THE PLANK OCTOBER 26, 2009
Americans are used to presidential candidates promising to get tough on China only to turn tail once they are in office. Could the same be true of German Chancellor’s promises to get tough with Russia? The Financial Times has an extraordinary report on “The New Ostpolitik,” between Germany and Russia. When German Chancellor Angela Merkel first ran four years ago, she was highly critical of former Chancellor Gerhard Schroeder’s warm relationship with the Russians. Indeed, after leaving office, Schroeder became the chairman of Nord Stream, which is owned by the Russian firm, Gazprom, and is developing an undersea gas pipeline that will connect Russia directly to Germany. But once in office, Merkel, who was re-elected last month, has given her blessing, and active support, to the rapid enlargement of German-Russian economic relations.
Germany is Russia’s largest export market – Germany buys 45 percent of its gas and 34 percent of its oil from Russia -- and until the recent recession, Russia was Germany’s fastest growing export market, increasing 20 percent a year. Volkswagen is the largest industrial investor in Russia, and Porsche sells more cars in Russia than in the United States. In addition, Russian firms have recently agreed to a majority stake in former GM car-maker, Opel, and bought up a shipyard in Merkel’s district. Siemens ditched its French partner in a nuclear venture to go with the Russian firm Rosatom. Will these growing economic ties impinge on German foreign policy? Or to ask an analogous question with an obvious answer: Have America’s economic ties with China affected its foreign policy?