Germany

Are sanctions making Russia richer?

Before the invasion of Ukraine, it was by no means certain that there would be a united response from the West. The sanctions imposed on Russia after Vladimir Putin’s annexation of Crimea in 2014 were fairly limited, especially from the European Union. Germany pressed on with the Nord Stream 2 gas pipeline to Russia. But now, America, Europe and much of Asia have been united in applying severe sanctions against Russian banks, companies and oligarchs. Three months on, it’s time to ask: are the sanctions working? The answer from the Bank of Russia’s balance of payment data for January to April isn’t reassuring. It showed that the sanctions are emphatically

Sanction Gerhard Schröder

From the start of the war in Ukraine, the democratic world has shown striking unity in the economic boycott of Russia. But sanctions are always a blunt instrument: aimed at the regime, they end up harming the whole population. Ordinary Russians, too, are victims of Vladimir Putin’s corruption and misrule. Far better to target the Kremlin and those close to it. The system of targeted sanctions on named individuals is one way of doing this. Action has now been taken against 1,086 people, with assets suspended and travel bans imposed. To go after the rich and powerful is always a test for democracies, especially if such people are generous in

Olaf Scholz is tanking

North-Rhine Westphalia is Germany’s largest state, almost as large as the Netherlands. It was a traditional SPD fiefdom during the time of Helmut Kohl, but in 2005 it became a CDU state. Surely, if the SPD was on the march, ready to turn Germany’s regional politics red as it did the chancellery in last year’s election, a state like North-Rhine Westphalia would return to the party? But the big news from yesterday’s federal state elections is that the SPD, the party of German Chancellor Olaf Scholz, scored its worst-ever result in Westphalia: less than 27 per cent of the vote. The CDU won with 35.5 per cent and will probably

Merkel is turning into Blair

Angela Merkel left the German chancellery at the end of last year with a bunch of flowers, a standing ovation in the Bundestag, a fist bump from her successor Olaf Scholz, and an approval rating of 68 per cent. Rarely for a national leader, she left office on her own terms, remaining Germany’s most popular politician until the week she stepped down, set to become the country’s elder stateswoman. Less than three months later, Russia invaded Ukraine – immediately throwing her legacy into doubt. The 21st-century Germany she built is extraordinarily dependent on Russian energy thanks to years of dovish engagement with Vladimir Putin’s regime, placing German business interests firmly

Germany’s wilful ignorance is hurting Ukraine

Berlin, Germany Germans have a complex relationship with their Erinnerungskultur, or ‘culture of memory’. Whenever the word appears, it almost invariably refers to how the country thinks about its difficult past. Determined never to forget the horrors of the Nazis, Germans have spent decades reflecting on the evil that their forbears unleashed upon the world. And yet this process isn’t helping us understand our present. As a German-Canadian whose grandparents spent their childhoods in bomb shelters, I’ve long respected German memory culture. But events in Berlin on VE Day this past Sunday have shaken my faith. Today, Ukraine is revealing how little we actually understand about our history in Germany. Ukraine’s

The relentless march of Europe’s zombie centrists

Journalists rarely had it so easy as when it came to writing up the final result of the French presidential election on Monday morning. The copy almost wrote itself: the triumph of moderation, demonstrated by a convincing win for centrist Emmanuel Macron over his far-right challenger Marine Le Pen; the clear defeat of disruptive extremist politics that might otherwise have threatened European stability; and the return to EU business as usual, with euroscepticism once again off the table and the re-establishment of a stable Franco-German axis in charge of Brussels. Easy, but ultimately unconvincing. Centrists who can be trusted not to be too radical may indeed be in power in

How long can Olaf Scholz last?

Just what exactly is going through German Chancellor Olaf Scholz’s head? ‘Russia must not win this war’, he says. But it is less certain about who Scholz wants to be the victor. Publicly, the Chancellor says that he is giving Ukraine the ‘strongest possible support’. But in a highly anticipated speech last week, he once again refused to deliver the heavy weapons Kyiv has been asking for. Many in Berlin were left wondering why Scholz chose to do the speech at all given that he had nothing new to say. He was disingenuous in his excuse that the G7 had agreed that the Ukrainian army needed Soviet-era technology. The Netherlands, Canada, the UK and US

Will economic pressures weaken the West’s alliance?

This morning’s retail sales update isn’t pretty. Sales volumes fell by 1.4 per cent last month, following a 0.5 per cent drop in February (revised, and worse, than the original estimate of 0.3 per cent). The biggest fall came in non-store retail shopping: almost an 8 per cent month-on-month fall. However, the Office for National Statistics points out that overall sales volumes are still roughly 20 per cent higher now than they were pre-pandemic. But the recent drop indicates that the cost-of-living crisis is already worsening, as inflation – now at 7 per cent – is taking its toll on real incomes and is already prompting changes in consumer behaviour.

The case against a European army

The end of the Cold War was used by the victors to unite Germany. To balance this, Europhiles created a single currency which, by replacing the deutschmark, would ‘hold Germany down’. The reverse occurred. The euro made Germany the most important power in the European Union, and so it remains. Today, the same Europhiles want to use the rebirth of the Cold War to encourage Germany to re-arm. To balance this, they want to create a truly ‘European’ defence, of which Germany would be a vital part. The EU would prevent Germany from using its force for national needs. For this purpose, they say, Nato would be no good because

Zelensky has snubbed Germany’s President

When Volodymyr Zelensky told the German President Frank-Walter Steinmeier yesterday that he did not want to see him in Kyiv, it hit his delegation like a slap in the face. The political class in Berlin still underestimates the depths of mistrust caused by Germany’s Russia policy. Whether trust with Eastern Europe can be rebuilt will depend on Berlin’s support for Ukraine – and certainly not on empty words, gestures and visits. Steinmeier had been on a state visit to Poland when Zelensky’s message reached him. He had travelled there in order to meet with President Andrzej Duda – in itself no easy encounter. Tensions between the two countries run higher than many

Boris and Scholz parade the new Europe

Russia’s invasion of Ukraine has changed Europe forever. That was the argument that Boris Johnson made on Friday when he held a joint press conference with German Chancellor Olaf Scholz. One of the changes Johnson was keen to emphasise was that European leaders are united in their support of Ukraine and against Putin. This, he argued, was one of the ways in which the Russian President had failed: he had sought to create divisions in Europe, but had ‘demonstrably failed’. ‘The Europe we knew just six weeks ago no longer exists: Putin’s invasion strikes at the very foundations of the security of our continent,’ he said, adding: ‘Putin has steeled

Germany’s progressives have a Putin problem

Eighty-nine years ago this week, the German Social Democrats in the Reichstag cast the only votes opposing Adolf Hitler’s dictatorial power grab, the Enabling Act. Today’s SPD members often cite that moment as the proudest in their party’s 146-year history. With a memory like that, there is something awkward about the current SPD Chancellor’s position. Olaf Scholz is now having to come to terms with decades of SPD appeasement towards the dictator in Moscow. Before Putin’s invasion, Russian doves could be found across the German political spectrum, but Scholz’s now-ruling SPD has an especially long and developed history of Kremlin cosiness. The party has been at the centre of German

Is Germany already backsliding on Russia?

Just three weeks after Chancellor Olaf Scholz announced that Germany would directly arm Ukraine, Europe’s economic powerhouse is running out of weapons to send. ‘We’re delivering Stingers. We’re delivering Strelas. The Defence Minister has looked at what we can deliver but honesty also requires us to say: we don’t have enough,’ Foreign Minister Annalena Baerbock told the Bundestag last week. ‘If we could conjure up more weapons to send, then we would.’ Scholz then appeared to revert to an old German habit: trumpeting the importance of diplomacy as an end in itself. In the very same tweet in which he thanked Ukraine’s war-time President Volodymyr Zelensky for his speech to

Germany’s attitude to Russia is changing. Does it go far enough?

It’s hard to overstate the pace of the change now under way in Germany. A country that had been defined by its reluctance to deploy military force is now sending lethal weapons to Ukraine and promising €100 billion more in defence spending. The Nord Stream 2 pipeline, which would have ferried more Russian gas to Germany, has been abandoned. Germany has accepted Russia’s exclusion from the Swift banking system, in spite of the collateral economic damage. All of this adds up to the biggest policy shift that I can remember. Perhaps the most significant change is in the tone of German public debate. Take last weekend’s gathering of 100,000 on

A new Europe is emerging from this crisis

With every hour that Kiev holds out, the geopolitics of Europe changes more. Germany, which so values its prohibition on sending weapons into warzones, has just announced that it is sending 1,000 anti-tank weapons and 500 Stinger missiles to support the Ukrainian forces. I expect that defence spending will rise considerably in the coming years Germany is also allowing other Nato members to export arms with German-made parts to Ukraine — which will make a material difference to the supplies that the Ukrainian government receives. Yesterday evening, it was announced that Russian banks are going to be cut off from Swift. The EU seems to have realised how unsustainable their position was when

It’s time for Germany to stand up to Russia

In his novel The Loyal Subject, which appeared on the eve of the first world war, Heinrich Mann, the brother of Thomas, satirised Wilhelmine Germany as a hotbed of chauvinistic nationalism. The servile nationalism that Mann mocked could not be further from the ethos of the Federal Republic of Germany today. So pervasive is Germany’s eirenic disposition that on Thursday, as Russian president Vladimir Putin ravaged Ukraine, Lieutenant General Alfons Mais, the head of the German army, took the unusual step of turning to LinkedIn to ventilate his exasperation at the impotence of his own fighting forces. ‘In my 41st year of peace-time service, I would not have thought that

Head of Germany’s army admits: we’re not ready for war

You wake up in the morning and realise: there is war in Europe. Yesterday the army held a ‘Day of Values’. The core question was ‘what do we serve for?’ It has never been easier to explain this to the generation that did not live through the Cold War. In my 41st year of peacetime service I would not have believed that I would have to experience another war. And the Bundeswehr, the army that I am privileged to lead, is more or less empty handed. The policy options we can offer in support of the alliance are extremely limited. We all saw it coming and we were not able

The moral courage of P.J. O’Rourke

Was it Socrates who said that chaos was the natural state of mankind, and tyranny the usual remedy? Actually it was Santayana, and boy, did he ever get it right. My friend Christopher Mills has given me a terrific book, The Wages of Destruction by Adam Tooze, about the making and breaking of the Nazi economy. I thought I knew everything there is to know about that period, but I hadn’t thought of global economic realities, the ones that actually won the war. Germany’s limited territory and lack of natural resources led to war. Germans had been starving since the end of the Great War, and needed the corn of

It’s too late to break Europe’s gas reliance on Russia

So, Nord Stream 2 will not be plugged into Germany’s gas grid. A little surprisingly, Chancellor Olaf Scholz has been first out of the blocks this morning in the western economic response to Putin’s recognition of breakaway states in eastern Ukraine. The block is not total: what Scholz says is that the certification process for the pipeline will be halted — leaving open the possibility that it might, after all, be connected if Putin starts to behave himself, or Germany becomes especially desperate for gas. Nevertheless, it is a significant move which will have an economic impact on Russia. But it is astonishing that the project was ever allowed to come

How the Ukraine crisis ends

Vladimir Putin does not think in the way the West does. Of course sanctions will hurt. But so what? He may be wrong in his strategic calculations, but he is not, as Boris Johnson claimed over the weekend, irrational. Putin is an old-school strategist. This is one of the reasons that sanctions will not have the desired impact. An import ban on Russian gas would definitely hurt the Russian economy, but that seems highly unlikely. Italian President Mario Draghi said on Friday that we should not touch gas. It is now the guy who sits in Moscow, rather than Draghi, who is willing to do ‘whatever it takes’. An import