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reflections

Oct 29, 2015 | 01:04 GMT

6 mins read

Germany Tests the Waters With Russia

(Stratfor)
It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

Germany sent a signal Wednesday that it is rethinking its relationship with Russia, when Vice Chancellor and Economy Minister Sigmar Gabriel met with Russian President Vladimir Putin in Moscow. The visit's official purpose was to discuss bilateral trade, but since trade is linked to EU sanctions on Russia, the meeting suggests that Berlin is looking for ways to modify or even lift the current punitive measures against Moscow. However, such a decision would probably create friction between Germany and most Central and Eastern European countries, which means that Berlin is still not ready for a formal change of direction.

Before Gabriel's visit to Moscow, the German Ministry of Economy issued a news release focusing primarily on bilateral trade. According to the statement, during the first half of 2015, German exports to Russia contracted by 31.5 percent compared with the same period in the previous year. Russia is only Germany's 13th most important exports destination, but at a time when Europe's economic recovery is still fragile and China's growth is slowing, Berlin probably thinks it needs to diversify its exports as much as possible. The EU sanctions against Moscow make exporting goods to Russia complicated. In addition, Germany and Russia had planned to increase trade before the crisis, with talks for trains, chemical plants and other projects on the table.

Gabriel's visit happens only three months before the European Union has to decide whether to extend, expand or lift its economic sanctions against Russia. Germany may think it has reasons to push for a softer stance on Moscow. In recent months, the situation in Ukraine has become relatively stable, with only sporadic cease-fire violations. There were no major security breaches during Ukraine's regional elections this past weekend (though certain parts of eastern Ukraine did not vote), and the self-proclaimed Donetsk People's Republic recently started the second stage of withdrawing light weaponry. 

Germany is also interested in improving its ties with Russia for energy. On Oct. 8, Gabriel met with Gazprom's CEO in Berlin to discuss new infrastructure projects for Russian natural gas, including an expansion of the Nord Stream pipeline. As part of his visit to Moscow, Gabriel will also meet with Russian Energy Minister Alexander Novak on Oct. 29. Germany is the largest consumer of Russian natural gas. This fact forces Berlin to make sure that German and Russian energy companies continue to cooperate. It also forces Berlin to balance between containing Moscow's influence in Central and Eastern Europe and making sure Russia continues to sell natural gas at affordable prices.

In addition, Germany sees Russia as a key player in solving the crisis in Syria, which is directly linked to the increased arrival of asylum seekers in Europe. Most of Syria's asylum seekers are heading to Germany, which is putting political stress on Berlin. Germany has been softer than other Western European countries and the United States when it comes to discussing the future of Syrian President Bashar al Assad's government and the Syrian conflict.

Russia has reasons of its own to invite Gabriel. In recent months, a combination of falling oil prices and Western sanctions has taken a toll on the Russian economy, which could contract by as much as 4 percent this year. The Kremlin has been actively lobbying many European countries, such as Italy and France, to ease sanctions — though Moscow knows that Germany is the key to unlocking the sanctions. The Kremlin also sees meetings with high-ranking European officials as proof that it is not isolated and as a way to generate friction among EU members.

Putin is probably also thinking long term. Gabriel is the leader of the Social Democratic Party, which traditionally has been sympathetic to Russia. With the popularity of German Chancellor Angela Merkel's Christian Democratic Union party in decline because of the refugee crisis, there is a chance Merkel will not be victorious in the next general election, scheduled for 2017. The Social Democratic Party is also taking a hit because of the refugee crisis, but preserving Russia's good ties with the German center-left could be useful should the party perform well in two years. Similarly, Putin has scheduled a meeting with former French President Nicolas Sarkozy on Oct. 29. France will hold presidential elections in 2017, and Sarkozy's conservative party will probably make it to the second round of the vote.

Gabriel's meeting with Putin will draw the attention of Ukraine and the United States. Berlin and Washington have so far coordinated their reactions to the situation in Ukraine, and both administrations insist that fully implementing the Minsk agreements is key for any changes in the sanctions regime. The problem is that Germany and the United States may have different interpretations of what compliance with the Minsk agreements means. Lifting sanctions against Russia could damage Germany's relationship with the United States and also force the White House to increase its economic and military cooperation with former Communist states, from Poland to Romania. This would, in turn, deepen the European Union's already serious political fragmentation.

The problem for Gabriel and Putin is that it will take more than a trip to Moscow to improve the European Union's relationship with Russia. Though countries in the West such as Italy and France would welcome an easing of tensions with the Kremlin, most EU members in Central and Eastern Europe continue to push for a hard line on Moscow. In Poland, the nationalist Law and Justice party's election victory will only toughen Warsaw's position on sanctions. These countries already have a tense relationship with Germany over its strategies for dealing with the immigration crisis; Central and Eastern Europe have been particularly critical of German plans to relocate asylum seekers across the European Union, and Berlin is not ready for another confrontation.

With the wounds created by the debate over migrant quotas still open, Berlin will probably try to delay the debate over Russian sanctions for as long as possible. Considering that the existing sanctions do not expire until Jan. 31, Germany will probably choose to deal with one crisis at a time. However, Gabriel's meeting with Putin suggests that Berlin is testing the waters before making a decision on the future of Germany's relationship with Russia.

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