Berlin’s Balancing Act

In January, a disturbing report made the rounds in Berlin’s corridors of power. Written by Hans-Peter Bartels, the German parliament’s commissioner for defense oversight, the 95-page document laid out the abysmal state of the German military. Soldiers, the report said, lacked guns, ammunition, and night-vision goggles. Some new recruits were being forced to wait 45 weeks to get their uniforms. Only one-third of Germany’s 123 Typhoon fighter jets were fully deployable, as were just five of its 60 Sikorsky CH-53 transport helicopters. Military training sometimes featured “laughable improvisations,” the document said; earlier reports had described battle exercises during which soldiers used broomsticks to stand in for gun barrels and passenger vans instead of armored personnel carriers. The report was damning but not surprising: for years, the German government has starved the Bundeswehr of funds, leaving it with only 170,000 soldiers, few of them with combat experience, down from over 500,000 in 1990. 

The decline of Germany’s military comes at a particularly bad time for the country. U.S. President Donald Trump has repeatedly singled Germany out for free-riding on U.S. security guarantees and for the country’s huge trade surplus with the United States. No other U.S. ally has received more of Trump’s ire. “We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military. Very bad for U.S. This will change,” Trump tweeted at the end of May. 

Trump’s bluster and oversimplification aside, the core of his accusation—that Germany has benefited more from the global order than the country has contributed to it—is largely correct. And the claim isn’t new: other U.S. presidents, including Barack Obama, have made similar points. For decades, Germany has sheltered under the U.S. security umbrella and built its economy on the back of the global economic system created and upheld by the United States. Despite recent steps toward taking a more active role in Europe—engineering a eurozone bailout deal, for example, and brokering an agreement with Turkey to stem migrant flows—Germany has long shied away from global leadership. Now, however, it has no choice but to act if it wants to preserve the liberal order on which its prosperity is built. It must do more to promote free trade, take greater responsibility for its own security, and push Europe to make deep economic reforms. Above all, Germany needs a serious national debate on its vision for Europe and the wider region, and on the role the country wants to play in the world. 

MADE IN AMERICA

More so than any other major European country, today’s democratic and prosperous Germany is the product of U.S. engagement in Europe. Nearly 70 years ago, the Marshall Plan jump-started Europe’s postwar reconstruction and created the institutions that brought together former enemies and later grew into the European Union. Those institutions, as well as the U.S. guarantee of Western Europe’s security during the Cold War, allowed West Germany to get back on its feet without alarming its neighbors. 

Today, the German economy dominates Europe. German companies have built factories and distribution hubs all over the world. German container ships ply the oceans, bringing cars, precision machinery, and other industrial goods to every corner of the globe. All told, Germany earns a massive 46 percent of its GDP by selling goods abroad, more than any other major country. Even China and Japan, two other great beneficiaries of free trade, generate only 20 percent and 18 percent of their respective GDPs through exports.

Germany has long shied away from global leadership.

But until now, Germans have been reluctant to engage in any robust debate over their country’s responsibilities for maintaining the global order. During the Cold War, the horrors of the recent past gave rise to a reflexive pacifism in West Germany. The country strove for moral clarity and was happy to leave the messy business of power politics to others. At the time, such reticence was also smart policy. It made sense for West Germany, on the frontlines of the confrontation and with wary neighbors, to speak softly and carry no stick. 

Even after the Cold War ended and Germany reunified, little changed. When the West went to war, as it did to liberate Kuwait from Saddam Hussein in 1990–91, Germany sent a check instead of soldiers. Less than a decade ago, after Russia’s invasion of Georgia in 2008, Berlin held up NATO from planning for a conflict with Russia for fear that such plans would antagonize Moscow. Among German elites, anything other than perpetual peace on the continent seemed unthinkable.

Since then, events in Europe have forced Germany to assume more responsibility. The eurozone debt crisis of 2010 didn’t abate until German Chancellor Angela Merkel threw Germany’s financial power behind hastily constructed bailouts. And since Russia’s annexation of Crimea in 2014, Merkel has led Europe’s response to Moscow’s aggression. But each time, Germany has taken the lead only reluctantly, at the last minute, and without a broader vision of its aims and role in the world.

Now, Trump is accelerating change. Sigmar Gabriel, the German foreign minister, recently said that Germany must “resist” Trump or be “complicit” in U.S. policies that “put peace in Europe at risk.” Merkel, although more circumspect, has said that her view on globalization “differs very sharply” from Trump’s and has called on Germany to assert its interests on trade. Speaking to supporters at a campaign rally in Bavaria in May, she said that the days when Germany could depend completely on the United Kingdom and the United States “are to some extent over” and that “we Europeans must really take our destiny into our own hands.” 

AMERICA, STILL INDISPENSABLE

Despite such talk, Germany has little alternative but to maintain the transatlantic relationship. The United States buys nine percent of Germany’s exports, more than any other country. Beyond that, without continued U.S. support, the liberal world order that has generated German prosperity would crumble. And on security, Merkel recognizes that Europe is nowhere near ready to go it alone. “We need the military power of the United States,” she said at the Munich Security Conference in February. As difficult and unpredictable as Trump can be, Germany has no choice but to engage with him. 

Berlin is already doing so. German officials, including Christoph Heusgen, Merkel’s foreign and security policy adviser, say that relations with the Trump administration at the working level, including cooperation on defense and counterterrorism, are better than expected. Merkel has tried to build a back channel to Trump by giving his daughter Ivanka the kind of reception in Berlin normally accorded only to foreign leaders. On trade, German officials tirelessly remind their U.S. counterparts that German companies employ 700,000 people in the United States and that U.S. exporters depend just as heavily on the EU’s 500 million consumers as European companies do on the United States’ 300 million. Merkel has also confirmed that Germany aims to meet one of Trump’s main demands by spending two percent of its GDP on defense by NATO’s agreed date of 2024, up from the current figure of 1.2 percent. (Many observers, however, believe that Germany and several other NATO members will not reach the target without relying on bookkeeping tricks, such as moving foreign aid into their security budgets.)

Today’s democratic and prosperous Germany is the product of U.S. engagement in Europe.

As well as preserving its relationship with the United States, Germany must, to secure its own self-interest, play a more active role in maintaining the broader global order, especially when it comes to trade. Here, Germany can do much better than it has in the past. In 2016, for instance, protests in cities across Germany helped scuttle a prospective EU-U.S. free-trade deal, the Transatlantic Trade and Investment Partnership (TTIP). A majority of the German political and business elite backed the agreement but offered only lukewarm public support, allowing a few well-financed professional activist organizations and their supporters in civil society and the media to control the conversation. They painted trade as a threat and played on widespread resentment toward the United States. The episode revealed a profound naiveté in large parts of German society about the sources of the country’s prosperity.

After the United Kingdom’s vote in June 2016 to leave the EU and Trump’s election on an “America first” agenda in November, Germany’s elite seemed to finally wake up to the country’s economic vulnerability. Berlin helped push through an EU-Canada trade deal in late 2016 and agreed to the initial framework of a similar EU deal with Japan in July. Merkel has also said that she hopes to restart TTIP negotiations with Washington. Also in July, at the G-20 summit in Hamburg, Merkel began recruiting rising powers, such as Brazil and India, to play a greater role in maintaining free trade and global economic governance.

REFORMING EUROPE

Germany will not succeed in defending the current global system if it does not also commit to helping Europe get its house in order. The eurozone’s debt and banking crisis is festering. Two of the continent’s largest economies, France and Italy, have sunk into a decades-long malaise. Unemployment in the eurozone is falling but remains dangerously high. The EU cannot agree on how to handle the continued influx of refugees and has disguised its inability to police its outer borders with a deal that pays Turkey to prevent migrants from crossing into Europe. Meanwhile, illiberal regimes and populist movements threaten the continent’s political unity. 

Although Germany is Europe’s most powerful country, it cannot fix these problems alone. It must work with the rest of the EU. Hopes are high in Berlin that the new French president, Emmanuel Macron, a German speaker who ran on a pro-EU agenda, can succeed in reforming the statist and stagnant French economy, something that his predecessors have failed to do. There’s talk in Berlin of a grand bargain between the two countries. In return for German support for a common eurozone budget and a new eurozone finance ministry, France would implement serious economic reforms to reduce the likelihood that the European Central Bank will have to bail out its economy and major banks. Full fiscal union would be off the table, and the devil would be in the details, but Berlin should push hard for an agreement. Europe cannot remain stable and secure without revived Franco-German cooperation.

Germany also needs to get the EU to take some of the burden of military leadership off the United States. It has made an important start: in 2016, Berlin hiked the Bundeswehr’s budget for the first time since the end of the Cold War. This year, Germany’s military spending will rise by another eight percent, or $3.1 billion, part of a $12 billion boost in defense spending by non-U.S. NATO members planned before the U.S. presidential election. The military is also creating a new cyber and information warfare command, to be staffed by 13,500 people. And it has bought new equipment, including $500 million worth of armored vehicles currently deployed by German peacekeepers in Afghanistan and new frigates to protect global trade routes from pirates.

To better coordinate European defense, the Bundeswehr now operates combined units with forces from France, the Netherlands, Poland, Romania, and other countries, which could potentially serve as the basis for a pan-European fighting force. In the Baltics, the Bundeswehr has taken a leading role in NATO’s forward defense by supplying the main contingent of a multinational force in Lithuania, a monumental step given Germany’s long-standing reluctance to confront Russia. In July, Macron and Merkel announced the joint Franco-German development of a next-generation fighter jet. Germany is also helping fund a new, $1.5-billion-a-year EU-wide program for joint defense research. 

Long before Trump’s election, Merkel and much of her government recognized that Europe would have to do more when it came to security. To do so, however, Berlin must confront a deeply ingrained culture of pacifism and disengagement in Germany. Although German soldiers are currently deployed in 16 foreign hot spots, including Afghanistan, Iraq, Mali, and the waters off Somalia, their mandates almost always exclude combat. The German navy’s new frigates can take on small craft but lack the weaponry to confront an advanced adversary. In June, the Defense Ministry abandoned a plan to lease military drones from Israel, likely because the mere possession of such lethal aircraft would have proved too controversial during an election year. As long as Germany does not have a clear strategy for how and why it deploys its forces, its military upgrades will remain halfhearted. And as long as the Bundeswehr’s mandates nearly always exclude combat, the country’s allies will continue to worry that Germany will shirk its responsibilities in a security crisis.

As part of its leadership role in Europe’s foreign policy, Germany must face up to the challenge to the continent’s postwar order posed by Russia. In recent years, Russia has worked to destabilize Western countries by interfering in their elections, spreading disinformation, supporting populist and far-right parties, and undermining Western institutions such as the EU. Russia is deeply involved in German politics. It operates a network of German-language propaganda channels and hires prominent Germans as Kremlin lobbyists. If Russian President Vladimir Putin wanted to keep the 2016 U.S. Democratic nominee, Hillary Clinton, out of the White House, he likely has an even greater antipathy to Merkel, who has worked to ensure that EU sanctions on Russia in response to its annexation of Crimea will remain in place. In early July, Thomas de Maizière, Germany’s interior minister, said that the government expected Russia to attempt to influence this year’s German general election, perhaps by releasing data stolen from the Bundestag, Germany’s parliament, in 2015. 

Germany needs to get the EU to take some of the burden of military leadership off the United States.

Despite all of this, many Germans still oppose policies they perceive as anti-Russian. According to a Pew survey released in June, 25 percent of Germans trust Putin, compared with just 11 percent who trust Trump. Sanctions against Russia are unpopular with German businesses, which have closed some 500 Russian subsidiaries since 2014. Merkel also faces opposition from her own coalition partner, the Social Democratic Party, which takes a more sympathetic stance toward Russia. Merkel’s foreign minister at the time of the Russian invasion of Ukraine, the Social Democrat Frank-Walter Steinmeier, accused NATO of “saber rattling” by deploying units to the Baltic states—ignoring Russia’s threats and its far larger military buildup along its western border. Merkel’s Social Democratic predecessor, Gerhard Schröder, has worked as an executive for an energy company with close ties to the Kremlin since leaving office and still wields influence in his party. Even Merkel herself has not been uniformly tough against Russia. In June, after the U.S. Senate voted to strengthen sanctions on Russia in the energy sector, she confirmed plans to go ahead with the controversial Nord Stream 2 gas pipeline, to be built by a German-Russian consortium in which Schröder is a key executive. The pipeline will run from Russia to Germany and give Russia an even greater share of Europe’s energy market, in direct opposition to EU policy.

To successfully deter Russia, Europe will depend on continued U.S. engagement. So far, the Germans’ worst fears have been allayed. “One of the issues we were most worried about from early news of where the Trump administration would go was that they would make a deal [with Russia],” Heusgen told Stephen Hadley, a former U.S. national security adviser, at the American Academy in Berlin in June. “This has proven wrong. . . . Trump was very tough on Russia, very tough, and very clear also on Crimea.” U.S. actions have also reassured Germany. Washington has kept Russian sanctions in place, deployed more troops and equipment to Europe, and boosted funding by $1.4 billion, or 41 percent, for an Obama-era program to fortify NATO’s eastern defenses. U.S. allies such as Germany see such actions as more significant than Trump’s often incoherent public statements on Russia.

PHYSICIAN, HEAL THYSELF

In order for any effort to reform Europe to succeed, Germany will have to reform itself as well. Germany’s economy is doing well now, but its extreme dependence on exports exposes it to great risks from the growing global anti-trade backlash. Within the EU, Germany’s vast surpluses in trade and capital have not won the country any friends. Large investments of surplus export earnings in everything from Greek debt to Spanish real estate have helped destabilize the eurozone. Because German taxpayers end up holding the bag for the resulting losses, moving to a more stable economic model is in their own interest.

To rebalance its economy so that it relies less on exports, Germany needs a fresh round of reforms to unleash domestic growth. That means more spending power for citizens (Germans pay some of the highest taxes in the world), higher government investment (for example, in education, infrastructure, and defense), and deregulation to spur more domestic investment by German companies. These reforms, because they would boost German demand for foreign goods, could be Berlin’s most important contribution to any Franco-German plan to rebalance the eurozone.

Most difficult of all, German politicians will have to convince a skeptical public that Germany needs to carry its fair share of Europe’s security burden. Even in a time of rising tensions, most Germans oppose any increase in military spending. In a survey conducted in December 2016 by Forsa, only 32 percent of Germans polled approved of increased outlays. A similarly small minority endorsed the Bundeswehr’s participation in combat missions. In the political parties, academia, and the media, skepticism toward the use of hard power is just as widespread. Too many years of collecting a rich peace dividend and standing by while others provided security have produced muddled thinking. Many in the German elite still seem to take perpetual peace in Europe for granted, are reluctant to contemplate that using hard power is ever necessary, and do not acknowledge that Germany has a bigger role to play in upholding the European order.

Dealing with these political realities would be difficult enough, but Trump’s toxicity in Germany has made Merkel’s task even harder. According to a June survey by Infratest dimap, 92 percent of Germans disapprove of Trump; only five percent approve. And only 21 percent of Germans asked said they considered the United States “a trustworthy partner,” down from 59 percent last November. (At 94 percent, France was the most trusted partner. Even China scored 36 percent.) In a poll conducted that same month by the Pew Research Center, among 11 European countries surveyed, Germany had the least trust in the United States.

Merkel’s challenger for the chancellorship in the September elections, the Social Democrat Martin Schulz, has tried to tar her as insufficiently hostile to Trump, accusing her of letting Trump “humiliate” Germany. Schulz is also trying to paint Merkel as a warmonger for raising military spending; in his stump speeches, he opposes higher defense outlays and calls for hikes in social spending instead. He is clearly hoping to copy Schröder’s come-from-behind election victory in 2002, when Schröder capitalized on fierce public opposition to U.S. President George W. Bush and the impending war in Iraq.

Merkel, therefore, has to tread carefully between preserving a working relationship with Washington and keeping her distance from Trump in the eyes of her electorate. Her statement in May that Germany and Europe could no longer fully rely on their traditional allies and would have to chart their own course didn’t attack Trump directly. And although she and other leading German politicians have said similar things before, most of the German and international media interpreted her statement as a major stab at Trump, something that probably won her points with German voters. She has also closed ranks with Macron, a popular move among Germans. 

Trump’s election and his continued snipes at Germany have raised the specter of a dangerous breakdown in transatlantic relations. But they have had one beneficial effect: accelerating Germany’s process of rethinking its global role. “Things are getting serious,” Heusgen said at the American Academy event in June. “We have problems getting closer to Europe,” such as Russian aggression and chaos in the Middle East. “Now we see that we cannot sit back anymore and have the Americans solve all the problems for us. . . . This is our hope: that this is a lesson for the Europeans that we have to get our act together and assume more responsibility.” There are no guarantees, he said. “We’ve always been able to shoot ourselves in the foot, but there is a certain chance in Europe that we move forward.” With a U.S. president like Trump, Berlin may no longer have a choice.