Last week, Angela Merkel and Volodymyr Groysman opened the third German-Ukrainian economic forum that addressed digital economy, agriculture, transport, infrastructure, etc. This was quite a specialized event mainly for businessmen and top managers, but it gained intense political coloring and attracted much attention as relations between Moscow and Kyiv had escalated.
The forum's organizer is the German Committee on Eastern European Economic Relations that brings together companies working in post-Soviet countries, and this made the event even more intriguing. The Committee champions the cancellation of anti-Russian sanctions and is maybe Germany's chief lobbyist of the Nord Stream 2 project.
Prior to the forum, Kyiv had launched an information "softening-up" campaign. Ukrainian Ambassador in Berlin Andriy Melnik, Ukrainian Foreign Minister Pavlo Klimkin, Kyiv mayor and famous boxer Vitaliy Klychko and even Petro Poroshenko spoke in German media about the recent events in the Kerch Strait. All of them actually demanded the utmost harsh Germany's reaction to Russia's action: introducing new sanctions, dispatching warships, but the main thing was to give up the construction of the second thread of the gas pipeline through the Baltic Sea. At the same time, Ukraine had secured Washington's support. On November 28, Donald Trump said that German Chancellor Angela Merkel should be engaged into the current conflict between Moscow and Kyiv.
This is not a totally new approach for the United States. It acted similarly back in 2014, when it tried to shift the task of resolving the Ukrainian crisis to its European partners. Some experts believe that the famous statement of Barack Obama that Russia is a regional power was addressed to Berlin and Paris rather than to Moscow and was a clear hint that Germany and France should solve their European problems themselves. The United States is thus solving its own problems that are to relieve itself of excessive foreign political burden, to use the EU as an effective tool of influencing Moscow and what is more to keep the necessary level of tensions in Europe, not letting the EU, in particular Germany, to get along with Moscow. Now Kyiv is taking up this strategy, focusing on the last point for clear reasons.
After noisy statements of Ukrainian politicians in German media Groysman let himself show restraint at the forum and center first of all on economy. Kyiv's position had been to a sufficient extent delivered to both officials in Berlin and German society. Nevertheless, the Ukrainian prime minister touched on the Kerch Strait incident in his speech. He also criticized Nord Stream 2, but that happened later in a Saturday interview with Die Welt, calling the gas pipeline project "a manifestation of hidden war against Europe."
Merkel's situation is much more complicated. She was to respond to all demands earlier voiced by the Ukrainian side on behalf of the German government. Germany's business newspaper, Handelsblatt, described the chancellor's speech at the forum as "an unexpected emotional statement in favor of Ukraine." Judging by the first three or four paragraphs of the speech it is so indeed. Merkel said that the fight for the Association Agreement had been absolutely right and that today the fruits of this fight could be seen, as the Ukrainian foreign trade was re-orienting to the European market, bilateral exports were growing and Ukraine was becoming attractive for Western investments.
But later on the German leader was far less optimistic, pointing at the still unresolved corruption problem and difficulties of reforms. Noteworthy that by the end of her speech, the German leader showed a good deal of realism so uncommon of Germany's foreign policy, saying that increasing of people's welfare is the top priority. Merkel said that democracy was, of course, important, but was coming into question very quickly if people's living standards were falling. She noted that that was true not only for Ukraine but also for Germany. Berlin has never allowed itself to make such statements about Moscow, even before 2014.
Almost the whole second part of the chancellor's speech was dedicated to relations with Russia, and when it came to sanctions Merkel sounded nearly vindicating, "Many businessmen of course want good relations with Russians and raise the sanctions issue. But, ladies and gentlemen, this is a principal issue. We introduce sanctions not because we want sanctions, but to explain that countries neighboring Russia have a right to their own development path."
This at the first glance looks quite logical but a closer look at Merkel's speech reveals that Germany, for which export is the source of economic and political influence, took on a disabling burden, which is Ukraine, and is paying for this not only with loans and direct financial assistance to Kyiv but also with losing economic relations with Russia. And political and what is more economic prospects are unclear here.
Everything was quite radiant for Brussels and Berlin in 2013. They thought that it was necessary to just sign the Association Agreement on their terms and the Ukrainian market would immediately get to the sphere of the EU's economic influence. The reality turned out to be much harsher.
Ukraine is not at all willing to undergo reforms, demanding that the West makes more investments and that Germany also gives up Nord Stream 2. In fact, Kyiv suggests that Berlin should give up plans of ensuring its own energy security and competitiveness of its economy and that it should buy American shale gas, for example in Poland that also wants to become a gas hub and understands that these plans would fail if the second thread of the Baltic gas pipeline is built. But this is all of course is solely for Europe's salvation, as Ukrainian politicians would say.
Berlin has so far been fighting back. Kyiv's demand to dispatch warships to the Sea of Azov is responded with a statement that the current crisis can only be settled peacefully. Germany's governmental position on Nord Stream 2 has also remained invariable. This is an economic project and Germany is not going to give it up. Merkel voiced all of these things in her speech at the economic forum.
A question arises here, why Germany needs all this? Apparently, the expansion on the Ukrainian market has failed and it would be more profitable to have good economic relations with Russia. Merkel clearly stated in her speech that people's living standards, not democracy - is the main thing. And the answer is pretty simple: Germany needs the US.
Despite all unfriendly moves of the United States, Germany still believes that trans-Atlantic ties are strong and hopes that relations with Washington will sooner or later get back to the normal track. And now it is trying to pay its allied debt defending the so-called "coordinated position."
