German Diplomacy

Speak Softly But Carry Big Sanctions

steinmeier-Handelsblatt-Marc-Steffen Unger
Frank-Walter Steinmeier.
  • Why it matters

    Why it matters

    Germany needs to forge a foreign policy that avoids military intervention but also dead-end talks.

  • Facts

    Facts

    • Mr. Steinmeier, 59, has been Federal Minister for Foreign Affairs since 17 December 2013.
    • He studied law and political science and has held various government positions.
    • He is a member of the Social Democratic Party.
  • Audio

    Audio

  • Pdf

German Foreign Minister Frank-Walter Steinmeier supports a new German foreign policy that pursues a course between military intervention and talks without consequences. He views the conflict in Ukraine as a litmus test.

Although Mr. Steinmeier wants to avoid isolating Russia further, he admits that the economic sanctions have had an impact in negotiations.

 

Handelsblatt: You work is in the mold of Willy Brandt. A portrait of the former chancellor hangs on the wall behind your desk and a sculpture of him to the right. What does Brandt’s policy of “change through rapprochement,” on which he founded his Cold War “Ostpolitik,” or new eastern policy, mean to you?

Mr. Steinmeier: Willy Brandt said in a speech in 1963, during the coldest days of the Cold War, that foreign policy must be the “attempt to find peaceful solutions to problems without having any illusions.” For us, it is clear that seclusion and isolation have yet to solve a serious crisis in the world. By the same token, that doesn’t mean that since the end of the Cold War, we can simply depend on the economy and trade relations and expect everything to fall into place by itself. We must be decisive and united in our reaction when European principles of peace are openly questioned, for instance, through the sanctions imposed by the European Union against Russia.

So conducting trade is better than rattling weapons?

Trade relations make an important contribution. But a look at the crises in the world clearly shows that a globalized economy and closer networking in and of themselves do not guarantee a peaceful world.

What are the consequences of this analysis? Is Vladimir Putin the right man for shuttle diplomacy à la Willy Brandt? Or is Russia’s president using the breaks in negotiations to achieve strategic advantages?

Russia operates in the contradiction between its participation in the globalized economy and adherence to geopolitical thinking. The country itself can see that its influence is difficult to maintain, let alone increase, given this contradiction. Even without sanctions, its annexation of the Crimea – illegal under international law – shocked its neighbors and partners worldwide and led to capital flight from its own country. A year later, the ruble has lost a large part of its value, the foreign exchange reserves have dwindled by one-third, and intervention buying has not been able to bolster the ruble.

And Putin has not yet changed course.

The conclusions Russia must come to are anything but rosy. But the situation for the neighboring state of Ukraine is even more bitter. After a year of crisis and war in Donbass, the country is struggling for political stability and desperately needs economic help from its partners. Since the beginning of the conflict in Ukraine, we have been actively seeking to defuse the crisis. The ceasefire appears to have held largely over the past few days. We urgently need a positive dynamic to avoid falling back into a deadly spiral.

That is also a difficult balance for you, too. On February 12, Germany and France negotiated with Russia and Ukraine a ceasefire that was immediately broken by the separatists.

We have a clear and decisive position on Russia’s attempts to destabilize a neighboring country and above all on vilolations of borders guaranteed by international law. And I have learned through many years of experience in foreign policy that a ceasefire, and especially peace, cannot simply be wished or sanctioned into happening.

What does that mean in concrete terms?

It means, for example, that in conflict situations such as in eastern Ukraine, using clear words is appropriate. But I have never had the illusion that with that alone, or even with just sanctions, conflicts can be solved. If you want a solution, you must have the courage to seek a return to negotiations when the opportunity arises. Harsh rhetoric doesn’t stop people from dying. The Minsk agreement is truly anything but perfect. And I have always said that it is not a breakthrough. But if heavy weapons are now being pulled back, the ceasefire is largely holding and we are possibly given access to provide humanitarian aid in the region, then that is much more than the empty outcome many want to see from the Minsk agreement.

Have the West and the German federal government made mistakes in the process of rapprochement with Ukraine?

Much has happened in the near decade and a half since Putin’s speech at the Bundestag and his call for a free trade zone from Lisbon to Vladivostok. In the meantime, there has even been discussion of NATO membership for Russia, or at least of a joint security partnership. But there has been a growing alienation not just since the crisis in Ukraine. Countries’ borders were violated in the war with Georgia, with the military actions in South Ossetia and Abkhazia in 2008.

That, more than ever, raised the question of what went wrong.

The E.U. talks over the association agreement with Ukraine provided no level of dialogue that would have bridged the growing division between the E.U. and Russia. But that is history. My task now as foreign minister is to defuse the conflict in Ukraine and above all to contribute to Ukraine getting back on its feet economically. Moscow should also have an interest in stabilizing the country. And that will depend on how our relationship with Russia progresses.

You recently defined the course of a new German foreign policy. You said it was about a new course between military deployments and “talks without consequences,” with sanctions playing an important role. How far is German business willing to go along?

I did not suggest a new, third path. For me, it was much more about showing that the diplomatic toolbox is more generously equipped. Consider, for example, preventing civil crises, establishing a constitutional state or mediating peace. Foreign policy also includes applying pressure where necessary. But pressure is not an end in and of itself, and should not be misused to score public opinion points.

Are sanctions a tool to tame Russia?

No, sanctions are never there to put down the other party, but rather to lead the party to negotiations it has previously rejected. The current developments suggest this wasn’t completely wrong.

And how is German business reacting?

In different ways. The major trade associations largely back the policies, but this doesn’t preclude individual companies, especially those for which Russia is an important market, from publicly revealing their critical stance. To them, we also say: “Let’s cooperate. Defusing the situation is also in your interest!”

Your words imply some disappointment.

No, I can understand that a machine manufacturer that sells two in every three systems per year to Russia is affected differently than the Federation of German Industries, which says that trade with Russia accounts for a total of 3 percent.

How can functioning trade relations ease the start of political talks?

I am not expecting a permanent separation of Europe from Russia. Even if a political solution takes years, maybe even decades, we must do everything in our power to solve the conflict. Henry Kissinger [Eds. former U.S. secretary of state], who is not necessarily known to be an outspoken friend of Russia, sees it the same way in describing a new world order. And he also warns against a policy that targets an isolation of Russia.

How much more is Germany prepared to do for Ukraine, through aid from the International Monetary Fund and other international organizations?

Ukraine’s financial needs can hardly be estimated. At the moment we have no solid ranges to calculate upon the condition of the Ukranian economy. Much also depends on the ability of Ukrainian politicians to pursue the necessary reforms, including the battle against corruption and administrative reform.

Is there now more money for Ukraine?

Europe has declared its readiness for support, as has the U.S. in addition to its multilateral obligations. Germany has held out the prospect of an additional half a billion euros. That is something to show. Ukraine greatly appreciates that.


Video: Mr.Steinmeier in Kiev for talks.

Foreign policy relies not only on economic sanctions; it also facilitates opening up new markets for business. What can German foreign policy do for German companies?

During my recent travels to South America and Africa, it became clear to me again that not only German industry has interest in these regions; in these countries, we are also seen as a politically strong and economically stable country, known for its good products. We are not forcing ourselves onto anyone. On the contrary, there is almost the expectation internationally for us to help establish closer economic ties through foreign policy.

Can you give us an example?

In Africa, we help not only discover regions and markets, but also gain a realistic view of their competiveness and investment climate. We want to change awareness in that way. Especially with regard to Africa, our old understanding of it as a continent of crises, wars and conflicts is not up to date. There still are abundant crises and conflicts, but in addition to them surprisingly stable regions have developed. There is a lot of potential.

What countries are you thinking of?

East Africa is one of them. I just gained insight into Rwanda and Kenya. It wasn’t only me who had the impression that they are striving for political and economic stability beyond their respective national borders, the business representatives who traveled with me also felt the same way.

Is China a model when it comes to that? The People’s Republic is securing natural resources in Africa in return for investments in building streets and airports.

China is very present in Africa. Truthfully, a large portion of the infrastructure in some regions of Africa would not exist without China. But Germany isn’t popular in Africa for wanting to be exactly like the Chinese.

Then why?

Africans now know that German companies invest differently and don’t seek to make the quick dollar. German companies are more cautious, but when they come, they stay for the long-term. They bring something with them others don’t have, for example, the concern for subsequent generations and a model for vocational training in companies, which is attractive for many countries. We can benefit from this.

How so?

Within the government, we have agreed on improving Hermes guarantees [a government export credit guarantee covering companies in the event of non-payment by foreign debtors. Eds.]  for Africa. I’m sure more German companies are now willing to make the jump over the Mediterranean.

Are we really doing enough to open the doors to business there? Other countries, like France, seem more successful. The Rafale fighter jet is now being sold in the Middle East, and not the Eurofighter.

I don’t think we have to hide from our record of doing a lot for German businesses abroad. Especially when it comes to opening new markets, we support German companies, and they are grateful for that. I experience that on my trips, on which I’m almost always accompanied by high-level industry representatives.

How do you engage them?

It helps when German companies say they have backing from the German government. This  applies especially to our host countries where the state and business are closely tied to one another, such as in China or the Persian Gulf.

Expectations of German foreign policy wary widely. Foreign countries are calling for more leadership, but, according to surveys, Germans themselves would prefer to be left alone. What are you doing to close this gap in expectations?

I never anticipated that within a year, the gap between the expectations of foreign countries and the willingness of the Germans for more engagement could close. But I’m confident the broad public debate over foreign policy with more than 60 major events has strengthened the understanding that Germany is simply too big to remain on the sidelines. Clearly,  communicating foreign policy will not end with a review process. We will continue to have discussions with citizens in Germany about our foreign policy.

What should they be convinced about?

As the country with the strongest economy in the middle of Europe, we can’t be indifferent to what is happening around us.

Does that mean, in a nutshell, that Germany is confidently taking over the role of crisis manager in the world?

The world doesn’t need half-hearted intervention, especially not from us. What it needs is countries around the globe that work on the issue.

What issue do you mean?

No other country is as networked as Germany, and only a few have an export economy that is comparatively strong and lives on the trade and exchange of goods. For this reason, we rely more than others on international rules not eroding. It is our interest that international organizations such as the United Nations, the IMF and the World Bank do not suffer a loss of authority. Therefore, we advocate a strengthening of international order, based on rules. This affects Germany’s core interests, especially those of business.

There are also order and rules in Europe. How flexibly should we be in bending these rules, for example for Greece, to hold Europe together?

For five years, we have been struggling with a crisis, in whose wake a portion of Europe finds itself in economic recession. We often lose sight of the fact that much has also improved. Think about Ireland and Portugal. They have put their crises behind them. Spain is working on stabilizing its banking sector. France has tackled the reforms with full force. All of this is happening in a framework, in which there is flexibility, which we should use. But the framework itself must be clear and apply to all.

Should the Europeans be more accommodating to the Greeks?

Greece’s European and international partners have signaled their willingness to listen to new ideas. Now it is the Greek government’s obligation to put forward suggestions that are serious. We understand Greece’s desire to create more socially balanced reforms in the future. But the budget consolidation is essential.

Will Greece remain in the euro zone?

I’m one of those who want Greece to remain in the euro zone, and not just for economic reasons. Everything else would have grave consequences for European and foreign policy, and also for the image of Europe in the world. It would be an enormous loss to the reputation of the E.U., if it, with its considerable economic power and political experience in compromising, did not manage to accompany a member nation on the path from economic and fiscal recovery to success.

 

Mathias Brüggmann heads Handelsblatt’s foreign affairs desk. Hans-Jürgen Jakobs is editor in chief. And Torsten Riecke is a Handelsblatt international correspondent who reports on international finance and economics. To contact the authors: brueggmann@handelsblatt.com, jakobs@handelsblatt.com and riecke@handelsblatt.com

 

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