Germany’s soft spot for Russia Business deals inform the nation's politics

Mounted atop a former warehouse in Hamburg’s industrial-era docklands, the billowing form of the Elbphilharmonie concert hall rises above Germany’s second-largest city like an ocean wave. The glass-panelled building crowns a new, forward-looking section of the city, a modern and elegant counterpoint to the seedy Reeperbahn nearby. Built with the help of taxes raised from round-the-clock trade from the sprawling port it overlooks, it’s a testament to the country’s remarkable success as a trading nation, as globalisation opened new markets for “Made in Germany” goods.

The building’s scope and ambition echo the Victorian grandeur that can be found in Liverpool and London, and the epic public buildings of Paris, Antwerp and Amsterdam. It’s a building that marks a golden age. Its foundation stone was laid in 2007, when Germany was still Exportweltmeister (world’s top exporter) and before the convulsions of Brexit, Donald Trump’s trade wars, and Vladimir Putin’s efforts to carve up and control Ukraine. The opulent venue was finally finished in 2017, the same year Angela Merkel secured her final term as chancellor and the far-Right AfD showed signs of its political potential. Less than a decade later, it looks like a totem to a bygone era.

Few countries profited from the postwar order as much as Germany. It was well protected from the tumult of power politics thanks to America’s protective shield which allowed the country’s leaders to pursue a mercantilist agenda. But the world has turned more volatile. The re-election of Donald Trump effectively killed off the post-Cold War vision of ever greater global integration. That’s a particularly acute problem for the world’s most trade-dependent major economy and creates a dilemma about where and how Germany will sell its goods.

Just how unprepared Germany is for the crumbling world order emerged in spring 2022, when a diplomatic scandal unfolded. It involved Frank-Walter Steinmeier, the President of Germany — a ceremonial role, which is supposed to be apolitical, even though it is often filled by a former politician. So it’s unusual for a German president to get embroiled in an international spat. But that’s what happened.

A few weeks after the war in Ukraine broke out, Steinmeier was getting ready for a journey to Kyiv in a show of support that was a tantalising opportunity for him. But the ensuing fiasco served as a prime example of why Europe’s largest economy struggles to take a leading role in global affairs.

Just days before Steinmeier’s planned departure, a train station in the hard-fought Donetsk Oblast was hit by a Russian rocket, killing dozens of people who were trying to flee. In the midst of that carnage, Steinmeier was still hoping to make an appearance, but Ukraine baulked. It was a shock given Germany’s critical role in the country’s support network.

A brief note arrived via diplomatic channels stating that Steinmeier’s visit would be “more substantial and more acceptable” if he travelled independently. That’s diplomatic language for “stay away”. It was a clear affront, and Steinmeier’s ego was bruised. For weeks he stewed. Chancellor Olaf Scholz rallied to his side, vowing not to travel to Kyiv until the issue was sorted out. So while Ukraine was fighting for its survival and clamouring for artillery, air-defence systems and ammunition, it had to deal with the vanities of a man who played a key role in emboldening Russia’s aggression.

Before being appointed as president in 2017, Steinmeier helped deepen Germany’s dependence on the Kremlin. He was foreign minister under Angela Merkel and before that the chief of staff for Gerhard Schrӧder. After leaving power, the former chancellor was quickly and controversially hired as a well-paid adviser to Russian firms.

Under Steinmeier’s watch, Germany started mainlining Russian gas via the first Nord Stream pipeline in 2005. Steinmeier extended those ties while serving as Germany’s top diplomat twice. In his first stint (2005–9) he refused to let the murders of opposition figures Anna Politkovskaya and Alexander Litvinenko or the invasion of Georgia get in the way of good vibes between the countries. During his second term as foreign minister (2013–17), Russia illegally annexed Crimea, which Steinmeier and many other leading German figures quickly normalised.

Shortly before the land grab in early 2014, Steinmeier was in Moscow and set an accommodating tone, urging a new “positive agenda” in relations with Russia. He underscored that message, which was the mainstream view in Berlin, in an interview with the Russian newspaper Kommersant during the visit: “It is important to me to offer a trusting and constructive cooperation with Moscow.” He even suggested that the Kremlin had a role to play in resolving political tensions in Ukraine — a dangerous signal for pro-democracy demonstrators at a time when the Maidan uprising was in full swing. The message from Berlin was that Germany’s relations with Russia were a higher priority than whatever else was going on in the region.

That approach didn’t change following Crimea’s annexation or after Russia-backed forces took control of parts of the Donetsk and Luhansk regions of Ukraine. Instead, Steinmeier sought to continue negotiations with Moscow and lobbied for reining in sanctions, citing concerns that Russia could be destabilised. He then went a step further and proposed a formula as part of the Minsk talks to freeze the conflict in eastern Ukraine.

It was clear what the priority was: Germany needed its fix of cheap Russian energy. And like any addict, it wanted more. The Nord Stream 2 pipeline was supposed to be another direct injection from Russian gas fields to Germany’s industrial infrastructure. The project was given the green light in 2015, just one year after the annexation of Crimea — so much for punishing the aggressor and standing strong for liberal values.

For years, Steinmeier and the rest of the German establishment continued to back Nord Stream despite warnings by the United States and other European allies that it posed a security risk for Germany and in turn Nato. Merkel defended Nord Stream, as did Olaf Scholz, as did the entire political mainstream in Berlin, collectively dodging political culpability by disingenuously labelling the pipeline as a mere commercial project. The attitudes towards Nord Stream and Russian gas stand out, but aren’t unique. German politics is largely an extension of the country’s business interests. Commerce regularly outweighs broader concerns of politics, security, or much less moral values, because of the central role that economics and affluence plays in the identity of postwar Germany. So when Germany’s elite saw how much money could be made in tapping Russia’s vast resources, the political establishment fell into line by not poking the bear in Moscow, regardless of its actions. It didn’t end there.

The head of Siemens went to meet with Putin less than two weeks after Crimea’s annexation, facilitating Moscow’s plans to decouple the peninsula from Ukraine’s power grid Siemens also got deeply involved with the Russian rail network. A veritable conga line of executives gave their seal of approval to the Kremlin’s aggression. BASF, Uniper, Volkswagen and Daimler were active as well. So while the postwar order was under attack in Germany’s own backyard, the country was actively profiteering.

Ahead of the planned trip to Kyiv, Steinmeier did offer a mea culpa after being accused of having a “spider’s web” of contacts in Russia, connecting his stance with a broad-based shift towards detente starting with the 1975 Helsinki Accords. But given his efforts to engage with the Kremlin, it’s hardly surprising that Kyiv wasn’t thrilled about serving as a backdrop for his rehabilitation.

A thaw only started with a telephone call between Steinmeier and Ukrainian President Volodymyr Zelensky in May 2022. Finally in October (more than seven months after the war started), the German president visited Ukraine. “My message to the people in Ukraine is: You can rely on Germany!” he said during the visit. The boast rang hollow then and the emptiness echoed long after.

To be fair, there are historical reasons why Germany has a soft spot for Russia. Berlin is dotted with a dozen Soviet monuments, including an imposing memorial and a cemetery with the remains of more than 13,000 Red Army soldiers. Unlike in former Eastern European countries, no cranes or bulldozers have come to topple them. That’s part of Germany’s post-Nazi memory culture: Soviet troops were the first to enter Berlin. In addition to that historical debt, the people in former communist East Germany have a certain affinity towards Moscow that was nurtured during years of hardship following reunification. Having said that, standing up to Russia doesn’t come as naturally to Germany as it does to America and Great Britain. And it’s especially hard to do when cheap Russian energy is fuelling the economy.

Germany’s policy of appeasement with Russia dates back at least to Willy Brandt’s Ostpolitik in the Seventies when the fate of the East Germans was at stake and reaching out to the Kremlin opened up the prospect of creating holes in the Iron Curtain. After reunification, Germany didn’t have the same noble aims. Instead, the focus was on money.

On top of the Russia question, Germany struggled to get its mind around a military conflict. For Berlin’s mercantilist mindset, the economic risks of an invasion of Ukraine were too high even for Putin. That stems from a post-military perspective. After spending decades under America’s shield, the country’s leadership had embraced Francis Fukuyama’s “end of history” idea after the Berlin Wall fell. The great ideological battles were over and liberal democracy had won. Rather than brinkmanship and bloodshed, conflicts could be resolved through diplomacy and international institutions. That made a robust military unnecessary. It was an appealing (and indeed self-serving) approach for Germany in its reconstituted form, straddling the former Iron Curtain and striving for affluence above all else.

There was also solid public support for leaving militarism behind. For most Germans, military spending was a waste of money and an uncomfortable reminder of the country’s Nazi past. Every mission was hotly contested by the public, and hardly any politician was going to stick their neck out and demand more money for weapons and soldiers. Before the invasion of Ukraine, German news coverage underscored doubts about the military, focusing on the Bundeswehr’s scandals and dysfunction. The outcome was feeble spending, with Germany regularly missing Nato’s guidelines to spend at least 2% of GDP on defence. You would have to go back to 1991 to find that level of investment.

In that context, Scholz’s Zeitenwende speech a few days after Russia’s invasion of Ukraine was indeed historic. He took advantage of the moment by announcing a special €100 billion fund to upgrade the military and broke with postwar tradition by promising to deliver lethal weapons to a conflict zone. Germany did become one of Kyiv’s chief suppliers of military equipment, behind only the United States. But the momentum was choppy and every new step was accompanied by hand-wringing over fears of escalation.

The slow walk of support, with Scholz hemming and hawing over weapons, gave the impression that Germany doubted that a Ukraine victory was possible and preferred normalisation sooner rather than later.

At the end of the day, Germany’s motivations are rather straightforward. Although the country moralises about freedom, democracy and human rights, its chief aim is protecting German affluence. Even after the invasion, the country continued filling up Russian coffers. In 2022 it transferred €97 million every single day for energy and other imports, a 6.5% increase. The following year, trade with Russia still totalled nearly €12.6 billion despite sanctions and the end of most energy purchases, making the country more important to the German economy than EU partners Greece, Bulgaria and Lithuania — and of course more important than Ukraine. Also, exports suddenly shot up to Central Asian countries like Kyrgyzstan, indicating former Soviet republics were serving as a way station for goods heading to Russia.

Aside from the blow to Germany’s credibility, Scholzing hampered progress towards a military capable of deterring or containing conflicts in the future. “Decades of counting pennies” left the country’s defence forces with a stockpile of ammunition that would only last days in the event of an attack. Radio equipment, armoured vehicles, ships and planes were all dated. The total price tag for modernising the German military has been pegged at some €300 billion, or three times the Zeitenwende budget, and that’s looking optimistic given the proliferation of crises.

In the wake of February’s federal election, the incoming Chancellor Friedrich Merz has moved to secure more funding for Germany’s military. After a fiery speech from US Vice President JD Vance at the Munich Security Conference just before the vote, it has become increasingly clear even in Berlin that action is needed. Taking advantage of the still-serving parliament, which is friendlier to military outlays than the one just voted in, Merz plans to amend Germany’s constitution to exempt defence spending from fiscal limits and pledged to do “whatever it takes” to protect the country.

But Germany’s military impotence isn’t just about money and hardware. There are also severe structural issues that are very common across the economy. Navigating the labyrinth of approvals and procedures means upgrading the Bundeswehr’s infrastructure alone would take half a century and getting approval for a commercially available flight helmet took 10 years — a negative highlight of German inefficiency. And on top of hard-power failings, Germany’s intelligence network has displayed alarming gaps throughout the years, downplaying threats and being unable to keep Russian and Chinese espionage in check.

February’s election also exposed how fragile support for strengthening the Bundeswehr could be. The far-Left Linke and far-Right AfD — both opposed to increased military spending and supportive of closer ties with Russia — surged in the polls. Young Germans, who would be called on to fight in the event of a conflict, disproportionately backed these fringes, raising the spectre of deep societal fractures if Germany is forced to reinstate some form of conscription to rebuild its armed forces. Cuts to welfare to free up defence spending could further inflame divisions.

Immediately after Russia’s invasion of Ukraine, General Alfons Mais, head of the German Army, lamented that the Bundeswehr was “more or less bare”. It was a collective failing. The political establishment had turned a blind eye to dangers, even if they were clear and present. That points to an issue of mentality, a more vexing problem than money or structure. Does Germany really want to lead? “We all saw it coming” after the annexation of Crimea but failed to act, General Mais said. “That doesn’t feel good! I am angry!”

Germany has a tendency to drift back to a reassuring status quo and avoid change. The uncomfortable reality is that it doesn’t have that luxury anymore. Business is no longer just business, and security is no longer a spectator sport, especially after the first Trump administration raised doubts about American commitment to its pampered European allies. The German Council on Foreign Relations warned in 2023 that it’s a question of when and not if the country has to fight in a war, predicting a window of less than a decade.

Despite the shock over its missteps, the country has struggled to shift gears. It took two years following Russia’s full-scale invasion of Ukraine for Rheinmetall (the maker of Leopard tanks) to break ground on a new munitions factory. Despite all of its lauded manufacturing prowess, Germany hasn’t come close to gearing up for the security challenges it faces, raising questions over the political will.

The war in Ukraine has exposed the country’s naïveté, even to Germans. Tanks rolling towards Kyiv showed how foolhardy it was to tie Germany’s energy system to a former KGB agent nostalgic for the dark days of the Soviet Union. The war also ended Germany’s soothing illusion that hard power is passé. There’s at least one positive thing to come out of Germany’s foreign-policy reality check: the country’s diplomats will almost certainly never justify deals with autocrats with the smug Wandel durch Handel (Change through trade) policy. Post-Ukraine pacts with Qatar and Saudi Arabia will instead be sealed in the name of energy security. But at least that requires a more active, case-by-case justification. The risk is that the interest in a fundamental reorientation of defence and foreign policy fades as soon as pressure eases. That’s often been the case in Germany, which is good at mobilising in a crisis, but equally adept at reverting to regular routines as soon as the heat is off. Germany’s leaders need a long-term strategy. Simply repeating the word Zeitenwende isn’t enough.

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A version of this essay appears in Broken Republik: The Inside Story of Germany’s Descent into Crisis by Chris Reiter & Will Wilkes, out now with Bloomsbury.

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