Why Schröder Loves Russia

9 november 2004

Alexander Rahr - Research Director, German-Russian Forum.

Resume: The German business world is pushing Schröder into Putin’s arms. This is not surprising, since Germany has always had a special business approach to Russia, unlike other Western countries.


Germany’s Federal Chancellor Gerhard Schröder believes that relations between his country and Russia are now much better than at any time in the past 100 years. His rapport with President Vladimir Putin reveals greater friendliness, even mutual trust, in comparison with his relations with U.S. President George W. Bush. This is a phenomenon that would have been totally inconceivable just a few years ago.


German businesses regard the Russian market as second only to China in terms of its lucrative prospects. The German treasury has received positive signals from Russia: the government of Vladimir Putin, in contrast with the former Yeltsin government, is making regular payments on its foreign debt; Russia’s sovereign debt to Germany has decreased from EUR 30 billion to about EUR 14 billion since Putin came to the presidential office. Part of the debt has been rescheduled. Germany is Russia’s biggest trade partner outside the Commonwealth of Independent States, and accounts for about 10 percent of Russia’s foreign trade and about 20 percent of all foreign investment in the Russian economy.


In international relations, Germany, Russia and France put up mild opposition to the U.S.-led war in Iraq in 2003, thus opening, albeit cautiously, a new chapter in postwar European history. The Iraqi crisis is destabilizing the construction of a new world order, and if the Americans are unable to get the situation in Iraq under control, their world leadership will be called into question. In many ways, Berlin and Moscow share similar views of how that new world order should be built.




When Putin, a man whose past professional activity had been linked to Germany, came to power, new prospects for a bilateral partnership between Germany and Russia arose. Unfortunately, the opportunities have not been used to their greatest potential since many people in Germany and Europe, generally speaking, do not accept certain aspects of Putin’s policy. For instance, Deputy Chancellor and Foreign Minister Joschka Fischer does not share Schröder’s same euphoria about Russia – he believes that Russia under Putin is drifting away from liberal values.


Germany’s mass media has leveled sharp criticism at Schröder for his rapprochement with “KGB-dominated Russia” and for his reluctance to use his frequent meetings with Putin as an opportunity for criticizing human rights violations in Chechnya, the selective – and hence politicized – persecutions of oligarchs, and encroachments on the freedom of speech. Journalists and public figures in Germany so vehemently protested against plans to bestow on Putin the title of Professor Emeritus of Hamburg University that the gala ceremony was postponed indefinitely.


There is yet another glaring example of how misunderstandings and differences between the agendas of the two countries can put the brakes on important initiatives. This is the St. Petersburg Dialog, a forum that Putin and Schröder initiated back in 2000. Four years later, it has failed to become a bridge into 21st century Europe for Russia. The German participants in the dialog insist on imposing upon Russia their vision of how to build a civil society on the basis of the abundant experience that Germany gained after World War II. However, the Russian participants do not need such lessons. Rather, they need the dialog to attain pragmatic purposes, like preserving the commonality of strategic interests in building Europe’s future structures, the expansion of trade, the establishment of cooperation in the energy sector and high technologies (including the aerospace industry), mutual easing of travel visa regulations, and the recognition of university diplomas. What is more, the procedures in the format of the St. Petersburg Dialog are overly bureaucratized, since those forums bring together well-known policymakers and public figures rather than ordinary members of civil society.

To sum up, the “strong arm” policy – the consolidation of authoritarian tendencies in Russia – hinders the process of rapprochement. However, Schröder believes that the German news media and bureaucracy pass overly biased judgments on the situation in Russia and that their position creates problems. While most European policymakers grieved about the collapse of liberal ideas at the presidential and parliamentary elections in Russia, Schröder was among the first foreign heads of state to visit Moscow and congratulate Putin on his re-election. At a time when the European Union is growing increasingly mistrustful of the Russian president’s “authoritarian modernization” and is beginning to compete seriously with Russia in a number of areas, the German-Russian partnership is becoming something of a stabilization locomotive in Eastern Europe.




When Schröder’s predecessor Helmut Kohl was still in office, Germany became the main advocate of Russian interests in Europe and, generally speaking, across the globe. It offered massive aid to Russia in the early 1990s, a particularly hard time for the country when the entire social and economic system was suffering heavily. The Germans never forgot the role that Mikhail Gorbachev and Boris Yeltsin played in the reunification of their land.


Analysts argue that, in 1999, it was German diplomats who successfully managed to convince Yeltsin – infuriated by NATO’s war against Serbia – to relinquish support for the Yugoslav dictator Slobodan Milosevic and join the Western coalition’s peace plan in the Balkans. On the other hand, Putin succeeded in using the drawn out tête-à-tête with Schröder to convince him that the Kremlin’s policy in Chechnya was correct. Following their first several meetings, the Federal Chancellor was fascinated by Putin’s concept of modernizing his country; Schröder applauded louder than others when Putin addressed the Bundestag soon after September 11, 2001. At that time, the Russian president said: “Europe will earn a solid and enduring reputation of a powerful and truly independent center of world politics if it pools its own resources with Russia’s resources – human, territorial, natural, economic, cultural, and military.”


Moscow does not harbor any illusions about its chances of joining the European Union, as current trends in the development of the EU and Russia are rooted in different and sometimes completely opposite civilizational and cultural values. Russia is strengthening its state structures through a tough centralization of power, while Germany and other European nations are gradually dropping the idea of a nation-state and delegating part of their sovereignty to the pan-European center in Brussels.


In a way, the latter fact explains why Moscow and Berlin are unable to cooperate as closely in the development of strategies and concepts as the Germans and French do for the benefit of the whole European continent. Joint Russian-German activities trigger waves of apprehensiveness in the new East European allies of the West. The East Europeans are cautiously watching the progress of relations between Moscow and Berlin.


And yet it is clear as daylight that Russia and the EU are so tightly linked to one another that close cooperation between them is predestined. Russia will need reliable partners and allies in the processes unfolding on the European continent. It was no accident that Putin said in a recent speech at the Russian Foreign Ministry that Germany, France and Italy have a genuine interest in maintaining friendly relations with Russia. And Germany will definitely play a leading role in that group.


It is true that Germany speaks out most vigorously among the EU countries on the issue of easing travel visa regulations for Russians. Germany is ready to cooperate with Russia in building new pipelines across the floor of the Baltic Sea that will double the throughput of Russian crude oil exported to the West. Berlin has convinced its West European partners to lease Russian transport aircraft for airlifting European soldiers to hotbeds of tensions in the Middle East.


Russia responds in the spirit of reciprocity. It has given the Bundeswehr permission to use Russian territory for the transits of cargoes to German peacekeeping units deployed in Afghanistan. German companies have been offered promising investment projects in Russia, including in the energy sector where U.S. corporations dominated in the 1990s. Furthermore, at a time when the Russian authorities have forwarded charges against the oil major YUKOS, Putin said that Russia was ready to lift restrictions so that German companies may purchase stakes in the major natural gas producer, Gazprom. That was good news for the German gas operator E.ON that has 6.5 percent in the gas giant.


The German business world is pushing Schröder into Putin’s arms. This is not surprising, since Germany has always had a special business approach to Russia, unlike other Western countries. Close economic cooperation between the two countries began back in the mid-1970s, especially in the energy sector. At that time, both governments were mutually interested in stronger trade as an instrument of building up contacts. German businesses received state insurance coverage (Hermes Company) to protect them from the risks of working in Russia. Thus, German businessmen working on the Russian market have grown accustomed to special comforts in the form of protection by their own government – something that companies from other countries never enjoyed.


Russia is heeding the opinions of its German partners. Russia agreed to the advice of German banks, which called for the reform of the Russian banking system before it joins the World Trade Organization. Russia’s “bank crisis” of July 2004 cleared away many small lending institutions that did not, in fact, engage in banking activities. At the same time, German lending organizations have discovered new opportunities for their own business on the Russian market. So some observers are definitely correct in saying that Germany and Russia enjoy a better relationship on the whole than the EU has with Russia.




Unfortunately, many politicians in the West have become disenchanted with what is happening in Russia. Their conviction is that the project of reshaping Russia along European standards, of which there had been so much hope in the 1990s, has failed or, at most, is a thing of a distant future. Yet, Schröder’s policy toward Russia ranks him amongst a group of visionary Western leaders who understand the importance of a strong, democratic and stable Russia for Europe in the 21st century. These leaders do not get discouraged when they find that a plan fails to work as originally designed. The question of Russia’s place in the future Europe has as much historic significance as that of the role that the U.S. will play in the world in the future.

Moscow is sending a clear signal to Berlin that Russia stabilizes the Eurasian continent and can serve as a window of opportunities for Germany within that region. The Russians trust Germany and cherish the hope that Berlin’s foreign policy will count Russia as a strong, reliable, and highly cooperative neighbor of the EU, rather than as an economically backward nation.


German-Russian relations will have good prospects if not fermented by anti-American sentiment. Were Putin trying to drive a wedge between the Europeans and Americans, like the Soviet leaders did in the past, Germany would not be attempting to establish such close contacts with him. Schröder needs a pro-European, rather than anti-American, Russia. He realizes that the looming problems of energy resource imports from the Persian Gulf countries, as well as the ongoing conflicts with Islamic fundamentalists that the European countries may become entangled in, will have severe detriments for the Old Continent. As a result, support will have to be sought elsewhere, including in Russia with its huge resources.

No one can rule out the possibility that Russia may at any given moment discard its pro-Western orientation. However, with that said, the profound and encouraging change that swept the country after the fall of Communism is rather indicative that there is little chance for any sort of political cataclysm. Actually, it is foreseeable that the current German-Russian rapprochement will set the scene for the construction of a powerful ’drive engine,’ similar to the one built by the Germans and the French in the past. It played a historic role in the rise of the European Union and in the general blossoming of West European civilization.

Last updated 9 november 2004, 19:52

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