Source: Ember/Agora Energiewende

The public discourse about the energy transition tends to focus on the additive side: can we add enough wind turbines so that they produce a quarter of our electricity? From a climate protection point of view, however, it is the subtractive side of the transition that is relevant. The objective is to avoid burning fossil fuels, and it doesn’t matter to the atmosphere whether we do so by running the dryer on renewable power, making it more efficient, or not turning it on at all.

It’s a bit like tobacco, another product we burned for a long time before we were aware of the health effects. You might have no hope of giving up cigarettes unless you exercise, meditate, or vape. But doing all of those things, as nice as they might be, will do little to reduce your risk of lung cancer if you still smoke a pack a day.

This irksome fact—that we need to stop consuming still-valuable resources—is what makes the low-carbon energy transition different from previous transitions and coal exits such an important part of EU climate policy.

Coal’s Dying Embers

The good news is coal is on the way out in Europe. In 2019, wind and solar generated more electricity than fossil fuels for the first time ever, as EU-27 power plants burned 339 million tons of coal, down from 586 million tons in 2012. The pandemic-blighted year of 2020 has seen a further drop, with EU coal power generation down nearly a third thanks to a mild winter, low demand during lockdown, and the falling cost of renewables.

Though the trend line is clear, the Europe-wide statistics mask major differences between countries. Sweden, Austria, and Belgium have already closed down their last coal power plants. Coal is increasingly irrelevant for power production in the United Kingdom, Italy, and France, which all plan to quit coal completely over the next few years. Lagging behind are Slovenia, Bulgaria, Greece, and the Czech Republic, which all generate a sizable share of their electricity from coal but do limited damage to the climate because of their relatively small economies.

Then there’s Germany and Poland. Each generated about as much electricity from coal as the rest of the EU combined in the first half of 2020, and each plans to burn coal for many years to come.

The Kohleausstieg

In July, Germany adopted a law to ensure the end of coal power by 2038 at the latest. Unfortunately, the Kohleausstieg will happen so slowly that it is incompatible with the Paris Agreement goals—to reach those targets, the German Institute for Economic Research found, Germany would have to quit coal by 2030. Critics also argue that the law will give power companies too much compensation for running coal-fired plants that won’t be profitable anyway.

On the other hand, the process has been a shining example of how to steer and manage the decline of an important industry, with power companies, coal miners and coal regions, and a majority of the Bundestag able to reach a compromise. The €40 billion set aside for coal-dependent regions is a sign that the government realizes the scale of the job. And the coal exit could go faster in the end: the German Federal Network Agency, for one, expects it to be wrapped up by 2035. An expensive date that arrives too late is better than none at all.

Light at the End of the Mine

Poland has set no date for its coal exit. Deputy Prime Minister Jacek Sasin recently said, “We believe that Poland’s dependence on coal energy will come to an end in 2050 or even 2060,” a timeline that makes Germany’s plodding exit look like a hundred-yard dash.

While the nationalist-conservative PiS government is especially close with the coal industry, politics is not the only obstacle to rapid change. Poland is wary of replacing some coal with Russian gas (as Germany has done) and also has no nuclear power plants (a soon-to-be-realized German objective). Ahead of the 2019 parliamentary elections the biggest opposition group, the European Coalition, proposed 2040 as an end date for coal. It appears Poland’s coal replacement will be a slow one, whoever is in charge.

It’s not as if Polish decision-makers are unaware that the future for coal is not bright. The CEO of state-owned coal giant PGG, Tomasz Rogala, admits that “the situation is critical.” The Ministry of State Assets, which Sasin leads, reportedly planned to introduce a restructuring plan for PGG in late July. The plan would have closed several loss-making mines this year, temporarily cut miners’ salaries, created a fund for miners who quit to receive retraining, and perhaps even set a coal exit date of 2036.

In the face of pressure from powerful trade unions, however, the government had to walk back its restructuring plans. (Poland is going ahead with a plan to combine its three utilities in two groups, one for coal and one for non-coal energy, which could pave the way for more changes to come.) It now wants to set up a commission, including union representatives, to find a solution acceptable to all.

Coal miners will benefit from the government’s recent creation of a strategic reserve of hard coal worth €30 million, the latest installment of state support for an industry that has come to rely on it. Polish miners are having to dig deeper and deeper to access coal, which makes it more expensive. In fact, Polish firms have been importing huge quantities of Russian coal because it is cheaper and higher quality, quite a contradiction for a country with such concerns about becoming dependent on energy from the east.

Angry Neighbors

Higher costs for mining, pressure from citizens upset about foul air—in 2016 Poland had 33 of the 50 most polluted cities in Europe—these are the internal forces working against the Polish coal industry. But there is external pressure too, mostly from Brussels. The rising cost of EU emissions permits over the last three years has only added to coal-fired plants’ expenses. And one reason that Polish utilities have risked miners’ fury to import Russian coal is because its sulfur content is low enough to comply with EU regulations, unlike the Polish stuff.

As European climate regulations get stricter and the EU budget gets larger, these external pressures will grow. For instance, according to the EU budget and recovery package agreed last month under Germany’s EU Council presidency, Poland will receive only 50 percent of the funds it is eligible for under the EU’s €17.5 billion Just Transition Fund because it has declined to sign up to the EU goal of net-zero emissions by 2050.

Missing out on a small share of that money, meant for the EU’s most vulnerable fossil fuel-dependent regions, won’t fundamentally change the coal equation for Polish leaders. Yet the fact that the EU is making some funds conditional on climate action (if not adherence to the rule of law) sets a precedent that could be costly for Warsaw. If the EU approves the European Commission’s proposal to increase the 2030 emissions reduction target from 40-55 percent, Poland would have real difficulties meeting its obligations.

Unsatisfying Council Conclusions

By the time of the next EU budget negotiations in 2027, coal will face an even more unfavorable environment. EU politics will be even more Europeanized, perhaps even with transnational lists for European Parliament candidates. The next budget will likely represent a bigger share of member-share revenue and be more conditional on climate action—and pressure from international bodies and trading partners will weigh heavier too.

We could even look ahead to Germany’s next European Council presidency, sometime around 2034. Greta Thunberg will be 31, the next generation of youth climate activists will be even less compromising, and EU consumers will demand more information about the carbon footprint of their products. Poland and Germany, however, will still be burning coal for electricity. Coal may be in decline in Europe, but there is still a lot of work to do to ensure we aren’t having the same debates about coal exits in seven years, or in fourteen.

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© REUTERS/Andreas Gebert

A small biotech company in the German city of Tübingen is one of about 20 companies, institutes, and universities worldwide working on developing a vaccine against COVID-19, the new coronavirus that is causing a worldwide shutdown.

With a staff of 450, CureVac AG is pushing ahead with an innovative, RNA-based method that, if proven successful in the clinical trials planned for this summer, would make it possible to vaccinate hundreds of millions of people within just a few weeks.

Yet on March 15, the German newspaper Welt am Sonntag reported that US President Donald Trump was trying to buy up the company or hire away its scientists so that the United States—and only the United States—would benefit from the vaccine.

From a journalist’s point of view, it’s a good story. For the German government, however, the story is even better: at a time of terrible worries and fears, the CureVac drama provides a perfect narrative of hope, of good against evil, and of solidarity against selfishness. It’s crisis communication at its finest.

Being such a good story doesn’t make it untrue, either, despite energetic denials by Richard Grenell, Trump’s ambassador to Berlin. The German government confirmed the report; CureVac itself issued a half-hearted statement which only denied that an offer for the company as a whole had been made. No mention was made of trying to lure away the scientists working there.

Add to that a curious coincidence: CureVac had come to Trumps’s attention at a White House meeting on March 2, where a number of biotech CEOs outlined their efforts against the coronavirus. One of them was Daniel Menichella, the German company’s CEO, a Harvard-educated American business manager.

Just days later, Menichella was replaced unexpectedly. The shareholders brought back his predecessor Ingmar Hoerr, a co-founder of CureVac. Hoerr is not in good health, so his deputy Franz-Werner Haas will be running the company day-to-day for the time being.

Trump’s attempt to poach the vaccine research outraged German politicians of all parties. The Federal Ministry for Education and Research pointed to the substantial financial support that CureVac had been receiving for its research. The European Commission chipped in with offers of additional credits of up to €80 million.

“Germany is Not for Sale”

Economic Minister Peter Altmaier even raised the idea that Germany could block a foreign takeover because German security interests were at stake. Except that this time, it would be to protect a German company not from China, but from the United States. “Germany is not for sale,” Altmaier added somewhat unnecessarily. Chancellor Angela Merkel said the federal government had gotten involved at a very early stage. The issue had been “solved,” she said.

At a time when all the news seems dark—from the number of infections to the economic fall-out of the crisis—the CureVac story hits a number of spots.

It caters to rising anti-American feelings fueled by anger over President Trump’s policies and attitude and especially over his decision to abruptly close US borders to Europeans without consulting with allied European governments. It also deflects criticism away from Germany’s public authorities, which have not always been up to scratch over fighting the pandemic, either.

The story contains an element of “David against Goliath”—after all, it’s about a small German company facing down demands from the giant United States. In parallel (and perhaps in contradiction, but who wants to squabble?), it’s a battle between billionaires.

CureVac’s main shareholder is Dietmar Hopp, founder of the German software giant SAP and certainly a much richer man than Trump. Hopp immediately promised to keep the company and its jobs in Germany and to make any vaccine available to people all over world. Incidentally, the second-largest investor is the Melinda and Bill Gates Foundation—and Gates will certainly not accept that any vaccine be limited to the US public.

Yet the most potent ingredients in this remarkable story are pride and hope: the pride about having a German company on the cutting edge of the world’s most important research; and the hope that a vaccine available to everybody in the foreseeable future. While it is clear that the process is still likely to take several more months, CureVac and its commitment to Germany and the world still bring a silver lining to the Corona story.

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© REUTERS/Charles Platiau/Pool

When it comes to Europe’s Russia policy, most of the impetus seems to be coming from Paris these days. For six months now, French President Emmanuel Macron has been setting the agenda. In August he invited Vladimir Putin to a bilateral meeting at Fort Brégançon ahead of the G7 summit, followed by an exchange at ministerial level between Paris and Moscow. Meanwhile, the most recent meeting of the Normandy Format—which brings together France, Germany, Russia and Ukraine to discuss the ongoing conflict in eastern Ukraine—took place in Paris in December 2019. And November 2020 marks the 30th anniversary of the Charter of Paris for a New Europe—an occasion that Macron would like to use for talks about a new European security architecture. Paris, Paris, Paris: France is in the fast lane to Moscow.

This is a new and unfamiliar situation for Germany. Since the beginning of the Ukraine conflict six years ago, it was Berlin that defined Europe’s position towards Russia and ensured cohesion and a hard-won consensus in the EU. However, France is now attempting to redefine this consensus and by doing so is overtaking Germany, or so it seems. Is it time for Berlin to modify its policy towards Russia? Has Germany perhaps held on to its previous “post-2014” approach to Moscow for too long?

Traditionally, Germany has always been the driving force in Europe’s relations with Russia. The German-Russian special relationship flourished after reunification and the end of the Cold War. The early 2000s, after Putin’s election and when Gerhard Schröder was still chancellor, is regarded by some as the “golden age” in relations between Berlin and Moscow. However, this closeness has often given rise to mistrust, especially among Central and Eastern Europeans: during this period, Germany was happy to leave it up to the EU to criticize Russia.

In French politics, on the other hand, Russia only really played a role at times when France remembered at its own great power ambitions. This was the case during the 2008 war in Georgia, when then President Nicolas Sarkozy—on behalf of the Europeans, but on a French mission—negotiated the ceasefire between Tbilisi and Moscow. In the Ukraine conflict, France left the leadership to Germany: President François Hollande was neither striving for proximity to Russia nor looking to project French power. Macron is now returning to the same pattern as Sarkozy. And in doing so, he is following the assertion of Charles de Gaulle: “France cannot be France without grandeur.” This includes a positive relationship with the other great power on the continent: Russia.

A German Lack of Direction

Up until the Ukraine conflict, German policy towards Russia was guided by three principles: reconciliation, integration, and rapprochement. Basically, it was a variation on the Ostpolitik theme: from “change through trade” to “rapprochement through interdependence” and “partnership for modernization.” The longer Berlin adhered to this approach, the louder the accusations of German naivety towards Russia became. The annexation of Crimea and the covert war in eastern Ukraine marked a turning point, leading to a short and medium-term reorientation: Russia policy now consisted primarily of “holding the line” and defending common European positions: extending sanctions, implementing the Minsk agreements, and preventing a sell-out of Ukraine—especially in the form of a “grand bargain” between Trump and Putin.

There was a path dependency to Germany’s Russia policy before 2014 remained. Which is why, despite all the political and economic doubts, Berlin stuck with the construction of the Nord Stream 2 pipeline. From the perspective of its supporters, it was important not to sacrifice the last pillar of the German-Russian special relationship: after all, the gas business with the Soviet Union had functioned reliably even at the height of the Cold War. That is why it is still considered a stabilizing factor in East-West relations today. For critics, Nord Stream 2 is the pivotal issue that could demonstrate a serious change in German policy towards Russia. There is no doubt that Berlin has massively underestimated the political consequences of continuing with the construction: Merkel’s argument that a Russian gas molecule remains a Russian gas molecule, regardless of whether it arrives via Ukraine or the Baltic Sea, has not convinced the US Senate. The pipeline will now probably have to be completed by Russia on its own.

German policy towards Russia thus currently consists of little more than sanctions on the one hand and a commitment to Nord Stream 2 on the other, coupled with an effort to maintain political dialogue, which often leads to frustration—whether in the Petersburg Dialogue or the High Working Group on Security Policy at the level of senior ministry officials. Moreover, the contrasting approaches from the period before and after 2014 make this policy very difficult for European neighbors to understand. In short: Berlin is treading water in its Russia policy. What is missing is a long-term strategy.

An Emotional Relationship

Russia is only 13th (based on total revenues in 2018) on the list of Germany’s most important trading partners, and under the current conditions, there is little potential for growth. It is therefore unclear on what basis German-Russian relations will develop over the next ten to 15 years. At the same time, a kind of “Russia fatigue” has started to take hold in Berlin. For example, the German EU Council Presidency, which starts in July, is setting very different priorities with an EU-China Summit and an EU-Africa Summit. Even a summit on the Eastern Partnership did not make it onto the German agenda, but will take place in Brussels in June instead.

It seems that Germany’s hopes for a positive change in relations with Russia have been dashed. It is the end of a strategic partnership; at the same time, German policymakers are reluctant to see Russia as a strategic adversary, as some other European member states are advocating. Such an approach would be difficult to communicate to the German public. For them, the relationship with Russia is an emotional one. According to a survey conducted by Körber-Stiftung, Germans are consistently in favor of more cooperation with Russia. Moreover, the concept of “decoupling” or “disentanglement” is not popular in German foreign policy, which is based on the principles of multilateral cooperation and collaboration. And Russia is now indispensable in many international policy fields.

Meanwhile, Macron is hoping for cooperation: he wants to form a common front with Russia in order to survive in a new world order marked by US-China rivalry. According to Macron, Europe will not be able to assert itself as a great power if it cannot get along with its biggest neighbor on the continent. The German approach is much more pragmatic: dialogue with Russia—especially in international crises such as Libya, Syria or Iran—is still urgently needed. A geopolitical “alignment” with Russia à la Macron seems, however, absurd. Russia and China each remain challenges in their own right.

Germany, unlike France, cannot take a great power approach to Russia. At the same time, however, Berlin should not leave Russia policy entirely to Macron, but should identify areas in which it can actively advance the Russia policy agenda together with France.

The five Russia principles that the former EU High Representative Federica Mogherini set out in March 2016—the implementation of the Minsk agreements, the strengthening of relations with Russia’s neighbors, resilience, selective cooperation, and civil society cooperation with Russia—are still valid, but they need to be reviewed. An exchange with Russia on European security would be in France’s interest— in the full knowledge that when it comes to European security, Russia is part of the problem, for example because of its violation of the INF Treaty, and only to a limited extent part of the solution.

Putin’s Russia Is Here to Stay

Macron is right to have placed the issue of arms control and strategic stability high on the Franco-Russian “agenda of trust and security” led by diplomat Pierre Vimont. And he is right to argue that European security cannot be decided between the US and Russia and over the heads of Europeans, as happened with the end of the INF Treaty. However, a sense of proportion is required: the Russian offer of a moratorium on the stationing of intermediate-range missiles, which Macron would like to talk about, is a rather unhelpful suggestion if NATO partners believe that such missiles have already been stationed by Russia. Overall, however, Germany, working together with France, can make a useful contribution to this issue.

Macron has also already announced that he will attend the celebrations of the 75th anniversary of the end of the Second World War in Moscow in May 2020. Such symbolic gestures form an important part of France’s policy towards Russia. Should Chancellor Angela Merkel decide to follow Macron’s example, she will have to walk a fine line between remembrance on the one hand and rejection of Russian historical revisionism on the other. The politicization of history for the purpose of constructing a positive Russian great power idea and rehabilitating Stalin’s leadership reached a new high point in a speech President Putin gave late last year. History policy is thus also a field in which Germany—ideally together with France—should take a clear stance.

Europe’s Russia policy can only be shaped jointly and not by France alone. Germany should help define the framework conditions of the new French initiative on Russia: inclusivity before ambition, unity before great power. Without the support of other Europeans, Macron’s Russia policy will have little chance of success—and the skepticism in Central and Eastern Europe is already significant. Macron’s visit to Warsaw was a first step towards confidence-building, and others must follow. It is only by working together that the EU can exert a constructive influence on Russia and, if necessary, counteract destructive policies.

Realistically, however, one must accept the fact that there is little prospect of any change within Russia. The constitutional amendments now being pushed through in Moscow point to a continuity of the form of rule and of the ruling elites after 2024, the end of Putin’s current term of office. Whether the Russian president chooses the “Kazakh succession model,” whereby he steers the fortunes of the country as the éminence grise in the background, or whether he finds an alternative model—Putin will in all probability not leave the political stage. This makes it all the more important for the EU to review its principles for cooperation with Russia and ensure they are given a long-term orientation. Neither France nor Germany can achieve this alone.

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© REUTERS/Andrea Verdelli/Pool

Near the end of her speech at the Munich Security Conference in February, Chancellor Angela Merkel struck a resigned, almost plaintive note about Germany’s place in a world dominated by a more hostile United States and China.

Germans could work day and night to be the best, she told her audience, but they would still come up short against the Americans, with their massive economy and all-powerful dollar, and the rising Chinese, with a population more than 16 times the size of Germany’s.

“The odds look pretty bad for us,” Merkel concluded in a remarkable admission of frailty.

That moment in Munich is instructive when trying to understand Merkel’s trip to China last week, her twelfth in 14 years as chancellor and perhaps the most challenging of all her visits, amid violent protests in Hong Kong, an escalating trade war between Washington and Beijing, and nascent European attempts to push back against the master plans of Chinese President Xi Jinping.

Constant Criticism from Trump

Germany is feeling especially vulnerable these days. Its economy, held up for the past decade as the growth locomotive of Europe, is heading into recession, buffeted by the decline in international trade and investment, Brexit, and a struggle by its industrial champions to adapt to a digital future.

The United States, guarantor of Germany’s security since World War II, has turned into its biggest critic. Hardly a day goes by when US President Donald Trump or one of his allies doesn’t lob a verbal grenade at Germany, for its lack of defense spending, its outsized trade surplus, or its addiction to Russian gas.

Against this gloomy backdrop, China looms with open arms. It believes in climate change. It pays lip service to the idea of a free, multilateral trading system. Despite recent signs of weakness, it remains a vast, growing market for German firms. And it doesn’t engage in Germany-bashing. On the contrary: at a time when the Trump administration is gearing up for a new Cold War, Beijing is doing all in its power to lure Europe’s largest economy into its camp.

But there is a price for doing business with China, and Merkel paid it during her two-day visit to Beijing and Wuhan. Not once did she utter the word “Xinjiang,” the western Chinese province where more than a million members of the Muslim minority have been detained in reeducation camps. And not once did she criticize Beijing for its handling of the protests in Hong Kong, limiting herself to calls for dialogue and de-escalation.

Open for Business

At her news conference with Chinese Premier Li Keqiang, Merkel sounded almost apologetic about her government’s moves to shield German companies from the opportunistic embrace of state-backed Chinese rivals, reassuring her hosts that the German market remained open for acquisitive Chinese firms. And she praised Beijing for granting German companies like Allianz, BASF, and BMW opportunities in China that have been denied to other Western firms—moves that skeptics dismiss as symbolic gifts designed to soften up the Germans.

Merkel’s trip came after a year in which Europe, in the words of French President Emmanuel Macron, overcame its “naivety” vis-à-vis China, erecting its own barriers to Chinese investments in its critical infrastructure and declaring the rising Asian superpower to be a “strategic rival.”

In January, the Federation of German Industries, an influential business lobby, issued a toughly worded paper that questioned whether China would ever fully open up its market to foreign investment and urged European countries to work closely together, and with like-minded partners including the United States, to coordinate their response.

European Shift

Spooked by China’s economic ambitions, a new European Commission is expected to explore changes to the bloc’s industrial, competition and procurement policies when it takes over later this year.

Yet there was little evidence of this European shift during Merkel’s visit. And her partners, in Paris, Brussels, and other capitals, may be alarmed by its “back to business” tone.

Merkel travelled with a large delegation of German CEOs, the most prominent of whom was Siemens boss Joe Kaeser, who once referred to China’s controversial Belt and Road Initiative as “the new WTO.” Also along for the ride was Volkswagen’s chairman, Herbert Diess, who only a few months ago caused outrage when he denied knowing anything about the mass detentions in Xinjiang, where VW has a plant, despite months of front-page stories about the plight of the Uighurs.

The Trump administration, which has been piling pressure on Germany and other European countries to follow its lead and decouple from China, will also be alarmed. A transatlantic split over the inclusion of Chinese telecommunications supplier Huawei in next-generation 5G networksis looming. And that may provide just a taste of the tensions to come.

At a time when Washington is eyeing new export controls against China, Germany is doubling down on research collaboration with the Chinese and pressing Beijing to clinch an elusive investment agreement with Europe in time for an EU-China summit that Merkel will host in the eastern city of Leipzig in September 2020. If the deal comes together, two months before the US presidential election, it would mark the death knell of Trump’s clumsy attempt to pry the Europeans away from China.

Antithesis to German Values

The Americans must see this. On the same day that Merkel was meeting with Li in Beijing, US Defense Secretary Mark Esper was in London warning Europe to be wary of China.

“The more dependent a country becomes on Chinese investment and trade, the more susceptible they are to coercion and retribution when they act outside of Beijing’s wishes,” Esper told the Royal United Services Institute, a think tank.

Merkel is not naive. As Hong Kong pro-democracy activist Joshua Wong pointed out in an open letter to the German leader before her trip, she grew up under authoritarian rule in communist East Germany. She sees what is happening in China, from the rollout of a Social Credit System grounded in big-data surveillance, to Beijing’s attempts to chip away at democratic freedoms in Hong Kong and its crackdown in Xinjiang.

All this is antithetical to German values. And yet, unable to count on the support of the United States, Merkel seems to feel she has no choice but to cozy up to Beijing.

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The German question seems to be back yet again. With speculation about the end of the Atlantic alliance and the liberal international order, there are renewed fears of German dominance at the heart of Europe.

German power now takes a different form than in the past. While before 1945, the German question was geopolitical, the current German question is geo-economic, as I outlined in my book The Paradox of German Power. But things have changed since it was published in 2015—in particular with the election of Donald Trump as president of the United States. In a recent thought-provoking essay in Foreign Affairs, Robert Kagan suggests that we should now be less certain that Germany will remain “benign” in geopolitical terms. In other words, for Kagan, the old German question is back.

However, this underestimates the deep cultural change in Germany since World War II. It’s hard to imagine any circumstances that would lead to the country reverting to an old-fashioned kind of German nationalism and militarism. The commitment of ordinary Germans to the idea of peace is simply too strong. For better or worse, this is the lesson that Germans have drawn from their experience in the 20th century.

Moreover, focusing on a remilitarization of Germany actually obscures a more likely—and interesting—possibility. If the United States were to actually withdraw its security guarantee to Europe, or if the liberal international order were to completely collapse, Germany might defy the expectations of realist international relations theorists and simply choose to be insecure rather than abandon its identity as a Friedensmacht, or “force for peace.” In other words, even in this worst-case scenario, Germany might in effect do nothing rather than either develop its own military capabilities, including nuclear weapons, or exchange dependence on the US for its security for a new dependence on France.

How Germany Harms the EU

Meanwhile, those, particularly Americans, who warn about the danger of the return of the old German question underestimate how problematic today’s Germany already is in the European context. Germany’s semi-hegemonic position within Europe is one of the main reasons why the EU has struggled to solve the series of crises that began with the euro crisis in 2010. On the one hand, Germany lacks the resources to solve problems in the way a hegemon would. On the other, it is powerful enough that it no longer feels the need to make concessions to other EU member states, and in particular to France. As a result, the EU has become dysfunctional.

It’s important not to idealize post-war Germany as acting selflessly. German politicians certainly look out for German interests in Europe. In fact, since the beginning of the euro crisis, much of the debate about Germany’s role in Europe has centered on exactly this question of the relationship between Germany’s national interest and the wider European interest. From economic policy and the management of the single currency itself to the refugee crisis and the Nord Stream 2 gas pipeline, Germany has again and again been accused of putting its own national interest ahead of the interests of Europe as a whole.

Nor has Germany exactly rejected nationalism altogether. Although—or perhaps because—Germans rejected militarism, they found new sources of national pride. In particular, a kind of economic nationalism developed in Germany and increasingly focused on Germany’s success as an exporter—what I have called “export nationalism.” During the Obama administration—long before Trump “targeted” Germany, as Kagan puts it, for its huge, persistent current account surplus—the US treasury had already put Germany on a currency-manipulation monitoring list.

Restoring the Franco-German Balance

Today, the dire state of trans-Atlantic relations and the threat of the withdrawal of the US security guarantee have raised concerns about how Germany might respond. Historically, American power has pacified Europe—that is, it “muted old conflicts in Europe and created the conditions for cooperation,” as Josef Joffe wrote in 1984. There are therefore good reasons to worry that a withdrawal of the security guarantee could lead to European disintegration and even the reactivation of security dilemmas. Yet a US withdrawal could also help to resolve the German question in its current, geoeconomic form—without necessarily re-opening the classical, geopolitical German question.

This is because Germany’s semi-hegemonic position in Europe is dependent on the configuration of the US-led liberal international order, and the particular form it took in Europe, that allowed Germany to “free ride.” In particular, the US security guarantee meant that Germany didn’t need France’s military capabilities and therefore had little incentive to make concessions to France on other issues like the euro. Whatever Trump’s intentions, his threat to withdraw the US security guarantee has given France greater leverage over Germany and thus gone some way to restoring what Harvard’s Stanley Hoffman called “the balance of imbalances” between the two countries. If the United States were actually to withdraw its security guarantee, it would further restore this balance and could mean the end of German semi-hegemony.

Power Politics Persists

In particular, increased German dependence on France for security might—and I emphasize might—force Germany to make concessions to France on other issues like economic policy and the euro, which would be good not just for France, but for Europe as a whole. In this way the removal of the US security guarantee could potentially enable Europe to finally deal with the crisis that began in 2010. The crucial question, however, is whether even this dramatic scenario would be enough to force Germany to rethink its approach to economic policy and the euro. It’s also perfectly possible that Germans would still not feel sufficiently threatened to make concessions to France on these issues as a quid pro quo for a more explicit or extensive French commitment to German or European security.

There is a tendency at the moment to view the world in extraordinarily binary terms. But the situation in Europe today is much more complex. While commentators like Kagan worry that a collapse of the current order would lead to a return of power politics within Europe, in reality power politics never really went away, even if it was no longer pursued using military tools. Within the peaceful, institutionalized context of the EU, member states continued to pursue their own national interests. In short, Europe may not have been quite the Kantian paradise that Kagan famously suggested it was in Of Paradise and Power.

Similarly, since the beginning of the euro crisis, it has become apparent that the Atlantic alliance and European integration did not resolve the German question quite as conclusively as was once thought. Given the ongoing reality of power politics within the EU, the unequal distribution of power among member states continued to matter, though that power was largely economic rather than military. After reunification and enlargement increased German power within Europe, a familiar dynamic emerged—though it only really became apparent after the beginning of the euro crisis. In other words, in resolving one version of the German question, the EU and the United States may have simply created another.

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© REUTERS/Wolfgang Rattay

It was the summer of 2015. Hundreds of thousands of refugees from Syria, Afghanistan, Ethiopia, and elsewhere were making their way to Germany, drawn by Chancellor Angela Merkel’s decision to keep the borders open and by crowds of welcoming Germans. The country was torn between an intense joy over being able to help and a deep fear of being overwhelmed.
At a press conference in Berlin on August 31, Merkel was asked about the immense challenges of this massive influx. “Wir schaffen das,” she said, meaning “We can do it.“ It was a slogan that became iconic. Supporters of a liberal refugee policy used it as a rallying shout; opponents repeated it with deep sarcasm.

Nearly four years later, normalcy has mostly returned to Germany. Tight patrols on the EU’s borders and a series of bilateral agreements with neighboring countries have sharply brought down the number of refugees newly arriving in Germany. Even so, the country is still home to 1.7 million asylum seekers and refugees, most of whom have arrived in 2015 and since.
Integration is happening—and even happening faster than in many other Western countries—but it continues to be a lengthy, difficult, and demanding process. Even now, only every third immigrant from war-torn countries like Syria, Iraq, Afghanistan, or Somalia has a job that gives him or her access to social security benefits, according to a discussion paper published in June by the Berlin Institute for Population and Development.

“There is no doubt that this is a success, but it is to be enjoyed with some caution,” said the institute’s director Reiner Klingholz. “Many of the refugees work in sectors where fluctuation is very high, and most of them have temporary or low-skilled jobs.” Even people who may have had their own business or who held management positions back home now work in restaurants, hotels, or cleaning services.

A Very Slow Process

Still, integration into the labor market is happening a little bit quicker now than in the 1990s, when Germany took in a million refugees from former Yugoslavia. Five years after arrival, the Berlin Institute for Population and Development said, just under half of those refugees had found jobs. After ten years, the percentage went up to 60 percent. It took 15 years for refugees from Yugoslavia to reach an employment share of 70 percent, which corresponds to other immigrant groups.

Germany has integrated the most recent wave of refugees faster than most other industrialized countries. According to a study published in January by the Organization for Economic Cooperation and Development (OECD), the average among its 33 member states was that five years after arrival, only one in five refugees was employed, with a particularly low percentage for women.

Low employment translates into lower well-being as measured by household income, housing conditions, life satisfaction, social support, and students’ skills, the OECD writes. Even in comparison to other migrant groups, refugees do badly. On average, it takes them 20 years to catch up even with other migrant groups.

Three main reasons stand out: first, refugees do not make a choice about leaving their country but are forced to do so; second, they are often less qualified than other migrant groups; and third, many are traumatized by persecution, war, and tragedy during their flight.

Hardships and Handicaps

The numbers are shocking. For Germany, the IAB-BAMF-SOEP Refugee Survey, a repeated survey among 5000 refugees, showed that one-quarter of respondents had survived shipwrecks. Two-fifths had been victims of physical assault; one-fifth had been robbed; more than half had fallen victim to fraud; more than one-quarter had been blackmailed; and 15 percent of female refugees reported having been sexually assaulted.
So what seems slow at first look—only one out of three Syrians, Afghans, or Eritreans in Germany holding down a job that gives access to social security—is actually a huge achievement. On arrival, according to the survey, fewer than one out of ten refugees spoke any German. Today, one third has good or excellent language skills, and another third has reasonable German.

Another issue that takes time to remedy is the lack of education and training: every fourth refugee who arrived in Germany between 2013 and 2016 had never gone to school or only attended elementary school, the Berlin Institute for Population and Development said. Three quarters had no professional education. To make things worse, new arrivals had little information about the German labor market and not much of a personal network to help them along.

“Getting qualifications takes a lot of time: maybe two years to learn the language and then another three years for professional training,” Klingholz said. Many refugees need to quickly earn money in order to support family members back home or in transit, or to pay back the traffickers who brought them to Germany. “Intellectually, these people know that they are getting themselves stuck in lower-paid and more precarious jobs, but this is overruled by their needs.”

A Thicket of Regulations

By now, however, most refugees have been in Germany long enough that individual issues have ceased to weigh so heavy, said Klingholz. Instead, it is institutional hurdles that keep them away from jobs and therefore integration. As a federal state, Germany has an enormously complex system of federal, regional, and local authorities, which all have a say in granting asylum, accepting qualifications, or providing access to the labor market, training opportunities, language courses, medical benefits, or housing.

The relevant sector of legislation is as extensive and complicated as tax law once was. For instance, there are many kinds of residence permits that all give access to different rights and benefits, creating enormous uncertainties for the refugees themselves, but also for companies considering training or hiring them. At Berlin’s Ausländerbehörde, the agency that deals with foreigners, procedural notes alone amount to some 800 pages.

“The law is like an overprotective mother,” said Engelhard Mazanke, the agency’s head. “Sometimes, it really strangles us. And the more complex it is, the more difficult it is to do justice to an individual case.” Analysts say that much of the bureaucratic tangle is due to contradictory objectives: trying to be discouraging to potential new asylum seekers (in a clear turn-around from 2015), yet accepting that those who already are in the country should be given help to integrate.

Germany, with its ageing population and lack of skilled workers, might do well to take a clearer and more generous line, Klingholz said, pointing to two demographic characteristics of the recently arrived refugees. First, there was the high number of children: more than half a million refugees were under 18 when they registered for asylum between 2015 and 2018, according to his institute’s data. By now, younger children have been integrated into the German school system, giving them native German and a perspective to acquire much better professional skills than the older generation.

The largest group among those asylum seekers, however, were young adults―again, half a million in the age group 18 to 29. More than two thirds of these are men. And while young men can certainly adapt more easily to life and work in Germany than older people, they also represent a higher risk to society if they cannot find jobs and set up families.

“We are running out of time,” said Eberhard Mazanke from the Berliner Ausländerbehörde. “We have many young men here, people in their 20s, and they want to start their lives.”

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© REUTERS/Fabrizio Bensch

Back in the summer of 2016, the winds of change were sweeping across Europe. In their shock over the Brexit referendum, European Union leaders promised deep reform: the EU would make such a leap in efficiency, democracy, and cohesion that no other country would ever be tempted to leave. “We got the message!” they told the public.

Almost three years on and, at least in Germany, voters are facing one of the dullest European Parliament election campaigns ever. No big plan for the EU’s future has emerged that politicians or citizens could passionately debate; no controversies over major policy decisions; not even a heated battle over who will lead the EU in the future. Only the Greens and the right-wing populist Alternative für Deutschland (AfD) are even talking about policies on their campaign posters.

Just take a look at the parties currently governing in Angela Merkel’s grand coalition, the center-right Christian Democratic Union (CDU) and the center-left Social Democrats (SPD). “Peace can’t be taken for granted” is one of the uninspiring CDU election slogans; “Prosperity can’t be taken for granted” another. Merkel herself, having stepped down as party leader in December 2018, initially refused to even take part in the campaign. In the end, she grudgingly agreed to two appearances (although one of them is in Croatia rather than Germany).

Domestic Faces Prevail

Not that you would guess it, but Germany’s conservatives actually have a big stake in this election. Their top candidate Manfred Weber stands a reasonable chance to become the next president of the European Commission. That would make him the first German to lead the Commission since Walter Hallstein was appointed in 1958.

Weber was nominated as Spitzenkandidat by the European People’s Party, which will likely remain the largest group in the new European Parliament. While this does not oblige the heads of government to nominate Weber, a good election result would translate into considerable political pressure to do so.

Weber works hard on the campaign trail, crisscrossing Germany and the EU for numerous appearances and speeches. Having spent 15 years as an MEP, he is also extremely well versed in the ins and outs of Brussels. Weber is smart, decent, and personable. But one thing he is not: a person who can inspire people to believe in Europe. His party seems to be aware of his lack of charisma: even in his homeland Germany, the Spitzenkandidat rates only small-format campaign posters. “For Germany’s Future. Our Europe,” the slogan says.

The second Spitzenkandidat who has a realistic chance of becoming European Commission president, is Frans Timmermans, current vice-president of the Commission and former Dutch foreign minister, who is standing for the center-left Party of European Socialists, the European Parliament’s second-largest group. Timmermans is far more passionate and eloquent than Weber, but Germany’s Social Democrats haven’t even put him on a poster. While they back his nomination in Brussels, in Germany they only show German candidates.

EU Reform Is Dead

It’s not just the faces on the posters that seem curiously lacking a European flavor. There seems to be very little debate over the big European issues as well. Little mention is made of Brexit, the reform ideas of France’s President Emmanuel Macron, the rift between eastern and western Europe, the risk of another eurocrisis, or the uncertainty surrounding transatlantic relations. Indeed, after the first shock, the Brexit saga seems to have actually contributed to the stagnation.

So little has come of the pledges made in the wake of the Brexit vote in 2016. The EU summit in the Romanian city of Sibiu on May 9, originally scheduled to take place after Brexit, was supposed to provide the opportunity to EU leaders to open a new chapter in European integration. In reality, however, EU reform is dead for now, while the United Kingdom has still not managed to leave the union.

The miserable spectacle of Britain’s political elite mismanaging Brexit in fact let the EU of the hook: in most countries, approval rates for “Europe” have risen through no particular merit of the EU leaders, but because nobody wants to be caught in the same situation as the British. Even right-wing populists who used to be rabidly anti-European have stopped calling for an exit the EU. Instead, they now plan to join forces in Brussels to weaken the EU from the inside—a project that, given their continued rise in popularity, could prove just as dangerous to Europe’s future as a crumbling membership.

European leaders clearly share responsibility for not seizing the chance for reform that arose after 2016. But nobody is more to blame than Angela Merkel who let every opportunity to embrace change slip by. It seems fitting, then, that the most interesting issue that has emerged from the European election campaign is one that at first sight has nothing to do with EU politics: when will Merkel finally leave office?

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Much of the debate over drone use in combat has focused on the United States. It is true that the way Washington has employed its armed drones is controversial and, in parts, illegal, and that is something the international community, including Germany, should care about. It is also legitimate to mention the debate when discussing the procurement of drones. And yet.

For ten years, because of the controversy over US targeted killings with armed drones in countries such as Pakistan, Yemen, or Somalia, the German debate has been overly focused on US drone use and armed drones, while ignoring German drone use and surveillance drones.

This has been to the detriment of the Bundeswehr, which for years has not received the equipment it wants and arguably needs. Most importantly, it shows that the German public, and substantial parts of the media and German politics, are not ready for the kind of debates that we are set to have more and more often in the future as the world becomes an increasingly dangerous place.

German Drones

Unbeknownst to many, the Bundeswehr was an early adopter of drone technology, acquiring its first surveillance drones in 1972. This first Bundeswehr drone, the Canadian-built CL89, was never used outside of training, but its successor model, the CL289, was successfully deployed to Yugoslavia and Kosovo in the late 1990s. The positive experiences with drone use there led to investment in several development programs, including two armed drone systems.

All but one of these projects (the unarmed KZO), however, eventually fell victim to post-Cold War defense budget reductions or failed because of unrealistic technological expectations. Germany’s experiences in the ISAF mission in Afghanistan from January 2002 then revived the Bundeswehr’s interest in drones. Initially, the Bundeswehr did not deploy any drones to Afghanistan because it barely had any. The first surveillance drone to be used in the country was LUNA, Luftgestützte Unbemannte Nahaufklärungs-Ausstattung, or “Airborne unmanned close reconnaissance system.” At 1.4 meters long and 40 kilograms with a wingspan of four meters, LUNA became the unmanned workhorse of the Bundeswehr, flying over 6000 sorties between 2003 and 2014. It was followed by four other drone systems in 2005 (ALADIN), 2009 (KZO), 2010 (Heron I), and 2011 (MIKADO).

All of the drone systems used in Afghanistan were surveillance systems, meaning that their payload consists of video, infrared, or still image cameras used to gather information on anything from Taliban movements and IEDs to roadblocks and traffic jams. Also, all these systems were flown from within the Afghan theater—either directly by soldiers on the ground (such as MIKADO or ALADIN), or from encampments, as with the Heron I drones that were piloted from Camp Marmal in Mazar-e-Sharif.

So for German soldiers in Afghanistan, the debates about US “cubicle warriors” with a “playstation mentality” killing people at a distance had little bearing on reality and their daily experience.
Though not without problems, including crashes, the Bundeswehr drones proved their worth in Afghanistan, helping troops on the ground with intelligence-gathering and improving battlefield awareness. Today, many of the drones used in Afghanistan have been moved to Mali, now the Bundeswehr’s biggest mission.

But most Germans are unlikely to know much about this. When the comparatively intense debate about drones in Germany started in the early 2010s, it was simply not about German ones.

A Half-Billion Euro Disaster

Before 2010, there was no real talk about military drones in Germany, even though they had been in daily use in Afghanistan for years. By 2012/13, however, drones had become a topic of public interest. The media coverage increased notably as US targeted drone killings attracted international attention and condemnation, and as the Bundeswehr’s “EuroHawk” project failed spectacularly in 2013, after having cost around half a billion euros.

The language used to describe drones oscillated between hype and hysteria. On the one hand, there were technology-focused articles written in enthusiastic tones. Drones were portrayed as “superbirds” or “super drones;” SPIEGEL Online featured a 3D model of the US Reaper drone, detailing all its technical gadgets (including its armaments) as well as a list of the “most important drone types” with technical specifications. On the other hand, drones were also described as “robot killers” or “flying killers.” Indeed, the term “killer robot,” which until 2010 had been reserved for discussions about the Terminator movies, predominantly became used as a drone synonym.

Both the high-tech “superbird” and the “killer robot” narratives, however, referred almost exclusively to US developments. German unmanned technology was widely ignored. The “most important drone types” were all American. In fact, the press reported considerably less on actual German drone use than on potential future US drone plans. An avid news reader would have had no problem naming several US drones, but probably would not have known what kind of drones the Bundeswehr employed, or whether it did so at all.

Unfortunately, Germany’s politicians were little better. Between 2006 and 2014, drones were mentioned 102 times in the Bundestag (in the form of minor interpellations, written questions, or in debates). Almost half of these questions or debates were not about German drone use or procurement, but about American drone use (most notably about US targeted killings, with about a quarter pertaining to the stationing and testing of US drones on/over German territory).

Ask the Relevant Questions

When, on January 31, 2013, the Bundestag finally held question time on the government’s procurement plans for an armed drone for the Bundeswehr, the debate once again primarily centered on US drone use in Pakistan. Finally, a liberal MP asked somewhat desperately: “What does this have to do with our procurement plans, for God’s sake?” The impact of the US use of drones on the debate was so important that in the 2013 coalition agreement, CDU and SPD specifically underlined that they “categorically oppose extra-legal killings with drones,” distancing themselves from the (US) use of UAVs for targeted killings (without, however, explicitly naming the US).

Again, there is nothing wrong with discussing and criticizing the way the United States uses armed drones. It is rightfully controversial. But in Germany, the almost exclusive concentration on this has come to the detriment of the debate we should be having. The (understandably) emotional debates about civilian deaths caused by CIA drones in Pakistan have made it nearly impossible to have a rational discussion on German drone use. But there are many debates to be had on how the Bundeswehr should be using its drones, in particular the new weapons-capable drone systems whose procurement the Bundestag just authorized. Relevant questions include: what types of conflict is the Bundeswehr likely to face in the future, and what equipment will it need for that? How do drones feature in this equation? Does the Bundeswehr have sufficient drone reconnaissance, and how might it use its armed systems? Even doctrinal documents offer few answers to these questions.

Recently, there has been some change, with more discussion happening in the national media. But it is a case of too little, too late. It is important for us to get our act together on such debates. Because the next strategic debate is already beginning, this time on the use of artificial intelligence in warfare, in particular autonomous weapons. In this discussion, informed public engagement is more important than ever. In the drone debate, Germans would do well to be more rational, more informed, and to think more about the elements that are important for Germany.

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© REUTERS/Kevin Lamarque

By the end of this week’s NATO summit in Brussels, it wasn’t just European leaders who were leaving with negative feelings about America. Even the European journalists covering the summit left flummoxed and frustrated.

“Why do we have to put up with this?” one asked me. “I am so sick of America. Trump comes here and humiliates us and there’s nothing we can do about it.” Even the White House press corps, he complained, was granted a sizeable area in the summit’s press room, cordoned off from other media—the US was the only country with such a reserved space.

Indeed, the press seating arrangements seemed to mirror the general power dynamics in NATO itself. It is viewed by many not as an alliance of equal members committed to defend each other, but as an American military protectorate over Europe. Trump, breaking decades of protocol, acknowledged this on Wednesday morning during a fiery breakfast with NATO Secretary General Jens Stoltenberg. “We’re supposed to protect you against Russia but they’re paying billions of dollars to Russia and I think that’s very inappropriate.”

Trump was referring to Germany, and Berlin’s approval of a new pipeline to import Russian gas. Washington, and many others, say this will increase Europe’s energy dependence on Russia, and they should instead import US liquefied natural gas. “Germany is totally controlled by Russia,” Trump said, before citing a markedly incorrect figure for how much gas Germany already imports.

It was an unprecedented public display of aggression by a US president toward the NATO allies, and it was a humiliating blow to Merkel. When she arrived at the summit later, she told press that as someone who grew up in East Germany—a country that really was controlled by Russia—she is glad that a unified Germany is independent today.

But is it? To many, Trump’s remarks sounded like a protection racket. The American military protectorate comes at a price, and apparently that involves European countries surrendering sovereignty to Washington. In Trump’s view, Berlin is not free to make its own decisions as long as it is the recipient of American military protection.

Attack, Then Retract

Trump’s comments sparked such discord that he and Merkel hastily arranged a joint appearance before the media. Trump insisted that he has a great relationship with Merkel and relations between Germany and America are the best they have ever been. Merkel did not look convinced.

It is a tactic Trump uses often – attacking and then later insisting no attack was made. He did it again during his visit to London on Friday, criticizing Prime Minister Theresa May in an interview with The Sun tabloid newspaper and saying her rival Boris Johnson, who just quit her cabinet, “would make a great prime minister.” He later walked back his statements during a damage control joint press conference with May.

But his biggest lurch in tone came on Thursday. Around midday, reports emerged that Trump had threatened to pull the United States out of NATO unless countries immediately increased their military spending. Stoltenberg hastily convened an emergency meeting of the 29 NATO members to try to come to a solution. Trump then called an unscheduled press conference, where he said he had successfully strong-armed the Europeans into committing to spend more on their military. He was asked three times if that involved making a threat to pull the US out of NATO, but he didn’t answer.

“We have now got it to a point where people are paying a lot more money,” he said. “And if you talk to Secretary General Stoltenberg, he gives us total credit, I guess that’s me. He gives me total credit. Everybody in that room by the time we left, got along and agreed to pay more.”

Except they didn’t. French President Emmanuel Macron quickly contradicted Trump’s assertion, saying NATO members made the same commitment agreed at the 2014 summit in Wales – to aim to increase military expenditure to two percent of GDP by 2024. Inside the room, Trump had demanded that this be increased to four percent – even though the US itself doesn’t spend this amount. The other leaders said this was not only impossible, it would also be ill-advised to throw so much money at their militaries so fast.

For the rest of the afternoon, in press conference after press conference, prime ministers had to find diplomatically creative ways of saying Trump lied, without actually saying it. Asked repeatedly why Trump had made the claim that Canada will be doubling its military spending, Canadian Prime Minister Justin Trudeau repeatedly pointed out that Canada is increasing its military spending by 70 percent over the next ten years.

Nobody wanted to incur the wrath of the US president by calling out his untruth. In a particularly creative attempt, Belgian Prime Minister Charles Michel offered that it might be a question of differing interpretation.

A Shaky Alliance

It was a display of just how fractious the nearly 70-year-old alliance has become, and it had a lot of journalists asking why Europe should continue to put up.

In the short term, the answer is clear: Europe has relied on the NATO military protectorate for the last seven decades, spending little on their militaries and instead investing that money in generous welfare and healthcare systems. Even with the end of the Cold War and the supposed end of the Russian threat, nobody other than the French was suggesting that this arrangement might not make sense in the future.

The NATO system makes Europeans completely dependent on the goodwill of the United States to guarantee their protection because they would not be able to defend themselves from a Russian attack.

The EU has now launched a defense union, which got underway in earnest this year. But it will take years to develop to the point where it could actually serve as an effective coordinator of Europe’s militaries in the event of a conflict without American assistance.

The UK remains adamantly opposed to the EU Defense Union because they say it undermines NATO. But Britain is on its way out of the EU, and London can hardly object to the enhanced cooperation now.

But what exactly did Trump say on Thursday? Most accounts point to the president saying: ‘If you don’t increase your spending, then America may go it alone.’

Some officials have cautioned not to read too much into that, and that Trump may not have understood what he was saying. This is the interpretation that European leaders have chosen to accept, in public at least. Macron insisted that there had been no threat to pull the US out.

In private, officials acknowledge that this was obviously an implicit threat. The implications are serious. If the US did pull out of NATO, the alliance would become a hollow shell. The US is, obviously, the largest pillar, and Trump’s comments caused understandable alarm. A US exit could leave Europe relatively defenseless overnight.

Like most NATO summits, this ended with few tangible outcomes. Conclusions regarding increased military spending remained unchanged from the Wales goal – something most of the NATO members are well on their way to reaching.

In past years, these annual summits of NATO leaders have become more about putting on a display of unity and power, a message to the world, and particularly to Russia. But this year’s gathering highlighted the exact opposite, putting NATO’s weaknesses and serious divisions on full display.

And those divisions will be brought into sharp relief as President Trump meets Russian President Vladimir Putin in Helsinki.

The post Calling His Bluff appeared first on Berlin Policy Journal - Blog.

© REUTERS/Kevin Lamarque

Whenever Angela Merkel considers a political issue to be of pressing importance, she invites experts to the Federal Chancellery. The evening of May 29, 2018 was no exception: Merkel convened a group of 20 experts from business and science to discuss artificial intelligence. The chancellor has long been worried that Germany and the EU may miss out on this groundbreaking technology.

To also give her cabinet the benefit of the specialists’ urgent message, Merkel asked a number of ministers to attend, including her close confidant, economics minister Peter Altmaier, and labor minister Hubertus Heil of her coalition partner, the SPD. Germany is meant to have an AI strategy by the end of the year, so the cornerstones of a strategy have to be in place before the Bundestag’s summer break in July.

The chancellor has long been clear: Dominance in AI could entirely restructure the geopolitical order—or serve to cement American supremacy and Chinese power. There is resistance to this latter outcome, above all in Berlin and Paris. If there is one thing that French President Emmanuel Macron and Merkel are in absolute agreement about, it is the strategic importance of AI.

Since taking office, Macron has been talking of Europe’s need to defend its “strategic sovereignty”, adding that this will be a battle fought on many fronts, including technology. In a June 3 interview with the conservative Frankfurter Allgemeine Sonntagszeitung, Merkel emphasized that as early as 2017, she has been calling for Europe to take its destiny more into its own hands. Most have taken those statements as references to Europe’s security dependence on the United States. But she was also taking about technology.

It was in 2013, in the wake of the NSA spying scandal, Merkel first had to acknowledge how being dependent on American software and Chinese hardware could limit a country’s capacity to act. Five years later, during a visit to China, Merkel took a detour to the high-tech city Shenzhen, where she visited the Chinese startup iCarbonX and saw how far advanced China is in the usage of big data for the health sector. It was a painful reminder for a chancellor who, for all her time in office, has yet to witness a successful introduction of an electronic health card in Germany.

As always after a trip to China, Merkel returned to Germany impressed and worried by the pace of change. While she is quick to stress that certain aspects of communist China—be it the desire to control citizens or the lack of data protection—could never be replicated in in a democracy, that doesn’t change the fact that German companies have to compete on the same field as American and Chinese tech giants.

Ever Louder Warnings

Warnings about the explosive potential of AI development have been getting louder and louder. Military officials believe that AI is already in the process of revolutionizing warfare. The US and China have been long been experimenting with autonomous weapon systems, drones, and ship fleets that can organize themselves. While Germany was debating whether its conventional weapons systems are even operational, or if there are enough boots and protective vests for its soldiers, other places were developing the technology that will decide future wars. The technological gap is widening even more rapidly—and in the outdated German security debate, nobody seems to have noticed.

Merkel on numerous occasions, even to her coalition partners, has warned of the need for increased spending on German defense. But she has so far avoided a debate about the possibilities and dangers of these new types of weapons. In the meantime, Germany’s Foreign Office has begun to consider how AI will change foreign policy. An international debate over the ethics of using automated and autonomous weapons has begun.

Merkel has, to this point, limited her attention to the shortcomings of digitalization in the civil sector. She has been pushing the issue since 2012. Her initial efforts attracted ridicule after she described the unpredictable consequences of the internet for society as Neuland—terra incognita. Then she threw her weight behind Industry 4.0, a campaign meant to push German companies to understand and implement the digitalization of production, administration, research, and sales. Merkel warned that, unless Germans master Big Data and the specialized manufacturing technology of digital-age products, proud German industry could simply become the work bench for American IT firms.

In 2016, the term “artificial intelligence” finally appeared in the chancellor’s vocabulary when Merkel, a trained physicist, realized during conversations with entrepreneurs and scientists that artificial intelligence would massively accelerate the fusion of otherwise separate research domains. “I’ll put it bluntly: It is not entirely clear to me in which fields we are actually top-notch; in which fields we need to buy more knowledge; what the interconnection of diverse fields will look like one day; and if we will, by then, have all of the technological capabilities that we need to be at the front of the pack,” she acknowledged at a research summit on June 12, 2016. Afterwards, Merkel called even more urgently for Germany to go on the offensive in AI research. If necessary, Germany should protect its AI companies from being taken over by American or Chinese firms.

Three Competing Ministries

One reason Merkel was turning up the heat was her improved understanding of the complex effects of AI, which she now describes as “disruptive” or “revolutionary.” Another was the realization, at the end of the 2017 legislative period, that the grand coalition’s digitalization efforts have had little success. For example, though national broadband expansion was ranked among one of the government’s top priorities in 2013, Germany’s position in the international rankings for data connectivity has continued to worsen.

The chancellor credits herself for the steady expansion of Germany’s research budget. But research expenditure was not tax deductible—an issue especially important small and medium-sized businesses—until 2017. Venture capital has also been slow to arrive. In the last election campaign, politicians of all stripes complained that having three ministries, run by three different parties, responsible for digitalization didn’t exactly speed things up. On top of that, critics said that the government had made too many special considerations for Deutsche Telekom. By allowing Telekom to increase network speeds by “vectoring” preexisting copper cables, they cut costs in the short run, but only delayed the expensive and inevitable transition to fiber-optic cables.

In response, Merkel insisted during the campaign that the chancellery should centrally manage all digitalization activities in the future. In her new grand coalition, she has two senior figures dealing with the issue: Helge Braun, head of the federal chancellery, and Dorothee Bär, federal government commissioner for digitalization. Additionally, she created a new department responsible for digital issues in the central government office and integrated it with other departments from the interior ministry. In short, Merkel wants to speed things up. Her May 2018 meeting with AI experts only reinforced the point that Germany was lagging behind and needed to take decisive action. One element is to make it clear to small and medium-sized companies that if they want to survive, they have to engage with AI technologies.

In the battle to win back some technological sovereignty, lots of levers need to be pulled at the same time. That is not easy given Germany’s federal structures and the distance between politics and the economy. Unlike Beijing, Berlin cannot “rule from the top.” And unlike in the US, there are not huge sums of private money ready to be spent on scaling up start-ups or accelerating IT research. In Germany, the federal government has to ask the states to reform their educational systems in order to meet new technological challenges. And when the big companies in China or the US come calling, company managers naturally think about their own interests or the firm’s interests—not necessarily about Europe’s strategic needs.

The Complete Value Chain

In the tech age, a region only has technological sovereignty if it can produce the complete value chain of digital products. Whether it be computer chips, computers, batteries, or software, the European countries have collectively given up on competing at the top. Instead, they have become customers for other nations’ companies. The US and China dominate the market for software, hardware, and social media platforms, which have an ever-greater impact on daily life. And when there are interesting technological developments from German startups or companies, the large American and Chinese firms eagerly buy them out.

These problems are why the 2016 Chinese acquisition of the German robotics company Kuka generated such a passionate debate in the government about foreign investors. Should foreign takeovers of strategically important companies be more strongly controlled? “We need to exercise caution, so we can maintain a foundation, so that not everything will be bought out from us,” warned Merkel in May 2017. Merkel also called for more flexible European aid rules that would allow member-states to better support AI firms.

Yet the attempts to redress Europe’s deficiencies seem modest given the speed of innovation elsewhere. For years, Merkel has worked in the background with some similarly minded European leaders to try and develop an independent European computer chip factory, or perhaps a European battery factory. But the fragmentation of the EU internal market, national reservations, and the lack of strategic direction have hindered progress. Only in 2018 did the European Union implement its General Data Protection Regulation, which provides a common legal framework for handling data in the EU. Everything is too slow.

A Three Percent Benchmark

Merkel and Macron want to kindle a new research dynamic—or at least expand on current basic research and its applications. For the chancellor and the French president, the possibilities of AI are so revolutionary that the research needs to be revolutionary too. The model is the Pentagon’s DARPA program for defense research which has regularly boosted civilian R&D. But accepting that research projects will sometimes fail conflicts with the German approach of accounting for every penny spent.

The leaders of France and Germany argue that such a cautious, rigid approach makes it impossible to discover the necessary “game changers” or “technological leaps” that could secure the survival of European industry. They believe that the EU should use the European Innovation Council to support high-risk research projects—even if nine out of every ten projects will ultimately fail.

It is not clear whether the drive to catch up will work. China and the American tech giants have been following forward-looking strategies for years, investing tens of billions in new technologies. In an aging Europe, on the other hand, the debate focuses almost exclusively on the distribution of social benefits and fears of migration. The EU will still have around 450 million citizens after Brexit, but no functional European digital market to serve them.

On top of that, there is the general lack of awareness about the importance of innovation. Much of the EU is absorbed by passionate debates about NATO members’ commitment to spend two percent of GDP on defense. Yet nobody seems to be noticed that almost all EU member states are seriously neglecting another, more important commitment that dates back to 2010: they should all be spending three percent of their economic performance on research and innovation.

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