Russia Day

Ties that Divide

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Why don't we all be friends again?
  • Why it matters

    Why it matters

    Germany takes a different approach to sanctions on Russia than the US: Former chancellor Gerhard Schröder is praised by business for his opposition to these measures.

  • Facts

    Facts

    • Social Democrat Gerhard Schröder, 70, preceded Angela Merkel as chancellor of Germany.
    • Russia was the second-largest trading partner for companies in northern Germany before the Ukraine crisis.
    • Nord Stream, a subsidiary of Russian natural gas producer Gazprom, operates a pipeline through the Baltic Sea and Mr. Schröder is the chairman of Nord Stream.
  • Audio

    Audio

  • Pdf

It was a scene reminiscent of days gone by. When former German Chancellor Gerhard Schröder walked into the drab ballroom of the casino in the Baltic Sea resort town of Warnemünde, he was greeted with enthusiastic applause. Journalists jumped from their seats and photographers lit the room with their flash shots. All eyes were focused on the former chancellor.

Schröder was greeted by his fellow Social Democrat, Erwin Sellering, the governor of the northeastern state of Mecklenburg-Western Pomerania and host of the event. He grabbed a beer, took a long sip and looked over at the stage, where the Shanty Choir warmed up for its second set.

“Fifteen men on a dead man’s chest. Yo ho ho and a bottle of rum,” the men sang. Mr. Schröder, smiling broadly, began to sway to the music. He took another long sip and then posed for a selfie with the other guests at the table.

Critics like to portray Mr. Schröder as a political outlaw in bed with thuggish Russia, but at this event, he was celebrated as a forward thinker, a builder of bridges between cultures. It was the opening evening of Russia Day, a business event that has been the subject of heated debate. Some accuse the state’s Social Democratic government of patting itself on the back at the expense of human rights.

“Although economic sanctions are not an end in itself, they are necessary.”

Angela Merkel, German Chancellor

Mr. Schröder came to argue that the opposite is true. A few hours after the fanfare of his arrival, the 70-year-old former chancellor stood in front of an audience of 400 in the ballroom of the Hotel Neptun. While the surface of the Baltic Sea outside was calm, Mr. Schröder went about making waves inside.

German and Russian business owners were in the audience. The Russian ambassador had come from Berlin. Senior government officials and investors were also in attendance.

There was enormous interest in Mr. Schröder’s address. “I was pleased to see that you, dear Erwin, have stood your ground despite all criticism,” Mr. Schröder began. In the end, he said, voters had the most respect for politicians with guts rather than those who are easily swayed by the mainstream media.

Then he began to dish out criticism of his successor, saying that the latest sanctions against Russia were wrong. “My advice would have been different,” Mr. Schröder said, criticizing the government’s decision to further tighten sanctions against Russia following the Minsk ceasefire agreement.

On the same evening, at an event hosted by the German Retail Federation in Berlin, Chancellor Angela Merkel defended the sanctions. “We have to react,” she said. “Although economic sanctions are not an end in itself, they are necessary.”

Although Ms. Merkel was loudly applauded, many businesspeople agree with Mr. Schröder, especially those gathered in Rostock. “I have to agree with him. Sanctions have never succeeded,” said Sava Bychkov, who manages the business of a Russian wood-processing company in Germany. Harm Sievers, managing director of the Sassnitz port facility, bluntly added: “Sanctions? That’s all very well and good, but please make them short.”

“We need a free trade zone from Lisbon to Vladivostok.”

Gerhard Schröder, Former German Chancellor

Before the crisis, Russia was the second-largest trading partner for companies in northern Germany. Those days are gone. The volume of trade has declined dramatically, with Mecklenburg-Western Pomerania alone seeing a drop of more than 20 percent.

Uwe Lemcke, who runs an engineering firm, said Russia was such an important market that he decided to establish an office in St. Petersburg. “Nothing is happening there at the moment,” he said. “We don’t have a single order, and yet the fixed costs haven’t gone away.”
Mr. Schröder is familiar with the problems. He is the chairman of the board of Nord Stream, a subsidiary of Russian natural gas producer Gazprom.

The Nord Stream pipeline links Russian natural gas fields with Germany and ends only a few kilometers from the Hotel Neptun. Because of his ties to Gazprom, critics say Mr. Schröder likes to warn about “cold times” returning to Europe if European leaders don’t return to a “policy of détente” soon.

After pointing out that Russia is a nuclear power, Mr. Schröder posed the question: “Do we want security with or without Russia?” His answer: “clearly with.” The former chancellor added the European Union should not have negotiated an association agreement only with Ukraine, but also with Russia. “We need a free trade zone from Lisbon to Vladivostok,” he said.

Judging from his recent remarks, the Russian ambassador to Berlin, Vladimir Grinin, doesn’t think much of cooperation at the moment, preferring a more aggressive approach. “It’s time for the West to finally realize that the world is multi-polar,” he said recently. If Europe doesn’t want to cooperate with Russia, he added, Moscow will simply turn to Asia.

At the end of his speech, Mr. Schröder also became more dramatic. “I see Russia as a European nation,” he said, before leaving the lectern with a satisfied look on his face, to applause, cheers and slaps on the back.

 

Simon Book is a reporter at Handelsblatt, and Mathias Brüggmann, who has worked as a correspondent in Moscow, Brussels and Warsaw, is now international correspondent of Handelsblatt. To contact the authors: book@handelsblatt.com and brueggmann@handelsblattt.com

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