By Tunç Akkoç
The new Foreign Minister of Germany has had a quick start to her job. Annalena Baerbock, who flew to Paris on the first evening the day of the oath ceremony, made her first visit to France. Baerbock, who has made six trips in seven days, visited five cities, attended the G7 Foreign Ministers summit and the EU Foreign Ministers meeting; she has made quite a name for herself in her first week in the office.
The possibility of changing the axis of German foreign policy if Annalena Baerbock, whose name has been mentioned for the Ministry of Foreign Affairs for months, took office, has been debated recently. However, in an interview during her visit to Brussels, Baerbock clearly targeted the Nord Stream 2 pipeline: “At present, it means that the pipeline, as it does not meet the requirements of the EU energy law and safety issues are still on the agenda, cannot be approved as it stands.” 1 The construction of the Nord Stream 2 pipeline, which is critical for Germany-Russia relations and Germany’s energy supply, was completed during the Merkel era. Meanwhile, only two days after this statement, Baerbock declared two Russian diplomats stationed in Germany persona non grata. This sanction was imposed following a court decision regarding a murder case which committed in Berlin, which was determined to have involved stationed Russians. Russia expelled the two German diplomats in response.
An interview with Annalena Baerbock a few days before taking office has resonated. Her responses to questions, particularly about China, have been widely talked about. Using statements quite similar to the rhetoric of the US administration, Baerbock stated: “As European democracies and also as part of the transatlantic democracy front, we are in systemic competition with an authoritarian regime like China…We Europeans should not make ourselves smaller than we are. We are one of the largest domestic markets in the world. And China in particular has great interests in the European market. If goods from regions like Xinjiang, where forced labor is widespread, were blocked, this poses a huge problem for an exporting country like China. We Europeans must use the joint internal market as a tool much more strongly. However, this method will be effective only if the 27 member states act together… When I see how the Chinese administration treats tennis player Peng Shuai or the arrested journalist Zhang Zhan, of course, we need to take a closer look at the Olympic games.” 2
During the 16-year Merkel period, Germany’s policy towards Russia and China was not aligned with such perspectives. So can Annalena Baerbock, Germany’s new Foreign Minister, really give the country’s foreign policy a new direction?
Economic and geopolitical interests of Germany
Economically, Germany is one of the most powerful industrial countries in the world. Germany, in particular, has been setting records for many years in exports, and is the third most exporting country after the United States and China. All the ruling parties, from past to present, have seen the way for Germany to become a bigger global actor in making economic development sustainable. Therefore, economic dynamics significantly shapes German foreign policy. Let’s make it concrete.
China has been Germany’s largest trading partner for the last five years. In 2020, the trade volume between the two exceeded 210 billion Euros. Again, the country from which Germany imports the most was China with a transaction volume of 116 billion Euros. On the other hand, China is Germany’s second largest export destination, right after the US. The Chinese market is now highly vital, especially for the automotive industry, which is the flagship of the German economy. To put it in figures: four out of every ten German cars are sold in China. In 2020, Volkswagen, Daimler and BMW sold over 5.4 million cars in China. That is 38.2% 3 of their sales worldwide. In addition, China has become the primary production center for German automotive giants. For the first time in 2019, the number of German brand cars produced in China exceeded those produced in Germany. 4 It’s not just the automotive industry, German investors have invested almost €100 billion in more than 2000 Chinese companies. 5 The biggest income source of BASF, Germany’s largest chemical company, is the Chinese market. This is the case so much so that the German chemical giant plans to make the largest investment in a single location in the 150-years of the company’s history. The chemical plant, which will be established with an investment of 10 billion Euros in Guangdong province of China, will be the third largest location of the company after the headquarters in Ludwigshafen and the complex in Antwerpen, Belgium. 6
Chinese companies’ direct investments in Germany are also increasing. Currently, Germany ranks tenth in the list of countries where China invests the most. Especially over the last five years, the numbers have increased significantly. While investments made between 2011 and 2015 amounted to approximately 1 billion Euros per year, this figure exceeded 11 billion Euros in 2016.7 To give a few striking examples: In 2016, the Chinese Midea Holding bought Kuka, the largest robotics manufacturer in Germany, for 4.5 billion Euros. Having bought 9.9% of Deutsche Bank AG in 2017, the Chinese (with the automobile company Geely) also became partners with the German automobile giant Daimler AG with a 9.7% share in 2018. The Chinese company CATL, which produces batteries for electric cars, is making one of its biggest investments in Erfurt, East Germany. CATL also plans to spend 1.8 billion Euros in the next five years, employing approximately 2,000 people and producing critical parts for the automotive industry. 8
Taking into account the above economic data, the Chinese policy of the previous Merkel government becomes more visible. The influence of large capital groups on politics is an undeniable fact in Germany, which has an export-dependent economy. As a matter of fact, it is necessary to look at the short article of Herbert Diess, the CEO of Volkswagen Group, published on his private page a few days ago in this context. In the article titled “We need more cooperation and presence in China, not less!” Diess was nearly answering to Foreign Minister Baerbock’s outbursts about China: “It would be very damaging if Germany or the EU wanted to decouple from China. As a global company, we will never stop advocating for globalization, a multilateral rules- based trading system and engagement… We have to use the Chinese speed and local technology platforms to remain worldwide relevant in NEW AUTO! On the political side we need cooperation, dialogue, international collaboration and an expansion of our economic relations.”9 The fact that Diess, who draws attention with her determined and clear style, says that Germany needs China to be successful in global competition, is meaningful in terms of expressing a strategic orientation.
Will Germany endanger its own economy?
In order to complement this economy-based foreign policy analysis, it is necessary to examine the current state of the German economy. Germany, which realized an ‘economic miracle’ after the Second World War and created a social welfare state and a society based on a large middle class, especially during the period until the 1980s, now projects a very different image. In Germany, which prides itself on putting the ‘social market system’ (Soziale Marktwirtschaft) into practice, social rights and state aid have been severely cut in recent years. The previous function of social insurance has been gone. The gap between the rich and the poor has widened like never before in the post-war era and the middle class has eroded. This is the first time that such an impoverishment has occurred. Wages fell, unemployment rose.
This reality is blatantly revealed by the findings of a recent study. According to scientific studies conducted by the independent organization Paritätischer Wohlfahrtsverband, 16% of the German population is poor. In 2006, this number, which equates to 13.4 million individuals and is at an all-time high, was 14%. In the published results, there is another significant point. A disparity between the states can be seen when looking at poverty rates. The rate is 11.6% in Munich, Germany’s southernmost state, while it is nearly double in Sachsen-Anhalt, East Germany (20.6%).10 On the same day, the Bertelsmann Stiftung, one of Germany’s most prestigious foundations, released the results of another thorough study that throws light on the low-income groups of society. Accordingly, the number of people who had to work additionally in a job despite receiving social assistance from the state (unemployment benefit, etc.) reached 860.000. One-fifth of persons getting social assistance fall into this category. Families with children, in particular, have more hurdles.11
The questions we need to answer now in light of this economic data, are: will Germany, which nearly sanctifies the concept of stability in economic management and social life, shift its foreign policy axis and take risks? Would Foreign Minister Baerbock dare to confront Germany’s biggest companies on relations with China? Can Annalena Baerbock block the usage of the Nord Stream 2 pipeline, which was finished by Germany’s previous administration and is projected to bring 55 billion cubic meters of gas per year to a country that is dependent on Russian gas for energy supplies due to its geographical location?
Cook and waiter
Right after the swearing-in ceremony of the new cabinet, while Foreign Minister Baerbock was on her flight to Paris to make his first visit, Rolf Mützenich, the head of the parliamentary group of the SPD, the major partner of the coalition, issued a timed statement. “Foreign policy and European policy will be directed primarily in the chancellor’s office,” Mützenich said, giving the public a message ahead of Baerbock’s meetings and pronouncements.12 Omid Nouripour, the Green Party’s potential new Co-Chair, was quick to answer. Replying to Mützenich with a tweet, Nouripour said, “foreign policy will not be directed rather in the chancellor’s office. Downsizing the State Department in this way is traditional ‘cook-waiter- logic’.”13 In terms of foreign policy, Olaf Scholz was the chef and Annalena Baerbock was the waitress, according to this metaphor!
The initial signals from incoming chancellor Scholz were also significant. Olaf Scholz highlighted continuity in foreign policy in his first speech to parliament as chancellor to outline the new government’s program. He also used constructive expressions on relations with China: “When universal principles and human rights are abused, we will not close our eyes and say it as it is. That does not change the fact that a country the size and history of China has a central place in the international concert of peoples. That is why we offer China cooperation on human challenges such as the climate crisis, the pandemic or arms control. We offer China fair economic competition for mutual benefit, with the same rules for everyone.”14 As can be seen, Olaf Scholz’s speech differs significantly in content and tone from Annalena Baerbock’s remarks on China. As a matter of fact, although it is known that Foreign Minister Baerbock was willing to boycott the winter Olympics to be held in Beijing, the new government took no action in this regard. Olaf Scholz also did not make a statement on the subject. Meanwhile, Wirtschaftswoche, one of Germany’s most influential weekly economic journals, disclosed significant backstage information based on top diplomats. According to the story, Olaf Scholz is delivering a message to Chinese President Xi Jinping before assuming the position of Prime Minister. In the message conveyed to Xi Jinping through the President of the European Council, Charles Michel, it was stated that the line in the Merkel period would be continued.15
Olaf Scholz made a different statement about Nord Stream 2 as well. Scholz, who has always backed the pipeline’s construction, claimed after the EU meeting last week that Nord Stream 2 had nothing to do with the “Ukraine crisis” in a statement. According to Scholz, “North Stream 2 is a private initiative. There is one remaining issue that needs to be resolved in order for it to become operational, and that is to determine that it is in compliance with EU laws. An official office in Germany, which is out of politics, will decide on this issue.”16
One more thing needs to be added to all of this. Germany has always advocated for a single European position on major foreign policy issues, particularly at the global and regional levels. To bring up a policy, all EU member states must agree and do so unanimously. First of all, it is known that countries such as France, Portugal, Greece and Hungary do not want to get tough on China. Germany, which considers France to be its closest ally and values bilateral relations highly, will not want to be divided from its neighbor on key foreign policy matters. As a result, Annalena Baerbock, Germany’s new Foreign Minister, appears to be facing a difficult challenge. In fact, according to a recent public opinion poll, the majority of Germans believe she is incapable of performing this duty properly. Annalena Baerbock came last among the ministers in a survey, which asked whether cabinet members were fit for their duties.17