Source: Transatlantic Trends 2014

However, Greece’s newly empowered populists are not unique in their special relationship with Moscow (though it should be noted that Syriza has roots in the pro-Russia Greek Communist Party). There are strong cultural and historical ties between the two countries; after all, Russia and Greece share the Orthodox Church. But there is still more to it.

First, Greeks have indeed been more reluctant than other Europeans to become involved in the Ukraine crisis. When the German Marshall Fund’s Transatlantic Trends survey asked in June 2014 – before the downing of Malaysia Airlines Flight MH17 – if the European Union should continue to provide economic and political support to Ukraine despite the possibility that this could exacerbate relations with Russia, 44 percent of Greeks – less than in any other country in Europe – agreed, while 49 percent of Greeks said that it should not. Greeks generally supported measures to strengthen Ukraine, such as offering NATO and/or EU membership, but were considerably warier of steps challenging Moscow directly, opposing both the provision of military supplies and equipment to Ukraine as well as stronger sanctions against Russia.

To be sure, there is an element of euroskepticism in the Greek attitude toward Ukraine: among those Greeks who feel ill-served by the EU – and there are many, with 42 percent of the country saying that membership has overall been bad for Greece – there is reluctance to toe the EU line. Among the 85 percent of Greeks who agreed that the EU had not done enough for the countries affected by the economic crisis, most opposed strengthening sanctions against Russia. Among the 12 percent who said that the EU had in fact done enough for the crisis countries, a plurality supported stronger sanctions against Russia.

But Greece going wobbly on anti-Kremlin sanctions is not just about frustration with the EU. Pew’s 2012 Global Attitudes survey found more sympathy for Russia in Greece than in most other EU countries. That year 61 percent of Greeks expressed a favorable opinion of Russia, as did 63 percent in 2013, and 61 percent again in 2014; in Germany, on the other hand, 64 percent of respondents expressed an unfavorable view of Russia in 2012, as did 64 percent in France, 67 percent in Italy, 60 percent in Poland, and 54 percent in Spain. Greeks just like Russia more than most other Europeans do.

Moreover, Greek affinity for Russia may have more to do with nostalgic memories of the Soviet Union’s support for the Greek left’s opposition to the Regime of the Colonels in the 1970s than a feeling of solidarity with Moscow today. When the 2014 Transatlantic Trends results are broken down by age, it turns out that younger Greeks are often less fond of Russia than their parents or grandparents. Of Greeks aged 18 to 24, 57 percent said their opinion of Russia was favorable – compared to 74 percent of Greeks over 65.

And breaking down the results along partisan lines shows that the right wing in Greece is actually friendlier toward Russia than the left, possibly in part thanks to Putin’s identification as a defender of “traditional” values. Of self-identified left-wing Greeks, 51 percent said Russian leadership was undesirable, while 66 percent on the right said it was desirable. On the right, 53 percent said that the EU should not continue to support Ukraine, compared to only 47 percent on the left.

Syriza may frighten Brussels, but there is more behind Greece’s affinity for Russia than can be explained by party alliances alone – as these numbers show, keeping Athens in line on Russia policy may be trickier than expected.

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Artwork: Cristóbal Schmal

It is also a mistake to focus too much on Putin’s persona: In George Kennan’s famous 1946 Long Telegram, the ultimate strategy paper of the Cold War period, Stalin’s name was only mentioned once. When deciding what to do over the next few months, we must keep in mind that Russia’s current aggressive behavior is a product not only of its strengthened capabilities, but also its internal weakness and growing anxiety. In other words, in order to grasp the difficulties ahead of us, think not only of the Putin factor but also of the Kadyrov factor in Russian politics – what other actors, like Head of the Chechen Republic Ramzan Kadyrov, are likely to force Putin to do.

A lack of insight into the Kremlin’s master plan – if it exists – does not, however, mean that we cannot clearly see some of Russia’s objectives in the current crisis: Russia aims, among other things, to decouple Europe from the United States, weaken (and even split) the EU, and prevent Ukraine from becoming a functioning state. What is needed in response is not simply “European unity,” but unity that can be sustained for a long period of time. This should be the central logic when crafting sanctions policy. Brussels should design a framework for EU member states that reduces the temptation for constant renegotiation as a result of domestic policy changes.
At present, our ultimate priority is not to convince Russia to change its objectives – this would be difficult – but to change its weapon of choice: “hybrid warfare.” The demilitarization of the conflict is our most pressing task.

Russia has some advantages in the short term, but time does not work in its favor. This leads me to believe that a frozen conflict in the Donets Basin would be preferable to the highly risky and uncertain process of Ukrainian federalization. The state-building process in Ukraine will be a very messy and uncertain enterprise anyway, and increasing that risk by introducing a Bosnia-type constitution would be the wrong policy.

Rather, we should convince the Ukrainian government that at present the best option is to install peacekeepers along the existing ceasefire lines and support the reconstruction of Ukraine proper and the Donbass as two separate projects. We should also keep in mind that if we increase the economic cost for Russia of sustaining Crimea and the Donbass, there is a danger that we push it toward further military action.

EU economic investment in Ukraine is another necessary short-term strategy. While it is considered bad taste to talk about spending money in Europe these days, without heavy investment in Ukraine to help its people survive the present crisis we could end up with a black hole at the center of the continent. And failure in Ukraine would mean that Russia’s strategy is succeeding. Empty promises of EU or NATO membership are no substitute for immediate sizable economic investment in Ukraine – symbolic politics in the absence of real commitment has already cost us dearly in this crisis.

When we talk about the EU’s medium- and long-term strategies toward Russia, the choices are of a different nature. We should be prepared for prolonged confrontation marked by both escalation and de-escalation of tensions. At any given moment we could be confronting Russia on one front while cooperating with it on another. The dynamics of this relationship will be determined more by internal problems faced by the EU and Russia than by the logic of geopolitical rivalry.

Thus a long-term strategy will require three pillars:

First, there is a need for a credible deterrence strategy in response to the military threat emanating from Moscow. Unfortunately, economic and political problems at home can make Russia increasingly aggressive. Any successful policy of deterrence must assume a common transatlantic strategy.

Second, we need consolidation within European values-based institutions. Putin’s game with the EU’s far right and far left as well as the temptation of some EU members to play their own small politics necessitates efforts increasing EU internal cohesion. Let us be frank: The success of Russia’s propaganda lies in large part in the public’s growing mistrust of European elites. Putin is trying to take advantage of this situation, but he did not create it. I happily advocate immediate Russian expulsion from the Council of Europe and will be even happier to readmit it when it truly shares the values of the organization.

Third, we need a long-term strategy for reengagement with Russia – not on the basis of shared values, but on the basis of shared interests. Several things have happened as a result of the Ukrainian crisis: China has emerged as a major power in Eurasia; the Moscow-led Eurasian Economic Union (EEU) has become a reality, albeit a contested one; and Russia’s dependence on China has increased. Facing this new reality, the EU should think in terms of a Eurasian order and not simply a European one.

Observing political dynamics in Central Asia, where several countries teeter on the brink of troublesome power transitions, we should declare our readiness to work with the EEU; at the very least it should not be the EU’s objective to kill the project. At the same time we should try to bring China into the OSCE-centered discussion about the security architecture of the Eurasian space. This will not be an easy process. At the moment China’s interest in exploiting the economic potential of Eurasia is aligned with the EU’s interest in pressing Russia to denounce military power as an instrument for achieving its objectives – in other words, the EU and China prefer the same tool of economic competition, but do not share values or common goals. In the long run, China’s economic and political presence – not only in Eurasia, but also in Europe itself – could be a risk factor for the EU, but this is probably a risk worth taking.

While trying to find a name for this strategy, I was reminded of Rilke’s beautiful line from Requiem: “Who speaks of victory? / To endure is all.” A Rilke Strategy is what the EU needs – one that does not promise a spectacular victory, but rather the survival of the EU as a liberal project.

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The Russian leadership’s use of force and multiple explicit threats – including nuclear threats – drastically transforms the nature of Russian relations with the EU and the US. The West might have at times mismanaged Moscow, but the deliberate decision to move away from the post-Cold War order is a Russian decision. It is accompanied by a growing reliance on nationalism and a geopolitical project entitled Eurasian Economic Union which unequivocally aims to reestablish uncontested Russian influence in its near abroad and restore Russia as a major power.

This new Russia should, however, not be confused with the Soviet Union. It is economically fragile and further weakened by the decline in oil prices, as well as by limited Western economic sanctions which have discouraged investors. In spite of a rapidly growing defense budget (an increase of 152 percent since 2001) and an ambitious military and nuclear modernization, the Russian Federation is not in a position to be a genuine military threat to NATO and Europe, at least in the realm of conventional weapons. Lastly, the future of domestic politics remains unpredictable, as the popularity of the Russian president may or may not last.

The most difficult challenge for Europe – and the West in general – is to manage two major asymmetries. First, Russia has the upper hand in the short term, while in the longer term the sustainability of Putin’s policy is questionable. Second, there is an asymmetry as far as political will on both sides is concerned. Putin has already sent weapons and troops to Ukraine and lost soldiers, whereas Europeans and Americans have often appeared divided and reluctant to fully acknowledge the gravity of events. Against the backdrop of these two imbalances, Putin retained the initiative, whereas the West has often seemed only to react.

Overcoming these problems and taking into account the lessons of 2014, a new Russia strategy should rely on the following pillars:

First and foremost, the West needs to recognize the reality of a deeply transformed European security environment and relationship with Russia and should no longer expect to go back to “normal” as it did after the Russo-Georgian War of 2008. The current state of affairs is the “new normal.” A naive approach underestimating these changes to preserve our comfort would only be perceived as weakness and trigger further unwelcome action by Putin.

Second, NATO’s defense and deterrence capabilities need to be restored in order to make any aggression – even in the form of hybrid warfare – against any NATO or EU member state unthinkable, as solidarity amongst allies would be guaranteed. The September 2014 NATO summit in Wales was a first opportunity to address the shortfalls of the alliance’s military posture and improve its ability to address a European contingency. These efforts should continue. The best way to preserve peace in Europe is to make a major war impracticable through robust defense and deterrence, including its nuclear component. The allies should be unimpressed by Russian efforts to bully some of them and ready to display unconditional solidarity should the need arise.

Third, on Ukraine, a two-track policy should be pursued. The Minsk II agreement offers a fragile and narrow path toward peaceful settlement. Its full implementation, including the restoration of Ukrainian sovereignty over its entire territory and borders, is the real test of Russia’s attitude in this crisis. Events since the first Minsk agreement, however, only allow for moderate optimism. In addition, and perhaps even more importantly, it is urgent to strengthen Ukrainian democracy and foster better governance through democratic, economic, and military assistance in order to reduce its vulnerability to Russian pressures, either direct or by proxy. This will come at significant financial cost, but it does not compare with the much higher price of Ukrainian collapse.

Fourth, Moscow stands as a difficult but important partner in the management of a number of international crises (Iranian nuclear negotiations, Syrian Civil War, etc.) and will continue as such for the foreseeable future. Russia also remains a significant economic partner for Europe. A policy combining realistic engagement and increasing repercussions for Putin’s unacceptable behavior currently seems the best way forward. However, this needs to be pursued with the mid- and long terms in view, as the effectiveness of sanctions will increase as time passes. Should the situation arise, the EU and the West should not hesitate to immediately sanction the breakdown of the Ukrainian peace process or further Russian actions in Ukraine or elsewhere.

The real challenge for Europe and the West vis-à-vis Putin’s Russia is to preserve the firmness and consistency of its policy: deterring further aggression through a robust defense posture, staying firm on democratic and governance principles, supporting Ukraine, and refusing to enter into rhetorical escalation, all while disallowing violations of agreements and rules.

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Artwork: Cristóbal Schmal

Beyond sanctioning certain segments of the Russian elite and specific branches of the economy, German and European policy needs a positive agenda to present to the Russian public. Thus easing of visa restrictions (such as the removal of visa fees or the lowering of entrance requirements) for the great majority of the Russian population should now follow the travel ban on leading representatives of Putin’s system. EU member states could in part make such changes immediately within the existing legal framework, and the act would be symbolic of a policy of engagement with Russian society. Further, existing exchange programs for young elites, journalists, and students (such as the Erasmus program) should be massively expanded. Existing civil society exchange formats should receive more support, and a shift from the dominance of dialogue between elites to a broader dialogue with varied actors within Russian society should follow.

At the same time, improved communication with Russian society and the Russian-speaking minority within the EU must be used as a short-term instrument: Although the Russian leadership is trying to limit cultural exchange, the work of NGOs, and a free press, we can pursue communication streams reaching Russian society directly to explain European policy decisions. Putin appears on German television – leading German and European politicians should do the same in Russia. The half-truths and lies of Russian policy and media outlets must be made transparent. To this end, an Internet platform (in German, English, and Russian) could be developed to systematically counter the Russian leadership’s propaganda through facts and levelheaded analysis, as well as to provide policy arguments. Further, Russian-language media offerings by EU member states should be increased, and a professional and independent Russian-language news program for broadcast on the pan-European channel euronews developed.

It is equally important to expand capacities for the analysis of political, cultural, economic, and security policy-related developments in every post-Soviet state, as well as to improve coordination between EU member states. To this end, cooperation between state and non-governmental institutions and closer coordination with existing political consulting institutes focusing on the countries in question are essential. Central to this is more effective coordination on the European level, as well as increased cooperative strategy development within existing EU frameworks.

Given the current Russian regime, no real policy change is possible; the Russian leadership is using every resource at its command in its fight to retain power, and only regime change could usher in real change. Such change can only come from inside Russia itself, which appears unlikely for the foreseeable future. At the same time, however, there is a risk of further Russian destabilization due to increasingly difficult economic conditions and the strengthening of nationalistic forces at the cost of liberal ones. For this reason, we must pursue a mixture of containment and engagement: keeping Russia in check where necessary and cooperating with it wherever possible, with the aim of medium- to long-term policy change. Projects working to prevent further Russian isolation or to increase understanding of Russian policy must be counted here. Such projects should not legitimize the Russian leadership – as has been the case with the Russo-German Petersburg Dialogue – but rather be developed into true civil society platforms.

In the short term, the situation in Ukraine must be stabilized through agreements recognizing the limited sovereignty of common neighbor states. For the medium term, this means abandoning NATO integration of Ukraine and other states in the region. Parallel to this, new concepts and increased resources are required to enable the stabilization of security institutions in states outside of NATO as well as to offer them a membership perspective over the long term. Should the EU’s policies fail in its immediate neighborhood, its entire security and foreign policy will be called into question.

The OSCE is simply too weak an instrument to negotiate with Russia on security matters or to ensure the security of Ukraine. We must continue to work within the OSCE framework to secure the Ukrainian-Russian border and to include the separatists in that dialogue; at the same time, however, we need to develop a new format in which to discuss these complex hard security questions. The NATO-Russia Council could be one such forum, given that NATO cannot be blocked unilaterally by the Russians and that the US – both a negotiating partner and important security policy actor – is included.

The conflict with Russia is a long-term challenge that requires both a fundamental strategy change as well as a stronger German and EU policy focus, expanded across the entire post-Soviet region. The destabilization potential of the current Russian regime is enormous – both domestically and in its neighborhood. Such a policy change requires grounded analysis, improved cooperation with other EU countries, and consultation with the US. Germany’s improved Eastern European policy will require closer coordination of all parties active in the region.

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Do not demonize Vladimir Putin and exaggerate his significance. The role of Russia’s president is weighty, but the country is going through a difficult transformation that follows its own logic. Contemporary Russia is not a product of Putin. Rather, Putin is a stage in Russia’s development. The fall of the Soviet Union meant not only the collapse of the previous form of statehood, but also of a common lifestyle and identity. Russia is beginning to pull out of the Soviet rut, but its society has yet to build a new foundation. Twenty-five post-Soviet years have amounted to an unsuccessful transition, leading the country into a blind alley. This state of affairs started long before Putin, and its consequences will be felt long after he is gone.

Do not count on coercing Russia with force and military pressure. Russian history shows that all attempts to influence the country from the outside have led to Russian society closing ranks, with disastrous results for those trying to exert influence. Russia’s main enemy has always been – and remains – its incapacity for timely internal renewal, but only Russia itself is capable of managing its own development, creating conditions for bringing about or avoiding disasters. Outside pressure gives rise to national pride, even in those who are dissatisfied with the government in place.

Do not think that Russia is destined to interact with the West, and that sooner or later it will realize it. It is true that Russia has witnessed two centuries of intellectual discussion on the subject of its Western or non-Western orientation. Those who regard the Western vector as inevitable have always prevailed. However, until now this was not a real choice – Asia could not serve as a source of economic development and innovation. Today the West is still in the lead, but Asia is growing into an ever-larger competitor. Russian supporters of an Asian orientation are putting forward concrete arguments and are offering concrete opportunities. If current trends persist, the picture of Russia’s external relations and its priorities will look quite different. China is ready to invest huge resources into the construction of Eurasian infrastructure, which will bind Russia tightly to the East.

It is pointless to explain to Russia its “genuine interests.” Europeans make this mistake often; Americans make it all the time. This causes genuine irritation and triggers an inclination to act differently.

Do leave history alone and do not call on Russia to reevaluate its past. Both Russia and Europe have had many different historical narratives and views of events, and so it is better to avoid going into this altogether. Otherwise a heated conflict is inevitable, especially since Russia is going through a period of creating a new identity wherein the past plays an important role.

Do not tell Moscow that the West has abandoned the zero-sum approach and is formulating its policies based on the common good. First of all, it is not true; each country – or group of countries – regards its own interests as primary. Secondly, no one will believe it anyway, in Russia or in the rest of the world, but will regard it as hypocrisy. A rational conversation about the balance of powers and interests would be much more productive.

Do not pay attention to all of the public statements coming out of Moscow. In today’s communication environment, where information flows resemble tsunamis, even diplomats have stopped thinking about what they are saying. What counts is the speed and toughness of the response, which in Internet communication is known as trolling – the art of deliberately, cleverly, and secretly pissing people off. The peculiar irony of Russian responses (especially from the Ministry of Foreign Affairs and the Ministry of Defense) is sometimes a reaction to the total dominance of Western opinion on the global media scene. They attempt to outmaneuver it with the help of paradoxical and sarcastic pronouncements.

Do not regard Russia as an anomaly, and Putin as a person “living in a parallel reality.” The reality of Russian politics is the reality that the overwhelming majority of the world is accustomed to, one which has existed for the duration of human history. It is the EU that lives in a parallel reality, trying to build an entirely different type of international relations. The deviation from the norm is more likely to be found there.

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(c) Mykola Lazarenko/Handout via REUTERS

After years of a “partnership,” Berlin and Moscow are back in “crisis mode.” It is the third phase of German-Russian relations since protests in Kiev began during the winter of 2013-14. By fall of 2014, recognition sets in that the conflict is not going to blow over in a few weeks – the West has to settle in for the long haul, a point that Merkel acknowledges in demanding “strategic patience” in the West’s dealings with Russia and Ukraine.

After the annexation of Crimea, Berlin’s determination surprises Moscow. Yet it takes until November 2014 for a serious debate to begin over how long-term concepts of Germany’s relations with Russia need to change given this breach of trust. The Chancellery and the Federal Foreign Office both see previous ideas on security, political, economic, and even societal cooperation with Russia as outdated.

Russia, until recently a partner, has become an adversary, and not only in the conflict in Ukraine, which increasingly is seen as and called a “war.” Russia has become an opponent of the West itself. And there is more: The Russian leadership suddenly went from an uncomfortable proximity with Europe’s left- and right-wing populist, anti-EU parties to full interference in the internal politics of EU member states. Germany’s ruling coalition of Merkel’s conservative CDU and the Social Democrats (SPD) of Steinmeier and Economics Minister Sigmar Gabriel agrees: Russia is now defining its foreign policy interests not in alignment with Europe’s, but in opposition.

For several reasons, the driving force for such a shift in Berlin is the Federal Foreign Office. Time and again, Foreign Minister Steinmeier has suffered setbacks over Putin’s handling of the Ukraine crisis. During the negotiations to form Merkel’s third government in autumn 2013, Steinmeier had clung onto his “modernizing partnership” approach. One year on he no longer harbors illusions. A different framework for German foreign diplomacy is needed.

Successful and sustained cooperation with Russia on international problems, such as nuclear negotiations with Iran, is not enough on its own. Work with Russia in fora and organizations like the NATO-Russia Council and the Council of Europe – which were believed to be effective in bridging the gaps between East and West – has collapsed. In Merkel’s Chancellery, interest grows in a new, long-term line of argument: The German government must equip itself for the 2015 EU debate over the extension of Russia sanctions, originally imposed for a single year. It must be made clear to EU partners that even though hope for future cooperation with Russia has not been lost, sanctions remain essential until the situation improves.

Finding a new concept is also crucial for Steinmeier in his role as leading SPD politician. Germany’s Social Democrats not only experienced the crumbling of their Russia policy in 2014. The party also struggles with the (not entirely welcome) input of its previous leaders. Former Chancellors Gerhard Schröder and Helmut Schmidt, even Willy Brandt’s Security Adviser Egon Bahr publicly voice their “Putinversteher”-views on the Russia debate. These are out of tune with Steinmeier’s recent experiences of Russian behavior in Ukraine. As the SPD has seen itself as the guardian of German Russia policy since Brandt’s Ostpolitik, Steinmeier and Gabriel consider it essential to stake out a new position for intra-party debate.

On November 16 Steinmeier suggests to further trade between the EU and the Moscow-driven Eurasian Economic Union (EEU). He hones in on Putin’s remarks at the end of October, when the Russian president requested further dialogue between these organizations. Three days later, at the 17th German-Polish Forum in Berlin, Steinmeier stresses, “There is a consensus in the crisis among EU foreign ministers that Europe’s long-lasting security is only conceivable with Russia, not against it. For that we need conversations … and we need venues – something like the Council of the Baltic Sea States, or an exchange between the EU and the Russia-founded EEU, and of course the OSCE.” A few weeks later, during a discussion with students in the Russian city of Yekaterinburg on December 9 Steinmeier again emphasizes the necessity of cooperation. He makes clear that this should be a part of a greater conceptual framework in a December 14 letter to an SPD party colleague: “As Social Democrats we must confirm the basic concepts of our Ostpolitik under these new and more strenuous conditions.”

He is not alone in this approach – four days later at the EU summit Merkel advocates the introduction of a free trade zone between the EU and the EEU: “Indeed, we have nothing against working together with Russia, with Kazakhstan, with Belarus on a large common economic area, and I believe that with appropriate progress in the course of the Minsk agreement we can keep that goal in sight.”

But closer cooperation with Russia will depend upon developments in eastern Ukraine. Even discussing closer cooperation is only possible thanks to a perceived relative quiet in eastern Ukraine at the time. Pro-Russian separatists do make further territorial gains, but these are mainly unnoticed by the broader western European public. With the Ukraine conflict knocked off the top of news broadcasts, voices in the German public grow louder to “offer something to the Russians.”

During the World Economic Forum in Davos, the debate over an “offering to Putin” dominated the media. When Merkel and Gabriel repeat their suggestion for a common free trade zone as a long-term vision, it too generates much media coverage.

Back in Crisis Mode, January 24-30

Yet events again intervene – the search for long-term cooperation is dramatically interrupted on January 24 by a rocket attack in the southeastern Ukrainian city of Mariupol. Attributed to pro-Russian separatists, it kills more than 30 people. Perceptions of the conflict become more acute, not just in the public mind, but also among political actors. Western intelligence had already reported a massive secret operation supplying separatists with modern equipment from Russia. Berlin increasingly gets the impression that the relative quiet since Christmas was no more than preparation for a new offensive. The attack on Mariupol in particular revives previous fears that separatists could, under Russian leadership, seize enough territory along the Black Sea coast to create land access to the Crimean Peninsula, which remains difficult to supply. Putin himself used the term “New Russia” (Novorossiya) in April 2014 among Russian nationalists to refer to the Black Sea coast as far as Odessa.

That fear is heightened by a massive attack by separatists on the Debaltseve railway junction between Donetsk and Luhansk. The size of the attack on the several thousand-strong Ukrainian force assembled there alarms the German government. In the EU the question of stronger sanctions return to the agenda; proponents of a softer approach, among them Italian Prime Minister Matteo Renzi, now have trouble making their case. The United States openly accuses the separatists and Russia of seeking territorial gains in the Ukraine. In Washington, a serious discussion starts about supplying weapons to Ukraine.

On January 29 the EU foreign ministers – including their new Greek colleague – decide to extend by six months the visa and banking restrictions imposed in March 2014 on pro-Russian separatists and Russians connected with Crimean annexation. They also consider further sanctions and ask the EU Commission and EU High Representative for Foreign Affairs and Security Policy Federica Mogherini to compose a list with more candidates for visa and account restrictions.

Dramatic Diplomacy, January 30-February 12

One of the most dramatic diplomatic phases of the crisis begins on the weekend of January 30. Military action, with separatist attacks on 80 Ukrainian army positions, becomes so intense the German government fears an open war in the east. At the same time, behind the scenes, the Russian government makes suggestions to resolve the crisis – suggestions completely unacceptable to Ukraine and the Europeans. It prompts a hectic bout of telephone diplomacy with dozens of discussions on the highest levels, led by Merkel and Hollande and including Presidents Obama, Poroshenko, and Putin.

Top German and French diplomats work on responses to Ukraine and Russia. On the evening of February 3, Merkel and Steinmeier and their closest advisers hold a long session. The chancellor also phones the Russian president. On February 4 the idea to start a diplomatic mission led by Merkel and Hollande starts taking shape, underlining the severity of the situation. The first priority seems to be to prevent further territorial gains by the separatists south-east of Mariupol and avoid a complete debacle for the Ukrainian army in Debaltseve. The September Minsk agreement remains the necessary basis for a renewed ceasefire, even if details need changing to take into account the separatists having since conquered more than a hundred square kilometers. In the background Merkel’s Foreign Policy Adviser Christoph Heusgen, Steinmeier’s State Secretary Markus Ederer, and Foreign Office Political Director Hans-Dieter Lucas race between Paris, Moscow, Berlin, and Kiev to explore which “adjustments” Kiev might accept, to enable ceasefire negotiations to begin. Poroshenko and Putin also talk at length on the phone on February 3 and 4.

Washington’s role remains ambivalent. On February 4, US Secretary of State John Kerry stops in Minsk and is informed of the united European effort. Yet both Merkel and Steinmeier regard the American debate over delivering weapons as unhelpful to their efforts. They fear it might raise false hopes within the Ukrainian government and reduce the potential for compromise.

On Thursday, February 5, Merkel and Hollande fly to Kiev – and then on to Moscow; a plan to which previously only a small circle has been privy to, including EU high representative Mogherini and EU Council President Donald Tusk. At the same time, Steinmeier visits Warsaw and Riga to inaugurate the Latvian EU Council presidency. Latvia and Poland are the EU members closest to Ukraine, and Steinmeier aims to clarify the current diplomatic approach. The hope is to avoid the impression that Ukraine is being coerced to concede its territorial claims in eastern Ukraine.

The talks between Merkel, Hollande, and Putin in Moscow on Friday, February 6 last four hours. The German-French duo stress that there will not be any rupture in the trans-Atlantic alliance even if the US were to deliver weapons to Ukraine over European objections. The message is twofold: Putin may be better off making an agreement over Ukraine under the mediation of the Europeans. And the repeated offers of establishing a Russo-EU free trade zone should not be misunderstood: Europe and the US would not be divided over the conflict.

On Saturday, February 7, Merkel and Poroshenko meet US Vice President Joe Biden at the sidelines of the Munich Security Conference and brief him on their discussions. The next day during a phone conference in “Normandy format” (France, Germany, Ukraine, and Russia) they arrange a summit in Minsk for the following Wednesday. Representatives of the “Trilateral group” – Russia, Ukraine, and pro-Russian separatists – are to join the meeting. After Merkel gets assurance by President Barack Obama that the US would back the European-led negotiations, February 12 sees the agreement of a 48-hour truce. It includes concrete implementation plans – complete with deadlines – for the essential points of the Minsk agreement.

During this period it becomes clear that the various levels of response – short-term crisis management, medium-term planning, and long-term consideration – must all be pursued simultaneously. Back on February 5, NATO’s foreign ministers had resolved to strengthen the rapid response force for eastern Europe to reassure increasingly uneasy eastern NATO and EU partners. In western capitals, efforts are also made to push back against the Russian “information war.” On February 16, in response to the earlier shelling of Mariupol and in spite of the Minsk agreement, 19 additional separatists and Russians are added to the EU sanctions list.

Agreement of the Minsk implementation treaty (“Minsk II”) affords little respite to the exhausted diplomats – it immediately becomes apparent that Putin’s request to delay the ceasefire for 60 hours was a ploy to give the separatists time to seize the crucial rail junction of Debaltseve. In marathon telephone conversations, Merkel, Hollande, their foreign ministers, and their advisers nevertheless convince Kiev, Moscow, and the separatists to keep to the agreement.

On the European side, the tone changes to a cautious optimism. In the coming weeks a trans-Atlantic discrepancy emerges as some American generals underline their concerns that the ceasefire will be exploited by the Russian side to resupply forces so they can later march on Mariupol. But Germany’s statements stress minor progress in implementation of the Minsk agreement.

Thoughts on New Concepts

Despite the massive efforts demanded by the management of the immediate crisis, efforts to develop long-term concepts for dealing with Russia have continued. In January, the German government decides to establish a new Russia and Eastern Europe research institute. Steinmeier wants new policies to be grounded in an improved understanding of social, economic, and political developments in Russia and post-Soviet countries.
And again, Moscow is offered incentives to work with the EU, particularly in light of Russian economic troubles ­– a result not so much of Western sanctions, but of low oil and gas prices. In their conversations with the Russian government, the Germans and French insist that a new gas agreement with Ukraine and adjustments to the EU-Ukraine Association Agreement must be addressed in the first half of 2015. Indeed, Merkel explicitly emphasized on February 2 that she wants Russia to remain Europe’s energy provider, even as countries like Ukraine have turned away from Russian energy with surprising speed, threatening Russian gas provider Gazprom with the loss of important markets.

Steinmeier uses the Munich Security Conference to stress that the development of new concepts for dealing with Russia continue – necessarily so, despite the crisis. The relationship with Russia must be built on new foundations – even as the trust of ten years ago is now destroyed. His speech included this core section: “Germany has a particular responsibility for Europe’s security. That means that we must think beyond the current conflict in eastern Ukraine. I don’t mean that in the sense of going back to how things were – that won’t happen and it would be an illusion, a dangerous one at that. What I mean is that if we’re able to de-escalate and resolve the critical conflict, how do we then want to re-incorporate Russia into a European security architecture after trust has undoubtedly been lost. … And this is why what I am saying now is also a call to Russia to tell us what kind of contributions they want to make, what they want to contribute in order to bring about a security architecture that is beneficial to all of us.”

The same day, February 8, Steinmeier’s party leadership committee publishes a paper that refers back to Brandt’s Ostpolitik while aiming to point the way forward: “The EU and Germany cannot give up on a European Russia. Our goal remains the integration of Russia in the broader European political, economic, and security structure,” it says. “We should be aware of the opportunities that a trade policy initiative offers for conversations between the EU and the recently founded Eurasian Economic Union. This project shows an opportunity for equal partnership in the future.” Of course, respect for the democratic rights of self-determination of Ukraine and other countries of the eastern neighborhood of the EU is a prerequisite for such partnership. The goal is a common trade area “in which, beside the EU and the Eurasian Economic Union, all countries would be able to take part.”

On February 12 Merkel, Hollande, Poroshenko, and Putin sign a general declaration in Minsk saying: “The national leaders and heads of government commit to an unchanged vision of a united humanitarian and economic space from the Atlantic to the Pacific on the foundation of full respect for civil rights and the principles of the OSCE.” At the following EU summit, all 28 member states support the agreement. Meanwhile, Moscow continues to receive signals that further cooperation is wanted – if and when basic framework conditions are met. Steinmeier says in a March 5 interview with the German daily Handelsblatt: “I do not want Europe to be permanently walled off from Russia. Even if a political solution takes many years, possibly even a decade, we must do everything in our power to solve the conflict.”

Yet in Berlin talk of cooperating with the Eurasian Union is quieting down – partly due to the reticence of Eastern European countries who think little of the inclusion of Russia at the moment. The “wiggle room” for a new German and European Ostpolitik is narrow – especially as polls show that German citizens have lost their trust in Putin. Concern remains that Hungary and Greece might pursue a separate policy of rapprochement with Russia, thus undermining unity within the European Union.

Despite slow progress in the development of a new Russia policy, two important decisions are made within a week: On March 11 the International Monetary Fund decides to release $17.5 billion for Ukraine. And on March 12 the OSCE member states – including Russia – extend the Ukraine mission by a year and increase the number of observers to a thousand. Both decisions are seen in Berlin as important contributions to stabilizing the situation in Ukraine.

Shortly before, Merkel had sent a signal to Moscow: She will not attend the traditional military parade commemorating the end of World War II on Red Square on May 9. Instead, she agrees to join Putin in laying a wreath at the Tomb of the Unknown Soldier a day later. The gesture is symbolic – when the present is marked by enormous problems and few specifics are known about the future, the memory of a shared, bloody past could help: “The duty to remember the dead exists independently of what currently separates us from Russia,” says Merkel’s spokesman Steffen Seibert when announcing her trip.

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Illustration: Dominik Herrmann

Allies, take note: with German leadership you get, and we do apologize for this, the deutsche Sprache – not to mention German thinking, which tends to be, well, complicated, and rarely straightforward enough to conduct proper methodical exegesis – and so you may yet, notwithstanding our very sincere efforts to explain ourselves fully and wherever possible with extensive footnotes and useful diagrams, be sorry you asked. “Man acts as though he were the shaper and master of language, while in fact language remains the master of man,” wrote the German philosopher Martin Heidegger, adding by way of elucidation: das Nichts nichtet. We must admit in all sincerity that this, like many of our deepest ideas, sounds more confusing and less helpful in English: “the nothing nothings.”

Many may associate this concept of leading from the center with the characteristic quiet of Chancellor Angela Merkel – and the <> shape she makes with her hands, fingertips joined together in a rhomboid in front of her navel (or solar plexus chakra, seat of self-confidence and -control), when listening impassively to her Social Democrat coalition partner Sigmar Gabriel; or US President Barack Obama; or EU Commission President Jean-Claude Juncker; or Greek Prime Minister Alexis Tsipras, all of whom keep on talking (and talking …) despite the fact that she has already decided what they are going to do.

But while the defense minister’s ambitions are thought to be – like her self-confidence – essentially limitless, she is undoubtedly aware that her position in the German cabinet is not known as the government’s ejector seat for nothing: since 1949, there have been eight chancellors and 16 defense ministers. She has enough self-control, at least for now, not to be seen as wishing to lead from the center of the cabinet table, since one of the most important lessons from the history of the Merkel era is that such leadership invariably leads to departing the cabinet table entirely. And to be a good German is to learn from history and not be seen as trying too hard, which is uncool.

Meanwhile, Berliners who generally would rather be dead than be thought to be trying too hard at anything – among them tens of thousands of Israelis who have taken up residence in the German capital because they are bored by history (and Israeli chocolate pudding is so much cheaper in Berlin than at home) – may have assumed that Führung aus der Mitte would mean uniforms and armored personnel carriers among the laptop-and-latte crowd in the cafes on Torstrasse, thereby definitely and possibly terminally reducing the coolness of Berlin-Mitte. They, too, need not worry.

No, what Ursula von der Leyen was trying to explain – in, it must be said, teutonically convoluted fashion – was what Germany does not want, namely a) to lead from the front (or, as she called it, “Prussian style”), or b) “dominance over our neighbors” (been there, done that, didn’t work out so well). Führung, she remarked at a recent conference in Brussels, still sounds terrible in German. “Really?” said the moderator. “I have a Führerschein (driver’s license) in my pocket.”

Nor, presumably, does von der Leyen want Germany to “lead from behind,” like Obama in Libya, meaning sitting back, letting allies screw things up, finding yourself forced to deliver weapons anyway, and ending up bombing much of the Middle East on a daily basis.

A quick and highly unscientific Google search reveals that in the business world, “leading from the center” is a recommended technique for middle managers seeking to run their departments efficiently and with a minimum of anomie, subversion, or actual insurrection (think “The Office”). While this fits neatly with German Foreign Minister Frank-Walter Steinmeier’s self-description as Europe’s “Chief Facilitating Officer,” it is perhaps not a felicitous concept when applied to sovereign countries.

To be fair, the concept behind “leading from the center” is as well-meaning as it is appropriate: the idea is that Germany should assume responsibilities commensurate with its power, but that it is also dependent on and vulnerable to its neighbors and partners. Therefore, it must work together with them, offering its own resources to bolster the capacities of others. So far, so gut, as we say.

And high time, too. Germans refused for nearly a quarter-century to accept that the enlargement of the EU and NATO had allowed their country to export its border security problems outward to the periphery of Europe. It took Russia’s armed support of the “separatists” in eastern Ukraine to make them understand why the Balts are afraid. Now Merkel is holding together a European coalition against Putin, but allies still complain that they are not in the room (much less consulted) when Berlin (sporting a French fig leaf) cuts deals like the much-criticized Minsk II agreement with Moscow.

“You’ve come a long way, baby!” – a legendary 1970s advertising slogan – certainly applies to Germany in this case. But it still has quite a way to go. And maybe it needs some better copywriters.

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Who Will Blink First, Alexis or Angela?

Opinion polls show that Greek citizens want to renegotiate terms with their creditors – but want to stay in the euro. This is the mandate that they gave Prime Minister Alexis Tsipras. The new Greek government has exercised brinkmanship in trying to achieve this: it unilaterally declared that it would not respect the agreement between Greece’s previous government and the country’s creditors, that it would increase government spending, and that it was insolvent at the same time.

The response has been predictable: the rest of the euro area – and in particular the European Central Bank and Germany – felt blackmailed and called Greece’s bluff. The ECB made access to its liquidity more difficult for Greek banks, while Chancellor Angela Merkel’s government has signaled it considers a Greek exit from the eurozone manageable.

What Have We Learned from Athens?

This response was necessary, but insufficient. A monetary system cannot function credibly if a small part of the union can hold the core of the system for ransom. A country cannot unilaterally decide to increase expenditure at the expense of other parts of the union and hope to receive funding for it. It also cannot unilaterally refute agreements between its previous government and its European partners.

Yet at the same time, ignoring the Greek vote is not an option. Greeks need to believe that their lives will improve. This perspective cannot be achieved via gambling, unilateral action, or blackmail; rather, it needs to be the result of domestic action and an agreement between the partners of the Eurogroup. The essential elements of a deal include serious domestic reform, such as reduced corruption, further preferential funding, a significant reduction in savings demanded by the Troika, and more certainty about the terms of the debt should growth rates disappoint.

The heated discussions about Greece show that a monetary union needs political collaboration and trust to work. There needs to be trust that agreed principles are followed – but also trust that the prescribed solutions will not destroy an economy. While previous Greek governments have put their country in a bad situation with irresponsible fiscal policies, too much of the adjustment burden during the crisis has been loaded onto the backs of the Greek citizens, and too little onto private creditors.

Where Did the European Fracture Start?

The euro area was always comprised of two groups of countries with substantially different socio-economic models, which means they had different macroeconomic policies and outcomes. There were the core countries such as Germany and France, which had continuously belonged to (or shadowed) the Exchange Rate Mechanism (ERM), introduced in 1979, and the peripheral countries like Spain, Portugal, and Greece, which had stayed mostly outside the ERM or joined late.

Different initial conditions in the core and the periphery, mainly in terms of interest rates, led to a credit boom in the periphery after the introduction of the euro, financed by capital flows from the core. The result were increasing different levels of competitiveness within the eurozone, which were insufficiently monitored and difficult to counter in the absence of the exchange rate instrument. As a result, current-account balances and net foreign asset positions diverged to an unprecedented degree between the core countries (in surplus) and those on the periphery (in deficit). When the financial crisis hit in 2008-09, private capital flows from the core to the periphery suddenly stopped, leaving a mountain of external (private and public) debt in the periphery owed to creditors in the core countries.

Why Did the Cracks Widen?

Instead of producing real and sustainable convergence between the core and the periphery, the single currency resulted in imbalances and was ill-prepared to deal with them. This shortcoming, along with deeply entrenched opposition to bank resolution in a system characterized by major inter-dependencies between political systems and financial institutions, was a major hindrance in getting to grips with a European financial-cum-sovereign-debt crisis.

Another weakness of the euro area’s economic governance architecture was that it lacked a mechanism to monitor and correct macroeconomic imbalances, except in budgetary policy. Enforcement of the deficit rules – limiting government deficits to 3 percent of GDP, among others – was inadequate, public debt sustainability received relatively little attention and private debt was completely ignored. Similarly, scant focus was trained on external debt – and current account imbalances.

When the global crisis triggered the European crisis, Europe’s policy system was largely unprepared. The initial policy response in 2009 was timely and coordinated, consisting of monetary policy easing and a substantial increase in fiscal deficits. But crisis management faltered after the May 2010 elections in Greece, which triggered the European debt crisis, and several stressed countries started losing market access.

What is the Situation Now?

So far, the overall crisis response has not produced the desired results. The banking union project may now be nominally complete, but it remains a work in progress. GDP has not grown since 2008, and unemployment rose from 7.5 percent to 12 percent in 2013. Inflation has fallen substantially, and in December 2014 area-wide deflation (of -0.2 percent) was recorded for the first time since 2009. Internal adjustment has proceeded, with current-account deficits shrinking substantially. However, current account surpluses have, if anything, increased in Germany and the Netherlands, reaching 7 percent of GDP and more in 2014. Some wage and price adjustment was implemented in the crisis countries, but relative prices between the three biggest euro-area countries – Germany, France, and Italy – have adjusted only marginally. The very low area-wide inflation rate has not helped: the lower it falls, the more difficult it becomes to achieve the necessary adjustment.

The extent of Greece’s difficulties and its inability to adjust effectively – through exports, for example, or decreasing wages – may render it an outlier, but the obstacles Greece faces are not qualitatively different from structural issues that have arisen throughout the currency union. Besides the severe macroeconomic imbalances at the beginning of the crisis, four common problems can be identified.

First, from 2011 to 2013, fiscal policy in the euro area was pro-cyclical. In 2014, fiscal policy was flat and did not counteract the continuing deterioration of the economy, public investment and R&D expenditure were cut during the crisis. Second, Europe has taken a gradual approach to bank resolution; unresolved banking issues continue to plague credit provision. Third, the ECB has been slow to respond to the deteriorating economic situation, and has tried to avoid taking risks. It also misjudged the situation twice, resulting in erroneous rate increases. And lastly, no serious and significant measures to address price divergence between Germany, France, and Italy have been undertaken.

What Has to be Done Now?

Progress needs to be made in three directions simultaneously. First, bank survival must be made independent of the stability of member states; second, divergences in competitiveness need to be ameliorated; and third, fiscal coordination should be further advanced.

At a famous summit in June 2012, the European leaders announced that they intended to “break the vicious circle” between banks and sovereign states. This was a new step in European integration. The creation of the so-called banking union is arguably the most significant deepening of policy integration since the start of the euro, and certainly since the start of the crisis. The aim was to make the financial system more resilient and weaken the link between banks and states.

To achieve this, three major steps had to be undertaken: first, bank supervision had to be moved from the national to the European level. Second, mechanisms for bank resolution, in particular for banks operating across borders, needed to be developed. Third, mechanisms were needed to reduce the risk for taxpayers and share the remaining risks across the union.

Are the New Powers of the ECB Enough?

Policy makers have made significant progress on all three, but the work is not finished. In particular, the link between national public resources and fragile banks will remain for quite some time. The biggest success so far is the creation of a strong and centralized supervisor in the European Central Bank, the Single Supervisory Mechanism. The ECB has not only hired 1,000 new experts for its banking supervision, it has also brought substantial transparency to Europe’s banks by assessing the quality of their balance sheets with stress tests, and harmonizing bank reporting. Banks that fell below certain thresholds for risk-weighted capital in these stress tests are increasing their capital to become more resilient. Yet important steps remain unfinished.

A first important question is whether the ECB, as a newly established supervisor, will be able to ensure that deposits can circulate freely within banking groups. During the crisis, national supervisors put limits on subsidiaries to reduce the exposure of depositors to capital flows and risks in other countries. This policy has rendered bank integration across borders less beneficial, and has undermined financial integration. Yet the idea of abandoning the policy altogether has implications for deposit insurance, and will therefore remain controversial.

And the Other Banks?

Another important question is how the ECB and national authorities will continue to clean up and restructure the banking system. And the role of private creditors in bank restructuring and resolution needs to be examined. Tough legislation has been put in place but enforcement may be less credible. If a bail-in is not enough to solve banking problems, fiscal resources will again be used. The joint funding mechanisms developed will only suffice for small to medium-sized banks. Bail-in and risk sharing will in any case not be enough to reduce the link between banks and national sovereigns – banks will also have to reduce their exposure to sovereign debt and other claims of the countries in which they are located.

Overall, the process of repairing and deepening financial integration in the EU, and the eurozone in particular, is bound to take time. The crisis has dented investor confidence. However, the establishment of a strong supervisor and the progress made on banking resolution should be considered game changers.

What Do We Need to Hold Things Together?

To address competitiveness divergence, the euro area needs a proper policy framework. Leaving adjustment to market forces alone is unlikely to work, as labor mobility in the euro area will remain much lower than in the United States. The framework should thus ensure that wages move in line with productivity. Such a system could be introduced in each euro area state. These national mechanisms would constitute national competitiveness councils, with a Eurosystem Competitiveness Council consisting of both national Competitiveness Councils and the European Commission. Its primary task should be to ensure that no euro-area country fixes a wage norm that would result in significant competitiveness problems for itself and/or others.

The fundamental question for the eurozone is whether to move ahead with fiscal integration, accepting that national parliaments would lose some power; or whether to implement full decentralization in which fiscal decisions are taken at the national level. This latter option would accept defaults without mechanisms to safeguard financial stability, and would therefore be politically, socially, and financially unstable.

A More Constraining Framework 

Europe needs a reform of the fiscal framework along the lines of “fiscal federalism by exception,” as originally proposed by Jean-Claude Trichet in his Charlemagne Prize speech of 2011. This puts the focus of fiscal surveillance on debt sustainability as well as ensuring a proper fiscal stance. The closer a country moves to unsustainability, the stronger the intervention would be, with the ultimate sanction being a complete removal of credit. This enhanced governance would be in addition to possible debt restructuring. The fiscal framework should also ensure that the sum of deficits in the euro area achieves a reasonable area-wide fiscal stance. The new framework would thus not only in extreme cases be able to overrule national parliaments in prohibiting borrowing, it would also have the right to force member states to run higher deficits if the eurozone economy hit a substantial recession. In other words, the notion of “fiscal federalism by exception” should be made a symmetric one.

The governance of fiscal surveillance could be organized in a Eurosystem of Fiscal Policy, with a governing council comparable to the eurosystem of central banks. At its centre would be a eurozone Finance Minister – or a European Budget Commissioner, as Wolfgang Schäuble has suggested. In normal times, fiscal deficits would still be managed on the national level, and the recommendations of the Eurosystem of Fiscal Policy would not be fully binding. But in exceptional circumstances it would take control.

Coordinate but Do Not Share Risks

It is important to note that this model does not imply the creation of a “federal budget”. All government spending would remain at the national level. It is also important to note that the proposal does not foresee risk sharing beyond the current ESM capacities. It is essentially an improved framework for fiscal policy coordination. A much more far-reaching step would be to establish a fiscal mechanism for proper risk sharing across countries, such as a European unemployment insurance mechanism. This would introduce real risk-sharing. But this would arguably only be possible if labor market conditions were to be significantly harmonized.

If anything, the Greek case demonstrates that the euro area needs to increase integration and improve its coordination framework. A monetary union cannot credibly work if any member can act unilaterally. The banking union needs to be completed, competitiveness divergences need to be kept in check as labor markets will remain largely national, and fiscal policy needs to ensure debt sustainability, while defining a proper fiscal stance for the eurozone in recession.

Pia Hüttl, a research assistant at Bruegel, contributed to the article. 

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This apparent disengagement by Britain is part of a broader set of actions that have given rise to a bout of national soul-searching about the country’s future role in the world while raising questions in European capitals and Washington about whether Britain can still be counted as one of the world’s major powers.

For example, can Britain help Europe craft effective responses to challenges in its neighborhood so long as Prime Minister David Cameron promises the country an in-out referendum on its EU membership should the Conservatives win the general election on May 7? The government also seems relaxed about allowing national defense spending to fall below 2 percent of GDP six months after hosting a NATO summit at which it pledged – along with other members of the alliance – to uphold this threshold. And, as the recent report by the British House of Commons Defense Committee noted, British troops are now largely absent in Iraq as other Western countries help the Iraqi government battle the Islamic State. What happened to Britain rejecting the notion of “strategic shrinkage,” as former Foreign Secretary William Hague put it at the beginning of the coalition government?

Rebuilding Foundations

While these are fair questions, Britain’s seeming lack of engagement in the Ukraine crisis does not paint an accurate picture of the country’s overall foreign policy. First, the government’s core priority is to rebuild the foundation of the UK’s long-term economic prosperity. The financial crisis of 2007-08 exposed the bankruptcy of a British economic model that was overly reliant on private debt, public sector spending, and tax income from a financial sector on steroids.

As a result, the government has been willing to let certain key defense capabilities lapse, including essential assets such as maritime patrol aircraft, in the belief that it will be able to reinvest in the country’s military power capabilities later. Instead, the government has prioritized what it terms “commercial diplomacy,” leveraging Britain’s diplomatic connections and historic links to generate trade with and investment from emerging markets.

Second, British public opinion is suffering more than most from intervention fatigue following the country’s expensive and bloody interventions in Afghanistan and Iraq. In August 2013 the government lost a parliamentary vote on military intervention in Syria and changed its policy, a climb down clearly attributable to the government’s unwillingness to take on a public estimated to be 70 percent opposed to any such intervention. The government must also manage a far more complex domestic political environment. A historic fragmentation of the British party system is currently underway, with the UK Independence Party (UKIP) and the Scottish Nationalists likely to play an important role in the outcome of the upcoming election, making the government far more risk-averse than in the past.

Third, the fact is that all governments inhabit a world in which the exercise of national power to achieve external goals is exceedingly difficult, and all countries, Britain included, are currently more selective in where they put their effort. In this context, the British government has made some intelligent choices in the past five years. Sustaining its pledge to spend 0.7 percent of national GDP on overseas assistance allows Britain to help promote stability and growth in parts of the world that would otherwise likely become sources of regional and international instability.

Its chairmanship of the G7 in 2013 put the notion of “open government” at the vanguard of the international agenda at a time of growing public frustration with tax avoidance by multinationals and opaque, sometimes corrupt, tendering processes for major international infrastructure projects. Its campaign against sexual violence in conflicts has made it harder for governments inside and outside conflict zones to turn a blind eye to this devastating phenomenon. The government has also been right to focus on strengthening domestic and international cybersecurity. And the decision to join the Asian Infrastructure Investment Bank as a founding member, while taken with one eye on future business and financing opportunities, also underscored the government’s desire to ensure that investment in the long-term growth of developing countries takes place within as transparent an environment as possible.

Sometimes Absence Helps

At the same time, accusations about Britain’s absence from key recent international crises do not assess whether more overt UK involvement would actually have been helpful. If Britain, one of America’s closest allies and a country with poor bilateral relations with Moscow, had demanded a leadership role alongside Merkel in the Minsk negotiations with Putin, this would probably have made agreement more difficult to achieve. Instead, the German government has been able to rely on full British support in developing a tough line on EU sanctions against Russia, including UK acceptance of the impact on the City of London’s role as a base for Russian corporate financing. In a similar vein, overt interference by the British government, as the former colonial power, in support of the “Occupy Central” protesters in Hong Kong in 2014 would probably have made it harder for the various parties to arrive at a peaceful solution.

The notion of British retreat from the world stage needs a more dispassionate assessment. Britain still has the world’s fifth-highest defense budget, the sixth-largest economy, one of its two leading financial centers, and is the second-largest contributor of international financial assistance. It remains one of five permanent members of the UN Security Council and a nuclear power. Not bad for a country representing under one percent of the world’s population. British diplomatic influence is enhanced by its membership in some of the world’s key institutions, from the EU, NATO, and G7 to the G20 and the Commonwealth. And Britain’s capacity to coalesce solutions benefits from the use of English as a global lingua franca, by London’s status as a global hub, and the reach and influence of its media, universities, and non-governmental organizations.

In addition, current public antipathy to British overseas military interventions could ease in the future, especially if the threat posed by the Islamic State starts to seriously undermine British domestic security. And, while Britain may not have been in the diplomatic lead on Ukraine, there is stronger British public support for sustaining sanctions than in many other EU member states, as well as a strong belief that Britain should retain a wider international role. Being an ally to Merkel at this stage, therefore, may be more useful than trying to be a leader in the EU.

Great Still

There are, though, two serious worries for the future. The first is the government’s willingness to countenance a further decline in British defense spending. As a permanent member of the UN Security Council, Britain has an institutional responsibility to help sustain peace and stability across the world, over and above its self-interest as a nation heavily dependent on a stable global economy. The trajectory of defense spending means that the UK may be unable to fulfill this role for at least a period of five to ten years from 2016-17. While this might have been an acceptable trade-off in 2010, it is not in 2015, when Russian defense spending has moved in the opposite direction and reasons for it to interfere in European security have multiplied.

The second worry is that widespread ambivalence across Britain about the value of EU membership is undermining the capacity of British policymakers to offer leadership within the EU at a time of unprecedented risk and uncertainty. An energy union, a single digital market, service sector reform, and the Transatlantic Trade and Investment Partnership (TTIP) are all essential components of future British prosperity and security, but very few British politicians are stepping forward to make this case. Instead, the sense of drift over Europe undermines the capacity of other major actors like Germany to play as strategic a role as they might like, given that UK presence and support cannot be taken for granted.

At a time when national power is more difficult to wield effectively than ever and leadership requires partnership, the British obsession with wondering whether it would be better off in or out of Europe is a dangerous self-indulgence that undermines its international influence.

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The problem is that many mainstream politicians, rather than waking up and smelling the coffee, are pressing the snooze button. They close their eyes and mumble to themselves: “It’s just because of the crisis.” “When growth returns, voters will come to their senses.” “We can’t fight these demagogues – and we shouldn’t descend to their level.” “Better to ignore them. Don’t give them the oxygen of publicity.”

The snooze button is dangerous in politics, however, and while it is true that the economic crisis has fueled protest votes, many of the new trends in European politics predate the euro’s problems. Southern Europeans have long felt frustrated with elite-centric debates and corruption, while Northerners’ anxiety about the future of welfare states was growing before the euro started to wobble. The crisis has exacerbated and accelerated these trends, and the austerity policies that followed resulted in the EU getting much of the blame.

Gaining Ground

Deeper, longer-term trends are fueling the rise of populism. Protest voting is the result of anger and fear among the public as the decline in the power of individual governments becomes apparent. Voters still expect the politicians they elect to be able to protect them even as governments’ power to insulate their populations from the results of global economic trends and problems in other parts of Europe is reduced. The crisis has now shown European voters the dark side of global interdependence and a single currency that makes one country’s liabilities the problem of all.

Protest voting is not new, but it carries greater weight in government as populists begin to capture votes from both former social democrat and conservative supporters. In previous decades, xenophobic and anti-EU populist parties tended to gain the votes of only a small proportion of the population in only some of the EU member states. Now they are gaining electoral ground in most countries and overtaking mainstream parties in a few. In political discourse at both EU and national levels, the core logic of populist politics – mistrust of elites, cynicism about political institutions, and demands for the exclusion of newcomers – is spreading as mainstream parties take it up. Many parties of the center are leaning much further to the right on immigration and starting to lean to the left in their rhetoric on protecting the welfare state.

The rise of populism on the extremes is perhaps inevitable as the center has become more crowded. Since 1989 there has been a structural shift in party politics across Europe toward the center, which has left much more room on the fringes of the political spectrum for new parties to occupy. Neoliberal economics became widely accepted after the collapse of communism and the liberalization of European economies to global markets through the Single Market program. Mainstream parties of the left and right moved to the center of politics, largely agreeing on the fundamentals of macroeconomic policy. The political game has changed from a fundamental left/right contest over the role of the state in the economy to a question of how much and in what ways to protect the losers of globalization through the welfare state and limits on migration. This has left plenty of space for populists to blame all mainstream parties for being self-serving and deaf to the concerns of the people, ignoring the complexity of the problems and proposing simple, radical solutions. They seize the opportunity to play to public fears and appeal to identity arguments rather than arguing about policy options.

Much of what they propose is unfeasible unless their countries withdraw from the global economy, and their measures would damage liberal democracy. But they are still gaining ground, and their style of politics is affecting other parties too. Populists occupying the fringes are not a temporary exception but the new normal. Their way of organizing supporters through exploiting social media, blaming elites, and offering charismatic leaders rather than policy alternatives is here to stay, and mainstream parties need to adapt quickly.

Preferring the Original

But the centrist parties should not run after the populists and feed intolerance. As Marine Le Pen has observed, voters prefer the original to the copy. If they want to survive the populist onslaught, mainstream parties should look more deeply into why so many more voters than ever before are leaving them – and how liberal values can bring them back. Membership in mainstream parties is in freefall in many countries in Europe. Record numbers of voters have become what political scientist Catherine Fieschi terms “reluctant radicals” – people who previously voted for mainstream parties but have become disillusioned. They can be won back if centrist liberal parties address their real concerns, which lie below the anger, fear, and apathy.

After all, one person’s “populist” is another person’s “authentic democrat in touch with the common people,” and there are often legitimate grievances behind even the illegitimate expressions of political outrage. Long-standing public concerns are not being addressed by mainstream politicians, and that poses a problem for democracy if it results in falling public trust in political institutions. There is no replacement for political parties as the fundamental institution offering voters choice, but many old political parties with a long pedigree in the 20th century are in danger. Rather than calling the new parties untouchable, mainstream politicians and commentators need to look carefully at what exactly they espouse. It is vital to distinguish between legitimate protest and criticism of elites, and exclusionary politics that seek to blame the most vulnerable in society and to bring down the whole infrastructure of institutions and policies that protect them. The many parties that are called populist have different motivations, tactics, and rhetoric. The ones that threaten the openness of European societies are the politicians who call for the exclusion of marginalized groups, such as migrants, ethnic minorities (from Roma to Muslims), and the lesbian, gay, bisexual, and transgender (LGBT) community, and criticize EU policies, laws, and funding protecting rights and personal freedoms.

Populism is by its nature illiberal in that it denies pluralism and refuses compromise. Moreover, it usually seeks to exclude at least one minority group in order to give itself legitimacy as the voice of the “authentic” people of the community. But most dangerous for open societies are the xenophobic populists, who make exclusion and denial of equality the main plank of their electoral platforms.

This xenophobic populism is starting to meet and merge with euroskepticism. Several parties that started as mainly anti-EU – for example, the United Kingdom Independence Party (UKIP) – are increasingly using xenophobic rhetoric, including demands for the exclusion of migrant newcomers as part of their discourse. Conversely, some of the parties that started as openly racist – for example, the French Front National (National Front) – have moved to blaming the EU and calling for an exit from the euro to broaden their appeal. These two discourses converge when populists blame the EU for immigration and attack its protection of fundamental rights.

In his fundamental defense of liberal democracy The Open Society and its Enemies, published in 1945, Karl Popper warned of the threat of totalitarian ideology to open societies. For Popper, the defining feature of liberal democracy is that it allows institutional change without violence. The EU has developed the capacity for change without violence on an unprecedented level. One of the main reasons why populists attack European integration is that it limits the excesses of governments: EU laws prevent the rollback of protection of rights and freedoms. Membership in the Union ties countries into a system of international commitments to liberal democracy that makes it harder for them to squash press freedom and dissent, or to treat immigrants and minorities harshly.

The Fidesz government in Hungary is testing the limits of the EU’s restraining power, and if it continues to receive little criticism from fellow member states, other countries’ leaders will be tempted to follow. Trying to outflank UKIP’s europhobia, the British Conservatives are threatening to leave the European Convention on Human Rights (which all EU members must implement). Both governments criticize the restrictions on sovereignty that EU membership imposes. What is surprising about their domestic debates is how few voices point out to the public that these restraints protect them from government excesses. The populist logic has gone mainstream.

How to Tell One from Another

There is much confusion about the definition of populist parties. Dutch political scientist Cas Mudde made a seminal classification of populist radical right parties in Europe that continues to distinguish well between these diverse groups. Mudde defines populism as an ideological feature – not merely a political style – that considers society to be ultimately separated into two homogenous and antagonistic groups: the “pure people” and the “corrupt elite.” Populist ideology puts the “general will” of the people first, even when it clashes with human rights or constitutional safeguards.

If this dichotomy between the “pure people” and the “corrupt elite” is taken as the core of populism, the term covers parties across the political spectrum. In the European Parliament formed last year, populist parties under this definition would include a substantial number of the anti-austerity and anti-bailout parties on the left end of the hemicycle. The key difference determining whether they threaten the openness of societies is the extent to which they espouse the exclusion of minority groups and xenophobia toward people who are different from the “pure people” they claim to represent. While parties like the Greek Syriza (Coalition of the Radical Left), the Italian Movimento Cinque Stelle (Five Star Movement), and the Spanish Podemos (We Can) position themselves as representatives of the people in the struggle against corrupted political systems, they are essentially egalitarian parties that do not make xenophobic claims or espouse a nationalist ideology. On the contrary, these parties advocate forms of emancipation, in that their party programs and structures aim to offer ways for excluded citizens to achieve meaningful democratic political participation.

The parties that threaten openness in European societies are those that Mudde terms “populist radical right parties” (PRRPs). Central to the identity of such parties is the ideology of nativism, which “holds that states should be inhabited exclusively by members of the native group (‘the nation’) and that non-native elements (persons and ideas) are fundamentally threatening to the homogenous nation state.” Nativism combines xenophobic and nationalist ideas, although the grounds for defining non-nativeness may vary across parties. For some parties the criteria are ethnic, while for others they are national, racial, religious, linguistic, or even cultural. Based on this exclusionary vision of society, PRRPs oppose the fundamental values of a liberal democracy, most notably political pluralism and the constitutional protection of minorities.

Mudde excludes non-nativist right-wing populists from the PRRP umbrella, mostly because their core ideologies are not nativist (e.g. UKIP), even though they may include far-right factions or at times employ xenophobic or nationalist rhetoric (e.g. the Finns Party). But some of the parties that have gained support in recent elections are borderline cases under Mudde’s terminology. These parties are generally considered more legitimate political actors than their more radical counterparts because they are not so openly racist and exclusionary; nonetheless, their rhetoric can be very harmful to the open society when their leaders erode the social norms of inclusion and anti-racism in the broader political discourse, for example by blaming an entire ethnic group, such as the Roma, for crime. Moreover, PRRPs are influencing the policies proposed by mainstream parties, particularly on immigration.

The European Parliament now contains a fragmented group of xenophobic populists. While some PRRPs lost seats at the European level, including the Italian Lega Nord (Northern League) and the Dutch Partij voor de Vrijheid (Party for Freedom Party), others lost all representation, such as the Bulgarian Ataka (Attack) and the British National Party. However, new parties like the Nationaldemokratische Partei Deutschlands (German National Democratic Party) also entered and, taken together, PRRPs gained 15 seats. This resulted in 52 Members of the European Parliament (MEPs) from ten parties. To these must be added six borderline cases. Some have far-right factions like the Finnish Perussuomalaiset (Finns Party) and the Latvian Nacionālā apvienība Visu Latvijai! (National Alliance: All for Latvia!); others, like the Polish Prawo i Sprawiedliwość and Konfederacja Polski Niepodległej (Law and Justice and the Confederation of Independent Poland), advocate the limitation of rights for specific minority communities – notably in relation to LGBT and gender equality; still others use xenophobic discourse to advance other standpoints, including anti-EU claims like those advocated by the British UKIP and the Hungarian Fidesz (“Hungarian Civic Alliance”). The total number of MEPs in this category amounts to 62, from five countries. Overall, that makes 114 xenophobic populist MEPs (15.2 percent) out of a total of 751.

The outcome of the 2014 European Parliament elections will affect the success of populists in national elections as well – there is a general election in the UK on May 7, and in Portugal, Denmark, Poland, and Spain in the fall – because gaining MEPs has given these parties opportunities to build greater visibility through the media, gain legitimacy, and receive more public money.

Don’t Join the Blame Game

The most dangerous kinds of populism emerging in Europe are those that denigrate political institutions and attack the public policies that protect vulnerable minority groups in society. Mainstream parties must stand up and defend this vital infrastructure for societies to remain open. They also have a duty to defend one of the EU’s greatest achievements: the consolidation of much of this infrastructure in institutions and commitments at European level.

But the established parties cannot beat the populists by trying to outflank them in the blame game. If they dance to the populists’ tune on exclusion by blaming minorities and migrants for Europe’s woes, they will find it impossible to stop the music.
Instead, they need to appeal to the “better angels of our nature,” in Abraham Lincoln’s words. Liberal norms of tolerance and anti-racism are still strong in European societies, and parties can regain support again by defending them robustly rather than adopting the same language as the populists.

Anti-immigration rhetoric is used to make underlying racism socially acceptable – this cannot be allowed to stand. Mainstream politicians can reclaim the debate by talking about the real issues that need to be tackled: the violent conflicts that cause people to flee the Middle East and Africa, the poverty that impels people to risk their lives on the Mediterranean. These are issues that deserve a responsible political debate and solutions at the EU level.

Nationally there is a desperate need to tackle the exclusion and disillusion of second- and third-generation migrants, as illustrated by thousands of young Europeans fighting for the Islamic State in Syria and Iraq. Increasing inequality – a topic in many European public debates – must also be addressed by the existing elites. So far, populists have failed to offer anything here as they avoid campaigning on detailed policy solutions.

Karl Popper’s idea of the open society remains a very attractive one in Europe. Politicians of the center-left and -right need to defend it as central to the freedoms and rights that all Europeans enjoy. That is the best response to the new populism.

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