iraq and Africa. “It has to regain control over its borders, over its migration and asylum policies,” he said.

Mr. Valls comments came after Mr. Medvedev, in an earlier interview with Handelsblatt, said it was “simply stupid” to make Europe’s borders wide open, referring to the European refugee policy as a “total failure” that is “absolutley frightening.”

The French minister’s comments also came after Chancellor Merkel’s chief of staff, Peter Altmaier, and German Defense Minister Ursula von der Leyen called for more European solidarity in the refugee crisis.

Ms. Merkel has been battling fiercely for a deal that would see refugees spread more evenly across the European Union after Germany took in more than 1.1 million asylum seekers last year. But resistance to her plan has been steadily mounting, especially in Eastern European countries, which are now either planning or already erecting new razor-wire fences.

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Leaders of Hungary, Poland, Slovakia and the Czech Republic, kown as the Visegard Group, are meeting later Monday in Prague to discuss their border situations.

Ms. Merkel on Friday spoke of a group of countries that may voluntarily accept more refugees. She plans to bring together what the media has dubbed “a coalition of the willing” during the two-day E.U. summit in Brussels, which begins on Thursday.

“The people are losing confidence that international political institutions are in the position to resolve crises,” warned Martin Schulz, president of the European Parliament. “National interests have priority,” he said.

According to Airbus chief executive Thomas Enders, the many crises are tearing at the continent’s seams.

“The centrifugal forces in Europe are without a doubt increasing,” Mr. Enders told Handelsblatt. “That is very worrying.”

 

Ina Karabasz is an editor at Handelsblatt’s companies and markets team, covering telecommunications, IT and security issues. Torsten Riecke is Handelsblatt’s international correspondent.  Axel Höpner is the head of Handelsblatt’s Munich office, focusing in particular on Allianz and Siemens. Mathias Brüggmann is the head of Handelsblatt’s foreign affairs desk, leading the coverage of the Ukraine crisis. John Blau is a senior editor at Handelsblatt Global Edition. To contact the authors: karabasz@handelsblatt.com,riecke@handelsblatt.comhoepner@handelsblatt.com blau@handelsblatt.com and brueggmann@handelsblatt.com

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