Oct 06, 2023

Berlin’s Eurasian Tilt  

The announcement of the India-Middle East-Europe Corridor (IMEC) as well as the recent Germany-hosted summit with Central Asian states shows that the country is leaving behind its past hesitancy and starting to get involved in a changing world’s new geoeconomics.

Indian Prime Minister Narendra Modi talks to Germany Chancellor Olaf Scholz upon his arrival at Bharat Mandapam convention center for the G20 Summit, in New Delhi, India, Saturday, Sept. 9, 2023.
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At the September G20 summit in New Delhi, host nation India as well as the European Union, Germany, France, Italy, the United States, Saudi Arabia, and the United Arab Emirates launched an initiative that made some headlines: the India-Middle East-Europe Corridor (IMEC), which aims to reshape the power dynamics in Eurasia by bridging the geoeconomic and geopolitical space between the Indo-Pacific and Europe-West Asia.

The corridor comprises two routes: an eastern one that connects India to the Gulf through sea lanes and a northern one that connects Saudi Arabia to Europe through Jordan and Israel, mainly by railways. Once finished, it will establish an efficient transit network that supplements existing paths for trade among participating states. While Washington and Brussels are trying to position the IMEC as an attempt by the West to challenge China’s Belt and Road Initiative (BRI), other participant nations such as Saudi Arabia and the UAE—two pillars of the BRI and IMEC—would reject the idea that the IMEC is in competition with the BRI. Nevertheless, the IMEC provides better terms for West Asian nations concerning labor and finance and offers states greater agency compared to the BRI.

The IMEC encompasses multiple transportation modes, digital infrastructure, and clean hydrogen pipelines, but its journey is fraught with challenges like geography, logistics, geopolitics, competition with existing trade routes, and regional security. Berlin's participation in the IMEC should be interpreted as Germany’s attempt to influence Eurasia’s economic and security dynamics through the corridor, aligning minilateral trade and security networks with US and European interests. The IMEC, in a sense, represents a realpolitik pivot for German foreign policy that enhances Berlin’s standing in Eurasia and should be seen as a reflection of Germany’s changing position on China and Russia.

A Changing Approach to China

The IMEC is a manifestation of Germany’s significantly changing approach to China, as reflected in its first-ever comprehensive China Strategy published by Chancellor Olaf Scholz’s coalition government in July. This shift acknowledges that China now poses challenges to Germany's economic and political interests, both within Europe and on the global stage, creating significant obstacles to finding common ground between the two trading partners. Berlin's China strategy signifies an end to “business as usual” as it confronts the new global economic landscape defined by geopolitics and heightened competition.

Germany’s objective is to reduce its exposure to China and preserve its trade and industrial edge in this emerging multipolar world order—a complex strategic challenge for German policymakers. Chancellor Scholz possesses a clear understanding—still economic in nature—of the evolving world order and has described the present moment as a Zeitenwende (a historic turning point) for Germany, and indeed the world. He emphasized that "the Zeitenwende goes beyond the war in Ukraine and beyond the issue of European security. The central question is this: How can we, as Europeans and as the European Union, remain independent actors in an increasingly multipolar world?"

This pivotal question lies at the heart of Berlin's nuanced geoeconomic and geopolitical approach. As the industrial powerhouse of Europe, and with the German-French duo at the center of the European project, Berlin must work in tandem with Paris and, eventually, London to build a proactive political and economic European agenda that aligns with the United States, collectively addressing China- and Russia-related challenges. Therefore, Germany, France, Italy, and the EU view joining the India-Middle East Europe Corridor (IMEC) as a strategic move that aligns with their objectives.

The IMEC represents the inception of a potential economic bloc that offers Europe access to expanding markets in India and the Middle East, supporting their efforts to de-risk from China. The IMEC could also contribute to supply chain resilience, particularly for critical goods, and address energy security concerns following the Russian invasion of Ukraine. The IMEC should also be viewed as a component of the "Global Gateway," the European Union’s connectivity initiative, which has experienced slower progress than anticipated due to the EU's inherent cautiousness. Nevertheless, IMEC signifies a notable shift, with signs of hesitations in Brussels diminishing and a growing inclination toward a more pragmatic approach to geopolitics and geoeconomics. This shift would necessitate the EU's adoption of minilateralism and the embrace of transcontinental corridors.

Latecomer Germany

Notably, Germany stands out among the IMEC nations as a latecomer to the trend of minilateralism. Existing minilateral formats, such as AUKUS, the Italy-Japan-UK Fighter Project, I2U2, the Quad, and the France-India-UAE trilateral, already include most of the IMEC nations. Germany now seems to be leaving behind this hesitation with the joining of the IMEC and the recently announced “Middle Corridor” connection. A few weeks following the IMEC announcement, Berlin convened an extraordinary summit meeting with the heads of all Central Asian nations to establish a "Middle Corridor" connecting Central Asia and Europe. Chancellor Scholz hosted leaders from Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, all of whom gave their endorsement to the initiative. This initiative aims to connect the region to Europe via the Caucasus, Black Sea, and Turkey, with financing sought through the Global Gateway initiative.

The Middle Corridor underscores the participants’ commitment to enhancing energy security, exploring alternative supply routes, improving transportation infrastructure, and transitioning toward a more environmentally sustainable economy. The Middle Corridor and the IMEC seem similar in their objectives and their transcontinental approach. Berlin is embracing minilateralism and transcontinental corridors to adapt to the changing times of the emerging multipolar world. Importantly, this strategy aims to create new growth markets for Germany, particularly as Western tensions with China escalate.

New Links with Key Partners

The IMEC also offers Germany an opportunity to enhance its relations with key partners like India, Saudi Arabia, and the UAE, who are experiencing significant economic growth and, consequently, increasing political influence. For instance, with a GDP of $3.53 trillion, India surpassed the United Kingdom to become the fifth-largest economy globally as post-Brexit Britain’s economy faced significant challenges. In 2022-23, the UAE, with a trade volume of $76.16 billion, ranked as India’s third-largest trading partner. It was followed by Saudi Arabia, with a trade volume of $52.72 billion. The three nations are building increasingly integrated economic ecosystems. Through the IMEC, Germany, is eyeing this emerging West Asian economic bloc.

Furthermore, with the rise of West Asia as a significant economic and political bloc and Germany’s pursuit of energy supply diversification in the wake of the Russian invasion of Ukraine, joining a transcontinental initiative that includes the UAE and Saudi Arabia is a strategic necessity for Berlin. Combined with expected large-volume Qatari liquid natural gas (LNG) deliveries, additional hydrocarbon partnerships with the UAE and Saudi Arabia could meet a substantial portion of Germany’s energy needs. Germany’s primary trade partner in the Gulf is the UAE, accounting for a trade volume of $8.5 billion, while Saudi Arabia follows closely behind with $7 billion in trade volume.

Hydrogen plays a crucial role in Germany’s climate goals, and Saudi Arabia and the UAE are seen as reliable energy collaborators, aligning with Germany’s renewable energy objectives. The clean hydrogen pipeline embedded in the IMEC is central to this alignment of goals between Germany, Saudi Arabia, and the UAE as Riyadh and Abu Dhabi work toward establishing themselves as regional centers for hydrogen production.

As the world’s geopolitical and economic center is shifting toward the East, Germany must actively secure its position in this evolving multipolar world, especially with the gradual consolidation of the Russia-China axis in Eurasia. The India-Middle East-Europe Corridor offers Germany the potential to leverage its participation for economic growth, industrial and digital resilience, and energy security. Furthermore, against the backdrop of the Russian invasion of Ukraine and the growing tensions surrounding Taiwan, and as Germany seeks to diversify its international partnerships, the corridor signifies Berlin’s commitment to expanding its geopolitical, economic, and security partnerships, not only regionally but also within broader Eurasia.

Mohammed Soliman is the director of the Strategic Technologies and Cyber Security Program at the Middle East Institute (MEI) in Washington, DC, and a visiting fellow with the National Security Program at Third Way.