The Ukraine war pushes Germany to strategic shifts that are difficult to implement

Days after the Russian invasion of Ukraine last year, German Chancellor Olaf Scholz announced a strategic shift in his country, at a juncture that remains difficult to implement.

Statements made by the German chancellor at the Munich Security Conference, which concluded on Sunday, reveal the extent of this change, as Scholz told other Western officials: “We bear the responsibility that a country of Germany’s size, economic status and power must bear in times like these”.

Germany, which didn’t forget the atrocities of the Nazis, was keen to remain peaceful for a long time, and didn’t send soldiers to European soil except during the NATO intervention in Kosovo in 1999.

In light of the dream of a German-Russian agreement after the Cold War and the reunification of Germany, the state allowed its military capabilities to decline, and contented itself with being the first European economic power without assuming more responsibilities for world security.

“We thought that security can only be achieved with Russia and not against it, and this was a mistake,” vice president of the think-tank group, the German Council on Foreign Relations, Rolf Nikel said.

Since Russian attack on February 24, 2022, all of these facts have fallen away.

Three days later, Scholz announced to the Bundestag the start of a new era and allocated an extraordinary sum of 100 billion Euros to modernize the army.

After hesitating for years to commit to NATO’s funding goals, Berlin promised to allocate more than 2% annually of its gross domestic product to its defense sector.

The German model has also changed in the field of energy, which is an essential sector of the economy.

Before the war, manufacturers received 55% of their gas and 35% of their oil from Russia.

This gas, which is obtained at low prices, was promising to secure the transition process pending the development of alternative energies such as wind and solar energy panels, after Berlin’s decision to gradually abandon nuclear energy in the wake of the Fukushima disaster in 2011.

“We thought it was a process of interdependence: Yes, we were dependent on supplies from Russia, but we assumed they were also dependent on us as a seller… We didn’t have a plan B,” Nickel said.

To replace Russian gas pipelines, Berlin had to extend the operation of its nuclear power plants by a few months, temporarily restart a number of coal-fired power plants, and open LNG terminals to LNG imports.

A year after the start of the Russian offensive, Germany became independent of Russian gas, as Olaf Scholz declared.

In fact, the country had no other choice, and Russia has gradually reduced deliveries via the Nord Stream underwater gas pipeline.

An explosion, of unknown origin, last September led to the final cessation of shipments, after causing damage to the pipelines.

Without Russian gas, Germany is buying liquefied natural gas at much higher prices, which threatens to permanently weaken the competitiveness of some industrial sectors.

As for the strategic and military transformation, it’s taking place with great difficulty.

Marie-Agnes Struck-Zimmermann, a deputy from the liberal Free Democratic Party, a member of the government coalition, said that the strong impression left by Scholz’s speech on February 27 of last year decreased over the months, because it took months before Germany started actually supporting Ukraine, including military equipment and weapons.

The Der Spiegel magazine, recently asked: “How long does Scholtz want to hide behind the US President Joe Biden?”

Expressing dissatisfaction with an advisor who only thinks about security under the US umbrella.

From artillery to battle tanks, Scholz has been criticized for being too slow, and Scholz must take into account the reservations of a part of society, as evidenced by the Manifesto for Peace launched by the far-left politician Sarah Wagenikt and the women’s rights activist Alice Schwarzer.

The manifesto, signed by 500,000 people for compromises by Kiev and Moscow, calls for a demonstration next Saturday.

As for the leadership role that Germany wants to assume now, it needs communication, according to opposition lawmaker Jürgen Hart of the conservative Christian Democratic Union, who criticizes Angela Merkel’s successor for his inaudible and confused statements, which could lead to loss of trust and commitment.

Peter Adrian, head of the Federation of German Chambers of Industry and Commerce, said the Ukraine war would cost the German economy around 160 billion Euros ($171 billion), about 4% of GDP, by the end of the year.

This, he explained to the Rhenish Post, meant that the per capita GDP of Europe’s largest economy would be 2,000 Euros less than it would have been without the war.

Industry constitutes a larger share in the German economy compared to many other countries, and the sector consumes most of its energy-intensive parts, which means that German companies have been greatly affected by high energy prices, which last year recorded the highest levels in Europe.

A study conducted by Allianz Trade last month said that the industrial sector is set to pay about 40% more for energy in 2023 than it paid in 2021 before the crisis caused by the war on February 24 last year.

“So the future growth prospects in 2023 and 2024 are lower than many other countries,” Adrian told Reuters, adding that this was the case last year as well.

Energy prices in Germany, which for decades depended on relatively cheap Russian gas, are high compared to the United States, which has its own reserves of natural gas, while France has abundant nuclear energy.

“The price of gas is three to five times higher than in the United States,” Adrien said, adding that electricity is four times more expensive than in France.