Berlin Cable

Aug 23, 2022

Berlin’s Summer of Discontent

As Germany braces itself for the tough months ahead, its squabbling politicians need to get a grip and focus on what really matters most: ensuring that Ukraine wins.

German Chancellor OIaf Scholz stands next to a gas turbine meant to be transported to the compressor station of the Nord Stream 1 gas pipeline in Russia during his visit to Siemens Energy's site in Muelheim an der Ruhr, Germany, August 3, 2022.
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The true meaning of Berlin’s unusually hot summer is not so easy to fathom. It is not a repeat of 2021, when biblical rainfall led to catastrophic flooding in western parts of Germany, causing the deaths of almost 200 people and destroying the homes and livelihoods of many more. This literally earth-shifting event happened at the start of the German election campaign’s “hot phase,” producing images that stuck in the German psyche and convinced many that addressing climate change was the most urgent task. Armin Laschet’s clumsy reaction to it likely cost the Christian Democratic Party’s (CDU) chosen successor to Angela Merkel the chancellery later in September.

This summer, Germany has been spared so far climate change-induced catastrophes, although temperatures often soared. Rather, it is the coming winter that has been exercising German minds and imaginations.

The image of the summer was in fact a “photo op,” orchestrated by German Chancellor Olaf Scholz. On August 3, he took the Berlin press corps to Mühlheim an der Ruhr, where Siemens Energy is keeping a gas turbine fully serviced and ready to use in the Nord Stream 1 gas pipeline, which Russian state-owned Gazprom said it needed, but could not get, because of Western sanctions. Thus, it had reduced supply to 20 percent of the usual amount of gas flowing into Germany via the Baltic Sea.

Breaking Sanctions

The German government had gone to unusual, not to say embarrassing lengths to reach this point. The Siemens turbine had been overhauled in Canada, and Ottawa wasn’t too pleased at first with the German request to turn a blind eye and deliver it regardless of anti-Russia sanctions. It gave in, according to German Foreign Minister Annalena Baerbock, when it was told that then perhaps “no more Russian gas would flow and Germany wouldn’t be able to help Ukraine anymore, because we would busy dealing with popular uprisings,” she told Redaktionsnetzwerk Deutschland, a national news desk for Germany’s regional papers. This might be “a little over the top” (“überspitzt ausgedrückt”), she admitted when challenged by her interviewer, but “we continue to need gas from Russia.”

Two weeks later, the chancellor stood in front of the turbine explaining his unusual move by the government’s wish to “demask” Putin and Gazprom, the Kremlin’s geo-economic blackmail and coercion tool of choice. “With the delivery of the turbine, we called Putin’s bluff,” he told the Canadian Globe & Mail newspaper. Moscow would no longer be able to argue it was breaking its contractual obligations because of technical issues. Indeed, Gazprom simply said that it was “impossible” to take delivery of the turbine. It is still in Mühleim an der Ruhr.

But is it really Putin who is bluffing? Who would believe a word the Russian president says anymore? Or is it rather Scholz and his government who are trying to prevent the German public from becoming radicalized by rapidly rising energy prices and turning against the coalition which has been in office for only nine months?

Shaky Governance

The way the summer has gone so far suggests the latter. Top politicians from the ruling coalition of the Social Democrats (SPD), Greens, and the pro-business Free Democrats (FDP) seemingly competed on who could come up with an initiative that would make them look good in the eyes of their voters. This has resulted in shaky governance. One example last week was the hastily introduced VAT reduction on gas sales, from 19 down to 7 percent, after a “surcharge” was agreed and announced on gas sales that comes to €0.03521 per Kilowatt hour to support system-relevant gas traders like Uniper, that are already struggling because they are not allowed to pass on price increases fully to their customers. The temporary VAT reduction will likely offset the “surcharge” for households. But as critics quickly pointed out, it runs counter to the aim of reducing consumption and helps those most who use the most.

On further measures—there has been talk of a “third package” to alleviate the burden of rapidly rising bills—there is no agreement within the government yet. Instead, there is more confusion. While Scholz said, in front of the turbine, that keeping Germany’s three remaining nuclear plants running for a little longer through the winter would “make sense,” Economy and Climate Minister Robert Habeck, a member of the Greens, ruled that out last Sunday, saying the effect would be too small—the wrong message at times when many consumers, businesses as well as households, are ready to “do their bit” by making energy consumption adjustments, which, in sum, will likely achieve the 20 percent reduction required. It also plays incredibly badly with Berlin’s European partners, who see a Germany unwilling to change its spots while they are themselves supposed to act in solidarity with their Russian-dependent neighbor.

Who Will the Public Blame?

Habeck’s stance is catering to traditional Green voters. The overall fear, however, that the public will blame the government rather than Putin for necessarily unpopular decisions and developments is clearly shared across the higher echelons of the coalition parties. There is already the populist, Putin-friendly argument emerging on Germany’s far-right and far-left fringes that the country should not “sacrifice Germany’s hard-won wealth” because of the war in Ukraine.

And as if to demonstrate that Scholz’ “photo op” did not persuade the “pro-Russian” elements, it was the vice president of Germany’s parliament, Wolfgang Kubicki of the FDP, the party of Finance Minister Christian Lindner, who came up with the brainwave of opening defunct the Nord Stream 2 pipeline instead—which the government had declared dead on the eve of Russia’s war of aggression, because Moscow had used energy as a weapon. In a snap poll, 39 percent supported the idea of handing Putin a massive victory and breaking ranks with Germany’s allies, while a majority of 58 percent were opposed.

The true problem for Germany’s government this summer, however, is a lack of unity as well as clarity in its communication. Where French President Emmanuel Macron has called on his compatriots to consider the rising energy costs as the “price of freedom” that needs to be paid if Putin is to be stopped in his criminal and illegal war, Scholz’ message so far has been quoting the Liverpool Football Club anthem “You’ll never walk alone” as a way of signaling that the government will not leave the weakest in society uncared for. This, however, further feeds worries about cold winter nights rather than demonstrating to Putin that his energy blackmail will fail.

Good Reasons for Greater Confidence

This is unfortunate. In fact, the German government has good reason to take a much more confident line. Gas storage facilities are filling up rapidly, and “flowing” Liquified Natural Gas (LNG) terminals, which Germany lacks, will come onstream on Germany’s northwestern coast in December. To be sure, the winter will be tough, but it will be manageable for a country as wealthy and inventive as Germany.

Therefore, it is time for the government get a grip and focus on what is even more important if Germany wants to continue to live in a rules-based world and free of fear of further wars of aggression—to say goodbye to Russian gas as soon as possible and not to forget that it is Ukraine, and not Germany, that is the country most vulnerable this winter. As three young coalition MPs wrote last week in an op-ed for newsweekly DER SPIEGEL, Ukraine also needs more German weapons. It was refreshing to hear from parliamentarians who are seemingly less afraid of making proactive arguments than their senior government colleagues.

Henning Hoff is Executive Editor of INTERNATIONALE POLITIK QUARTERLY.

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