Olaf Scholz’s foreign policy will show us who he really is
Over the next year in European politics Emmanuel Macron will get the front-page headlines, and Olaf Scholz will probably mostly be deep in the inside pages in the sections many people don’t read. Those are the important bits.
His views on the world are not widely known given that he contented himself with economic policy during his time as Finance Minister under Angela Merkel. However, from various interviews an outline sketch emerges of a left-leaning Atlanticist who is also committed to the EU and believes in closer union, but with limits. Early next week Scholz becomes Chancellor of Germany. Within a few days he’ll be in Paris to see President Macron and the following week both will be in Brussels for the European Council summit. In January, France takes over the Presidency of the EU for six months, and Germany begins its yearlong leadership of the G7.
With the international challenges he faces, Scholz’s world view should become clearer quickly. We’ll also find out if his three-party coalition government will support or restrain him – the latter seems more likely.
I interviewed the then Finance Minister last year. He speaks fluent English. During an almost hour-long conversation what came through most clearly, and frequently, was a commitment to the EU and multilateralism: “Anyone should understand that there is a reason behind the European Union and if we want to defend our sovereignty the only way to do it successfully is to have more progress with a better Union… This obviously means that some decisions will not be taken on the national level, so I’m very much supporting the idea of having majority decisions, maybe a qualified majority, but majority decisions of the foreign ministers and finance ministers which will make the integration process even easier.”
Despite those comments, Scholz is unlikely to support a rush to fiscal union for the EU. His version of integration appears to be a gradual one. With the British gone – something Sholz told me he regrets – Germany’s position within the EU is strengthened. The UK was a weighty enough force for some smaller EU countries to join with to balance the Franco/German behemoth. Without it the Germans may be strong enough to emerge more openly as the “first among equals” in the 27. So, Macron may grandstand, but if the German economy holds up, Scholz can quietly get on with shaping the EU in Germany’s favour – mostly by continuing its dominance as the export king of the Union.
Foreign policy outside of the EU may be more difficult and cause tensions within the new chancellor’s coalition government. The manifestos of the three parties differed on foreign and economic policy. The Greens are against the Nord Stream 2 gas pipeline from Russia, arguing that it will make Germany even more subservient to Russia. They are also more critical of Russian human rights abuses than was the outgoing Merkel-led coalition. Annalena Baerbock is the co-leader of the Greens and the incoming Foreign Minister. She may clash with Scholz if he favours Gazprom winning its license to bring gas through the now completed pipeline (the license is currently awaiting approval).
For years Scholz’s Social Democratic Party (SDP) has been close to the Kremlin. In 2005, two weeks before he lost that year’s election to Angela Merkel, Chancellor Gerhard Schröder agreed the Nord Stream 2 project with Russia. Within days of leaving office, he joined the board at Gazprom and is now its chairman. Germany’s current President, Frank-Walter Steinmeier, who is from the SDP, is close to Schröder and recently this year has defended the pipeline partially on the grounds that it was part of Germany’s debt to Russia after the Second World War.
Although Scholz is not linked to the Kremlin he will come under pressure from senior SDP grandees to back Nord Stream 2. If he sides with them he’ll come up against both Baerbrock and the new economic minister Robert Habeck who is also a Green. If he sides with the Greens he’ll not only face internal party unrest, he’ll also risk damaging relations with Moscow.
China presents a similar problem. Germany is China’s biggest European trade partner and its criticism of Beijing’s human rights abuses have been muted. Not so the Greens. In opposition they were vocal in their protests, especially over the treatment of the Uighurs. That is unlikely to change which means that Scholz will have to deal with the heat from Beijing.
Defence should be less problematic, at least within the coalition. The Greens have given their anti-NATO stance and although publicly the coalition will talk about a robust German military, privately they will agree they won’t even try to meet the 2 per cent of GDP funding target set by NATO. Therefore, the German military will continue to be an afterthought in the alliance’s planning. It will also undermine President Macron’s dreams of an EU army.
Behind the reluctance to bring the military into the 2020s is not just the long hangover of the Second World War, it’s also, perhaps more so, that the country needs money for other things. The rapid greening of the German economy and an ambitious modernisation project will cost at minimum tens of billions of Euros a year. The Greens will insist on the former but the third coalition partner, the free market supporting FDP will insist that taxes are not raised to pay for it. In German politics defence spending is low hanging fruit, easy to reach and cut.
Scholz must hit the ground running. The issues surrounding Covid, the EU summit, the G7, Russia/Ukraine, and Nord Stream 2 are here and now, front and centre. On the inside pages Scholz is about to show us who he is.