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German influence on Russia could be key in Ukraine dispute

March 8, 2014 at 7:41 PM EDT
After a week of occupation, Russia appears to be on the verge of annexing Crimea. While the West proposes sanctions on Russia, it seems Germany could be in a unique position to help resolve the dispute. Hari Sreenivasan speaks with the Executive Director at the Transatlantic Academy, Steve Szabo, about the strong relationship and close economic ties between Germany and Russia.

HARI SREENIVASAN: It’s been a week now since Russian forces occupied Crimea, an area that’s been part of Ukraine for the last 60 years. Publicly, at least, neither side seems to be giving ground. Russia may be on the verge of annexing the region and the West is imposing sanctions. One country might be uniquely positioned to help resolve the dispute — that country is Germany. for more about this we’re joined from Washington by Steve Szabo, he’s the Executive Director of the Transatlantic Academy and has written extensively about German foreign and security policy for many years. So Steve, why is Germany uniquely positioned here? How could they break this log jam?

STEVE SZABO: Well, they are by far the most important player in Europe on Russia and Russia policy. You really can’t have a European position without Germany on Russia and of course the European position is central to the American strategy because we can’t have a really effective strategy if the Europeans are not on board. Secondly, the Germans are a huge economic player in Russia, by far the largest foreign player. So they have a lot of impact on Russia, the Russians listen to them because of this close economic relationship and so the Germans can, I think, speak to Putin with a little bit more confidence, let’s say. He would have more confidence in them then talking to, let’s say, to Obama or to somebody from other countries. So they’re increasingly important interlocutor between the West and Russia.

HARI SREENIVASAN: So what do we know about the relationship between the two leaders, Merkel and Putin?

STEVE SZABO: It’s very bad. It’s at least as bad as the Obama Putin relationship. Don’t forget she grew up in East Germany and Putin was a KGB officer in East Germany at that time. And when they first met, when she was chancellor, Putin knew that she had a big fear of dogs, especially big dogs. So Putin brought his big dog into the meeting to show her that he knew that and that he could intimidate her. She’s also felt that when Putin speaks German to her she’s being interrogated. So it’s, on a personal level, is very bad. But Merkel is a professional, she’s a scientist, she’s very rational, she’s a politician. She understands that you have to separate personal feelings from political relationships and she’s done that as well. So she does, I think she does that very effectively.

HARI SREENIVASAN: Wow, now this is in the context of U.S.-German relationship that’s gone through restrains when we realize one ally has been bugging the cell phone of another ally.

STEVE SZABO: Absolutely. That’s a very important factor right now in this whole relationship on Russia and Crimea and Ukraine. Because the German-American relationship is really in a bad state right now. The Snowden effect has been very deep in Germany much deeper than anywhere else really in Europe. You have to of course think about their history, not only the Nazi past but the East German Stasi were always listening in to German conversations. So the Germans are super sensitive and they also felt that the U.S. was their best ally and really a friend, and I think they feel a bit betrayed. So now they have, they’re kind of caught in the middle. They have a certain sense of distance from the U.S., they also have the strong economic stake with Russia. but at the same time, the German public and the German media are extremely critical of what’s going on in Russia and with Putin in particular. So it’s a very difficult time I’d say for them right now. It’s a very tough time for the U.S. to try to work with the Germans given this Snowden impact, and the fact that they’re still very disappointed in the Obama Administration.

HARI SREENIVASAN: So what are the Germans doing right now? It seems neither Germany or the U.S. want to take the lead on sanctions and possibly put their own companies in their countries at a competitive disadvantage.

STEVE SZABO: That’s exactly right and I think this is the important point that we have to keep in mind in trying to develop our own sanction policy because we don’t want to penalize our own companies. Our economic stake is much smaller than the European or the German stake, but it’s still there and there are certain companies that are trying to make, that have some substantial investments, let’s say, in Russia. So I think that what the Germans are trying to do is to try to find some sort of solution to send a signal to Russia that this is being taken very seriously, but at the other hand they realize that they are in a situation where they really can’t afford to take serious economic sanctions because the impact on their economy would be quite substantial. Don’t forget that they get about a third of their energy — their gas and their oil — directly from Russia, so this would have a devastating impact on their economy. So it’s a bit like the U.S.-China relationship. We have a lot of problems with the Chinese, but at the same time we have this very strong economic relationship which really limits what we can do.

HARI SREENIVASAN: So how do those energy needs play into all this? It seems that there’s a few European countries already asking for the U.S. to start selling them natural gas.

STEVE SZABO: That’s right, and we have a very difficult decision here because we want to keep the natural gas here to keep our energy prices down and this will allows us to be more competitive in the international competition with German and European companies. So the more that we send to Europe, the more that affects our economy at home. The other factor of course is that Gazprom is now threatening to cut off gas supplies to Ukraine and a lot of the gas to Europe goes through Ukraine. The Germans have a separate gas pipeline with the Russians so I think they’re a little bit more immune from that, but I think overall we are seeing right now that energy can be a major factor in how the Russians try to destabilize Ukraine and put pressure on the Europeans, and also put pressure on the U.S.-European relationship.

HARI SREENIVASAN: So what could Germany do in these conversations with Putin?

STEVE SZABO: Well, I think what they can do, and I really think the Germans are going to have to be the intermediaries between the West and Russia. I don’t think, I think the U.S. is too poisonous right now in terms of Putin’s view of us. So I think they have to take the lead and to tell the Russians essentially how serious this is, and that they really are risking a much more serious breach with the west if they don’t understand that they can’t go beyond Crimea. I think Crimea is a containable situation, but if the Russians were to go into eastern Ukraine I think that we’re talking about a very, very serious unpredictable relationship. What the Germans and the Europeans are doing right now is threatening to stop, they were talking about liberalizing visas with the Russians into Europe , into Russia-into Germany sorry, they want to now suspend those discussions. They’re suspending trade discussions. they’re talking about going through this European Union Trade Association with Ukraine as a way of bolstering Ukraine. So these are the kind of things I think that Europe and the Germans can do.

HARI SREENIVASAN: All right, Steve Szabo from the Transatlantic Academy. Thanks so much.

STEVE SZABO: Thank you, my pleasure.