Throughout the war in Ukraine, German Chancellor Olaf Scholz has often drawn lines in the sand only to cave soon after. Berlin is once again saying it won’t go any further, ruling out the possibility of German boots on the ground. Presumably this means no to joining the current NATO contingent in Ukraine or backing the plan being bandied about for EU “peacekeeping forces.”
And once again, Scholz’s past is being resurrected putting pressure on his chancellorship. During his time as mayor of Hamburg, Scholz was involved in some shady dealings with a bank. Some background from Politico EU:
It became public earlier this month that police discovered €214,800 in a safe deposit box of Johannes Kahrs, a former lawmaker from the Social Democrats (SPD), Scholz’s party, who served as an adviser to Christian Olearius, head of Hamburg-based Warburg Bank, which is at the center of the scandal, while Scholz was still mayor of Hamburg in 2016.
According to media reports, Kahrs arranged meetings between Scholz and Warburg senior executives who were trying to get out of paying back €47 million in illegal tax refunds at the time. After those meetings, Hamburg tax officials revoked their demand that the bank pay back the money on the grounds that the statute of limitations had expired. A German court later reversed that decision and the bank has since repaid the funds.
The Hamburg regional parliament plans to summon Scholz for the third time this spring. And the center-right bloc in the Bundestag is also setting up its own investigation. That center-right CDU/CSU bloc is a strong backer of the war having submitted multiple parliamentary resolutions that would have Berlin send more heavy weapons to Ukraine.
The “Cum Ex” scandal, as it’s known, has been like a sword of damocles hanging over Scholz’s chancellorship. In January, the CDU and CSU were making noise about summoning Scholz before the finance committee. Trouble was they didn’t have the votes, but now the the CDU/CSU group, with the backing of the Left party reportedly do have enough to set up an investigative committee.
At that time Scholz was resisting sending (or granting permission for third countries to send) Germany’s Leopard 2 tanks to Ukraine. Of course, he eventually caved on the Leopard tanks once he got assurances that the US would also send Abrams tanks, which seemed more like an opportunity to save face rather than any concession on Washington’s part, especially seeing as the Abrams aren’t supposed to arrive in Ukraine until this fall.
The scandal also erupted again at beginning of August.
That was when Scholz was dithering on sending more arms for Ukraine. By the end of the month he pledged to support Ukraine “for as long as it takes.” From Reuters:
Germany had undergone a “fundamental change of heart” in recent months on its military support for Ukraine, he said. “We will keep up this support, reliably and, above all, for as long as it takes,” he told the packed university audience.
His change of heart came despite members of his own party demanding an end to support of the war and to engage in negotiations with Moscow.
One year ago, Olaf Scholz was elected as the ninth German chancellor since World War II, and leads a “traffic-light coalition” of the Social Democratic Party (SPD), the Greens and the Free Democratic Party (FDP) — named after the three parties’ signature colors of red, green and yellow.
During the election, Scholz’s opponents faced relentless scrutiny over plagiarism and gaffes while Scholz largely received a free pass over the cum ex corruption allegations, as well as his torture and political violence policies in the “gateway to the world” city. The next national election isn’t set to be held until 2025, but will Scholz’s coalition survive that long?
Increasingly public fights between the Greens and Scholz’s Social Democrats show that the relationship is on thin ice. With public money being thrown at the energy crisis after cutting off Russian gas and inflation taking its toll, the coalition is increasingly at odds over budget priorities.
A crisis meeting at the Chancellery at the end of March dragged on for three days, and no one emerged satisfied. Robert Habeck, Green federal minister of economic affairs and the country’s vice-chancellor, received the ultimate insult in western political circles these days: he was compared to Putin for his complaints about a lack of environmental progress.
A record high of 71 percent of the German public are not satisfied with the work of the federal government, according to the most recent Deutschlandtrend survey.
While the ruling coalition is at odds at home, there are questions abroad about who is really in charge of Berlin’s foreign policy: Scholz or his Green foreign secretary Annalena Baerbock who frequently undermines Scholz’s stated policies.
Baerbock, an overly confident and outspoken Atlanticist, has been one of the biggest proponents of German support for the Ukraine war and has helped undermine Scholz’s efforts to pump the brakes on that support. She favors a “feminist” interventionist foreign policy that aligns neatly with the US’ enemy list. She’s probably best well-known for her declaration that Europe is “at war with Russia” while addressing the Parliamentary Assembly of the Council of Europe in January.
Despite Baerbock trying to dictate policy towards Russia and China, Scholz for some reason has refused to dismiss her and instead has been reduced to “carefully” tallying her “mistakes.” All of this has created confusion abroad as to who is actually steering German foreign policy. As Le Monde notes:
As a not-very-vocal chancellor at the head of a raucous coalition, he has difficulty giving clear direction to his policy and is regularly overwhelmed by his ministers, with whom it is not always clear whether they are speaking for their party or for their country. His frequent disagreements with his foreign minister, Annalena Baerbock (Greens), confuse their foreign counterparts.
While Scholz sometimes seems to change position by the week, Baerbock is consistently in line with Washington. She was the only chancellor candidate during the 2021 election who campaigned against the Nord Stream 2 pipeline and is always one of the louder voices calling for Berlin to send more heavy weaponry to Kiev. She was an early advocate for the establishment of a special tribunal to bring Putin and his government to trial over the war.
Baerbock, whose introduction to transatlantic governance began with membership in the German Marshall Fund, the World Economic Forum’s Young Leaders Program and the Europe/Transatlantic Board of the Green Party’s Heinrich Böll Foundation, is the frequent recipient of glowing media reviews in both the US and Germany:
https://t.co/FL1t9WoQuN
— Lord Bebo (@MyLordBebo) April 14, 2023
Or like this from the Washington Post, “Germany’s Green foreign minister is taking the lead on Ukraine:”
She did promise more weapons — which, she said, would help Ukraine “free its citizens who are still suffering under the terror of Russian occupation.” That was far more forceful than anything Chancellor Olaf Scholz has said in recent weeks. The war in Ukraine, it turns out, is Baerbock’s fight too — for the chance to become the next German chancellor.
The surprise visit to Kharkiv was Baerbock’s fifth to Ukraine since she took office at the end of 2021. She traveled therefor the first time in January 2022. Scholz, by contrast, needed five more months to make it to Kyiv, and only in response to considerable internal and external pressure.
Still, it’s somewhat shocking to see her with the highest approval rating of any of Germany’s main politicians, especially after she told German voters she doesn’t care about the toll her support for Ukraine takes on their lives and the country. (Germany might be able to avoid a recession this year as long as energy prices remain low but the long term prognosis is dire.)
And yet voters by and large agree with Baerbock’s hawkish stances on Russia and China.
According to the recent Deutschlandtrend survey, a majority of 47 percent (+3 compared to February) considers Berlin’s support for Ukraine appropriate. Only 31 percent think that supporting Ukraine with weapons goes too far while 16 percent believe Germany should do more to support Ukraine.
When asked to name the most trustworthy partner in the world, 59 percent of Germans said the US. Ukraine came in second at 47. China is considered an important foreign policy partner by only 8 percent of those polled.
Baerbock’s foreign ministry office is currently drawing up a new “China strategy” that is expected to adopt a much more hawkish stance against Beijing and one that is more in line with the wishes of Washington despite China being Germany’s largest trading partner.
Scholz, seemingly dragged along in Ukraine, is also bowing to Baerbock regarding China policy. It wasn’t long ago that Baerbock was leading a lone boycott of the Beijing Olympics while Germany and the EU shrugged.
Now Berlin is shifting its entire China strategy and participating in the Taiwan provocations. Beijing was unhappy when Germany’s education minister visited Taiwan at the end of March – the highest-level visit by a German official in 26 years.
And Scholz who formerly favored strong trade ties with China and courted Chinese investment is now parroting the US warnings that Beijing better not use force to alter Taiwan status quo. Should Berlin, having already severed its ties with Moscow, do the same with Beijing, the results could be devastating. A recent New York Times piece continues to push the narrative that by trading with China, Germany falls into a trap of “reliance” like it did by getting Russian energy. But the article also hits on what it would mean should Berlin sever its relationship with Beijing, including:
- “Germany depends on China to provide essential technology products, including mobile phones and LEDs, as well as raw materials, including lithium and rare earth elements.”
- “China has been Germany’s biggest trading partner for seven years in a row.”
- “German automakers, including BMW and Mercedes-Benz, sell roughly a third of all vehicles they produce in China — exceeding sales in all of Western Europe.”
- “A study by the Kiel Institute showed that decoupling from China would be very costly for all of Europe, but especially Germany, given the strength of its economic ties. Calculations by the institute, based on gross domestic product from 2019, showed that Germany could lose income worth more than €131 billion. And it could be even more if China retaliated.”
As the Global Times notes:
…the European economy is facing increasing challenges, including sustained inflation, labor shortages, high electricity prices, rising raw material prices, soaring government debt, and shrinking export markets. These have led to the stagnation of the European economy, which in turn seriously affects people’s livelihoods, threatens the long-term welfare system, and affects the fiscal capacity of various European governments. As Europe remains an important economic and trade partner of China, maintaining and developing economic and trade cooperation with China has become a vital choice for Europe to get out of economic difficulties.
…Meanwhile, strengthening transatlantic relations and relying more on the US has brought additional pressure to Europe and is not in its best interests. In order to advance strategic autonomy and safeguard its strategic interests, the EU needs to strengthen its relationship with China so as to break free from US control.
Scholz and Baerbock, while not in lockstep, are soldiering on nonetheless and taking all of Germany with them.