** Germany Looks to Ease Russian Sanctions

By George Friedman 

June 1, 2016 

A daily explanation of what matters and what doesn't in the world of geopolitics. 

Berlin is performing a balancing act between Moscow and the West. 

German Foreign Minister Frank-Walter Steinmeier said on May 31 that Germany would consider easing sanctions on Russia gradually if there is “substantial” progress on the issue of Ukraine. A day earlier, German weekly Der Spiegel published a story indicating that German Chancellor Angela Merkel’s government is considering lifting some initial sanctions, such as travel restrictions, in return for Moscow's cooperation on local elections in eastern Ukraine. The article made it clear that senior officials want to become more proactive in finding a way out of the stalemate. 

Russia has clearly demonstrated that it will not change its policy toward Ukraine because of the sanctions, and Ukraine has become something of a frozen conflict. Kiev cannot regain control of the parts of Ukraine under the control of pro-Russian elements, nor can it change the status of Crimea.

At the same time, Russia cannot prevent Kiev from forming close ties with Europe and the United States, nor can it trigger an uprising in eastern Ukraine. Short of direct intervention in Ukraine, Russia has been blocked. And a direct intervention would not be easy or without risk for the operation itself, or Russian interests elsewhere.

Therefore, it would be surprising if the Germans didn’t search for a way to lift sanctions, in order to normalize bilateral relations with Russia. From Germany’s point of view, the worst case scenario would be a Cold War to its east. The European Union is sufficiently fragile to frighten Germany. A confrontation between Europe and Russia would likely shatter the EU. NATO is the European defense system, but it has responded minimally to this point. Should the confrontation endure and escalate, the United States would use NATO as a vehicle to conduct a containment strategy against Russia.

Germany needs to hold the EU together because about a quarter of its GDP is derived from exports to Europe. The expectation of countries like Poland, Romania and the Baltics is that Germany would participate fully in containing Russia. Other parts of Europe that have no interest in such a confrontation would pressure Germany to block the American strategy. Germany is forced to infuriate some part of Europe in this situation. Given the fragility of the EU, the pressure of a Cold War could be the final blow to European unity. 

Since the Russians have not capitulated to sanctions to this point, it is unlikely that they will. Therefore, it is in Germany’s interest to defuse the confrontation with Russia, and to do that, they must at least loosen the sanctions, or ultimately eliminate them.

There is a basis for a compromise in Ukraine. The Russians want a neutral Ukraine. Kiev may maintain whatever economic and political relations it wishes, but it must not become part of the Western defense system. What Russia cannot tolerate is Western forces on the Ukrainian-Russian border. That would represent an existential threat to Russia.

While such a presence is a bare possibility far down the road, Russia has learned in its history that bare possibilities can rapidly turn into realities. Therefore, neutralization of Ukraine in terms of defense relations is the foundation of any settlement for the Russians. Other issues such as some degree of autonomy for eastern Ukraine are manageable if Russia gets neutralization.

Of course, on the list of other things — far more important than eastern Ukrainian autonomy — that Russia would want to revise is the growing U.S. presence in the Baltics, Poland and Romania. I’ve written extensively about the century-long commitment of the United States to prevent a hegemon from consolidating the resources of the European Peninsula and Russia. The United States resisted potential hegemons in the two world wars and the Cold War. This is the fundamental geopolitical interest of the United States, towering over its interest in who owns what island in the South China Sea. Russia, having sensed a Western push eastward, responded as it normally does by pursuing a blocking position. 

The Russians would certainly ask for a removal of forces based on NATO’s eastern front. And now we come to the heart of any settlement over Ukraine. The Russians, having seen a force of any significant size to their west, will not trust the West’s commitment to neutralization. The Americans will not trust the Russians to respect Ukrainian neutrality without a U.S.-led force providing a deterrent in the region. The Russians will not believe that force will respect Ukrainian neutrality.

And this is the dilemma the Germans face. The Ukrainian crisis has drawn the U.S. military into their neighborhood. The Germans, along with other European countries, want to end sanctions. The U.S. deployment of troops in the region has made getting rid of sanctions far more difficult and has turned the sanctions into a side issue.

The Russians have a bigger worry: American intentions. Therefore, this probe by the Germans on lifting sanctions faces a far more difficult hurdle. Eliminating sanctions will not assuage Russian concerns and would undermine the American deployment, which is taking place in the context of NATO. The region is in a different place than it was when sanctions were imposed.

Germany is, as we have argued, facing serious economic problems. The European Union and NATO – both pillars of German national strategy – are experiencing friction, within and between them. And the Americans, pursuing their own interests, are posing a challenge on the eastern edge of the EU, as is Britain in the west, and Mediterranean Europe in the south.

The normal strategy for Germany is to do nothing. But doing nothing, in this case, means allowing a set of destabilizing forces to undermine core German interests. While the Americans and Russians pursue their interests in Europe, Germany cannot yet act on its century-long strategy of building its military power to protect its interests.

Taking that as a given for now, the only other option for Germany is to find another means to balance the Russians and Americans. The Americans are the stronger power, but far away and not yet committed to a full-scale deployment equal to the Cold War. The Russians are far weaker, but much closer. That equalizes the two. 

At the moment, the Germans worry about the Americans more than they worry about the Russians. The Russians are pursuing their buffers. The Americans, in resisting that, may do what they did during the 20th century – swamp Europe with its power. Given German economic vulnerability at the moment, the Americans can destabilize the foundations of Germany. Therefore, it makes sense for Germany, playing the balance of power in Europe as Britain did in the 19th century, to reach out to Russia. Russia can counterbalance the Americans and would welcome German economic activity in the country, given its weakened economy.

But eliminating sanctions doesn’t fully solve Germany’s problems. The core problem, a Cold War emerging to its east, is the real issue. Of course, if Germany pursues this strategy, NAT and the EU are likely to fragment as well. But Germany may have reached the conclusion that these institutions, even if they survive, will not function as they used to and are worth the price if a balance of power that contains the Americans can be created.