Russia’s invasion of Ukraine has undone longstanding efforts of Western European countries to insulate their economic ties with Moscow from dangerous political differences such as assaults on Russian dissidents on European territory, periodic cyber attacks and overflights of Russian warplanes.
The look-the-other-way approach was modeled on Ostpolitik, the pioneering policy of German Chancellor Willy Brandt in the late 1960s and early ’70s. The policy rested on the idea that autocracy would eventually die while diplomatic and economic ties lived on.
Thirty years later, the Soviet Union collapsed and Moscow and its former East European satellites embraced democracy.
Then came President Vladimir Putin and a two-decade return to dictatorship. In response, Ostpolitik was revived, again justified by the notion that trade would outlive tyranny. But not only did Putin’s rule tighten but he revived an old European nightmare: war of conquest.
The invasion of Ukraine quickly killed Ostpolitik, even in its home country Germany and in the mind of Chancellor Olaf Scholtz, an avid practitioner. It’s also provided a move toward what less than a week ago had been unthinkable: a German military response.
“Germany is now facing the ruins – politically, economically and militarily – of its policy of détente toward Russia that dates back to the Cold War era,” wrote Der Spiegel, the German weekly magazine.
Italy, Europe’s third-largest economy and a practitioner of Ostpolitik a la Italiana, is in a policy bind. It, too, is militarily shy, preferring peacekeeping to war preparation. After several other European countries decided to beef up their forces in eastern Europe, Italy did so only over last weekend.
There are economic risks for both Berlin and Rome but they are graver for the Italians. Italy, like Germany, buys 60% of its natural gas from Russia. Germany sells cars to Russia; Italy, luxury goods such as handbags and sleek shoes.
A big difference is that Italy has a more limited margin for dealing with the likely economic outcomes of inflation, higher interest rates and deficit spending to cover social costs: Italy’s debt is already 160% of GDP.
For Europe as a whole, there are also political and economic risks of possible tensions with China, Russia’s quasi-ally. In particular, Germany and Italy both need to shore up exports with China following the slowdown of two years of the coronavirus epidemic.
Scholz has long promoted Ostpolitik toward China as a solution to the democracy versus autocracy conundrum. China has disappointed Germany by abstaining from United Nations Security Council votes critical of Russia’s invasion.
A downside for China, if Europe’s new defense militancy holds, is that the American military desire to “pivot to Asia” (that is, counter China) becomes easier as Europe begins to take on more aggressive defense responsibilities on its own continent.
In any event, for the moment, with Italy and Germany hardening their positions, there is effective unity in the European Union and the North Atlantic Treaty Organization. It didn’t come easily.
After days of dithering, Scholtz’s Social Democratic Party, along with its partners in Germany’s coalition government, pulled the plug on Russia-centered Ostpolitik. In a series of meetings last week, the party decided to back the European Union in placing formerly unthinkable sanctions on Russia.
The measures include banning some Russian banks from the SWIFT financial transfer system that facilitates rapid cross-border commercial payments, a freeze on Russian central bank transactions and restricting high-technology exports to the country.
Scholz also delayed putting into operation the Nord Stream 2 natural gas pipeline, a decision that upended his predecessor Angela Merkel’s decision made earlier this year to put it into operation. For weeks, German officials had insisted that Nord Stream 2 was simply a commercial tool, not a geopolitical weapon.
Finally, for the first time in post-World War II history, Germany is sending military weaponry into a European conflict zone, in the form of anti-tank weapons and surface-to-air missiles to Ukraine.
In a speech to the parliament Sunday, Scholz berated Putin for igniting a “war of aggression in cold blood.” Germany also scrambled to cobble together ground forces to send east.
“Had it not been for the Ukraine crisis landing on Scholz’s desk within hours of his becoming chancellor, the tanker of Ostpolitik could gradually have turned, in the slow consensual fashion characteristic of contemporary German democracy,” wrote Timothy Garten Ash, a British historian. “But history, that cruel taskmaster, has not left Scholz the luxury of time. The new course has to be set right now.”
In sum, Ostpolitik, or what Scholz called “Wandel durch Handel,” or “change through trade,” crashed.
“We were too optimistic,” said Axel Schaft, a member of the German parliament. “We should be self-critical enough to say that. We always reached out to Moscow with an olive branch. Now Putin is responding with a clenched, armed fist.”
A dissenting voice was issued by one of the party’s past luminaries whose pro-Russian activities had become an embarrassment: Gerhard Schroder, a former chancellor, author of 20 years of Russian-targeted Ostpolitik and moving force behind the construction of Nord Stream 2.
He also sits on the board of three Russian corporations, including Gazprom, the Russian energy giant.
Last Thursday, Schroder published a message on the networking website LinkedIn citing mistakes on both sides of the Russian-Ukrainian conflict. “With the necessary sanctions, care must be taken not to completely cut the remaining political, economic and civil society ties that exist between Europe and Russia,” he wrote.
Italy is also suffering foreign policy whiplash. Like Germany, it was hesitant to provide military aid to Ukraine after Russia’s invasion.
And unlike EU leaders President Emmanuel Macron of France and eventually Scholz, Italian Prime Minister Mario Draghi did not travel to Moscow to appeal for an end of the invasion. He instead phoned Putin to ask him to “put an end to the bloodshed.”
Putin’s response to European actions has been to place his nuclear weapons arsenal on alert. A NATO defense official said the alliance is less worried about missiles launched from underground silos, which the West monitors, than about ones on mobile rocket launchers that NATO can’t monitor.
The official said it’s hoped that Putin’s order is merely a bargaining tool for use in future talks with the EU or NATO.